Chamber and committees

Sorry, just to update the record for the committee, I am reading that

“it is the clear view of NFU Scotland that the principles now embedded in the UK Internal Market Act (IMA) 2020 pose a significant threat to the development of Common Frameworks and to devolved policy.”

That evidence was provided by NFU Scotland, and I agree with it. I rest my case that there is a way of approaching the single market—we are all agreed that we want it to work as well as possible and to provide certainty for business—but the internal market act should not play a part in that.

As we have already discussed at committee and in debates in the chamber, it is important to understand that common frameworks were created as the solution to the challenge in the first instance but were never allowed to become the primary working vehicle to deal with the challenge. Instead, the internal market act—the Trojan horse that has been driven into the devolution settlement—was introduced. It eclipsed what the common frameworks were designed to do and held back their development as the agreed, preferred way of managing the single market in the United Kingdom.

Members of the committee—although perhaps not all of them—have previously heard me give an example of that situation. I told colleagues about what happened shortly after I took up office, when I was having discussions with the UK Cabinet Office. The then Cabinet Office minister was Chloe Smith, and there was an encouragement that we should speak with one another about common frameworks because things were not progressing. We all know the role that the Scotland Office played at that time—it was all about the internal market act and muzzling devolution. Chloe Smith and I agreed on a number of points: common frameworks were there to serve a purpose; we were both committed to making them work; we did not understand why they had not progressed as they might; we committed that they should; and we would come back within a matter of weeks to identify whether our officials had been able to make progress. The answer to that was yes, and that is exactly what happened.

Therefore, I reflect on my personal experience in office that, where good will exists, the common frameworks are able to work if they are understood and treated in the way and spirit in which they were created.

The UK Government’s consultation document proposes making frameworks the key mechanism for managing regulatory co-operation. That is fine in so far as it goes, except for the fact that the internal market act will remain in place and can be used in ways that will undermine that. If one is saying that one wishes to have a reset with devolved Governments and Parliaments, and the legislatures in Scotland and Wales have agreed a position on that, I find it utterly extraordinary that the UK Government would not even consult on the position that its colleagues in those Parliaments had voted for. I do not understand it.

That is why we have provided the paper to outline our position. I wish the common frameworks well, and we will try to make them work, but that does not resolve the issue of the internal market act remaining in place, and the excuses for its doing so are fatuous. There is absolutely no requirement for the act to remain. I encourage the UK Government to embrace the common frameworks and repeal the internal market act in line with the position of this Government, this Parliament, the Welsh Government and the Senedd.

Absolutely—just so. That is part of the problem, and it should outrage democratically elected parliamentarians in this place that people who are not elected to deal with these matters can make such opaque decisions and run roughshod over the democratically elected representatives of this country. The issue is actually not that complicated. We have in place a system that we have agreed that we wish to make work. Why do we not just get on and do that, and bin that which we have commonly agreed is not fit for purpose?

However, it is important to recognise Mr Harvie’s service.

In some respects, we are in the foothills of post-European Union membership changes and the operation of a UK internal market. It started out as a focus on a very small number of issues that many people might see as distant from their lives or priorities—things such as single-use plastics, the deposit return scheme and glue traps. However, it is true that there is an ever-growing list of areas in which the internal market’s potential imposition, or the non-delivery of common frameworks in those areas, will have an impact. That situation is continuing. That is all the more reason to get the certainty and agreement that stakeholders have suggested to the committee that they wish to see. I agree. The uncertainty is the result of not knowing whether the internal market act will be applied in those areas. That is undermining certainty.

The Scottish Government meets with the office for the internal market, our officials meet with one another and I have met with the office. The officials have great expertise and are scrupulous in meeting their duties in an even-handed way, which is important. However, I am sure that they would be the first to concede that the office’s role is limited to considering the economic and trade implications of any policy. I go back to the point that I made to Mr Harvie about the very real example that we had of minimum unit pricing. If the OIM looked at the issue today, it would be able to consider it only in economic and trade terms, even though it was a policy innovation that was introduced for a public health purpose. That answers the question in that, yes, the office plays a role, but its limitations underline the point that it reflects a system that is not fit for purpose, because it has to consider things in the round, if anybody is to consider anything in the round.

On the point about an arbitrator, we already have one and it is called the UK Government. It makes decisions regardless of the position of this country’s Parliament and Government—the examples show that to be the case. To me, the UK Government cannot be the ultimate arbitrator, because it is a party to the process and has shown in its actions that it is prepared to override democratic consent. I do not know how an arbitration process would operate.

I go back to the positive ground where I have planted my flag, which is to say that common frameworks are commonly agreed to be the way in which we should make things work. Let us end the bad faith that there has been from the UK Government by getting the internal market act off the statute books. That is the position of this Government, this Parliament—having voted on the issue on a number of occasions—and our Welsh colleagues.

I end by reiterating a quite simple point: we have a system, so let us make it work. Let us get what is not helpful to intergovernmental relations and the operation of devolution off the statute books.

A properly functioning internal market regime looks very different from the internal market act. The way that the act operates is different from the way that a well-designed internal market regime operates, and it is very different from the regime that operates within the European Union.

The internal market act replaces broad legal principles of mutual recognition and non-discrimination with rigid statutory requirements that apply in almost every case.

It is really important to understand, as I said in my introductory statement, that the internal market act has no proportionality or subsidiarity principles. Those are common features in other internal market regimes, and that was the case in the European single market. That lack of proportionality and balance is a recipe for confusion and uncertainty and does not ensure a functioning domestic market. Therefore, when stakeholders say that they want certainty, one has to understand that the internal market act does not provide that.

The feature that I have drawn attention to is not a bug and it is not hidden away. The act is a crude, clumsy and undemocratic attempt to constrain devolution, and it is one that masquerades as an internal market regime. That is not just the position of the Scottish Government or the Scottish Parliament. I am sure that, among your deliberations, you have had a close look at what one of our country’s most pre-eminent legal minds, Lord Hope, has had to say on that subject and others. We are of exactly the same mind about what the internal market act is and how it does not replicate what the European single market did. Among many other things, it is missing the key principles of proportionality and subsidiarity.

No. Unsurprisingly, I do not agree with Mr Kerr, who I think is confusing the outcomes that, I think, we both share in wanting to ensure that detrimental approaches are not taken to managing the single market in general, with support for the internal market act. I am unaware of evidence having been presented by the organisations that he quotes that they require the internal market act to stay in place. I would be very grateful to see that—

I think that it is fair to observe two things. First, there has not been significant progress between the UK and the European Union so far. Secondly, preparations are under way in Brussels, London, Edinburgh, Cardiff and Belfast for forthcoming meetings in which more substantive progress can be made. That is the stage that we are at.

I observe that the UK Government has been taking the issue more seriously within Government, which is welcome. There have been changes to the machinery in the UK Government to deal with that, including a new Cabinet committee on Europe, which the Prime Minister chairs.

Clearly, the UK Government is thinking about what is coming up. It would be remiss not to draw attention to the changing geostrategic peril that we all feel in Europe at present, and that dimension will perhaps loom larger in everybody’s considerations, here and in the other capitals, of how we work together.

What can I imagine will be coming up? I can imagine that both the United Kingdom and the European Union will be focused on advancing shared interests in defence and security. We would very much welcome for there to be a joint statement on co-operation in that area.

I note that, overnight, the European Union has announced a very significant defence package, which is not open to the United Kingdom defence sector. That might change, were there to be a co-operation agreement between the UK and the EU. That is strong encouragement for that to happen. I think that there is goodwill on all sides to make progress in that area.

For the Scottish Government’s part—I think that you have heard me make this point before—we have, for the longest time, advanced the need for what I call a food, drink and agriculture agreement. The terminology is important, because people might understand what that is as opposed to a “sanitary and phytosanitary agreement”.

For those of us who have been speaking with our food and drink sector and our rural stakeholders, it seems that the general view is that it is very important that we should have such an agreement. We have been impressing that view on the UK Government and sharing it with European Union interlocutors.

There are other areas of common interest to the UK and the European Union: greater co-operation on energy and on law enforcement; addressing irregular migration; and perhaps having something like the pan-Euro-Mediterranean convention for example. All those things might feature. Both sides have particular issues that might well be raised as part of the process. There is an expectation that the European Union is very keen to make progress on youth mobility, and we would share its interests in that. We will no doubt come back to that. There is also an expectation that fishing issues will be discussed, although there are no details about what that might involve. We very much hope that the UK Government will push for business mobility and mobility for touring artists.

We expect negotiations after the forthcoming summit to continue over the summer. We are not aware of discussions between the parties as yet on the timing of the next TCA Partnership Council or on the spring round of specialised committees. I think that we are at the cusp of making progress. We have been making our priorities clear, and no doubt we can go into that in detail.

In fairness to my opposite number in the UK Government, Nick Thomas-Symonds has been impressing on me and colleagues in Wales and Northern Ireland that the UK Government wants to take the priorities of devolved Administrations seriously. We are taking that at face value, and we very much hope that progress can be made on those matters as well as on the other areas that will be discussed.

No, there is not a co-decision mechanism in the United Kingdom. Sadly, that is not how the devolution settlement works. That, of course, was the advantage of the European Union. As a member state of the EU, we were formally part of a co-decision process, which also involved directly elected parliamentarians. We do not have that. We have an assurance that the UK Government will listen to the priorities of the Scottish and Welsh Governments and the Northern Ireland Executive, and that that will inform the UK’s negotiating position, but there is no formal mechanism whatsoever for decisions to be made jointly.