 Good afternoon! Welcome to the 14th 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're turned to silent. Apologies have been received today from Tavish Scott MSP. Fy enw i ymwyno'r gweithiau yn y cymdeithasol ifyd ystod yn yr Article 50. Rwy'n hi ffrifegi wrth yw ei gael i fyndeithio i Gw assezb i gefnogi Rydw i gaeli'r Genesbank Ysgolennu Ion, Rwy'n hi'n rhoi i'r gweithio am unig Aberon Gw, i gael i'r goffodonOrder Rydw i'r perlygio i'r gwaith i gyda Gwysigol ym Gwysigol wrth yw'r Gwysigol i'r gweithio i'r gyfnogi'r cymdeithasol, ac i gael i'r gweithio i'r Thank you very much, convener, and thank you for the invitation to be here today with my colleague the parliamentary undersecretary of state for exiting the European Union. We're pleased to be appearing before this committee, as I believe is an important part of engagement between the UK Government and Scottish Parliament, and this is an opportunity for me to hear your views directly. As members of this committee will be aware, last Thursday I appeared before the Scottish Parliament's Finance and Constitution Committee and the Delegated Powers and Law Reform Committee to discuss the EU withdrawal bill. I hope that my appearance provided a useful opportunity for those committees and MSPs to consider the revised approach to clause 11 of the EU withdrawal bill. The appearance gave me the opportunity to clarify a number of issues as the committee considered that bill. However, I'm aware that this committee has a different remit and therefore a different focus. I'm looking forward to hearing from members of the committee on our preparations for the UK to leave the EU. It's important that both the Scottish Parliament and the Scottish Government are able to share with the UK Government their views on EU exit. I look forward to discussing the UK Government's thoughts and positions with this committee, albeit recognising that we are still negotiating our exit from the EU. Through the JMCEN, we are making good progress on agreeing a formal process for the Scottish Government to feed into the EU negotiations. We are proposing a two-tiered approach to increase involvement of the devolved administrations in negotiations. This approach was discussed at the JMCEN on 2 May and includes the creation of a new ministerial forum within the architecture of the JMCEN and a formal process to enhance official-level engagement. We have proposed that the new ministerial forum be co-chaired by my colleague here Robin Walker and Chloe Smith, Minister for Constitution at the Cabinet Office. We expect the forum to meet regularly and to follow the rhythm of negotiations so as to make sure that the right discussions can take place in advance of those negotiations. On the technical discussions, we have proposed joint UK devolved administration technical working groups to consider specific issues related to the negotiations. The key point of the proposal is to create clear mechanisms through which devolved administrations feed into the negotiations. To ensure that the process is efficient and as effective as possible, the co-chairing ministers will provide a detailed update in advance of the JMCEN, the minutes of the meeting will also be circulated to UK cabinet ministers so that this information can directly inform the cabinet-level discussions on the UK's negotiating position. We are looking forward to further progress on these matters and to working closely with the Scottish Government in this forum. Thank you very much, Mr Mundell. Last week you appeared, as you said, before the Parliament's Finance and Constitution Committee, and the convener of that committee, Bruce Crawford MSP, asked you whether the UK Government would proceed with the EU withdrawal bill, even if this Parliament withheld legislative consent from that bill. It is fair to say that you did not at that time give Mr Crawford a definite answer to his questions, but you did say that you very much hoped that the Parliament would give its consent and that you believed that the Finance and Constitution Committee's report on the LCM would, in your words, be very influential in informing people's views. The Finance and Constitution Committee has now published its report on the supplementary LCM just 10 minutes ago when I realised that there is not much notice. The conclusion of that report says that the Parliament should refuse to give legislative consent to the EU withdrawal bill unless clause 11 is dropped. I wonder now if you could tell the committee whether the UK Government will go ahead and impose the withdrawal bill on the Scottish Parliament. Obviously, convener, I have not had the same level of access to the committee report as you have, but I look forward to reading it because I know that committee does take its work very conscientiously and I look forward to reading it in detail. I am sure that that will be the case for colleagues. However, my position remains the same as it was when I appeared before that committee. The decision as to whether legislative consent is given for the bill is a decision for this Parliament, for all members of this Parliament. I am not going to pre-empt that decision. I hope that there is still time, firstly, for us to be able to reach an agreed position with the Scottish Government on the bill. I think that everybody accepts that that is the best outcome. I hope that, when Parliament comes to consider the bill and when it reflects on all the evidence available, including maybe some of the evidence that is delivered to this committee today, that it will give that consent. You will be aware that the Parliament will make that consideration on Tuesday and will make a decision on the LCM on Tuesday, so you do not have very much time. I know that we do not have much time. We are up against the wire now, but many of the negotiations of this type—negotiations in the European Union, for example—always seem to go right to that very wire. We are open to further discussion. David Liddington, the Chancellor of the Duchy of Lancaster, who oversees the constitutional arrangements in the Cabinet Office, will be in Scotland tomorrow. He has made clear, as I have and ministerial colleagues, that our door is still open. We still want to continue to engage with the Scottish Government, because we believe that, if we are able to reach agreement as we were with the Welsh Assembly Government, that is the best outcome. If you do not reach agreement before Tuesday, will you be imposing this piece of legislation on the Scottish Parliament against it as well, if the Scottish Parliament is objective? What I will be doing is continuing in the time left to try and secure agreement. I will also be trying through this appearance and, more generally, to make clear why we think that the arrangements that are put forward within the bill, as amended in the House of Lords, are a good deal for Scotland, that they respect the devolution settlement and provide a way to move forward in respect of this unanticipated situation at the time of devolution of leaving the EU and that, on reflection, a majority of members of this Parliament will feel able to give consent, and that is what my focus will be. A majority of members of the Finance and Constitution Committee believe that the only dissenters for members of your own party have said that, unless clause 11 is removed, that this Parliament should not give consent. My experience of this Parliament is that individual members of this Parliament take their responsibilities very seriously, although, as I have said, I am sure that the report will have been done with the usual rigour of that committee. It will be for individual members of the Parliament to decide. In fact, as I have said here before, I have certainly said it in other forums that the Scottish Government has always been very clear that this was not a decision for them, it was a decision for this Parliament. That is what will inform the process. I will ask you one more time. It is a decision for this Parliament. The committee's report would certainly indicate that this Parliament will not give its consent to the legislative consent motion. Are you going to impose the legislation on this Parliament? I am not going to pre-empt Parliament. I respect this Parliament. I respect the debate that you will have next Tuesday. I have a supplementary from Richard Walker. The decision that the Parliament will shortly have to take here. You said that there may be a third way that is required to get through the debate. Can you elaborate on what you believe the third way to be, given that the clock is ticking? I have said that it was not obvious to me what a third way was, because there are a number of aspects of the agreement. For example, the terms of the clause, the wording of the clause, the wording of the Governmental agreement and the MOU. However, the position that I set out by the First Minister appears to me to be a position that the Scottish Government does not agree with that approach at all. It is not about having a discussion about how long the sunset clause should be, because my understanding is that the approach of the clause is not the right one. If I am wrong on that, I am happy to be corrected. Thank you, Clare Baker. It might be helpful if the Secretary of State, because I am not sure that I—what has been raised with us previously is that there are two cultures that play here. There is not a clear understanding with the UK Government how devolution works or the understanding that we have here is a different way of how it works. Do you think that there is an understanding at the moment between Governments on the issues and understanding of where the Scottish Parliament is coming from and why it is having difficulty with the LCM? Could you outline what you understand those to be? I think that we have sought to set out our position in relation to this matter. I am very disappointed that we are in this position. For me, it is a pinhead constitutional argument that we are in. The Scottish Government and the UK Government have agreed 24 areas where we think that, after we leave the EU, they should stay exactly as they are, exactly as they are regulated at the moment. We have agreed that, but we are now having an argument about what the formal process for agreeing it is. We have agreed the substance, and we are having a debate and discussion about the formal process. I believe, as I think was articulated extremely well in the House of Lords by Lord Jim Wallace, who, after all, was one of the founding fathers of this apartment, that when devolution came about in the late 90s, this situation was not envisaged. We have a requirement to address a unique situation. We have come forward with a proposal that is reasonable to address that unique situation, in which your colleagues in the Welsh Government identify that it does not, in any way, undermine the devolution settlement. That is what we have sought to do, not interfere in any way with the existing devolution settlement and be very clear that no powers, responsibilities that are currently exercised in this Parliament will change. In the response to this committee, the other committees, the MPs, Lords and others who have commented, we have brought forward a fundamental change to the clause to give it essentially a presumption of devolution, but we have inserted in it a basis for what should happen if there was not agreement. That appears to be at the core of the contention. You made opening comments around the GMC and outlined a number of areas where there has been new ministerial groups established, there has been working parties established. It has been raised with us that over the years the working relationship between the Scottish Parliament and the Westminster Parliament and the two Governments has frayed, not through intention, but perhaps just because there is a change of personnel, the architects of devolution are no longer within government and civil servants have moved on. How important? You have outlined the new bodies being established, which are welcome but are still quite limited. How do you see the relationship moving forward in future years and what needs to be done to build up? It is a very positive thing about what happened at the last meeting of the GMC and Robin was present as well. Although we had an area of disagreement with the Scottish Government, we were able to conduct a very cordial and business-like meeting. There was no friction, there was disagreement, but there was no friction. I think that that is a sign of a mature relationship where you can have a disagreement. However, in the same meeting that we did not reach agreement on clause 11, we still reached agreement on the setting up of this new forum and we reached agreement on how we would take forward the work on those 24 areas that in future will have frameworks. I felt that there was a maturing of the process. I stand by my remarks at the Finance and Constitution Committee. I have been around the bloc a few times and I think that the relationships between the two Governments were most difficult in the early part and mid 2014 than they are at this moment. It is just to follow on from Clare Baker's question. I understand what you are saying, but we heard evidence from Professor Keating that that was just last week. It was about what he seemed to think was a lack of understanding of devolution. He said that, as Clare Baker mentioned, there is a high turnover of officials on Whitehall. Officials establish relationships with the devolved administrations and get to know people. The relationships tend to be good at the ground level, but then someone else moves in. That needs to be built more clearly into the system. Similarly, ministers in Whitehall are often insensitive in the sense that they are unaware of the devolved implications of things. They have to learn more about that. While we saw that the GMC did not meet for nine months last year, we had position papers put forward that are related to devolved responsibilities without the Scottish Government or Parliament being consulted. Do you understand where that belief comes from? How would you react to that statement? I certainly do not dispute that there is a need to continue to improve devolution capability and understanding in Whitehall and, indeed, more generally, because it is an evolving situation. As we have seen, following the Scotland bill in 2016, significant more devolution has taken place. If you had set out a briefing on devolution two years ago, the situation now is different. It is very important that people are kept up to date and are on top of the arrangements. It is important that Leslie Evans, the permanent secretary of the Scottish Government, is part of the regular meeting of permanent secretaries of all the Whitehall departments. At that top level, you have that level of connection. I think that there is a good level of interaction between the Scottish Government. I have some people who have just come from the Scottish Government to work for the Scotland office and some people from the Scotland office have gone into the Scottish Government. We can do better, but I do not recognise the bleakness, perhaps, of the situation, as I have suggested. If I might come in on this, I think that what we have seen both in the AMCEN discussions and you pointed to a period in which those were not happening, which, obviously, I think everyone regrets and I think that we want to make sure that we have more regular engagement with that. We have seen an improvement there, but also the work that is underpin it at an official level has actually been of extraordinarily high quality and the frameworks discussion that has been led by the Cabinet Office from our perspective, but with the officials at every level has resulted in a huge amount of agreement between the different Governments as to how we can work together. It is important to pay tribute to that work, but, for my department, having been spun out of, if you like, the Cabinet Office and the original Cabinet Office Brexit unit, there is a real understanding of the importance of devolution. It is something that is in our DNA, and our permanent secretary, Philip Rycroft, has come from the Cabinet Office. I think that it is fair to say that one of the things that we do have to do is challenge those other Whitehall departments that perhaps are not as used to engagement with the devolved Administrations to ensure that through this process they are doing that. We have seen a step up in that, both in terms of the approach to the future partnership, where, obviously, the new committee that I will be chairing with Chloe Smith will play an important role there, but also in terms of the work that has been going on in PDC contingency planning, of making sure that we are challenging all our colleagues across Whitehall to work with the devolved Administrations wherever possible. I absolutely recognise what the Secretary of State says. There is always more to do in this space, but it is very much a core part of our brief. Jackson Carlaw Good afternoon, gentlemen. The convener made reference to the finance and constitution report. Clearly, the earlier report was one that was supported unanimously, but this report makes reference to the very considerable progress that has been achieved during the course and welcomes many of the amendments that have actually been accepted by the UK Government to the bill. It does rest on Clause 11, as we know. What would you say to the committee and to Parliament in support of having confidence about the arrangements now that the bill has progressed, this section of the bill has progressed through the Lords, in relation to the amended Clause 11, which ought to underpin the support of it in the Parliament next week? I would have thought that, perhaps, rather than listening to myself, who might be perceived not to necessarily to be objective, people should reflect on the debate that took place in the House of Lords, where you saw a number of people from Labour members of the House of Lords to Lord Jim Wallace, who I cited just now, who said that this situation was not envisaged at the time of devolution. It requires a bespoke solution. The UK Government has moved very significantly to try and find one that has been agreed by the Welsh Government, and it is not a threat to devolution and does not change anything about the existing devolution settlement. People like Lord Mackay of Clashfairn, who is regularly cited by Mr Russell, who was very clear that the Government has done all that it could do reasonably within the devolved arrangements to get a way forward. I would look to those people who are not the principal protagonists but respected figures within Scottish and UK politics what they are saying about this. You referred to the atmosphere that exists between the Governments in discussion as being one that, where there is a difference of opinion, there has been a lack of friction. Given the important business that lies ahead, are you confident that a business-like approach to the issues that will require to be discussed, the framework, if I can borrow that phrase in the narrower context, for a constructive and productive representation of interests exists? Thank you very much. Recommendation 51, from today's report by the Finance and Constitution Committee, says that the committee's view is that the commitment that common frameworks will not be imposed is contradicted by the consent decision mechanism created by the UK Government's amendments to clause 11, which would allow the UK Government to proceed with regulations without the consent of the Scottish Parliament. That is not really a matter that you referred to dancing on a constitutional pinhead. That is quite fundamental. I think that, if I may say so convener, there is a slight misunderstanding in some quarters of what the legislation says, although I have not obviously had the opportunity to read paragraph 51, but what I can say is that when I was talking about the imposing of frameworks, that is what the new arrangements will be when we have, across the United Kingdom, negotiated those arrangements. That is what I have been quite clear, that new frameworks to apply once we have left the EU will not be imposed. I am absolutely stand by that statement. What the clause 11 does, it provides a basis in relation to the 24 areas where the existing arrangements are to be frozen, as they are right now. That is what it deals with. It does not deal with new frameworks or how new frameworks are to be arrived at on those 24 areas. Surely, if agricultural fishing regulations are frozen, which is your desire, they cannot be frozen in time forevermore. They have to change at some point. The Scottish Government is arguing that they cannot be changed without the consent of the Scottish Parliament. Do you agree with that or not agree with that, and would you change those regulations without the consent of the Scottish Parliament? I do not think that that is what the Scottish Government is currently arguing in the context of clause 11. What they are arguing in the context of clause 11 is that, if we cannot agree that things stay the same, the UK Parliament cannot take the decision that they do stay the same. That is what, in simple terms, they are arguing. They are not arguing. That may be a separate argument that they have, but in the context of clause 11, clause 11 is about whether existing arrangements, what the situation is right now, stays the same the day after we leave the EU or within the two-year period. Can I just add to that the agreement on sunsetting on clause 11 powers does mean, of course, that there is going to need to be a replacement on those, but that will need to be achieved through new legislation, if it is a legislative framework, which will then require visual principles to be respected and consent to be sought if it is in an area of devolved competence. We are not talking here about the creation of new frameworks. We are talking about the maintenance of existing ones on a temporary basis. It was one of the areas that both the devolved Governments pressed in the negotiations around that, but there should be a clear indication of the finite nature of any clause 11 regulations. We have recognised that through the new sunsets that have been introduced in the revised version of the clause. Final supplementary point is that, if you take fishing and agriculture, they are devolved issues. The Scotland Act does not have a pile of regulations that are referred to which are frozen in time in 2018. They have the subjects of fisheries and agriculture. Therefore, they are devolved and you seem to be wanting part devolution for the Parliament. Does not a free rein over those issues that are devolved under the Scotland Act? All those areas, all those powers that are devolved remain devolved. There is no effect on those areas, but those areas currently sit at a European level. Areas are referred to as fisheries, agriculture and so on. They are devolved. In the intergovernmental agreement, the agriculture areas, for example, are documented in terms of the different types. Although 24 areas are cited, for example, agriculture makes up a significant part—it is not just agriculture, it sets out what those things are. We have been very clear, all the Governments, even though we have not reached agreement, that, in the deep dives that we are going into, even if I cite the example of agriculture and zoo tech, which is the sort of preserving DNA of animals, even within a sector like that, it might be found that some of the things would not need to be done on a UK basis. Even if you are on the list of 24 areas, it does not mean that every single aspect of that would form part of a framework. One thing that I think would be helpful, perhaps convenient for me to say again, which I did say at the other committee, is that if we were not able to, in the regatable situation, if we were not able to reach agreement, we would abide by the agreement that we have reached with the Welsh Government vis-à-vis the Scottish Government. So you would impose on the Scottish Parliament then? No, we would not. Because you have not reached an agreement with the Scottish Government. I know that you are very keen for me to say that, but I am not going to say that because I am going to, in relation to Parliament and the legislative consent, I am going to wait for Parliament's deliberations. Maybe I misunderstood you, but you seem to be saying that you would impose the agreement that you have reached with the Welsh Government on the Scottish Parliament. No, I did not say that. What you said is the deal with the Government that we have reached with the Welsh Government. The terms of that, the respect for the devolved administrations in that, are open to the Scottish Government as to a restored Northern Ireland executive, and I think that it is very important that there is that parity of treatment across the whole of the constitutional settlement when it comes to these issues, and that that is open whatever the outcome going forward of other debates and disputes. I think that it is important that that is the UK Government acting in a reasonable manner, setting out that we will respect the role of the devolved administrations, and that is notwithstanding the whole conversation about legislative consent, which, as you say, is for this Parliament to decide. The amendments to clause 11 would remain. What the situation is, is that this Parliament will have a debate on the basis of the EU withdrawal bill and whether to grant legislative consent to the various provisions, and we will await those deliberations, whilst, in the meantime, as I have set out, seeking to still get a positive outcome to any vote in this Parliament, and to get agreement with the Scottish Government. Theresa May has proposed a customs partnership option for the UK's future relationship to the European Union. Boris Johnson described that as crazy. Do you agree with the Prime Minister or the Foreign Secretary? We have presented two options for the future customs relationship between the UK and the EU, and we recognise the enormous benefits of having frictionless access for goods. This is something in which we are in agreement with much of the evidence provided in Scotland's place in Europe about the importance of frictionless access for goods. What we are talking about is the mechanism for delivering that, and for meeting our commitments on no infrastructure on the Irish border, but also our commitments for a UK independent trade policy. Both of these options are designed to deliver that, and the new customs partnership is one way of doing that in agreement with the EU. They have raised some concerns about that, as you will be aware. The highly streamlined version, the so-called max-fac option, is another way of doing that with both sides taking steps to do that. Both of these are still under consideration. They are both serious options, and we are looking forward to the detailed conversation on the future economic partnership getting under way, so we can discuss them in more detail with our counterparts. What made the Foreign Secretary describe the partnership option as crazy? Throughout this process, we will see political arguments and noises off from all sorts of parties to— Does collective cabinet responsibility not still exist? I think that there will be a collective cabinet decision on this issue. When will there be a collective cabinet decision on this issue? It keeps being pushed back. I am keen to see that reached as soon as possible. It is very important that we get this decision right, that we make sure that it is one on which we can make progress with the other side of the negotiations. At the stage where we are having reached agreement on large chunks of the withdrawal agreement and having reached agreement in principle on the implementation period, the next stage is to get in for detail of those talks on the future economic partnership. That will give us the opportunity to explore some of those options in more detail. When will the cabinet make this decision? Cabinet is at the moment looking at the options, as we have discussed before. The Cabinet work on a committee system, but the full cabinet will make the decision in relation to the important matter, because we recognise the important— When will the decision be made? The cabinet's considerations have been very well publicised by cabinet members, enthusiastic to meet their views known. Is there a deadline? If there is not a deadline, it would be worth putting on the record that the cabinet has not currently set a deadline for making that decision. The cabinet realises the need to make a decision in early course. It was not because of the nature of the timetabling of the EU negotiations that was an issue that was not available to be discussed with the EU ahead of the March council. Indeed, it was very important to understand the nature of the implementation period going into this next phase. I recognise the need to make a decision, but I also recognise the need for that decision to be right. Therefore, it is the right thing to do to get further detail on the options before a final decision is made. Will the final decision be made before the European Council meeting? I would hope that that is the case, but I am not stating that as a de facto situation. We have an indicative deadline somewhere. Mr Walker, you mentioned that two options have been put forward and you also mentioned that the European Union has raised concerns. The European Union has essentially said that both of the options that are being debated within the cabinet are some who have used the phrase unworkable. It is a matter of debate how unworkable they are, but the fundamental point of concern is around the impact on the island of Ireland and the peace process. I assume that the UK Government is in complete agreement that any customs border between Northern Ireland and the Republic would be incompatible with the peace settlement. The UK Government has been very clear that we are committed to all of our commitments under the Good Friday agreement. We have made the strong case for the continuation of the common travel area, which is an example of exceptional arrangements that exist between the UK and the Republic of Ireland. I am glad that the Republic of Ireland has also made that strong case, and that is something that is now accepted by the EU side in negotiations. Of course, as you will be aware, there are technical borders between Northern Ireland and the Republic already in terms of excise, and both parties are able to deal with those in a way that does not put any physical infrastructure, any hard stop at the border. I think that what we need to ensure is that the agreement that we reach with the EU allows for that, allows for the continuation of the unique circumstances that are there in the island of Ireland and recognises the importance of the peace process and the commitments that both parties, both international parties, have made in that regard. Absolutely, right from the start of this process, and as a former PPSM in Northern Ireland office, I have seen this very directly for myself during my time there, we have recognised the importance of maintaining our commitments on the Irish border. Government position is absolutely clear that there will be no new physical infrastructure at the border. Just to round this topic off, I quote from a speech that Michelle Barney made in Ireland last month, just in the final section. She said, since we all agree that we do not want a border, and since the UK agreed to respect Ireland's place in the single market, the Republic, then that means that goods entering Northern Ireland must comply with the rules of the single market and the customs union code. That is our logic, as simple as that. Do you agree with Michelle Barney's logic? Again, there are going to be positions taken throughout the negotiations. Where I agree with Michelle Barney is where he said that we need to make sure that both sides are coming forward with creative and imaginative solutions to the unique circumstances in the island of Ireland. That actually means that some of the approaches that we have set out in terms of potential outcome equivalents will regard goods, but also in terms of maintaining existing north-south cooperation, where it already exists and where there is already the sign-off from a power-sharing devolved executive, for instance, in phytosanitary arrangements. That could be an important part of the overall solution. The European Union's proposed backstop, if no other agreement is made, is that Northern Ireland at least stays within the customs union. Is the UK Government's position, would you agree to any situation in which there is a customs frontier between Northern Ireland and the rest of the UK? Is it between Northern Irish ports and Scottish West coast ports? I think that the simple answer to that is no. If this is a situation that the Prime Minister has made clear, she does not believe that any UK Government could commit to a situation in which you were creating an internal barrier between different parts of the United Kingdom. It is very important that we look at the actual principles of the Good Friday agreement, which includes the principle of consent. That consent would not be there to separate Northern Ireland from the rest of the UK. We need to reach an arrangement that recognises that and recognises what we agreed in a joint report, which is respect for each other's legal and constitutional systems. We have to respect the single market of the European Union, but they also need to respect the internal market of the UK. The alternative backstop is the whole of the UK that stays in the customs union in the event that no other agreement has reached? We are not going to stay in the customs union because we need to have an independent trade policy, but we are absolutely open and we have been very clear. It is set out in our customs paper that we are open to exploring customs arrangements between the UK and the EU, but allow for that frictionless movement of goods. I want to thank Mr Walker for his acknowledgement regarding the poor handling of intergovernmental relations when he spoke about the issue of devolution. The fact that devolution has been here for 19 years and that there are still some UK departments that do not fully understand and you are pushing them, so thank you for that acknowledgement. At the weekend, Greg Clark spoke about how important it was to get some type of close customs arrangement with the EU, and he cited the three and a half thousand potential jobs at Toyota. Caroline Fairbairn from the CBI welcomed Mr Clark's comments, saying that hundreds of thousands of jobs in the UK depend on frictionless trade with the EU. This whole issue is so crucial for the economy going forward. The timescale is running out fast, and that uncertainty that has been created and generated by the UK's negotiating position is quite, frankly, appalling, to be honest. When will the UK Government and the EU come to an arrangement, come to some type of fixed deal that will help the economy and provide that certainty for business and for trading? You are absolutely right to talk about the importance of certainty in this regard, and what we have already done is to reach the political agreement on an implementation period, which is very important with regard to providing that certainty to make very clear that there will only be one set of changes. One of the things that I know businesses, including the CBI and many other business groups, have raised with us as a concern is that they did not want to see two sets of changes, one on the exit of the UK from the EU and another one when we ended an implementation period or when we established a new arrangement between us. The implementation period takes away the risk of that. It means that we can agree the same arrangements will remain in place, including effective participation in the customs union, although we will not be a member once we have left the European Union, and provides some of that certainty to businesses. The next part of it is the importance of the frictionless movement of goods, and that is where we recognise that it should be in the interests of both the UK and the EU to ensure that we can continue to support the complex supply chains that exist between us. We are a range of different ways of doing that, but we should start from the perspective as the EU guidelines recognise of zero tariffs, and I think that it is very welcome that that is an element in the EU guidelines that they are seeking to achieve. We also need to look at areas of equivalence when it comes to standards in terms of goods and mutual recognition in that respect. I think that some of the options for the set-out in our customs paper—mutual recognition of all-fries economic operators and these sorts of things—could be very important to the end solution here as well. However, in the modern world in which we live, you have international companies in automotive, being an excellent example, or aerospace being another, who are moving goods from one jurisdiction to another on a very regular basis. They hold an enormous amount of data and information on those goods and how they move and need to move. We need to ensure that our Governments are able to work together between the EU and the UK to support those supply chains and maintain that investment. Of course, if we look at the economic benefit and the risks of this, it is economic benefit and risk that cuts in both directions. What we hear when we meet with European business groups and individual member states is that same desire to see the maintenance of the frictionless movement of goods that we have in the UK. I am not saying that it is necessarily going to be easy or that it is necessarily going to be quick to reach a solution on this, but it is fundamentally in the interests of both parties to reach a solution here. Having the implementation period means that we have the time to do so. The best approach will be to make sure that we have as much detail agreed as possible by the time that implementation period starts, so that the maximum amount of that time can be used for putting the new arrangements in place. Certainly. The Prime Minister, when she gave her speech on 2 March, there were five key points that she highlighted, one of which was that it must protect people's jobs and security. With the huge uncertainty that we face, I and also the comments that the weekend answered from Greg Clark and the comments from CBI to have some type of deal, I do not see how there is going to be any certainty in any protection of jobs with this delay and with this intransigent position that seems to be taken by the UK. I do not believe that it is the case that there is an intransigent position being taken by the UK. What we have seen in recent months is some of the issues which I think people thought would be most difficult to resolve, like the financial settlement, the position of citizens and so on and so forth have been agreed. We have made progress on those. We have agreed to move now on to the future economic partnership, something we were very keen to be talking about from the start. We want to focus on where there is real mutual interest in reaching a deal here. I think the example you give of goods in the automotive sector is an excellent example of where that real mutual interest exists. There are big international companies that are reporting their profits in France and Germany and in other EU member states who will benefit from getting a deal in this space, and that is what we are driving towards. The CBI also suggests that the customs union should remain in place unless and until an alternative is ready and workable. Do you agree with the CBI? I think that we have to reflect on the fact that the UK's trade policy and membership of the customs union was an important part of the referendum debate. It was something that, when we had this democratic exercise across the whole of the United Kingdom, people considered and debated. Having an independent trade policy is one of the opportunities of this process to go out into the world and be able to make deals both across goods and services that could be beneficial to the UK. Therefore, we will not be part of the customs union. What we, of course, need to explore is the best options for how we then manage the customs relationship between the UK and the EU to make sure that that slightly less than half of our trading goods that we have with the EU at the moment continues to thrive. That is a very important objective for the UK Government. That is why it was one of the first detailed papers that we submitted last summer. It is an area that is really important, but we get right to those negotiations. My final question is in terms of trading. It is reported to the weekend that America wants a confident free trading Britain able to do its own deals. Surely any trade deal should be done for the benefit of all the citizens within the UK as compared to America's first president, Donald Trump? Absolutely. We need to make sure that all trade negotiations are focused on the interests of people in the UK, but there is a real risk here. I remember that I sat on the business select committee in the House of Commons when we looked at the TTIP negotiations that were taking place there. We concluded that there were potentially huge benefits for the right deal on that, but there were real concerns about the accountability of the EU trade negotiation process there and the fact that the UK Parliament Government did not have enough of a say in it. I think that there is a concern that the idea that is currently put forward by the leader of the opposition is that we would stay in a customs union and that the EU would give us a special sale on trade policy. I am afraid that it is fictional. If you were in the customs union, the EU would have the full right to trade negotiations on our behalf with no say whatsoever, not even that amount of say that we had in the TTIP negotiations for the UK. It is one of the reasons why I think that once the decision has been taken for you are leaving the EU, you have to come out of the customs union. What we now need to do is forge any relationship with it. I really just have a number of questions, Julian. It is around EU citizens and the settled status of EU citizens. Recently, we have seen a number of serious issues emerge from the Home Office. We have heard Amber Rudd resign over immigration targets continuing fallout from Windrush. The families in Scotland that have been threatened with deportation mistakenly by the Home Office and the Prime Minister who allegedly blocked requests from other Government departments to allow doctors from overseas to enter the UK. Do you believe that the Home Office has the capacity currently to deal with the settled status applications of the over 3 million citizens that live here, which would average about 6,000 applications a day? It is incredibly important that we get the settled status scheme right and that we ensure that it is a scheme that is as friendly as possible to those communities who are part of our communities. I have been working very closely with my colleagues at the Home Office on this. We have been holding a number of events with diaspora communities in the UK from a whole range of EU member states to make sure that we are getting their feedback on board before the scheme is launched. I think that that is really important. In the past, you gave some examples of where there have been problems. In the past, some schemes on immigration have been designed to catch people out to find a reason why people should not be allowed to stay. The settled status scheme is being designed the other way round. It is being designed to be a scheme that helps people to prove that they have the right to stay, but it is designed to work with those people who are in the UK as EU citizens to ensure that they can be documented. I think that it is right that the mistakes that were made over the Windrush generation have been acknowledged. Although Amber Rudd is a personal friend and someone I have known for a very long time, and I respect greatly, in the circumstances, she was right to resign over the way in which that had been handled. However, we now need to ensure that we do not create problems of that sort for the future. Therefore, having a scheme that is designed to help people to get the documentation that they need to prove their long-term residence is the right approach. I think that it is also right that we have looked at ways in which we can improve that over the current EU permanent residency scheme, which is equivalent. People have talked about the 82-page forms, the problems that people have had with that. People have talked about the problem of people having to prove that they have health insurance, even though they have access to the NHS, which is a particularly ludicrous aspect of that policy. We have removed those from the settled status scheme. We are trying to work with the widest possible range of groups across the UK to make sure that they have a real say in informing how it will work. I am confident that we are taking the right approach on that. I will continue to work very, very closely with colleagues at the Home Office to make sure that we are joined up in our approach to make sure that it is about how we make sure that people have and prove that legal right. Has any extra capacity been built into the Home Office to be able to deal with all those applications? Does that also mean, based on your response that there will be well, almost two tiers of migrants in the country then? You will have a hostile environment for people from out with the EU, but a non-hostile environment for people that have come from the EU to have a separate system there. I think that it is very important to draw the distinction between the whole debate about a hostile environment, which has taken place under successive governments, which is one that is about illegal immigration. It is not about legal immigration, whether that is EU or non-EU migration. The focus needs to be on how we make sure that those EU citizens who have made their homes here, who have come here legally under the EU free movement rules, which remain in place in this country until the end of the implementation period, are able to continue their lives legally. The Government should be doing everything in its power to help them with that, and that is absolutely what we will continue to focus on doing. I think that one of the things with the whole debate about immigration that we have had in this country over recent years has been the concern that many people have in communities up and down the country, that there is simply no control when it comes to the freedom of movement rules and that side of things. I think that one of the things that we have to show for the future and for our future system is that there is a degree of control in that respect. I think that that could improve the attitude of the Home Office and, indeed, Government in general towards people who are coming legally from both beyond the EU. That is why I did not remove some of the stigma and some of the pressure on the immigration debate, having personally made the positive case for immigration during the referendum debate. One of the great problems that I had and one of the things that I was constantly confronted with by constituents was the but-you-have-no-control argument. I think that we need to address that in order to improve the atmosphere with regard to the positive benefits that immigration can bring to the whole country in general. I think that that is something that is already recognised in Scotland. I think that what you have intimated is more an attitude that is reflective elsewhere in the UK, because the Government published a report here about the benefits of immigration and why we preferably like to see the continuation of the free movement of people because we rely on the inward movement of people for our own population growth. That brings me to Scotland in particular, because there was a recent interim report published by the Migration Advisory Committee, which had very little to say about Scotland. I would be wondering why that is. Are we still waiting on that element to come, and is that work on going at the moment? I might say on that, but that work is on going. The interim report is exactly what it says. It is an interim report. The Migration Advisory Committee has taken the view consistently that immigration, which is a reserved matter, needs to be looked at on a UK-wide basis. I think that it is very important that the evidence from Scottish stakeholders, Scottish businesses and Scottish communities is taken into account in that respect. I, certainly, have been to meet with, for instance, the Fife growers to talk to them about their reliance on seasonal workers and how we can make sure that that is understood by the Migration Advisory Committee and that they are taking that into account in their work. I think that the same issues that affect them also affect businesses in the Vale of Evesham near my constituency in Worcestershire, which are very involved in fruit-pooking in another part of the UK. I think that there is a perfectly rational argument for a consistent approach across the United Kingdom, but it is really important that it should take into account those areas all over the United Kingdom, which have a different demographic pressure areas in remote and rural areas and where the population is ageing. That was very much an interim report from the Migration Advisory Committee, and most of it just set out the parameters of what they were doing. We are expecting their full report later in the year so that we can move forward with an immigration policy that is evidence-based, because that is what they are about. I can confirm that you are probably aware that the Scottish Government did submit a very significant document that a lot of other Scottish stakeholders have done so. I suppose that I also have a concern because the impacts of Brexit are already starting to hit areas. I represent Angus North and Merrens, which is a rural constituency, and in farms across Angus that are expected to see 15 to 20 per cent shortages in the number of seasonal staff that they have working, and that is for this coming season. I am just wondering what work the Government is undertaking to mitigate against that impact and the impact that it is already having on people in Scotland? The completion of the Migration Advisory Committee work needs to take into account the different sectors of the economy that rely on different workforces. Obviously, it was the case until relatively recently that we had specific seasonal agricultural workers' schemes. Those were removed because the free movement rules meant that they were not necessary. I think that it is one of the areas that the Migration Advisory Committee needs to look at. I would observe that where I have had conversations with stakeholders about the seasonal workers, in many cases they are now already becoming from beyond the EU because changes in currency, changes in the domestic economy of some of those EU member states from which people have come from traditionally have meant that it is less attractive for people to come here and send money home. I was quite struck in meeting some of the growers' organisations by having a number of Ukrainians who are taking part in those activities, who are not covered under European free movement rules. The concerns being expressed by organisations such as the 3 million, I am sure that you will be aware of them, about an immigration exemption in the data protection bill that would deny people access to their data. That would affect everyone who is currently involved in an immigration case or those who may apply for settled status in the future if they become involved in it while they are applying for settled status. Can you update the committee on the status of that exemption and whether that has been removed? I think that I have to write back to you on that, I am afraid, because I am not cited on that particular issue for today's appearance, but I am very happy to write back to you on that. Obviously, we had a debate on the data protection bill yesterday in Parliament and there will be further progress on that as we go through the stages. Perhaps I can check with my colleagues at the Department for Culture, Media and Sport, who are leading on that, and I will write back to you. That would be of great interest. The committee has done a lot of work and commissioned quite a lot of research on immigration, so that would be much appreciated. Ross Greer wants to come back in. Yes, thanks, convener. Just going back to the previous exchange, but customs union, one point that did not cover that was, as Mr Medell highlighted, this is ultimately a decision for the cabinet. As Scotland's representative in the cabinet, it would be useful to have on record your view, Mr Medell, between the customs partnership and the Max FAC option. I want to consider, as you would expect me to, the options, because, as I have said to you, it is very important that we get it right and that we have an arrangement. When we have an arrangement agreed within the cabinet, I will abide by the usual rules of cabinet collective responsibility and support the decision that the cabinet makes. The Brexit vote was two years ago. The decision to activate article 50 was just over a year ago. What information do you not have yet that means that you are still having to consider your position? Some of your colleagues have rehearsed their positions in public to significant extent. Firstly, I do not feel that it is appropriate for cabinet ministers to rehearse their positions in public. The position for cabinet ministers is to debate and discuss around the table and then to respect collective responsibility when decisions are made. We worked against a timetable, which was the wish of the EU in terms of the different parts of the arrangements for leaving the EU. As Robin has set out, we concluded the withdrawal agreement at the December council, or at least the basis of that. We have put a huge effort into securing the implementation period, which I think supports some of the points that Stuart McMillan has raised, the importance of that certainty. It is only in that period that the focus has been on the issue of the customs union in that sense of being able to have a direct dialogue with the EU. A lot of work is currently being done to build on the work that was set out in the initial paper, and I want to see that work and then take part in the discussion that will determine ultimately what the outcome is. I have a supplementary on this topic from Richard Walker. I was wanting to ask a similar question to Ross Greer. You have had two years to make representations on what is the best customs arrangement for Scotland. What are your views on what the best customs arrangements are for Scotland? My view is that the best arrangements for Scotland is to have as a frictionalist arrangement as is possible, with the minimum of tariff and intervention. That is the outcome that we want to get to in those discussions. What will be your position if that is not the outcome agreed at cabinet due to certain individuals in the cabinet taking alternative view to what you are asking for? I think that we will, as we have demonstrated in the other key areas, be able to reach agreement. Only months ago, people were saying that we would never be able to get collective or parliamentary agreement as to what the effective divorce bill would be, that we would not be able to get agreement on an implementation period and the operation of that implementation period. Those things have been achieved because when it comes down to it, those are really serious issues where, as you indicate, the interests of Scotland and the United Kingdom have to come first and not individual political positions. Just in conclusion on that topic, you talk about the progress that you have made on the withdrawal agreement. Mr Walker spoke about how, in June, you will move on to talking about the future economic partnership. When Mr Barney spoke in Ireland last month, he was very clear that, without an agreement on the Northern Irish border, which means that you have to settle your customs issues, without that agreement, there would be no withdrawal agreement. Without an withdrawal agreement, you are not going to be able to talk about the future economic partnership. If there is no deal on customs, there is no deal on Ireland, it means that there is no deal. That is crazy. We all want to make sure that we reach a comprehensive agreement on the withdrawal agreement on the legal text of that. That includes the elements of the joint report referring to Northern Ireland. Of course, there are different positions being taken as to the exact drafting of that. Those need to be reconciled and reached agreement. Where I would slightly disagree with you is in terms of saying that you have to reach your full agreement on customs in order to do that. It is actually the commission themselves that has made sure that we were not able to talk about the detail of customs up until this stage. We were very keen to open that conversation earlier, so we are very keen to progress with both. The timetable for reaching a full agreement line by line on the legal text of the withdrawal agreement is for October. We want to ensure that, alongside that, fitting the words of article 50 itself, we have as much detail as possible on the future framework for the economic partnership between the UK and the EU. We are very keen to press on with both. Officials have been meeting in Brussels on a regular basis to take forward that discussion on the withdrawal agreement text. We are absolutely committed to all elements of the joint report to date. The wording to which the Prime Minister objected on creating a border in the IRC effectively was wording but went beyond the joint report and was one interpretation of it. That, we have made very clear, is not acceptable to us. We need to reach agreement on an alternative to that. That is where the talks are right now. We are pressing ahead to do that in order to make sure that we can get the maximum progress, both ahead of June Council but also crucially ahead of the full final withdrawal agreement being there in October. In those official discussions that you are talking about, reports from those official discussions say that the EU has systematically annihilated both your customs options. I do not think that we should pay too much attention to media reports. I think that we have got to focus on getting the detail right in these arrangements. We have put forward two detailed proposals on customs. We have not yet had the broad conversation about customs that we would like to have with the EU, but we want to get on with that as soon as possible. Certainly, those reports are pretty credible. In places such as the Financial Times, for example, perhaps they are more reliable than some of the briefings that come out of the UK Government. If it is the case that your customs options have been systematically annihilated by the EU, then where do you go other than to remain within the customs union? I think that the key thing is to get the negotiations right in the room and not to speculate on media reporting. Thank you very much for coming to give evidence to us today. I will now suspend the meeting and move into private session. Thank you very much.