Meeting of the Parliament

Meeting date: Tuesday, December 20, 2016

Official Report 859KB pdf

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Scotland’s Place in Europe

The next item of business is a statement by the First Minister on Scotland’s place in Europe. The First Minister will take questions at the end of the statement, so there should be no interruptions or interventions.

15:01  

I begin by expressing my condolences and sympathies to all those who have been affected by last night’s appalling attack in Berlin. Our thoughts are very much with all those who lost their lives, those who sustained injuries and those who lost loved ones. I am sure that, as the Cabinet did earlier this morning, Parliament will want to express our solidarity with the people of Germany at this time.

I am pleased to have published today “Scotland’s Place in Europe”, which is a paper containing detailed and practical proposals to mitigate the very real economic, social, democratic and cultural risks that Scotland faces as a result of June’s United Kingdom-wide referendum on European Union membership.

Let me clear: Brexit is a problem that is not of Scotland’s making. Scotland voted overwhelmingly to remain in the EU, yet—notwithstanding the fact this problem is not of Scotland’s making—the paper is the first and only detailed plan for dealing with the implications of Brexit to be published by any Government in any part of the UK.

Six months on, the fact that there is still no clarity, no plan, no direction and no leadership from the UK Government on an issue of such profound importance to every individual and every business across our country quite frankly beggars belief. That should be of particular concern to MSPs in this chamber, as there are many here who believe and argue that the case for leave was sold on a false prospectus.

As everyone knows, I believe that Scotland should be an independent country and that, as an independent country, we should be full members of the EU. Indeed, if we were independent, we would not now face being taken out of the EU against our will.

The manifesto on which I was elected as First Minister just eight months ago said expressly that, in relation to independence, 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.”

That change of circumstances has occurred and there can therefore be no question about the legitimacy of the Scottish Parliament and the Scottish people considering afresh the question of independence, if that is necessary to protect our interests.

I have made clear—and do so again today—that the option of independence must remain on the table. Without that option, Scotland would simply have to accept the inevitability of whatever decisions the UK Government makes, no matter how damaging they are to Scotland’s interests. In my view, that is not a position that any serious politician or party should ever be content for Scotland to be in, and as First Minister it is my duty to ensure that all options are open to Scotland in these unprecedented times.

However, as I have also made clear, independence is not the focus of the paper that we have published today. The paper that we published earlier today is about fulfilling in full the commitment that I made to the Scottish people in June. The day after the referendum, I promised to explore not just my preferred option of independence, but all options to protect Scotland’s place in and relationship with Europe. The paper also delivers on the mandate given to this Government by Parliament on 28 June

“to explore options for protecting Scotland’s relationship with the EU, Scotland’s place in the single market and the social, employment and economic benefits that come from that”.—[Official Report, 28 June 2016; c88.]

I said specifically that we would seek to find a solution that would enable Scotland’s voice to be heard and our interests to be protected from within the United Kingdom. This paper fulfils that commitment. Indeed, it goes further and sets out ways forward that I believe would also be in the interests of the rest of the UK and in the interests of other European nations. “Scotland’s place in Europe” sets out practical proposals to keep Scotland in the European single market. It also details the additional powers that the Scottish Parliament will need to serve, protect and promote Scotland’s economic and social interests in the post-Brexit landscape.

Let me be clear: the proposals fall short of what I consider to be the best option for Scotland and the UK—full membership of the European Union. In the unlikely event that the UK Government has a change of heart and decides to remain in the EU, it would have my support, but that is clearly not an outcome that is in my gift. I am therefore seeking to set out a sensible way forward for Scotland that respects the reality of the situation that we find ourselves in. In that regard, the proposals represent a significant compromise on the part of the Scottish Government, not a high bar for the UK Government to pass.

The proposals in the paper are a serious and genuine attempt to build consensus, to square the circle created by the referendum result and to unify the country around a clear plan to protect our interests. I hope and expect that the UK Government, in considering the proposals, will demonstrate the same flexibility and willingness to compromise.

I also hope that Opposition parties will consider the proposals seriously. To those who say that they want to protect Scotland’s place in Europe, but will not get behind the proposals, the question will be: if not this plan, then what? Simply criticising the Scottish Government’s proposals without coming up with alternatives will be tantamount to telling Scotland that it simply has to suck up whatever the Tory Brexit Government at Westminster decides, no matter how damaging. I suspect—they may prove me wrong, but I doubt it—that that will be the position of the Scottish Conservatives. However, it will be a much harder—I would suggest impossible—position for Labour and the Liberals to explain.

I turn to the detail of the paper. It sets out in some considerable depth why keeping our place in the single market matters so much. It matters principally to our economy and to jobs, trade, living standards and investment. It is estimated that being outside the single market could cost the Scottish economy 80,000 jobs, and workers could lose £2,000 a year after a decade of a hard Brexit. Being in the single market also ensures protection for workers’ rights and consumer rights. It facilitates the flow of skills that our economy depends on and allows all of us to travel, work, study and live across Europe if we so wish. It will guarantee the rights of EU citizens already living here—something that, disgracefully, the UK Government has still not done six months on—and it provides a platform for co-operation on some of the major issues of our times, such as climate change.

The paper sets out the primary ways in which Scotland’s place in the single market can be protected, and it has three principal strands. First, we propose that the UK as a whole should stay in the single market, by remaining a party to the European Economic Area agreement, and that the UK should also stay in the customs union. It is important to remember that membership of the EU and of the single market are not one and the same. They are, in fact, two distinct propositions, as the position of three of the four European Free Trade Association countries demonstrates.

I accept that there is a mandate in England and Wales to take the UK out of the EU. However, I do not accept that there is a mandate to take any part of the UK out of the single market. It would make no economic sense whatsoever for the UK to leave the single market. In fact, it would be economic folly of the highest order, and it would be entirely democratically justifiable for the UK to remain within the single market, so the Scottish Government will seek to build consensus with others of like mind across the UK and will continue to argue for continued UK membership of the single market.

However, I reluctantly accept that, as things stand, given the rhetoric of the Conservative Government, that seems at this stage to be an unlikely outcome. The Tories—quite unbelievably, in my view—seem intent on placing a higher priority on cutting immigration than on absolutely anything else. The economy, jobs and living standards all lag way behind on their list of priorities.

As a result, the second strand of the paper proposes ways in which Scotland could stay in the single market through EFTA and the EEA even if the rest of the UK chooses to leave. The paper does not shy away from the challenges that are associated with such an option. On the contrary, it specifically identifies the key challenges that would be faced—for example, how continued membership of the single market could be achieved without Scotland being an independent country; the legislative and regulatory requirements; the issue of financial contributions; and the practical implications around the free movement of goods, services and people. Crucially, however, the paper sets out the basis of how each of those challenges could be overcome if the political will exists to do so.

It is very important to note—as many members across the chamber have emphasised—that that option does not prioritise membership of the EU single market over continued free trade across the UK. Talk of a hard border for Scotland has always rung hollow, and will continue to do so, from a UK Government that says that no such border will be required between a post-Brexit UK and the Republic of Ireland as a continuing member of the EU and the customs union.

That argument aside, the paper sets out clearly how free movement of goods, services and people would continue across the UK, even with Scotland in the single market and the rest of the UK not in it. In that respect, it is worth emphasising that what we propose would not see Scotland having a different relationship with the customs union from the rest of the UK.

We hope that the UK will stay in the customs union. If it does so, that proposal would enable Scotland to be in both the single market and the customs union. However, if the UK opts to leave the customs union, Scotland—in common with other EFTA EEA countries—would not be in the customs union either. There will, of course, be disadvantages to Scottish business if we are not in the customs union, which is why I argue that the UK should stay in it, although those disadvantages would be minimised if Scotland remained in the single market. However, under that proposal, the border between Scotland and England would not be an external EU customs border. What is in effect a customs union now between Scotland and the rest of the UK would continue.

There will be those who say that a differentiated option for Scotland such as the one that we propose would be too difficult to achieve. As I have said, the paper does not underestimate the challenges. However, it is important, in response to that suggestion, to consider the following three points. First, there are already a range of asymmetric and differential arrangements in operation within the EU and single market framework. Denmark, Greenland and the Faroe Islands are one arrangement and the Channel Islands another, and there are many other such arrangements. The solution that we seek for Scotland would, of course, be different in detail and scale from many of those arrangements, but it would not be different in principle.

Secondly, the UK Government already appears to be open to a flexible Brexit approach in relation to different sectors of the economy, as we have seen with its approach to Nissan. It will also be necessary to take a flexible approach in relation to Northern Ireland and to Gibraltar. There is quite simply no good reason why such flexibility should not also apply to Scotland.

Lastly, as we are now seeing almost daily, everything about Brexit will be difficult, challenging and unprecedented. The negotiations ahead will be characterised in all respects—particularly if the UK intends to leave the single market and the customs union—by a need to find practical solutions to a whole range of complex issues. It is in that spirit that we seek to find solutions that will respect the voice, and protect the interests, of Scotland.

The final strand of the paper deals with the powers of the Scottish Parliament. It is, in my firm view, time for a fundamental reconsideration of the devolution settlement in light of Brexit. The paper argues that, in light of the removal of rights and responsibilities that are provided by EU law, and whatever the outcome of the Brexit negotiations, Scotland’s interests within the UK demand considerably enhanced and strengthened powers for this Parliament. The paper looks at three broad categories of powers that must now be considered.

First, it looks at the powers that are set to be repatriated from the EU that currently sit within Scottish Parliament responsibility. Examples are fishing, the environment, justice and agriculture. I hope that all members will agree unreservedly that those powers must remain firmly and unambiguously within devolved competence. If there is a need to agree UK-wide arrangements on any matter, such as animal welfare, it must be done by agreement and not by imposition. Brexit must not become an excuse for a Westminster power grab.

Secondly, powers to be repatriated that are not currently devolved should also be considered for devolution. Powers in areas such as employment law and social protection would allow the Parliament to protect key rights and avoid the risk of a deregulated race to the bottom by Westminster.

Thirdly, a much broader range of powers to protect Scotland’s interests and support a differentiated solution of the kind proposed in the paper, such as, for example, power over immigration, must also be considered. Indeed, it is worth noting that growing support across the UK for greater flexibility over immigration is increasingly being expressed.

In short, the proposals in the paper are detailed, serious and reasonable. They are deliberately and unashamedly designed to respect Scotland’s voice and protect our interests, while acknowledging and respecting the vote in other parts of the UK and the position that the UK Government now finds itself in as a result.

Let me now, briefly, set out how we intend to take forward the proposals. We accept absolutely that the negotiation that will start on the triggering of article 50 will be a negotiation between the UK and the EU. We are not seeking a separate, parallel negotiation with the EU institutions or member states. That is why the proposals are aimed, first and foremost, at the UK Government.

We want the UK Government to make clear when it triggers article 50 that it intends to stay in the single market and the customs union. If it will not do so, we want the UK Government to seek, as part of its negotiation, a differentiated solution for Scotland as set out here. We will submit these proposals formally to the UK Government through the joint ministerial committee framework for discussion in the new year. I intend that the Scottish Parliament will continue to be involved and informed at every step of the way just as it has been through 11 parliamentary debates on different aspects of Brexit to date

When I met the Prime Minister in Edinburgh in July, she pledged to fully and fairly consider the proposals that we brought forward. She repeated that commitment without reservation when I spoke to her yesterday and I welcome that.

It is beyond any doubt whatsoever that the Brexit vote with its different outcomes in different parts of the UK has raised fundamental questions for all of us about our relationship with Europe, but also about how political power is exercised across the UK. To the Westminster Government, my message could not be clearer. Its response to these proposals will tell us much—perhaps it will tell us everything that we need to know—about whether the UK is, in reality, the partnership of equals that the Westminster Government claims it to be.

To our European partners, I today reaffirm our belief in and commitment to the core values of solidarity, co-operation and democracy that underpin the European Union.

To the people of Scotland I pledge this: I will continue to do everything I can to protect your interests as we navigate the challenging times ahead.

The First Minister will now take questions, for which there will be around 40 minutes.

We want the best deal for Scotland in the Brexit talks that are to come. On this side of the chamber, we believe that that means coming together to negotiate hard in the interests of all of us in the UK, and not throwing up more divisions between Scotland and the rest of the United Kingdom. It is vital that the SNP Government begins to recognise that we achieve more by pulling together than by pulling apart. We believe that there is plenty scope to do just that. There is plenty of room for agreement between the UK and Scottish Governments—perhaps more than the SNP likes to think. Given that we are all part of the same country, perhaps that is not a surprise.

We all want the freest possible trade between the UK and the EU, we all want a deal that allows our firms to continue to sell and operate within the European single market, and we all want a deal that ensures that European companies can still do the same here. I am confident that the Scottish Government and the UK Government can work together to achieve that, but I have to question many other areas of the Scottish National Party Government’s approach from today.

On proposals for EEA membership, the Scottish Government’s paper in 2013 said of such a deal:

“Scotland’s citizens would lose all ability to influence the laws and regulations to which they would be subject.”

The First Minister said in July that to end up abiding by the rules of the single market while being unable to set them would be “giving up control”. It breaks one of the SNP’s five tests. Does the First Minister accept that that is the case?

On the plan for a separate deal, the First Minister claimed this morning that Scotland could opt to stay in the single market, with the UK being out, without damaging UK free trade. However, many firms have pointed out that that approach would mean, as the head of Scottish Engineering said today, that Scottish manufacturers would

“have to adopt two regulatory systems if they were to continue trading with the UK ... our largest market”,

which could lead to Scottish firms being ditched for firms elsewhere in the UK. Can the First Minister explain why that would be in Scotland’s interests?

Finally, the First Minister insisted this morning that she wants to find compromise and is not using the issue to manoeuvre for independence, but today’s paper says that one reason why the SNP supports membership of the European single market is that that would

“ease the transition to a full independent Member State”.

If the First Minister really wants compromise, could she start by ending all talk of another referendum? Is not it time to end the threat of a transition to something that people in Scotland do not want and have roundly rejected?

Ruth Davidson mentioned comments that we made in 2013. We did indeed make those comments about the EEA, but I remind Ruth Davidson that in 2013 we were not facing being taken out of the European Union against our will. In fact, around that time, Ruth Davidson said that voting no meant that we would stay in the European Union. The reality now is that if we stay in the UK the choice is not between the EU and the EEA but between the EEA and being out of the single market altogether, with all the damage that that will do. That is why what we are putting forward is a sensible solution.

The contempt that I hear from Conservative members for the views of the Scottish people—given that the divisions around Brexit were created by the Conservatives—is, to be frank, staggering. Ruth Davidson’s views might have more credibility if they were remotely consistent with anything that she had said not just before but in the immediate aftermath of the EU referendum. Do members remember the lion roaring at Wembley stadium about how Brexit would be a disaster and how people were not being told the truth and deserved the truth? That roaring lion has been replaced by a meek mouse, which tells Scotland that it must simply accept whatever damage Brexit is going to do. That is the transformation in Ruth Davidson.

The week after the referendum, on 30 June, Ruth Davidson said in this chamber at First Minister’s question time:

“Retaining our place in the single market should be the overriding priority.”—[Official Report, 30 June 2016; c 24.]

She then asked me what I was going to do to secure that place. Today, I have put forward proposals that would secure Scotland’s place in the single market. The question for Ruth Davidson is this: is she on the side of the people of Scotland in trying to protect our place in Europe and stop the damage that Brexit will do, or is she simply on the side of the hard Brexiteers in London? I suspect that we got the answer to that question today.

I associate myself with the First Minister’s remarks on the atrocious events in Berlin over the past 24 hours.

Scottish Labour has been, and continues to be, supportive of the Scottish Government’s right to be fully involved in the negotiations about our future in the aftermath of the EU referendum. Today, we welcome the starting point of the Scottish Government’s approach, and we agree that the best outcome of Brexit would be for the whole United Kingdom to continue to enjoy the benefits of the European single market and the EU customs union.

I think that we have had 13 debates on Brexit in this Parliament, and Labour has voted with the SNP on 12 of those occasions. The only time that we diverged was when the SNP suggested that the European single market is somehow more important to Scotland than the UK single market. That is clearly wrong. The First Minister should accept that and, by ruling out a second independence referendum, end the uncertainty that our economy faces.

As we work out the future for our relationship with Europe, it is important to recognise that it is a decision not just for the Tory Government at Westminster, as Alex Salmond tried to suggest at the weekend. There are 27 other nations of the EU that also have a say. That is the very nature of the European project.

The Scottish Government’s document refers to the need for

“a reshaping of the UK constitution”.

The United Kingdom is leaving the European Union, and we therefore need to start to develop a plan for what will happen when powers are repatriated from Brussels to Britain. I note that much of the Scottish Government’s paper sits well with what Labour proposed two weeks ago—in particular, regarding powers over agriculture, fisheries, employment law and workers’ rights.

I therefore ask the First Minister whether she agrees with me that we need a people’s constitutional convention across the United Kingdom to talk about power, where it sits and how it is exercised.

No, I do not. What Scotland really needs now is politicians who will stand up for its interests and make sure that Westminster does not walk all over those interests. By the time that a people’s convention had met, deliberated and decided, we would already be out of the European Union and the single market, and jobs would be on their way to being lost. We need action now.

I welcome some of what Kezia Dugdale has said. I welcome her support for what we said about the need for more powers, but let us get on with pressuring the UK Government to deliver them. I welcome what she said about the UK staying within the single market, but she did not comment on our proposal to try to keep Scotland in the single market. Kezia Dugdale has said to me on more than one occasion that she wants Scotland to stay in the UK and in Europe. We have put forward a plan that sets out a way for us to achieve that. Is she going to back it or not?

We know that Kezia Dugdale does not support independence—although I am not sure whether, in her heart, that is really her position, I suspect that she knows that I suspect that it is not. However, that is the position of the Scottish Labour Party. If she does not support independence and is not prepared to get four square behind the proposals in the Scottish Government’s paper, she needs to come up with proposals of her own. The only other alternative is to do what the Tories are doing and say that it is all down to Westminster.

I hope that we can work together, but it is time for the Scottish Labour Party to get off the fence and to start backing Scotland unequivocally.

All our thoughts are with the families and the victims in Berlin.

I thank the First Minister for providing us—along with the rest of the country—with an advance copy of her statement. It is regrettable that, despite committing to exploring all the options, the First Minister has given up on the UK remaining part of the European Union—that is not one of the three options that are set out in her report. We will not give up on the UK remaining in the European Union, even if others have given up.

The First Minister’s differentiated option of Scotland remaining in the single market is confused and complex. However, independence is at the front and back of the document, and it is clear that independence is front and centre, as it has been for the First Minister’s entire political life. Is it not a fact that the First Minister does not want any other option to succeed, as she wants only Scottish independence?

Everything about Brexit is confused and complex; I would have imagined that Willie Rennie would have noticed that by now, as everybody else has. In a situation in which everything is confused and complex, surely our duty is to get the best deal for Scotland and to navigate the best path through that for Scotland. I had hoped that the Liberal Democrats, who are enthusiastic in their support for our place in Europe, would be able to get behind our proposals.

Does Willie Rennie not understand how ridiculous the first part of his question sounded? He said that I have given up on the UK staying in the EU, but I would love the UK to stay in the EU. I did not want a referendum on EU membership and I want the UK to stay in the EU. If the UK Government has a change of heart and decides that it wants the UK to stay in the EU, it will have my whole-hearted and enthusiastic support for that option, but that does not appear very likely at the moment.

I must set out a path that deals with the reality of the situation that we are in. That is what we are doing—we are setting out serious, reasonable and sensible proposals. I say in all sincerity to all the parties in the Parliament that, if they think that there are flaws in our proposals or that there are areas in which they can be strengthened, they should put forward their ideas and suggestions, because simply sitting there on the sidelines criticising the only Government that has produced a plan for Brexit is not good enough. If they want to put forward their suggestions, I am all ears.

Does the First Minister agree that many sectors are highly dependent on EU citizens who choose to live and work in Scotland? For example, the tourism and agriculture industries rely heavily on workers from other EU countries and, in the health and social care sector, about 1,400 doctors from other EU countries are working in Scotland.

What comfort can the First Minister provide to those EU citizens as a result of the proposals that the Scottish Government has published today? Does she agree that the impact on our economy and, indeed, our society of those EU citizens not being able to remain in Scotland would be as dramatic as it would be unacceptable?

I agree. On what our proposals mean for EU citizens who are already living here, Scotland staying in the single market, either with the whole UK or separately from a UK that chose to leave the single market, would secure the rights of people who already live here. Scotland staying in the single market would also do more than that—it would mean that freedom of movement could continue, which is important to our economy. That is so often missing from much of the debate on immigration.

Bruce Crawford was right to talk about the sectors of our economy and the parts of our public services that rely heavily on people from other parts of the EU who choose to live and work in this country. I want that to continue, just as I want the ability of people from Scotland and the rest of the UK to visit, study, work and live in other European countries to continue. That is good not only for economies across Europe but for our culture, for our societies and for increasing the mutual understanding between different countries. We should give that up extremely reluctantly.

Our paper sets out clearly how that can be continued. That is one of the reasons why stakeholders across Scotland have today made many supportive comments about it. It is striking that many of them, whether they are in the private sector, our university sector or our public sector, specifically mention the importance of freedom of movement. I hope that that is one of the reasons why people will get behind our plan.

The First Minister and her front-bench colleagues have been on a charm offensive across Europe over the past six months. Given that any differentiated deal for Scotland would require the unanimous support of the other 27 Governments in the EU, can she tell us how many other EU Governments have signalled their in-principle support for her proposal?

If Murdo Fraser ever wants any lessons on charm offensives, I would be happy to arrange for my colleagues to provide them.

That is barely a serious question. Anybody who asks that question has not read the serious proposals that we have put forward. We have said clearly that, at this stage, we are not seeking a parallel negotiation with the EU. We recognise that, for our proposals to work, of course they will in due course require the agreement of other European countries but, first and foremost, we require to persuade the UK Government to make them part of its negotiating strategy. That is another example of how we are acting in a logical and sensible way that puts the interests of Scotland first.

I readily accept that there are members who disagree with aspects of the Scottish Government’s approach and there is of course disagreement on independence but, as we seek to navigate a way that is right for Scotland through the complex and unprecedented situation that we find ourselves in—which we did not create—surely we should expect the Parliament to get behind us.

The First Minister said that, if people see flaws in her proposals or have different ideas, she is all ears. It is a pity that that was not the tenor of her response to our suggestion of a constitutional convention, even though her paper recognises clearly the need for constitutional change across the UK.

I will give the First Minister the opportunity to respond in the way that she described. Paragraph 157 of her paper states that the conditions of membership of the single market would make no difference to trade to and from different parts of the UK, even though the European single market dictates common rules and standards. Paragraph 149 appears to say that the application of

“different conditions of sale of goods and services”

in different parts of the UK would be merely an administrative matter, even though it is surely the single hardest question that her proposals have to address. As she clearly understands that the single market and the customs union are not the same thing, will she explain how Scotland can belong to two different single markets at one and the same time and will she attempt to build support for her proposals rather than simply seek to divide?

The paper sets out much of the detail, but there will not be a difference of approach to the customs union between Scotland and the rest of the UK under our proposal, so the Scotland and England border will not be an external EU customs border. The customs union that in effect exists across the UK now will continue. Regardless of what happens with a differential solution for Scotland, if the UK is out of the single market and the customs union, there will require to be around the external UK border administrative arrangements to assess tariffs and standards. If Scotland had a different relationship to the single market from the rest of the UK, those external border arrangements would have to take account of that to make sure that the correct tariffs or arrangements were applied to goods and services, depending on where in the UK they originated or where in the UK they were intended to be sold. However, none of that applies to the border between Scotland and England—the paper sets that out in detail.

I am more than happy to engage and to have my officials engage with any member of the Parliament who wants to discuss those issues of practicality in greater detail. The paper readily concedes that all those issues will require to be discussed with the UK Government in greater detail.

Aside from all that, I will make a point that is—to be fair—probably better directed to the Conservative side of the chamber than to the Labour side. The UK Government is saying that there will be no requirement for a hard border between a post-Brexit UK and the Republic of Ireland, which will still be in the EU and the customs union. David Davis went to Ireland not long ago and explicitly said that Ireland will not have to choose between the EU and the UK. I know that different circumstances pertain to Ireland but, in a practical sense, if the UK Government could say that with such certainty for an independent country that is still going to be in the customs union, why on earth would we not be able to continue to continue free trade within the UK, where Scotland and the rest of the UK would have a common position on the customs union? Let us continue to discuss the detail, but if there is political will to do what we propose, those points of detail can be resolved and the challenges can be overcome.

On the constitutional convention, I say that I want to work with others across the chamber who are willing to work with us. I know that there are areas of common ground between the Scottish Government and Labour, and I am genuinely and sincerely keen to work on them. However, putting everything into a constitutional convention would be kind of like fiddling while Rome burned. We need to address the issues now and get on with it. I do not think that it is a mystery what powers the Parliament needs to protect Scotland’s interests. Let us get on with it—that is what the interests of Scotland demand.

The Greens welcome that the Scottish Government is proposing options for Scotland’s continued relationship with Europe, but today’s proposals make a significant compromise. They are not what our electorate voted for and amount to damage limitation, not a positive solution for Scotland. We acknowledge the attempt to find a compromise with the UK Government, but will the First Minister confirm whether that is the greatest extent to which the Scottish Government is willing to compromise, given that further concessions would result in unacceptable damage to Scotland?

In addition, today’s publication makes clear the Scottish Government’s commitment to the free movement of people. The UK Government, on the other hand, seems committed to prioritising the free movement of capital over that of people. Will the First Minister confirm that that is not an area where the Scottish Government is willing to compromise with the UK Government?

When it comes to the free movement of people, the Scottish Government’s position cannot be in any doubt. Even our sternest critics would have to concede that the Scottish Government has always stood up for the principle of freedom of movement, often in the face of criticism and quite tough challenge, and it has never been prepared to be part of the anti-immigration rhetoric that, regrettably, we have seen from some—not in this chamber, but in other parts of the UK. I hope that our position is beyond any doubt.

On the question of compromise, I have said, and the paper says very explicitly, that this is a compromise position. It is not my preferred option. I want Scotland and—for the benefit of Willie Rennie—I want the UK to stay in the European Union. That is what I argued for and, unlike some in the chamber, I have not changed my mind or my position on that. I think that the best option is for Scotland and the UK to be in the European Union.

I will make two further points. I have to deal with the reality of the situation that we find ourselves in. That is what I am seeking to do. I recognise that as First Minister, not just as leader of the Scottish National Party, I have a duty to try to find a way through this situation—which is not of our making—that tries to bring as many people as possible across Scotland together in consensus. That is what I am trying to do and it is what I will continue to try to do.

I hope that I can persuade people across the chamber—or at least, across most of the chamber—to get behind us on this and to be part of the discussion that will be required on the detail. Outwith the chamber, I will continue to seek to persuade people across the country that this is the way forward that we should embrace. I hope that I will have the Greens’ support, recognising absolutely that Ross Greer and I share a view when it comes to independence for Scotland.

I welcome the proposal from the Scottish Government that would enable Scotland to stay in the single market after Brexit. That would do much to mitigate the economic damage of Brexit to individuals and businesses, in Glasgow Provan and across Scotland. The proposal would also be good for businesses across the UK, enabling them to trade in the EU single market after Brexit, using Scotland as a base. I ask the First Minister what evaluation has been done of the economic benefits to Scotland and the rest of the UK of this proposal, compared with a hard Brexit.

That is a really good question. It is challenging at the moment—[Interruption]. Given that the Tories have put Scotland into this position, their contempt for this entire debate is quite disgraceful. These are serious issues for every individual and every business across this country, and they are being treated with contempt by the members on the Conservative benches. I do not think that that will be lost on many people.

It is challenging to do specific analysis and modelling while the position of the rest of the UK is so uncertain and unknown. It is important that we should continue to model the economic impacts of the options as they take shape. There is a point here, and I hope it is one that is not lost. It is why I said that, while these proposals are unashamedly motivated by Scotland’s best interests, they are in the best interests of the rest of the UK as well. For even just part of the UK still to be within the single market will, I think, have economic benefits for the whole of the UK. I hope that that is something that the UK Government will look at when it gives its wider consideration to these proposals, and I think that it is a very important point to have raised this afternoon.

The First Minister categorically states in the paper that, in her view,

“the best option – is to become a full member of the EU as an independent country.”

As the First Minister will no doubt be aware, for a new member to accede to the EU there is a comprehensive approval process including the adoption of EU standards and rules in 35 different policy fields, known as the acquis communautaire. That includes, in chapter 13, full participation in the common fisheries policy. Fergus Ewing stated on 7 December in a debate on fisheries negotiations:

“The common fisheries policy has not been a success for Scottish fisheries, and I recognise that there are opportunities for our industry outside the EU. ... and I fully intend to press the UK Government to make the most of those opportunities.”—[Official Report, 7 December 2016; c 19.]

With that clear contradiction at the heart of Government, and given that the First Minister called new powers to this place

“a fib and a half”

during the referendum campaign, how does the First Minister intend to represent our coastal communities, as well as the one million Scots who voted “Leave”, including 400,000 SNP supporters, who currently feel that their voices are being ignored and that they are simply being air-brushed from history?

All that Ross Thomson has managed to demonstrate in that long and winding question is that he has not actually read the proposals that we published today, because one of the things that the paper says is that the option that we put forward for staying in the single market through EFTA and the EEA would mean that Scotland was not within the common fisheries policy, giving this Parliament much greater flexibility over fishing policy.

I appreciate that Ross Thomson is far too young to remember what I am about to cite—I am almost too young to remember it—but it was a Conservative Government that treated the Scottish fishing industry as “expendable”. That is the word that the Conservatives used. It is really important now that we do not give a Tory Government a free hand to treat the Scottish fishing industry as expendable all over again.

Finally, I say to any Conservative who, after everything that has happened over the past two years, still stands in the Parliament and talks about the difficulties, according to them, of an independent Scotland getting into the European Union, that we should remember that it was the Conservatives, joined by some of their colleagues across the Parliament, who said that voting no was the only way to secure our membership of the European Union. Scotland voted no, and we are facing exit from the European Union. That is why we should never, ever again listen to a word that the Conservatives have to say on the matter.

I welcome the publication of “Scotland’s Place in Europe”. Will the First Minister outline what the reaction to it has been? Does she agree that it is disgraceful that, six months on from the vote, the UK Government has produced nothing but meaningless soundbites on its plan for Brexit?

The reaction that I have managed to see so far from stakeholders across Scotland—I have to concede that I have not seen all the reaction yet—has been very positive. Not everybody will agree with everything in the document, and I would not have expected that to be the case. Many people will recognise the real practical, technical and legal challenges around the delivery of some of the options—as do we—but across all the reaction that I have seen, there is quite a warm appreciation of the fact that the Scottish Government alone in these islands at the moment is coming up with some kind of plan to try to get our way through the situation. I look forward to working with people across civic Scotland and others in the chamber as we take the proposals forward.

It is the case—every time that I say this, I find myself thinking that it surely cannot be the case—that, this week, we are six months on from the EU referendum and nobody yet knows any more about what “Brexit means Brexit” means than we did on 24 June. If that was just a political debating point, that would be bad enough, but it has implications for the lives and livelihoods of every single person across the UK. That is an absolute disgrace and the UK Government really needs to get its act together soon.

In paragraph 145 of “Scotland’s Place in Europe”, the Government emphasises its desire to stick to current EU rules on procurement, competition law and state aid. Why on earth would we want to stick to rules that prevent industries from being supported by Government, force our railways and ferries to go out to tender, and prevent the living wage from being paid to all public contractors? Those are three areas of EU law that the Government has previously claimed have frustrated it from taking progressive policy choices. The First Minister now appears to be preparing to die in a ditch to keep them. How is that stronger for Scotland?

Right at this moment, every member of the Labour front bench is studiously looking at their phone to try to avoid the suggestion that that is the official Labour line. I suspect that it is not. In fact, having just expressed such views, Neil Findlay might feel more comfortable sitting on the Conservative side of the chamber.

The substantive question that Neil Findlay asked is an important and legitimate one. There are many aspects of the European Union’s rules and regulations that I do not agree with. Neil Findlay mentioned some that I have long argued should change, and I will continue to argue that they should change. However, we should argue for changes from within the European Union. There have been some changes to procurement regulations over the past few years, but Neil Findlay’s approach appears to be that we should throw the baby out with the bath water because we do not agree with some regulations and that we should give up all the benefits of EU and single market membership.

With the greatest respect, that is just a difference of opinion between us. The real danger of where are just now is in the compromising of workers’ rights that we will see if we leave powers that are currently regulated by Europe in the hands of a right-wing Tory Government at Westminster. I do not want to do that. That is why I would rather that we stayed in Europe and that those powers were in the hands of the Scottish Parliament and not in the Tories’ hands.

Obviously, I am in favour of all those powers coming to the Scottish Parliament, with or without Brexit.

I have a couple of factual questions for the First Minister on the proposed arrangements in the paper. Value added tax is the most important taxation aspect of the single market, but it is not included in the list of powers that the Scottish Government demands be transferred to this Parliament. Will the First Minister look at the issue of value added tax? According to the UK Treasury, it has not been devolved so far because, under EU rules, VAT cannot be varied within a state. Under the arrangements set out in the paper, would that rule still apply, or would we be able to take full control over all aspects of value added tax policy in Scotland?

There is absolutely no reason why VAT cannot be devolved to the Parliament. As Alex Neil rightly says, the reason that it cannot be devolved and why we can only be assigned a share of VAT revenues rather than have the power to decide what the rate should be is because of European Union rules. With or without the proposals in the paper, with the UK leaving the European Union there is no reason why that argument would continue. I will look more closely at the matter and any other issues of detail that anybody raises.

I repeat that, for all the undoubted imperfections in the proposals—there will be imperfections; they are not our ideal solution—the plan is about protecting jobs, trade, investment and living standards in Scotland. The implications of being taken out of the single market for all those areas would be devastating. When members have had more of a chance to look at the detail in the paper they should, by all means, come forward with questions and suggestions, but I hope that people across the chamber will get behind it.

I welcome the document that was published by the Scottish Government this morning. Much of it is a thoughtful piece of work that deserves to be taken seriously. In that spirit, I have a question on what the document says about EEA membership.

Paragraph 99 says:

“We”—

that is, the Scottish Government—

“are advocating that the UK should remain a full member of the European Economic Area”.

Yet, only three years ago, in a document that was signed off by the then Deputy First Minister, Nicola Sturgeon, the Scottish Government said:

“The argument that membership of the EEA is desirable because it allows members to gain access to the Single Market but without having to adopt all of the regulations that full EU membership requires is simply wrong.”

That same document went on to say:

“The Scottish Government therefore does not consider that EEA membership is a desirable option from a democratic perspective”.

Those are not my words but the words of Nicola Sturgeon.

The Scottish Government was correct in 2013, so why has the First Minister U-turned? Why does she now advocate membership of the EEA, despite it manifestly failing to meet her own tests of what is in the democratic interests of Scotland?

Let me be the first to advise Adam Tomkins of a significant event that has happened in the UK since the time of that comment. In June, a referendum on EU membership took place across the UK. Scotland voted to stay in, but the rest of the UK voted to leave and Scotland faces being taken out of the EU against our will.

If it was still a choice between the EU and the EEA, my view would be exactly as Mr Tomkins has just cited, but that is no longer the choice for Scotland if it stays within the UK. The choice is now about trying to secure our place in the single market through the EEA or being taken out of the single market altogether by the Tories. His leader asked the same question and I gave the same answer. I advise the member that he should probably listen more to his leader and adapt his questions accordingly.

I encourage members to be as brief as possible, and we will try to fit in as many members as we can.

The Culture, Tourism, Europe and External Relations Committee has heard evidence and received briefings on how the provinces of Canada and the regions of Belgium are recognised and involved in striking international agreements; even the cantons of Switzerland set their own immigration policy. There are many more such examples.

Given such examples, does the First Minister agree that a differentiated solution for an empowered Scotland will get a hearing in the EU as long as the UK Government accepts and proposes such a differentiated deal for Scotland?

Yes. That is why we have directed the proposals first and foremost at the UK Government. People talk about the response that we have had from other European countries. That response has been warm and sympathetic and they are keen to help, but the one consistent thing that they have said is that the negotiation will be with the UK and therefore, if we want proposals for different solutions for Scotland to be considered, we must steer them through the UK process. We have listened to that advice and we are acting accordingly. Joan McAlpine is absolutely right about that.

Joan McAlpine is also right to cite examples of countries across not just Europe but the world where some of what is proposed in the paper already happens. For example, that applies to Canada and to Belgium, where the devolved areas have the kind of treaty-making powers that are talked about in the paper. We are often told by those on the Opposition benches that the Scottish Parliament is the most powerful devolved Parliament in the world, but some of those other examples actually give the lie to that.

We have an opportunity. In seeking to find a solution, as I am trying to do within the UK, to try to get some of those powers and give ourselves much greater ability to protect the interests that are at stake because of Brexit, we will find plenty examples of that. There is probably nothing in the paper that in some way, shape or form—albeit different in detail and scale—does not apply in another part of Europe or the world. That should give us great confidence that, if there is the political will, there is no reason why we cannot achieve the ambitions that are set out in the paper.

The UK is the fastest-growing economy in the G7 and is one of the strongest advanced economies in the world. That benefits Scotland four times as much as the EU single market does. The SNP has set out plans for a separate deal for Scotland, but Professor Michael Keating of the Economic and Social Research Council has said that, if we were to harmonise our regulations with Europe and not the rest of the UK,

“it would be very difficult to have free trade with England, particularly in services.”

Does the First Minister agree with him, or is he wrong?

No, I do not agree with him. I am not sure whether Professor Keating has read the document, but I would be perfectly happy to discuss his views, as he is a respected academic. However, I do not agree. In fact, the paper sets out in detail how it is possible, with the political will, to ensure continued free trade across the UK while protecting Scotland’s continued place in the single market.

I again ask the Conservatives why David Davis went to Ireland and said to the people of Ireland that they do not need to choose between the EU and UK, but the Conservatives here say the polar opposite of that to Scotland. In the days of the internet and modern technology, people hear what is being said in other parts of Europe right now, and they will come to the conclusion that the Conservatives’ arguments are not based on anything other than not wanting to rock the boat for their colleagues at Westminster.

The paper that has been issued today suggests that employment law and health and safety law be devolved to the Scottish Parliament. How does the First Minister’s Government plan to consult on that suggestion and with who? To what extent does the Scottish Government consider that there is a Scottish labour market, a UK labour market and a European Union labour market?

I want those powers to be devolved to the Scottish Parliament. The starting point of consulting on that is the document that we have published today, which proposes that the powers should be devolved to the Scottish Parliament. I hope that Richard Leonard supports the proposals in the paper, certainly in that regard.

The inescapable point is that the powers might already have been devolved to the Scottish Parliament if Labour had not argued against them being devolved in the Smith commission process, which is what I seem to recall happened. We argued for employment law and rights over trade union regulation—if we had those rights, we would not have the Trade Union Act 2016, which recently went through Westminster. My party and I have been absolutely consistent in arguing for the powers to be devolved to the Parliament. If Labour now backs us on that, I absolutely unreservedly welcome that and I look forward to that support being vocal.

Does the First Minister agree with some of the evidence that we have had at the Economy, Jobs and Fair Work Committee about the importance of free movement of labour, particularly for certain sectors of the economy? For example, we heard from Angus Soft Fruits that, if it did not have access to labour from other European countries it might have to

“scale ... back and try to match production to the available labour.—[Official Report, Economy, Jobs and Fair Work Committee, 22 November 2016; c 10.]

We heard that, alternatively, it might have to move production overseas.

Absolutely. I specifically saw the evidence that was given by Angus Soft Fruits. In many ways, that encapsulated the fear that employers in many different parts of the economy have right now. Their fear is that, if their access to labour from other parts of the EU is cut off, that will have a direct and serious impact on their ability to do business. Angus Soft Fruits set that out very starkly. That is why freedom of movement is so important.

I know that people have legitimate concerns about immigration but those of us who believe in the benefits of people from different countries getting to travel to, live in and work in other countries must be able to stand up, have the courage of our convictions and argue the case. It is right in many ways, but it is absolutely right for our economy. The quotation that John Mason just read out says that much more starkly than I or any other member of the Parliament ever could.

The First Minister is right to draw attention to the population demographic that demonstrates the need for migratory labour in Scotland. She places undue emphasis on the EU, as only 3 per cent of EU nationals who work in the United Kingdom choose to settle in Scotland; the other 97 per cent choose to settle elsewhere. Given that we will depend upon a migratory workforce from the rest of the United Kingdom, does the First Minister not understand that, by placing obstacles between Scotland and the rest of the UK, she potentially undermines the workforce that we need? Will she tell us what it is about her style of government and economic management that is deeply unattractive to the other 97 per cent of EU migrants, who choose not to settle in Scotland?

I have enormous respect for Jackson Carlaw. We used to cross swords when I was health secretary and he was Opposition health spokesperson. Although we disagreed—often passionately—I always had real respect for the understanding and analysis that underpinned those disagreements. However, the question that he has just asked me demeans him in many respects.

There is absolutely nothing in the paper that would put a single obstacle in the way of somebody from another part of the UK who wanted to live in Scotland or somebody in Scotland who wanted to live in another part of the UK. As I have said often inside and outside the chamber, my grandmother came from England and many of my family live in England. No matter our political disagreements, the idea that I would put or am putting any obstacles in the way of free movement across the UK is completely without foundation.

Let us disagree where there are real disagreements—I have and can have no quarrel with that—but, for goodness’ sake, let us raise the quality from the question that we just had and debate the real issues that currently face Scotland.