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Chamber and committees

Meeting date: Wednesday, March 15, 2017

Meeting of the Parliament 15 March 2017

Agenda: Portfolio Question Time, European Union Referendum (Reports on Implications for Scotland), Business Motions, Parliamentary Bureau Motion, Decision Time, Commonwealth Day 2017


Contents


European Union Referendum (Reports on Implications for Scotland)

The Presiding Officer (Ken Macintosh)

The next item of business is a debate on motion S5M-04570, in the name of Joan McAlpine, on behalf of the Culture, Tourism, Europe and External Relations Committee, on reports on the implications of the European Union referendum for Scotland.

14:42  

Joan McAlpine (South Scotland) (SNP)

It is fitting and timely that the debate is taking place so shortly before the United Kingdom Government triggers article 50 and starts on the path of leaving the European Union.

The committee’s inquiry work since the EU referendum on 23 June last year has revealed layer upon layer of complexity in relation to leaving the European Union. The committee initiated its work almost immediately after the referendum. I commend and thank my fellow committee members for the time and energy that they committed to the inquiry, which involved weekly and sometimes twice-weekly meetings, as well as visits, events and meetings with stakeholders and visiting parliamentarians. The fact that we are debating four reports today is testament to the committee’s hard work. Although different members held different positions on some issues, we succeeded in reaching broad conclusions in a number of areas.

From early in our inquiry, our two expert advisers, Professor Sionaidh Douglas-Scott, of Queen Mary University of London’s school of law, and Professor Michael Keating, of the University of Aberdeen and the centre on constitutional change, have supported the committee’s work. I thank them for the many written and oral briefings that they provided to the committee. Their expertise and knowledge benefited our work. I also thank the committee clerks, who worked incredibly hard over the course of the inquiry.

An early action of the committee was to commission two pieces of research. The first, from the Fraser of Allander institute, was into the long-term economic implications of Brexit, and the second, from Professor Alan Page, of the University of Dundee, was on the implications of leaving the EU for the devolution settlement. Both pieces of research have been important in informing the committee’s inquiry work—in particular, our most recent report, “Determining Scotland’s future relationship with the European Union.” I thank the Fraser of Allander institute and Professor Page for their work.

I also thank the Scottish Parliament information centre for the many briefings that it has published on the impact of Brexit on individual sectors in Scotland, and for the briefings that it prepared specifically for the committee.

In conducting our inquiry, we aimed to hear from stakeholders from as many sectors as possible, as well as from individuals who would be affected by Brexit. I am grateful to everyone who gave evidence to the committee. That evidence deepened our understanding and raised our awareness of the implications for Scotland of leaving the EU.

We received more than 160 written submissions in response to our call for evidence, and the views that were contained in those submissions are summarised in one of the reports that we are debating today—“Brexit—What Scotland thinks: summary of evidence and emerging issues”. That report shows that for virtually all sectors of the economy, with the notable exception of the catching part of the fishing industry, Brexit is a challenge. Whether the submissions were focused on justice and home affairs, further and higher education, schools and skills, agriculture and food, climate change and the environment, health and sport or equal opportunities and human rights, the overwhelming message was about concern and the risks that lie ahead that have been identified. There are fears about the risks of leaving the single market. There are fears about losing access to EU funding, such as horizon 2020 funding, and there are fears about the erosion of rights, about the huge volume of legislation that would need to be revised, about environmental standards, and about losing the EU citizens who work in so many sectors. There was very little optimism or sense of opportunity in the evidence that we received.

The report “Brexit—What Scotland thinks: summary of evidence and emerging issues” is a comprehensive summary of Scottish interests. I call on the Scottish Government and the United Kingdom Government in the weeks, months and years ahead to recognise those views in all discussions, negotiations and decisions relating to Scotland’s future. The report should be a reference point for identifying both what is and what is not in Scotland’s interests.

The committee undertook an early visit to Brussels in July last year, as well as another in January this year. In July, there was still a sense of shock and disbelief about the result of the referendum, and there was uncertainty about the next steps. However, by January, the Prime Minister had made known her intention to pursue a hard Brexit, and the experts in EU policy and the members of the European Parliament whom we met were clear about the challenges for both parties in the negotiations that lay ahead. Those two visits were very important in giving us a perspective of the views from Brussels on the negotiations.

The visit to Brussels last July contributed to our first report, in September, which summarised the initial evidence that we heard and included our conclusion that access to the single market is vital to Scotland. The visit in January was invaluable in extending our understanding of the withdrawal negotiations, the negotiations to agree a new treaty and the need for transitional arrangements. In January, we published the report “EU Migration and EU Citizens’ Rights”. The evidence that that report brings together on EU migration to Scotland provides valuable quantitative and qualitative material on migration patterns and on the contribution of EU migrants to the Scottish economy and society. It also considers the rights of the 181,000 EU citizens who are resident in Scotland, who represent 3.4 per cent of the population, as well as the rights that UK citizens enjoy as EU citizens whether they live abroad or in Scotland.

The UK’s withdrawal from the EU has made all our futures uncertain, but in no group is that uncertainty more keenly felt than among the 181,000 EU citizens who live in Scotland and the Scots who have made their homes in Europe. In Scotland, EU citizens have settled in our cities, towns and rural communities. They have helped to reverse the population decline that so worried us at the beginning of the century. They have contributed to the growth of our economy by filling skilled and unskilled, and temporary and permanent jobs. Most important, they have settled in our communities, enriched our lives and broadened our cultural horizons.

In “EU Migration and EU Citizens’ Rights”, we include testimonies from two EU citizens who have lived in Scotland for many years. Both have made their homes here and regard Scotland as their home, but they were unclear about whether they could remain in the future, particularly given the complexity of the 85-page form and the documentation on health insurance, national insurance contributions, employment and periods spent outside the UK that people are required to submit when they apply for a resident’s card. It should not be forgotten that UK citizens living in this country and in Europe will also see a reduction in their rights on the UK’s leaving the EU. We have become used to moving freely within the EU for business and pleasure, but in the future, as a third country, we face the prospect of visa requirements or travel restrictions.

We heard from the Scottish Youth Parliament that young people in Scotland see freedom of movement as an opportunity rather than a threat, and want that right to be protected. There must be consideration of how the rights of EU citizens in Scotland can be protected and how EU nationals who are already in Scotland can remain. Therefore, the committee concluded that, in the future, there should be a bespoke or differentiated solution for immigration policy in Scotland. Not only would that allow the Scottish Government to end any uncertainty for EU nationals, it would also protect Scotland from the demographic risks that are associated with a reduction in the number of EU migrants.

The committee’s final report, which was published at the beginning of March, is entitled “Determining Scotland’s future relationship with the European Union”. It covers three key areas: future trading arrangements, intergovernmental relations and the impact of withdrawal on the devolution settlement.

The UK Government has chosen to withdraw not only from the European Union but from the European Economic Area. Witnesses told us that the UK will leave the most successful free trade area in the world and that it will no longer be a party to the EU’s preferential trade agreements with more than 50 other countries. As we were told, never has a country decided to dismantle its existing trade agreements in such a way.

Scottish exporters have benefited from the abolition of tariffs and non-tariff barriers, and it has become the norm to send Scottish produce across the continent without any border controls. There is no need to satisfy rules of origin for goods that are manufactured in Scotland and exported to the EU. All that could go when we leave the EU. By choosing a hard Brexit, and by entering the negotiations with red lines that relate to freedom of movement, the jurisdiction of the European Court of Justice and EU legislation, the UK might find that it can achieve only a very limited trade agreement with the EU, so Scottish businesses will suffer as a result. Alternatively, as we heard being suggested at the weekend, the UK may be unable to reach a deal with the EU within two years, and we will fall back on World Trade Organization rules.

The UK will be reducing its trading opportunities by choice. We heard that, since the second world war, there has been a progressive move towards reducing tariffs and non-tariff barriers in international trade. The EU has made the greatest progress of any region in pursuing free trade, but the UK Government has decided that it wishes to give up those opportunities by leaving the EEA and starting from scratch in renegotiating its trading relationship with the world’s biggest trading partner, as well as with other countries throughout the world.

The possibility of a hard Brexit on WTO terms looks increasingly likely, as UK ministers have described that scenario as “perfectly OK”. In contrast, the Fraser of Allander institute submitted a report to the committee that predicts that that situation would result in a 5 per cent reduction in gross domestic product, a 7 per cent reduction in real wages and the loss of 80,000 jobs.

Our latest report also considered the intergovernmental arrangements for agreeing the UK’s position on Brexit and for conducting negotiations with the EU on withdrawal, as well as on the future trade relationship, and it considered intergovernmental relations between the UK and the Scottish Governments. Those areas will be the focus of other speakers, so I will limit myself to referring to the role that other sub-states have in relation to trade. During our inquiry work, we heard about how Québec, along with the other Canadian provinces, was included in negotiations on the Comprehensive Economic and Trade Agreement, and about the influence that the Parliament of Wallonia was able to use to block the CETA agreement temporarily. Both those examples highlight the comparative limitations of the intergovernmental structures in the UK.

Finally, the report considered the impact on the devolution settlement of withdrawal from the EU. As all members will be aware, under the devolution settlement, powers that are not reserved to Westminster are powers of the Scottish Parliament and the Scottish Government. Thus, under the devolution settlement, current EU competences—including the environment, agriculture, fisheries, justice and home affairs—fall within devolved policy areas. The committee concluded:

“We believe that any power currently a competence of the EU that is to be repatriated after Brexit and which is not currently listed in schedule 5 of the Scotland Act 1998 should be fully devolved, alongside a funding mechanism, resulting in no detriment to Scotland.”

Scotland currently receives considerable funding under agricultural and structural funding programmes. There is no clarity about how funding in those areas would be calculated in the future. The committee considers that there is

“a very significant risk to EU competitive funding streams, agricultural support and structural funding in Scotland following withdrawal from the EU.”

and is particularly concerned that

“Any move towards a territorial funding framework within the UK that is based in population share rather than the allocation system currently in use would see Scotland’s agricultural sector, for example, lose hundreds of millions of pounds.”

Finally, the majority of the committee concluded that a bespoke solution for Scotland that would enable it to remain in the single market should be explored as part of the negotiations ahead, and that the UK Government should provide a response to “Scotland’s Place in Europe” before article 50 is triggered.

In conclusion, I say that members will see that there are significant implications for Scotland of withdrawal from the EU, which the committee’s reports highlight.

I move,

That the Parliament notes the conclusions and recommendations contained in the Culture, Tourism, Europe and External Relations Committee’s 1st Report, 2016 (Session 5), The EU referendum result and its implications for Scotland: Initial Evidence (SP Paper 5); 1st Report, 2017 (Session 5), Brexit: What Scotland thinks: summary of evidence and emerging issues (SP Paper 64); 3rd Report (Session 5), EU Migration and EU Citizens’ Rights (SP Paper 84) and 4th Report, 2017 (Session 5), Determining Scotland’s future relationship with the European Union (SP Paper 99).

14:55  

The Minister for UK Negotiations on Scotland’s Place in Europe (Michael Russell)

I thank the Culture, Tourism, Europe and External Relations Committee for tabling the reports that we are considering today and for its work, which has contributed—and, I am sure, will contribute—much to the wider consideration in our country of the implications of the EU referendum.

There is, of course, a sense in which those implications cannot yet be fully understood and will not be for a long time, but the implications of the United Kingdom’s rush towards, and achievement of, the hardest of Brexits will eventually emerge. The damage that will be done will not be completely visible on the day after the UK leaves the EU but, bit by bit, its effect will be felt. Indeed, some of it is beginning to be felt already, with increased prices and greater economic uncertainty.

Our job, as members of the Scottish Parliament, is to find ways to mitigate such damage and, if possible, to avoid as much of it as we can. It is the belief of the Scottish Government that that can now be done only by allowing the Scottish people to make an informed choice as to the future that they prefer.

This debate is very timely. It will give the Scottish Parliament a chance to reflect on key issues that are covered in the reports and to inform the wider public of the issues at stake. I say at the outset that we broadly welcome the reports and their conclusions.

Adam Tomkins (Glasgow) (Con)

Will the minister take an intervention?

Michael Russell

Of course I will, if Mr Tomkins allows me to make some progress first.

Let me address some of the conclusions. The overarching findings from the reports highlight a number of common themes, including the economic, social, constitutional and legal implications and challenges that we will face when we are taken out of the European Union.

The committee’s reports recognise a number of key benefits of EU membership. They recognise the importance of the single market, the way in which Scotland has benefited from increasing trade opportunities during the UK’s 43 years of membership and the fact that EU membership and access have been of vital importance to Scotland’s economy. They recognise that migration is key to addressing Scotland’s demographic challenges and that it is necessary to guarantee the rights of EU citizens who are resident in the UK. They recognise the importance of retaining freedom of movement, and that a bespoke solution that reflects Scotland’s majority vote to remain in the single market is required for Scotland. In short, the committee comes to many of the same conclusions that we came to in our paper, “Scotland’s Place in Europe”. I particularly welcome the committee’s recognition of the importance of membership of, not merely access to, the single market, and of the fact that a differentiated approach is required for Scotland.

Of course, “Scotland’s Place in Europe” went further. It recommended continuing membership of the single market for the UK as a whole and pointed out the benefits of such membership, but that option was rejected by the Prime Minister 48 hours before the Scottish suggestions were discussed at the joint ministerial committee. That contempt for effective process has been the pattern over the past few months. Even now, on this very day, we have no idea of the timing, substance or format of the article 50 letter.

The JMC (European negotiations) agenda is meant to be set and shaped by officials from all the Administrations, but there have been endless delays, papers have been provided late and discussion of key strategic choices that we thought we had all said should appear in the agenda and work plan has been omitted.

The JMC(EN) terms of reference set the aim of agreeing a UK approach to and objectives for the article 50 negotiations and of having “oversight” of those negotiations to ensure that, as far as it is possible in any negotiation, the outcomes agreed by all four Administrations are achieved. Those terms of reference were painstakingly negotiated and were based on the commitment to agreeing a UK approach that the Prime Minister set out when she came to Scotland and met the First Minister on 15 July, yet the Prime Minister now refers to the purpose of the committee as merely for the devolved Administrations to “make representations” to the UK Government and behaves accordingly.

The ministers from devolved Administrations travel long distances to attend, as the meetings are always held in London. UK Government ministers attend to listen to the devolved Administrations, but they rarely have insights of any substance to offer. The JMC process has barely discussed, let alone agreed, a UK approach to article 50 and the subsequent negotiations. Matters raised by me have been taken away for consideration, but not answered. It is clearly the UK Government alone that is agreeing the approach, and there should be no pretence about that.

The chamber does not just have to take my word for that. As my Welsh colleague Mark Drakeford pointed out in his evidence to the House of Commons Exiting the European Union Committee:

“St Fagans Community Council, in my constituency, would be better organised than most JMC meetings have been.”

He then added a sentiment I agree with entirely, namely:

“There is a need for greater effort to go into basic running of this very important forum.”

All of that has bedevilled genuine attempts to get constructive progress, as has the UK Government’s growing insistence that the campaign promise to repatriate all relevant powers after Brexit was not a promise at all. Instead, a new concept of the UK single market has been invented to justify an anti-devolution power grab that is shamefully being supported by the Tory members of this Parliament, against the interests of their constituents and our democracy.

Yet we have kept trying. Even now, we are prepared to continue to discuss areas of mutual concern and Brexit issues of vital importance to Scotland. However, we must prepare ourselves for the future. We can have little if any confidence in the UK Government’s ability to secure a deal that works for us. That deal—a compromise deal involving single market membership for Scotland and an increase in devolved powers—has been on offer from us for the past three months, but it has produced no formal response. As a result, the First Minister has rightly determined that we must provide a clear plan for the next two years, and she has done that by ensuring that the people of Scotland will get to choose between the Brexit deal as negotiated by the UK and independence, on a prospectus that will be brought forward by the Scottish Government.

Adam Tomkins

The minister has just picked up on the point that I sought to intervene on earlier. Right at the beginning of his remarks, he said—if I am quoting him correctly—that the implications of Brexit will not be understood for a long time, and he also said that on Monday the First Minister called for an informed choice. Does it not follow from his own logic that that informed choice cannot be made for a long time, given that the terms of Brexit will not be understood for a long time?

Michael Russell

It does not, and it is regrettable that not only Mr Tomkins but the entire Tory benches do not know what is in article 50. Let me tell them: there is a two-year timescale, at the end of which the European Parliament will vote yes or no. If the negotiated settlement between the EU and the UK can be voted on by the European Parliament, it can be voted on by the Scottish people, and we will put against it a clear option of independence. That will be an informed choice, and the people of Scotland will choose.

Let me carry on. As the First Minister also made clear at her press conference on Monday, we remain open to a substantive and positive response to our paper and proposals. However, it is hard to see that coming forward; indeed, the opposite is still happening. Last Thursday, the Prime Minister’s spokesperson ruled out any devolved responsibility for migration within hours of David Davis—with whom I have no issue in terms of his personal commitment to progress—indicating in the house that that might still be possible, and also while a high-level civil service negotiation group was still in existence, trying to identify a way forward. I do not know when we will next have contact on Brexit with UK ministers, as the JMC that was scheduled for this week has been cancelled, but I make it clear that we want that contact to continue. Indeed, on many issues such as the great repeal bill, it will be essential.

Leaving the EU will be profoundly damaging to our economy, our society and our reputation in the world. The people of Scotland did not vote for that damage, and they have the right to reject it and choose a different future. This Government has a mandate from its manifesto for that approach. Each of us on this side of the chamber told our electorate that we believed that

“the Scottish Parliament should have the right to hold another referendum ... if there is a significant and material change in the circumstances that prevailed in 2014, such as Scotland being taken out of the EU against our will.”

There is a contrast between that clear statement, which is now being honoured and which is underpinned by the fact that we are sitting here as an elected Government—

Adam Tomkins

A minority Government.

Michael Russell

Not so much of a minority as the Tories—who are, indeed, half the number, if I remember correctly.

There is a contrast between that statement and that of the Tories, whose 2015 manifesto, we will recall, said, “yes to the Single Market”. On mandates, let us be crystal clear: we are honouring a mandate, and they are breaking one. Accordingly, we now have a plan in place that will move to the next stage on Tuesday and Wednesday when this Scottish Parliament will be asked to approve a request for a section 30 order.

Those who believe in the 19th century concept of an untrammelled, sovereign and very British Parliament are now in charge of the Tory party, and such people are in the UK Government. They refuse to accept the help of those who contribute to our wellbeing because they come from elsewhere; they are reluctant to encourage our young people from every background to live and learn in other places; they refuse to accept the judgments of courts outside our shores; and they look backwards with longing to the days of empire. For those people, the very idea of devolution is a threat to that sovereignty and to their myth-ridden nostalgic world view.

The Deputy Presiding Officer (Christine Grahame)

Please conclude.

Michael Russell

They want power to be concentrated at Westminster; indeed, they believe that that is the only place from which power should be exercised. I do not believe that. I believe in an independent future and a system that works for Scotland. There is a choice to be made, and that choice will be made by the Scottish people.

The Deputy Presiding Officer

I gave Michael Russell slightly longer because he took quite a long intervention.

15:05  

Jackson Carlaw (Eastwood) (Con)

I begin with my own tribute to the clerks and officials who have served the Culture, Tourism, Europe and External Relations Committee.

When the committee was first established after the election, we had a merry discussion about our work programme. It would be fair to say that then neither MSPs nor officials expected the turn of events that will no doubt be rehearsed throughout this debate. In consequence of that, the committee has had extensive meetings and open consultations; taken evidence from ministers at Westminster and Holyrood; participated in visits to Brussels; and engaged with diplomats from nations across Europe, whether in the European Union or not. Throughout, we tried to establish the facts as best we could in a world in which informed and uninformed speculation was king. The four reports are a testament to the efforts of all the clerks and officials, my colleagues and our convener, Joan McAlpine, to whom I hope to pay a more extensive tribute in my own way later in my remarks. I thank them sincerely on behalf of Rachael Hamilton and myself.

Nowhere in those reports will members find committee members arguing for a second referendum on Scottish independence. All of us campaigned for a remain vote last June, and none of us sought the challenge that the majority voted for in the UK’s referendum.

Beyond the politicking, the committee endeavoured to explore the potential for variations in any final UK settlement that might be open to Scotland to secure, and our visit to Brussels last summer suggested that such variations might be possible on programmes such as Erasmus and horizon 2020 and in other areas. However, that advice was caveated. We were told by one member state’s EU ambassador that that was dependent on the closest possible working relationship between Scottish Government ministers and UK Government ministers. The UK is the member state, and other EU member states will take their lead from it. We were told that, should that relationship be in any way compromised,

“the shutters will come down all over Europe to any variable settlement for Scotland”.

Joan McAlpine and others have sought to diminish that phrase ever since.

Our dismay on Monday was therefore profound. At a stroke—a hugely self-indulgent stroke at that—the leader of the SNP has alienated Scotland from the whole negotiated Brexit withdrawal process. Who, at meetings of the JMC or in Wales, Northern Ireland, Gibraltar, the Channel Islands or Europe can trust any confidences to Scottish Government ministers, as they have announced so belligerently in advance of any negotiation or agreement that they intend to campaign against it and against our neighbours in these isles?

The Cabinet Secretary for Culture, Tourism and External Affairs (Fiona Hyslop)

Can the member recall being told of any one instance of the Scottish Government having ever betrayed the confidences of the Westminster Government?

Jackson Carlaw

The Scottish Government has now made it clear that its intention is not to support any negotiated agreement, but to seek independence. Of course it cannot be relied upon.

I welcome the cabinet secretary back to debates on Europe and am delighted that her junior minister is allowing her to participate this afternoon. Members occasionally want to hear from the organ grinder.

Scotland’s case, which is a vital one, will now be all the harder to press, negotiate or secure when the attention—

The Deputy Presiding Officer

Wait a wee minute, Mr Carlaw. I know that this is a heated debate, but I am mulling over the reference to “the organ grinder”. I am not very happy about that. Okay?

Jackson Carlaw

The boss.

The attention of Scottish Government ministers is not on the deal in prospect, but on the separation that they intend to make their life’s only true work and priority. That is a tragedy for Scotland. If Scotland’s destiny continues to be within the United Kingdom—2 million people voted for that just two and a half years ago—the SNP will have undermined Scotland’s potential to have any varied relationship with the future EU. That is both an abdication of duty and a disgrace.

In the committee’s conclusion on intergovernmental relations in its most recent report, it made a series of strong recommendations. Across the political spectrum, members recognised both the enormity and complexity of the discussions ahead.

On the basis of the counter-briefings received, we gently admonished both Governments for allowing a perception to emerge that they had not been working hand in hand. As I have said before, we on this side of the chamber have noted the reputation of the Scottish Government minister who has assumed responsibility for these matters of being a pussy cat at the JMC meetings and a locker-room hero when he pitches up afterwards outside number 10 or in this chamber to vent his grievances before us all.

We noted the Secretary of State for Scotland’s commitment to provide a formal written response to the Scottish Government’s submission, together with our expectation that that would be published ahead of the triggering of article 50.

Michael Russell

Will the member take an intervention?

Jackson Carlaw

Not at this point.

We sought agreement to the participation of Scottish Government ministers in negotiations that will follow in bilateral and quadrilateral talks with international partners on new post-withdrawal trading relationships. We talked of a joint ministerial committee on international trade. In other words, as a committee, we recommended a Scottish Government involved heart and soul and body and spirit in the multiple strands of work required to negotiate and secure Scotland’s interests in the agreement reached to withdraw from the EU.

No committee member has argued or concluded that that will be easy. If anything, the extensive engagement that we have had since last June has illustrated just how difficult and fraught it will inevitably prove to be, and has identified the considerable, exceptional legislative burden for which this Parliament will have to prepare.

We were ultimately divided on the prospects of continued membership of the single market, which the SNP leader has called for. Indeed, I have yet to hear any member state diplomat argue that that is achievable, and all 27 member states would have to agree to it. However, it was that demand that lay at the centre of the Scottish Government’s submission. Was it sincere? Was it all along a plan knowingly doomed to be denied support across Europe? Was it always intended to be an unobtainable object that the SNP willed the UK Government to acknowledge and reject, sowing yet another grievance, but ahead of any EU state delivering the coup de grace?

If the SNP Government was sincere, it would today be touring the capitals of Europe urging EU member states to declare their support for such an idea, but it is not doing that and we all know why. According to press reports and senior ministerial sources, the SNP is no longer clear itself on what the Scottish Government’s EU policy would be. It is hard to see how Scotland’s interests can be fought for now in the negotiations that lie ahead.

Scottish Government ministers have driven a coach and horses through the recommendations in the committee reports and have humiliated the committee convener, Joan McAlpine. Indeed, the way in which that loyal backbencher has been traduced is an absolute tragedy. Clearly, SNP ministers can no longer be trusted in the work that lies ahead. Their ultimatum and their objective are incompatible with almost all the conclusions that the committee reached.

There will be debating time aplenty next week to discuss the doomed actions and motivations of the Scottish Government in calling for a second independence referendum. Today, with the Scottish Government’s announcement, which is effectively an abdication of its responsibility in the negotiations that lie ahead, we call on others who care about Scotland’s place in the UK and the future trading relationships that we will enjoy therein to work together to achieve all that is best in the EU withdrawal negotiations for Scotland. We can no longer rely on the Scottish Government to achieve that objective.

15:13  

Daniel Johnson (Edinburgh Southern) (Lab)

Clarity and certainty have become rare currencies in politics. The issues that we face are defined by disruption to so much that we have, until now, taken for granted. That in turn leads to understandable angst, not just in Scotland and the UK, but globally. The EU underpins much of how our economy, government and legal system work, but not always in obvious ways. Therefore, the prospect of leaving the EU raises questions where previously we assumed certainty.

The committee must be commended for the cool-headed analysis that its published reports undoubtedly represent. The reports are extensive in their scope, thorough in their approach and, above all, balanced. Many of the topics raised in the reports have been covered in previous debates, but I think that it is worth summarising the key points of clarity that the reports afford us. Leaving the world’s largest free-trade area will have a fundamental impact on how our economy works and how our industry operates. Those impacts will be counted in jobs and measured in the prosperity of working people.

The committee’s work is clear and, indeed, sobering. The committee makes it clear that, 10 years after leaving the single market, our gross domestic product is expected to be between 2 and 5 per cent lower than it would have been otherwise and employment is expected to be between 1 and 3 per cent lower. That amounts to losing as much as £8 billion from our economy and up to 90,000 jobs from our workforce.

Edinburgh is home to the second-largest financial services centre in the UK and is a leader for asset management in Europe. Just last week, I visited Standard Life at its headquarters in Edinburgh, and the impact of Brexit on that leading employer of thousands of people in the city was made clear and very real. In Germany alone, Standard Life has over half a million customers that it is able to serve solely due to the passporting rights that it enjoys by dint of the UK’s membership of the European Union. Crashing out of the EU and relying on equivalence rules rather than having full passporting rights will make serving retail customers in financial services an impossibility. That will force companies to look at relocation and they will take with them the high-value, high-wage jobs that the financial services industry provides.

Other sectors face similar challenges. The reports highlight the difficulties that are being faced by the energy industries, tourism and the wholesale and retail trade, amongst others. The real cost of Brexit will be lost jobs, livelihoods and opportunities for industries, businesses and the people who work in them.

Although, on the one hand, that loss of jobs is undoubtedly one of the most severe problems that we are facing while we contemplate Brexit, we are simultaneously facing a critical loss of labour and access to skills. Freedom of movement within the EU has given us the ability to fill skills gaps as needed and expand our economy’s capacity and capability while preserving existing standards of employment. The strength of the European Union has been to give us the flexibility to find skills where and when we need them, because it has allowed people from throughout Europe to come here to work and help our economy to grow and adapt, and that has been underwritten by strong regulation, guaranteeing working standards and rights at work.

However, it is not just working standards that the European Union has guaranteed. It is a union that has fostered co-operation and developed shared standards across a broad range of areas. On the environment, we have seen the benefits of international collaboration, with the EU taking action on air quality, climate change, water quality, species protection and habitat protection. Likewise, in health, we have seen co-operation on pharmaceutical laws and public health initiatives.

Over the years, much Eurosceptic bile has been directed at European standards in various types of trade. Even after Brexit, we will still have to abide by those rules if we want to sell our goods and services into Europe, but we will have no say over them and we will have to bear the cost of running parallel bureaucracy and regulation systems here.

The co-operation is also embedded in the body of law that we have come to rely on. European institutions, standards and laws are embedded in and intertwined with laws and regulations that have been set in Scotland and the UK. As the committee’s summary of evidence sets out, 2,029 regulations and 1,070 directives that our laws and regulations rely on will need to be reviewed. That represents a legal and technical challenge that is without precedent and it will continue for years, if not decades, following withdrawal from the EU.

The importance of the committee’s work is that it sets out with clarity the complexity of our relationship. Our economy, our laws, our regulations and our society have become interlinked. Our 40 years of development and co-operation in the European Union mean that breaking those bonds and interdependencies will bring uncertainties and risks, and the committee’s reports set those out.

However, that also exposes the faults and inconsistencies in the SNP Scottish Government’s logic. It is impossible to discuss those issues and the reports without reflecting on the decisions that the First Minister has taken over the past few days. The decision to pursue independence is, according to the First Minister, predicated on withdrawal from the European Union. It is motivated by those costs, uncertainties and risks, but however great the risks that are posed to Scotland by withdrawal from the European Union, it is incoherent to argue that they are mitigated by seeking to withdraw from another union. In fact, the opposite is true—separation would double down on those costs and risks.

Our economic bonds with the UK have been developed over 300 years and that trade is worth four times our European trade. Our legal systems and social institutions are intertwined and embedded in fundamental ways. If breaking our bonds with Europe exposes us to risks, the risks and costs of breaking deeper and more fundamental bonds with the UK can only be more profound. That is the lesson from the committee’s reports. [Interruption.]

Leaving the European Union will have pronounced consequences, costs and risks that will be counted in lost jobs and lost prosperity, but to respond to those risks and costs by breaking the bonds that we have with the nations with which we share so much and have even deeper interdependencies simply makes no sense whatsoever. [Interruption.]

The Deputy Presiding Officer

Can we just calm down a wee bit please—especially the chorus that is going on in the background?

15:19  

Ash Denham (Edinburgh Eastern) (SNP)

I draw attention to the fact that I am the parliamentary liaison officer to the Cabinet Secretary for Culture, Tourism and External Affairs.

While we should no longer be surprised, it is nonetheless alarming to see yet another committee in this Parliament clearly spell out how damaging Brexit will be to Scotland. Of Scotland’s international exports, £12.3 billion-worth, or 43 per cent, goes to the EU. In plain terms, that is the economic value that a hard Tory Brexit seeks to tear Scotland away from. According to the Culture, Tourism, Europe and External Affairs Committee’s report “Brexit: What Scotland thinks: summary of evidence and emerging issues”, leaving the EU could cost Scottish GDP between £3 billion and £8 billion, and cut between 30,000 and 90,000 jobs in the 10 years following the UK’s exit.

I know that such dire numbers have been reported before, and I am sure that they will fall on deaf ears yet again for some in the chamber, who complacently stand by as the UK Government seeks to wrench Scotland from the world’s single biggest market against its will. The SNP, however, has been anything but complacent. The committee’s report “Determining Scotland’s future relationship with the European Union” concluded that

“a bespoke solution for Scotland must be considered before and after Article 50 is triggered.”

Such a solution is precisely what the Scottish Government has worked earnestly to achieve.

As was noted in evidence to the committee, the Scottish Government was the first constituent part of the UK to deliver a report that set out what it wanted and what the options were. Theresa May’s approach to Scotland’s compromise proposals was “unfortunate” and “a disappointment”—those are not my words; they are the words of those who testified for the committee’s inquiry. Dame Mariot Leslie, a former senior diplomat and permanent representative to NATO, commented that

“It was extraordinarily unfortunate that the Prime Minister’s speech”

at Lancaster House

“seemed to set”

the Scottish Government’s paper

“aside when it had not been considered in any detail at the joint ministerial committee.”

Michael Russell, Minister for UK Negotiations on Scotland’s Place in Europe, stated that,

“there was great disappointment that the Prime Minister did not wait to present her Government’s outline of plans until after they had been discussed with the JMC”.—[Official Report, Culture, Tourism, Europe and External Relations Committee, 2 February 2017; c 9, 18.]

It is now beyond doubt that Theresa May and her Tory recruits here at Holyrood have no care at all for the 62 per cent of Scots who voted to remain in the EU, nor will they give an inch of compromise to protect Scotland’s place in Europe. Yet here we stand looking down the barrel of the gun that is article 50, facing great complexity and great uncertainty, and with no bespoke solution emerging for Scotland. As the Scottish Chambers of Commerce testified, the Prime Minister has not been clear about where the country is going, where it will end up and what her policies are surrounding new free-trade agreements between the UK and the EU.

Further, the committee received ample evidence from businesses that are concerned about the uncertainty surrounding the UK’s future trading relationship with the EU. Numerous organisations, including the Royal Town Planning Institute, Highlands and Islands Enterprise and Construction Scotland, noted reduced investor confidence as a consequence of prolonged Brexit uncertainty.

Professor Gordon Masterton, of the Institution of Civil Engineers, stated that companies are operating in a field of uncertainty, which represented the

“worst business and investment risk possible.”—[Official Report, Culture, Tourism, Europe and External Relations Committee, 24 November 2016; c 20.]

He urged the committee that “this period of uncertainty” must be navigated through “as quickly as possible”. However, the sheer complexity of the position of a UK outside the EU and the renegotiation of trade deals will be anything but quick to navigate. Dr Margulis of the University of Stirling pointed out that the process of merely renegotiating the market access that the UK currently has—not additional trade deals—could take “years if not decades”.

Professor Anton Muscatelli, of the University of Glasgow, agreed. He noted that the global atmosphere has grown “increasingly protectionist” and, therefore, the UK

“must ... not think that life outside the EU will be a bed of roses.”—[Official Report, Culture, Tourism, Europe and External Relations Committee, 2 February 2017; c 16.]

Despite warnings from experts, Greg Hands, the UK Minister of State for International Trade, still had the audacity to claim that the UK wants the new agreement

“to be the most comprehensive free-trade agreement that anybody has yet negotiated in the world.”—[Official Report, Culture, Tourism, Europe and External Relations Committee, 22 February 2017; c 19.]

Well, Mr Hands, a world-renowned, comprehensive trade agreement has already been reached: it is called the European single market, and Scotland is not prepared to be dragged from it and over a disastrous fiscal cliff against its will.

The committee’s conclusions and recommendations give more alarming proof of how destructive Brexit will be. Complacency about those warnings will yield only calamity. Although Tory and Labour members may be okay with that, I am not, the SNP is not and the Scottish Government is not, and we will do everything in our power to stand against the recklessness of Westminster.

15:25  

Rachael Hamilton (South Scotland) (Con)

I reiterate the words of our convener, my colleague Jackson Carlaw and other committee members in thanking the clerks to the Culture, Tourism, Europe and External Relations Committee for their concerted efforts.

As has been mentioned, events following Monday’s announcements have sadly rendered much of our committee’s work superfluous. Unbeknown to members of the committee, it was the SNP Government’s desire to use the decision by the UK to leave the European Union as a reason to call for a second independence referendum. Nowhere in the body of the committee’s report on “Determining Scotland’s future relationship with the European Union” is there any suggestion—not one word; not one iota—that Scotland should be independent. Nowhere in the report did the committee recommend leaving the United Kingdom.

Joan McAlpine

Will the member take an intervention?

Rachael Hamilton

I ask Joan McAlpine to let me make some progress, please, and then I will take an intervention.

Much time was spent in the committee on discussing options that are not possible. For those reasons, members will note that Jackson Carlaw and I dissented from parts of the report. He and I dissented from the argument that

“Moving from full EU membership to EEA membership would be an easier transition for Scottish businesses than leaving the EU completely as they would be able to remain in the single market. Membership of the EEA would also allow freedom of movement, which is very important to key parts of the Scottish economy as well contributing to Scotland’s population growth.”

It is clear from Brussels and EU experts that there can be no bespoke deal for Scotland. The United Kingdom is the departing EU member state and will negotiate its exit. That means getting the best deal for Scotland, Wales, England and Northern Ireland.

Joan McAlpine

Rachael Hamilton says that Europe has ruled out a bespoke deal but, in fact, the European Parliament’s Committee on Constitutional Affairs, which, as she knows, we met when we were in Brussels, has said in a report that a differentiated deal for Scotland should be considered.

Perhaps Rachael Hamilton will also note the fact that the purpose of the committee’s inquiry was nothing to do with Scottish independence; its purpose was to look at Scotland’s future in the EU, so it is not really a surprise that the reports do not refer to independence.

The Deputy Presiding Officer

I will make up your time, Ms Hamilton.

Rachael Hamilton

I thank Joan McAlpine for that very long intervention. As she knows, Dr Fabian Zuleeg said that it is “highly unlikely” that there will be a bespoke agreement for Scotland, and so did Charles Grant.

The hypocrisy of the SNP and the Greens in exuding outrage about our leaving the single market is almost beyond belief. Let me explain. If we had become independent in 2014, we would have left the European Union, the single market and our most important trading partner in the single market, which is the rest of the UK. The report specifically makes that point when it states:

“The EU is now the single largest market for Scottish exports outwith the UK.”

Professor Michael Keating said:

“It’s not possible. If Scotland was in the single market and the UK was outside there would be a hard economic border between Scotland and England.”

That begs the question: why would Scottish businesses cut off their nose to spite their face?

Gillian Martin (Aberdeenshire East) (SNP)

Will the member take an intervention?

Rachael Hamilton

I cannot, because I took such a long intervention earlier. I am sorry.

The people of Scotland have witnessed another screeching U-turn. The SNP and the Greens are now fanatical about the single market, obsessed with the EU and preoccupied with using anything to hold another divisive independence referendum.

Labour and the Liberal Democrats also agreed to the language in the report, inadvertently promoting a bespoke deal and undermining the Brexit negotiations. I recognise the motives of the Liberal Democrats, because their leader and party want to rerun the referendum and ignore the vote of June 2016. However, I cannot understand Labour—currently, nobody gets Labour. Does it support Brexit? Does it support Scottish independence? The leaders of both those parties have shown utter disregard for the results of the referendums and confused us on where they stand. A vacillating Labour Party leadership must be to blame for pushing our sole Labour committee member to agree to the idea of a bespoke deal for Scotland and in turn back the SNP to weaken the Brexit negotiations and further the SNP’s cause for independence.

Daniel Johnson

Will the member give way?

Rachael Hamilton

I will take a quick intervention.

Daniel Johnson

What part of rejecting the need for a referendum or rejecting independence itself does Rachael Hamilton not understand? Kezia Dugdale has made the position utterly clear. Would Rachael Hamilton please not slander her in the chamber?

Rachael Hamilton

The Labour Party voted for the European referendum, so that answers Daniel Johnson’s point.

The second conclusion that Jackson Carlaw and I dissented from relates to speculation. The report it uses that very word when it says:

“there is already speculation that the EU may seek to agree the principles of the withdrawal agreement before starting the process of negotiating the future trade agreement. Some have said that the negotiations for the trade agreement could continue for years, thus the UK would leave the EU without a new trade agreement in place. On withdrawal, the UK would also no longer be party to the preferential trade agreements that the EU has with third countries. It is vital, therefore, that transitional agreements be requested by the UK in the Article 50 letter.”

It is unhelpful to promote further uncertainty in a time of uncertainty. The UK Government has proposed phasing arrangements to ensure that there is a smooth transition. That is neither fantasy nor speculation—that is fact.

Let us not forget the enormous benefit that Scotland gets from the UK’s network of more than 100 countries, which promotes a solid base for securing strong trade deals. Those trading relationships and that influence should not be jeopardised. It is better to be at the table than dining alone.

To some extent, that is agreed in the report. We agreed that, together as one—as a United Kingdom—we should continue to participate in strong and productive intergovernmental relations. The report recognises that Scottish ministers have

“participated in negotiations following the prior agreement of a UK negotiating line and set of priorities”.

Certainly, we would like to enjoy the further participation of Scottish ministers, although now it seems that the Scottish Government would rather try to disrupt the negotiations than positively engage in them. The SNP Government seems to want to dine alone.

The Deputy Presiding Officer

I have a little time in hand for interventions if members wish to take them, but of course that is up to members.

15:32  

Richard Lochhead (Moray) (SNP)

I, too, thank my fellow committee members for all their hard work on the reports, as well as the clerks, the advisers, the witnesses who appeared before us or wrote to the committee.

The most recent report is very important, as all four reports that the committee has issued have been. They shine a light on how EU membership has been interwoven with Scottish society and our economy in our recent past. Our future relationship with Europe will be the transcending issue of our time. Just as our forebears in the post-war environment in Scotland and elsewhere in Europe were brave enough to reorganise countries’ relationships with each other and create the European Economic Community—of course the UK first joined the European Free Trade Association and then in the 1970s joined the EEC—our current generation of politicians will have to be equally courageous and show vision if we are to secure the best future for the people of Scotland, the rest of the UK and the rest of Europe.

The report highlights issues of importance to Scotland that must be taken on board before the triggering of article 50. The work on our reports has been challenging given the refusal of David Davis to attend our committee. It is pretty outrageous that, although the biggest challenge that Scotland faces since the last war is our relationship with Europe, the Secretary of State for Exiting the European Union has not appeared before a Scottish Parliament committee. Likewise, Liam Fox, the trade secretary, has not appeared before our committee, despite our requests. To rub salt into the wound, David Davis’s junior minister, David Jones, agreed to appear before the committee but then cancelled his appearance and said that he would meet the committee after article 50 is triggered. That is wholly unacceptable when the people of Scotland face such a big issue. It shows disrespect, it is discourteous and it is dismissive of Scotland and the Scottish Parliament.

Adam Tomkins

How many times has the Secretary of State for Scotland appeared before the committee?

Richard Lochhead

The Secretary of State for Scotland has appeared before the committee, but we invited the Secretary of State for Exiting the European Union to appear before us to discuss what is described as the biggest challenge that Scotland faces since the second world war. As I said, it is discourteous and disrespectful that he has not appeared before us.

However, this morning, the secretary of state appeared before a House of Commons committee. He is in the headlines for that appearance because it turns out that—and this is probably why he is too embarrassed to appear before the Scottish Parliament committee—he has not quantified the cost to the UK of leaving Europe and having to use World Trade Organization rules, despite the fact that Theresa May has said, time and again, that

“no deal ... is better than a bad deal.”

He is being slated in the House of Commons and across the media as we speak, because he has not quantified the cost of moving to WTO rules.

David Davis has acknowledged that we will lose financial passporting and the EU open skies agreement. When he was challenged by Hilary Benn, he acknowledged that, if we end up with WTO rules, meat and dairy producers in Scotland and throughout the UK will be hit by tariffs of between 30 per cent and 40 per cent. It is no wonder that he has been unwilling to come before the Scottish Parliament committee, given that those industries are disproportionately more important to Scotland than they are to the rest of the UK.

Our most recent report addressed the cost of moving to WTO rules, as opposed to maintaining links with the single market or the EU. The Fraser of Allander institute told us that GDP in Scotland would go down by 5.3 per cent, exports by 11.3 per cent, real wages by 7.2 per cent and employment by 3.2 per cent.

It is important that, as the committee has tried to highlight, we see the debate in terms of future generations. It is about Scotland’s long-term future. It is not just about the political banter in this chamber; it cannot be seen simply through this current debate. There are real issues at stake for Scotland and its future generations.

Some of the most powerful evidence to the committee was given by Kirsty MacLachlan. I will give her correct title, because it shows that she knows what she is speaking about. She is the senior statistician and head of demographic statistics at the National Records of Scotland. On demographic projections, she told us:

“between 2014 and 2039 ... the working-age population in Scotland will increase by 1 per cent ... and by 13 per cent in England.”—[Official Report, Culture, Tourism, Europe and External Relations Committee, 8 December 2016; c 17.]

With zero EU migration, the projections are that the UK’s working-age population will increase by 6 per cent and that Scotland's working-age population will go down by 3 per cent.

That is bad enough, but let us look at the projected number of Scottish children—our future. Between 2014 and 2039, the number of children is projected to go up by 9 per cent in the UK and by 1 per cent in Scotland. However, post-Brexit, in a zero-EU-migration scenario, the number of children will go up by 3 per cent in the UK and down by 5 per cent in Scotland.

This debate is about Scotland’s future and its future generations. That is why the committee and many other people in Scotland have found it so important that we maintain our links with the single market—indeed, our membership of the single market—and our wider links with Europe. It is also why one of the committee’s reports concluded:

“The evidence that we have collected shows that demographic risks for Scotland of a reduction in the number of EU migrants are more acute than for the UK as a whole. This leads us to conclude that there has to be a bespoke—or differentiated—solution for immigration policy in Scotland in the future.”

All the members of the committee signed up to that conclusion.

The issues that I have raised are of profound importance to Scotland’s future. Yesterday morning, when I was listening to “Good Morning Scotland”, I heard James Hick, managing director of the ManpowerGroup, talk about companies in Scotland not being willing to hire as many people as they had previously hoped to hire. He said:

“The uncertainty of being able to access labour from outside the UK is causing workers who may have wanted to come to Scotland and the UK, to not come in the numbers that they were able to and wanted to come in. That is causing major problems in that sector and in others.”

That is a huge issue for Scotland’s economy.

I will finish on another issue that the committee picked up on.

The Deputy Presiding Officer

You must do so in a sentence or two only, please.

Richard Lochhead

The issue is the threat to devolved powers in Scotland. It is important that we all recognise the difference between not taking powers that we have at the moment and that we enjoy in this Parliament and stopping the powers that should be devolved coming back to this Parliament from Brussels. The threat is that powers are not going to come back to Scotland from Brussels. When I challenged the Secretary of State for Scotland on whether the power to set fish quotas would come back to Scotland, he was unwilling to make specific commitments.

That is a real threat and that is why this issue will continue to dominate Scotland’s efforts over the next two years to find the best solution for our people’s future.

15:39  

David Stewart (Highlands and Islands) (Lab)

I thank all the members of the Culture, Tourism, Europe and External Relations Committee for the excellent and thorough report that they have prepared for us.

Sometimes, events have a horrible habit of raining on our parade. Just as the committee has made some useful recommendations regarding article 50, two major factors come into play. They have been referred to already. The article 50 bill cleared the Commons on Monday, and the First Minister announced proposals for the second independence referendum. More of that next week.

Triggering article 50 takes the UK into uncharted territories. As members will know, no full member state has ever left the EU, so it is very difficult to predict the next steps, although we have a few clues. Full single market membership is not sought by the UK Government, nor is it likely to be granted, because the gatekeeper condition of the four freedoms would not be met.

We know that the European Commission’s Michel Barnier is the chief negotiator and needs to take instructions from the remaining 27 EU countries. The European Parliament also needs to give the go-ahead for talks. The final Brexit deal can be ratified by a qualified majority of the other 27 EU leaders, but any new trade deal requires a unanimous vote of all 27 and likely approval by national and, in some cases, regional Parliaments, as we know from the CETA deal.

What would the effect be in Scotland? The introductory paragraph of SP paper 99.1, “Determining Scotland’s future relationship with the European Union”, makes the valid point that, when we are considering future trading relationships, there are three models that we need to consider. First, there is a future with the EEA and EFTA. Secondly, there is a future through the Swiss bilateral agreement model. Thirdly, there is a future through the World Trade Organization. I will touch on those three models, and I will link them with the evidence that was taken by the committee.

Members will know that EFTA was set up in 1960, and the UK was a founding member. When Norway, Lichtenstein and Iceland joined the single market, they became part of the wider European Economic Area, which includes all 28 EU members. The EFTA countries are a part of the single market, but they are at arm’s length from the EU. The advantage of that model is that, if the UK joined, it would avoid the ground-zero approach of a sudden dislocation from the single market.

However, it is not all plain sailing, as we would expect. Membership of the EEA, as we have heard from Daniel Johnson, is not on a par with Scotland’s current deal. Financial services would suffer, as the three European supervisory agencies on banking, insurance and the security markets are not incorporated into that agreement. For an EEA agreement to work, Britain would require full equivalence from the European supervisory agencies.

There is another problem. Ian Dunt, editor of politics.co.uk, said in his recent book:

“And even when equivalent status is secured, the EU has extraordinary powers to cut the life support at any time. It can withdraw equivalent status whenever it likes with just a few days’ notice. This imbalance of power is reflected in the way that EEA countries are in an almost servile state next to the legislative force of the EU. They must accept the rules the EU passes about the single market, but they cannot influence them.”

However, it is not all doom and gloom. EEA/EFTA countries such as Norway pay less in contributions than full EU members. The UK, of course, is a net contributor. Norway has the benefits of the single market but implements only just over a quarter of all EU laws. It also has exemptions from areas of law such as fisheries and justice. Would it not be ironic if the UK went full circle and rejoined EFTA after a 40-year gap, creating a two-speed Europe?

The second model is the Swiss bilateral model. The Swiss deal is fiendishly complex, as members will know. Switzerland is a member of EFTA but not of the EEA. It is in the single market but not the EU or the customs union. It is a classic example of the Schleswig-Holstein question. As Lord Palmerston is reported to have said,

“Only three people … have ever really understood the Schleswig-Holstein business—the Prince Consort, who is dead—a German professor, who has gone mad—and I, who have forgotten all about it.”

It started with a referendum—which sounds familiar. In 1992, Swiss voters rejected the idea of joining the EEA. However, the Swiss Government thought that the single market was a good idea. Six years later, the Swiss got their multiple agreement. However, for the Euro bureaucrats, that bespoke model is a fudge and a muddle. They cannot file it under “EEA”, “Customs Union” or “eurozone”. It is bespoke with a capital B. Whether Europe will want to go down that road again is open to much debate.

Fiona Hyslop

Has the member had any indication from the Secretary of State for Scotland, or indeed any UK Government representative, whether it is that very complicated, challenging model—the Swiss model—that the UK wishes to adopt?

David Stewart

My advice is that the Swiss model was a one-off—it was a bespoke model that was difficult to reach. With regard to my personal preference, the EEA model is an existing and well-trodden path, and it is what I would recommend to Parliament.

The final model is the WTO model. Again, the UK was a founder member in 1995 and was in the WTO’s predecessor arrangement, the general agreement on tariffs and trade, which started in 1948. The WTO has 164 members and accounts for 97 per cent of world trade. We are currently members of the WTO and would default to its rules in the event of a hard Brexit. The sting in the tail of WTO rules is the most favoured nation clause. That means that a country cannot discriminate in its tariffs. The UK needs to establish itself within the WTO, as currently all the negotiations are done by the EU on our behalf.

What the UK needs to do is to create schedules on goods and services. There must be a full analysis of how we would trade with the rest of the world and how the other WTO members would trade with us. We can probably avoid some of the problems with complaints from other countries by following EU external tariffs. However, as the convener pointed out earlier, the Fraser of Allander institute suggested to the committee that there will be long-term economic downturns in the Scottish economy, GDP, real wages and employment if we revert to trade rules under the WTO.

Brexit is the most fundamental political sea-change in my lifetime. However, I believe that the reports that are before us today represent a first-class analysis of the issues, and I commend them to Parliament.

The Deputy Presiding Officer

Thank you, Mr Stewart. I will need to read your speech in the Official Report afterwards so that I can understand the complicated alternatives that you gave. You can add me to your list of people who do not understand the Swiss model.

15:46  

Ross Greer (West Scotland) (Green)

The evidence that our committee has received in recent months has made clear the extent of the confusion and concern that is felt across Scotland about what leaving the EU will entail. With very few exceptions, that evidence has suggested that the question that we are considering is a matter of the scale of the damage, not whether we can avoid it.

We have heard from charities, businesses, expert bodies, trade unions, individuals of immense experience—as well as from our constituents across the country—and the responses have been overwhelmingly negative. It is clear that, in its narrow-minded approach to Brexit, the Westminster Government has not given any consideration to Scotland. In fact, it is becoming increasingly clear that the UK Government does not know what it is trying to do: its approach to Brexit is confused, contradictory and dangerous.

On trade, we hear about aspirations of a global Britain trading with the world at the same time as we hear that we are to leave the world’s largest single market, in a hard Brexit. The Tories want to take back control of national sovereignty at the same time as the UK becomes a global trading nation. The thing is, access to global markets means reducing non-tariff barriers. The EU, which is the largest single market in the world, not only constitutes a significant proportion of global trade, but influences trading standards everywhere. The UK will give up direct input into shaping the very regulations by which we will need to abide. The stated intention of withdrawing from the jurisdiction of the European Court of Justice will likely be incompatible with a meaningful future relationship with the EU. Trading relationships require arbitration, and a trade deal with the EU would almost certainly require having the ECJ as that court of arbitration. “Taking back control” sounds ever more vacuous.

The contradictions are now matched by absurd rhetoric. Neo-imperialist terms such as “empire 2.0” are bandied about and, just this week, the Secretary of State for International Trade tried to rewrite the history of the British empire at the very time when he expects to win favourable trade deals with countries that are still scarred by our colonial oppression. The ignorance of history and of present reality from the Westminster Government is dangerous. Protectionist isolationism is not compatible with being a global trading nation. Further, from what we know, neither of those contradictory visions is deliverable or desirable for Scotland or for the UK.

In its rush to mitigate the damage of Brexit, the UK Government cosies up to the US Administration of Donald Trump. That will not end well. It intends to cut a deal with a man who has been explicit about putting American corporate interests ahead of all else. Our committee heard the evidence quite clearly: US negotiating style is to present the deal that it has come up with and then tell other Governments to sign. The only economic bloc with which it does not take that approach is the European Union, because the EU is too big.

The rhetoric about the Scottish Parliament being one of the most powerful sub-state parliaments in the world will look tragically empty when we are faced with UK trade deals that we are set to have no role in approving, while our colleagues in the Belgian state parliaments can decide the future of EU trade deals.

The Westminster Government’s hard Brexit still hangs over citizens of other European nations living here, and a threat to them should be seen as a threat to all of us, and to the economic, social and cultural health of our society as a whole. Free movement enriches Scotland. As we heard in committee, sectors across our economy face huge problems if free movement is restricted. Hotel and restaurant staff, research staff at our world-class universities, seasonal agricultural workers and many others are drawn from across Europe, yet the Westminster Government has refused to give assurances to EU citizens. It has been prompted repeatedly—in the House of Commons, in the House of Lords, in our committee and in the chamber of this Parliament—but each time it has instead decided to continue the uncertainty and anxiety that is faced by more than 180,000 people in Scotland, and millions across the UK who have chosen to come and live here.

EU citizens who want permanent residency face harassment from the British state. Just recently, a German PhD student was threatened with deportation if she did not produce medical insurance documentation. The UK has constructed a bureaucratic nightmare for such people. If EU citizens wish to attain permanent residency, they must fill out an 85-page form and produce a mass of documentation from the previous five years of their life, including a diary of every time they have left and re-entered the UK. The situation is so bad that the European Parliament has set up a task force to investigate the UK’s treatment of EU citizens.

It is also clear to the committee—and to most of us—that the Conservatives are treating Scotland with contempt. We voted by 62 per cent to 38 per cent to remain in the EU.

Rachael Hamilton

Does the member remember that the voting slip said:

“Should the United Kingdom remain a member of the European Union or leave the European Union?”

Ross Greer

Rachael Hamilton should think about her interventions a bit harder before making them. Of course we all remember the question on the ballot paper. Scotland voted for the UK to remain in the European Union, and people in Scotland were told in 2014 that voting no was the only way to stay in the European Union, but that has tragically turned out not to be the case.

The Scottish Government published compromise proposals that were based around EEA membership—going further than I was comfortable with—and tried to come to some kind of understanding with the UK Government, but those proposals have been roundly ignored. The Scottish Government is not even aware of when article 50 will be triggered. That is the level of contempt with which the UK Government treats the devolved Administrations.

There is no UK-wide approach to Brexit as was promised, and it is beyond doubt that leaving the EU will directly impact on the devolution settlement—the Supreme Court has already attested to that—yet the UK Government has refused to apply the Sewel convention. This is a constitutional crisis of the UK Government’s making. It is clear that Scotland’s vote to remain in the EU is being ignored. The UK that Scotland voted to stay a part of in 2014 no longer exists.

Finlay Carson (Galloway and West Dumfries) (Con)

Will the member take an intervention?

The Deputy Presiding Officer

The member is in his last minute.

Ross Greer

In that UK’s place is a country that is becoming increasingly inward looking and regressive, and which has turned its back on its European partners and tilted back towards a subservient relationship with the new American Administration. Scotland must choose whether that is a future that we want to be part of, or whether we want to put our future in our own hands.

15:53  

Emma Harper (South Scotland) (SNP)

I remind members that I am the parliamentary liaison officer to the Cabinet Secretary for the Rural Economy and Connectivity.

The points that I am about to make will focus on the future relationship of Scotland, the UK and the EU with our agricultural sector. The opening sentences from the latest Culture, Tourism, Europe and External Relations Committee report state:

“In the 43 years that the UK has been part of the European Union, Scotland has benefited from increasing trade opportunities. The EU is now the single largest market for Scottish exports outwith the UK.”

I am a member of that committee and we have heard lots of evidence and expert opinion from witnesses. Many thanks are due to the committee convener and members, to the clerks for their diligent work on reports, and to Professor Michael Keating and Professor Sionaidh Douglas-Scott for their expertise and input.

We need to be quite clear about what the aim will be 24 months from now, in March 2019, for negotiations on agriculture regarding trade, tariffs and support—that is, the replacement for the common agriculture policy. We heard evidence from Peter Hardwick of the Agriculture and Horticulture Development Board, who told the committee that, when negotiating trade agreements, agriculture proved to be one of the most challenging sectors. He said:

“agriculture is always concluded at the end because it is the most difficult bit”,

and he went on to say that

“we cannot see a solution that delivers what the sector needs if it includes tariffs.”—[Official Report, Culture, Tourism, Europe and External Relations Committee, 24 November 2016; c 27.]

Mr Hardwick’s most crucial point was that “On-going tariff-free access” for beef and lamb exports is essential for Scotland.

Finlay Carson

Would the member be happy if Scotland remained in the common agricultural policy and the common fisheries policy?

Emma Harper

We have talked about the common agricultural policy and the common fisheries policy in previous debates. The CFP needs amendment; it is not a policy that the SNP has ever supported.

This morning, the Secretary of State for Exiting the European Union, David Davis, confirmed what many people in the industry have suspected, which is that there will be tariffs of at least 30 per cent to 40 per cent for beef and dairy.

The committee heard evidence that exposed the significant risk to various EU funding streams, including horizon 2020, LEADER and NUTS 2. Agricultural support is a particular focus for me. It is not yet clear whether the UK Government will provide support and funding for agribusiness to the same extent as the European Union currently does. If the future framework for funding is determined by population share, rather than by the current allocation system, Scotland’s share of agriculture sector support will be reduced from 18 per cent to a meagre 8 per cent. That translates into hundreds of millions of pounds of support vanishing.

Farming and agribusiness in Scotland are vital for our rural economy. Cabinet Secretary for the Rural Economy and Connectivity Fergus Ewing is correct when he refers to farmers as “custodians of the countryside”. They are the folk who grow our food, rear the beasts and look after the land. They are crucial for the rural economy and they spend their money locally, thereby contributing to the sustainability of our rural communities. I have been out and about, speaking to many local rural and agriculture businessfolk and farmers since the vote to remove us from Europe.

We have the opportunity to revert to World Trade Organization options for trade agreements, but we all need to understand that that would mean that there would be no subsidies and no support for agriculture.

Finlay Carson

Will the member take an intervention?

Emma Harper

I have already taken an intervention from Finlay Carson. I need to make progress, or I will run out of time.

Such are the WTO rules. The only trade agreement that allows for subsidy for farmers is the trade deal with the EU, which we are about to leave.

Last week, as part of my committee work, I was speaking to one of the Conservative members of the London Assembly, here in this Parliament. I told him that Scotland has 974 dairy farms, 48 per cent of which are in Dumfries and Galloway. I explained that in recent years many of the dairymen have hailed from eastern European countries including Romania, Lithuania and Poland. I relayed that information because I was curious about the perspective from London on how we can recruit replacement dairymen if Prime Minister Theresa May fails to guarantee EU citizens the right to remain as residents in the UK, even if they have been here for five or 10 years. My Conservative visitor’s solution was that we will need to find unemployed people from Sunderland, take them from their homes, ship them to Scotland and expect them to work as dairymen—a job for which they have no skills. That is the answer. It is simple: we just force folks to up sticks and move from their homes, their families and their communities. It is also completely disrespectful to the dairy industry to assume that being a dairyman is an unskilled job.

Whatever happens during the post-article 50 negotiations, I ask the Scottish Government continuously to pressure the UK Government to acknowledge the democratic will of my constituents and the constituents of all members, including Conservative members, who are the 62 per cent of people in Scotland who voted to remain in the union of free nations. I ask that both Governments keep Scottish folk and agribusinesses informed, included and involved in relation to progress regarding the EU exit.

I remain committed to mak siccar that the best deal will be achieved for Scotland.

15:59  

Alexander Stewart (Mid Scotland and Fife) (Con)

I acknowledge the work of the Culture, Tourism, Europe and External Relations Committee, which diligently took evidence from ministers both here at Holyrood and at Westminster, and travelled to Brussels to discuss many aspects of the debate that we are having this afternoon. The committee took evidence from individuals, groups and organisations, and it looked at sectors such as agriculture, tourism and fisheries as well as at the economy.

I pay tribute to the committee members, who worked diligently, for their endeavours and to all the individuals who gave of their time and their talents to support the committee and ensure that it came up with good recommendations such as we have seen in the reports that we are discussing today. Those individuals worked in good faith to ensure that the recommendations were what the committee believed in and what it wanted the public in Scotland and this Parliament to see.

Nevertheless, as many members have pointed out, this debate takes place in the aftermath of the First Minister’s betrayal of the people of Scotland, who, only two short years ago, made clear their desire to remain a strong and integral part of the United Kingdom.

Gillian Martin

Will the member take an intervention?

Alexander Stewart

Not quite now. I will take an intervention from the member later.

They did so in full acknowledgement of the fact that the then Prime Minister had pledged to hold a referendum on the United Kingdom’s membership of the European Union. In fact, “Scotland’s Future”, which was seen by many people as a taxpayer-funded SNP manifesto and which was published prior to the referendum, stated:

“If we remain in the UK, the Conservative Party’s promise of an in/out referendum on EU membership raises the serious possibility that Scotland will be forced to leave the EU”.

Despite the SNP’s whole approach to politics, the people of Britain’s wish to leave has been expressed and we must respect that wish in the context that we are working with.

The two years of division and the divisive debate that took place have left us with a situation. We know that there is neglect of our public services, and the people of Scotland do not want to go back to any of the processes that took place. The Scottish National Party has, once again, turned to its comfort blanket of independence at any cost to ensure that its utterly abysmal record in government and its lack of attention and involvement—

Ash Denham

I have a question for the member. How many jobs would have to be predicted to be lost in Scotland before the Conservatives would act and stand up for Scotland? Thirty thousand? Forty thousand? Eighty thousand? How many?

Alexander Stewart

You need to think about independence. If you were making independence—

The Deputy Presiding Officer (Linda Fabiani)

Speak through the chair, please.

Alexander Stewart

Independence would cost tens of thousands of jobs. Even over the past few days, I have had constituents cancelling orders and who are unhappy about the way we are going forward. That is having a massive impact on our economy now because of the action of the First Minister.

Let us think long and hard. Let us look at the world that we live in. This country was known to lead the world on education, and education was discussed in the committee many times. However, we now do not even lead on education in the UK. Almost every endeavour and every policy that the nationalists bring forward cause division and instability.

Gillian Martin

Will the member take an intervention now?

Alexander Stewart

No. I have taken one already and I want to make progress.

If the Scottish Government really wanted to get the best deal for Scotland in the imminent negotiations with its European partners, it would take the threat of an independence referendum off the table. That shows us where we really are. Mike Russell—who is no longer in the chamber—and his colleagues professed to be doing everything in their power to fight for Scottish interests, but they have completely changed their view. They wanted to ensure that unworkable and impracticable solutions were on the table when they sat down with the UK Government. As has been mentioned, they did not create a big issue at the table; it was when they came outside and saw the media that they wanted to create the issue.

We know that the domestic market is important to Scotland and is worth four times our trade in goods and services with the EU market. Only members who are situated in the central benches of this chamber could argue that the EU single market is more important to Scotland than the UK domestic market and keep a straight face.

Our Prime Minister, Theresa May, has made it absolutely, categorically clear that she will insist on negotiating a Brexit that works for the whole of the United Kingdom. If the SNP stopped its posturing and thought for one minute that it might want to work together, we might find some common ground that would work for the people of Scotland and of the United Kingdom.

The approach that has been taken by the Scottish Government thus far has been entirely divisive. It wants to cause as much difficulty as it can, and the First Minister’s announcement on Monday was just a platform for doing that.

The opportunities for agriculture, fisheries and trade that present themselves now as we depart the political structures of the European Union are immense. We have seen that. Some of the individuals who gave evidence assured us that that was the case.

As someone who campaigned to leave, I accept that there will be challenges as we go forward—no one has ever suggested otherwise—but no challenge that is presented by Brexit will be solved by independence, and no Government should do all within its power to stymie debate. The SNP should play its part to ensure that Brexit works for everybody in this United Kingdom. Scotland can do well from it. I support the recommendations that came from the reports. Thank you.

The Deputy Presiding Officer

I will have to be strict with time for the last speeches—we are really pushed.

16:06  

Tavish Scott (Shetland Islands) (LD)

I thank Daniel Johnson for making a genuinely pro-European speech in his first five minutes. He set out exactly what Labour has been missing. If I may say so, if Jeremy Corbyn had been making that kind of contribution, we would not be quite in the mess that we are, given his complete inability to make a speech in favour of the European Union. I genuinely thank Daniel Johnson for saying exactly what should have been coming from Labour’s benches down at Westminster but, sadly, was not.

I thank the committee clerks, as other committee colleagues have done. I thank my committee colleagues, too, for pulling together a report that, I must confess, I did not necessarily believe would be possible at the start of that Thursday morning at 8 am, if I remember it correctly.

I have two wider points. There are Dutch elections going on today. If I, as a pro-European, wish anything, it is that Mark Rutter is re-elected and that he stems the tide of alt-truth, or anti-immigration populism. Secondly, I saw on Twitter last night the flow of requests for money for both sides of the debate, and then, 10 minutes later, in the news at the back of 10 o’clock, the millions of people who are facing famine in Africa. I just hope that we in Scotland remember to look outwards rather than inwards, given the destitution that people face in other parts of the world.

I want to make a number of points about where we are now. Others have commented—correctly, in my view—that committee reports come and go, and that some of them gather dust. This one gathered dust instantly—or within three or four days—because of what has happened in the past couple of days. That was caused not by Nicola Sturgeon, or even Theresa May, but by David Cameron. His gamble to buy off the Conservative Party in order to try to mend a historic split within it caused the unholy mess that this country is now in—

Adam Tomkins

Will the member give way?

Tavish Scott

I will finish this point, and then I will happily give way.

That caused the unholy mess that we are now in, and I suspect that history will be very unkind to David Cameron’s premiership. If Adam Tomkins wants to argue with that, he is welcome to.

Adam Tomkins

Is it Liberal Democrat policy now to have fewer referendums or more referendums? Mr Scott seems to want to have another referendum to reverse the result of June 2016, despite the fact that he thinks that holding that referendum was a mistake. Which is it? Should we have more referendums in this country or should we have fewer?

Tavish Scott

I have not even mentioned referendums yet, and Mr Tomkins is off on one about the issue. I will deal with that question in a few moments.

Mike Russell began by saying that leaving the European Union will be profoundly damaging. That is absolutely true not just for Scotland, of course, but for the whole of the United Kingdom. The number of times that the committee heard evidence about the damage to the financial centres of London—which link to Edinburgh, Glasgow and Aberdeen, not least because of different mergers that have just taken place across financial services—was very considerable indeed.

Mike Russell said that some of the impact is already beginning to be felt, and he mentioned democracy and mandate. I want to make two gentle remarks to Mike Russell—although I see that he is not in the chamber—on democracy. I saw him on television last night talking about the importance of democracy. Of course democracy is important; he makes a fair point. However, he must recognise that the Parliament has agreed to motions criticising the Government’s position on Highlands and Islands Enterprise, the Scottish Further and Higher Education Funding Council and education policy, so let us be tight about our definitions of when Parliaments say things and when Parliaments do not say things.

On mandate, we all have a mandate. I have a mandate, too. I was elected in Shetland on a mandate of making the case for the European Union and standing up against a second referendum on independence. Quite understandably, Mike Russell and his party believe that they stood on a mandate to make their case but, at the very least, they must recognise and respect the fact that those of us on other sides absolutely did not, and that we will make our own case.

What I fear most of all is Scotland leaving the UK and the UK leaving the EU. That would be the worst of all worlds. I do not fear that for my own sake, because by the time all this happens—whatever happens—I will be at the stage that Gordon Wilson has reached, whereby he was trotted out on the telly last night as an old man of politics to opine on the latest development and conduct an elegant elder statesman’s U-turn and support his party. I have no doubt that we will all get to that point—well, it is more difficult for a Liberal. [Laughter.] Anyway, at some point, we will all be in that place.

I fear our being out of Europe and out of the UK for my children’s sake and the sake of the next generation. My kids are pro-Europeans. I regularly go to school classes in Shetland and—with the Education and Skills Committee that I am honoured to be a member of—across Scotland, where I meet young people who are European in their outlook.

I think that the huge decision that the UK Government has taken is, as has been said, profoundly damaging. That is why, especially given all the remarks that have been made about clarity, if we are to have a second referendum—the Greens will vote for it, so there will be a parliamentary majority in favour of it—the decision must be made in full knowledge of what has happened. Therefore, to say, as the First Minister did, that the referendum must take place within a precise period of time before the outcome of Brexit is known is wrong, because anyone who knows anything about the tortuous negotiations of the EU will know that nothing is agreed to or all is agreed to. Only at the very last minute will we know what has been agreed to. Therefore, it is only right, if the people of Scotland are to be subjected to another referendum on this nation’s constitutional future, that they know exactly what has happened in those Brexit negotiations.

The Deputy Presiding Officer

I remind members that we are very pressed for time.

16:12  

Stuart McMillan (Greenock and Inverclyde) (SNP)

I commend the Culture, Tourism, Europe and External Relations Committee’s reports to Parliament and thank colleagues from across the chamber, the committee’s excellent clerking team, our advisers and everyone who has provided evidence. I believe that the committee’s reports will help many people to understand some of the issues that Scotland and the UK face as we venture headlong into the Brexit process.

Article 50 has not yet been triggered, but we know that that could happen any day now. I echo the comments of some in asking the Prime Minister to at least respect 25 March, which is the anniversary of the signing of the treaty of Rome, by not triggering article 50 on that day, the day before or the day after, and I ask her to let Europeans who care about the EU enjoy their day. If the UK Government respects 25 March, it will garner some credibility, which at the moment is in short supply.

The Foreign Secretary’s comments have not helped. Boris Johnson’s attempt to compare the EU and Hitler was ill advised, to say the least. He said:

“Napoleon, Hitler, various people tried this out, and it ends tragically. The EU is an attempt to do this by different methods. But fundamentally what is lacking is the eternal problem, which is that there is no underlying loyalty to the idea of Europe.”

For the UK Government’s Foreign Secretary to have made such remarks was ill advised, to say the least. Alexander Stewart—who I see has left the chamber—accused us of being divisive. I would argue that, in making such a comparison, the Foreign Secretary was being utterly divisive. Rachael Hamilton said that we were in a time of uncertainty for the economy; unfortunately, such comments by the Foreign Secretary make that uncertainty worse and detract from the respect for the UK Government in the EU.

Our committee has produced four excellent reports, and I have no hesitation in highlighting them when I talk to constituents, local businesses and anyone else with an interest. Now that political interest in Scotland is at such an increased level—which I and, I am sure, MSPs across the chamber welcome—I hope that we can highlight the various points that are made in those reports.

I have to point out that during an evidence session that the committee had on 22 February, the Rt Hon Greg Hands MP, the Minister of State for Trade and Investment, stated in response to a question from my colleague Emma Harper that,

“In 2015, Scotland secured a total of 119 foreign direct investment projects, which makes it the second most attractive region in the UK, behind only London.”—[Official Report, Culture, Tourism, Europe and External Relations Committee, 22 February 2017; c 13.]

That somewhat let the cat out of the bag about the UK Government’s position and thinking about Scotland, because Scotland is not a region; it is a nation. At the time, I gently asked the minister to reconsider his comments, and his reply was what can only be described as supercilious. However, I genuinely do not blame him; that reflects the culture of the Westminster bubble, which considers Scotland as an irrelevance at worst and an annoyance at best.

Adam Tomkins

Scotland is, of course, a nation—all of us in all parties in the chamber agree on that. However, as a matter of European law, Scotland is classified as a region.

Stuart McMillan

The minister Mr Hands was talking about foreign direct investment in a UK sense. Mr Tomkins is absolutely correct that Scotland is a nation, but I ask him to please say that to his ministers down in London, because they do not know or respect Scotland.

The people of Scotland did not vote for Brexit, and only one of the nation’s 59 MPs backed the UK Government by voting to trigger article 50. I do not want Scotland to lose an estimated 80,000 jobs within a decade or to cost people an average of £2,000 in wages, as is indicated in the Fraser of Allander institute research that the committee commissioned. I do not want Scotland to be ignored any longer. If it can be ignored on an issue of such magnitude as our membership of the European Union and the single market, it is clear that the UK Government can ignore our voice and our interests at any time. We are not going back into our box, and the politics of the past is no longer acceptable to the electorate of Scotland.

Our committee’s recent report entitled “Determining Scotland’s future relationship with the European Union” clearly highlights the position that many people across Scotland hold. Our key recommendation of

“a bespoke solution for Scotland”

is not something that many people will argue against. It has caused debate, but clearly not at the UK level, given that the UK Government appears to have ignored the compromise suggestion that the Scottish Government made in December. Rachael Hamilton said that a bespoke solution is highly unlikely, but I am sure that, decades and decades ago, when people first thought about going to the moon and sending rockets up into space, others probably thought that that sort of thing was highly unlikely to happen. Did that stop people from trying? No, it did not, and we should not stop trying to find a bespoke solution for Scotland.

Finlay Carson

Will the member give way?

Stuart McMillan

No—I am in my last minute. The compromise suggestion does not seek to make Scotland different; it is a compromise to help our economy and the people who live in Scotland.

A further recommendation of the committee was to explore EEA membership with the EU 27 before and after the triggering of article 50. Many comments have been made in recent months about the opportunity that Brexit provides, but I argue that Scotland and the UK should have the opportunity to have the differential position. Our committee recognised that there is no direct precedent for such a solution, but I note that a variety of differential arrangements already exists in the EU—the arrangement between the Faroe Islands and Denmark provides one example.

I am conscious of the time, Presiding Officer, and I know that you are going to stop me, but I want to say finally—

The Deputy Presiding Officer

No, Mr McMillan. We are seriously pressed for time.

Stuart McMillan

I want to say that I will support the motion tonight.

The Deputy Presiding Officer

Thank you, Mr McMillan.

I should say that it is the Presiding Officer’s quite strict rule that members should stay in the chamber for at least two speeches after their own, unless they have asked the Presiding Officer to let them do otherwise and have been given permission to do so. I am sure that Mr Alexander Stewart will apologise when he comes back into the chamber.

16:19  

Ross Thomson (North East Scotland) (Con)

I, too, thank the Culture, Tourism, Europe and External Relations Committee for its work and for bringing forward the debate. It is most striking that the committee’s first report of 2016 calls for engagement from across Scotland. That is encouraging, and it demonstrates the importance of bringing people together to establish facts, challenges, solutions and opportunities from exiting the European Union. However, after Monday morning’s announcement by the First Minister, it is apparent that such constructive engagement is the last thing that is on the Scottish Government’s agenda. The Government would rather pursue another divisive independence referendum than explore the numerous opportunities for Scotland that Brexit presents.

Stuart McMillan

Will the member take an intervention?

Ross Thomson

No. I am not even a minute into my speech.

It could not be clearer that the Government’s so-called compromise proposals were never genuine or sincere; instead, they were just another move in the SNP’s independence game plan. However, as the Prime Minister has said, politics is not a game. The lives of our people are not a game, and the prosperity of our businesses and industries is not a game.

Ash Denham

Will the member take an intervention?

Ross Thomson

No, thank you.

The security of people’s jobs is not a game, and the future of our country is not a game.

I have lost count of the number of people from across Scotland who have contacted me since Monday to express their dismay and anger. That anger is particularly potent from the north-east’s fishing communities. In her opening remarks, the convener of the committee described the challenges that fishermen face. The report reflects the evidence that the committee heard. Let us be clear: the Scottish Fishermen’s Federation has been unequivocal in its support of the UK Government’s approach to leaving the EU. The chief executive of the Scottish Fishermen’s Federation, Bertie Armstrong, has reiterated that the Scottish Government is

“making the wrong argument at the wrong time”

when it comes to independence.

Gillian Martin

Will the member take an intervention?

Ross Thomson

No, I will not.

We can imagine the palpable frustration from fishermen who now fear that the SNP will sell out their industry and coastal communities by dragging them back into the EU and the common fisheries policy. Alex Neil is absolutely right that the SNP and any pro-independence campaign will haemorrhage votes in the north-east if they continue to disregard the legitimate views of leave voters.

Joan McAlpine

Will the member take an intervention?

Ross Thomson

No, I will not.

A theme in the report is the option of EFTA membership for Scotland, which David Stewart highlighted. Maybe it was Alex Neil’s words of wisdom that led to the total and utter chaos that we have seen in the SNP today. There are reports that it is now considering ditching its policy of supporting full EU membership in favour of a Norway-style deal. Just a day after the First Minister demanded a second vote on independence, senior nationalist sources told The Daily Telegraph that Nicola Sturgeon would instead try to join EFTA. That is despite Mike Russell’s stating only yesterday in the Parliament that the SNP remains in favour of full EU membership. Even senior SNP figures cannot seem to agree on what relationship Scotland should have with the EU.

What makes the whole fiasco even more extraordinary is that the First Minister stated in July last year that the EFTA option would leave Scotland with no influence. I will quote her—I hope that Alex Neil and his Brexit colleagues are listening. She said:

“To end up in a position, which is highly possible, where we have to abide by all the rules of the single market and pay to be part of it, but have no say whatsoever in what the rules are, would not be taking back control, to coin a phrase we’ve heard more than once recently—it would be giving up control. Having an influence in the world we live in matters—for all of us.”

While the Prime Minister attempts to negotiate bold and ambitious free-trade deals with the EU and others, the Scottish Government continues to overinflate the importance of the single market and conveniently sidesteps the fact that Scotland’s biggest trading partner is the rest of the UK. However, the SNP’s contempt for cold, hard facts, economic reality and the benefits of Brexit should come as no surprise to anyone in the Parliament.

Joan McAlpine

Will the member take an intervention?

The Deputy Presiding Officer

It is clear that Mr Thomson is not taking interventions. Can we have a wee bit of calm, please?

Ross Thomson

Thank you very much, Presiding Officer.

The Scottish Government has abdicated its responsibility to promote Scotland’s interests in the negotiations that are to come. [Interruption.]

The Deputy Presiding Officer

Mr Arthur, please be quiet. I am sorry, Mr Thomson—carry on.

Ross Thomson

Thank you, Presiding Officer.

The Scottish Government will be actively and aggressively talking down the UK Government’s efforts to achieve the best deal for the whole United Kingdom. It is up to the rest of us to stand up for the democratic decisions that we have made as a country. The Scottish Conservatives can and will do just that.

16:25  

Christina McKelvie (Hamilton, Larkhall and Stonehouse) (SNP)

Reports, reports, reports—by the time the Prime Minister triggers article 50, there will be a library full of reviews, considerations, discussion minutes and research files. Some of them will be genuinely useful and intelligent, such as the Culture, Tourism, Europe and External Relations Committee’s first report of 2016, on the EU referendum result, but others pull together thinly veiled propaganda that represents, as my colleague Stephen Gethins MP has said, a “dereliction of duty”.

That is what happens when there is a vacuum and a Government completely fails to provide readable, accessible and objective information. Such a vacuum also creates a space in which extremist people develop the status of heroes. Vacuums are dangerous. I therefore congratulate the committee on producing accessible and readable reports. Together, the committee’s members have distilled a wide range of different perceptions into documents that are practical and real: we hear the voices, we get the issues and we digest and respond.

Colleagues have spoken at length—we had anger from the Tory side, but whether it is righteous remains to be seen—about the difficulties that lie ahead in securing sustainable trade deals post-Brexit. We are standing on a cliff edge, about to say goodbye to all the riches that Europe has brought us during the past decades, but the Brexiteers are waving their hats and cheering for the end of the four fundamental trade freedoms: the free movement of goods; freedom of movement for workers; the right of establishment and the freedom to provide services; and the free movement of capital. Not to give reassurance on Monday to EU nationals who live here was a disgusting act by the UK Government, and it is not representative of the country in which I live.

The Brexiteers cheer because they are under the illusion that they will be living in a land that is flowing with milk and honey, but they are blind to what will be the end of everything that we have had from the EU—from a legal guarantee of human rights and social protection, and the support of major national partners in the event of war, to CAP payments. That is like someone setting fire to their own house and cheering at the destruction as the roof blows up.

The four freedoms have a series of associated social protections—that applies particularly to freedom of movement. The Scottish Government and Governments across Europe have been working hard—indeed, they have been very successful—in the drive to protect against human trafficking, discrimination, violence against women and girls, and LGBTI bullying and abuse.

Many support groups, such as Scottish Women’s Aid, Enable, Engender, Money Advice Scotland and Stonewall, and many other organisations, including disability rights groups, follow carefully what we are achieving and commend the Scottish Parliament for it. As the convener of the Equalities and Human Rights Committee, I participate in those important exchanges constantly.

We have set ourselves goals that represent who we are and the kind of country that we want to live in and play a part in. We are global citizens who happen to live in a forward-thinking, innovative, protecting and compassionate society. That we are citizens of Europe puts us into a huge and disparate group of some 600 million people, the vast majority of whom share our ideals and our values. I hate to look towards the prospect of a passport that no longer says that I am a citizen of the European Union, but I look forward to one that says that I am a citizen of Scotland and the European Union.

The nasty aspects of today’s reality include terrorist bombs in France, Belgium, Germany and Glasgow; cruel and destructive actions against refugees, not just by Governments across Europe but by the UK Government; human trafficking; torture; and female genital mutilation. I could list more such aspects, but at present we tackle them together with the strength and impact of not only 28 countries—perhaps to be 27 soon—but a central core of legislation that protects workers’ rights through the working time directive, holiday leave entitlement, maternity rights, equal pay rights and sickness benefits. Of course, there is also the right not to be discriminated against or tortured.

Let us consider one of those rights—the right to healthcare while on holiday. In committee today, David Davis said when asked that he could not confirm whether UK citizens will no longer have access to the European health insurance card. He said, “Probably,” but he said that he has not looked at the issue. That seems to sum up the UK Government entirely.

As has been widely reported today, the Westminster Government is ill prepared for dealing with the implications at any level of leaving the EU. Some of its members have overtly lied to the public and others have been misleading. There is not much truth to be found, because the truth is too awful to talk about. That is why David Davis has admitted that he has no plan A, B, C or even Z.

I hope that the way forward is paved with good intentions, but there are an awful lot of challenges. Scotland will make its presence felt. We will demand recognition at the negotiating table and we will fight for the representation of our people. Ultimately, Scots will make their own decision about the kind of society that they want to be part of and how they want to make that work. I know which side I will be on.

The Deputy Presiding Officer

We move to the closing speeches. I am disappointed to see that not all members who took part in the debate are back in the chamber. I call Daniel Johnson. You have up to six minutes, Mr Johnson.

16:31  

Daniel Johnson

This has been, at times, a contentious and fraught debate, but that is not surprising given the subject matter that we are discussing and the context in which we are having the debate. However, there are some common threads, so let me begin with consensus.

First and foremost, I reiterate my thanks to the Culture, Tourism, Europe and External Relations Committee for the hard work that has gone into its reports and for their clarity. They are valuable and useful. Richard Lochhead made the important point that the EU has been the context for the current political generation and that, whatever our points of view or our perspectives, we need to think about future generations. That is absolutely right.

Three principal issues have been discussed: the impact on the economy and jobs; the impact on people; and the options that we have. However, before I go any further, I thank Tavish Scott for his kind words about what I said earlier. Whatever happens and whatever option this country—the UK or Scotland—takes, it is incumbent on all of us who are pro-European to continue to make the case for Europe. I, for one, am committed to making the case for the UK’s participation in Europe—indeed, I am committed to making the case for the European Union—beyond whatever happens through article 50 and the UK’s exit from the European Union. That is my personal commitment.

Let me talk briefly about the impact on jobs and the economy. I do not want to cover the ground in depth, but it is clear that there is going to be a huge impact on jobs, and that has to be our fundamental consideration. Again, I think that there is consensus on that. We also have to recognise that, as we move from a situation of deeper co-operation, we will need to make compromises through trade deals.

There are areas that we have not discussed. The profound implications for universities and research funding will have impacts both on jobs and on the wider benefits. One or two members mentioned agriculture, which is an area of huge complexity and one that requires our attention.

I reiterate the brutal impacts that are outlined in the numbers from the Fraser of Allander institute, which a number of speakers mentioned. They suggest that crashing out of the European Union on WTO rules would lead to declines of 5.3 per cent in GDP, 11.3 per cent in exports and 7.2 per cent in employment. Those are circumstances that we cannot accept.

Joan McAlpine

I agree with the points that the member has made about an exit under WTO rules. Does he agree with the chief economist of Quality Meat Scotland, who has pointed out that, under WTO rules, the tariff on a carcase of lamb will increase by 49 per cent, so a carcase that sells at present for £80 will go up to something like £119?

Daniel Johnson

I would not pretend to know the detail, but that is an example of the tariffs and trade conditions that we need to look at. I will come back to that point later.

We also need to look at the people impacts. Christina McKelvie made an impassioned speech about the real impacts, and it is indeed people’s lives that we are talking about. The Government is treating people who have made their lives in this country as a bargaining chip. It is absurd that the UK Government did not accept Harriet Harman’s amendment, which would have basically ensured that people who are already here could stay here. What is the cost? There is no concession there. I understand the need to bargain over the rights of EU citizens in the future, but surely we can extend those rights to the EU citizens who are already here.

The debate is about Scotland’s options going forward, and I thank my colleague David Stewart for his very thorough explanation of the three different options and the costs and downsides to each of them. Even the EEA-EFTA model is not without complications and downsides—the costs to the financial services sector would be profound. The Swiss model is probably unrepeatable, and I have already mentioned the WTO rules. Ross Greer correctly pointed out that the concept of becoming a global trading nation means accepting the restrictions and tariffs placed on us.

We also need to look at the Scottish Government’s so-called alternative model. It is important that we explore every opportunity to maintain our links with, access to and membership of the single market. However, simply to present its option as a concrete and sure model that we can just take off the shelf is not correct—the committee’s reports make that clear. Dag Wernø Holter from EFTA said:

“there have been no concrete, direct discussions either between the EFTA states or between EFTA and the Faroe Islands on that matter in any substantial way.”—[Official Report, Culture, Tourism, Europe and External Relations Committee, 17 November 2016; c 29.]

To stand in front of us and claim that that option can be taken easily, swiftly and without cost or consequence is simply a nonsense.

Michael Russell

Throughout “Scotland’s Place in Europe”, Mr Johnson will find references to the difficulties of moving forward on any of those options, including the UK option. I am sure that he would like to be fair about that—I will be happy to send the references to him.

Daniel Johnson

Let me be fair—that is what the paper says. However, those are not the words that Government ministers utter when describing the paper. The option is presented as a certainty, and that is unfair and dishonest.

It is also dishonest to talk about job losses and the economic costs of coming out of the EU without acknowledging the costs and implications of coming out of the UK. If coming out of the EU and destroying the bonds that we have with the rest of the EU has costs, implications and risks, those costs and risks are faced many times over if we come out of the UK. That is the realistic and honest assessment that we have to have if we are discussing independence.

Finally—

The Deputy Presiding Officer

No, Mr Johnson. I am afraid that you have to close. We are pushed for time.

Daniel Johnson

That is why Labour rejects independence and rejects the need for a second independence referendum. I will close on that point.

16:37  

Adam Tomkins (Glasgow) (Con)

I start by praising the committee’s work and thanking the members from all parties who serve on the committee, as well as the parliamentary staff. The committee’s work is impressive in both its quantity and quality—it is rich and full. However, as David Stewart rather eloquently put it,

“events have a horrible habit of raining on our parade.”

I rather share my friend and colleague Jackson Carlaw’s sympathy for the convener, Joan McAlpine, who had the rug pulled out from under her by the First Minister on Monday.

From the richness of the committee’s work I want to pull out three broad themes, each of which has been reflected in the debate. The first is the theme of opportunity versus risk. Richard Lochhead put something very strikingly in his speech. He said that the creation of the EU was an act of political bravery in the immediate post-war era of European politics, and he is right about that. We now need to be equally brave and bold in our advocacy of the relationship that we as the UK should have not only with the EU, but with the rest of the world. It seems to me that there is a big argument to be had about that—a big argument about what Brexit means and what it should become.

Ash Denham cited the evidence given to the committee by my boss at the University of Glasgow, Anton Muscatelli, in which he said that we live in a world in which protectionism is on the rise and liberal unionism—liberal internationalism—is struggling to make its voice heard. My view and the view of my party is very much that Brexit must not mean a surrender to nationalist protectionism. Brexit should not mean that we put up walls between ourselves and our nearest neighbours; it needs to mean that we pursue what the Prime Minister has described as the

“freest possible trade in goods and services”

with the European Union, the fullest possible access to the European single market and the “greatest possible” participation in it. Some members of this Parliament like to describe that as the hardest of hard Tory Brexits, but that is not what a hard Brexit is. We cannot simultaneously say that what the Prime Minister is seeking is a hard Brexit and then say that coming out of the EU and trading on WTO terms would be the hardest of hard Brexits, because those are not the same things. The Prime Minister and the British Government do not want Brexit to mean trading on WTO terms. We want the “freest possible trade in goods and services” with the European Union, the fullest possible access to the European single market and the “greatest possible” participation in it.

Ross Greer

Will the member give way?

Adam Tomkins

Not at the moment.

We must be brave and bold in articulating that vision of free trade. In Scottish politics at the moment, the question is asked: what kind of country do we want to be? The kind of country that I want us to be is a country that is one of the world’s beacons for free trade and for the freedom, liberty and prosperity that come with free trade. That is the argument that we should be making in Scotland and throughout the United Kingdom. On the question of what Brexit means, that is my view about what it should mean, and it is a view that Ruth Davidson and Theresa May share.

Michael Russell

I hear the member’s articulation and I understand it, but can he point to any difficulty in being that type of open, bold and expansive nation within membership of the EU? It seems to work for Germany, which exports far more than we do. What is it about the EU that holds that back? Nobody has yet defined that.

Adam Tomkins

The answer is that membership of the European Union—and, indeed, membership of the European Economic Area—prevents a member state from making a free-trade agreement on its own terms with any other country in the world.

Michael Russell

No, it does not.

Adam Tomkins

It does. The European Union is a trading bloc—it has never been part of the European Union to be a proponent of free trade with the rest of the world. I and my party want the United Kingdom to be a beacon of global free trade.

The second theme that I want to draw out—I am in my last minute, so it will have to be the last theme that I draw out—is the idea that what the SNP produced in December was a reasonable compromise deal. That is a myth that needs to be nailed. The idea is that we could have a differentiated deal for Scotland—with Scotland being in the European Economic Area while the rest of the United Kingdom was outside it—without there being any material change to the nature of the border between Scotland and the rest of the United Kingdom. That just does not work. Members do not have to take my word or my party’s word for that. That is what Svein Roald Hansen, the head of the Norwegian Parliament’s EEA and EFTA delegation, said and it is what the deputy chair of the Norwegian Parliament’s foreign affairs committee has said. Michael Russell is fond of quoting Welsh ministers, but the Welsh First Minister, Carwyn Jones, has also ruled out Scotland getting a special deal from the European Union.

The Deputy Presiding Officer

You must close.

Adam Tomkins

Professor Michael Keating of the University of Edinburgh has said:

“It’s not possible. If Scotland was in the single market and the UK was outside there would be a hard economic border between Scotland and England.”

Those are not my words; they are Professor Keating’s.

Michael Russell rose—

Adam Tomkins

I am sorry, but I am out of time.

Michael Russell

I am very happy—

The Deputy Presiding Officer

Mr Russell, the member is finished. I know that you are terribly disappointed about that.

Michael Russell

I am.

16:44  

The Cabinet Secretary for Culture, Tourism and External Affairs (Fiona Hyslop)

I thank the committee for its excellent reports and thoughtful recommendations. I also thank the convener, Joan McAlpine, for her equally excellent exposition of their content. The committee offers a welcome and measured voice in the debate about Scotland’s future relationship with Europe.

This morning, I spoke at the opening of the Scottish Tourism Alliance conference and the launch of Scottish tourism week. The sector is of great importance to Scotland, and it has benefited from Scotland’s being part of the EU and the single market. The challenges that the sector faces bring into sharp focus a number of the committee’s points. In particular, the committee recognises the benefits that Scotland has enjoyed from freedom of movement and the valuable contribution that our fellow EU citizens make to our economic prosperity, with over 20,000 being employed in the tourism sector alone. As Christina McKelvie pointed out, those are the same EU citizens whom the UK Government voted, on Monday in the House of Commons, not to protect.

UK ministers like to pretend that they have the same approach to EU nationals as the Scottish Government has, but they do not. We want their rights to be protected and guaranteed: the Tories want to use them as bargaining chips. Ross Greer pointed out—and the committee report says—how difficult it is to complete the 85-page form to become a resident of the UK.

More broadly, migration is key to addressing Scotland’s demographic challenges and to our future prosperity. As Richard Lochhead set out in his speech, the growth of our population is crucial to the growth of the Scottish economy, and EU nationals play a vital part in that. There are Scottish jobs and businesses that rely on EU nationals.

Our ability to create a more productive and fairer Scotland depends more than ever on trading with our friends in Europe and the rest of the world, and on attracting investment and talent into our economy. Like Tavish Scott, I thank Daniel Johnson for his opening speech—or at least the first half of it—as it set out the European proposition very well. The great risk to Scottish jobs and our economy is a hard Brexit; worse still would be for the UK to leave the EU with no deal at all.

Joan McAlpine cited evidence in the report that the world has never seen a trade arrangement being dismantled in this way. Ash Denham pointed to evidence that rebuilding the trade deals that we currently have, let alone building any in addition, will take years.

I looked at what I might want to quote from the Conservative speeches. When I looked at what I had written regarding Alexander Stewart’s speech, I saw that it was only one word: “bitter”.

I turn to the more substantive contributions on the committee’s evidence. David Stewart pointed out that the Fraser of Allander institute concluded that if, after Brexit, we were to find ourselves in a scenario in which Scotland was operating under WTO regulations, outside the single market, in 10 years Scottish GDP would be 5 per cent lower, exports would be 11 per cent lower, real wages would be 7 per cent lower and the number of people employed would be 3 per cent lower.

Richard Lochhead pointed out the agriculture tariffs of 30 per cent to 40 per cent that we face, and Emma Harper quoted Peter Hardwick, who said that agricultural deals will come at the end, because they tend to be the most difficult ones. She also referred to the dairy-labour market.

Members should remember that the UK Government has no mandate from any part of the UK specifically to leave the single market. We can be out of the EU and still be a member of the single market. Indeed, the Conservative Government at Westminster was elected on a manifesto that said:

“We say: Yes to the Single Market.”

That is just one reason why the Tory Government’s decision to ignore the Scottish Government’s compromise proposals is democratically wrong. Yes—the compromise proposals are technically and legally challenging, but we have been told that they are possible, if the political will exists. The UK Government is determined to take the UK out of the single market.

Finlay Carson

Does the cabinet secretary agree that the single market is underpinned by various policies, two of which are the common fisheries policy and the common agricultural policy? If she does, does she suggest that the SNP Government wants to stay part of the CFP?

Fiona Hyslop

I would ask Finlay Carson whether he could guarantee that the UK Government will not trade the fisheries policies and position of Scotland for benefits in terms of its trading operations.

The UK Government has not moved an inch towards compromise or agreement. We have a choice: to follow the UK towards a hard Brexit or become an independent country.

The First Minister has set out a plan to protect Scotland’s interests. We will do all that we can to protect Scotland during the UK’s negotiations to leave the EU—we have responsibility to do that. When the terms of Brexit are known, we will give people a choice over the direction that Scotland should take before it is too late to change course. Before people make that choice, we will set out the challenges and opportunities of independence: how to secure our relationship with Europe and build a stronger economy and a fairer society.

Rachael Hamilton

Will the minister take an intervention?

Fiona Hyslop

I want to move on.

My ministerial colleagues and I continue to be active in engaging in Europe and beyond—as Jackson Carlaw has urged us to do. He was a bit ungracious to his convener, so he might want to reflect on his remarks.

Since the referendum, we have met the EU institutions and all 27 member states. Only last week, Fergus Ewing met Commissioner Hogan and Minister Creed during a visit to Brussels, and Keith Brown visited Berlin and Hamburg. Across Europe—and the world—Scotland’s predicament has been met with interest, understanding and open ears. Europe is listening to us.

Scotland is at a crossroads: at stake is the type of country that we want to be. We want to be seen as an outgoing and welcoming European nation. We embrace the values of democracy. Let us not be driven against our will to a damaging hard Brexit; let us instead give the people of Scotland the opportunity to choose their future for themselves.

16:50  

Lewis Macdonald (North East Scotland) (Lab)

In my role as the committee’s deputy convener, I thank the committee clerks and advisers, the SPICe researchers and all those who assisted us in our work and who have contributed to the debate. I also make a special mention of the elected members of the Welsh and London assemblies who came to Scotland to discuss issues of common interest, as well as the elected representatives who met us during our visits to London and to Brussels.

Today’s debate has focused on our most recent report “Determining Scotland’s future relationship with the European Union”. Although we did not achieve complete consensus, it is striking that all five parties on the committee were able to agree to a broad range of conclusions based on the evidence that we heard.

The report is only a fortnight old. In some respects, its conclusions and the committee’s recommendations have been overtaken by events, as Mike Russell made clear in his opening speech. However, the report’s tenor remains relevant.

Although committee members agreed about the benefits of the single market for Scotland and for the UK as a whole, we neither endorsed the Scottish Government’s proposed mechanism for Scotland to remain in the single market if the rest of the UK were to leave, nor did we reject it; instead, we said:

“a bespoke solution that reflects Scotland’s majority vote to remain in the single market should be explored with the EU 27 as part of the negotiations ahead, before and after the triggering of Article 50.”

It is worth remembering that all committee members agreed to that wording.

At the time that we agreed the report, a majority of the committee believed that a differentiated solution could be found in the EU to accommodate Scotland in, or its connection to, the single market, but no collective view was expressed about what that differentiated solution might be. However, we were explicit in saying that a bespoke solution for Scotland—within the UK—should continue to be explored after, as well as before, the triggering of article 50.

Given this week’s events, whether anyone still believes that a bespoke solution for Scotland within the UK is possible is a debate for another day. Suffice it to say at this juncture that nothing in the evidence that we heard from Scottish ministers led us to expect a fundamental change in their approach before the triggering of article 50.

It is important to note that the committee welcomed the intensification of discussions at official and ministerial level on the proposals made by the Scottish and Welsh Governments. We called on UK ministers to respond to the Scottish Government’s proposals before invoking article 50 and we asked them to say whether the Scottish Government’s objectives for a differentiated solution would be set out in the article 50 letter to the EU.

Those were reasonable demands, commanding all-party support on the committee, even if their force has been somewhat weakened by this week’s wider developments. Our call for the Scottish and UK Governments to work together on those matters still stands; so, too, does our call—made by the majority—for transitional agreements to be requested by the UK Government in the letter triggering article 50.

The convener mentioned that, in Brussels, we met members of the European Parliament’s Committee on Constitutional Affairs. In their discussions with us, they were clear that a withdrawal agreement would be negotiated first, followed by a separate agreement on the UK’s future trade relationship with the European Union.

Our committee’s report on migration and citizens’ rights recognised the contribution of EU citizens living in this country, called for them to be reassured about their future status without further delay and acknowledged the case for a differentiated approach to the issue of free movement and migration in the UK.

We now know that the UK Government has chosen to leave the future of EU citizens in this country to be dealt with as part of the withdrawal agreement, which will also have to deal with other difficult issues: EU staff and pensions; UK payments as part of current EU programmes; and the location of EU agencies.

Even if the divorce deal dealing with all those difficult issues is done within a two-year timeframe, a future trade deal between the UK and the EU clearly will not be. The Canadians, whom we also met in Brussels, took two years to agree the scope of what would be included in their trade deal with the European Union and then another five years to agree the terms. Ratification and implementation follow thereafter.

In view of such daunting timescales, the majority of the committee took the view that the UK Government must seek to agree transitional arrangements as part of the article 50 process to maintain something like the existing terms of trade while a long-term agreement is put in place.

In Brussels, we also heard from lawyers with expertise in these areas that World Trade Organization rules permit transitional arrangements for up to 10 years, after which the default position of WTO terms and tariffs would come into force. Avoiding such an outcome—dependence on WTO rules—would require a final deal to be reached during a transitional period, which, in turn, would have to follow from the withdrawal agreement. The committee heard from nobody at all outwith the UK Government who believes that such transitional arrangements might not be necessary.

On the subject of powers repatriated from Brussels, as the convener said, we concluded that any such power that is not currently reserved should be devolved, alongside a funding mechanism, with no detriment to Scotland. Different parties have different views on what should happen with the repatriation of other competences, but an agreed starting point for that debate is laid out in our reports.

There are many EU funding streams, but structural funds and agricultural support cover the main ones that are delivered through a territorial funding framework. The question of whether there should be a UK-wide framework for agreeing support for disadvantaged regions or less favoured areas objectively across Scotland, England, Northern Ireland and Wales was raised. If that is to happen, the reports’ clear implication is that such a framework has to be devised by the UK Government and the devolved Administrations working together, rather than being determined by the UK Government alone.

Whatever the timescale for article 50, the committee agreed unanimously that the respective Governments should deal with European partners on the basis of an agreed approach. Current practice in relation to the Council of Ministers is described in our reports in these terms:

“Scottish Ministers have participated in negotiations following the prior agreement of a UK negotiating line and set of priorities. This principle should apply to the withdrawal agreement and any new free trade agreements.”

We also said that, as those negotiations proceed, a means should be found to involve the Scottish Government in discussions on future trade deals, whether by creating a joint ministerial committee on international trade or in some other way. Just as importantly, we called for the written agreement between the Scottish Government and the Scottish Parliament to be augmented to ensure that committees of the Parliament are fully informed by ministers on both the EU withdrawal agreement and any future trade deals. Here again, events this week may have put some of those recommendations in a different light, but they remain the unanimous recommendations of all members of the committee.

The reports have not sought to lay down red lines, whether to the Scottish Government, the UK Government or, indeed, the EU 27. They propose that if the will is there, a means can be found to square the circle of Scottish support for a close relationship with Europe and freedom of movement with the UK-wide decision to leave the EU—a decision that is not challenged or denied in the reports.

The reports call for a response from UK Government ministers to the Scottish Government’s proposals before the triggering of article 50. They also call on both Governments to continue to work together for a mutually beneficial outcome once that critical point has passed. The reports do not express a view on the merits or weaknesses of the Scottish Government’s proposal. The committee divided on the merits of the UK Government’s approach, but we agreed on almost everything else.

These are serious reports, and they deserve to be taken seriously by all parties and by both Governments. How far developments this week suggest that that is happening I will, for the moment, leave for others to judge. The only thing that we can be certain of today is that we will face continuing uncertainty tomorrow.

I commend the approach that the committee has taken in its reports as the right approach to that uncertainty in the period ahead.