Rural Economy and Connectivity Committee

Meeting date: Wednesday, May 15, 2019

Official Report 709KB pdf

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European Union Withdrawal (Implications for Scotland)

I welcome everyone back to the meeting and invite committee members to declare any interests.

I am a member of a farming partnership in the north-east of Scotland.

I am the joint owner of a small registered agricultural holding.

I am a member of a farming partnership.

I welcome the Rt Hon Michael Gove, the Secretary of State for Environment, Food and Rural Affairs for the United Kingdom Government. He is giving evidence to us, via videoconference, on the implications for Scotland of the UK’s departure from the European Union. Mr Gove, we will go straight to questions.

Good morning, Mr Gove.

I will start by asking about fisheries, which is an important issue in the north-east, where I stay. On 24 April, Mr Ewing told the committee:

“It would be premature to bring fisheries legislation before the Scottish Parliament when we do not know what additional powers the UK Fisheries Bill would confer on Scotland.”—[Official Report, Rural Economy and Connectivity Committee, 24 April 2019; c 15.]

What additional powers will the UK Fisheries Bill confer on Scotland, and how could they benefit the Scottish industry?

Thank you, Peter. I apologise to the committee for not being able to be with you in person, as I would have wanted to be. I had the opportunity to be in Scotland—in Aberdeen—just under a fortnight ago, when I met representatives of the fish processing and catching sectors, and I am looking forward to being back in Scotland at the end of this week.

The Fisheries Bill will provide an opportunity for the Scottish Government to manage Scotland’s fisheries resources more effectively. We are in conversation with Fergus Ewing about exactly what powers he thinks are necessary to make sure that Scotland can benefit.

The Scottish Government itself has acknowledged, in the work that it has done, that leaving the EU, taking back control of our waters and leaving the common fisheries policy will mean thousands of additional jobs and that hundreds of thousands of additional pounds can be injected into the UK economy.

I am open to any proposals that Fergus has to make sure that the bill works for all parts of the United Kingdom, and, in particular, that the coastal communities of the north-east can benefit more.

The fishing industry in the north-east looks forward to that happening. The basic question is this: do we still feel that we can come out by the end of 2020, as was originally envisaged?

I hope so. That is absolutely the UK Government’s plan. It all depends on whether our Parliament in Westminster passes the withdrawal agreement bill. Last night, the Prime Minister signalled that she will bring it forward—God willing—in the first week after our Whitsun recess. All Scottish Conservative MPs voted to support the withdrawal agreement at the last time of asking, on March 29, because there is a recognition that, if we can secure that withdrawal—

We have lost the signal. I will suspend the meeting briefly so that we can re-establish communication.

10:50 Meeting suspended.  

10:51 On resuming—  

We have re-established contact. You were in mid-flow Mr Gove.

I was responding to Peter Chapman’s point about the transition period into 2020. We anticipate that we will have a transition period up to the end of 2020—provided that the UK Parliament lets us. We will then be fully outside the common fisheries policy and can take full advantage of the sea of opportunity that will exist.

Let us hope that we can achieve that. I have another very important question. What will replace the European maritime and fisheries fund? How will that be administrated in Scotland, and what sums of money might be involved? Will they be similar to those that we are receiving through the EMFF at the moment?

I hope that they will be more. We want to replace the EMFF with a fund to ensure that coastal communities can invest in a way that allows them to take full advantage of the opportunities that will exist initially. Just last December, the UK Government made available an additional £37 million on top of EMFF funding. That was distributed in accordance with EMFF rules so that the Scottish Government could ensure that its priorities were properly reflected. We want to ensure that more money is available and to respect the legislative and administrative competencies of the Scottish Government, so that it can spend that money as it thinks appropriate.

As I discussed in a different committee, there may be areas—for example, investment in the redevelopment of Fraserburgh Harbour—in which the UK Government could go above and beyond in making sure that everything that the community there wants to see happen, to which I understand that the Scottish Government is sympathetic, can occur. My approach is to absolutely respect the devolution settlement; however, where the UK Government can go above and beyond in helping Scotland, we should.

I will bring in Stewart Stevenson.

Mr Gove, it is clear that there are considerable opportunities for the catching sector to increase the quantum of what it catches, but the economic value is delivered through the rather larger processing industry. Even at the moment, there are significant vacancy levels in a number of processors—I am sure that you will have heard about that—and the proposed immigration rules that the UK Government is currently engaged in set an income floor that is somewhat above the level of many of the people who come and work in the industry in the north-east. With a 30 per cent vacancy level in certain processors already, how can the UK Government respond to ensure that we will actually be able to capture the full economic value of the access to greater catches? The processing sector needs to be part of that.

That is a good point. As you may know, I was in Aberdeen just under a fortnight ago, and I visited Nolan Seafoods, an exemplary fish processing company. In talking to Michael Park, its chief executive officer, I appreciated how important it is to the company that it has access to a wide range of sources of labour. While I was there, I met one member of the team who, a long time ago, worked for my dad. Another member of the team had come over from Poland and had been trained by my uncle. I appreciate the vital importance of ensuring that people have access to talent, both home-grown and from abroad.

You make a good point about the migration advisory’s committee’s recommendation that we look at ensuring that it is easier to get skilled workers. It is true to say that defining a skilled worker as someone who earns more than £30,000 a year is not responsive to the particular needs not only of the fish processing sector but of the food and drink sector overall. There are people working in processing who are highly skilled but who earn less than £30,000 a year, and we must have access to that talent. Anyone who has seen the state-of-the-art facilities at places such as Nolan Seafoods will appreciate that they are absolutely at the cutting-edge of technology. However, we also need to place skilled manual labour alongside that technology to ensure that high-quality seafood is delivered in a way that the customer wants.

You are absolutely right in what you say. I have made the point to the Home Secretary and others that we need to be flexible in how we define what a skilled worker is in the light of the needs of specific industries.

As a result of leaving the EU, the processing sector will require export health certificates for every batch or every shipment of fish. The estimated cost of that process is £15 million. Will the UK Government pick up that tab?

I have said to Fergus Ewing, the Cabinet Secretary for the Rural Economy, that, if he lets me know what the Scottish Government needs, the UK Government stands ready to support it.

If there are no further questions on that area, we will move on.

My question is on policy frameworks, common frameworks and so on. Can you give us some idea of your thinking about what will need legislation and what will not? The Scottish and UK Governments have been co-operating in some areas without legislation. Do you anticipate that we will need a lot of legislation or really not very much?

It is a case-by-case issue. I think that all of us would like the internal market across the UK to be preserved. That means that we need common frameworks on issues such as animal health, so that Scottish farmers and food producers will continue to have access to the UK market and so that we all, collectively, will benefit from the high reputation that the whole of the UK enjoys. I am grateful to the Scottish Government for the fact that it has made its officials available for a variety of meetings, which has enabled us to put in place some of the statutory instruments and secondary legislation that will ensure that we can deal with whatever outcome results from EU exit.

I have also said to the Scottish Government that we are always ready to provide additional time for our Agriculture Bill, so that a schedule can be attached that makes provision for whatever legislative changes the Scottish Government needs to be made. I think that the Scottish Government is planning to introduce its own bill, and we will do whatever we can to support it in that regard. We will liaise with it to ensure that the legislation works in the interests of all.

I hope that all of that can be done through negotiation and that there will be a good relationship between you, Fergus Ewing and others in the other two countries. However, if there was disagreement around the formation of a framework, whether or not it was legislative, how would you see that being resolved?

I think that it could be satisfactorily resolved only through consensus and agreement. Without wanting to be too starry-eyed about it, I would say that, although Fergus Ewing and I have disagreements, I cannot fault him or the Scottish Government for the way in which, when it comes to the practical implementation of all the measures that are required to ensure that we retain the benefits of the union, he and his team have been principled and determined to work in a constructive and pragmatic way.

That is encouraging, but I wonder what would happen in a situation in which we could not reach agreement. For example, if Scotland wanted to have slightly higher standards than the rest of the UK in agriculture—because agriculture is so important to us—would there be flexibility for that, or do you think that the UK would impose the standards that it wanted on Scotland?

11:00  

No. There are some areas in which it is absolutely right for different parts of the United Kingdom to want to do their own thing. That is the principle behind the devolution settlement, which I completely respect.

If, for the sake of argument, Fergus Ewing—or any other cabinet secretary in the future—wanted particular standards to apply in any area in Scotland, we would do everything possible to facilitate that. It would, of course, be a matter for the cabinet secretary and Scotland’s food processing or production sector to decide on the extent to which there might be economic challenges. However, I would do everything that I could—and I am sure that my colleagues across the UK Government would do everything that they could—to make sure that the ambitions of any future cabinet secretary could be met as well as to protect the interests of everyone across the United Kingdom.

Mr Gove, international treaties are clearly a matter for the UK Government to deal with—I am thinking of the World Trade Organization rules in the specific context of agriculture. However, there is open disagreement, I think, about devolved versus reserved implementation of the rules. The Scottish Government tabled some amendments to the UK Agriculture Bill, which the Environment, Food and Rural Affairs Committee has rejected. Is it still on the agenda for ministers to consider responding to and taking forward the amendments that the Scottish Government proposed, or close variants of them?

You describe the situation perfectly. Notifying the WTO about the level of agricultural support that we provide within the amber box and making sure that we are WTO compliant is the UK Government’s responsibility for the reasons that you point out. That is the relevant body for concluding international treaties and satisfying international obligations. However, within that, both the Scottish and UK Governments recognise that it is for the devolved Administrations to decide how the amount that is allocated should be spent.

The disagreement, or difference of views, over how to achieve that should in no way obscure the basic agreement that we all have on the underlying principles. We have reached a satisfactory arrangement with the Welsh Assembly Government on the issue, and conversations are continuing with the Scottish Government, to make sure that our shared ambitions can be met and that any difference of interpretation or opinion can be reconciled, whether through amendment or through a deeper shared understanding of what both Governments want to achieve.

I understand the issue around the amount, which will always be the subject of vigorous debate. I am more focused on the incorporation of rules into domestic law. Under the common agricultural policy—and, indeed, a range of policies—the Scottish Parliament, working with the Scottish Government, has been responsible for the incorporation into Scottish law of the obligations to which the UK has committed, as is the case in Wales. That is the area that I am trying to probe, and I am relatively encouraged by what you have said. Do you think that we will get to a resolution that will recognise that, when the Scottish Parliament and Government do that—which will save work at Westminster, to be blunt, or there is a danger that work will be done twice—they are doing so in order to help the UK to meet the international commitments to which it properly has signed up?

Yes, that seems very fair.

Thank you.

Yesterday, in a statement to the Scottish Parliament, the Minister for Rural Affairs and the Natural Environment said that the Scottish Government had submitted amendments to the UK Agriculture Bill, and that that bill is holding up construction of a Scottish Government agriculture bill. Do you support that assertion, or is it not true?

I do not support that assertion. I was struck by what Jonnie Hall of NFU Scotland said at its recent meeting, when he suggested that the Scottish Government has not provided as much detail about the future of agriculture in Scotland as those of us south of the border have provided there. The Scottish Government has both the means and the ability to do so. As I mentioned earlier, we have said that we would be more than happy to provide a schedule to our Agriculture Bill, as we have done for the Welsh Government, in order to meet all Scotland’s requirements for putting the future of farming on a firmer legislative framework.

Again, I am more than happy to consider any suggestions, thoughts or recommendations from the Scottish Government. However, I certainly do not think that there has, on the part of the UK Government, been a lack of willingness to help the Scottish Government to move on and to provide farmers with greater certainty.

There has also been a question about whether the Scottish Government needs to introduce an agriculture bill in order to continue to make payments here. Will you clarify your position on that?

The Scottish Government could have co-operated with the UK Government on the Agriculture Bill in order to provide the greater certainty that has been sought. However, if it wishes to introduce its own bill, we will do everything possible to facilitate that. Such certainty could have been provided had the Scottish Government opted to use the UK legislation, but that was a decision for the Scottish Government.

Where exactly is the Agriculture Bill in the system? Is it one of the pieces of legislation that must be passed before we leave the EU? If so, will it be passed?

The Agriculture Bill has completed all its stages in the House of Commons, apart from the report and third reading stages, in which we can consider amendments, including those that have been proposed by the devolved Administrations and to which UK parliamentarians have put their names. The UK Parliament needs to pass the bill on the withdrawal agreement before it can pass the Agriculture Bill. Of course, we can formally leave the European Union without the Agriculture Bill having been passed. If we leave in accordance with the withdrawal agreement, we will enter a transition period, during which we will have the necessary powers to continue to provide payments.

I want to continue on the CAP convergence review. The UK Government has initiated an independent review into the factors that should be considered to ensure that funding for domestic farm support is fairly allocated to the Administrations of England, Scotland, Wales and Northern Ireland. We all know that Scotland is at the very bottom of the league table of payments per hectare to farmers in the EU. Mr Ewing has told the committee that it is

“unthinkable that the review would not result in additional money coming to Scotland.”—[Official Report, Rural Economy and Connectivity Committee, 24 April 2019; c 23.]

Is his view right, and do you agree with it? If there is additional money, when will it be allocated?

The review is an independent one, so I cannot pre-empt its conclusions. I am very grateful to the Scottish Government for recommending Jim Walker, who is an excellent member of the panel. We have representatives from each of the constituent parts of the United Kingdom. The chair of the review, Lord Bew of Donegore, is a cross-bench peer of unimpeachable integrity who, as it happens, lives in Northern Ireland and works in London, but hails originally from the Irish Republic.

The review has been designed to ensure that it is an objective and inclusive look at all the issues that have arisen. The setting up of the review was a commitment that was undertaken by one of my predecessors in this role. Its terms of reference have been agreed, and our work is proceeding.

The UK Government knows the history of the matter; we know that concern has been expressed in Scotland that convergence money that was made available because of Scotland’s unique geography should have been allocated in a different way. As I have said, I do not want to pre-empt the review’s conclusions, and I believe that its independence is important. However, whatever its conclusions are, of course the Government will take them seriously. We know that hard work is being undertaken by every member of its panel.

You have expressed a personal desire to support hill farmers in Scotland. What does that mean in practical terms? What do you intend to do to ensure that it happens?

The first thing is that, obviously, the allocation of support for farmers across Scotland is a matter for the Scottish Government. Once we leave the EU, the Scottish Government will decide how it allocates the money that we will provide to it. As you know, agriculture funding is not subject to the Barnett formula. However, because of its particular needs, Scotland—as, for that matter, do Wales and Northern Ireland—enjoys a greater level of support for agriculture and the rural economy than strict application of the Barnett formula would allow. That is a good thing and it will not change. Therefore, the first thing to say is that we guarantee the funding, and the Scottish Government decides how to use it.

The second thing is that, south of the border, we recognise that upland farmers face particular challenges. They farm in less favoured areas and they have less capacity to increase productivity. However, they contribute not just to food production, with high-quality red meat, but to maintaining iconic landscapes and enhancing our environment in a number of ways. In addition, in terms of social ecology, parts of this country—the southern uplands and the western Highlands—depend on upland farmers. We recognise that upland farmers, livestock farmers and others who are critical to the health of our rural communities need support for the future. Fergus Ewing recognises that and, in respecting the competence of the Scottish Parliament, I will do everything that I can to work with him in order to help. I stand ready to do what is required at any stage.

Can I take it from your comments that, once we leave the EU, the UK Government will give Scotland all the funding that we presently get from the EU?

Yes—we have guaranteed to preserve funding until 2022.

Thank you very much.

You know that the EU is the largest export destination for Scotch lamb. If we come out of the EU with no deal, exporters will face a tariff of 40 to 50 per cent. We have heard some awful scare stories about there having to be mass slaughter of sheep. Based on the UK Government’s modelling, what impact will a no-deal EU exit have on the Scottish sheep sector?

You are right to point out that sheep meat is the sector of UK farming that will most immediately be affected by EU exit. The principal export destination for sheep meat from the United Kingdom is the European Union—in particular, France, although it goes to other European nations, as well.

We have developed a scheme that would, in the event of a no-deal exit, ensure that we support sheep farmers’ income. One of the models that we have in mind is payment according to the number of breeding ewes that a farmer has. We believe that that is one of the most effective models, but there might be alternative methods of providing support. On that basis, there should be no need for the measures that Maureen Watt mentioned, because the income of hill farmers—and, more generally, sheep farmers—will be protected from the initial shock that EU exit will bring to the sheep-meat sector.

Thank you for that answer. Can you be more specific about what you mean by—I think that you said this—protecting breeding ewes?

The scheme is a way of making sure that we safeguard the income of upland farmers and, more generally, sheep farmers, by providing additional support for their income. One of the ways we can do that is by providing an additional payment that is related to the number of breeding ewes that each farmer has.

There are some arguments about the different ways in which we can allocate support. The Scottish Government will be able to decide on the method of support that it thinks is appropriate for sheep farmers. I will work with the Scottish Government to demonstrate how we apply the scheme south of the border. If the Scottish Government wants to apply the scheme—or any parallel scheme—in a different way, we will look at that. As I said to Fergus Ewing, the UK Government stands ready for any specific requests for additional funding to help the Scottish Government.

11:15  

Again, one of my strong beliefs is that we should respect the competence of the Scottish Parliament and the devolution settlement. It is working very well, but I do not think that there should be any bar to the UK Government stepping in at any point and providing the Scottish Government with additional resource or help. That is one reason why we are stronger together—the UK Government’s capacity to help the Scottish Government to achieve what it wants is one of the virtues of the devolved settlement in our strong United Kingdom.

With all due respect, I do not think that what you have said will be very welcome to the sheep farmers who are listening to the meeting. Given the huge uncertainty that they face in planning their agriculture businesses, would not it be wise to give the upland farmers the £160 million convergence money that they are due?

First of all, I say that it is the UK Government that can make resource available to support upland farmers and sheep farmers more generally, and we stand ready to provide that support in any eventuality.

Secondly, if we want to avoid a no-deal exit—as you quite rightly point out, a no-deal exit would be particularly challenging for the sheep sector—voting for the Prime Minister’s deal is one of the best ways to do that: all 13 Scottish Conservative MPs voted for that deal, while other Scottish representatives in the UK Parliament did not. Were they to do so, that would provide Scottish farmers with a degree of certainty for the future.

Thirdly, the Bew review is looking at all the issues on convergence funding. As was mentioned earlier, that review is independent, and the representatives include the very excellent Jim Walker, who was the Scottish Government’s nominee.

I think that the right thing to do in order to provide farmers with certainty is to vote for the Prime Minister’s deal, recognise the strengths that the UK Exchequer can bring in supporting agriculture overall, and work with the independent Bew review so that we can give farmers—not just in Scotland, but across the UK—a fair allocation of funding in the future.

There are a few follow-up questions on the issue.

I have a couple of short supplementaries. Good morning, secretary of state. You recently stated—indeed, you have repeated it today—that the UK Government should be able to spend additional money in areas of devolved competence, such as Scottish farming, fishing and, indeed, education. You will be aware that the UK ministers do not have legal powers to interfere in devolved areas, unless the UK Parliament were to choose to amend the Scotland Act 1998. Is it your intention to undermine Scotland in that way?

I would never undermine Scotland. Throughout my political life, my commitment has been to strengthening Scotland’s position. Scotland is stronger in the United Kingdom. The Scottish Parliament and the Scottish Government were granted, by the UK Government that was led by David Cameron, additional powers, which were confirmed by Theresa May. We have done that because we believe in devolution, but we also believe in the union.

We think that it is important that where the United Kingdom Government can support the Scottish Government in discharging its responsibilities, it should do so. I absolutely respect the legislative competence and the administrative autonomy of the Scottish Government—it is a good thing. However, I also think that—I have said this to Fergus Ewing—if the Scottish Government needs support at any point, we stand ready to provide it.

You mentioned education. The education system overall in the United Kingdom benefits from the freedom of academics and students to study across the UK. One of my concerns is that, over the past few years, Scotland’s schools have been falling behind those in the rest of the United Kingdom, particularly those in England. I want to help the Scottish Government and work with John Swinney and others to see whether some of the reforms that have helped to raise standards internationally can be introduced in Scottish schools. That, of course, is a matter for the Scottish Government. However, some of the proposals that Ruth Davidson outlined just under a fortnight ago on how we can improve vocational education seem to me to provide a brighter future for Scotland’s students—not least when it comes to land-based education.

I encourage Mr Gove and Mr Finnie to stay within the remit of the committee.

Absolutely.

I will allow John Finnie one more question.

Forgive me, convener. Although I had struck out the words “and, indeed, education” from the question that I had written down, I went on to say them. We are concerned with farming and fishing here, secretary of state.

Absolutely.

I take no reassurance whatsoever from what you have said. If Scotland’s devolution settlement can be treated so lightly—that is how I view much of what you have said—how can we ensure that our interest in matters such as high agricultural and environmental standards will be respected in any future UK trade deals?

I disagree with your initial premise. I cannot see how the UK Government saying that it respects the devolution settlement and that it wants to provide additional resource and work for the Scottish Government in order to put the interests of Scotland’s citizens first undermines the devolution settlement in any way. That reinforces the devolution settlement. What undermines the devolution settlement is an argument for separation and independence for Scotland, which would mean that the powers that the Scottish Parliament currently has—

So you know better than the Scottish Government on devolved matters.

No, I—

You know better than the Scottish Parliament on devolved matters.

No, but I think that—

That is reassuring.

I have repeated to the committee what I have said to committees previously, which is that I respect the devolution settlement. One of my concerns is that the Scottish Parliament and the Scottish Government sometimes have opportunities to improve things and, although I completely respect the devolution settlement, I am not sure that all their powers are used in the right way. However, that is a matter for the Scottish Government.

I thought that it was very interesting that Jonnie Hall from NFU Scotland, for example, recently pointed out that the Scottish Government has not provided the same degree of clarity, detail and future vision that the UK Government has on farming, agriculture and the environment in England. The Scottish Government must decide what approach it believes is right, but as someone who loves Scotland and wants to see it succeed, and who wants an effective Scottish Government, I listen with interest when voices such Jonnie Hall’s are raised.

I absolutely respect the devolution settlement. The key phrase is, “Let’s make it work.” One way in which we can make it work is by no longer having a divisive debate about separation, independence, another referendum and a separate currency. Instead, the powers that the Scottish Government already has should be used—

Mr Gove, there is nothing more divisive than Brexit.

I do not want the discussion to become a political one; I want to get back to the questions.

I want to follow up on your response to a previous question from Maureen Watt about a no-deal Brexit and its implications for Scotland’s agricultural industry.

I know your position: you want a deal, and you want all your colleagues to vote for a deal to get things through. However, let us assume that that does not happen and that the alternative is a no-deal Brexit. In my view—I do not want to put words in your mouth—a no-deal Brexit would be devastating for Scotland’s agricultural industry, with, for instance, the tariffs for the sheep sector that have already been mentioned. I think that you have already accepted that. Are you doing all that you can, as the minister responsible for the UK’s agricultural industry in the UK Cabinet, to argue that whatever happens—I know what your preference is—we do not leave the European Union with no deal and have subsequent devastation of our agricultural industry? I hope that that is your position. Will you confirm that?

Even though we are in different parties, we find ourselves agreeing on a lot. I agree with you—but not quite with the language, although I understand why you used it. If we were to leave without a deal, there would be real risks and challenges for the whole UK economy; in particular for agriculture, farming and—as you and Maureen Watt have pointed out—for the more vulnerable sectors, such as upland farmers in the sheep-meat sector. We—the UK Government and the Scottish Government—can and have put in place measures to mitigate the impact of that.

One of the reasons why I strongly advocate a deal is that I recognise that, although the UK could get through the initial turbulence that no deal would cause, none of us wants that turbulence because of the impact that it would have on the people whom you represent.

With your particular responsibilities, do you not feel obliged to fight the corner in Cabinet to prevent a no-deal Brexit, whatever else happens? That is my question.

I have made the case that the best answer is a deal, and I will make that case on any platform that I am given. When I spoke at the NFU conference in Birmingham in February, I made the point that there would be real challenges with no deal.

During the course of parliamentary debate in the UK Parliament, when the Prime Minister was indisposed for health reasons and I stood in for her, I also explained some of the difficult consequences that no deal would bring about. I and my colleague—and our mutual friend—David Mundell make the same arguments.

However, one thing that I have to acknowledge is that no deal is one of a number of possible scenarios for which we have to be prepared. Although it is far from being the scenario that I prefer, it is my responsibility to make sure that we are ready for whatever is the outcome of the process.

Good morning, Mr Gove. I would like to expand the discussion on access to the labour markets, which we touched on earlier. It is quite an important issue for agriculture. Notwithstanding the issues for the fishing industry, I want to talk a little bit about the soft-fruit industry and seasonal workers in farming. I appreciate that immigration policy is a matter for your colleague in the Home Office, but I suspect that you have a strong interest in the issue.

Can you update me and the committee on how the industry is responding to the pilot scheme for migrant workers? We could probably approach the matter in two ways. One is to ensure access to labour from within the EU, and the other is to ensure access to labour from outside the EU, which will not be affected by Brexit in the same way. It would be helpful to get an update on that.

There has been an enthusiastic take-up of places on our seasonal agricultural workers pilot and, as you quite rightly point out, we have been recruiting from places just beyond the EU, such as the Ukraine and Moldova. At the moment, the pilot is smaller than some would have wanted it to be, but the enthusiastic take-up helps us to make the case for the potential expansion of the numbers who will come in through the seasonal agricultural worker scheme.

One of the arguments that is made is that, although the seasonal agricultural workers pilot for people from outside the EU is a good thing, we are still in the EU and, if the withdrawal agreement bill is passed, even though we will be out of the EU free movement will continue during the transition period, which means that workers from Romania, Bulgaria and elsewhere can still come and work in the UK.

As countries such as Romania and Bulgaria become wealthier, of course, more individuals who have worked in the UK might want to work in their home country. Also, as the value of sterling in the immediate aftermath of the referendum fell a wee bit—which was a help to exporters—the earnings of some of those workers diminished in relative terms. That also had an impact.

We need to keep all these things in balance. I think that we need to take an open approach and that the soft-fruit sector, which is so important in Angus and Perthshire, needs to make sure that it has access to all the labour it needs.

Thank you for that detailed response. It is fair to say that the needs of soft-fruit growers in Angus are not dissimilar to the needs of those in Ashford, so the issue is UK-wide.

I agree.

You touched on the numbers there. Industry is saying to us that the number of seasonal workers that it needs to pick the fruit is somewhere in the region of the tens of thousands. Is there scope for the pilot scheme to be expanded?

There have also been one or two pieces of anecdotal evidence of delays in processing the visas for some workers. I hope that you might be able to take that up with the Home Office so that we can see the timely processing of visas and get people on the ground doing the job that we need them to do.

I certainly will, and thank you for bringing that to my attention.

I am open minded about how the scheme might develop in future. One of the reasons why we were able to get the scheme in place so quickly was because of the advocacy of Kirstene Hair, who did a brilliant job in making sure that the Home Office appreciated the vital importance of having a pilot scheme. I hope to see Kirstene Hair and visit Angus later this week. We will keep the evidence on the ground and what might be required in the future under review.

I add my commendation of the work of my colleague Kirstene and that of any MP who is working on behalf of constituents across the UK on the matter.

What are your thoughts on how we could grow a local workforce for seasonal agricultural work? I appreciate that, traditionally, we have relied on people from the parts of the EU that you mentioned, but there has been a change of course and we are now looking beyond Europe’s borders for seasonal workers. Are there roles for both Scotland’s Governments to play in trying to encourage people who already live and work here to take up that work as a potential career, or to look at it as a potential employment opportunity? What can we do to help to grow that workforce?

11:30  

You are absolutely right; we need to consider how we can make agriculture overall an even more attractive profession. I want to work with Scotland’s Rural College and others to make sure that attractive career paths are open to people who want to work on the land and in agriculture. Some of the work that organisations such as the James Hutton Institute are doing is scientifically exciting, and it also holds open the prospect of growers being able to produce soft fruit, salad vegetables and other fresh produce in exciting new ways.

As technology advances, the opportunity for enterprising and innovative Scots to make a career in agriculture and in growing increases, so it is important that both Governments work together to support those who are at the cutting edge of innovation and to take account of the specific concerns of people who are already making a success of producing some of the highest-quality produce in the world.

Thank you.

We will move on to the next question. I am conscious that I need to get all committee members in, so short questions and answers would be good.

Other members will ask about international trade and geographical indications, but I will ask a narrow question that relates to the US trade report and negotiating position for a trade deal. In particular, the US wants to bring in whisky that has not been held in bond for three years. We do that under the Immature Spirits (Restriction) Act 1915, which my father’s cousin was responsible for in Asquith’s Government.

There are also issues around food hygiene and the use of hormones, which from our perspective relate to public health concerns. We know that the US is 27th in the world when it comes to perinatal deaths, that it leads in opioid addiction and that obesity is a huge problem. Therefore, it is not a leader on those issues. In any negotiations, we would strongly resist the imposition of the ideas that it is putting forward, and we would make sure that the jurisdictions across the UK were involved in setting the terms of any debate on the subject.

It is fair to say that the US’s initial ask in the trade negotiations is probably designed more to appeal to aspects of the domestic audience in America than to work for us.

That is fine, thank you.

I also sit on the Parliament’s Culture, Tourism, Europe and External Affairs Committee, which has been doing a lot of work on the role of the devolved Administrations in future negotiations and trade deals, both bilateral and otherwise.

Agriculture and fisheries are pertinent issues when we negotiate trade deals with countries such as New Zealand and the US. What role could and should the devolved Administrations play in the process? Should they be at the table before the negotiations begin, talking about the needs and wants of the various constituent parts of the UK to ensure that those needs are reflected in the UK Government’s negotiating position when it enters into conversations with the other side?

That is critical, and your approach is absolutely the right one. We want to make sure that the negotiating mandate that we have in those trade negotiations is as widely understood as possible, that we involve people from across the United Kingdom and that we take advantage of the expertise and commitment of the devolved Administrations. It is the UK Government that has to be in the room to take part in the negotiations because they will relate to an international treaty, but it is absolutely critical that we make sure that any trade agreement works for all parts of the United Kingdom.

Thank you for that answer.

I appreciate that environments such as the joint ministerial committees are designed to facilitate those conversations. Are there any other practical measures that the Governments could participate in, perhaps to get over any disagreements on strategy or to formalise a process that meets the various needs of each of the Governments? The Welsh Government may have a view on a certain strategy, the Scottish Government may have another and you might be going in a different direction. How do you square that circle to ensure that there is a strong, unified single voice negotiating before you go into the room?

We do everything that we can to make sure that every sector that has particular interests is effectively represented. Recently, representatives of Plaid Cymru raised the particular impact of our relationship with South Korea and the trade terms for whelk exports. It is critical for parts of Wales that we maintain good access, and we are determined to take account of that.

With respect to Scotland, two of the UK’s most important exports are salmon and whisky, and we want to make sure that the high standards that we maintain are in no way undermined. Of course, I am happy to meet not just representatives of the Scottish Government, who have a critical role to play, but other members of the Scottish Parliament and representatives of individual sectors. For example, the Royal Highland Show at Ingliston is an opportunity for me to hear directly from people in aquaculture and agriculture what their particular concerns—and hopes—might be around future trade arrangements, and to incorporate that into the UK Government’s approach.

Thank you. I look forward to seeing you at the show.

I turn to the issue of geographical indications and access to markets. GIs are clearly important to products such as Scotch whisky, which you mentioned. How will the UK’s GIs be treated in the EU market in the event of a no-deal Brexit at the end of October?

It will be the case that, under EU law, the EU will continue to respect our geographical indications.

In going forward and negotiating any trade deals, would continued protection of UK GIs in the EU market be a red line for negotiations with the EU? Would continued protection be a red line in negotiations with the United States on any trade deal?

We are absolutely committed to making sure that the benefits of geographical indications continue to be available to producers across the United Kingdom.

Which do you think would be the best for Scottish produce such as Scotch whisky, in terms of access to markets: a no-deal Brexit or a deal that includes a permanent customs union?

One of the interesting things about whisky is that it does not have tariff barriers, but I would say—I suppose that you would expect me to say this—that the best deal is the one that the Prime Minister has negotiated, which manages to ensure that we have tariff and quota-free access for goods and agrifoods while, at the same time, having an independent trade policy when it comes to services.

Gail Ross wants to ask a follow-up question.

I do. I commend my colleagues Deidre Brock and Emma Harper for all the hard work that they have done on protected geographical indication status.

Mr Gove, the UK Government stated that, in the event of a no-deal Brexit, existing holders of protected status should prepare to reapply to the EU for protection and the use of the EU logo. Is that still the case? If so, will it involve a cost? If it will, who is going to pay for that?

The UK Government stands ready to make sure that we take into account all additional unnecessary costs that business bears.

Sorry, but what is the difference between an unnecessary cost and a necessary one?

Again, we will look pragmatically at each of the individual challenges that business has to bear. As I mentioned earlier, we are seeking to do everything that we can to avoid a no-deal exit, but we are also capable of making sure that the impacts of a no-deal exit in particular sectors and for particular producers are mitigated.

We have heard about the bill being picked up for health certificates in the fish sector and compensation being given to the sheep sector, and now there is money for protected status. Do we have a final cost for all of that?

If we leave the European Union, we will no longer pay into the European Union, which would result in a net benefit equivalent to at least £10 billion a year.

My question is on our preparedness for EU exit in relation to borders. The National Audit Office published a report in October 2018. I realise that, at that point, it expected that March 2019 would be the exit date, so things might have changed since then, but its report says:

“Defra has done well in very difficult circumstances ... What really matters now though is that Defra accelerates its medium-term planning for the Withdrawal Agreement while finalising its contingency plans.”

Can you give us an update on where we are with borders and border controls?

Yes. Thank you very much for your very fair summary of the National Audit Office report. The report thanked officials from the Department for Environment, Food and Rural Affairs for their hard work, but it acknowledged that there was much more work to do. The report was very helpful in marking our homework and telling us where we needed to work harder, which we have done.

If we had left the EU on 29 March, we would have had in place the information technology systems and the other organisational preparations. As I mentioned earlier, there would, of course, have been some turbulence and bumps on the road. Indeed, if we leave on 31 October without a deal, there will be some turbulence and bumps on the road. However, we are confident that DEFRA and other Government departments are taking the appropriate steps to mitigate the risks.

The report said that some of the controls at the border would be “less than optimal”, which sends up at least some amber, if not red, lights. Given that we have been in the EU, is the suggestion that we would carry on in a more relaxed way after we leave, before things gradually tightened up? If that is the case, do we expect EU countries to be equally relaxed about our exports to them?

That is a very big and important question. The UK Government’s approach is that there should be continuity wherever possible. If a no-deal exit were to occur, we do not expect that, the next day, France, Germany or Austria would suddenly lower their animal welfare or environmental standards when exporting to the UK. We can have confidence that we could continue to allow exports from EU countries into this country without the need for the same level of checks that we might apply to non-EU countries.

The EU has said that, in the event of a no-deal exit, it would insist on not only the common external tariff but a battery of other checks, including sanitary and phytosanitary checks, being applied to UK exports, which would mean that UK exports would need to go through a border inspection post. It is within the EU’s power to apply such rules with a greater or lesser degree of flexibility. That is one of the known unknowns—as someone once said—about a no-deal exit. For example, to what extent would the French Government prioritise speed of flow over the most comprehensive checking that is possible? There were lots of signals from people in the French Government that it would prioritise speed of flow, but we had to take into account that not everything might have been in place to guarantee that.

If we allowed food from France and other EU countries, which would probably be of a perfectly high standard, to come into our country, that food would be able to compete with Scottish products and those from the rest of the UK. However, if our products were delayed at the border—and some would not survive more than a few days—I presume that Scottish farmers would fear that they would not be able to compete in European countries.

That is a concern. However, in relation to fair competition, we published an indicative schedule of the tariffs that we would apply in the event of a no-deal exit, in order to ensure appropriate protection for UK agriculture while balancing the need for price stability for the consumer. French consumers, for example, would have an interest in ensuring that the shellfish that they enjoy, which is provided in abundance from Scotland and Cornwall, get into French restaurants as quickly as possible. Therefore, across Europe, there would be a strong commercial incentive to ensure the unimpeded supply of produce that people could not replicate from any other source.

11:45  

The final question is from Peter Chapman.

Mr Gove, you recently published a tariff schedule for use in the event of a no-deal exit that, in my opinion, showed a great lack of fairness, given that the tariffs on our food exports to the EU are generally much higher than the tariffs that you are proposing to level on imports. That would have a catastrophic effect on our farming industry. Surely there should be parity of tariffs for exports and imports for the system to be fair? Will you reconsider that approach?

Our approach to tariffs was designed to protect the most vulnerable sectors in agriculture and, at the same time, safeguard prices for consumers. We discussed the particular vulnerability of the sheep meat sector earlier, and some of the most vulnerable sectors would have exactly the same protection outside the EU as they have inside the EU. Other red meat sectors, such as beef, will also enjoy appropriate protection.

We also believe that it is right to have an overall approach to tariffs that leads to a greater degree of liberalisation. If you compare the agriculture sector with other sectors in our economy, you will see that our approach in a no-deal scenario would be to protect agriculture much more energetically and vigorously than any other sector, for the reasons that we know well.

I do not accept that. The levels of protection for sheep meat are similar, but the tariff rates for imports are much less for everything else than the tariffs for our farmers’ exports. How can that be fair? It would help to keep food prices down, but it would do nothing to give the agriculture industry any kind of secure future.

There are other ways in which we can support the agriculture sector. There are ways to make sure that farmers in some of the more exposed sectors are helped through the initial challenges, and there are ways in which we can invest in improved agricultural productivity overall.

You and I agree that we must deliver Brexit—that is what folk across the United Kingdom voted for. A no-deal Brexit would cause particular challenges and, in that context, we need to work together across the United Kingdom to make sure that UK farmers and food producers are protected. One of the best ways of doing that is to make sure that the shared muscle of all the countries of the United Kingdom working together helps us through whatever challenges we face.

Unfortunately we have come to the end of our time. Mr Gove, I thank you for all the evidence that you have given the committee.

I suspend the meeting to allow the cabinet secretary and his officials to arrive for the next item.

11:47 Meeting suspended.  

11:52 On resuming—