Rural Economy and Connectivity Committee

Meeting date: Wednesday, April 19, 2017

Official Report 584KB pdf

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Implications of European Union Referendum (Agriculture, Forestry and Fisheries)

We will now take evidence on the implications for Scotland of the outcome of the European Union referendum in relation to agriculture, forestry and fisheries. Before I welcome the panel, would any committee member like to declare any interests relating to agriculture or forestry?

I declare an interest in an agricultural business in the north-east. I refer members to my entry in the register of members’ interests.

I have a very small registered agricultural holding, from which I derive no income.

I declare that I am a partner in a farming business, the full details of which can be found in my entry in the register of interests.

I welcome Fergus Ewing, the Cabinet Secretary for Rural Economy and Connectivity, and Michael Russell, the Minister for UK Negotiations on Scotland’s Place in Europe. The ministers are joined by David Barnes, deputy director in the agriculture and environment EU hub, Allan Gibb, head of the sea fisheries division, and Jonathan Taylor, head of secretariat and communications at the Forestry Commission.

Mike Russell, I believe that you are going to start with an opening statement. I ask you to keep your statement within two minutes, or as close as possible.

That is the second warning that I have had from you, convener. I shall pay attention to it.

Thank you for the invitation. We are both grateful to have the opportunity to discuss the United Kingdom’s departure from the EU in relation specifically to agriculture, forestry and fisheries. We have followed the committee’s work on the impacts of Brexit but, of course, events are moving very fast—you do not require me to tell you that on a day such as today. As a result, I think that most of the information will come to you in questioning, but, if I may, I will make two points.

First, this is a crucial time. Scotland did not vote to leave the EU but, recognising that the rest of the UK voted differently, the Scottish Government put forward compromise proposals in the document “Scotland’s Place in Europe”, with which I am sure members are familiar. Those proposals were genuine compromises, which were designed to square the circle by addressing Scotland’s interests, in particular our interest in remaining in the single market, while enabling the UK Government to respect the referendum result elsewhere in the UK.

Last month, unfortunately, the UK Government rejected that compromise position, whilst the Scottish Parliament voted in favour of the First Minister’s proposal that the people of Scotland be given a choice about their future. That means that the Scottish Government is working to deliver the right to choose that the Parliament approved, but at the same time must continue—as the First Minister has said—to stand up for Scotland’s interests during the process of the Brexit negotiations. The interests that this committee represents are, of course, very significant in terms of the devolved settlement, European competence and their impact on Scotland.

I am happy to talk in more detail about all those issues during questions.

Thank you.

Fergus, would you like to make an opening statement?

Yes, thank you, convener. Good morning, everybody.

The Scottish Government has made clear what we see as the key issues in the event of Brexit, and I welcome the opportunity to run over in a bit of detail what those are. First, common agricultural policy funding is a hugely significant issue. Between 2014 and 2020, Scotland will receive €4.6 billion, or about £400 million per annum, from the EU across the two pillars of the CAP. That is hugely important to rural Scotland. Although the UK has given some limited assurance, which is welcome as far as it goes, it does not really apply post-Brexit at all. There are questions about funding but no answers, and that is despite active engagement by me and Ms Cunningham on these matters.

On trade, we have made it clear that single-market access is absolutely essential for agriculture, food and aquaculture. Seafood is far more important for Scotland than it is for the rest of the UK, even though farmed salmon is the UK’s second—and, on occasion, top—food export, yet the UK Government will not share with us its list of priority countries for trade agreements. Our salmon industry has made clear the importance of the single market—along with the free movement of goods and of people—for the future of its business and has highlighted non-tariff barriers as an area of significant concern. About 8,000 people who are employed in the food and drink sector are non-UK EU nationals and our soft fruit and vegetable sectors employ up to 15,000 non-UK seasonal workers each year for harvest in summer and autumn. No one knows with certainty what the future position of those absolutely essential workers will be—again, there are questions but no answers.

Finally, on the repatriation of powers, fishing and agriculture are devolved and our position is that all those powers should come to this Parliament. That has been pursued by me, Michael Russell and Roseanna Cunningham, and questions have been put but, again, there have been no answers. I am persevering with the process of meetings and will be in London tomorrow unless the meeting is unilaterally cancelled by the UK Government, as it has been in the past. On behalf of the Scottish Government, I will seek to ensure that we have the answers as well as the questions, and we will take it from there.

Thank you. We would like to explore 12 themes during today’s meeting, and Stewart Stevenson will introduce the first.

I want to talk about relationships with other Administrations in these islands and in the United Kingdom on the common cause of getting the best outcome, in particular where agriculture is concerned. The Cabinet Secretary for Rural Economy and Connectivity referred to knowing the level of financial support up to 2020, but not post-Brexit. Given the history in respect of such matters as convergence payments, which have not been distributed on the basis of agricultural need, are there any specific areas of common cause to ensure that agriculture—which is disproportionately important in Scotland, compared with in the rest of the UK—will continue to get the right proportion of the support? Is that something that is being worked on with Wales and Northern Ireland—and the dependencies, for that matter—or with other interests in England that are affected by poor decisions that could be made in that area? How is that going?

That is a long question—I know that the convener is hoping for comparatively short answers, and probably for shorter questions.

We have sought to engage constructively with the UK, and so have our counterparts in Wales and Northern Ireland. There is a group that has met twice, on 8 November last year and on 23 February this year. The Secretary of State for Environment, Food and Rural Affairs cancelled a meeting scheduled for 26 January 2017, against the wishes of the devolved ministers. We have pursued those meetings positively and constructively, but there has simply been no information whatsoever on anything. That is unfortunate, but it is the reality.

Stewart Stevenson’s second question was about convergence, and perhaps I should give a brief explanation. The European Union provided a fund to assist with convergence—a moving together of the real rates of return for farmers across the EU. The UK qualified for that money only because of Scotland. If it had not been for Scotland, the UK would have received zero. Instead, because the rate per hectare in Scotland is way below the EU average, the UK was entitled to convergence funding. That funding was in the region of £190 million and my predecessor argued that, because the money came to the UK because of Scotland, and only because of Scotland, it should be received for the benefit of farmers in Scotland, who receive a far lower rate of return per hectare than our friends down south or in other parts of the UK do. Sadly, that is not what happened.

This Parliament has debated the matter before, in the previous session of Parliament, when my predecessor sought and obtained an agreement from the UK Government to carry out a review. Although Owen Paterson, the previous Secretary of State for Environment, Food and Rural Affairs, agreed to a review, it has not been carried out. It is a pledge that—without being political about it—simply has not yet been fulfilled. When I became Cabinet Secretary for Rural Economy and Connectivity, I pursued the matter by seeking a discussion with my counterpart, Andrea Leadsom. I had a meeting with her in this very room last autumn, when she undertook to look at the issue and revert to us thereon. We are waiting for a substantive response.

The matter is hugely important, because it involves £190 million of money that should have come to Scotland. It is not an EU issue; it is between Scotland and the UK. I hope that all members of this Parliament will agree that Scotland’s farmers should receive the benefit of that funding, which was specifically designed to tackle the lowest average rate of return per hectare in the EU—that is what the money was for and what it should be used for. It has not been used for that purpose and, believe me, the matter will be pursued over the coming weeks.

My other question is quite brief and will probably generate quite a brief answer. Given that, as the convergence issue illustrates, Scotland gets far greater than its population share of support for agriculture, is there an opportunity for common cause with the other jurisdictions, to ensure that our share of support for agriculture is broadly preserved, or are there indicators that that clear message is neither being heard nor being responded to?

10:15  

I am an optimist by nature and therefore I am working positively to procure what Andrea Leadsom promised—namely, a sensible, reasoned discussion and then, perhaps, a solution. That is what I want; I am interested in practical results. This is a good opportunity to report to Parliament on what I have been doing, and I hope that all members will support our efforts in that regard.

We also work closely with our colleagues in Wales and Northern Ireland. Scotland’s per hectare rate was only 45 per cent of the EU average. The rates for England, Wales and Northern Ireland were all above the 90 per cent threshold set by the Commission. The EU said that all countries receiving less than 90 per cent of the EU average should close the gap by one third by 2019. That is the purpose of the convergence fund. I have the details here and I undertake to write to the committee with the full facts. I will not labour the argument by going over them now, but on the face of it, the case is crystal clear. It concerns money coming to Scotland in respect of which the UK Government promised something but has not delivered yet. People should deliver on their promises in government.

We will take you up on your offer, but we will leave the matter there. Mike Russell signalled that he wanted to come in on that question, so I will take him now. On a matter of etiquette, if you both look at me, I will indicate who should answer.

I wanted to address the point that Stewart Stevenson raised about working together on agricultural issues. Although the JMC(EN) has not had the opportunity to discuss agricultural issues in detail, largely because there has not been an opportunity to resolve how the agricultural frameworks might be devolved—that has begun to emerge only now through the UK Government’s white paper—we have identified with Wales and with part of the previous Northern Ireland Executive common interest in agricultural issues being a major matter that will require to be discussed during the negotiations in JMC(EN). Sorry, I should have said that that is the JMC (EU negotiations). The joint ministerial committee has been deeply unsatisfactory, but members from the devolved Administrations have made common cause on a range of issues in agriculture, fisheries and forestry, and a number of other areas have been identified as key for the next phase—the post-article 50 phase.

We will move on to the next theme.

Looking to what we might have in the future, I wonder what work has been carried out to assess the impact in relation to the common agricultural policy, whether positive or negative?

We use a number of different methods to assess the impact of CAP, which provides a number of forms of payment. Particularly important for Scotland is the support that it provides for sheep and beef farming through the less favoured area support scheme and various other schemes.

It is important to evaluate the success of our policies and we regularly use independent experts to do that. We have also established the Russel Griggs group to look at how we can support profitable farming while meeting our environmental commitments. We are all aware that farmers’ primary role is to produce food for the nation, and food security is moving up the agenda. It is also fair to say that farmers and crofters are the custodians of the countryside. If we did not have hill farming, what would the land look like? I am sure that Rhoda Grant and other members of the committee will be well aware of the huge role that farmers play as custodians of the environment. Perhaps we do not pay sufficient heed to that and need to evaluate it a bit more.

There are a number of other methods of assessing impact, such as auditing of independent assessment. I hope that the answer that I have given is sufficient, so I will leave it there.

At this stage, does any of that work indicate what you would want to carry forward into a Scottish support programme or whether there are parts of CAP that you would not want to include?

We believe very strongly that we need to continue to provide support for the high-quality farming for food that operates in Scotland. We are a high-quality food producer and we will remain so—we will not compete on lowest cost and lowest quality, nor should we. Therefore, whatever the future may hold, it is important that we continue to provide support for high-quality farming in Scotland, which includes beef, sheep, poultry, pig, soft fruit and potatoes, across the realm. We need to recognise that that needs to be supported to a greater or lesser extent. The particular areas that need support are sheep and beef farming—hill farming.

On a point of information, members will know that we have announced a decision to proceed with the 80 per cent LFASS parachute option for next year. We have also raised with the UK Government the fact that we will seek support for 2019 in order to maintain LFASS, because that will be post-Brexit, if it goes ahead. LFASS is essential for Scotland; we cannot do without it. We have been asking Ms Leadsom in particular for her support in recognising that we must maintain hill farming in Scotland, and without LFASS we cannot do that. I have asked for clarification that the UK Government accepts that, in principle. Tomorrow, I am attending a meeting at which Ms Leadsom may appear; if so, I hope that she will answer in the affirmative.

Peter Chapman wants to follow up. I will bring him in now and then come back to Rhoda Grant.

Cabinet secretary, you have made much of the difficulty in the negotiations between this Parliament and Westminster, but I would like to hear what you have done in the Parliament in Edinburgh to address the issues. We have had 10 months since the decision to come out of Europe, and I would like to think that much work has been done here to find a way forward. We all recognise that there are difficulties ahead, but there are also opportunities. One of the main opportunities is to design a system that is more suited to Scottish agriculture than what we have had to live with in the past with the CAP. I have heard nothing about what has been done here to try to address the issues going forward.

That is not correct. Numerous things have been done by me and my predecessor. For example, in June last year, or thereabouts, we produced the vision document that set out the future of Scottish farming. We have also appointed four champions—Henry Graham, Archie Gibson, Marion MacCormick and John Kinnaird—who are working very hard in the important areas of education, food and drink, public value and sustainability. We have appointed the Russel Griggs group to look forward and identify ways in which we can have sustainable and profitable farming while respecting the environment.

Let me go back to the initial premise of the question. Mr Chapman said that I have made much of the negotiations with Westminster, but there have not actually been any negotiations. Negotiation involves a discussion—it starts with an offer followed by a counter-proposal, a dialogue and a commercial agreement. I spent a lot of my life in business doing that. There has been no negotiation, because the UK Government has not been willing to enter into any negotiations on convergence. I do not actually—

Mr Ewing—

With respect, convener, I will just finish on this point—

No. I am sorry, but my understanding of the question—certainly of Rhoda Grant’s question—is that you were asked about what areas of the current system you would like to keep and take forward in the future for agriculture. That is what farmers and this committee are looking for you to answer. Rather than making a critique of Westminster, can you identify areas that we should be looking at as the future for farming post-2020, as far as subsidies are concerned?

Mr Chapman asked what work we are doing, and I have just described some of that work. There is the vision document, which I will share with you if you have not seen it, although it is in the public domain.

We have also appointed four champions who are looking specifically at key areas. Those four champions are highly respected leaders and experts in rural life. It is very important to use the experience and the willing assistance and aid of experts outwith the Parliament. That is why we chose Henry Graham, the national chair of Lantra Scotland; Archie Gibson, the chair of the Scottish Food and Drink Federation; Marion MacCormick, the buying director of Aldi; and John Kinnaird, the former president of the NFU Scotland and chair of the Royal Scottish Agricultural Benevolent Institution. What better way to shape future ideas, thinking and policy than to engage and involve the farming community and leading rural representatives? That is what we are doing.

We have also held various events. I have held various summits on rural life: two on forestry, one on shellfish, one on procurement, one on farming and food, and one on food and drink. We have heard from discussion groups—as Roseanna Cunningham has, too—involving non-governmental organisations and representatives of the farming and rural communities. Therefore, we have been involved in a huge amount of work.

On a matter that I expect Mr Rumbles to raise, we have agreed with Parliament that we should form a group of experts, and we are close to coming to a decision on that over the next few weeks.

I make a final point. If you are running a business, as both you and I have done, convener, you need a budget. If you do not have a budget, you cannot run a business and you cannot make a plan. As I intimated in my opening remarks, there are questions, but no answers from the UK Government, about funding, which is reserved to the UK Government. It is not currently possible for us to come up with a detailed plan about what might replace the CAP and the pillar 1 and pillar 2 funding. I hope that that is a fairly obvious, sensible point that everyone will accept.

Thank you for that. I appreciate your pointing out that I know the importance of a budget. I also appreciate the importance of cash flow being on time.

I think that Mike Rumbles wishes to develop the theme of the future of agricultural policy.

The Cabinet Secretary for Rural Economy and Connectivity is absolutely correct. Back in January, in a debate in the chamber, the cabinet secretary accepted an amendment that called for the establishment of a review group to develop options for agricultural support beyond 2020. The post-2020 period is what the committee is particularly interested in. What is the Scottish Government’s policy agenda for that? Does it have a free hand to develop a bespoke policy for Scotland?

In a written answer to me on 29 March, the cabinet secretary said:

“The Scottish Government is currently working up proposals for an external group to provide advice on future agricultural support”.—[Written Answers, 29 March 2017; S5W-08043.]

That group is to fit in with the expertise from Archie Gibson, Henry Graham, John Kinnaird and Marion MacCormick that the cabinet secretary just mentioned.

I entirely understand the point that the cabinet secretary is making about which comes first—the budget or the policy development that we want for Scotland. This is what I am trying to say, although I do not know how the cabinet secretary wants to deal with this point. Let us park the money to one side for the moment, because, as he has said, we just do not know what is going to happen with that, and focus on what his priorities are for developing a bespoke agricultural policy for Scotland. He spoke about a decision being made in, hopefully, a few weeks’ time. Is he working to get the group of experts together? How is that coming along? I am asking about the policy agenda for the future, rather than the money.

That is a very fair question, and Mr Rumbles is right in his formulation. There are three broad groups that I feel could play an important part. I have mentioned the champions, and I have mentioned the Russel Griggs group, which will play an extremely important role. The third grouping is a group of experts on farming and the rural economy, which we require to provide us with advice.

It is actually easy to enunciate a set of principles around which I hope we can all agree. In particular, Scottish agriculture is more heavily reliant—by 100 per cent, I think—on the CAP than the rest of the UK. In other words, the CAP is twice as important here, to put it simply, than it is for the UK, pro rata. That funding is hugely important. About 16 per cent of CAP funding comes to Scotland, but a Barnettised formula would give us 8 or 9 per cent. There are high stakes here. The funding is something that we cannot overlook. We could park the car, but we need the car to get to the office.

10:30  

To address the rest of the question, we need support schemes for hill farming and the livestock sector, specifically beef and sheep production. I am proud of our high-quality beef and lamb, and our farmers do a terrific job in producing high-quality products. Quality Meat Scotland does a great job in marketing, but there needs to be financial support for that to continue, otherwise imports with no tariff barriers from New Zealand or Argentina will simply swamp the market and potentially render our products uncompetitive. We therefore cannot ignore the importance of access to markets, including the single market, and the potential of tariffs, which could have very serious consequences for all our food products.

We also recognise that CAP funding is vital for the Scottish forestry sector, especially the grants for new woodland creation. The funding is vital for woodland management and research, which is an area on which we work closely with the UK. The CAP is also the primary vehicle for agri-environment schemes, and a replacement for that would be essential in the event of Brexit.

We are working hard on those issues and have more work to do. Within the CAP, we have been seeking a better deal for new entrants, given that the average age of farmers is just south of 60, which is not a very good statistic. There are therefore lots of policy objectives and imperatives that I hope we can all agree should be part of a new policy. Formulating precise policy requires more detail on money, markets and labour but, sadly, we do not have that detail at the moment.

My final point is an important one. I entirely agree with Commissioner Hogan that the current CAP has a payment scheme that, sadly, often results in very serious consequences for farmers and crofters due to relatively minor and inadvertent clerical or other errors in the completion of the forms. Many of us who have been around the Parliament for a long time have dealt with tragic cases, often involving elderly farmers who have made a simple mistake on a form. A clerical error can result in loss of income—sometimes a whole year’s income. I am sure that the convener knows that Commissioner Hogan is working on reforming that process, which is good. However, if Brexit goes ahead and a new policy is required, I certainly recommend that we have a regime that treats people fairly and does not punish them for clerical mistakes.

I will bring in Mike Russell, then I will come back to Mike Rumbles, Peter Chapman and Rhoda Grant.

I want to make a point about the context of all this. Fergus Ewing is absolutely right to say that the development of the policy will be undertaken by him and the people who work with him. However, the negotiation is far distant from that, and it is important that people realise that. There are four possible outcomes. One is the continuation of devolved policy making, as exists now, building to a fully independent policy. Another is a transition process that could be of any length of time. Another possible outcome is the development of a UK framework, as anticipated in the white paper and in the Prime Minister’s Mansion house speech. However, we do not know whether the preference would be for a framework in which the decisions would be made by the United Kingdom or for one where there would be an element of co-decision, as with Europe at the moment. In addition—this is like playing three-dimensional chess inside a Rubik’s cube—we then have the issues of freedom of movement and whether there will be a continuing flow of labour, and whether we would leave the EU for World Trade Organization terms, which would be very harmful to agriculture.

It is possible to have a blue-sky vision of a policy, but the ways in which it is likely to be constrained are many and varied. The UK Government has not yet brought to the table a single proposal that outlines that. Indeed, from the discussions that we have had, it seems unlikely that that will be part of the discussion in this calendar year, given the nature of the negotiations that were about to start but which will now be delayed by at least another month to six weeks.

I found your response particularly helpful, Mr Russell, but what I am trying to get at is this: we are assuming—perhaps you will correct me if I am wrong—that the Government’s preferred option would be to maintain the UK farm support that we get at 17 per cent, and if that is the preferred option we should have a plan for the best bespoke system for Scotland. I assume that that is what the Scottish Government wants, but I have not heard that it is. It would be helpful if the committee heard the Government say that that is its preferred scheme.

May I make a point about that? I do not think that I or the cabinet secretary have any great differences with what you are saying, but the constraints around that preferred scheme are great. Fergus Ewing outlined the principles, which are important, and talked about some of the people who are playing a role in that regard. However, the moment that we introduce the issue of freedom of movement, for example, we introduce an enormous issue that will greatly influence some of the other issues.

Money is also crucial. Were the 17 per cent share in your gift, Mr Rumbles—you accept that it is not—it would be a good start, but of course there is no such commitment, and the history of negotiation in relation to money for devolved powers has always been one of the Treasury trying to deliver less than the policy costs. That has been the experience; it is the experience with social security at the moment—

I am not trying to be critical, but would it not be better to take a proactive approach, rather than a reactive one?

I think that the cabinet secretary has indicated that proactive approach. I am simply being boringly pedantic in saying that there is a huge range of qualifications that must be borne in mind.

Before I bring in Fergus Ewing, I want to bring in Peter Chapman, because I think that his question is linked to Mike Rumbles’s question. The cabinet secretary might answer both questions.

I understand the constraints and that negotiations have to take place. However, that does not prevent the two ministers who are sitting in front of us today from conveying to us what they would like Scottish agriculture to look like in future. I am hearing no vision for the future of Scottish agriculture—

Yes, you are. Mr Ewing—

No, I am not hearing a vision. You have told me what is going on behind the scenes, but surely you can illustrate some of the pluses that could come from the Brexit negotiations, rather than telling us all the negative stuff. That is all that we have heard. It has all been negative, negative, negative. There are opportunities here. Let us hear what they are.

May I make a point about the positives?

I will let you make your point briefly, but I think that Fergus Ewing should come in afterwards.

I would be happy to hear about the positives from Mr Chapman or anyone else. I am open to that, but I have to say that my inbox is not full of messages from people about positives, because every time someone comes forward with a positive it is possible to show that, far from being a positive, it turns out to be a poisoned chalice. If Mr Chapman has positives, I am happy to hear them.

Does Fergus Ewing want to respond to both questions?

I will certainly try to do so. First, on Mr Chapman’s point—I do not think that it was a question—I think that I have set out that I passionately believe that Scottish farming produces high-quality food and that our farmers and crofters have shaped and sculpted the landscape for generations. That allows us, as a country, to be attractive to visitors and to have some of the most beautiful scenery in the world. It has not happened by accident; it is because of the work that farmers and crofters do.

That is, I think, a vision that I have—to use our natural assets to their best advantage, protecting the crown jewels and having a thriving and vibrant rural economy. That is a vision—it is to me, at any rate; it is for others to judge whether it is a vision that Scotland should follow.

On Mr Rumbles’s point, I take the view that if the UK Government were to confirm that the funding that has come to Scotland, which I outlined in my opening remarks when I talked about the €4.6 billion over the period from 2014 to 2020, were to be matched and replicated for a further period of, say, five years, that would allow us to do some serious planning and discussion. In other words, my challenge and request to the UK Government, and my ask of it tomorrow, will be this: “Please confirm that you will at least match the funding from Europe.”

After all, that is what Andrea Leadsom and George Eustice said, prior to the Brexit vote. I have respect for the work that Mr Eustice has done in some areas, and I get on with him perfectly well on a personal basis—as I do with Ms Leadsom. He said that the funding would be at least matched

“Without a shadow of a doubt.”

All that I am asking is that after Brexit the UK Government does what it promised to do before the Brexit vote.

I am sure that the UK Government will hear your message loud and clear tomorrow. It is probably listening to the committee. Rhoda Grant will come in on that.

There are two issues, both of which are to do with negotiations with the UK Government. However, we are keen to see what the Scottish Government is doing, and you have outlined some of that.

Expert and specialist groups are being set up. We all know that farming and crofting involve very small businesses that are run by people who do not engage with conferences and the like. How is the Scottish Government reaching out to them to learn what they require from a scheme?

Across the portfolios, we reach out in a number of ways to small business. The small business bonus provides the most generous rates relief in the UK; more than 100,000 businesses receive it and pay low or no business rates. Having run a small business, I know that such financial assistance is probably the most concrete and advantageous measure to assist small businesses in the UK.

Specifically on the rural economy, we have not touched on the digital process. Although under head C of schedule 5 to the Scotland Act 1998 digital is, plainly, a reserved function, we could not hang around waiting for the UK Government to invest, so we came up with our two contracts that are worth £400 million, in order to invest in broadband to help small businesses—

I do not mean to be difficult, but there are a lot of themes that we want to develop, and broadband was not specifically referenced. People realise that the Government has made a commitment to broadband, and I am sure that they are appreciative when it is delivered. I ask you to stick to the specific question. I know that your colleague Mike Russell wants to come in on the back of what you are saying. Please tighten your answer, then I will come to Mike.

The question was quite an omnibus question: what can we do to help small business in rural Scotland? I can tell you that I get emails about this almost every day, so—

I apologise; obviously I have not been clear. I am saying that farmers and crofters are small businesses, and they do not engage in conferences, expert working groups and the like. How are you reaching out to crofters and farmers, especially in the small hill farms, to involve them in formulating the policy for intervention?

We are doing that in a variety of ways. We are working with MPs and MSPs who are reaching out to the farmers and crofters and then engaging with me—I met Finlay Carson yesterday about a fishing interest, for example. We work, to some extent, as a team.

Let me give you specific examples of how I have reached out to small croft and farm businesses. In recent days, I attended, in Applecross, the Scottish Crofting Federation’s annual conference—as did Mike Russell on different days—and a very good event it was, too. There was a question and answer session that lasted for about an hour and was very positive. Three weeks ago, I attended a hill-farming summit in Lanark with my colleague Aileen Campbell. Almost all the attendees were individual hill farmers, but there were also individuals from the fertiliser supply and fencing contracting businesses. In a month or so, after the lambing season is over, I will hold a second hill-farming summit in Dingwall, at which I will engage with hill farmers.

I should credit the role of the rural payments and inspections division offices throughout the country, of which there are 17 in total—David Barnes will correct me if I am wrong—and which day and daily are communicating and engaging with crofters. Much of that communication and engagement is fed back to me, because I am in regular contact with the local offices: indeed, I have visited more than half of them.

Rhoda Grant has raised an important point; if there are, as a result of this meeting, other ways in which she or other members think the Government should reach out to work with small business units in the farming and crofting world, I will gladly consider any such recommendation.

10:45  

I remind everyone that we have dealt with only three themes so far, and we are 45 minutes into the session. We have another eight themes to go. Brief answers and brief questions would be appreciated, so that we can get through all the business. I ask Mike Russell to come in briefly.

One of my roles is to work with colleagues to meet a range of people across Scotland. I take that very seriously. I have accompanied Fergus Ewing to a number of meetings and have held events and meetings, myself.

I also take meeting people in my constituency seriously. I tend to take the Miss Marple approach: if we know what is happening in our own patch, we can understand matters more widely. As a result, I have held regular meetings across Argyll and Bute—Fergus Ewing was with me at a meeting on Islay—in order to understand what is happening and what people might want from a new system of agricultural support. It turns out that it looks rather like the existing system of agricultural support—but there we are.

I will move on to the next theme, with John Finnie.

Good morning. The cabinet secretary touched briefly on regulation and standards. I will roll into one a number of questions on that theme. Our crofting and farming are subject to EU legislation and regulation and to some international regulation. Views differ on the significance of that legislation; it will not surprise anyone that I align myself with Pete Ritchie of Scottish Environment LINK, who says:

“Better regulation drives efficiency, so we do not believe that regulation equals red tape—quite the contrary.”

The cabinet secretary touched earlier on a more humane regime of regulation. I ask him to outline how that would dovetail with maintaining the high standards that—I presume—we all want in the agriculture and food sector. How will that regime be used to monitor and enforce standards in order to demonstrate to the market the high quality of Scottish products?

John Finnie sets out very well the case that high standards remain vital if we are to compete in home and international markets. I have found from engagement with leading figures in the farming community how important those high standards are as a means for us to continue to access markets. For example, the provenance of our seed potatoes is dependent on compliance with regulations that are of a very high standard in order to counteract the risk of disease. Only by meeting those high EU standards can we access markets furth of the EU for our seed potatoes. In other words, compliance with standards is an entry card to markets, but it is also a barrier: if we do not comply, we are barred from markets. Appropriate regulation is, therefore, not a foe but a friend and enabler.

Were we to go down the route of some ultra Brexiteers and get rid of all the red tape, we would not have many friends in the farming world, which relies on high standards. In terms of the quality of our beef and sheep and of our regulation of abattoirs, we have very high standards. That is rightly so: were we to depart from those standards in a free-market way, the commercial results would be devastatingly bad.

High standards need regulatory frameworks. Animal health and welfare, as John Finnie well knows, are also protection against disease. We do not have to think back too far to remember the ravages that were caused to communities and individuals by, as well as the economic cost of, foot-and-mouth disease. The best outcome would be that we continue to remain a member of the EU. Were that to be the case, those high standards would be a given.

I accept your final comment, which is the Green Party’s position. Do I understand correctly that you are saying that were the UK to come out of the EU, we would, in order to continue trading there, need to maintain those standards and others? There is a view that Brexit provides an opportunity to burn a lot of regulatory information and move on to a bright new future. Is that not how you see it?

There is an opportunity to get rid of what farmers often describe as gold plating—in other words, overzealous interpretation of the rules. Professor Griggs is looking at those important issues with a group that includes farmers, non-governmental organisations and a wide variety of experts, so that we get a Scottish approach that will ensure profitability and environmental sustainability.

If such regulation is a prerequisite of trade with the EU, has there been any discussion, or will there be any contact, between Professor Griggs and the EU on the workstream that is being undertaken?

Yes—there will be contact. One of the questions that I asked Ms Leadsom—although I have not yet obtained an answer—was about inspection points. In the event of Brexit, the UK would be a foreign or third country to the EU, which means that—on paper—there would be a requirement for inspection points on the EU mainland and for any export of food or fish produce to be checked. How many inspection points would there be, who would pay for them, who would run them and what delay and costs would arise for exporters? We have asked all those questions but—sadly—we have not had any answers from the UK Government. Those are also regulatory matters.

The issue of regulation causes concern because the assumption that there is a vast number of regulations that can simply be abandoned is an unsafe one, largely because safety drives many of the regulatory regimes.

There is another issue that needs to be understood. In many things, there will essentially be two big blocs of regulation—US and EU regulation. A smaller regulatory system goes down the pecking order of global manufacturers and traders; they will not spend a lot of time and effort on trying to please a much smaller regulatory system until they have already pleased the two big regulatory systems. Therefore, far from being an opportunity that will free people up to be more active, the opposite will sometimes—for example, in pharmaceuticals—be the case and the importance of your market will decline if you are not in either of those two blocs. That is a big worry for many people.

Fergus Ewing is right about trading—if a business cannot meet the requirements that are laid down by the EU, for example, it will not be able to trade within that bloc. There are huge difficulties in just saying, “Let’s get rid”, and having a bonfire of the regulations. The regulations that are safety based are there for a purpose, and those that are there for other reasons and are part of the trading bloc are necessary because not observing them means that a business will not get in.

Let us move on to the next theme.

The next theme is integrated land use policy. We spoke about the issue at our previous meeting. Stuart Goodall from Confor suggested that there should be a countryside policy, rather than a common agricultural policy. What are your thoughts on that?

We are very attuned to the proposal for an integrated land use policy, which reflects the fact that rural Scotland’s economy comprises a range of activities. There is not just farming, although it is the lead activity; there are also forestry, fishing, field sports and angling. We published a land use strategy in 2011. The latest version of our strategy covers the period 2016 to 2021 and aims to encourage an integrated approach to land use. There is a desire among stakeholders to build on that work.

A practical piece of work that we are currently doing is a sheep and trees project to encourage more work between farming and forestry. I am due to meet the National Sheep Association to discuss that further. In the past, some hill farmers have seen forestry as a bit of a challenge or, perhaps, even competition. Increasingly, rather than an either/or approach, we are seeing the two in a cumulative way—a large hill farm could sustain a plantation on part of the land. The Forestry Commission Scotland is doing excellent work to encourage farmers to think about plantations.

An integrated approach is very sensible and has for many years been part of the approach that has been taken by the Scottish Government. I will meet Confor this evening; we may discuss that issue further.

Thank you very much. We will move on from agriculture to more questions on fisheries. John Mason will start us off.

The common fisheries policy seems to be loved or loathed in different circles. It has been suggested to us by some people that there is nothing good in the common fisheries policy and that we should just walk away from it. However, it seems to have contributed to the fact that we still have fish in the sea and they have not all been taken. Which parts of the common fisheries policy do you feel we should keep, and which parts can we walk away from?

The common fisheries policy has caused enormous problems for Scottish fishermen, and we believe profoundly that Scotland’s not having had a direct voice in the EU has hindered our ability to prevent the worst excesses of the CFP over the decades. That said, there are aspects of the CFP that it would be sensible to retain—for example, the types and specifications of fishing gear that may be used, which are subject to regulation. There is a role for such regulation.

At a higher level, there is a guiding principle that fisheries should be sustainable, that there should not be overfishing and that, if there is overfishing, everybody loses. Sustainability requires a system of quota setting in line with scientific advice. In the relatively brief period for which I have been cabinet secretary—in my engagement with Mr Gibb in particular, but also in my engagement with the Scottish Fishermen’s Federation, the inshore fisheries groups and the whole range of stakeholders in fishing—there has been an acceptance that scientific advice has a role to play. There may have been huge scepticism about the advice some time ago, but there is now better alignment between the scientists and the fishermen and there is realisation that they need to work together.

We would wish to retain some things; for example, we would wish to retain access to markets. The EU is a massively important market for our fish, particularly for Shetland, as I learned from a recent visit there. The ability of people from the EU to work in our fish-processing factories is also important. Many of the factories that I have visited are pretty much dependent on people from other EU countries. Many of those people now live in Scotland but feel a wee bit uncertain about whether they have a long-term future here.

The EU has also supplied a great deal of financial assistance to build the capacity of our fishing effort. The financial aid that has been received from the European maritime and fisheries fund and other sources by ports and harbours including Peterhead and Fraserburgh to upgrade their facilities, and by processors and individual businesses, has been immensely important. More than £77 million was provided under the European funding scheme to over 1,200 projects in the fishing, processing and aquaculture sectors, which has safeguarded about 8,000 jobs. There is a question about what would replace that source of funding, which is not as well known as the CFP but nonetheless plays a hugely important role, as I have seen during my visits to our ports and harbours, in particular.

You mentioned markets, which are a subject in which I am particularly interested. We have taken evidence from fishing groups, including at the high end of the market, and they are not worried so much about a tariff of a few pence or pounds as they are about not getting fish across borders quickly. Delay in getting fish into France, Spain or wherever is the big worry for them. Can you reassure us about that? Is that a priority for you in your negotiations?

It is certainly a matter that I will raise tomorrow in my meeting with Mr Eustice. Let me give you an idea of the figures. Our seafood exports are worth £601 million and accounted for 78 per cent of the UK’s seafood exports in 2016.

Access to the single European market is hugely important. Were there to be delays at inspection points, or whatever they might be called, particularly for fish, that would be a big disadvantage and would place continued access to those markets in serious jeopardy, simply on practical grounds.

11:00  

The issue is one that concerns bodies such as the UK Chamber of Shipping and the British Ports Association, which I have met and to which I was referring in saying that I had met a wide range of organisations.

Perishable goods—and particularly fish—are probably at most risk, but so is just-in-time manufacturing. I have to say that, at present, there is no clarity about how that would be dealt with as far as tariffs are concerned. At the moment, we have no tariff barriers. The moment you put in tariffs of any description, you require inspection or declaration of goods. If that takes place, there are then delays and issues with the piling up of lorries. Members will be familiar with images of the motorway in Kent, with lorries all the way down it. That is because there is now no sizeable marshalling area in any of the major ports that can deal with tariff goods in that way. There are considerable issues to be addressed and not much time in which to address them. That is one of the big issues for transition. It would not be possible to put in that type of system after two years; it would require five to 10 years to be able to develop it.

Part of John Mason’s question was about things that the Scottish Government would like to keep. Just for my information, will the panel give me one item that they would like to lose from the CFP?

The most problematic area of the CFP is the way in which the landing obligation is being implemented. The purpose is to prevent discards—throwing fish over the sides of boats—which is a repellent practice that everybody agreed should come to an end. However, in order to deliver a practicable result, there has to be a system that does not result in fishing vessels having to be tied up in February. We would not expect Marks & Spencer to shut in February each year and remain shut for the rest of the year, would we?

That is an area in which I felt that a greater flexibility was required, and it is the subject of on-going discussion in the European Commission. I was in attendance at the European Commission discussions in November and then, of course, with Mr Gibb at the December negotiations. We achieved a remarkable outcome in those negotiations, not least because of the expertise and experience of Mr Gibb and his colleagues, and the respect in which they are held by their peers in Europe. However, we are up against a stumbling block of a regulation that was overly prescriptive and which many fishermen would be happy to see go or be changed into a more manageable one. That is a problem that has to be dealt with, though, because nobody wants to see a recurrence of the practice, which we have seen in the past, of dumping good fish over the side and having it entirely wasted. The problem is not an easy one, but there has to be far more flexibility in finding a solution to it.

On that very point, would it be worth considering changing from a quota system to a days-at-sea system to regulate the amount of fish taken, and going down a different route entirely?

Some system of ensuring that fishing stocks are not overfished and exhausted is the key principle, but I am no expert in how that could be achieved. There are different schools of thought and different strategies that can be pursued. As Mr Gibb is here, I wonder whether he might be able to provide an answer. As he knows far more about these things than I do, I am sure that he could give a more rounded answer if he has the opportunity, convener.

A short answer, please.

It will be very short. The days-at-sea option is quite popular in the press at the moment. There are other options, such as credits for the type of fish and extra credits for catching cetaceans as bycatch. I emphasise that those options are very complicated. In the mixed fisheries of the North Sea, for example, you have to look at your weakest stock. If you are going to follow your international responsibilities on sustainability, you cannot just go out and have unlimited fishing for a fixed number of days. You have to understand the mixture of your catch, and avoidance techniques. A days-at-sea-only solution is unlikely to fit the mixed fisheries that we have in the North Sea and the west of Scotland.

Stewart Stevenson will lead questions on the next area that we want to look at.

I want to talk about two issues relating to exclusive economic zone access for our vessels to waters out to the 200-mile limit, and the enforcement of our rights in those waters. The committee has heard, both at the Scottish Parliament information centre breakfast meeting and in our own deliberations, that we have the right to arrogate to ourselves the waters out to 200 miles, although we might choose not to do so. Interestingly, it is not a new issue. I discovered old SNP policy papers from 1974 that talked about the issue. Can either of the ministers tell us, in the light of what the UK has said in its white paper about a mutually beneficial result for fishermen in the EU and the UK, what they understand from that? How does it support the SFF’s position, which I support, that we must first have exclusive control, before negotiating how to use that exclusive control?

Significantly, the Prime Minister’s Lancaster house speech and the white paper both referred to fisheries only in those terms and only in terms of trading away access to waters. For many, that is eerily familiar, reminding us of what took place in the 1970s during accession, and I have certainly heard nothing different during the negotiation discussion to date. Fisheries have been referred to in the JMC process, not as a specific subject but as an illustration of subjects that will need to be dealt with in the detail of the European negotiations, on the basis of recognising, for example, historic rights that exist elsewhere, and that was also the subject of some media coverage yesterday. If I were a member of the SFF, I would not be confident that the UK Government is listening to or has heard the points that have been made.

Mr Stevenson has raised the matter before in committee and in the chamber, and I have raised the question on several occasions, both with George Eustice and with Andrea Leadsom. Specifically, I have asked for a guarantee that the UK Government will not bargain away Scotland’s fishing interests in its Brexit negotiations. I have received no answer to that question.

It is quite clear where we stand, if not where others stand. The second part of my question is on enforcement. Working on the basis that we have responsibility for how fishing is conducted out to the 200-mile limit, what challenges might we have to respond to in getting that new responsibility?

Questions about enforcement involve technical aspects, and I would be grateful if Mr Gibb could assist the committee on that.

Under the devolved fisheries management arrangements, we already monitor the Scottish fishing zone out to 200 miles. Marine Scotland patrol vessels and aircraft are already active in monitoring not only Scottish and UK vessels but those of the 11 non-Scottish nationalities that currently fish in the Scottish zone. We are well versed in that. The enforcement burden will increase, because we would need to ensure that people who had access to our waters had that access legitimately negotiated, so there is no doubt that there would be an increased burden. It is also fair to say that we would be reliant on vessel-monitoring satellite systems and electronic logbooks, which are two additional elements of the current common fisheries policy that we would probably look to keep. That is a technical issue, but those systems allow for collective and remote monitoring of activity in our waters and in other member states’ waters as well.

Thank you. John Finnie has some questions on a slightly different subject.

Yes—the next theme is the ecosystem approach to fisheries management, which the Cabinet Secretary for the Rural Economy and Connectivity has touched on. Just as there have been calls for an integrated rural or countryside policy, at a previous meeting we heard Calum Duncan of the Marine Conservation Society call for, in effect, the retention of a regionalised ecosystem approach to the management of fisheries. There is a lot of background to that but, briefly, it includes the protection of crucial fish habitats such as breeding and spawning grounds.

How do you respond to the calls for a sustainable ecosystem-based approach that links fisheries to marine protected areas and special areas of conservation? Would Brexit facilitate that more readily? What impact would future arrangements have on our ability to have such a system?

Scotland’s national marine plan, which we adopted in 2015, promotes the kind of approach that Mr Finnie mentions, putting the marine environment at the heart of the planning process. I share the responsibilities for these issues with Roseanna Cunningham, and Marine Scotland is to the fore in taking the work forward.

A sustainable ecosystem-based approach to fisheries management should be taken, in accordance with those principles. It is also seen as an asset by many sectors of our fishing industry. For example, the shellfish sector is reliant on the image—and the reality—that we have a clean marine environment, from which our high-quality shellfish products enjoy their provenance and receptibility in the marketplace. We are taking that approach at present.

The second question was about how Brexit would allow improvements in this area. I think that the only difference that it would make would be to change the process for offshore fisheries measures from an EU member state negotiation process to a national legislative one. Broadly speaking, the impression that I get is that the EU is in favour of the ecosystem approach—and, indeed, much of the environmental legislation is EU legislation.

Fulton MacGregor will ask some questions on the next theme.

In the interest of time, I will combine them into one question. Mike Russell and Fergus Ewing have already mentioned the theme. How does the Scottish Government respond to the concerns that the committee has heard from some stakeholders about the possible restrictions on EU labour in the sectors that we are discussing? What is the Scottish Government’s response to deal with that, specifically in areas such as vets and research?

I understand that it is a huge subject, but I ask you to keep your answer as tight as possible.

I shall do my best to be as brief as possible. We laid out in “Scotland’s Place in Europe” our proposals with regard to the four freedoms, of which freedom of movement is one of the more important ones for Scotland. About 8,000 EU nationals are employed in the food sector, and about 15,000 are employed in the seasonal market.

In agriculture, there is a big dependency on labour from the EU—for example, 60 per cent of the workforce in the abattoir sector comes from outside Scotland, largely from the EU—so there will be big pressures on the labour force, and there is no obvious place from which people can come to replace them. There are also pressures in the tourism sector, the finance sector and the innovation sector—for example, some 25 per cent of staff in research come from other EU countries—so we are very dependent on labour coming into Scotland.

We have, essentially, no information from the UK Government about how it would replace the present system. At the weekend, there was some press speculation about what were called barista visas. I think that it was the Home Secretary who suggested that giving young people a visa that would not give them any rights to continued residence or support from the state but would allow them to work here for a couple of years may be one of the solutions. That was rather interesting, because it tells us that there will be problems in leaving the EU and that sticking-plaster solutions will be required to solve some of them.

In Scotland, we will not be able to use a sticking-plaster solution for agricultural labour. If we put in place a sectoral approach, which has existed before, we will have considerable difficulties in administering it. For example, I think that the committee heard from Angus Growers Ltd about the difficulties that exist for soft fruit and the fact that the solution might be to move the bushes to Romania and Bulgaria, rather than to do anything about labour coming from Romania and Bulgaria. That would move the entire industry out of Scotland.

11:15  

The reality is that there will be a very considerable pressure right across the Scottish economy, particularly the rural economy, and there are no proposals to solve it at present. The pressure will be felt at various levels. You raised the issue of vets, which is very interesting because the hardest part to solve will probably be at the professional level. There will perhaps be a small number of alternatives at the labour level for some people, but there will not be any alternatives for professional services.

In the health service, many doctors and nurses are very fed up with being treated as bargaining counters; they are already leaving and the number of nurses coming in is dropping quite dramatically. We look to the UK Government to bring forward a solution for the migration problem, but no policy options have been presented. As a result, there is no solution and we are only two years away from leaving. That is another area in which there will have to be some transitional arrangements, which is very difficult for those people who believe very strongly in Brexit, because Brexit is about controlling access and, if we are not going to do that, some might argue, “What is the point?”

That is a very full answer, cabinet secretary, and, unless there is anything specific to add, I would like to move on to the next theme.

I have two points. There are around 181,000 non-UK nationals living in Scotland, and rural Scotland is particularly vulnerable to the loss of any of those people who have chosen to come to Scotland. Further, our leading agri-food and environment research institutes have attracted talent from many EU countries and any threat to that would be a serious threat to the continued success of the research excellence of our institutes.

Will any new or enhanced trading opportunities or relationships arise as a result of the UK’s exit from the European Union? If yes, what will those opportunities be and where will they lie? If no, why not?

I have still not seen any evidence presented to me of those trading opportunities. Sometimes much is made of India and the possibility that we might be able to sell more whisky there as a result of Brexit, but it is not clear why that would be the case. In reality, the Prime Minister went to India last October endeavouring to get trade deals, but she failed. She failed, by and large, because the Indian Government wishes to establish a relationship based on migration, particularly for younger and talented migrants who wish to come to this country. Internationally, migration is very often a trade-off for increased trade.

Something has been made of the opportunity in the old Commonwealth countries, but there is no evidence for that. Indeed, the Australian foreign secretary has talked about using Ireland as a route into the single market and about preferring investment in Ireland.

The real example lies in Germany, which is far more successful at international trade than the UK. Germany is a full and central member of the EU and it has no intention of leaving. It is not constrained in any way, so I see no evidence of membership of the EU bringing constraint on trade. The cost and difficulty of the process of withdrawal is far in advance of any advantage that might be seen. I have always said that, if people can bring me evidence that withdrawal is greatly to our advantage, I will be happy to look at it. However, I am eight months into this job and, so far, nobody has done so. I am always ready, if Mr Greene has some evidence here today.

If I may clarify, that was a question for you, rather than for me. Are there any trading opportunities outside the EU that might arise as a result of our exit from the EU?

I have just answered that question.

So that is a no.

The answer is no but, in the spirit of trying to work with people, which I believe that I should do, I am willing to hear examples if anybody brings them to me.

Do you want to add to that, Fergus?

Are you asking me to help Mr Russell find examples of trade opportunities?

Have you an example?

I do not think that there are any additional opportunities to those that already exist. There are already huge efforts by entrepreneurial people in our food and fish sectors to export throughout the world and they are well helped by bodies such as Scottish Development International, which has engaged the services of a number of individuals to assist in furthering exports.

However, membership of the EU is not an impediment to accessing that additional trade. If anything, it is an advantage because it is a badge of compliance with the highest standards and means that we are part of the European single market. Mr Greene is welcome to give us some examples of opportunities outwith the EU to help us on this question, but I am as baffled and perplexed by it as Mr Russell is. On the other hand, there is nothing at all uncertain about the risks of a switch to the default WTO tariff arrangements, which could lead to EU tariffs averaging between 7 and 11 per cent being imposed on Scottish shellfish, pelagic and white-fish exports and tariffs of up to 13 per cent being imposed on Scottish smoked salmon exports—hence the concerns of the aquaculture sector, to which I alluded in my opening remarks.

I am afraid that the risks are all too stark and crystal clear, while the opportunities are opaque and, as yet, unidentified.

As even Liam Fox has pointed out, the opportunities for world trade are presently diminishing, not increasing. In addition, we have considerable difficulties because of a protectionist United States. The outlook is therefore not bright in that regard. However, I continue to make the offer: if somebody has examples of opportunities outwith the EU, bring them to me.

Peter Chapman will lead on the next area.

We all know that untangling domestic policy from EU legislation will be a monumental task. Does the Scottish Government have the capacity and skills to deal with that? How many statutory instruments do you estimate will need to be reviewed and amended as part of the Brexit process for agriculture and fisheries? What processes and structures is the Scottish Government putting in place to do precisely that?

The great repeal bill was meant to be published at the time of the Queen’s speech, but that speech will now be at least six weeks later than intended. I have discussed the bill in considerable detail with David Davis and others, and my officials have been deeply engaged in that.

I will answer Mr Chapman’s question, but I will put it in context first. The great repeal bill raises a number of questions and issues, the first of which is whether the process can be done in Scottish terms through a series of legislative consent motions. In other words, can the process take place at Westminster and can we join ourselves to it and streamline it by means of such motions? Alternatively, would we be required, as a legislative Parliament, to produce separate primary and secondary legislation for the process? We will not know the answers to those questions until we see the bill.

We are told that the great repeal bill will take an approach that will involve not simply the legislation but case law—much of the European legislation is judged, in effect, by case law. We have to see what is proposed in the bill before we can answer the question whether we will introduce legislation to cope with the changes or give legislative consent to the great repeal bill and what will be a series of Westminster bills—possibly 10 or 12. In addition, if agriculture is, in the end, fully devolved and if we plan a different agricultural regime, we will want to have a separate repeal bill from the one at Westminster for the agricultural statutory instruments.

Now that I have given Mr Chapman that long preamble, the short answer to his question is that there will probably be many thousands of legislative instruments. We might be able to short-circuit the process with a legislative consent process, which would be far better. However, in the end, it might be necessary for us to introduce primary and secondary legislation, which would be complex and take considerable time.

The objective of the great repeal bill process is to ensure that on the day that the UK leaves the EU there is no hiatus in law, but the time available for that process has been shortened by about six weeks by the decision to hold a general election. The process will therefore become a difficult, complex and time-constrained one that will occupy quite a lot of parliamentary time from about the autumn of this year onwards not only at Westminster, where it will drive out most other legislation, but in the Scottish Parliament, where it will be prominent.

Is there the capacity and the skill in this Parliament to do the work that might be needed? We all understand that it will be difficult and that much is to be done, but can we cope?

We will have to cope; otherwise, there will be a hiatus at the end of the process. This is not something that we volunteered for. I have had good discussions with the Faculty of Advocates, the Law Society of Scotland and a range of others. In addition, the Lord Advocate and the Scottish Government’s legal service are deeply involved. I do not think that anyone will underestimate what is required. However, we do not yet have the key information. To be fair, we do not know whether the UK Government has that information, because the task is so complex.

An information trawl took place from last October onwards to look at what had to be done. We played a part in that trawl, and we have a considerable amount of data as a result of it. However, how Westminster chooses to legislate to kick off the process will determine what else follows. We have not seen that and we do not know what that will be.

We got an advance copy of the white paper on the great repeal bill—it was about four hours in advance, rather than several weeks or months beforehand. It would be helpful to be given information as early as possible.

I will leave that subject there.

Will you set out in broad terms the phases that you are planning in the coming months for agriculture and fisheries? What is the Scottish Government doing to prepare the rural economy for the possibility of life without EU funding?

Can I lay out what we understand to be the phases of withdrawal, and then perhaps Mr Ewing can fit the agricultural policy changes into that?

As you have offered to do so, you may.

Thank you—that is very good of you. The article 50 letter triggered a two-year process, so the clock is ticking. The first response from the EU is due on 29 April. The second—and detailed—response on the Council’s negotiating stance is due at the end of May. Discussion about all that will be subject to delays because of the UK election.

The first phase of negotiation is expected to be on the cost of withdrawal, although it is perhaps becoming clear that that will be about the methodology for setting the cost rather than about the cost itself. That is a crucial difference because I am sure that, once the cost is known, there will be the mother and father of all rows, and setting the methodology might not declare the cost at the beginning of the process.

It is expected that that, and the issue of EU nationals and the reciprocal arrangements for UK nationals in Europe, plus one or two other technical issues, will dominate the first period of negotiation. The question is whether there will be a parallel set of negotiations on the details of trade and other issues. The European Commission presently says that that will not be the case and that it will move on to the second part only when the first part of the negotiations is finished. I think that most people expect dovetailing towards the end of the process.

That takes us into the autumn before the negotiation on substantial issues takes place. That will very much be a sectoral negotiation. If the UK had agreed to stay in the single market in some way or another, the negotiation would be much simpler. That would essentially have been single market minus, and the negotiation would have been about what we were not contributing and what we were not taking part in. The UK has set its face against that, largely because of issues that are to do with the European Court of Justice and not accepting judgments outside the UK, so there will be a detailed and complicated sectoral process.

The framework must be finished by the end of 2018 to allow a ratification process that will involve more than 30 Parliaments. It will not be just national Parliaments that are required to ratify, because some sub-state Parliaments will have the right to do that, too. The only Parliament that does not appear to have that right is the Scottish Parliament—I just make that point.

After that, there will be a decision on the framework. However, putting that into effect might take several years, because there will be transitionary arrangements to make.

I would expect the agricultural and fisheries issues to be negotiated during the year to 18 months of detailed negotiation—that is from the autumn of this year to the autumn of next year. I would not expect the final arrangements to be put into place until the transition phase, which will be from spring 2019 onwards, provided that the Parliaments vote for it—and the European Parliament has the final say. The question is how long that phase will be.

That is all speculation—it is informed speculation, but anything could change, including any willingness of the UK to remain in the process. The European process would continue and come to an end, but the UK might have walked away.

11:30  

Does Fergus Ewing want to add anything, briefly, on timescales?

The question was about phases, and we are in the first phase. The first phase is to seek clarity about funding—about what the UK proposes as the alternative to EU funding. That clarity is essential. Secondly, we need clarity that all the powers over agriculture and fishing will come to this Parliament. Thirdly, we need the resolution of the convergence issue that I described, for which I will be pressing—with the support of all members of this Parliament, I hope. Fourthly, as we just heard from Mr Russell, the prospect of any deal on the continuing relationship of a Brexit UK and the EU on rural matters seems unlikely for some considerable time to come. It is therefore absolutely clear that the UK Government should no longer postpone its recognition that a serious transition plan must be laid out.

It is plain from what we have heard, and the discussion today has illustrated this, that it is impossible to devise brand-new fishing, forestry and farming policies and funding programmes between now and April 2019—anybody can understand that. A transition plan is therefore required. It is also required for the vital reason that those who are working in the rural economy need reasonable clarity about the future funding for the excellent work that they do. The sooner the UK Government comes up with a proper transition plan, the sooner some form of reassurance can be provided to those who are building and delivering on the rural economy across the board.

Thank you very much, cabinet secretary. That concludes our session on Brexit. I thank all of you: Fergus Ewing; Mike Russell; David Barnes, whom I noticed helping the minister; Allan Gibb for his contribution; and Jonathan Taylor for being in attendance. I will suspend the meeting briefly while we change witnesses.

11:32 Meeting suspended.  

11:36 On resuming—