Chamber and committees

I might get myself into all kinds of trouble with the convener, because I could happily talk about those issues for a long time.

I have a locus on the point about the diaspora because I also have responsibility in relation to the population challenge that we are facing. I do not know how widely people are aware that we are heading back into the territory of relative population decline, which is very concerning for us. That is the background to the perennial challenge—or opportunity—that we have.

We are one of the nations in the world that have a significant diaspora. The question is how we can best discover, maintain and develop our relationship with that diaspora. In the past, that has largely been thought of in terms of people who have left Scotland and gone to the United States, Canada, Australia, New Zealand and so on. However, there are other forms of diaspora. For example, tens of thousands of people have studied in Scotland and then gone back to the countries from which they originally came. They are a form of Scottish diaspora as well—they are aspirational Scots. We need to find imaginative ways of striking a continuing relationship with those people and making the most out of that.

We have lessons to learn from other countries, some of which you mentioned. I would add Ireland to the list. The Irish have a great experience of fostering relationships with their diaspora. There is more to come on that issue, and I will be happy to return to the committee when I can say more. It is definitely something that we are thinking about—we are working out how we can move all of that forward.

On the softer areas such as culture, it is relatively simple for me to take that forward as I have responsibility for external affairs and culture, so I can do both at the same time. In doing so, we always need to keep an eye on other areas of Scottish Government policy that also have such interactions. For example, education was mentioned. Shirley-Anne Somerville is extremely focused on that, and we talk about that area.

An area that we have not gone into today is justice. Through Brexit, we are in the unfortunate position of having lost our place in a great many judicial co-operation functions. That is the bad news. The good news—if we can call it that—is that the Scottish Government is working well across directorates and its areas of expertise in the area. Recently, we had a deep dive, as it is called in the jargon, that was hosted by colleagues at Scotland House Brussels. That is another example of the value that that network and the colleagues who work in that field in Brussels can bring. We are able to brief my Cabinet colleague Keith Brown, justice officials, my directorate and others on those issues.

That is a concrete illustration of how we are moving beyond Brexit, if we can call it that, and understanding the downsides. As I pointed out in my opening statement, there are very few upsides to Brexit. What will we do about that? We can find workarounds for some things, but the honest truth is that there are many things for which we cannot find workarounds. We need to be honest with people that Brexit has been extremely damaging not only to trade, but to education, culture, justice and other areas.

We will have an opportunity during the current session of Parliament to put that right and to chart our course for rejoining the European Union as an independent member state. That will go a long way towards repairing the damage that Brexit has wrought for us.

It is fantastic that there appears to be general agreement on, and general enthusiasm for, the excellent job that Scotland’s international offices do. They attract investment, broaden our horizons, and create domestic opportunities and benefits for people in Scotland, and they do so at a very marginal cost in the context of the Scottish Government’s budget. Between 0.01 and 0.02 per cent of the Scottish Government’s overall portfolio spending plans goes towards our existing eight international offices.

The future funding that is allocated in the Scottish budget includes the funds for the opening of our office in Copenhagen, which will take place this year. That offers us huge opportunities for developing our links with the entire Nordic and Baltic region. Those countries are our near northern European neighbours.

Within the current session of Parliament, we are committed to opening an office in Warsaw, which will serve central Europe. That is a region that matters enormously to us, not just from the point of view of trade and educational and cultural exchange, but because so many people who were originally from that part of the world live in Scotland. Therefore, the opening of that office makes perfect sense.

There is an interesting discussion to be had about where the network should develop at the next stage. Given that there seems to be so much encouragement for the network to be as successful as it can be, I can definitely identify parts of the world where we are not currently represented by a Scottish Government office. There is, of course, Scottish representation through Scottish Development International, whose reach extends right around the world. The question is where might we look next. Should we consider having offices in capitals in which there are strong bilateral and cultural connections with Scotland? In some cities, there is a very strong multilateral diplomatic and third sector presence. All those factors will go into the thinking about where we might expand after Copenhagen and Warsaw.

We are talking about a fast-evolving situation, and we are moving with the situation as quickly as it moves. We do not have an end state at the moment. We were supposed to have international agreements and the basis of a new relationship between the United Kingdom and the European Union, but we are not there yet. The United Kingdom Government is still threatening to invoke article 16 of the Northern Ireland protocol, with all the problems that that would bring for us all in a worsening relationship with the European Union.

I will highlight two levels on which we interact with European colleagues. First, we talk to people about Brexit and its on-going and unresolved issues. Secondly, we interact on areas in which we have emerged beyond the immediate wreckage of the Brexit process. For example, on education, we know what has been transpiring with the Erasmus scheme and that, measured against it, its UK replacement is inadequate. Nevertheless, we still want to ensure that we have the best possible relations with other European countries in respect of education. I spoke with the German federal minister who has responsibility for that, because we want to ensure that we have the best possible relations. A few weeks ago, I spoke with the French culture minister about how we can move beyond the problems that Brexit has caused for Scottish and French artists and how it has made it much more difficult for them to tour and perform.

We are working on two levels. We are considering how we deal with the immediate issues and how we can move beyond them. Some things are moving very quickly, and we have to deal with the fast-moving circumstances. We are also doing exactly what you mentioned: we are working out where the different areas are in which we can move beyond the immediate Brexit transition issues to try to firm things up and, in some respects, ameliorate the damage that Brexit has caused.

Speaking as a parliamentarian as much as a Government minister, I have to say that I hope not. I have repeatedly told the committee that I am happy to come back as often as you want me to—with five visits, I think that I qualify for a frequent flyer pass—and I would also hope that UK Government ministers would be happy to give evidence, as I have done to House of Lords committees in great detail and at great length.

It is essential that we have scrutiny and that we can shine a light on things, because that ensures that things work well. Scrutiny keeps people like me on my toes and lets civil servants know that certain questions are likely to be asked of them. Those are all good things, and we should not be scared of them. We might not always have the answers, but if we do not, that probably means that we should get them.

The Scottish Parliament’s strong committee system was set up specifically to make Governments in Scotland work in a better and different way. I am committed to making the system work, and I am moving forward in that collegial fashion. The suggestions that you make and the questions that you ask along the way really have an impact on me and those who advise me, and that is exactly what should happen.

This is one of the most problematic areas of the whole issue. UK ministers are now in a position to decide how public money—money that you, I and our constituents have paid in taxation—should be spent in Scotland. UK ministers have not been elected for that purpose, but they are now going to make decisions on the basis of their priorities, which they were not elected to do in Scotland. At the heart of it, there is democratic deficit and a democratic problem with all of that. As I mentioned in my opening remarks, it cuts across a range of devolved subjects including culture, sport, education, economic development and infrastructure. It bypasses you and your colleagues, and that is profoundly wrong.

UK ministers have not wasted any time in using their new powers in areas where you should be in charge, not them, and the spending is unco-ordinated. It is not co-ordinated properly with the Scottish Government, and it is not subject to your appropriate scrutiny. For example, more than £152 million of funding from the community renewal fund plus the initial rounds of the levelling-up and community ownership funds has now been awarded to projects in Scotland. It almost goes without saying that funding for worthwhile projects is a welcome thing. Who would gainsay that? However, that is not at issue. The issue is how we manage resources and priorities and what the democratic mechanisms are for doing so.

I will give you two concrete examples. First, there is the multiply programme, which involves a £560 million numeracy programme—it is not small. The multiply fund will be top-sliced from the UK shared prosperity fund and delivered by the UK Department for Work and Pensions across the whole of the UK, despite devolution being wholly involved. No engagement took place with the Scottish Government prior to the announcement, and it means that there is likely to be duplication—and waste—with the Scottish Government’s adult learning strategy, which is to be published in the spring.

My second example relates to the shared prosperity fund. The UK Government has shared some thinking about the role of the Scottish Government in the governance and operations of the shared prosperity fund that would make it a subordinate partner. The Governments would not be equals and there would not be co-decision. I say again that this is a devolved area and it is the Scottish Parliament and the Scottish Government that should be responsible.

Nevertheless, the UK Government is proceeding. Three options have been proposed in Whitehall, none of which has yet been cleared with Government ministers, and each of them has an ever-decreasing role for the Scottish Government. All the options state that UK Government ministers will have the final say, and a ministerial board has been described with the role of ministers from devolved Governments being to act in an advisory capacity only.

The Scottish Government has seen the initial paper on the indicative priorities of the UK shared prosperity fund and it raises significant questions about the strategic nature of potential projects. It only highlights our concerns regarding distant and unelected decision making for those issues. That is not just the view of the Scottish Government or the majority of members of the Scottish Parliament. Recently, the Scottish Council for Voluntary Organisations, which is the umbrella organisation for the country’s voluntary organisations, highlighted its members’ view that funding priorities should be set at a devolved level in order to tackle inequalities, enhance human rights and promote wellbeing

“by linking outcomes with Scotland’s National Performance Framework and other relevant policy frameworks”.

The SCVO has raised concerns about the shared prosperity fund being managed centrally by the UK Government, which echo concerns that the Scottish Government and members of the Scottish Parliament have had since the beginning of the process. Things are beginning to happen, and what we are seeing is indeed what was foretold.

I am giving my officials a heads-up that I am about to pass the ball to them with regard to the latest technical stage that things have got to.

I think that I shared with the committee at a previous evidence session that I have had productive and positive discussions with Chloe Smith, who was then a Cabinet Office minister, to try to get the framework process out of the mud in which it had managed to get stuck. The reason for that was that, unless we made progress on understanding what the frameworks were there to do, they were going to fail. We worked quite hard on that in good faith and managed to get things to a place where, through assurances that were given by the UK Government that mirrored ones that had previously been given at the dispatch box in the House of Lords, we could proceed with the frameworks. As you know, the frameworks allow us, in certain circumstances, to protect the position of devolved decision making, although only with the say-so of UK Government ministers.

We are in the process of going through that procedure, which is why I think that it will help if my colleagues explain where we have got to, what we know is working as it should be and how, as we hope, it all might work but why it might not. What lies at the heart of this—and what I want to leave the committee with—is that, although we might be really fortunate and find a sympathetic minister in, say, the Department for Environment, Food and Rural Affairs or some other UK ministry who says, “Okay, we see why the Scottish Government and Parliament want to do this. As minister with responsibility in the UK Government, I will be gracious enough to allow the people who are elected to do these things to get on and do them”, we might well find others who are less empathetic, sympathetic or understanding. What should concern all of us as democrats and elected parliamentarians is that this power has been taken—I was going to say that we have offloaded it, but that makes it sound as if it was voluntary when it has actually been done to us—and someone else is sitting in judgment on the matter. That is where things currently are—on the secretary of state’s desk.

I will ask Donald Cameron and Euan Page to jump in here and give you the latest on where we are.

It is likely that you will touch on a range of issues in relation to frameworks, because they impact in significant ways on the internal market act. The situation is moving and evolving, but I will update the committee on where we are at present.

We are moving forward to formal scrutiny of frameworks in all four legislatures across the UK. Prior to publication, officials have been sharing clear provisional frameworks with parliamentary officials. We saw some initial scrutiny of frameworks in the spring of last year, and some frameworks have been put forward for scrutiny in recent weeks. For example, the Cabinet Secretary for Health and Social Care gave evidence last week on frameworks in his policy area.

A number of factors have impacted on the development of common frameworks—not least the pandemic, as officials have been called away to other tasks. The biggest single impact has been from the UK Government’s decision to introduce the internal market act, which raised fundamental questions about the purpose or viability of the common frameworks. It has taken a considerable time to work through the act’s impact and develop mitigations.

With regard to stakeholders in the frameworks process, which includes the committee and everybody else who has a locus in the matter, there was a multiphase process for the development of the frameworks, and extensive stakeholder engagement. It has been encouraging to note from earlier witnesses in the inquiry the level of stakeholder interest in common frameworks and a clear consensus that frameworks offer a much better model than the internal market act does for co-operation on managing policy divergence. Stakeholders’ views on the efficacy of the frameworks are of central importance to the Government—and, no doubt, to the committee as it takes evidence on how things work.

Of course, there is also the committee’s on-going scrutiny. As I said in my opening statement, this is the fourth or fifth time that I have been with you, and I am happy to come back to update you, as are my officials, including my colleagues who were introduced at the start of the meeting, who do a lot of the technical work on the frameworks. We are happy to keep you apprised of how things are working or not working.

We are at the stage of seeing whether the UK Government will recognise the workings of the framework, which should allow for the divergence of policy across the UK. Either the UK Government will allow that to work or it will not. I have examples that I can go into. I do not want to pre-judge any questions that the committee has, but there are current issues in respect of which we will be able to see whether the UK Government is minded to allow us to get on with what we have been elected to do.

If I gave the impression that that is not needed, that is not the case.

[Inaudible.]—this morning. I think that this is my fifth session with the committee. Since we previously met, I have given evidence on common frameworks and the United Kingdom Internal Market Act 2020 to the House of Lords Common Frameworks Scrutiny Committee, and I have been in regular discussions with my counterparts in the UK Government and with the other devolved Governments.

Any inquiry into the internal market regime that is imposed by the internal market act must proceed against, and be seen in, the wider context of the devolution settlement. In 1997, people in Scotland voted overwhelmingly to re-establish the Scottish Parliament. With our own Parliament, free personal care has been introduced, university tuition fees have been abolished, and no one is now charged for prescriptions. Those initiatives and many more have improved the lives of people in Scotland immeasurably.

We are now confronted by an effort by the UK Government to put the gains of devolution at risk by taking control once again of key devolved powers without consent—without the permission of elected members of the Scottish Parliament and, indeed, the Scottish Government. In some parts of UK politics, devolution has always been seen as a problem to be fixed, and the UK is mistakenly conceived as being a unitary state rather than a voluntary political union of nations. That view has become increasingly obvious since the European Union referendum, and it can be seen most clearly of all in respect of the internal market act, which we are deliberating over today.

The Scottish Government’s opposition to the internal market act is clear, well known and understood. We have argued from the outset that it represents a fundamental change to the devolution settlement that people voted for in 1997, that it is a change that was achieved by stealth, and that it is a chipping away at the powers and responsibilities of the Scottish Parliament. The majority of members of the Scottish Parliament agree with that and have voted overwhelmingly to refuse consent to the act, as did colleagues in Cardiff. The Northern Ireland Assembly passed a motion to reject the bill. No devolved legislature has consented to the act. Despite that overwhelming rejection, the Sewel convention was once again ignored, and the act has been imposed on us.

Those concerns were, and continue to be, dismissed by UK ministers as scaremongering. Instead, we have been told that, somehow, the act represents a power surge—if that were to be believed—following EU exit. It is just over a year since the act passed into law, and we now have a growing body of evidence that vindicates our position and the concern of the overwhelming majority of members of the Scottish Parliament. Witnesses in the inquiry have laid bare the negative impact of the act.

I have had a look at the evidence that the committee has garnered, and certain contributions stand out. One goes as follows—this is a direct quotation:

“The Internal Market Act could create risks for the integrity of the existing devolution settlement and in particular for the integrity of the regulatory prerogatives that the Scottish authorities enjoy, in accordance with the Scotland Act 2016, in the area of public health and especially alcohol control policy.”

That is the view of Professor Nicola McEwen of the University of Edinburgh.

A further quote says:

“The internal market act views devolution and the potential for divergence as an obstacle and a potential irritant to the economic integration of the UK, which is prioritised and privileged through the market access principles of the act.”—[Official Report, Constitution, Europe, External Affairs and Culture Committee, 2 December 2021; c 19.]

Another says:

“The Act undermines devolution and will limit the ability to the Scottish Parliament and Government to improve farmed animal welfare standards.”

That contribution is from a written submission to the committee by Kirsty Jenkins of OneKind Charity.

I could go on, because the committee has received a lot of evidence that underlines our concerns. However, it is not just in the Scottish Parliament and other devolved institutions that the concerns have been amplified. Only last week, Lord Hope spoke to BBC Scotland, marking the publication of a House of Lords report. He said:

“The problem has been, while it was always understood from the beginning that Westminster would not make laws for Scotland which cut across the devolution system without the consent of the devolved administrations, they did not respect that, particularly with Brexit, and that created a great deal of mistrust and, indeed, hostility”.

Responding to a question about whether the internal market act strengthens or undermines devolution, Lord Hope said:

“Well, I think the Scottish Government are right about that.”

Lord Hope, who is a cross bencher and a very independent and well-versed member of the House of Lords, agrees with the position of the Scottish Government and the majority view in the Scottish Parliament on this matter. Although he and I might not see eye to eye on the best constitutional future for the UK, it is difficult to argue with those clearly expressed views, which he gave only last week.

The act means that devolved powers will now be exercised in a system that is designed and controlled by UK ministers. During the passage of the bill, much was heard from UK ministers about how the proposals simply replicated the rules that provide for regulatory coherence in the EU single market. That is not the case. The internal market act does not provide any of the exemptions or protections for local autonomy that are enjoyed by members of the EU single market, nor do its provisions mirror the internal market rules that pertain in other devolved or federal states.

Delegated powers in the act enable policy areas that are currently controlled by the devolved Parliaments to be brought within the scope of the market access principles by UK ministers. Those powers mean that UK ministers can change the scope of the act unilaterally. Indeed, as we speak, the UK Government is expected to seek the consent of the devolved Governments to changes to the services exclusions regime. The fact of it seeking consent might sound reassuring, but any such assurance would be false. Although there is? a duty in the act that requires UK ministers to seek the consent of the devolved Governments before such changes are made, the UK Government can proceed after just one month regardless of whether consent has been given.

The act has made other significant changes that are worth noting. It allows, for the first time, UK ministers to decide how money should be spent in Scotland on wholly devolved policy areas spanning culture, sport, education, economic development and infrastructure. That money should be for the Scottish Parliament—for you, as members of the Parliament—and the Scottish Government to make our own choices about, in line with the priorities of the people who have elected you and us. The First Minister of Wales has pithily observed that the act steals money and powers from Wales, and it is difficult to disagree with his assessment.

The act represents a fundamental erosion of the devolution settlement and a departure from the principles and practice of devolution that have been experienced over two decades. We will no doubt come on to questions about what can be done to mitigate or how to work with the grain of the act now that it is, unfortunately, a reality. My response will be plain. The act cannot be reformed or properly mitigated. It is an internal market regime that has been imposed on its constituent members without their consent. It is inherently unstable. It is unsustainable. The only way to address the act’s harms is for it to be repealed.

I hope that that is the case. I have been involved all the way through the process and have been updated on what the latest meeting has been like on a technical level and where we have got to. One often hears that people have not had political sign-off to go beyond certain stages. Therefore, even if there is good will at a technical level, one has often not been able to proceed. That is my first observation.

My second observation is that certain UK Government departments have an inherently better understanding of the devolved nature of governance in the UK than others. It is important to differentiate, in that no single approach is taken by the UK civil service in Whitehall and the civil service in Scotland.

Let me concentrate on the positive—I am a glass-half-full kind of person. We have a new structure, so let us try to make it work and let us see how the concrete examples are proceeded with. Let us give things a fair wind. The issue is not being exaggerated by anybody, as you will know from the evidence that we have received across the board. This is not a concern just of Government, of the majority of members in the Scottish Parliament, of the voluntary sector or of representative bodies; the concerns are reflected across the piece. We are dealing with something that is quite serious, but I want to rest on my glass-half-full approach and try to make some of this stuff work.

I have the benefit—if you want to call it that—of having been in Westminster for quite a long time. Many of my interlocutors are people I know, and that counts for something in trying to act in good faith and in moving things forward. At some point, however, one has to have sign-off for proposals and for legislation that the Government and the Parliament have enacted, and either UK Government ministers will allow what has been democratically decided to go ahead or they will block it.