 vote. I welcome to this joint meeting of the Finance and Constitution Committee and the Culture, Tourism, Europe and External Affairs Committee. We have some apologies from our colleagues, which is understandable because Parliament is still in session. The only item on our agenda today is to take evidence from the right hon. David Lidington MP and the Minister for the Cabinet Office, which will be taking evidence on the EU withdrawal agreement. We can safely say that we are living in a time of high political stakes. dealer, ac maen nhw yn gymryd, oherwydd fel gwybod hefyd datblygiadau i gyllidol newid yn ychydigol, neu yn roi, oherwydd gydag i gydagrath unrhyw gwahanol achos byn ailw ym Mhawr, ac i gael ei gael ar rydw i, oherwydd mae'r rhwyf yn y cyfnod y dylaid gweithgofyd i ddwyll 익rifeis. Rydym ni'n dwi'n hanfaint yn hyn, ac rydw i'n ddangos i gael eich gwaith hwnnw, ac yn systr i gael ei gael i'ch gwaith dechrau dwi'n ddaeth gyfarithaeth. i'n rhoi'r cael ei gilydd, a wneud ei fod yn i weld ffit ar ôl ffordd. Wnaeth y dyfodol gweithio yn rhoi gydag y cyfnodau. Felly, ein gwyll commun i'w gwisgai i'u diemarch o esfforddiol. A oes i fod i'n gweithio'r gweithio a'u gweithio'r cyffredinol ar gyfer gweld unrhyw yma, ac mwy oedden nhw y sefydliadau eu cyffredinol, yn storft menadau. A oes i weld i'n gweld i'r bod yn ystafellio i'r gwirgyn cyffredinol, ac mae'r d Yanghreifft i'w bwysig i'r rôl umbyg yw i'ch wneud rydw i, hefyd, o hyd i'w arferthau Oeddaeth Yma. Rwy'n dod oeddwn i'n dda'r ff Rhaglen, ond chyfnodwch â'r cyflaen i'r adnod ddim ond sprwspnol o'r beth i'r ni'n rydyn ni'n eu bod yn cymryddoedd. Ond os y fwrdd gennig, ar hyn o'r coriander—an oes yn ni'n admledd the Prime Minister and the other 27 EU heads of state and government provides some very welcome clarity and predictability for citizens and for businesses large and small in every part of the United Kingdom. The agreement points towards a free trade agreement between the United Kingdom and the EU 27, involving goods of all types, including agrifood products. We recognise also the importance of deep and ambitious customs and regulatory cooperation to Scotland and are confident that this deal will deliver for Scottish businesses in that regard. Financial services are clearly important to the Scottish economy and I am therefore pleased that under the arrangements set out in the political declaration, we will have a close relationship with the EU on services and investment. I believe that the deal delivers for Scottish fishermen in making the EU an independent coastal state controlling access to fish in its waters. That means that the United Kingdom will decide who can fish in United Kingdom waters and how fishing takes place, putting us in the same position as Norway or Iceland. We will be able to act independently to negotiate fishing quotas. The agreement guarantees that geographical indicators such as Scotch whiskey will be protected until a future economic relationship is put in place, and we have agreed comprehensive and close reciprocal law enforcement and judicial cooperation to keep people safe. I am finally convinced in terms of the process that now faces us. I am sure that the committees will be aware that the United Kingdom Parliament will vote on this deal on 11 December. That is in line with what the European Parliament is entitled to under the treaties. It will be a vote to approve or to reject the withdrawal agreement and future framework—a yes or no vote. If Parliament votes against the withdrawal agreement, which includes the citizens' rights deal and the implementation period, then that agreement cannot legally be ratified. That is the product of the statute that was passed at Westminster earlier this year. In such an event, the Government would be legally obliged to make a statement to Parliament on its proposed next steps and to table a motion in neutral terms on that statement. Thank you. Thank you very much, convener. Good afternoon, Mr Lidington. The withdrawal agreement is 585 pages long and Scotland is not mentioned once. The political declaration is 26 pages long. Scotland is not mentioned once either, despite Scotland being the distinctive nation in the United Kingdom and the nation that voted remain by 62 per cent—the highest remain vote within the UK. Can I ask why we are being ignored? I do not accept the premise of the question. It is right that there is no mention of Scotland, nor is there a mention of England, nor is there a mention of Wales. All are proud equal nations within the United Kingdom. There is specific mention of Northern Ireland. That is because of the exceptional position that Northern Ireland is in by virtue of two things. First, it is the only part of the United Kingdom to have a land border with the European Union, which is therefore a potential EU external border with all that the treaties imply for that once we have left membership. Secondly, because of the commitment of the United Kingdom Government and all parties in the United Kingdom Parliament, and as far as I am aware, the devolved parliaments and assemblies to the Belfast Good Friday agreement, and the overriding importance of ensuring that all parts of that still fragile settlement and peace-building process are protected. Thank you. Do you happen to know how many other—apart from Northern Ireland—nations, regions, territories, if you like, that are part of the UK umbrella? Do you mention in the withdrawal agreement? I have not gone through and made a count, but I know that I am confident in what I said that Scotland has been treated no differently from England or Wales in that regard. There are actually 153 mentions of other territories. They include the Channel Islands, the Isle of Man, Akatiri and Cyprus. Tristan de Cunha gets a mention, so do the South Siamwich Islands and the British Antarctic Territory. Can you see why Scotland feels disrespected when the British Antarctic Territory gets a mention and we don't? No, not on a reasonable analysis, because Scotland, unlike the British Antarctic Territories or the British Indian Ocean Territory or the South Sandwich Islands, has members of Parliament elected in the United Kingdom and is a full part of the United Kingdom. Those other territories are not part of the United Kingdom. They are either crown dependencies that have a particular relationship but are not fully part of the European Union by virtue of protocols to the European treaties, or they are crown dependencies, which are different in constitutional status from the British Overseas Territories. They are also entities that are self-governing, are not part of the United Kingdom, are not part of the European Union but have a relationship with the United Kingdom provided for in protocols to the treaties. Therefore, part of the responsibility of the United Kingdom Government in conducting these negotiations has been to ensure that the interests of those territories outside the United Kingdom itself are properly safeguarded and protected in those negotiations. I honestly don't think that that is anything that should be seen as a threat to Scotland. In my experience, people in Scotland fully understand the need for the United Kingdom Government to ensure the interests of the Isle of Man or Gibraltar are properly protected. I was merely suggesting that that was the case. I was merely suggesting that people in Scotland had an expectation. Indeed, they were told that their wishes would be considered. For example, when the Prime Minister came to Scotland in July 2016, our coach said, I am willing to listen to options and I have been very clear with the First Minister that I want the Scottish Government to be fully engaged in our discussion. The Scottish Government has said that they have not been fully engaged at all. Scotland, this Parliament, voted for a compromise solution to remain within the single market, and we have been ignored again and again. As a result of that, we are now looking at a deal that will result in the Scottish economy being damaged to the tune of £1,600 a year, which is the cost to each person per head of a free trade agreement. Do you understand why people feel that they have not been respected and included in a process that has a very direct effect on their lives and their livelihood? I think that if you look at what is in the detail of both the withdrawal agreement and the political declaration, you will find that there are many things there that reflect the positions that the Scottish Government itself and the Scottish Parliament itself have advocated. I completely acknowledge that there are political differences between the Scottish and United Kingdom Governments over the shape of the final deal. Whenever I have sat down with Scottish ministers, those differences are acknowledged about some of the overall policy objectives. However, the Scottish Government has been clear throughout that it is about its preference to remain fully part of the single market. That is different from the position of the United Kingdom Government. However, if you look at what is in the political declaration, on trading goods, including agrifood, we have an agreement for the creation of a free trade area for goods that facilitates trade, through a new customs arrangement, deep regulatory co-operation and avoids any tariffs and quotas. That is a priority for people in Scotland and elsewhere in the United Kingdom. If I look back at what was said in the publication two years ago of Scotland's Place in Europe, it is important to ensure continuing participation in law enforcement, criminal law and civil law measures. There is a whole section in the political declaration about a future security partnership to enable strong operational capabilities to tackle serious crime and terrorism, swift and effective data exchange, fast-track surrender programmes and continued close co-operation with Europol and Eurojust. The Scottish Government in its publication Scotland's Place in Europe last month called for continued full participation in competitive EU funding programmes. We are committed to seeking associate membership of or participation in such programmes as the Erasmus Plus and the Successor to Horizon, providing that the design of those in the future continues to match the strategic priorities of the United Kingdom overall. We would be prepared to make an appropriate financial contribution to those programmes as part of the price for such participation. I was talking about this with some of the professionals at Stirling University earlier today. They are very clear that this is what they wanted to see, and they hope that this was the outcome not just of the political declaration but of the final partnership agreement, too. It does not guarantee participation in those programmes. Erasmus, for example. You cannot guarantee things that would be the outcome of a negotiation that, in terms of the European treaties, cannot be commenced until we have left, as the committees will know. The treaties provide for member states to have particular rights and particular obligations. The treaties also provide for the EU collectively to negotiate trade agreements, political co-operation agreements and scientific agreements with third countries. The consistent position of the European Commission, and I think that that reflects the 27th view. To be honest, looking back at my experience as European Minister, I think that it is probably an accurate reflection of the distinctions made in the treaties. They say that until we have left, while we can have, in the meantime, political commitments about the future negotiation, we cannot have formal legal negotiations to turn that into those commitments into legal text. Each member has got a certain time that they are going to have to use here, Minister, and I am trying to encourage everybody to be as concise as they can be so that I can get through all my members around the table. Adam Thomps. Thank you, convener. Good afternoon, new minister, and thank you for joining us here this afternoon. I want to ask you two questions, if I may. Hopefully, the first one will be relatively short. The second one, we might need to go into a bit more detail, but the first question I wanted to ask you is this. At the moment, perhaps one of the most significant difference of view between the United Kingdom Government and the Scottish Government about the withdrawal agreement is that it is the UK Government's position that it is essentially this deal or no deal. The Scottish Government has reiterated, even as recently as the First Minister's questions today, that there are other options still on the table. Why is it the UK Government's view that it is really now this deal or no deal? Partly, there is a time factor involved, but chiefly, because, to get to this deal, both sides have had to move. There has been given take on both sides, and I expect that members of the two committees here have picked up some of the flack directed at Michel Barnier by other EU Governments over the past fortnight, for supposedly giving us too soft a time. The commission and the heads of government, President Macron, Chancellor Merkel, Chancellor Quirk's others, could not have been clearer, that, as far as they are concerned, this is the deal. They are not interested in reopening. Frankly, they have other priorities that are on their list to do. If I talk to French politicians at the moment, they are actually thinking much more about Italy and the future of the euro zone, the challenges that the Italian budget proposes to that, than they are about Brexit. They want this done and sorted, and they are making very clear to us that they are simply not prepared to countenance reopening a deal, which in their view made concessions to obtain. It is not simply the UK Government's assertion that it is this deal or no deal, it is the UK Government's reading of European politics both in key member states of the European Union and the European Union institutions themselves that lead you to that view, that there is no room, there is no appetite, there is no space for any kind of renegotiation between now and Brexit. There is absolutely no appetite for this. That has been true of both their public and private statements. They need to sort out some of the challenges that the euro zone faces. They have to devise a future multi-annual budget for the European Union without the United Kingdom's contributions. Devising those budgets, when I was involved in that last time round, it took about two and a half years. They have to get on with that at pace. They need this and want it sorted and they need to move on. I want to ask you about the Northern Island backstop. As you will appreciate, some of my colleagues around the table are of a nationalist persuasion. I am not. I am a unionist persuasion minister. You will know that there are a number of concerns within both Northern Irish unionism and Scottish unionism, and those two are very different sorts of unionism for all sorts of reasons. There are concerns within Scottish unionism about the extent to which the Northern Island backstop, as provided for at length in the withdrawal agreement, will lead to a differentiated settlement for Northern Ireland on the one hand and the rest of the United Kingdom on the other, and that this is difficult from a unionist perspective. So, unionist to unionist, what can you say to me and to my unionist friends around the table that would reassure me that this is a deal that does not pose an unacceptable risk to the United Kingdom? First of all, nobody whatsoever in London, in Brussels, in Dublin, in any other capital wants this to be used. They want it to be an insurance policy that is there just in case, and my conversations with the T-Shark and the Tornish have both been absolutely clear on this point. However, if this all derives from the political and the genuine security significance of the Northern Ireland-Republic of Ireland border, and certainly if one listens to what the chief constable of Northern Ireland police service, George Hamilton, has said repeatedly that he is deeply alarmed about any prospect of their being the need for any kind of border checks or infrastructure at all. However, the Irish Government could not have been clearer to me and in public that they want this not to be used. They want to go quickly to a UK-EU trading relationship that obviates any need for the backstop, and if it were ever needed, they want it in place for as short a time as possible. I can happily go into the reasons for the committee's wish, why I believe that the 27 have every incentive not to try to keep the backstop going. I fully accept that it is the stated intention that it is there as a not just a backstop but a kind of longstop insurance policy. Just for the sake of argument, let's assume that it does come into force. As I understand it, the backstop will require, as a matter of binding European law, Northern Ireland to continue to adhere to a number of provisions of single market law with regard to goods. If the rest of the United Kingdom is not required during that period to adhere to those provisions of single market law with regard to goods, is there not going to be regulatory divergence between Northern Ireland and the rest of the United Kingdom that would have the effect of risking the integrity of the UK's internal market? I understand the point. The first thing I would say is that, for many months, the EU position was that only Northern Ireland's specific arrangement on both customs and regulatory alignment was obtainable. A UK-wide one was just not negotiable. It's only been in the last month that they have conceded the point on customs. We were clear from February when the Commission published its draft protocol that we could never accept that and didn't believe that any British Government could accept the division of the United Kingdom into more than one customs territory. They have conceded that. On regulations, as Professor Duncan knows, there are already areas in which Northern Ireland diverges from Great Britain. Livestock is one, the island of Ireland being a single epidemiological area. Electricity is another because of the single electricity market across the border. What we have sought to do in the negotiation is to minimise any of the risk of the kind that Professor Tomkins alludes to the bare minimum necessary to ensure that that backstop insurance policy is there for the sake of the peacebuilding process in Northern Ireland and that the experience of ordinary businesses on either side of the Irish Sea should be pretty much exactly as it is now. To take livestock, for example, EU law would indeed require in those circumstances more intensive livestock inspections than are already currently carried out. The principle is already there in the current arrangements. It still will have to go through the port of Lawn as now. However, the Commission has already signalled that it wants a veterinary agreement. The veterinary agreement that New Zealand has with the European Union has reduced the number of livestock imports to the EU from that country to just 1 per cent of the total. There are tried and trusted ways to make this a minimalist burden. When it comes to regulatory checks on industrial goods, there are several things I can say to give comfort. I will try and be very brief. First of all, any checks would be only on the market and things like trading standards officers, nothing at the borders, carried out through normal market surveillance mechanisms by UK officials within Great Britain. Secondly, we as a Government have given a guarantee that we would seek, if the backstop were ever used as a temporary measure, we would seek to align GB with Northern Ireland so that they had the assurance that there would not be that diverse or any risk to the single market. If anyone misunderstands, we accept that that would mean some conversations with devolved Governments in Wales and Scotland as well. I have allowed a bit of latitude at the beginning, because I knew it was inevitable that we would be at the process, but I will need to try to make this a bit sharper if I want to get through everybody. Neil Findlay. I know that Mr Tonkin said that there was nationalists and unionists around the table. I remind him that there is also socialists around the table. I think that he may have been one in a previous life. The deal appears to be going absolutely nowhere. The Opposition parties, all of them in the House Commons, are opposed, including the former chums that are now estranged at DUP. The ERG are never going to accept this. Some of your more rational backbenchers are not going to accept this either. It looks as though, in the eyes of the Government, we are heading for no deal, and that would mean, given the Treasury's analysis, over 9 per cent reduction in economic activity, the end of security arrangements, the hard border in Northern Ireland and all the rest that goes with it. Do you seriously think that the British people are going to accept that? I believe that a low deal would be seriously damaging to the UK economy and UK interests, and it is certainly no part of the Government's objectives. We nevertheless have to plan against that risk, not least because it is not just Westminster that has to vote on this, it is the European Parliament as well. Just as any sensible business has contingency plans that they hope can stay in the safe and not have to be deployed in practice, so we need to have done the thinking and the preparation on the basis that 80 Government training any commercial organisation would do. My view is that members of Parliament at Westminster, all political parties, all parts of the United Kingdom, need to confront a very serious choice that has to be made. The message that I have had overwhelmingly from businesses in my constituency—different parts of the UK, picking it up again in Scotland today—is, for goodness sake, get on and get this done. We want the Government to be focusing on other important domestic political and policy priorities. Business wants the clarity and certainty of the implementation period and the approach to free trade agreement and other forms of co-operation that are spelled out in the political declaration. The one thing that is certain about a vote at Westminster to reject this deal would be that there would be continued and acute uncertainty, because you would certainly have some people campaigning to say, head for no deal, you would have others campaigning to say, let's reverse the 2016 result altogether. I genuinely think that, particularly the light of what I said earlier to Professor Tomkins, that this is the deal that the EU has been prepared to negotiate. I do not believe that the appetite is there to reopen the package and start looking at things again. I think that we will be getting into more dangerous, more risky territory where this will be rejected. Yes, of course, people want it done. If I had my car in to get fixed, I want it done. I don't want them to prevariciate. I want it done, but I want them to tighten the wheel nuts so they don't fall off. What we have here is exactly that. We have a deal that looks as though the wheels are going to fall off very, very quickly. Do you accept that a motion can be put forward that is not no deal and is not your deal? The motion that the Government has put forward is a substantive motion. It will certainly be amendable in terms of the rules of order of the House of Commons. I am aware of at least one amendment that has been tabled already. I am pretty confident that there will be others as well. It is entirely up to the Speaker of the House of Commons to decide which amendments are in order and which orderly amendments to select for division. That is a matter for the Speaker. I think that it is a matter of legal certainty given the statutory requirement for any agreement reached by the Government to be approved in the so-called meaningful vote before it can be formally ratified. There needs to be a clear vote for or against that agreement if there is to be legal certainty for the future, but it is not in the Government's hands to decide what amendments are tabled or which are brought forward for division. You said that you are preparing for every scenario, so if the deal is rejected and the Commons does vote for an amendment that says that we want another deal, what have you got prepared in that scenario? As I said in my introductory remarks, the Government already is subject to a statutory obligation in the event of it looking like no deal to come forward with a statement and a set of proposals to Parliament about what it considered to be the way forward. So far, none of the amendments that I have seen either published or brooted is putting forward a clear alternative to what the Government has placed on the table. No sort of rival proposition has yet provided evidence that what they want is something that the other 27 countries are remotely prepared to countenance. I am afraid that you are out of time in that particular situation. Patrick Harvie, please. Thank you very much. Good afternoon. I have to say that I speak to more people who want this not to be done than who just want it done. The UK Government, in acknowledging the economic hit that is likely from the various scenarios, generally falls back on the argument that this is what people have voted for. People have made their decision back in 2016, and if the choice is between being much poorer and being slightly poorer, the democratic mandate is still there. There clearly were majorities in England and in Wales for leaving. The overwhelming majority in Scotland was for remain. Northern Ireland voted remain as well, but at least it gets something that it needs, a specific set of mechanisms to look after its needs. Scotland, of the four nations within the UK, remains undeniably the only one of the four that gets neither what it needs nor what it wants. I suggest to you that, if you are the one who is supposed to be holding the union precious and looking to preserve it, you are going a funny way about it. In my earlier answer to Joe McAlpine, I listed a number of the ways in which what is in the agreement provides the very things that the Scottish Government and the Scottish Parliament have been calling for. I think that there is a real yearning in very large sections of the population, particularly in the business community, which have come out in Scotland and Northern Ireland elsewhere in support of this, to say that we need to have this sorted, we need to have clarity and the ability to plan. At the moment, there are investment decisions, there are employment decisions that have been put on hold because businesses are not yet able to plan with certainty. Get the implementation period in place, get negotiations going on the way forward. That is the best use as far as living standards and economic growth in the future is concerned. I certainly did see one business voice from Scotland backing the deal recently, Mr Ratcliff, from any other tax dodging billionaire, and it did not hugely surprise me that that is the kind of support that you are calling on. I would like to move on because we are tight for time and talk about some of the environmental governance aspects. The one silver lining to the cloud that I can see is that the political declaration does make it pretty clear that there will ultimately be a common fisheries policy. Shared stocks, sustainable management, quotas, access to waters, the works and the idea of returning to some sort of isolationist approach is clearly blown out of the water, but there is clearly a lot less clarity on the issue of climate change. Paragraph 72 of the political declaration says that the parties should consider co-operation on carbon pricing by linking a United Kingdom national greenhouse gas emission trading system with the EU's ETS. I cannot find anything on the UK Government's website that tells me what the UK ETS will be, how it will work and when it will be established. Are you able to answer those questions? That will be part of the negotiations. I would reject Mr Harvie's description of the proposed fisheries arrangements in the political declaration. It is very clear that the language says expressly that the United Kingdom will be an independent coastal state. That means that we will have the rights and responsibilities of a country like Iceland or Norway on climate change. Let us not forget that there are UK-wide statutory obligations already on the Government to ensure that we continue to reduce our carbon emissions at speed. We have a pretty good record, if you look overall, compared with most other developed economies. We need to do more on that. We need in the negotiations that would start from March to get to grips with the detail of emissions trading schemes and the like. Those ministers and officials with lead responsibilities for that will be very much wanting to crack on with that task. The political declaration has been negotiated already. You must have some idea that the mechanism that you are proposing, a UK ETS, is deliverable and has some notion of what it will look like. Can you at least guarantee that it will not be based on the UK ETS that preceded the EU ETS, which was not even mandatory? I am not in a position to go into detail on that because those negotiations have not started. However, what we have committed ourselves to is very clearly no regression in our environmental standards. Frankly, I detect no appetite amongst my cabinet colleagues, in Parliament, amongst public opinion, anywhere in the United Kingdom for a diminution of environmental standards. The public expects us to be leading the international pet, not falling behind. Can I just suggest that we are at a point where there is a new wave of anger and impatience, particularly among younger people who have been demonstrating in the most creative ways in London—I am not going to do so again in Scotland for more ambitious action on climate change. It seems that you have created an unnecessary political crisis with Brexit when you should be fixing the climate crisis. There is absolutely nothing in this document that says how your mechanisms are going to work. I do not see there being a contradiction between coming to a sensible future partnership, an ambitious future partnership with the EU, and continuing both in that context and nationally and globally to continue to try to lead the way on climate change. That is what we should be doing. I represent Shetland, so you will probably understand why I will drag you back to Fisheries Minister. The question that I really wanted to ask was why was Fisheries included in the transitional period? That was one of the outcomes of the negotiations. It also ensured that we continued for that transitional period to have the certainty of access to markets elsewhere in the EU for fish and shellfish and products that Scottish, English, Welsh and Northern Irish fishermen had taken. Also, the other issue that is obviously self-evidently there with the implementation period is that we were facing a decision about a potential deal in 2018. In 2018, we will be having the talks as full members of the EU for 2019, including a period when we will be outside. I think that what we had for the implementation period was a reasonable outcome to settle this period during the transition period. Do you accept that, in the period that will now take place after March, the industry has no formal input into the EU negotiating machinery, and therefore they wonder how exactly that goes into its course? No, of course we take part as a full member state with all those rights and responsibilities in settling the quotas for 2019. There is one year when we would be non-members, but we would be in the implementation period, and that would be settled in December 2019 for the calendar year 2020. In the agreement, as Mr Scott knows, there is an obligation on the EU to act in good faith, take account of UK interests and the keys to the quota system, part of that agreement is that they will not be touched. In the Prime Minister's letter published this week, it says that, at the end of the transition period, if no fisheries agreement is in place, no EU countries fishing fleet will have access to our waters. I am sure that you are aware that two thirds of fish landed in the United Kingdom goes into Europe. Where do you think that it will go if it cannot go to Europe? I think that what we are making clear is that both sides have an interest in coming to a fisheries agreement. We ask as an independent coastal state at that stage, and the EU as an important commercial partner. That would be in line with how Norway or Iceland operate in their relationships with the European Union. However, I think that that indicates one of the reasons why, for example, the backstop—let alone any prolonged backstop—is not in the interests of the EU 27. If we were in the backstop and there was no fisheries agreement in place, it would lose straight away any legal entitlement to fishing in UK waters. It has always been the case that fish migrate between jurisdictions, stocks that straddle jurisdictions. It is such a sensible thing for us to sit down as a very big player in the North Sea Atlantic fisheries areas to talk with our neighbours about access arrangements and access to markets for fish and shellfish. That is the way that other independent coastal states go about it. What you have described as it not is a direct linkage between access to waters and access to markets. I said fisheries. What has caused a furor in the last week is the suggestion from President Mackerel that the question of access to waters should be linked to access to trading markets generally in all sectors. This is something on which the commission made concessions during the negotiation, because, if you look back at the wording of their mandate last spring, the mandate said that future UK access to the EU market per se, not just fish, has to be linked to access to UK waters. We dug in and said no. That is not how independent coastal states operate. In any other EU third country agreement, those issues are distinct. Trade is separate from access to waters. That remains our position, and the EU agreed not to push that to the final negotiation. Thank you. One final question on trade. The Scottish Salmon Farmers produces its organisation worth £600 million to the Scottish economy every year in terms of export. Said last week in terms of the political agreement that by coupling aquaculture with future catch fish quarters, the document raises the prospect of tariffs being imposed on exports of farm fish. That would be calamitous news for a very important Scottish industry. What is the Government's response to that? It is certainly not something that we would want, and that is why the fact that the political declaration looks forward to tariff free trade is something that is very welcome. I am very well aware of the importance of exports of salmon for the Scottish economy, and in particular for the Highlands and Islands. That would be a very considerable priority for UK negotiators. Thank you for the short snappy questions, David. That was very helpful. Tom Arthur. Good afternoon, minister, and thank you for joining us. I would like to focus my questioning on the future trade agreement with reference to the context that that will take place in as a consequence of the withdrawal agreement. Clearly, there are particular pressures that the UK will face in negotiating, and giving that to achieve an independent customs policy will ultimately require the European Union to agree a deal with the United Kingdom. Most specifically, there are some time pressures that I wish to explore. The withdrawal agreement stipulates that a decision on extending the transition period is required before July 1, 2020, and, due to the EU political calendar and, as you acknowledged, other pressing commitments in Europe, substantive negotiations between the UK and the EU cannot effectively commence until the autumn of 2019. Given the Prime Minister's stated goal of not wishing to invoke an extension to the transition period, that leaves approximately eight months for the substantive negotiations on the future trade deal between the UK and the European Union to take place. Those negotiations are to be based on the 26-page non-binding political declaration. For context, at the time of the EU referendum, the EU's most ambitious trade deal was a comprehensive economic and trade agreement with Canada. Incidentally, Minister, do you know how long that agreement took to negotiate? You will appreciate that it took seven years to negotiate, and a further year to provisional implementation. It runs to over 1,600 pages, nearly three times the length of the withdrawal agreement. Minister, how long will it take for the UK to negotiate a trade deal with the European Union? To bend on the degree of political will on both sides to achieve that, but I am relatively optimistic for a number of reasons. First, I think that it is rather being too pessimistic in saying that substantive negotiations cannot start until the new commission is in place next autumn sometime. The writing instructions have now been given. There is absolutely no reason why preparatory work should not commence, indeed, as the committee will not. Tim, can you give me an estimate of how many months or years? No, I think that it is quite possible, just as we turned the— Are you unable to give me an answer as to how many years it will take to negotiate? I am trying to give you an answer. It is a bit like a John Humphries interview at times. We turned the declaration of the European Council last December into a nearly 600 page legal text within less than a year. We have, till the end of 2020, to get the economic agreement in particular in place. We start, unlike Canada, from a position where we are in complete conformity with EU standards and EU regulations and, furthermore, have imported the Aki on to a United Kingdom legal basis by virtue of the withdrawal act. Unlike CETA, or unlike the Association of Agreement with Ukraine, we do not have to go through this immense process of working out the degree and speed of alignment. We are starting from complete alignment. I think that that can be done and the EU has a tried and trusted practice of provisional application once agreement has been reached before even formal recognition. I appreciate the very circuitous way to say it. I do not know. Since the referendum, the EU has completed further negotiations, including the EU-Japan economic partnership. That took four years to negotiate and is still awaiting implementation. Britain's former ambassador to the European Union, Sir Ivan Rogers, said that it could take up to 10 years to negotiate a post-Brexit EU trade deal. Let me put a very specific question to you, Mr Lyndon. Businesses in my constituency who export to the EU, will they have to—can you guarantee here today that they will not have to pay additional tariffs after 2021? I cannot speak for 27 other national Governments. What I can point to is the fact that those Governments, each of them, have agreed to set themselves the objective of doing this comprehensively by the end of 2020. I can get another question, I am afraid, in the circumstances. Thank you, convener. Good afternoon, minister. I wonder if I could follow on from the questions that Adam Tomkins asked about the Northern Irish backstop. One of the concerns that the Scottish Government has raised is that in the event of the backstop applying, that would leave Northern Ireland in a situation where it was in the EU single market for goods, but Scotland and the rest of Great Britain would not be. The Scottish Government has expressed a concern that that would then give businesses in Northern Ireland a competitive advantage over businesses in Scotland. Can you tell us what the UK Government's view is on that concern? I think that, first of all, I would again say the clear intention of all sides is that this is not used, if it is used for a short time as possible. Secondly, the alignment of Northern Ireland with the EU on goods is only in respect of those things necessary to ensure that no need for any sort of controls at the Irish border. If we look at this in terms of pages of single market rules, it amounts to about 40 pages of those rules under the agreement out of about 1,100 pages of single market rules, if we look at the whole proposition. In practical terms, the degree of difference between businesses in Scotland and businesses in Northern Ireland will be marginal. I think that where Northern Ireland businesses could well have an advantage is sales within the island of Ireland. That has certainly caused a few complaints south of the Irish border. We are not expecting businesses in Scotland to relocate to Northern Ireland to take advantage of this, nor would we expect that investors coming into the UK would favour Northern Ireland over Scotland. Given the views of Scottish business on this and, contrary to Mr Harvey, we know quite well what Scottish business thinks around what is proposed. Scottish business is very clear that they want to see the deal proposed by the UK Government go through. They may well have reservations about it, but overwhelmingly the voice of Scottish business believes that it should be supported. Have any of those voices in Scottish business expressed a concern to you, or the UK Government, about a competitive disadvantage that Scotland might be in an event that Northern Ireland, because of the backstop, remains in the single market for goods? What I have had from Scottish business is the clarity that they want the UK-wide single market protected. They know that Scottish exports, if one terms of that to the rest of the UK, are about four times the value of those to the other 27 countries of the European Union. The appetite that I find from Scottish business in all sectors is, please get on, do this, we need the ability to plan with some confidence for the future. Angela Constance Thank you very much, convener. It seems to me, minister, that this deal is designed to achieve one thing and one thing only, and that is to end the freedom of movement apparently once and for all, not something that we have asked for in this Parliament. Can I ask you specifically, sir, what percentage of Scotland's population growth over the next 25 years will come from migration? Well, I think that one would have to have a degree of course about predicting 25 years ahead, but while I haven't got the figure immediately to mind, I've certainly been told by Scottish ministers that it is a significant particular issue for Highlands and Islands, which I appreciate. Okay. Well, it's actually 100 per cent. Our population growth over the next 25 years is reliant entirely on migration. If I could also press you further, do you know by what percentage Scotland's working age population would decline by without EU migration? Well, I think that the premise behind the question is that there would be no migration at all. Of course, the UK Government is preparing a white paper on future migration policy that will spell out the approach that we plan to take. That would be in addition to the proposals for a specific migration partnership that are included in the political declaration on the future relationship, and there will clearly be a need for provision for people, particularly those with high skills, who perhaps on intra-company transfers and the like, to be able to move into the United Kingdom or from the United Kingdom to other countries. The proposition is that we should in future, for newcomers from the European Union, apply the same, broadly the same rules as apply to people from other parts of the world. So they were looked at equally in terms of skills and particular market needs in sectors in our economy. What we are sure of, given your answer, Mr Lidington, is that it all seems rather uncertain, because what we know that without EU migration, Scotland's working age population will decline by 3 per cent. Do you think that that will have a positive or negative impact on Scotland's public finances? That presupposes a number of judgments about the structure of the economy in Scotland about how Scottish Government, now and in the future, can make Scotland a more attractive place for inward investment and employment and provide incentives for people to come in. However, I think that there is no avoiding the fact that free movement of people was one of the prime reasons why a majority in the UK as a whole voted to leave in 2016. I think that there is no avoiding that reality. If I could just stop you there, bearing in mind that you are giving evidence to a parliament in a country that voted 62 per cent to remain, bearing in mind that you are also giving evidence to the Finance Committee here today in Scotland's Parliament that has thoroughly explored the demographic risks to Scotland's budget, given that everybody knows that population growth is a driver for economic growth and that the funding of public services in Scotland is dependent on economic growth in a way that is not the case in terms of how regions in England are funded. Without migration, we cannot grow our working age population, so why on earth would we support a deal that seeks to end freedom of movement once and for all? On the broader issue of principle that Ms Constance mentioned, it was a UK-wide vote. I completely acknowledge that two parts of the UK voted one way and two parts voted the other way. Had the result gone 52-48 the other way to remain and had it been the Scottish vote that had been decisive in the remain vote, that should have been accepted as well. You are asking about the risks to our budget as a result of a declining working age population. That is why the immigration system already has a shortage occupation list specifically for Scotland, which the Migration Advisory Committee keeps up to date to ensure that it reflects changes. So far, the evidence that the Migration Advisory Committee has presented and published has shown not much difference between shortage occupations in Scotland and the rest of the UK. However, they conceded that they did not do any modelling for Scotland. I know that you do not want to move on, but I am going to have to move on to James Kelly, if I am going to get through this process. Thank you, convener. Good afternoon, minister. Minister, we heard yesterday from your colleague, the Chancellor, the Exchequer Philip Hammond that the consequence of this agreement being implemented would result in the UK economy being smaller. As a direct result of that, the money available to the Scottish budget via the block grant will be less and will have a reduced Scottish budget, won't we? Well, what the treasury scenarios that were published yesterday all show, under any circumstance, is continued growth in the future. What the treasury analysis was doing was to compare different outcomes over the long term. How great the growth would be, depending on the nature of the future relationship with the European Union. What that analysis showed was that the deal that is on the table is far better in terms of outcome than the no deal outcome. I suspect that there would be broad agreement around the table, which is undesirable, and that it was significantly better to the standard free trade agreement. It is a matter of public record that the person in charge of the economy in the United Kingdom, Philip Hammond, has said that the economy relative to just now would be smaller as a result of this deal. What that means is that what in effect you are putting forward is a cuts Brexit, which would mean cuts in the Scottish budget, which would affect communities, which would mean less money to spend in schools and hospitals. When MSPs come to consider and debate the deal in the Scottish Parliament next week, why should we give our support to a deal that will make our communities worse off? Because nothing that Philip Hammond said yesterday and nothing that is in the treasury documents that were published yesterday suggested that people would be poorer than they are today. What they were looking at is the relative outturn, depending on different scenarios, and leaving completely aside the questions of whether UK policy or, for the matter, EU policies might change in a way that reflected the comparative competitiveness of us on the one hand and the EU on the other. It was an attempt through analysis to isolate the economic impacts of different scenarios in terms of our future relationship with the EU, and that produced. I am somebody who campaigned for a main two years ago. I was out of the door step arguing that economically that was the better thing, but that decision was taken within the UK in 2016. People, when they voted, took account—yes, of economic arguments, but they took account of other arguments about sovereignty, about control of laws and so on, in coming to their decision. If, as I do, you accept that that was, even though narrow, a decisive outcome—and I am vast turnout—then it seems to me that we should usually be seeking an outcome now that both honours that democratic verdict but also does the maximum possible to promote growth and protect jobs and investment in the whole of our country. I am not arguing about the referendum result. What I am saying is that, as a consequence of that, you are putting a deal on the table which will make people in the communities that we represent worse off. Why, in all honesty, can you say to us that we should support that? I am saying look at the Treasury analysis. If you accept, as I take from the question that Mr Kelly does, the outcome of the referendum, the question is what is the best available partnership outside membership of the European Union, and what the Treasury analysis shows is that, compared with those alternatives, that deal is very attractive indeed. Very much, I will continue on the same theme in Mr Lidington. We are taking a hell of a hammering, surely, at rock bottom to then begin to improve. The Chancellor himself said that every outcome makes everyone worse off. Do you accept that, or do you deny that that is the case? The phrase that you are referring to is when he was talking about outcomes outside the EU, compared with continued membership of the EU. The Chancellor also said very plainly that he accepts the democratic legitimacy of the decision that was taken in 2016. Given that verdict, we have to plan for the best form of partnership with countries that are going to remain our neighbour's friends' allies' key trading partners for as far ahead in the future, which I can possibly predict. At the best way for the economy of all parts of the United Kingdom and for all sectors of UK business is the merit of what the Prime Minister has managed to negotiate. It has meant concessions, both from the EU and from us, from our starting positions, as in any negotiation. It is a compromise, but it is a decent compromise that both the 52 per cent and the 48 per cent across the UK should be able to get behind. Do you recognise the figure that independent experts have put a figure on this? It could be £100 billion a year by the end of the 15-year period after Brexit. Do you recognise that figure there? I have seen a number of different figures. It depends very much on the assumptions that are made. I know that in some of the research that the Scottish Government has published, just as in the work that the Treasury has done and the work that the Bank of England has done, there are notes explaining those assumptions and one has to look at those assumptions before coming to a judgment on those. I think that what the Treasury analysis has done is to set out a series of studies trying to isolate the impact of leaving the EU without taking into account of other possible variables that contribute to economic performance and growth. In reality, it will be in large part in our own hands the policies of the UK Government, the policies of the Scottish Government and the policies of the Welsh Government that will determine the prosperity of the people that we represent in the future. How long do you think that it will take us to make up that cannot deficit £100 billion a year, surely to goodness? I do not accept those figures without testing the assumptions. However, if you accept the democratic verdict of 2016, the evidence suggests on the basis of the Treasury analysis that the deal that we have on the table is one that delivers well compared with the alternatives that are available and possible and are not some sort of fantasy of having all the benefits of EU membership without any of the obligations that go with EU membership. Is it still the UK Government's position to support the talent declaration that it signed in October 2017? Which declaration? The talent declaration in 2017. Your government signed it. You will have it. Mr Coffey will need to give me some a bit more on that. It is basically a commitment to remain within the digital single market. Digital single market, we are committed in the political declaration to a close partnership on this. We are committed to new and specific arrangements on digital covering a wide range of areas, including e-commerce, telecoms and emerging technologies. We have agreed to specific arrangements compared with the outline political declaration on telecommunications services so that we get fair and equal access to networks and services in both jurisdictions. Broadcasting is not covered in the political declaration, but it is not specifically excluded or carved out. That carve-out would usually be the case in EU external trade agreements. We would be formally outside the EU single market arrangement, so we would not be obliged to follow every new regulation or directive from the EU, but we are seeking urgently, for example, an equivalence decision on data transfer, because that is clearly vital to both businesses and public services on both sides of the channel. I have no reason to think that a good digital partnership with other EU countries is unattainable in everybody's interests to have that. I will make this and I might, just about to do it for snappy. Jamie Greene I thank you for being here very good afternoon. Let's see where you can squeeze into my six minutes. Over a million Scots voted to leave the EU, and many will be naturally suspicious of any deal that leaves them in some sort of transitional purgatory, i.e. they are bound by rules of the EU, rule takers, not makers and so on. What do you have to say to provide some comfort to them that the withdrawal agreement on the table will not let that happen? At point one, the UK's withdrawal from the European Union will have one termed it of national control over lawmaking in this country. There will be an end to the automatic free movement of people under European treaties. There will be an end to the system of annual budget payments in line with a formula agreed as part of the EU membership. There will be, under the proposed deal, a two-year transitional arrangement and I think the reassurance to people who supported leave is that that is important for businesses large and small so that they have time to plan and adjust and they're not faced with the turbulence of perhaps changing regulatory arrangements at least twice during the course of a very short period of time. We really want to minimise the times when business has to change at regulatory compliance arrangements. Then, if we're looking at the backstop, I think the assurance is that the political commitments that the others have given, that they not to bring this into effect or if it's there to end it as rapidly as possible, is backed up by what's in their interest. From their point of view, the 27 see the backstop as giving the United Kingdom unbalanced, unfair access, tariff free to their markets and quota free without paying into the budget each year, without free movement, without shielding all the obligations of membership. That's why Barnier has been criticised in quite a number of European capitals in the last two weeks. Secondly, the Irish in particular see east-west trade as much more valuable economically than north-south trade. North-south is hugely important politically, but east-west is much more valuable, therefore they need hollyhead fishguard Pembroke to be sorted out, not just the Irish border, and that can only come with the future partnership ending any backstop arrangement. Thirdly, the commission has always been clear that legally they cannot erect a future partnership on the basis of a withdrawal agreement under article 50, because, as I said earlier, they can only have a future, a partnership agreement with a third country once it has left. Therefore, they know that with any year that passes when we're in the backstop, the legal risk to them of a successful challenge, for example, from a business in the south of Ireland that's in a republic that says that our neighbour, 10 miles north in the border, has an unfair advantage over us, that legal risk increases. Therefore, there are very good reasons to reassure people who voted leave that they will be getting what they want, that they shouldn't fear being all walked into the backstop semi permanently, and we should have good reasons for taking the EU 27 at their word on that. If I could pick up on the point around the fact that so many people are asking for a transition period, and it appears that the withdrawal period offers that, isn't it the reality, though? I think that there needs to be a bit of a reality check around all of this, that what will happen after 29 March next year is one of two things. We will either enter into transition period, as is proposed in the withdrawal agreement, or relieve with no deal and overnight become a third country. The evidence that we've taken on numerous committees and numerous meetings is that no deal would be disastrous for all parts of the UK, and we need that transition period. The CBI, the FSB, the NFU and all those organisations are telling us that. While I'm inclined to listen to them, why do you think that so many politicians won't? It's a question that individual politicians will have to answer. Among some politicians, there is still a lot of wishful thinking that the 27 is somehow going to go back and change the deal, that they have worked very hard and made concessions to negotiate, and which hasn't been easy in terms of compromise amongst themselves. Let's not forget getting 27 countries to agree on a common proposition is far from straightforward. However, I think that the degree is absolutely right about the prospect of no deal. What that would mean is the end of March, for example, that meat and livestock exports would become subject not only to WTO tariffs and quotas, which are pretty steep in terms of the tariffs on beef or lamb exports, but they would also be subject to phytosanitary checks, which under EU law have to take place at a designated border inspection post. If I say that, for the moment, there is no designated border inspection post at either Calais or Coquels, which are the two chief destinations for RoRo freight, that starts to tell you the scale of the problem for the automotive industry. It would mean a 10 per cent tariff, plus the requirement for rules of origin declarations, not just when an assembled car moved out of the UK, but whenever a widget that was part of a component moved backwards and forwards on the just-in-time cross-continental production systems and supply chains that we have at the moment. No deal is not something that anybody should contemplate lightly. We have to plan against the risk, but it is not something that we should seek to do. Annabelle Ewing Diolch yn fawr, minister. Let's talk about the real world, and is it not the case that there's no majority in the House of Commons for the PM's Brexit deal? There's no majority in the House of Commons for a no deal. Short of Scotland remaining a member of the EU, which is what Scotland voted for, 62 per cent, surely it is in Scotland's best interests to remain in the single market, a market of 500 million people, eight times the size of the UK market, to remain in the customs union and benefit from the sum 50 trade agreements that the EU has as we speak, right across the globe. That is what Scotland enjoys at present. Why do you want to make my constituents of Cowdenbeath and my country worse off? I want to give Ms Ewing's constituents in Cowdenbeath the prospect of the certainty that will arise for local businesses from a two-year implementation period, so that they have time to adjust and not face a cliff edge. I want her businesses and her consumers in Cowdenbeath to have the free trade agreement in goods and foodstuffs that is provided for in the political declaration and the close alignment and partnership on customs and on regulation that is also proposed in the political declaration. I want them to have the security partnership through policing and criminal justice co-operation that is provided for in the political declaration. I also want her constituents to continue to have access to the UK-wide single market that has such value to them. Can I just say on the issue of the two-year period, the idea that it would be certainly after two years? That is risible. It is risible. We have heard comments about the time that it will take to negotiate a deal. Aside from the disappointing reply, I suppose that it is a predictable reply to what we have heard from the outside, I suppose. Is it not just the case, Minister, that your Brexit deal is going down and that the UK Government has no plan to be in place as we speak? I think that what is clear is that there is no proposition on offer from those who have expressed opposition to the Prime Minister's deal that is likely to be negotiable or to be realistic or to be better in terms of outcome than the one that we have on the table. I remain much more optimistic about the timescale because, unlike Canada, Japan, Ukraine, Moldova or Singapore, we start from a position of complete alignment with conformity, with EU rules and standards. That therefore makes it much easier to define where any difference might be agreed. We are not starting from scratch trying to decide the nature and scope of any alignment. All evidence suggests that a two-year period to negotiate a trade deal with EU is completely unrealistic, but if that is your fantasy position, that is fine. The better outcome for Scotland and, indeed, the entire United Kingdom is surely to stay in the single market and in the customs union. Is there any other option that makes us worse off? Why did the Tory Government want to inflate that on the people of Scotland? I think that Ms Ewing would need to accept that to do that—if that is a question as to whether that would command a parliamentary majority—it is unrealistic to expect the European Union to accept that without acceptance of the United Kingdom's part of all the four freedoms. That has been a consistent line from the Commission and the 27 Governments that stand behind them. That takes you back to the freedom of movement question. It would also leave the United Kingdom as obliged to follow future EU rules in services. In terms of goods, the goods ackee has been stable for about the last 30 years. It is not likely to change in any significant way. The ackee on services is much more dynamic. I think that with us not at the table, it is probable that it will develop in a way that is perhaps more protectionist of EU interests on things such as financial services and that there will be considerable advantages to us in remaining outwith the scope of those services' single market arrangements, because services growth is where there will be the greatest global opportunity in the future. Gwyd's cases are in court of justice every other month, so the idea that the ackee is some sort of fixed, stable thing for goods is completely unsure. I appreciate you coming in front of us. I think that all of us would like this session to have been longer. I think that we have all got other questions that we would like to have asked, but at least you have come and given us a session this afternoon. We are up against the clock because we have got voting very shortly. Thank you for coming today.