 Good morning and welcome to the second meeting in 2018 of the Culture, Tourism, Europe and External Relations Committee. I would like to remind members and the public to turn off mobile phones and any members using electronic devices to access committee papers should please ensure that they are switched to silent. Apologies have been received from Mari Gougeon and Jackson Carlaw and I welcome Dean Lockhart to the committee as Jackson's substitute. Our first item of business today is an evidence session on Brexit and its effect on Scotland, in which we'll hear from the minister for UK negotiations on Scotland's place in Europe, Michael Russell. I'd like to welcome the minister along with Ian Mitchell, deputy director of external affairs for the Scottish Government and Stephen Morton, the economic adviser OCEA at the Scottish Government. I'd like to invite the minister to make an opening statement. I wasn't intending to do so, convener. If that's acceptable, I think in view of the fact that you hear me quite often, I'd be quite happy to move straight to questions. Right, that's absolutely fine. That's more time for the members to ask questions, which is always a good thing. I'd like to start, if I may, with something that's been in the news over the last couple of days, which is the leak of the EU exit analysis, the cross-white hall briefing. We've had another indication of some of its contents today in terms of free movement and the fact that the briefing suggests that the end of free movement will be more damaging. Can I stop you for one second and ask you to suspend just for a minute or two? I'm feeling slightly unwell and I'd just like to take a breath of air before I do. Do you mind if that would be possible? I'm happy to suspend. I'm sorry about that. Yes. I reconvene the meeting and I trust that the minister is feeling better now. As I was saying earlier, the minister will be aware of the leak of the EU exit analysis, the cross-white hall briefing. Today there has been a new development in that story, in that it's been suggested that the briefing did look at free movement and suggested that ending free movement of people would wipe out any gains that may be achieved through, for example, a free trade agreement with the United States. I wonder if the minister has had any discussions with the UK Government around those areas and was aware of a thinking within white hall around the consequences of the end of free movement? Yes. We have had discussions about migration, which is quite a regular basis, because it's a very key issue for Scotland in the Brexit debate. Scotland is very dependent upon EU migration and rural Scotland even more than the rest of Scotland. We did feel that it was incumbent upon us, as we pursued that argument, to look at the facts that we believe in evidence-led policymaking. Scotland's place in Europe, which was published on 15 January, has a whole section on migration. The figures are very clear in terms of Scotland. Each additional EU citizen working in Scotland contributes £34,400 in GDP. The total contribution of EU citizens working in Scotland is about £4.42 billion every year. On average, each additional EU citizen working in Scotland contributes £10,400 in GDP. EU migration is an economic positive. Therefore, I am not surprised in the slightest that that is the evidence that, when examined dispassionately by civil servants and others in London for the Westminster Government, will have produced the same result. The figures dwarf any anticipated benefits from new trade treaties. That is evidence. That is an projection. That is evidence of what is taking place. In terms of the paper leaked to Buzzfeed, we didn't look for validation from the UK Government, but it does appear to validate very much what we have published. Insofar as we know, the figures appear to be very similar from the figures that we have. That should give the UK Government pause for thought, because the conclusion that we draw should be the conclusion that they draw. The first of all, leaving the EU is economically and in every other way a bad idea, but if it is still to be pursued, then the only acceptable next step would be to continue in membership of the single market and the customs union. I hope that they are looking at the material in that way. The way in which they appear to be briefing against anybody who says otherwise perhaps means that they have not quite got the message yet. I have just finally observed, convener, that when we published our paper, it was roundly condemned by a range of UK Government figures, including the Secretary of State for Scotland, who accused us of scaremongering. If those figures are, as they appear to be in a UK Government publication, I think that those figures, including the Secretary of State for Scotland, have some explaining to do. Thank you very much. The committee conducted an extensive inquiry into the benefits of EU migration, which came to broadly the same conclusions. On this particular topic around this bus feed leak, it is interesting that you say that it should give the UK Government pause for thought, but today in China the Prime Minister seems to have been playing hardball on it in the suggestion that she does not agree that free movement should continue during a transition period, which was the understanding that the agreement reached between the UK and the EU at stage 1. You will be aware that, on Monday 29 January, General Affairs Council agreed supplementary directives for the negotiation, and they said that negotiations in the second phase can only progress as long as all commitments undertaken in the first phase are respected. It would seem that, judging from the Prime Minister's comments on free movement, she is not respecting what was agreed in the first phase of negotiations, and that might jeopardise the second phase. I wonder if you could share your views on that. I think that the Prime Minister spends her life playing to whatever gallery she believes she needs to play to. What we saw yesterday was playing to the Brexit gallery, the hard Brexit gallery, who believes that transition or, as she calls it, implementation will allow them to operate in just whatever way they wish. It won't. That has been very clear from the European side for some considerable time. If you remain within the A-key, you have to observe all the conditions of the A-key, and that includes free movement. There is an issue in here of the date on which the right to remain under free movement would expire. That, clearly, in the view of the EU, would be the date in which transition ends, because it is part of the A-key. That, of course, is for negotiation, but the Prime Minister needs to think of the logic and the economic sense of her position. The more she detracts from EU citizens wanting to work here, the more harm is done to the economy. By making those statements, she may be playing to Jacob Rees-Mogg and others, but she is doing economic harm to her own country. Just to return to the exit analysis that was leaked, the analysis suggests that every region of the UK would be adversely affected. You have obviously reflected on the similarities with your own paper. However, the Secretary of State for Scotland, David Mundell, came before this committee and suggested to us that there was absolutely no regional breakdown of any of the Government's analysis and was really quite specific about that. I wondered if you shared my concerns that there seems to be a discrepancy now that we know that there was some kind of regional analysis of Scotland conducted in Whitehall? That assumes that Mr Mundell knew that that existed, and perhaps he is not always in the loop. If he did know, then clearly there is a question to be asked. I should point out that I will be writing to the UK Government today asking for access to the document, but making it clear that we will not take it on conditions of confidentiality or secrecy. The document needs to be published, I have asked to have a copy of it, if I receive a copy of it, then I will make it available. I will now hand over to Clare Baker. Thank you very much, convener. I would like to ask a few questions around Scotland's place in Europe. The recent document was published in January. What if the minister could say a bit about what he hoped to achieve through the document? I know that he said that the initial response from the UK Government was largely questioning the document and was to a degree dismissive. I understand that the European Minister is meeting today with the Deputy First Minister, John Swinney. Is there an expectation or a hope that there might be more productive discussions around the document that was published by the Government away from the headlines of the media? I am always hopeful. It will be one of the topics that David Lidington and David Mundell will discuss with John Swinney and myself later today, quite clearly, or the issues within it. I think that the intention of the document is very clear. We published an original document in December 2016 that laid out the reasons why we believe that the UK should stay in the single market and the customs union, which failing and arrangement should be made to allow Scotland to remain within the single market. We believe, over the period of time that has elapsed, that that argument has moved in our direction. The Prime Minister at that stage was arguing for no transition. She then, in the Florence speech, moved to transition. Your own party has moved to send direction in these matters. We believe that the arguments are unanswerable in this regard. We wanted to present a case that not only reinforced where we were economically in terms of the difficulties but also looked at the advantages for gone. That is quite a key issue. This is not simply about the damage that will be done. It is laid out here and, obviously, we believe that it is laid out clearly in the documents that the UK Government now has. There are advantages that we are not going to have. For example, the continued expansion of the digital single market, which is exceptionally important to Scotland, will not come, in part or in full, to Scotland if we leave the single market in the customs union. It was important to lay that information out as well. The paper also does a number of other things, as I have indicated. It talks about migration and tries to change the narrative on migration. There is a negative narrative on migration coming from the UK Government and sections of the media that needs to be challenged and changed. Migration is good. It is good for Scotland. We depend on EU migration. Without it, we have very severe problems. That needed to be put in context. We also wanted to look at some of the flanking issues, issues to do with alignment, regulatory alignment, issues to do with some of the social policies that the EU has and to show how important those are. It is an attempt to reinforce the argument that we put out in December 2016, which attracted substantial support, to deepen and broaden that argument, and to continue to show that it is possible—and I think that this is a really key point—that it is possible to approach this issue in a rational, evidence-based way. That is really important, because we do not see much of that. We put that on the table. We work very closely, for example, with economists and others, with academics, to show that there needs to be an evidence-led process, rather than the process that we have seen from the UK Government. Thank you. I campaign for remain, as did the minister. I do not think that any of us really want to be in this situation. The favoured proposal of the Government to remain within the single market, do you foresee any difficulties with that? You mentioned alignment and regulation. There has been talk of a democratic deficit within that model, and we would have to abide by the rules but have no say in the rules. That is one of the reasons why I did not agree with us leaving the EU that we would end up in this situation. However, how do you see any difficulties, in particular, for Scotland if we reach that situation? It is not as good as being within as a member of the EU. There is no doubt about that, there is no point in pretending otherwise. However, it is better than being right out on the fringes. The information here is clear. The next, the least bad step is to stay in a single market and the customs union. You can see how that works for Norway, for the EEA and EFTA members. There is a clear route for the UK to do so. It would also make the process of negotiation much simpler, because the parameters of negotiation are entirely clear. It is not as good as being in the thing, but it is the next least bad option. The further you go away from it, the worse the options become. I know that many of you have the document, but the chart on page 7 from the commission itself about future relationship shows the steps that are being taken. It shows the UK red lines that are creating the economic difficulties. As you go through these, you move from EFTA membership through the treaty-based relationship to the Ukrainian-Ukrainian-Turkish relationship, and you end up only in a free trade model. The free trade model is not nearly as good as it exists now, but we analyse that, too. Beyond that, you go into the WTO only. I went to the WTO in Geneva last October. I clear that the WTO only situation is very problematic and challenging. If the UK document shows, as we believe it does, and we have seen the advantage to be gained by these mythical trade treaties, which are substantially less than the benefit of migration and the benefit of staying in the EEA, then there is a logical influence to be drawn. That logical influence is to stay as high up this hierarchy as we possibly can. That is the EEFTA membership, which is perfectly open and possible for the UK. If it is not possible and open to the UK, there are means by which it would be possible for Scotland. We argue those in the first document, and those are worth looking at. However, it is important to say that we are offering a compromise in this. We are not being didactic about this and saying that we are off to do this. We are saying that a compromise is possible and that a compromise is for the whole of the UK to stay in. I do not want to add more elements of complexity to this, but there is the implication of whatever the arrangement is with Ireland. If that is based on regulatory alignment, then there are issues that arise, particularly for Scotland in that and in the common frameworks issue that we have been discussing with the UK Government, which also dictates that we should remain within the single market in the customs union. We had interesting discussions in Ireland last week, and I am sure that other members will pick up on that. The document focuses on investment and jobs in the economy. The S2C has produced a number of measures in which the Scottish Government could make progress. A lot of that is about trying to influence and encourage the UK Government. However, it talks about calling for immediate action to establish investment plans for sectors that are most likely to be affected by Brexit. Is the work being taken forward based on that suggestion from S2C? We are at the stage of trying to work out which sectors in Scotland are likely to have the most significant impact on how we respond to that. You could call this document a summary of sectoral analysis, because a lot of work is done in talking to sectors. I meet sectors on a regular, almost daily basis. I met the NFUS yesterday. I tend to meet people very often—farmaceuticals, health care sector last week—a week before last. Our view of that is that we need to provide as much help as we can to each of those sectors. It is difficult to say that one sector will be worse affected than another at the moment, because almost every sector will have problems of the three sets of problems that arise out of Brexit—problems with workforce and availability of labour, problems with finance and problems with regulation. We are discussing this in detail, but the confusion from the UK Government is a bigger, single problem now. That applies to money as well. Let me give you an example. In the agriculture sector, when Michael Gove spoke to the Oxford Farming Conference—rather memorably, I heard somebody say the other day—he mentioned the archers more often than he mentioned the devolved administrations. However, in that, he promised, allegedly, that farming payments would continue and change to 2024. We have not had that confirmed with us financially, so the money that we would require to make the equivalent pledge has not been confirmed, nor do we actually think that there is Treasury cover for what he promised set at the border. There is huge confusion in that. The confusion about fiscal flows is very substantial, too. I was in the room down below this last night, where there was a reception for those people undertaking the rural leadership course, which Mr Lochhead will remember, which has now been expanded to take in the Highlands and Islands of my constituency. The issues arising in the discussion that I had with my constituents last night were precisely about that security of finance on pillar 1 and pillar 2 in terms of rural support. The fact that, while there is some assurance on pillar 1 in a limited period of time, there is none on pillar 2 at all at the moment, which means very substantial sums that are going into rural Scotland to support rural development. We just do not know what is going to happen, so, of course, we will do everything that we can to support sectors. We talk to the STUC often, we talk to a whole range of people and we will go on doing so, but the reality is that, until we have assurances ourselves, it is difficult to do. Assurance on free movement of people would help enormously. That would be even better than having investment plans, but there is nothing like it. Before I pass to Stuart McMillan, I want to ask a quick supplementary going back to your comments on WTO rules. In our inquiry last year, the committee took a great deal of evidence from trade experts on future free trade deals and Scotland's involvement in future free trade deals, rather than the dangers of Scotland not being involved in the negotiation of future free trade deals. We looked at examples where, for example, Canada, the Canadian provinces were at the table when Canada was negotiating with the EU. As a result of that, the committee recommended, in its report, that means that it is found to involve the Scottish Government in bilateral and quadrilateral discussions on future trade deals. Now, we are told that Liam Fox is already discussing future trade deals, which would be signed at the end of the transition period. I wondered if the Scottish Government had in any way been included in an early stage in discussions around those issues. I think that it would be incredibly surprising if I said, yes, no, of course that has not happened. It is part of the context of trying to get clear from the UK Government what the involvement of the devolved administrations is in the phase 2 of the negotiations with Europe and what flows from them. That, of course, is meant to be covered by the terms of reference of JMCEN, which are very clear on this matter. I read into the record yesterday at the committee, and I am happy to do so again if it was helpful to you. Within those is the oversight of the article 15 negotiation. Indeed, Ian has very helpfully provided me with this. There are four terms of reference for issues in the terms of reference to JMCEN. Discuss each Government's requirements for the future relationship with the EU. It has not happened. Seek to agree a UK approach to an objectives for article 15 negotiations. We never saw the article 50 letter. It was never discussed with us, and the meetings stopped in February when it became an issue. Provide oversight of negotiations with the EU to ensure, as far as possible, that outcomes agreed by all four Governments are secured from those negotiations. That is crucial in terms of where we go on phase 2, and there is no proposal on the table. Last JMCEN, we asked for that proposal. Mark Drakeford and I have not received it, and that will be an issue today with David Livington. To discuss issues stemming from the negotiation process, which may impact on or have consequences for the UK Government, the Scottish Government, the Welsh Government and the Northern Ireland Executive. That also covers a trade issue. There is a commitment. The Scotland Act deals with it and the memorandum of understanding deals with us being involved in issues of international treaties that impact on us. We have no such proposals on the table. Could I just stress for the record that those terms of reference were agreed between the four Governments in Downing Street at the JMC plenary in October 2016, and they have not been honoured by the UK Government. That is a very serious concern. In fact, the JMC plenary last met a year ago on Tuesday in Cardiff. It has not met since. The JMCEN, which was meant to meet monthly in the last 12 months, has met only three times—February, October and December. Thank you, Stuart McMillan. Thank you, convener. It actually takes me on to some JMC questions. After what you have just said, Minister, can you give us an honest appraisal in terms of how useful it is, the JMC process? Is it worth the effort? We believe that it could be useful. The JMC process has been in existence since the start of devolution. It has broadly been regarded by parliamentary committees in all the parliaments and by academic study as not for purpose. It is not robust. It does not have a statutory footing. There is no decision making, and it is always held in London. It is always convened by the UK Government. In fact, it has been held twice outside London, once under Labour, and a year ago in Cardiff, but that is all. I was a member of the JMC various committees when I was external affairs minister in 2009. Even then, it was pretty problematic. I went to the JMC E on one occasion, on which there were, I think, 21 UK ministers present myself and Rodri Morgan. It was not really an equity of arms in terms of the discussion. That being said, when we came to discuss how we would laze and negotiate on the issues of European withdrawal, it was clear that it was the only thing that we had, and that is why we established this new part of it. However, it had a clear written terms of reference and that was agreed by all of us. If those clear written terms of reference had been observed, then things might have worked, but so far they haven't. It is important that Mark Drakeford and I, so else in Scottish members, go and take part and argue and make sure that we are heard. I pay tribute to Damien Greene, who was getting it into shape. We had reduced the membership, had focused it, was listening. I personally regret that he is not doing that any longer. We will have to see what David Liddington does. David Liddington is starting from a standing start on this, and there is not a lot of time in it. We want to see a step change in the operation of the GMC, but I am not hopeful that that will take place. You mentioned a few moments ago in terms of reference. There were no proposals on the table, particularly regarding the future trading relationships. I would argue—I am quite sure that others would argue, too—that there has been an absolute breakdown in the GMC process. I am not sure that there has been a breakdown. I am not sure that I ever did it to start with. I do not want to pick to split hairs, but the GMC could be used for that purpose. It could convene on a monthly basis with a substantive agenda. There could be contact between ministers and meetings on trade issues. Officials do meet and have continued to meet, but it is fair to say that the quality of that engagement has deteriorated since the Brexit vote, and it has been difficult to get substance out of it. The system is not working. We are doing our very best to make it work. I have put in a lot of time to this. We have a lot of travel to it. We do our very best. It has not been helped, I accept, by the Northern Ireland Executive, not being in existence. It has not been the fatal flaw, but GMC-EN membership, when it started out, included Martin McGinnis and Arlene Foster, who had chosen to be members of it, so it was a substantive discussion that was taking place. Martin was very much and is very much missed in that regard, and it has simply got more and more difficult. I am committed to it. I cannot speak for my Welsh colleague, but I believe that he is also committed to it. We would like it to work, but if I may use the chancellor's phrase, it takes two to tango. Another area, just in terms of discussions with other ministers from the UK Parliament, has been reported in the past that there was an agreement in terms of amendments to go forward to the EU withdrawal bill, and it clearly has not taken place through the commons process, and we are now relying on some amendments to take place throughout the House of Lords. Do you think that that has been a positive way forward, or a retrospective way forward? Well, there is an agreement that the UK Government would discuss with the devolved administrations and agree with the devolved administrations amendments to the EU withdrawal bill. That has been a long, long saga. The bill was published on the 13th of July, I think. We saw it two weeks beforehand. We made it absolutely clear that it was unacceptable. The convention would be that there would be working together on the bill over a period of time, but we were not given access to it. I asked to see it, I asked the prime minister directly at the JMCP to see it, and we never got it. When we said that it was unacceptable, we were not treated necessarily with much seriousness, but when it became clear that the Welsh and Scottish Governments were united on this and were not willing to give legislative consent to the areas that require legislative consent, over a period of time this changed, and I am grateful for the Conservatives in the Scottish Parliament to have taken a clear position on this, too, and to have said that the bill is not acceptable at the present time to anybody. The Finance and Constitution Committee took that view. The Welsh Parliament has taken it unanimously. As a result of which it was agreed in early December, although we put forward joint amendments, they were voted down by the Conservatives. Those would have been acceptable. There was then a Labour amendment at report stage, which was acceptable to us, which was also voted down by the Conservatives, but there was a commitment given that there would be an amendment at report stage. It didn't happen. We are now told that there will be an amendment in the Lords. We have not seen the amendment, therefore it is not agreed, and until we see the amendment, there is no amendment, and then there will therefore be no legislative consent. It simply won't happen. We have to be prepared for withdrawal, even though we don't want it, and even though it might be a verdict, we have to be prepared for withdrawal. In those circumstances, we have worked on and have taken to the Presiding Officer continuity bill, as the Welsh have done, and we will bring that forward at an appropriate time as a Belt and Braces approach, because we can't just be left with nothing. The position that we are in is not simply one that we think is bad. The debate in the House of Lords on Tuesday in Wednesday on the withdrawal bill, the second reading debate, had a succession of peers—none of whom were mad nuts, I have to say—who were saying very clearly that they thought that the Scottish Government had been badly treated. David Steele said it. Lord Hope's speech is a very strong—and he's the leader of the crossbench—a very strong, clear speech. He believes that this has been badly handled by the UK Government. I noted that Ian Lang commended Lord Hope's speech, so it spreads right across the chamber, so we now look to see what takes place. We've been consistent, absolutely consistent and clear about this. We're very transparent. We can't accept the bill. There won't be a legislative consent motion. We will bring forward a continuity bill, as the Belt and Braces, but we'd like to get this amendment agreed. However, if there is no amendment, you can't agree. You mentioned Lord Hope there. It was something that I was going to come on to. Part of his speech, I think, is extremely damning. I wanted to put this to you, Minister. He said in his speech, as far as I know, that Henry VIII never got to Scotland, but Oliver Cromwell did. He, in the forces under his command, did quite a lot of damage while he was there. I think that these clauses have a touch of Oliver Cromwell about them. I suggest that that is a pretty damning indictment of the UK Government's approach, but also Lord Bridges. Lord Bridges' speech was also very useful, where he states that, my fear is that people will get meaningless waffle in a political declaration in October. The implementation period will not be a bridge to a clear destination. It will be a gangplank into thin air. I wanted to put them on the record, but I also wanted to get any further commentary for me in terms of what you think about their contributions, but also in terms of any of the Lords that you yourself are members of the Scottish Government have spoken to to try to encourage them to have further discourse and also to make possible amendments. I held a briefing along with Mark Drakeford in the House of Lords on Monday night. It was standing room only, I am glad to say. It was a very encouraging discussion. I think that there was only one strongly discordant voice, the voice of Michael Forsyth, but the others present were very positive and wanted to see this bill changed. Lord Hope, I have spoken to him on a couple of occasions and I saw him on Monday night and I was very impressed by his speech. I might swap one quotation for another quotation. I am astonished by the bill's failure to respect that settlement—that is a devolved settlement—in its formulation of the regulation making powers given to ministers. He went on to say that the Scottish ministers have declared that they will not put a legislative consent motion before the Scottish Parliament until their objections to this are met. As a mere lawyer, I am in full sympathy with that objection. That is a very profound and strong speech. I commend it to people to read, but as you indicate many other speeches, David Steele's speech is very strong, Jim Wallace's speech is very strong. I think that that is quite clear where we are. The UK Government is a Government. It needs to come to this Parliament with a proposal for an amendment to discuss that sensibly and then we will come to an agreement if we can, but we must stop having meetings about meetings and we must stop dragging this out endlessly. That will be, I have to say, the message that John Swinney and I put very clearly, I hope today, politely when welcoming David Lidington to Scotland. We are very clear what the situation is. We do not want to leave him in any doubt about this. The time for talking about this is well over. We need a proposal. We need to look at that proposal and debate it. As adults, we need to come to a conclusion on it. If the UK Government does not want to do that, when we understand that, there are flows from that as a set of consequences. However, this constant sitting on the fence, which is what happens in their negotiations with Europe, is bedevilling their relationship with the devolved administrations too. I was going on to a new subject. Is that okay, convener, about transition? I just wondered, Mr Russell, what your thoughts are on the requirements for the transition period or implementation period, as the UK Government is calling it. I was at the rural leadership group last night, talking to young people working in agriculture and running businesses. Perhaps you would like to discuss specifically how the NFUS is talking about what they require from the transition agreement. On that point, do you think that the transition period will run until 31 December 2020? What agriculture's business wants is certainty. They need to understand that there is some certainty. The uncertainty in this has been created by the UK Government. There are issues to do with creating common frameworks. We have indicated that common frameworks will be required, with no difficulty with that. However, those common frameworks have to be on the basis of agreement between the nations of the UK rather than by imposition, something that David Mandela himself has accepted. That is why the clause 11 issue in the withdrawal bill is so important. However, if we can get some certainty about the framework, that will be helpful. Transition is about continuing the act until it comes to an end. There isn't any other type of transition. We started off with the UK Government saying that there was to be no transition. That was not necessary. The Prime Minister then moved to a position where transition should be necessary, whether it is called implementation or not. The period set for that is bounded presently by the conclusion of the multi-annual financial framework that the EU has, which will come to the present phase of which it comes to an end at the end of December 2020. Many commentators believe that that period of time will not be enough, and some EU Governments believe that too. The Irish Government has indicated that they think that a longer period will be required. It depends on what you use transition for. If transition is used to create circumstances in which there is no cliff edge and there is a smooth set of changes, that would to me imply that transition leads to continuing single-market membership, which is not quite the same. Transition isn't that. Transition is a continuation of the act. It is a continuation of full membership but without the rights, which seems to be the worst of all possible worlds and how any Government could get itself into that position. I don't know, but that's what it means. At the end of December, you could transition into in-efter EEA membership, and that would give you some certainty. If it's simply postponing the cliff edge, then it's not going to be very helpful to people at all. I would hope that in the basis of the reports that the UK Government now has, on the basis of the well-sourced information that we've produced, then transition might be used to try to move into a single-market membership and that becomes destination. That would be sensible and that would give, from the very beginning, some security because we would know what we were aiming at. If it's not, then we still don't know what we're aiming at because this so-called deep and special partnership has no meaning within the established relationships that exist. Thank you for that. Do you think that there could be an extension to the article 50 negotiations? That's a curiously awkward question for anybody to answer because there is a procedure to extend the article 50 process, but that's not the procedure that's presently being used. Indeed, the difficulty of extending the article 50 process means extending membership. Now there are members of your own party who would regard extending membership as tantamant to treason and in those circumstances they would be very unhappy about extending membership. There are some technical issues in extending membership that are quite difficult. European elections are confirmed for June 2019. There wouldn't seem much point in electing people who are not going to be there for very long, so there are issues there. What is being attempted is to create a special set of circumstances that will bridge to something else, but it would be helpful to know what it was bridging to. There is a clear possibility, which I think has been indicated by almost everybody, to bridge to single market membership. That's a sensible thing to do. Leaving isn't sensible, but if you're going to do that, then the sensible thing to do is to bridge to single market membership. Okay, and lastly, is the Scottish Government putting any provision into the transition period to allow businesses to prepare for that? What conversations, and I'm sure you're having many conversations with different sectors, but what is it that we are doing, what is it that the Scottish Government are doing to prepare people? Well, the first thing we're doing is trying to get the UK Government to tell us what's going on, and if you could assist in that, that would be very helpful, because we just don't know. We are obviously doing everything within our power, for example, in discussion of the frameworks, to create the circumstances in the devolved competencies where we will continue to have a clear policy in place. We've been very constructive, our officials have been very constructive in negotiating on the issues of the frameworks and what will be required. The heart of this is a decision by the UK Government to take an action, which they are not clear about how they're taking, what the resourcing is of that and what the outcomes will be. My position with business across Scotland is to work very closely with them to find any ways that I can to mitigate the problems that they have, but for example, if you look at the pharmaceutical sector, there are probably two things that would leap to mind immediately. One is that there are a number of companies in Scotland that do drug testing, which the European regulations require those companies, if you do drug testing in the EU and EU regulations, to be in the EU. If we are not in the EU, those companies will have to relocate. No ifs, no buts, they will have to relocate. We can't assist in relocation of companies outside Scotland. That's a really crucial issue. That's an issue presented by the UK Government, which they cannot resolve. I'm sure that they will not assist companies to relocate outside the country. The second part of that is that there needs to be an absolute clarity about medicines and medical devices licensing. We had complete nonsense about this from Michael Gove and Boris Johnson during the leave campaign about how companies would leap to have a special UK post-Brexit licensing regime. The drug companies will tell you very graphically what nonsense it was because drug companies who invest very substantial amounts of money will go for regulation in the biggest markets first, because that's where the biggest return is. That's fairly obvious. If you are going to go for a new drug, you will want to get European approval and you will want to get American approval—two biggest markets. Those two regimes, incidentally, are coming together in an agreement later this year. You will not go for the UK, which will be less than 3% of the market. You will go for the UK when you've done everything else. Rather than getting earlier regulation and better regulation, you'll get later and worse regulation. Those companies are having now to make arrangements to have regulatory activity outside the UK because there's only way they can guarantee to continue to sell drugs. The Parkinson's Society gave another written evidence to one of the parliamentary committees on their fears about what that would mean in terms of supply of drugs. I've heard this from pharmaceutical companies, too. I cannot solve that problem. I can articulate it to the UK Government and to yourselves, but the UK Government needs to say very clearly that this is going to happen with the medicines agency. They've already lost the jobs. This is how we're going to operate, and this is going to solve the problem. So far, they haven't. Can I just move on because of the three other members who need to ask questions? Thanks very much. In terms of the implementation period, Minister, the Scottish White Fish Producers Association, which is the biggest constituent member of the Scottish Fishmen's Federation in terms of the catching sector, have tweeted all the Scottish Conservative politicians this week and all the UK ministers expressing concern that the fishing industry should not be drawn into any implementation period and using the hashtag no going back. Is your view that the UK Government is preparing to sell out the fishing industry? That the fishing industry will be part of the implementation period because, quite clearly, I suspect that the other EU member states are not going to allow the UK to cherry pick. Therefore, we are facing the UK Government breaking a big promise once again to the Scottish fishing industry. I was myself included in those tweets. Obviously, the White Fish Producers are very concerned about it. It is clear that the EU understands the special issues of agriculture and fisheries with regard to the continuing IKEE, particularly with regard to annual negotiations that take place. I do not think that there is a lack of realisation that this is an issue with the EU, but they are determined that the IKEE should be continued. Indeed, other countries will not wish to give up their rights during this period. I think that it is inevitable that it will have to be included in the transition period and, in those circumstances, the UK Government will have no option. They might have said so and it might have been helpful in the implementation discussion. If the Prime Minister had indicated that in her Florence speech, she seemed to be quite unaware of it, it is even worse. In fact, it is pretty unforgivable that then you have the responsible Cabinet Minister, Michael Gove, indicating that, of course, that will not apply, immediately indicating that. We had this from Ian Duncan, too. In fact, we had it on a platform that I was on with him, an NFU platform in Dunkeld in November, where he blithely asserted that the common agricultural policy would not apply even during the transition period, which is simply untrue. The UK Government had a lot of mixed messages. It would have been much better than being honest, but I see little possibility of anything happening except that there will be an understanding of the need to ensure consultation of some sort, and I am sure that there will be that. The IKEE will continue, as far as all of us know, unchanged for that period of time, and that means that those policies continue in place. Two more questions. First, on the implementation period, if fishing is part of that, that would suggest that there is the potential for having the worst of all worlds from the perspective of the Scottish fishing industry and our fishing communities in that negotiations will take place. No doubt there will be some arrangement made to allow the UK to somehow have a discussion with other member states over the allocation of quota and fishing rights, but clearly there will be less status than being a full member state because we will not be a member state. Therefore, Scotland's position will be even more distant from the actual negotiations and decisions, despite the fact that we have two thirds of the UK's fishing industry in Scotland. Therefore, do you agree that that would be the worst of all worlds for fishing communities? I have worked with you for a long time. You have gone through the difficulties of annual fisheries rounds. You have come back looking haggard from the bus I even represented you on one occasion at the Fisheries Council. The reality of the situation is exactly as you have described it. This is a worse situation for Scotland than the situation that they found themselves in, a more difficult situation, more fraught with problems, and it has been created by people who made false promises. That is really what we should be looking at. When you have Michael Gove stroveiging around the fish markets of the northeast of Scotland, making promises to people which he knows he cannot keep, I think that that devalues the whole business of politics. That is exactly what has happened. That needs to be explained and understood. Nobody is defending the common fisheries policy. As you know, I have substantial fishing interests in my constituency. Nobody is defending that, but there needs to be an honesty about the people who said one thing and are now going to be delivering quite another thing. Of course, my point was that the potential is that we will have the worst of all worlds, because we will not be out of the EU, but we will be in this no man's land that will leave Scotland in a very bad place in terms of negotiations over our fishing communities. My final question goes back to an initial comment that you made about the importance of the Irish position in terms of any potential special deal that might be created for the Irish. We all recognise the importance of the issues around the hard border on Ireland and the impact on the North Ireland. However, do you agree with me that there is a danger that if there is a special deal for the Irish who largely depend on exporting to the UK and, of course, via the UK to Europe, there is no special deal for Scotland, then our businesses, particularly the agrifood sector, will be a major competitive disadvantage and that could potentially inflict even more economic damage on Scotland? There is a potential for that. I should absolutely stress that we have always supported a sensible solution in Ireland, recognising the very special issues that arise in Ireland, particularly the issues of the Good Friday agreement. We do not, in any way, try to make comparisons in that regard. However, it is obvious that there are difficulties inherent in the Irish arrangement for Scotland. If that arrangement is one that creates an advantage for Northern Ireland in trading terms, we would have to look at that carefully in terms of our activities. There are other complications, for example, that I indicated in the frameworks issue, that if there is full regulatory and dynamic regulatory alignment between Northern Ireland and Ireland that ties into the EU regulatory structures, how we would then be able to establish a common framework on agriculture, for example, within those islands would be very difficult to see. If that common framework included Northern Ireland, it would automatically be in full regulatory alignment with the EU. The UK Government is refusing to address that with us, but that is a very serious set of concerns. We have close relationships in Northern Ireland and in Ireland. I am giving evidence next Wednesday to the next committee that I give evidence to. It will be the joint Senate Doyle committee in Ireland. There is a very clear understanding that those issues need to be teased out and discussed. Indeed, I will be visiting agrifood business in Ireland next Wednesday morning to understand them fully. We do not have much time left and we have two members who still need to ask questions, so I urge them to be as succinct as possible. Thank you, convener. Good morning, minister. I would like to move on to trade and, specifically, the plans to open the Paris and Berlin hubs. If you could provide a brief update on specific dates when the hubs might be open? Well, there is an appointment to Berlin and she is ready to start work, and I think that will be starting within months, I think, in the early spring. I think that the Paris appointment is imminent, so I would expect Paris to be operating during the first half of the year. I should point that responsibility to my colleague Fiona Hyslop, so it is subject undoubtedly to the information that she would give you, but that is what I understand to be the case. Thank you very much. Last week, trade figures published for 2016 showed a decline in Scotland's exports to the single market. I wonder if you could briefly give your views as to what might have caused that decline? Again, that would be a matter for Keith Brown, but I think that the figures indicate a strong growth in Scottish trade. There will be fluctuations from year to year about how it takes place. There is no doubt that continuing to trade, both with the rest of the EU and within the UK and more widely, are all objectives that we should continue to operate. We should not put anything in their way. You would no doubt say that having any difference in the constitutional arrangements north and south-east islands would put something in their way. I would indicate that the policy of Brexit will put something substantial in its way. We would want to continue to trade in the best way possible, which is likely to be guaranteed by continued membership of the customs union in the single market better than any other arrangement. I wonder if I could briefly look at the assumptions that were used in the Scottish Government's paper showing the impact of Brexit on trade. I believe that the WTO option assumes a 50 per cent decline in trade with the single market. Can you briefly talk us through what assumptions were applied in reaching that conclusion? I think that the best person to do that with a great suspect would be Stephen Morton, who is a man who understands the model even better than I would understand it. I think that perhaps you might want to say what those are. For the trade shock on the WTO scenario, the assumptions are drawn from the economic literature on the subject, in particular by Ebell and Warren, who are NISA researchers. It is drawn mainly from that. That was also the assumptions that were used by Fraser of Allander, who did the report that was for this committee. They also drew on that paper for their shock on the WTO scenario. I wonder if Mr Morton has a view as to what has caused that decline over the past six years in Scottish exports to the EU? I do not have the figures offhand with me here, but I believe that they were broadly similar over the past year. 2016 was a difficult year for the economy as a whole, so that perhaps had something to do with the latest figures. Two brief questions, minister. First, on the customs union and the Government's scenario planning around that, if we are working on the UK Government's current policy, which is leaving the customs union rather than what seems to have been agreed in stage one, which is something that is not quite that. I am aware that the Government has done broader macroeconomic projections around that, but what work has been done in terms of scenario planning for the infrastructure requirements, for example at Cairn Ryan, that would be needed? We know that the industry—I have met with the Chamber of Shipping and various others—has done a fair degree of scenario planning on that. It is pretty alarmed by the outcomes. There are some interesting straws in the windiness. Richard Lochhead has looked at the issue in Rotterdam and the increase in customs officers that Rotterdam port is planning to have. The implication of that would be that there would therefore be further checks and that it would require greater infrastructure at the east coast ports in England in order to deal with that. I think that the view presently is a wait-and-see view that nobody knows as yet—it is one of these many things that is affected—what the situation is going to be like. Infrastructure changes would be slow and difficult to achieve. On the west coast, particularly in Scotland, the additional issue is what will be the resolution in Northern Ireland. The resolution in Northern Ireland is one that makes a seamless border north-south. Would that increase any activity east-west? That is very much resisted by sections in Northern Ireland. You can understand that. We would not welcome it ourselves, but the reality of the situation is that that might create circumstances in which they would require to be more. It is difficult to see—I know a little from discussing this with people—how Cairn Ryan could be expanded quickly or at all. It would be difficult to see how Ardrossan could change substantially. That would be a possibility. There would be issues in there, but until you know, you cannot decide what you are going to do. If you have contingency plans to do it, they would not be cheaper, I have to say, and then you say, what are we going to get the resource to do this? It is one of those issues that a decision is required. The longer there is not any clarity in decision, the harder it will be. Based on that, you would have to come to the conclusion that any transition period would have to be substantial, because, as you say, developing infrastructure takes time. Absolutely. My last discussion of the Chamber of Shipping, which is probably more than six months ago—I mean, they were talking about five to ten years to be able to make infrastructure changes now—that probably is not unreasonable. Just one very brief final question, minister. In 2016 into 2017, the Scottish Government engaged quite extensively with the EU 27 one-on-one engagement with member states to explain Scotland's position. The committee has heard from yourself and the Cabinet Secretary around that. I was wondering if you could give us an update on whether that has continued in recent months. We continue to have a very useful productive dialogue. It is very much part of our duty to do so. Fiona Hyslop takes responsibility for that. I take responsibility for the entry UK activity, but I am involved in it and, through the Brussels hub, which has been upgraded and works very closely to talk to a wide range of people. We do it all the time, and we will continue to do it. It is very important that people know our position. Scotland's place in Europe has been an additional advantage. We have made sure that that is widely read and widely distributed. We have had some very positive feedback from EU 27 countries. Thank you. I thank the minister for giving evidence today in his officials and well done in recovering from your earlier bout of illness. That concludes the public part of the meeting today. I now move into private session.