 We welcome to the sixth meeting of the Culture, Tourism, Europe and External Relations Committee in session 5. We have received apologies today from Ross Greer MSP, but we would like to welcome Alison Johnson MSP to the committee. I would like to remind members and the public to turn off any mobile phones, and any members using electronic devices to access committee papers should please ensure that they are turned to silence. Rydw i'n dweud i'r ddaf ni'n gyffuniau ag y Minister of State for Trade and Investment, ac i ddweud i'r ddweud o'r ddweud i Llywodraeth yn ein ddweud â'r ddweud i'r ddaf ni, o'r eu rhif BECRYFORNEGаль sy'n gwneud hwn. Fy fydesaeth gyn rhywun hynny, gallwch i chi'n rwyf yn rwyf yn gweithio'r drwywch, lelyddodmi Llywodraeth a Llywodraeth i'r ddweud i'r ddweud a ddweud i'r ddweud i'r ddweud, pwylliant. I understand you will make a short opening statement before we move to questions from committee members. Brilliant. Well, thank you, Madam Covina, if I may, and thank you for making this possible. I hope that technology is going to work. First of all, apologies from my... Can I just check everybody can hear me first of all? Yes, we can. Thank you. First of all, apologies from my Secretary of State, Dr Liam Fox, who's travelling in Asia this week. But like him, I am fully committed to engaging on trade with the Scottish Government at the Scottish Parliament. Indeed, I enjoyed appearing a year ago in my last role in front of both your Scottish Parliament Finance Committee and the Constitution and Future Powers Committee, which were both in Edinburgh and hoping to come and see you in person at some point as soon as we can. The Prime Minister, Madam Covina, earlier this year set out her vision for the UK future as a truly global Britain. Included in this was her strong view that the UK should be the most passionate and convincing advocate of global free trade anywhere in the world. The UK Government and the devolved administrations need to work together to make Brexit a success. A unified voice strengthens our hand in the upcoming negotiations, and that is why the UK Government has set up a new joint ministerial committee on EU negotiations to discuss each devolved administration's requirements for the future relationship with the EU and to feed into a UK approach to the negotiations. Our Department for International Trade is dedicated to serving the whole of the United Kingdom now and when we leave the EU. Our Department's responsibility covers support to new and existing UK exporters, outward investment from the UK and inward investment into every part of the UK. I should point out that Britain's future trading relationship with the EU is primarily a matter for the Department for Exiting the European Union, although we do and will continue to feed into those deliberations. Meanwhile at the Department for International Trade we work hand in hand with Scottish Development International, SDI, which is responsible for implementing programmes that meet the particular needs of companies in Scotland as well as promoting Scotland to foreign investors. Whilst promotion of trade and investment is a concurrent power, trade policy and UK export finance's ability to support exports are, as we know, reserve matters. This means we can and do pool intelligence and work better for the benefit of the UK. For example, our trade department provides Scottish companies with access to events and trade mission support schemes. Our world-leading digital services, as part of grapes.gov.uk, which make it easier for firms to trade overseas, are an available resource for Scottish companies and I urge them to make use of them. And today my Department's trade policy officials will be hosting a briefing session for officials from each of the devolved administrations on the work of the WTO. By working together we can ensure that when one part of the UK succeeds, we all do. Our fortunes are inextricably linked. I, Madam Covino, like much of Scotland, campaigned on the remain side during the referendum. Indeed, 70% of my constituents voted to remain. But this was a UK-wide referendum. I am above all a democratic politician and more people voted to leave the UK than for anything else in our electoral history. And if you look at the figures, it is clear which union should matter more to the consumers and businesses of Scotland. While Scottish exports to EU countries totaled £12.3 billion in sterling in 2015, Scotland sold goods and services to the rest of the UK worth £49.8 billion, four times as much. This is four times more than exports to the European Union and three times the level exported to the rest of the world. Trade with the UK single market supports 270,000 Scottish jobs, roughly 10% of Scotland's total employment, and represents 31% of Scottish GDP. And Scotland's exports in goods and services to the rest of the UK have increased by 74%. 74% since 2002 compared to only 7.8% growth in sales to the EU over the same period. So Scottish exports and goods and services to the UK are increasing at almost 10 times the rate to the rest of the EU. It is clear that the United Kingdom is the most important union for Scotland. By speaking with one voice, we can champion all of the UK's consumers and businesses. Their interests should be at the heart of our discussions. So finally, my department stands ready to help Scottish businesses thrive overseas and to encourage greater investment into Scotland, and we are already doing this. By working together over the coming years, we can ensure that we build a global Britain that works for all. Thank you very much, Mr Hans. Before we start, I say that in the Scottish Parliament we don't use the term, Madam convener. Convener is perfectly adequate, so thank you very much for your courtesy. Can I open by asking you, given that Scotland voted 62% remain, we understand that the UK, as a whole, voted to leave. However, there is an extremely large body of evidence that shows that even the people who voted to leave did not vote to leave the single market, and this Parliament has voted on a number of occasions to support Scotland remaining within the single market. Can you explain to us why the UK, which was so instrumental in the creation of the single market, has decided against remaining in the European economic area? Right. Well, thank you, convener. Sorry about that, Madam. In our Parliament, of course, we call, for example, the Deputy Speaker, Madam Deputy Speaker. So it's good to know a proper procedure in your Parliament. But can I just say a few things, first of all? Clearly, this is the whole of the UK referendum. I pointed out earlier that, for example, my constituency, Chelsea and Fulham, in West London, actually voted even more for Remain than Scotland did. Our figures were approximately 70%, and that was not that unusual for parts of London. But the important thing is this was a whole of the UK wide referendum. That was clear during the campaign, it was clear when the Bill and the Act passed through the Westminster Parliament. In terms of the single market, what we are doing is seeking an ambitious and comprehensive free trade agreement with the DEU, including free flowing trade in both goods and services that is more ambitious than any other trade deal that we've agreed to date or that anybody has agreed to date. That is what our ambition is. So we want Britain to have the greatest possible tariff and barrier free trade with our EU neighbours. We want to see zero tariffs on trading goods and to minimise the regulatory and market access barriers for both goods and services. So what we're trying to achieve here, and bear in mind of course it's a negotiation, so I can only set out what we're trying to achieve at this stage, is that the fullest possible access to the single market for UK companies. Very much. Of course the most successful free trade area in the world is the European single market. The Prime Minister has said that if she would prefer no deal to a bad deal, do you agree with that? It's important to get a good deal, that is absolutely our ambition. Without which to contradict you, I think actually the most successful single market in the world is the United Kingdom single market and it's got done by exporting four times much into the UK single market. I think we can see where the relative importance of those two unions and those two single markets lie. I think it's what we're trying to do and we are ambitious for the sort of deal that we are seeking to achieve. The negotiation obviously hasn't started yet. As you'll know, convener, we are triggering Article 50 before the end of next month, that the date is getting of course ever closer and we are looking forward to a successful, productive, fruitful negotiation. I think it's very important to remember that the UK and the EU will remain friends and partners during and after this process. Very important that our cooperation continues, not just on trade matters, but really white the ray across the piece in terms of a conflict of security, counter-terrorism, all these other things. So I am reasonably optimistic for that negotiation process. I'm not pretending that it'll be easy, but our objective is to come to a good terms of departure and to have a full and comprehensive free trade agreement with the European Union, which will come in right away. The evidence that this committee has taken in Europe and amongst experts has been fairly unanimous in telling us that it's going to be impossible to conclude a trade deal at the same time as the exit deal. In fact, Professor Sir David Edward, giving evidence to this committee, said that the idea that he could secure such a deal within two years for the fairies was his word. It sounds to me as if you are still insistent that you can negotiate a free trade deal within two years when the Europeans are just saying that that's not on and may not even be permissible under article 50. With our ambition, and I think by working together in a common UK effort, we can make that more possible to do that within two years. That is very much our ambition, to make sure that we get a deal that works for the whole of the United Kingdom, not just that, but a deal that works for the European Union. It's worth remembering that the European Union has a very substantial trade surplus with the United Kingdom, and we think that it would be strongly in their interests to not have tariffs and other trade barriers between the United Kingdom and the European Union. Of course, weeks away from triggering article 50, the Prime Minister had said that she would continue to consider the Scottish Government's position paper on Scotland's place in Europe. Can you give us some indication of what's going to be in the article 50 letter and whether it's going to make reference to the position of Scotland as a remain voting part of the UK? You'll be aware, of course, that the constitutional affairs committee of the European Parliament has recently said that the position of Scotland should be addressed in the article 50 negotiations. Is it going to appear in the letter? I can't comment on what may or may not appear in the letter. What I can say is that our involvement and our interaction with the Scottish Government at all levels has been very strong, and we'll continue to be so. My boss, Dr Liam Fox, met in August 2016, as early as that, with Keith Brown, who we both know as Cabinet Secretary for Economy. Lord Price met with the Paul Wheelhouse on 2 November. We are absolutely committed to continuing ongoing interaction. We are studying the Scottish Government's paper, and I know that was formally submitted to the JMC, I think, in January. That paper is still being studied intensely. I'm sure Mr Mundell coming up next could probably give you a little bit more steer on that, but the involvement of the Scottish Government and indeed the Scottish Parliament in this process, I think, is a very important part of where we go forward from here. The Scottish Government has been very critical of the JMC engagement process, and I understand that Chatham House has said that it's an inadequate way to negotiate the exit from the European Union and the Scottish Administration's involvement in those negotiations. Could you perhaps tell me if you could name one policy area that you have changed as a result of the meetings with the Scottish ministers? I'm not a member of the JMC. Mr Mundell is a member of the JMC. You had had with the Scottish ministers. Certainly the importance of Scottish trade for me is of huge importance to these negotiations when we get started, and that, I'm sure, will be at the forefront of our minds as we carry out that negotiation. Can I just ask you again, could you name one policy area that you have adjusted as a result of meetings with Scottish ministers? The negotiation hasn't actually started yet, so when you say a policy area, the negotiation hasn't started. The Prime Minister has laid out pretty clearly, in a very comprehensive speech in January, what the UK's position was on all this, which included strong respect for the Scottish Government. But the negotiation hasn't actually started, so let's give the negotiation a chance, and I'm sure the Scottish Government's views will be fed in into that negotiation in the usual way through the JMC, through the First Minister, the Prime Minister and also with the Secretary of State for Scotland. I'll hand over now to Lewis MacDonald. Thank you very much, and good morning, minister. You described the role of your department as being to be a participant in the process, while Brexit department may take the lead. Clearly, the international trade department will make the expert contributions in relation to international trade. One of the things that was striking about the white paper compared with the Prime Minister's speech was that there was now more clarity around the Government's view of the customs union. I wonder if you could describe for us what the Government's view is of the relationship between the UK and the EU going forward in relation to the European customs union, and what discussions you are having with colleagues around that. Yes, well I think the customs union, I think the most important thing is the objective to make sure that we have frictionless trade with the European Union. The means of getting there is one aspect that we are open minded about as we enter these negotiations. I think the most important thing is that the objective here is to ensure that there are no tariffs and no new barriers in place where there are none currently today in our trade relationship with the European Union. The Prime Minister was clear both in the speech and in the white paper that we don't want to be bound by the EU's common external tariff or participate in the common commercial policy. So I think the most important thing, Louis, is to think about the objective here rather than necessarily the means of getting there. We've said that we want to come to a customs arrangement with the European Union, but we do not wish to remain members of the customs union, and we've mapped out pretty clearly to my mind what we're looking to achieve there in that space. I take the point, the objective is where the focus must be, but in order to get there you need to have the means. I'm struggling a little with the suggestion that, from a European Union perspective, frictionless or tariff-free trading arrangement with the United Kingdom is a given in the way that I think you would appear to imply. What is the offer, if you like, from the UK in relation to the customs arrangements that the European Union currently has? Secondly, what's the consequence for our existing trade with third countries? At the moment, all our trading arrangements with countries out with Europe are governed by our membership of the European single market and the European customs union, so what is the consequence for those agreements of withdrawal from the EU? Right, if I can, I think if I take that in two parts, I think you're asking what would be the EU viewpoint on frictionless trade and tariffs, and secondly what the implications would be of leaving the customs union on our trade and the UK's trade with third countries, so let me take each of those in turn. I think the EU viewpoint, I mean that's clearly a matter for the European Union, but I think we are confident the EU won't want to do anything that will harm their own trade with the United Kingdom. I mentioned earlier that the EU enjoys a very healthy trade surplus with the UK. Clearly not every member of the other EU 27 has a trade surplus with the UK, and different member states will have different priorities within that trading relationship that widespread and very integrated trading relationship with the UK, but I think the starting point should be that the EU wouldn't want to do anything to damage its own trade and its own exports with the European Union, its own really important investment relationship with the UK. Hundreds of thousands of people in the UK go to work every day for German companies, hundreds of thousands for French companies, et cetera, and the reverse is the case in those major EU markets. So I think it would be really for them to speak for themselves, but I think that logically and naturally the EU should have a strong interest in making sure that there are no new trade barriers between the United Kingdom and the European Union. I think in terms of the implications for our existing trading relations with third countries, being outside of the customs union, clearly allows us a greater degree of flexibility to come to free trade agreements with key partners outside of the European Union, and that, if you like, is one of the great opportunities provided by Brexit. Now, I'm not sure the video link is working so well, but I think I can see you wanting to come in on that point. I take the point that that's the objective. I think that the challenge, though, is that, on completion of the article 50 process, our existing trade agreements will fall if we have, indeed, at that point left the customs union and the single market, and therefore any new agreements will not come into force until they have then been negotiated following the completion of the article 50 process. So it's to understand what your department's perspective is on third-party trade agreements between, for the sake of argument, March 2019 and the completion of negotiations with all those potential trading partners out with Europe. That will also be part of the negotiations. Again, what we're looking to do is to have reached an agreement on our future partnership by the time the two-year article 50 process has concluded. We expect, then, a phase process of implementation in which both UK and EU institutions and Member States prepare for the new arrangements. I think where we go forward from there will be an interesting side of the whole Brexit process is how we take over, if you like, the EU side of those free trade agreements in third-party companies, and that will be part of the scoping out arrangements that we'll be having with third-party countries between now and the time that Brexit actually happens, as to which part of those agreements we want to take over, which part we may seek to improve, which part we simply translate over. But it's really too early at this stage to say which part and which agreement that's something that we are studying actively at the moment. Is it fundamental to both trade with the single market and to future agreements with third parties that there should be common standards and common rules of origin, and is that aligning the regulations and the rules of origin an objective of the UK Government in these negotiations? Well, some of these things are a careful balance between alignment and the ability to have our own set of standards and regulations that particularly suit the UK, and within that would be all parts of the UK, including of the devolved nations, and that'll be a careful part of that balance between alignment and the ability to take advantage of the UK being able to set its own standards and regulatory environment, and that'll be part of that process going forward, and that will by necessity vary by particular market and by particular trading relationship. Does that mean that differentiation between British standards and European standards is a process that will start immediately and will, in your objectives, be completed within two years? No, I think right away clearly we are still in the European Union, and within we cannot sign, of course, a free trade agreement until we are outside of the European Union, so on that basis no, I don't see that process starting immediately, I see that being something for the future. Richard Lochhead. Thank you very much for giving evidence today, minister. I do feel as you start off with a point of information. The next Scottish independence referendum has not been launched yet. I thought your opening remarks were like the opening speech for the no campaign, but what we really want to talk today about is trade relations with the rest of the world post-Brexit. In her speech, Theresa May, your Prime Minister, said that, in relation to her negotiations with Europe, that Europe should respect the differences within that union, there should be flexibility and compromise in terms of negotiations post-Brexit, and she wanted the rest of Europe to respect those differences within the European Union. Can you explain to me how those principles are being adopted in terms of Scotland's view on EU membership, given that 62 per cent of Scots voted to remain within Europe, and the Scottish Government's policy of seeking bespoke solutions to try to maintain our links with Europe and the membership of the single market? Should those same principles not apply to the Prime Minister and your Government in their dealings with Scotland, as the Prime Minister is asking the rest of Europe to respect? Well, okay. I feel that I've slightly answered this one already, but I think that the important thing, which we've been absolutely clear on, I think I've demonstrated, is the involvement of the Scottish Government in this whole process, and our interactions, very strong and meaningful interactions with the Scottish Government so far. We're studying the Scottish Government's white paper very closely, very intently. Mr Mandel can probably give you a little bit more detail on that part of the process. And I think Scotland is going to be a key and fundamental part to this negotiation from across the UK. But going back to the point about which way Scotland voted in the referendum, I will go back to the example of my own constituency, but it is fundamentally the UK wide referendum where the UK decided, as a United Kingdom, by a majority of 1.3 million people. I have to say, as I mentioned earlier, I campaigned on the other side, but nevertheless more people across the UK voted to leave the European Union than ever voted for anything else before. So the strong democratic mandate is there. And the best thing for us to do is to now work together and make sure that we deliver a new arrangement, a comprehensive free trade agreement with the European Union as a whole that benefits all parts of the United Kingdom, all of its constituent parts, including Scotland. And that is the basis on which we need to go forward. And I'm looking forward to working closely, our department is, to looking forward closely, to working closely with the Scottish Government as we go forward from here. As I understand it, there's a very constructive discussion at the JMC on the 30th of January in relation to how Scotland's trading interests can be taken forward in those discussions, in those negotiations, and also about the continued good work that my department does working closely with the Scottish Development International to make sure that we deliver good quality services for Scottish businesses and consumers as we go forward from here as well. In terms, though, of the Scottish Government's policy, widely supported within the Parliament and Scotland of seeking a bespoke arrangement to maintain Scotland's links with the single market membership of the single market, you seem very dismissive of any bespoke arrangement for Scotland, so do you not envisage any bespoke arrangement for Scotland to retain membership of the single market? Well, I wasn't dismissive. I think the access to the single market is extremely important for all parts of the United Kingdom, and that's one of the reasons why we want to maximise our access to the single market and make sure that our trade overall as the United Kingdom is as frictionless as possible. In terms of differentiation, we've read the Scottish Government paper which was presented, and we are taking the proposal seriously. An official level engagement has intensified to ensure that proposal is considered fully and feeding into the ongoing engagement through the JMC process. There's a lot that we can agree on already, which is in the White Paper. For example, protecting workers' rights, protecting the status of EU citizens currently in the UK, and ensuring Scottish universities have access to the best of European talent. So, there's already an enormous amount in that White Paper that we agree with, and we'll be taking forward as part of that negotiation. In terms of a differentiation, that is something that we are looking at, and Mr Madel can probably give you a little bit more full-out on that. I hear you say it, and I thank you for that answer, but those are all issues that are on the benefit of the whole of the UK. What I was asking was, are there any examples of bespoke arrangements for Scotland in light of the Scottish Government's paper? Can I just ask one final question in terms of the trade negotiations? There's a big concern in Scotland that post-Brexit, as negotiations proceed, there may be declining standards of imported goods to this country, because, quite clearly, the UK will have to negotiate with Europe and also third-party countries. Can you give a guarantee to the committee that there will be no declining standards of goods and services in this country as a result of the post-Brexit negotiations? I'm not sure if I understand the question. In terms of declining standards, at the moment we are obviously still members of the European Union, so whilst we are members of the European Union, there is no change in any standards beyond that. Well, it's very important that the UK maintains its standards. We've given very, very strong commitments in terms of areas like workers' rights, in terms of food standards. I've got a whole set of manifesto commitments in some of these spaces as well, so I think it would be wrong to say there will be a decline in standards as a result of Brexit on imported goods. Actually, what this allows us to do is to come to free trade agreements for the UK with third-party markets that will be to the benefit of UK producers and UK consumers. All of the free trade is important that free trade agreements do not infringe on any individual country's right to regulate, which includes standards on things like food and other products. That won't be changed that the UK and where appropriate of old administrations will have the right to regulate those products. That won't change. Thank you. Before I move to Jackson Carlaw, Minister, just like a quick supplementary on something that you mentioned there, you mentioned the university sector. You'll be aware of the report in The Times, which obtained a Government report on the Government's priorities, which had education as a low priority. Given the amount of evidence that we've taken in this committee about the importance of universities to the Scottish economy, detailing them as a low priority is a cause of great concern, and it seems to directly contradict what you've just said there about listening to the Scottish Government's concerns? I disagree with that. The chance of the extractor here has been absolutely clear in guaranteeing horizon 2020 funding up to the year 2020. That has been the clearest signal. That's one of the very first things that we did. After we leave is the concern, and universities have been designated a low priority by your Government. I think we've shown from our actions that one of the very first things that we did last August was to guarantee horizon 2020 funding as we move forward. You've said that, but we're talking about after we leave the European Union and you have designated universities as low priority? I'm putting out to you the high priority that we attach to universities right away across the United Kingdom. Some of the world's very best universities are in the United Kingdom, in Scotland and elsewhere in the UK, and actually they are an important part of our free trading future. When you look at some of our key markets, like for example the United States, but also key markets like the European Union, like China and others, the fact that UK has world leading universities is not only desirable, but is absolutely essential for some of our key sectors. If you look at the UK thriving life sciences business, I was actually out on the west coast of the States just a few weeks ago and actually talking to a company that is going to be setting up more operations in Edinburgh, and one of the things that attracted to Edinburgh was the quality of the university offer in Edinburgh. The life sciences sector as a whole is incredibly attractive to UK universities. The whole cluster around Cambridge, for example, is another example. In all of these, in terms of our free trading future, universities are going to be absolutely at the centre of that, and they are one of our strongest cars as we go forward from here. Okay, thanks. I'll still be categorised low priority. Okay, Jackson Carlaw. Good morning, minister. You used the expression frictionless trade, and I also noted you saying we want no new barriers where there are none today in our trading relationship with the EU. You also then went on earlier to describe the balance of trade that exists within the United Kingdom as opposed to Scotland's trade with the rest of the European Union and the value, therefore, of the UK market to us all. In any hypothetical differentiated settlement that might arise for Scotland, what intended or unintended consequences might arise or have to be resolved with regard to trade within the UK as a result of that? Well, I think the most important thing to do in all of it is to make sure, when we look at anything like differentiations, to make sure that trade within the United Kingdom is not harmed or infringed or made more difficult. When you look at the top trading partners, I'm looking at Scotland-only statistics, which come from the Scottish Government Global Connections Survey 2015, which show that, in Scotland's top five trading partners, the rest of the UK at a value of £49.8 billion, share a total export of 63%. The next closest market is the United States at £4.5 billion, which is less than a tenth of the amount of exports going from Scotland that there are to the UK. Clearly, any consideration of differentiation will have to ensure that we do not create a difficulty for trade within the United Kingdom. I think that we would all agree that it is or should be a paramount concern for Scottish businesses and consumers. Thank you for that. We've heard evidence as a committee of the arrangements that obtain between Northern Ireland and the Republic of Ireland, which arise historically and reflect the unique status in Ireland. Some have argued that that arrangement is therefore one that is directly transferable to the United Kingdom and any differentiated settlement here could use that as its base model. Do you see that as being a directly transferable option? Well, I think in terms of that, I think that there might be a question, again, better put, to Mr Mundell. But clearly, we have stated in terms of the Irish border that that is one of the top priorities. That's one of Theresa May's top 12 priorities for that negotiation. It's finding a way to make sure that that border works in a way that it has been doing so and to make sure that there's no damage to that trade as well. I don't directly see that as being an example that could be transferred over. Ruth Davidson made a statement at the National Farmers Union meeting last Monday, saying that, currently, we have one Scottish Development International office in the whole of Latin America. As we get ready for Brexit, she said that she thinks that we should be doing more to ensure that we're ready to take advantage of such emerging markets. I'm curious that we've got a really successful market in the EU on our doorstep. How much importance would we be putting on focusing on distant markets with environmental impacts, transport and freshness? Those are just simple things when we should be focusing on markets close to our nearest neighbours, because, as convener said, the EU market is the most successful. The first thing that I've said about Scotland's nearest neighbour is England. The importance of that market is the rest of the UK as a whole when talking about proximity. But I think in terms of the opportunities for Scottish business beyond the European constant, I think is extremely interesting. That's exactly the sort of thing that we want to be maximising. We already work very closely together as a Department with Scottish Development International. Whenever I go on my different visits to different markets, I quite often have seen the Scottish Development International. People I can think of recently, for example, I was in Taiwan in September and had made sure that Scottish Development International was there in the meeting that I had prior to the negotiation I was going into with the Taiwanese authorities in terms of securing a good deal for Scott Whiskey in Taiwan, which is an extremely important market. We engage very widely. Recently, the South Korean firm CS Wind was a Department for International Trade Engagement for their commitment to securing safeguarding 70 jobs in Campbelltown through building of the new offshore wind tower facility there as well. I think as we go forward, we have people in over 100 markets represented by the Department for International Trade. We have one of the best international networks out there. We are already engaging on a huge number of markets. Ministers have been to more than 50 different markets since the formation of the Department last July, making sure that Scottish exports have got a strong voice out there, and also making sure that foreign direct investment comes in to Scotland. In 2015, for example, Scotland secured a total of 119 foreign direct investment projects, which made Scotland the second most attractive region in the UK behind only London. Our officials are engaging very strongly in their own right and working very closely with Scottish Development International. That is exactly what we want to see continuing. I would like to move to the issue of EU workers in Scotland. They clearly have an impact on our ability to trade successfully. We believe that at the moment there are over 180,000 EU citizens in Scotland. The committee has heard evidence previously about the uncertainty that people are facing in that position. The UK Government has stated that it would like to address the status of those EU citizens in the UK at the earliest opportunity, while ultimately reducing future EU migration. Concerns have been raised that administrative procedures are not in place to identify those EU citizens who are already resident and to process any applications that they may need to make secure permanent residency. We are already seeing incidences where people are being asked to leave erroneously. I would like to ask if you are comfortable with the level of uncertainty and insecurity that EU citizens in Scotland are currently facing. Well, let me take that question head on. I have to say that my constituency in London, 17 per cent of my constituents are EU nationals, which I think is the highest in the whole of the United Kingdom. I am married to an EU national, so these issues are very close to hope. I think the UK Government is following exactly the right approach in setting out one of the earliest first things that we do is coming to an agreement to guarantee the status of EU nationals currently in the UK, as well as guaranteeing the status of UK subjects within the European Union as well. That is what we are confidently expecting to happen very soon in that negotiation. So I am confident that their status will be sorted out, because let's face it, they make a massive contribution to our society, to our economy. The three million EU nationals are certainly large parts of my constituency would not be able to function without them. You say 180,000 EU citizens in Scotland. I can tell you that in London the impact of EU citizens leaving would be very severe indeed on the London economy and London's society as a whole. So I think as we move forward, I think that's one of the things that we should be able to agree quite quickly. The Prime Minister has been absolutely clear on that, David Davis has been clear on that, and then beyond that, the most important thing is that the UK will have control of immigration policy and will be able to make the decisions that suit the UK as a whole in relation to immigration, and that's entirely properly the best way that these things are done. I appreciate that the minister appears to be taking this issue very seriously indeed, but will the UK Government simply not clarify the status of EU citizens living here and take them off the negotiating table? Well, it's important also for us to look after the rights of British citizens, which will include a large number from Scotland within the European Union as well. It would not be right for us to ignore their right as well. But I don't think it would be an either side's interest. I think one has to understand the common interest here between, you know, we are going to remain friends with the UK and the European Union. We currently work very closely together, we will continue to work very closely together. It is in my mind inconceivable that either side would want to jeopardise the status of five million people. I mentioned my own family. There's hundreds of thousands of families up and down the UK who would have that impact, and also in other EU countries. That is why I'm very hopeful, confident, that we will come to an early agreement. Nobody is jeopardising anybody's status quite the opposite. The UK Government will be going in early to make sure that those status is guaranteed as we move forward, and that's exactly the right thing to do. I think that it would be very helpful if the UK could give leadership on this issue. I don't think that we have to wait on others. We could take a decisive stand here. Can I just ask one final question, convener? Is the UK Government willing to concede that freedom of movement is essential and likely non-negotiable in any transitional phase? Sorry, if freedom of movement is not negotiable in terms of, well, I think that the European Union, from what the European Union, different interlocutors of the European Union, said that the four pillars, the four parts of the EU single market stand together, which is why Theresa May and her speech in January in the Government's White Paper said that we're not setting out an approach of cherry picking in this. But we've also been clear that the UK will be taking back control of the immigration policy in full, and we'll have to see. But the UK will be able to set its own immigration policy, which I think will be a very, very important thing to go forward from here. Can I just come back to your early national? I don't think there's any degree of uncertainty that's out there. I think that the UK Government has been absolutely clear. It's one of our earliest and most important priorities, and we would expect it to be agreed very, very quickly. I don't think it is an either side interest to jeopardise, or indeed calling to questions, the status of what is the total of five million people. When you think about these, the magnitude of that would be huge. I don't think that the EU would also want to jeopardise the status of two million British people, including a large number of people in Scotland, who are in other EU countries. Bill Hamilton. Good morning, Mr Hans. Can I just bring you back to trade, since we have that opportunity within this committee today? As you'll be aware, whisky is one of Scotland's most important exports to the world. Scotch whisky is the single biggest net contributor to the UK's balance of trade in goods. The industry body, the Scottish Whisky Association, has been clear about its approach to Brexit. In many markets, Scotch will also continue to benefit from existing zero tariffs, for example in the US, Canada and Mexico, as those are offered to all countries already. In many other markets that already demand high tariffs—for example, India, Brexit—will not make the situation any worse. I just wondered how your role in the UK Government as a trade minister will make the best use of these trade opportunities to the Scotch whisky industry and other industries, too. We work very closely with the Scotch Whisky Association. My boss, Liam Fox, when he was in Scotland last August, his partner in the Scottish Government, probably his second most important meeting, was with the Scotch Whisky Association. We make sure—I mentioned for example the trade talks that I did with Taiwan, which, if I'm not mistaken, is the fourth largest export market for a Scotch whisky, and making sure I had quite long and detailed discussions with the Taiwanese authorities about the lock codes on Scotch whisky bottles, which is a key concern for the industry in Taiwan, making sure that those lock codes remain intact and sacrosanct in that process. But we are, of course, keenly aware of the importance of the industry. Scotch Whisky, for example, is protected in Canada as a registered geographical indicator, which again is something which was negotiated directly with Canada. I think the importance of trade for Scotch Whisky as a whole. I mean, 93% of Scotch Whisky's production is exported, and last year, the total value of that export trade reached three points—it's a slightly incredible figure—of 3.999 billion. It must have been perhaps just a few bottles short of reaching the 4 billion figure, which was up from 3.845 billion in 2015. By the way, single malt Scotch Whisky exports topped billions for the first time in 2016. The US, for example, I think you mentioned, remains the biggest market of all for the value of sales, and that rose from 749 million to 854 million. We go into that very regularly and comprehensively for the industry, and that will clearly continue, particularly in conjunction making sure that we talk to interested stakeholders in Scotland as well—not only the producers but also Scottish Government and Scottish Development international as well. Thank you. I'm sure that the Scotch Whisky industry will be very pleased to hear your work that you're doing and will continue to do. Thank you, Stuart McMillan. Thank you, convener. Good morning, minister. Before I start, I think that the minister would like to reflect upon your comments a few moments ago, when you spoke about Scotland and foreign direct investment when you referred to Scotland as a region—in fact, Scotland is a country—and bearing in mind that the language that's been used in the past of a family of nations and a respect agenda. I'm quite sure that you'd like to reflect upon your comments. First, the question is regarding the WTO. The minister is aware that it can take some time for WTO schedules to be discussed and certified. How do you anticipate and also what schedules would you anticipate the UK Government would consider in terms of any negotiations that would take forward? Well, of course I recognise Scotland as a nation. My mother's from Scotland and I've got a large number of relatives in Edinburgh who I think may even be watching this committee of broadcasters today. Let me answer your question in terms of the WTO. In leaving the EU, we need to update the terms of our WTO membership where at present our commitments are applied to the European Union as a whole. The UK, of course, is a founding member of the WTO or its predecessor organisation. We need to make sure that the UK has its own independent schedules at the WTO, which at the moment will be simply transferring over the European Union schedules to be in the UK's name without any change, any future change that would have to go through the UK Parliament where Scotland has representation as well. In terms of any further discussions with the WTO and attempting to get a longer term set of agreements, do you have any anticipation of the length of time that that would actually take? I'm unconscious that there was a time delay in terms of the EU enlargement when it went to EU 25 in 2004 and that agreement was certified in December of 2016. It doesn't tend to be a short-term process to get WTO agreements in place. Well, I think that if it's okay with you, if I can write to you on the change that you mentioned in terms of the WTO rule, sorry, the WTO can do that, can I undertake to write to a committee via? Sure, yes. That would be helpful, thank you. Also, in terms of the WTO, this committee had commissioned some research from the Fraser of Allander Institute. In the document, there's a number of points that were raised and suggesting regarding the WTO model of potentially real wages expected to be 7 per cent lower, which is equivalent to a reduction of around £2,000 per year, and also a GDP expected to be over 5 per cent lower than would otherwise have been the case and exports over 11 per cent lower because the WTO tariffs are a lot more stringent and more challenging as compared to what we've actually had with the EU. In terms of the trade, I heard what you said earlier on regarding the work that the UK Government has been undertaking. Nonetheless, under trade agreements under WTO rules are anticipated to be a lot more challenging and potentially to have that negative effect and potentially to up to 80,000 jobs to be lost in Scotland as well. What would the UK Government attempt to do and how would you attempt to deal with the negative effects with the WTO rules? Our objective is not to have tariffs at all. That's the important thing to understand here in terms of the negotiation of a comprehensive free trade agreement with the European Union is to have that frictionless trade and tariff free trade and to make sure that that happens. That is what all our efforts are being put towards. That is why we are engaging with the Scottish Government to make sure that we work together to make sure that not only do we get reasonable terms of departure but also the terms of trade with the European Union in the future, which I talked about earlier at some length in terms of where I see the strong common interest that there is between both the United Kingdom and the European Union in making sure that we have that frictionless tariff free trade, which would avoid these questions entirely. That is our objective and, as I mentioned earlier, I'm confident that we are going to achieve that. Certainly the objective is something that I'm quite sure most people would want to agree on, but it's also been suggested as well that in the longer term there would actually be an average of 2 per cent increase in trade tariffs under the WTO scenario. An objective is one thing, we're also entering into discussions and then a final outcome can be totally different. Well, again, I return to the importance. First of all, it's our objective to avoid any tariffs in place in a place where there is currently a tariff free trade between ourselves and the European Union. The other thing that I would say is that it's also the importance of the United Kingdom as a market for Scottish goods. I mentioned those figures earlier that anybody who's thinking of breaking up that union I think would also need to answer questions as to precisely the 63 per cent of Scottish exports that go to the rest of the United Kingdom compared to the only 15 per cent that go to the European Union. That would be, I think, quite an interesting question for perhaps somebody to have a real study as to what the implications there might be for leaving the United Kingdom in terms of trade and exports and outward investment coming into Scotland. I think that the situation would be absolutely catastrophic and that, I think, is also a very relevant consideration as we move forward. But, Slyther Minister, I'm quite sure that you wouldn't want to jeopardise the £63 billion of goods that Scotland buys from the rest of the UK. Sorry, I didn't hear the question properly. I'm quite sure that you wouldn't want to jeopardise the £63 billion worth of goods and services that Scotland buys from the rest of the UK if you're considering using the language of a frictionless agreement. I think that in which case we can both agree on the importance of avoiding tariffs then with the European Union as well and making sure that we have good trade between Scotland and the rest of the UK and between the UK as a whole with the other EU 27 members. I'll return to the point I made earlier, which is, throughout all of this, we're going to be friends. We're going to remain friends. The UK and the EU need each other. We've got such a strong common interest in the world, not just in terms of our economies but in terms of our trade picture but also far beyond that. That's why I'm fundamentally an optimist in this process, that the negotiation will go well, will end up well and will get to a good agreement and be able to have that frictionless trade and have a comprehensive free trade agreement with the European Union, which will suit the whole of the UK, including Scotland as well. Just on that final point, I can be enough. Just in terms of the frictionless trade and remaining friends, can I gently urge you to speak to some of your colleagues because some of the language that some of your colleagues have been using regarding our European friends and historical events are not making friends, are not keeping friends in the European Union? And that certainly was a point that was raised with the delegate members of this committee when we went to Brussels only a few weeks ago, and that point was raised to us by multiple people. So I would gently ask you to speak to your colleagues. Well, I think why don't we make a deal here? Why don't we both speak to our colleagues? I will speak to any Conservative MPs who might be felt to have said things that have upset people. You could perhaps have a word with your members of Parliament down here in Westminster, who on the Monday did not oppose CETA in a vote in the House Commons, yet on Wednesday voted en masse to oppose the comprehensive economic trade agreement with Canada, which I can tell you did not go down well in either the European Union or with our key Canadian partners as we go forward. That perhaps if you could have a word with them as well, then we've got a deal. I'll have to speak to my colleagues anything. Thank you. Just to, in a supplementary on this comprehensive free trade deal that you say you will negotiate with the European Union within two years, is it going to cover services and agriculture because most free trade deals do not? Well, that will remain to be seen, but I think we would want it to be. When I say comprehensive, we would clearly want to have as many sectors within that deal as we reasonably could, whilst keeping the parameters of being able to negotiate it within the timeframe. What we have said is we want that deal to be the most comprehensive free trade agreement that anybody has yet negotiated in the world. So clearly we want to have the maximum number of sectors within that deal that would be consistent with being able to negotiate and free and deliver the deal and have it ratified. So will that include agriculture and services? Well, services are extremely important to the UK economy at the whole, 80 per cent of GDP, 79 per cent of jobs right away across the UK. Agriculture is a massively important sector in Scotland and across the United Kingdom, but precisely what goes into that FTA we will have to see, but I just repeat that we want it to be as comprehensive and all-encompassing as we can get. So you can't tell us whether these two key sectors of the economy are going to be included in this free trade deal, which most observers say that you can't negotiate within two years? Well, I would say that it is of course a negotiation, so I can't tell you anything what will definitely be agreed at the end of the negotiations. Surely you should have been weeks away from triggering article 50, surely you should have a position in place? I can tell you what the scale of the UK ambition is for that FTA for it to be as comprehensive and all-encompassing as possible. I'm not going to state it today which sectors would definitely be in and which sectors would definitely not be in, but I think that you can see from the direction of travel that the size of those sectors would be so large that inevitably they will be part of our consideration. Lewis MacDonald Thank you very much minister. In the course of the evidence, you've talked about maintaining common standards with the current European standards that apply and also about inheriting the WTO schedules that we currently have as a member of the European Union. You will understand the important role of the court of justice of the European Union in interpreting and applying standards in relation to trade. I wonder therefore whether you feel that the Government's apparent determination to disengage with the court of justice of the European Union, whether that limits the scope of any potential agreement, either in the customs area or in relation to the single market? What I would say to that is that common to all free trade agreements is an ability to assess standards and ability to enforce standards in the areas where it is appropriate and the areas that are within the agreement. So leaving the jurisdiction of the ECJ does not prevent us from having a common assessment of standards in the same way that any other free trade agreement will have a process for determining what those standards are, a process for determining how one can challenge something which one thinks is not in accordance with the free trade agreement and not in accordance with those standards. That would be what I would expect to happen in this. Can you tell us today how you envisage that process being designed? Clearly the ECJ has the final word if you like, an interpretation of the rules within the European Union, the UK Supreme Court has a parallel role here, but in any trade agreement that presumably has to be a third source of authority that is accepted by both parties, what you envisage that source of authority might be? Well, I think it's too early to predict that, but what I would say is that both parties, I'm sure, will have a strong interest in making sure that trade flows and making sure that common standards where appropriers are agreed. You've got to remember that within this process it's a little bit different to negotiating a free trade agreement to bring down barriers where there are currently barriers. Here we are talking about a free trade agreement that will preserve barrier free trade, and that is a rather different proposition when we go into this negotiation. It's impossible to say where that negotiation will lead. All I can say is that that strong common interest in trade between the United Kingdom and the European Union, the fact that 44% of our exports as a whole from the UK, about the same figure for Scotland, go to the European Union when in terms of our global exports, and the fact that the EU has got a substantial trade surface with the United Kingdom as well, I think it gives me a confidence that we will come to a good agreement to make sure that there's frictionless, tariff-free trade between the United Kingdom and the Europe. But clearly, before the negotiation has even begun, I cannot guarantee you what that negotiation will deliver. All I can guarantee you is that the EU enter into that negotiation seeking to represent the whole of the United Kingdom in conjunction and working closely with the Scottish Government, with the other devolved administrations as well, and making sure that everybody's voice has heard around that table and that we get the best possible agreement to deliver for the whole of the United Kingdom. We're just going to wind up now. Just before you go, Mr Hans, your previous engagement with this Parliament was in terms of your role with the Treasury. You have considerable expertise in the fiscal framework that operates between Scotland and the UK in terms of transfer of funds. Scotland currently gets 16 per cent of the common agricultural policy funds. How do you foresee that 16 per cent of common agricultural policy funds being transferred to Scotland after we leave the European Union? I think that that's going to be a matter for the Treasury and for the Department for Agricultural Fisheries and Rural Affairs, DEFRA. That'll be a matter for them, but I think the most important thing is that we have obviously guaranteed the funding for the common agricultural policy up to 2020, and making sure that that is delivered equitably, I'm sure, will be done in conjunction in the proper way with the Scottish Government as we go through. Equitably, or the 16 per cent that we currently get. Is that what you mean by equitably? I think that'll be a matter which perhaps could be best put to others. That's not strictly speaking within the remit of the Department for International Trade. I think you're perhaps asking me trying to learn me back onto ground that was perhaps more relevant for HM Treasury. But thank you for referring to my previous engagement. I did enjoy appearing before your two sister committees this time about a year ago, and I'm sure that engagement will continue. Okay. Well, thank you very much, Mr Hans, and we will just have a short suspension before going to the next evidence session. Thank you. We now continue the evidence session, and I welcome the right honourable David Mundell MP, Secretary of State for Scotland. Mr Mundell, can I start by thanking you for your patience? I apologise that we're running slightly behind time. I invite you to make an opening statement. Thank you, convener. I'm pleased to be here today to discuss the progress of the Government's work to take forward the referendum decision to leave the EU, and where the committee has just completed a session with my colleague the Minister for Trade and Investment on the vital work being taken forward to ensure that the UK secures the strongest possible trading relationships with the EU and the rest of the world. I'd like to give a short update on other aspects of the Government's work. Since I last appeared before the committee in October, we've seen significant developments. The Prime Minister's speech at Lancaster House and the subsequent white paper set out 12 principles that will shape the Government's approach and strategy. One of those core principles is strengthening the UK and delivering a deal that secures the specific interests of Scotland, Wales and Northern Ireland. I think it's important to be clear, though, because there's been a lot of public debate on this point, that Scotland will not be in the EU at the end of this process. There is no set of circumstances in which Scotland could remain a member of the EU after the rest of the UK has left. If Scotland's constitutional position were ever to change, it would have to apply to be a member of the EU afresh, and we should not make easy assumptions about the length of time this would take. The process Scotland would have to follow other terms of membership that might be on offer. The Scottish Government published their paper, Scotland's Place in Europe in December. I've made it clear that I recognise this as a serious contribution to the debate and serious work is under way to consider it, as I've set out in my letter yesterday to committee members. In addition, the Secretary of State for Exiting the EU will meet with Michael Russell today for a further discussion. Close engagement with the devolved Administrations remains a top priority for the UK Government, and this will continue to be the case following the triggering of article 50 as we move into the next stage of work to leave the EU. We've also seen the introduction of the article 50 bill and the completion of its passage through the House of Commons. It's currently being considered by the House of Lords, and subject, of course, to the completion of the bill's parliamentary passage, article 50 will be triggered by the end of March. Looking forward, the great repeal bill will be included in the Queen's speech. This important piece of legislation will provide legal certainty by ensuring that wherever practical and appropriate, the same rules and laws will apply on the day after we leave the EU as they did on the day before. The Government will bring a white paper forward providing more detail on that bill in due course. This legal certainty will be extremely important for business, the public sector and people here in Scotland, and we need to work closely with the Scottish Government and the Scottish Parliament to provide it. Engagement with sectors across Scotland continues to be a top priority for the Government. Lord Dunlop and I have now held over 100 such meetings to ensure that we are fully taking into account the priorities and issues for Scotland as the UK prepares for negotiations. Most recently, I held two very productive roundtables with the business community and academics and constitutional experts on Thursday of last week. Those are complex issues and there remains much work ahead to deliver a smooth orderly exit from the EU. I greatly welcome the committee's reports to date with which we will formally issue a response and look forward to continued engagement with the committee. Thank you very much, Secretary of State. Since you last appeared before the committee, as you said, the Scottish Government has published its place in Europe, and this Parliament has endorsed the principles of that. This Parliament has also voted against triggering article 50. You say in your letter that you have been engaging in a productive way with the Scottish Government, certainly the evidence that we have received from the Scottish Government does not back that up. For example, Mr Russell, when he came before the committee, said that the GMCEN meetings tended to be arranged without a great deal of input from the devolved administrations. They had very little control over the agendas. The officials confirmed that the papers came in late. In his most recent letter about the last GMCEN, he said that I was not content with the proposed work programme for the GMCEN programme. It was presented to me, and I felt that it lacked focus on article 50. He said that a joint communique was not agreed at the meeting. That does not take all that together. It does not sound as if there is a great deal of respect coming from the UK Government towards either the Scottish Government position or the Scottish Parliament. I completely refute that. First, as I have set out in my letter, in the past couple of weeks, there have been six substantive meetings involving Scottish Government and UK Government officials who have looked in detail at the proposals in the Scottish Government's paper. They have looked at ways in which some of the proposals could be taken forward to achieve the outcome in different ways. They have looked at the legal basis for the proposals. This is substantive work. I do find it offensive. I raised this at that last GMC. Mr Russell dismisses the efforts of officials in both the UK Government and Scottish Government who are doing sterling work in taking forward a very difficult task. We may have political disagreements. Of course, we are going to have political disagreements, but to dispute the fact that there is substantive work going on in this area, substantive work in terms of considering the Scottish Government's proposals is simply not the case. Mr Russell brought along one of his senior officials with him, who confirmed. In fact, it was the official that said that the papers came in very late and they didn't have a good notice of the agenda, so he didn't seem to think that it was working well. With respect, convener, we have all attended meetings where papers have come in very late. Papers coming in very late, I don't think, suggests that there isn't serious engagement. We are talking about the biggest constitutional change in this country since the Second World War. It is not just the Scottish Government that says that the process is flawed. If I can quote the Chatham House recently brought out a report on the interaction between the UK Government and devolved Administrations, it says that the institutional arrangement for decision making between the UK Government and devolved Administrations, the GMC, is not suited to developing a joint position on leaving the EU. That is Chatham House on devolved external affairs. I'm sure that Chatham House is entitled to set out their opinion when the GMC met at the end of January in Cardiff. I think that all the participants in the course of the meeting, the First Minister of Scotland, the First Minister of Wales, the First Minister of Northern Ireland and the leader of Sinn Fein, acknowledged that that meeting had provided a basis for setting out a full and frank exchange of views, of setting out in relation to Scotland a decision that has been followed through of intensifying the discussions in relation to the Scottish Government's paper. I regard that meeting as a productive meeting. I don't dispute the challenges that come in such an environment where some of the protagonists are coming from radically different perspectives, but it is an opportunity for a full and frank exchange of views and that's what took place. You can have a full and frank exchange of views but that doesn't mean to say that you're going to move forward. How are you changing your position as a result of hearing the views from Scotland, Wales and Northern Ireland? Can you name a change in the last few weeks as a result of hearing those robust views? What I can say is that this has been an evolving process that evolved through the Prime Minister's speech and through the white paper. One area that I can say is included as one of the Prime Minister's 12 priorities as a direct result of input from Scotland. The Prime Minister has acknowledged that on item 10, ensuring that the UK remains the best place for science and innovation. There were very strong representations from Scotland in relation to that issue and that part of the Prime Minister's setting out of priorities is included in the white paper. Within the speech, there are a whole range of views that are reflected in the Scottish Government's paper on workers' rights, on sharing of information in terms of criminal justice and security. There are many, many of the points in that paper that are reflected in the white paper. There is a huge amount of common ground and even where there is some political dispute, in most cases the objective is the same and that's one of the things that our officials are currently discussing as to whether we get to the same objective by different routes. You paint a very rosy picture but the fact is that this Parliament voted against triggering article 50. I acknowledge that and I acknowledge the right of this Parliament to have a debate and to express its views on that matter. When I was a member of this Parliament, and I think that Mr Scott was at that time, we had a very—and Mr Lockhead too—and indeed you, Mr McDonald as well. I looked round at it. We had a very lively and full debate on the UK's participation in the war in Iraq and that was an important opportunity for people to express views but ultimately the responsibility for foreign affairs in the devolved arrangements rests with the UK Government. Okay, you say that you've been listening. The article 50 letter is very soon going to be given to the EU from the Prime Minister. What reference is there going to be to Scotland in that article 50 letter? The article 50 letter hasn't been finalised in terms of the structure of that letter. I'm sure the Scottish Government's input to that letter may well be part of Mr Russell's discussions with Mr Davies today. It will certainly be part of the discussions the next time the GMCEN meet. Right, but can you tell us—you are Scotland's representative in London, although many people say that you are the UK Government's person in Scotland. You should know if Scotland is going to be in that letter. I don't think that that is an appropriate remark from somebody who is a convener of a committee in this Parliament. Can you tell us if Scotland is going to be in the letter? The point that I'm making is that you should know, as you're the person who's relying on to advance Scotland's position as Scotland will to remain. What I can give you an assurance is that Scotland's interests will be represented in the letter. The situation with the letter is that a final decision on the exact nature of the letter hasn't been made. Scotland's position will not, in any way, be prejudiced by the way in which that letter is set out. As you rightly say, it is my responsibility within the UK Government to ensure that Scotland's interests are represented, and I will make sure that they are in terms of the drafting of that letter. However, I cannot set out to you what will be in that letter at this time, because the letter has not been drafted. Will you ask for a differentiated position for Scotland that reflects the 62 per cent of people who voted to remain in Scotland? Again, we could go down a route that is well rehearsed of the fact that, firstly, the vote in Scotland was a vote as to whether the United Kingdom remained in the EU, Scotland having voted to remain within the United Kingdom. Secondly, the position is that we have given a serious commitment to look at the proposals for a differentiated settlement. I remain to be convinced in that regard, but I am still open minded in relation to bringing forward evidence that the position for a differentiated settlement is, in fact, to the benefit of Scotland and the economy, not driven by any particular ideology but for the benefit of Scotland and its economy. That is what we continue to look at, so we are still engaged in that process. I want to return to the theme of how you are representing Scotland's interests, because you were the only Scottish MP that voted to trigger article 50. We have a Government in Scotland, we have an apartment in Scotland, we had the result of the referendum in Scotland, where 62 per cent of people voted to remain within the EU. Most people, I would hope, we agree, who even voted to leave the EU, probably thought that we were going to stay in the single market, or at least maintain very strong links with the single market. Yet you voted for article 50. Can you give an example of how you are representing Scotland's interests through the only MP in Scotland that voted to trigger article 50? I have set out clearly my rationale for doing that. I voted to remain. That was my view, but the overall result in the United Kingdom was to leave the EU. I am a Democrat and I accept that result. As I have said many times before, if, in 2004, the result of the independence referendum had been a yes vote, I would have accepted that vote and worked to make an independent Scotland a success, I would not have campaigned to change the vote. As a Democrat, I accept that that was a UK-wide decision and the vote was for the UK to leave the EU. What we need to do is to leave on the best possible terms that secures the best outcome for Scotland's economy and the people of Scotland and the wider UK. We have a Secretary of State for Brexit, a Secretary of State for Trade, a UK Government, a Secretary of State for Foreign Affairs, but you are the Secretary of State for Scotland. What is different about your position to the rest of the UK politicians in terms of your job, which is to stand up and represent Scotland? There is no evidence that you have given to this committee, or we have heard in the public domain, of what is taken on board in terms of Scotland's vote. 62% of Scots voted to remain in Europe. 62% of people in Scotland voted for the United Kingdom to remain in Europe. I voted to remain in the EU. I did not do it on the basis that, somehow, if I did not get my way, we would reopen the whole constitutional debate about whether or not Scotland should be independent, which seems to be the line that some of your colleagues have been keen to take. My job is to look at an assessment of the issues as they affect Scotland. In terms of access to the single market, I am quite clear that the issues that affect Scotland are the same as they affect the whole of the rest of the UK. Therefore, an arrangement that allows frictionless access, barrier-free, tariff-free access to that market is the best for Scotland and the best for the whole of the UK. On the other significant issue of migration, my view is that that is an issue that impacts on the whole of the United Kingdom. Therefore, the arrangements that follow on from leaving the EU are as insignificant to areas of the United Kingdom, other areas of the United Kingdom, as they are to Scotland. I think that you have previously raised issues, for example, around seasonal workers. There are more seasonal workers in the east of England than the whole of Scotland, so seasonal workers are an important issue at UK level. The issue that is very distinct for Scotland and an issue that I have highlighted—I mentioned it the last time I was here—will be what happens to powers that are currently exercised in Brussels when they return to the United Kingdom. There is a very distinct Scottish interest in that regard. However, even in relation to the first two issues that I set out, I have been very clear that I am still open-minded in relation to the proposals that the Scottish Government has brought forward if they can be evidenced that there is actually some differential arrangement that would be beneficial to Scotland. However, can you not help the Scottish Government to reach that position if you think that is in Scotland's interests? You are saying that you want more detail, you want more evidence. The clock is ticking, and article 50 is about to be triggered in a few weeks' time. Are you just playing along and going through the motions and stringing along the Scottish Government? Absolutely, not doing that. We are working very—I think that, certainly at official level, we are working very constructively with the Scottish Government. We will come to a point where we will see what we agree on and what we do not agree on. I have said this several times, but I have not seen evidence myself that I think demonstrates that Scotland would benefit from a differential arrangement. However, I am still open-minded on that regard, because on the two big issues in relation to migration and access to the single market, I think that the resolution that we get across the UK is the one that would be best in Scotland. When Parliament voted on those matters, it called for the UK Government to give serious consideration to what has been proposed by the Scottish Government. Clearly, it has laid out in your letter some substantial work that has been undertaken since that vote over the past two weeks. Can you tell us at this stage what conclusions the UK Government is coming to? I think that you said in response to the last question that you had yet to see any evidence that supported a differentiated solution. Can you tell us what evidence has been gleaned from this process and what conclusions you have reached, for example, about the proposition for Scotland to maintain membership of the single market alongside membership of the UK customs union? I think that we touched on this the last time I was here. I mean, I haven't seen evidence that suggests that there is the possibility of membership of the single market without EU membership and the various things that go with that. However, I think that I have set out in detail in the letter that a work stream has been established in relation to access to single markets, where all the alternatives are being examined and the detail involving lawyers and others in relation to those proposals that are being gone through. What will be the outcome of that process? In other words, will the UK Government publish its conclusions on that process and, if so, at what stage in relation to the invoking of article 50? My view is that invoking of article 50, in a sense, is not a red line in the process. It will be possible that discussions could continue after article 50 was invoked. Clearly, the Scottish Government is entitled to a response, so the UK Government will respond formally to the proposals contained within the document. Just as we have done so far in terms of acknowledging those areas in which we are in agreement. While you are saying that you do not see the article 50 invocation as a cut-off point for that response, can you indicate the timescale in which you hope to respond to not just the Scottish Government or the Welsh Government has also made proposals that are in common with those and are clearly important to you? I wonder what timescale you have in mind for responding to those and completing the work that is under way at the moment? As soon as it is practical, I know that that is not definitive, but it is to everyone's benefit that we can reach as early a conclusion as we can. One of the things that has been clear in the past few weeks is that the Prime Minister of the UK Government has come to conclusions around the issue of UK membership with the single market. The issues that we raised with Mr Hans were around what alternatives to membership would provide access. Given what you have said about the importance of those issues from a Scottish perspective, what role the Scotland Office has in relation to questions of access to the single market and whether there are particular aspects of that importance to you and to the industry that I represent here? Clearly, there are many areas within the Scottish economy for which access is vitally important, and I absolutely acknowledge that. I think that we have said before that the work that is on-going, and this is work where there is again agreement with the Scottish Government at least in relation to the data, because everyone has to have a common set of data on which to proceed. One of the issues on which I thought Mr Russell may disagree, but there was actually a pretty substantive discussion at the last meeting of the GMCEN was in relation to financial services and to the significant importance of financial services. One of the issues that I have, and it is a matter in which anything that can be done by the Scottish Government and members of this Parliament would be helpful, because there is far too glib a use of the phrase city of London when people are talking about financial services. It is a city of London and, of course, that brings with it certain connotations that are sometimes negative. Whereas financial services are right across the UK—it was a point at that meeting in the Northern Ireland Executive—the Welsh Government made the importance in the respective parts of the UK of financial services. There was a very significant discussion in relation to financial services and, for example, the current passporting regime. However, if it did not continue, whether something equivalent could continue. There was a dialogue involving the chancellor. Financial services is clearly an example of one of the areas where the importance in Scotland—the importance here in Edinburgh in particular—needs to be emphasised. On migration, you mentioned in your earlier answers, as an issue where there are clearly common interests for Scotland and for the rest of the UK. Do you accept that it is possible to envisage a situation where there is a common UK immigration system, but differentiation within that? Not necessarily for Scotland, but potentially for London, as we have heard when we met the Greater London Assembly Committee and, indeed, for other parts of the UK? I think, firstly, I would say that, obviously, I have received the committee's paper on migration and I want to respond formally. That is, again, a serious and substantial piece of work. The Scottish Fair Select Committee, in fact, had done some work in that regard. What the position is, and I think again that it is important that it is clear, is that what is happening will be to bring back control of immigration in relation to people coming from the EU to the United Kingdom to the UK. It does not mean that immigration is being switched off. There will still clearly need to be significant numbers of people coming to do a whole range of things, from specialist work through to the seasonal work that we talked about. That is why the Government has announced that there will be an immigration bill that will essentially parallel or be dovetailed with the Great Repeal Bill. That will be an opportunity for debate and discussion around the issue of immigration specifically in relation to those EU citizens for whom the current arrangements will no longer apply. Finally, very quickly, on principle then, that bill, when that bill comes before Parliament, are you on principle opposed to or open to the possibility of differential arrangements around European Union migration, either on a sectoral or on a geographical basis? I think that it is clear that there will require to be sectoral considerations and to have some form of equivalent to the previous seasonal workers scheme. We need to address issues around depopulation and the provision of services in those areas. I am not, which I have said previously, and it was not part of the work of the Smith commission. I am not minded to have viewed that immigration should be devolved, that the Scottish Government has made a case. In relation to going forward, we want to have an immigration system that allows for those jobs that are necessary within our economy to be filled. Jackson Carlaw. You have covered a lot of ground in the answers that you have given. I would like to come back to the letter that you have supplied to the committee this morning and to thank you for it, especially in terms of the detail that you have been able to share with us with regard to the various meetings that have taken place. I have to say that Mr Russell has been rather economical in the details, since most of this is certainly news to the committee. I personally feel misled by the minister as to the extent of the discussions that have taken place. Indeed, it is only through you that we understand his meeting with Mr Davis this morning. You make reference in here to the work streams that are under way. In response to Lewis MacDonald, you confirmed that at some point there will be an official response to the Scottish Government's white paper. In the interests of public scrutiny, will the kind of work streams of the various groups that have been taking these proposals through be available for public scrutiny as part of any published response that the UK Government is able to publish? Those are clearly joint activities between the UK and the Scottish Government. If you were expressing a view that they should, I will go back and raise that point, because I could not unilaterally say yes in relation to that. The nature of the discussions that are taking place is that you characterise it as constructive and positive. The officials are actually making progress in your regard in teasing out the particular issues on which conclusions need to be reached. I think that the officials have made significant progress in taking the issues forward. My questions are about repatriation of powers from the European Union. In line with the Scotland Act, any powers coming back from the UK to the UK from Brussels should automatically come to Holyrood. The leave campaign promised that that would happen, and only a few months ago you categorically stated that whatever the circumstances, no powers will be re-reserved to Westminster. Can you guarantee that there is not going to be any re-appropriation of powers that are specifically devolved to Holyrood under the Scotland Act? There will be no taking back of any powers coming exercised here in the Scottish Parliament. Indeed, the Welsh Assembly or the Northern Ireland Executive were absolutely clear in relation to that. What I think needs to be done, and a significant step is happening at that tomorrow, for example in relation to agriculture, when Fergus Ewing is meeting with Andrea Leadsam and the representatives of the Welsh Assembly, the Government and the Northern Ireland Executive, my colleague Andrew Dunlop and the Secretary of State for Wales, to begin discussing how agriculture arrangements might come back to the UK and its constituent parts? I guess just to clarify that currently agriculture is devolved. Are you suggesting that you are going to look at re-patriation of agriculture powers under the UK Government? I am not looking to take any powers that are currently exercised by the Scottish Parliament or its Government away. What we are looking to do is to ensure that we can agree an arrangement across the UK as to how agriculture will operate in a post-EU world. That will mean that there will inevitably have to be agreement between the respective Governments in the UK in terms of ensuring that we have common approaches to issues such as animal health and a number of areas where there are common interests. We need to find out how the best way to achieve that is in relation to what is sometimes referred to as framework agreements, which might be for Governments coming together in terms of reaching an agreement. That is the position that we are in terms of the process. So far, there are several hundred powers that have been identified as coming back and specific responsibilities. The way that I want to proceed is in an orderly fashion in which we look at the consequences and the implications in relation to each area. I think that there are essentially three ways in which that matter will be taken forward. One, there are areas that will come directly to the Scottish Parliament, two, there are areas that will go directly to Westminster, none of which in that respect are matters that are currently exercised by the Scottish Parliament. Third, there will be areas in which there will be some form of shared responsibility. With regard to the several hundred powers, are you able to share with us the list of several hundred powers that have been identified? A final question was that Prime Minister, in January, said that part of the working carefully to ensure that powers are repatriated means that the right powers are returned to Westminster and the right powers are passed to devolved administrations of Scotland, Wales and Northern Ireland. Tell us what would be the right powers and what would be the wrong powers. I think that we are at the start of that process. I hope, I appreciate it. I come from a very devolutionist approach and Mr Davis has confirmed that that is his approach in relation to such matters. One area that I will give as an example is in terms of water standards. Areas around water standards are hugely complicated and there are a number of interlocking measures that fit together to do that. In fact, the whole batch of environmental responsibilities are very complex. It needs to work through, but I am not coming from it. The UK Government is not coming from an approach to somehow making sure that it takes away powers from the Scottish Parliament that would naturally flow to it, but it is to ensure that there is an orderly change. To pick up on the Secretary of State's point about framework agreements, framework agreements are completely different to powers. I think that the committee is looking for an assurance that there will be no stopping of powers coming back to Scotland, which is a kind of repatriation to Westminster. Can you give an assurance to the committee that there will be no stopping of powers coming back to Scotland in devolved areas? One example would be fish quota, 100 per cent of powers over fish quota in the Scottish territorial seas. We will come back to the Scottish Parliament. What I can give an undertaking is that there is no intention to prevent powers coming back to the Scottish Parliament. In fact, we are committed to a devolutionist approach, but I am not going to get into specific commitments. The other part of the process, which I think given the roles that you have previously talked about, is that there must also be a degree of engagement with stakeholders and those who have an interest in how they see this approach. That is what I am committed to doing. I am clear that we want to adopt a devolutionist approach, and that should be a presumption that powers do come to the Scottish Parliament. I have a quick supplementary from Lewis MacDonald. Angela Ledgson's on record in the last few days has talked about Brexit being an opportunity for a whole new set of arrangements suitable to the interests of British agriculture. Clearly, the question about whether there will continue to be agricultural subsidies in the way that there is at the moment is one that has been thoroughly examined in this committee. Can you envisage a situation where a decision about the future of agricultural subsidies in Scotland and a decision about the future of agricultural subsidies in England would be different? If so, how would that be managed in terms of the UK constitution? I cannot envisage a circumstance in which there is not continued support for agriculture. I think that that is very important. However, it is going to be an important part of the dialogue as to how, post the common agricultural policy, that support is delivered. It is a serious debate. I have encouraged NFUS, for example, to engage in that debate. I have, along again, I am sure with Mr Lockheith's and with Scott. Many others have spent a long time hearing from people of various concerns about the common agricultural policy. This is an opportunity to do something different, but people need to come forward with views and thoughts in relation to how that should be taken forward. I fully acknowledge that there are some very distinct agricultural needs in Scotland, particularly in relation to less favoured areas that are very distinct and an important part of the Scottish agricultural scene. We need to have full debate, discussion and participation in terms of coming forward with views. My apologies for being late. I was the education committee. I have not yet mastered the ability to be in two cases at once, even in this place. Can I just carry on with that point that you have been making, Secretary of State, on stakeholders, particularly in relation to fisheries? For 17 years, you and I have both done to say nothing of Richard Lockheith and Lewis Macdonald have heard nothing but absolute criticism of the common fisheries policy. The European Parliament's Committee on Fisheries said earlier this month that, granting access to the EU domestic market to the UK post-Brexit should be conditional on Britain continuing to respect the rights and obligations of the CFP. Did you notice that report? Have you discussed that with Mr Russell and other Scottish Governments? I did notice that report. I am aware as well that UK MEPs did not participate in that report. Indeed, as I understand it, all the committees of the European Parliament have been tasked with setting out their issues and priorities as the UK proceeds to leave the EU. It is not surprising that those member states would express that view, but our position going into the negotiations is to make absolutely clear, since it is occasionally referenced in the media. There is absolutely no situation whereby fishing will be a bargaining chip in those negotiations. It is a very important industry here in Scotland. Indeed, I very much welcome the positive approach of the industry. The Fishermen's Federation document C of Opportunity is a very outward-looking approach, but I certainly do not wish to display any complacency in relation to the tough nature of negotiations that may lie ahead. I presume that it is a fact that Spain would like to keep the common fisheries policy, and therefore access to UK waters. What discussions have been with Mr Ewing as the Scottish Fisheries Minister and your ministerial colleagues in relation to that matter? In this case, the co-ordination of a negotiating position once that is established? How will that continue once article 50 has been formally triggered? There are discussions tomorrow, which will involve Ms Leadsam. I think that it will be extremely important, and I certainly give a commitment to that in terms of engagement going forward. Mr Russell, in his very able way, has represented all interests as we have moved forward through this process. However, as we go forward into the next stage, portfolio holders within the Scottish Government will play a greater role in the nature of the discussions around negotiations. Thank you. Mr Russell has fishermen as well, he reminds me, which is quite important. I am not aware that the Scottish Government has yet worked out how they are going to transpose fishing regulation into Scots law. Some fishing lawyers think that it can take literally years and years and years. Has the UK Government done any work on that, which they could genuinely share with the Scottish Government? This is a fraught area of potential regulation. It is not just going to be fishing, there are going to be other areas. I have had a very serious conversation with Mr Russell about these legal issues. We can do all the necessary politicking, but I am absolutely clear that the Scottish Government recognises the importance of not ending up in a legal vacuum and creating unnecessary legal difficulties. There is quite a lot of work going on in relation to scoping out the scale of that. I myself have also met the Presiding Officer here in the Parliament scoping out the number of regulations that would need to be changed and the number of hours the Parliament might need to sit to change those regulations. Obviously, both Governments would prefer to proceed on the basis of including a line that ministers will change legislation as required. I very much doubt that that would pass through this Parliament and certainly it would not pass through the Commons of Lords. We have to find a way of doing it. I know that the Scottish Government is contemplating whether it would want to proceed by some primary legislation here in the Scottish Parliament or whether we would do it on a legislative consent basis as part of a wider package. We are very conscious of those wider legal issues. Good morning, Mr Mundell. With regard to post-2020 funding for agriculture and fisheries, are you personally committed to opposing a Barnett-style formula, funding determination, which would see Scotland lose out compared to our current arrangements? I am absolutely committed to ensuring that Scotland does not lose out. What I think we want to now look at and develop is what the structure of the support and the policy will be going forward. We are at the early stage of determining that, but for the reasons that I set out and the very distinct needs that Scottish agriculture has, I am absolutely committed to ensuring that Scotland does not lose out. There are a number of options that can go forward in relation to how the replacement of common agricultural policy would go forward. It is important that those decisions take place as that process begins tomorrow. It is also important to be in dialogue with stakeholders such as the NFU Scotland and Andrea Ledson will meet the new president of NFU Scotland tomorrow, for example. You are quite determined that we will not lose out compared to our current arrangements. I am absolutely determined to ensure that. Another area that you touched on earlier was funding for science and so on, and a similar question with regard to the horizon 2020 funding. It is not preallocated. If the UK replaces that horizon 2020 funding, would it continue to be on a competitive basis? I think that it is too early to say that. We are very alive to the issue and to the view, both in relation to that and other funding streams. I was in Berlin 10 days ago when I was at the free university there. We had quite an extensive discussion about funding streams going forward and, obviously, Erasmus as well. We are alive to the issue, but I could not give a commitment at this point. On that point, Mr Mundell, you will be aware of the recent report in the Times newspaper on the Government's sectoral priorities, which said that education was a low priority. Given the importance of universities to the Scottish economy, why has education been designated by your Government as a low priority? It is not a low priority and, if you look at the white paper, it is identified as one of the 12 priorities that the Prime Minister has been very clear. Are you saying that the report in the Times was wrong? There are many reports in many newspapers and I think it is best not to comment on individual reports. What we have is a Government white paper that has been issued, which emphasises the importance that is put on to science and research. On Mr Johnson's point about the common agricultural policy funds, we currently get 16 per cent of cap funds in Scotland, which supports the rural economy as well as individual farmers. Can you guarantee that we will get the equivalent of that 16 per cent after we leave the EU? I have set out that we do not know what the shape of that funding model will be in relation to the support for agriculture. I have given Mr Johnson a very clear commitment, and I personally have talked about what my roles and responsibilities should be. I am absolutely committed to ensuring that the new arrangements that Scottish agriculture does not lose out. A couple of questions regarding the Sule convention and Scotland. What is your assessment of section 288 of the 2016 Scotland Act? I will read the particular section that states that it is recognised that the Parliament of the Native Kingdom will not normally legislate with regard to devolve matters without the consent of the Scottish Parliament. That is the position. With that, after the 2014 referendum, the Smith commission recommended that the Sule convention be put on a statutory footing. You will be aware that Lord Wallace, when he was the general advocate in March 2015, had stated in the laws that the Smith commission recommended that we should put the Sule convention on a statutory footing. We have taken that faithfully and discharged it. You will also be aware that the Devolution for the Powers Committee in its interim report of June 2015 raised concerns about the proposals. That was that unanimous report. You will also be aware that, in the final report of the Devolution for the Powers Committee on 11 March 2016, we once again raised the issue of the Sule convention and what was proposed in the bill. You are also quoted, speaking in the UK Parliament, stating that the permits of the Scottish Parliament is now written in law, as is the Sule convention. Very recently, in the Supreme Court case, Mr Keane, in his verbal submission, to the Supreme Court stated that the correct legal position is that the Parliament is sovereign and may legislate at any time on any matter. That is specifically set out in the devolved legislation itself, section 287 of the Scotland Act 1998. Later, Mr Keane stated that it does not appear to me that there is any practical change as a result of section 288 emerging into the Scotland Act 1998. With those particular points that I have put to you, I am quite sure that anyone who is listening and anyone who has read any of the documentation is online. We could probably come to the same conclusion as myself, that what is in the Scotland Act 28 regarding the Sule convention is meaningless, worthless and could be removed because it does not have any effect on what actually takes place in this Parliament. I do not accept that interpretation. If you look in detail at the Supreme Court judgment, it sets out what a convention is. That convention has been placed on illegal footing, but it is a convention. That was thoroughly debated in its passage through Parliament. I do not think that anyone who paid specific attention to that issue was in any doubt as to the legal basis in relation to that convention. Indeed, if you care in terms of the Supreme Court to look at the pleadings that were made by the Lord Advocate on behalf of the Scottish Government, he does not challenge the basis of parliamentary sovereignty. I have made it absolutely clear that there is no following the judgment, and there is no intention to change the operation of the Sule convention as we engage fully with this Parliament. I have said, for example—I was very clear, and indeed the Scottish Government appeared to have accepted it—that the article 50 bill did not require a legislative consent motion because it was related to matters that were entirely the responsibility of the UK Government. However, when we bring forward the great repeal bill, which I anticipate on the basis of questions that I have answered before, we will change powers and responsibilities of this Parliament. That is a matter subject to the drafting that would require legislative consent. Of course, we would seek that. Certainly, I am sure that you could probably understand that my position and my interpretation, but I also probably note out many others as well, that when you have a UK Government representative, Mr Keane, highly stating that it does not appear to me that there is any practical change as a result of that particular section of the act. It clearly indicates that what is in the act does not mean anything. In relation to the convention, it has put the convention on a statutory footing, but it is a convention. Of course, all the other range of powers and responsibilities that were included in that act are very significant. I understand yesterday that, in the Scottish Parliament, the Parliament set the rates and bans for income tax for earned income in Scotland. I regard that as very significant. That could not have happened other than the basis of the Scotland act, but the sole convention is a convention. It has been put on a statutory basis. We could have a very academic argument. There is another convention called the Ponsonby convention. If you will indulge me, convener, I have always wanted Bernard to ask me about that, because I understand that it relates to international treaties, but there are conventions that are placed on a statutory basis. We are absolutely, in the UK Government, committed to abide by that convention. That is the approach that we are taking in all our dealings currently with the Scottish Parliament, and in relation to how we approach Brexit. No, that is very helpful. Thank you very much. Thank you, Rachel Hamilton. Secretary of State, since you last gave evidence to the committee, we made a visit to Brussels. I observed that the notion that Scotland could negotiate its membership of the EU was dismissed by a number of EU officials. What is your assessment of the likelihood of the EU-27 agreeing to allow Scotland to either inherit the UK's EU membership or, indeed, join with a differentiated arrangement? I set out in my opening remarks that I do not believe that there is any evidence at all to suggest that Scotland could either inherit the UK's position in the EU or could remain in the EU as the UK left. Of course, if the constitutional arrangements in Scotland were to change, Scotland would have to apply to become a member of the EU. If we look at newspaper reports, there are numerous conflicting newspaper reports indeed as to what that process would involve, but that is quite clear. At the end of this Brexit process, Scotland will be out with the EU, along with the rest of the United Kingdom. Thank you. As someone who accompanied you to that Rachel Hamilton to that visit to Brussels, I was struck by the positive response that we got from many officials and politicians towards Scotland. Indeed, we did have a meeting with the Constitutional Affairs Committee of the European Parliament that has recently said that the calls for a differentiated approach for Scotland ought to be addressed. It has taken quite a substantive evidence. Given that, the Constitutional Affairs Committee of the European Parliament, a very important committee, has said that Scotland's differentiated petition should be addressed, does not that put even more obligation on the UK Government to respond to that? We now know that Europe's keen to respond. I hope that I set out in my earlier remarks that Scotland's place in Europe proposals are being addressed in a series, and I hope in a constructive way. I am not in any way offering a pretence that, ultimately, we may agree on everything. There is a very substantial body of views and outcomes that we do agree on. That is clear, and we will continue to work with the Scottish Government to reach a conclusion on which we will offer a definitive view. I understand why people are skeptical of that, Secretary of State, because Scotland's place in Europe, the first part of it, proposed that the UK should remain in the EEA. Before that was even considered at the GMC, the Prime Minister made her speech at Lancaster House and completely dismissed that and said that we are outside the single market. Right from the outset, you talk about a respect agenda, but right from the outset, you dismissed a key aspect of that paper—a big compromise, in fact, because it is about UK membership of the EEA. That was not even considered. The committee brought out a report on a differentiated immigration system for Scotland, which was unanimously signed off by the committee. You are dismissing that. On those two areas, you say that you are listening to this place and that you respect us, but you have just dismissed Scotland's views. I have not done that. I do not think—of course—that Scotland has two parliaments. The views of this committee and this Parliament are very important, but wider views are important, too. My reading of Scotland's place in Europe was predicated on the basis that here is what we would ideally like the UK to do, but we do not anticipate that they will do it because of the various pronouncements that the Prime Minister had already made in relation to that. The document itself does not, on my reading of the document, anticipate that part 1 will be the outcome. What substantive part is about parts 2 and 3 and how those can be achieved. I am sorry if I did not make it clear that I have your report. I take that report seriously. It has detailed figures and numbers. Some of those are not—we were talking about the Times newspaper. The Times newspaper is an interesting report today about migration in it. What I will undertake to you and to the committee is that I will respond formally. I will do that in the way that I always do in terms of having an open mind in relation to evidence that is provided, but I am not in any way disrespectful of the report or the work of this committee. I particularly commend the first piece of work that has been extremely useful and which we have used within the UK Government that set out initial views from those people from whom you took evidence. I am glad that you found it useful, obviously. Those people overwhelmingly wanted to remain in the single market just before you go. I appreciate your time and that we have gone over time. You earlier mentioned, in response to Emma Harper's question, water regulations as an area of interest in terms of regulations throughout the UK. I thought that that was an odd example given that water is privatised in England and it is not in Scotland. What is that? I was referencing perhaps I should be more specific to water that is in rivers, in the rain and the coastal arrangements. What I could do and subject to, caviated by just confirming with the officials, I could share with you maybe a specific example of what I was referencing, but it was not in relation so much to drinking water as such, although, of course, some other water services. In the report that you referred to, what Scotland thinks, there was unanimous concern from the environmental organisations that the loss of the European Court of Justice would mean that the Scotland's high quality of environmental regulations would not have an arbiter. Speaking to your colleague Greg Hans earlier, he was not able to say what kind of arbiter would be in place to replace the European Court of Justice, which Prime Minister says very clearly that we are leaving. Do you understand those concerns of those environmental organisations in Scotland? Firstly, I do, but I do understand those concerns and we very much need to maintain environmental standards. That is one of the reasons that the great repeal bill in the process and the legal issues that Mr Scott referred to are so important, because we do not want the point that we leave the EU for that hard fought, in many cases, environmental framework to be undermined, and that is why the great repeal bill is so important. Clearly, within our own UK legal system, we will have the Supreme Court, but in relation to any other arrangements, there will have to be an arbitration body. There are, in relation to a number of other arrangements that the EU has with different organisations, but Mr Hans is being open and forthright that it is not clear what that will be at this stage, but it is clear that there will have to be one. Thank you very much for coming to give evidence to us today, Mr Mundell. Can you give us perhaps some indication as to whether you are able to come back after the article 50 letter is submitted? I would be very pleased to do so.