 Good morning and welcome to the fourth meeting of the Culture, Tourism, Europe and External Relations Committee in session 5. I would like to remind members and the public to turn off mobile phones and any members using electronic devices to access committee papers should please ensure that they are turned to silent. Today we are taking evidence on the implications of the EU referendum for Scotland and we are yn oedda'r Gwllff mwy o Gwllff yng Nghymru. Felly, rwy'n credu i'r ffyrdd a'u ffordd i'r Caerdydd y Cyfnodol i'r Gwllff ac i'r Minister ffyrdd o'r Unedig Llywodraeth a'u Llywodraeth i'r Gwllff. Felly, rwy'n credu i'r ffyrdd i'r Gwllff ymwysig, Professor Anton Muscatelli, Principale ac Fyfrdd Caerdydd y Chwmddiad Gwllff yng Nghymru, i'r Caerdydd i'r Cwll ffyrdd i'r Gwllff, Professor David Edward, former judge of the European Court of Justice, and Dean Marriott Leslie, former diplomat, members of the Standing Council on Europe. Welcome, and thank you for coming to give evidence to our committee. Can I open just asking you generally about the work of the Standing Council and how it has informed the Scottish Government paper on Scotland's place in Europe, perhaps Professor Muscatelli would like to start? Thank you, convener. The Standing Council on Europe began its work shortly after the referendum. We've been meeting roughly every month, six weeks in plenary session, and we've had a number of work streams ranging from issues such as the economy and financial services, HE and research, human rights and social protection. There has been one work stream particularly on the options that Scotland could scope out in the light of the Brexit referendum. The option to work stream scoped out in reasonably comprehensive detail all the possibilities for the Scottish Government to consider in terms of options. However, the work that was taken into the Scottish Government should be pointed out. The paper of the Scottish Government, not the paper of the Standing Council, is very much a policy proposal of the Government. The paper was then, once it was fully prepared just before it was published, we were consulted on that, particularly members with expertise in the variety of areas that the paper covers were consulted before the publication. However, it is very much a Scottish Government policy paper, as opposed to the paper of the Standing Council. In terms of the membership of the Standing Council, certainly Professor David Edward and myself were part of that option subgroup, and they married Leslie as part of the plenary group that was consulted at the final meeting before the actual publication of the paper. However, it is very much a Scottish Government policy proposal, which we then discussed before its publication. I would simply add that it is important to appreciate that we do not have individually or collectively a particular political position. I personally do not know the political allegiance of most of the other members of the council, and it is certainly true that, as it was said in paragraph 15, the views of the Standing Council members naturally differ on some aspects of the analysis and options in the paper. However, it is true that all share a common concern to limit the damage that Brexit will do to Scotland, so that is coming to us. The Scottish Parliament has voted to support the Scottish Government's efforts to keep Scotland in the single market. The work of the committee so far in the reports that we have published very much supports the argument that Scotland is better off in the single market. Since the Prime Minister's recent statement at Lancaster House, we now know that the UK Government is taking a very different position and intends to take the UK out of the single market. What do you think the challenges are in terms of the UK Government's position and the Scottish Government's position, and can those challenges be reconciled? I am starting, and colleagues have been wanting to come in. Speaking personally, I am sitting out here, and I think that this is probably the one point on which there is complete unanimity around the Standing Council. I think that it was very disappointing when the Prime Minister announced that she had an intention to effectively take the UK out of the single market. Our Standing Council members have made it clear in various interventions that we believe that membership of the single market is economically, socially and for other reasons absolutely key to the future of the UK and Scotland. I think that what we now face is certainly a difficult situation. I should perhaps make a few points at the end about whether the sort of route that the Prime Minister has charted is actually realistic in terms of timescales, but it does certainly take us into the territory of exploring alternatives to what this paper, Scotland's Place in Europe, set out as sort of the first potential solution, which is that the UK as a whole stays in the single market as probably the best solution. It takes us into the territory of exploring as to whether a differentiated solution is possible. Perhaps I should comment on some of the elements of what the Prime Minister said, because I think by saying that she would like to take essentially the UK out of the single market, and then there was some equivocation as to whether the UK should leave the customs union, although I think that it is increasingly clear that she is intending to take the UK out of the customs union. One of the difficulties with the timetable that has been said is that it is extremely challenging to essentially agree a bespoke deal, which is essentially a standalone free trade agreement in two years, while at the same time conducting a negotiation over the divorce settlement with the EU. I think that most independent experts, including some on the Standing Council, have expressed the view that that is really unrealistic to conclude all that within two years. We will be lucky in the first two years to conclude the divorce settlement and then perhaps some broad headlines around what a free trade agreement might look like. That is one of the areas of concern. Another area of concern is how you would develop a transitional arrangement to avoid a cliff edge, given that in order to develop a transitional arrangement you need to know where you are going. That is why a number of independent commentators have pointed out that perhaps the single market might still remain in play as a transitional arrangement. However, that is difficult and almost impossible to reconcile, given the red lines and the objectives that are set out in the Prime Minister's statement. That sets out the current situation. It really does take us into the territory of the differentiated solution, as far as the Scottish Government's paper is concerned. However, there is still a lot of uncertainty as to what the Prime Minister's statement actually means in terms of negotiations because of the fact that it would be difficult to achieve all that within the period of the article 15 negotiations. However, colleagues may have additional views. I am sure that that is right. I think that we all know that it will be extremely important. I think that this would be a view of the Standing Council probably in so far as we have discussed it, that when the Prime Minister does trigger her article 50 letter notification to the rest of the EU, she actually says something about the future framework for the United Kingdom's relations with the EU. The article 15 negotiations are about the separation, the divorce, the settlement of financial and personnel and other administrative matters. Unless the Prime Minister herself or the British Government asks for a parallel process to do with the future framework, as is specified in article 50 of the treaty, the EU isn't going to offer it to her. The EU Commission is all ready to work on the divorce settlement. They're not ready, haven't really consulted the EU 27 in any great detail yet to work on a future framework. Unless the UK asks for it, that pressure to do the two things in parallel won't exist. Even if they do, as Professor Muscatelli was saying, I think it will be extraordinarily difficult. I doubt if very much will get underway before the French and German elections, so not until the autumn of this year. Then time is very short before the 2019 European Parliament elections. The divorce settlements will happen. There's a clock ticking on that. A future framework, even if it's only a very broad set of heads of agreement, will, I think, be very difficult to negotiate politically in the remaining time. Thank you very much, Sir David. I think one of the important things, and I entirely agree with what has already been said, but one of the important things is to appreciate that this isn't a world of either or choices. The president of the after-court gave a lecture in Edinburgh on Monday evening, and he said that we're not looking at black and white photographs. We're looking at a series of moving pictures, and not just one, but several. The idea that you're either in or out of the single market, the idea that there is a customs union and you're in either in it or out of it, is to oversimplify the issues, I think. A way I would illustrate it is this. First of all, in the field of competition law, which is very important both in the UK and in the EU, British companies cannot divorce themselves from the jurisdiction of the EU authorities, which includes the Commission and the Court of Justice, insofar as their agreements have effects in the territory of the European Union as it remains. And because the Commission will have jurisdiction, so also will the Court of Justice. You cannot sell goods into the EU without complying with the EU standards. Where there is doubt as to the interpretation of those standards, the Court of Justice has in the EU jurisdiction to interpret those standards and provide the authoritative determination. Similarly, the Court of Justice has the ultimate jurisdiction to decide how the common customs tariff is to be applied. So a way I put it is, you may escape the direct jurisdiction of the Court of Justice, but you do not escape the jurisprudence of the Court of Justice. The Court of Justice case law is still there. So the idea that you divorce yourself entirely from this machine is simply not in accordance with the facts. And it is as well that people realise that before they start discussing are we in, are we out. The question is what kind of relationship are you going to have and how will not just companies, but how are they going to work? Is there, if a company invests in one of the other member states of the EU, are its directors, its employees, its salesmen, its artisans, its tradesmen, are they going to be able to move across frontiers freely in order to to operate this enterprise? Are doctors, dentists, architects, nurses going to be able to look for work in other member states and are the nationals of those member states entitled to come and work here? All those things are involved in the relationship and simply to say we're going to be in the single market or out of the single market in the customs union or not in the customs union is a gross oversimplification of the problem. And that's why I think both my colleagues have said and I would entirely agree that the idea that all this can be wrapped up in a couple of years is for the fairies. Very nicely put, thank you. All members want to come in with questions and we only have an hour, so I'm not going to take any supplementaries. I'm going to try to get every single member in and I know there were a couple of members wanting to ask supplementaries, but you will get your turn. I'm going to pass on to Lewis McDonald. Good morning and a very interesting introduction to this morning's proceedings. I guess a couple of things come out of that that are, I think, important. First of all, and following on from Sir David's comments about the complexity of all of this, but also the comments that were made earlier around the prospects, the possible shape of transitional arrangements, it seems to me that whatever the transitional arrangements are on, and as has been rightly said, we don't know where they're going, but we do know where they're starting from, and that's within the customs union, within the single market, and with the application of all these rules at the point that the transition starts. I guess my first question in relation to both the UK and the possibility of differentiated solutions within the UK is that a correct interpretation, and does that allow for, does the fact that we start from here allow, in a transition period, for differentiated solutions to be developed, both for Scotland and for other parts of the UK? I would make two points in response to that. First of all, yes, I think, and this is a personal view, obviously, as opposed to the view of the Standing Council. I've certainly written about the possibility that, since at least we know where we're starting from, if we want to develop a transitional arrangement because to avoid falling off a cliff edge, then actually, for the whole of the UK, an EFTA-EA solution is possibly the best solution. It's interesting that David Edward mentioned the President of the EFTA courts lecture. I think one of the things he stressed in that lecture in Edinburgh was the fact that I think there's a real misunderstanding here in the UK about the differences between the EFTA court and the operation of the European courts. The EFTA court actually would appear to satisfy some of the red lines that the UK Government has said around the primacy of its decision-making over the justice system of the EFTA countries that are part of the EA. There are also emergency provisions regarding migration within the EFTA agreements that could have been developed. Personal view is that, if things get really difficult, as they will, then, actually, if you want to build a transitional arrangement as a bridge, you build it close to where you are, as you said. At least we understand what the status quo is. My second comment would be in relation to the differentiated agreement—potential of the differentiated agreement—is that, yes, indeed—I think that if you look at the detail of the proposal that's in Scotland's place in Europe, it is about how you could keep Scotland within the single market if the rest of the UK were to decide to be outside it. In order to maintain the integrity of the UK market, what the proposal makes clear is that you need to keep the whole of the UK within the same customs zone, and to develop arrangements that allow the regulatory side of the single European market to be, in some way, conformed closely to that of the UK, so that there isn't too much divergence. Again, if you start with the status quo, if you have UK companies that are still wanting to export to Europe, as Sir David Edward pointed out, ultimately, if you want to export to Europe, you have to adhere to European standards, then the closer we remain to the status quo, the more likely it is that you're going to be able to apply differentiated solution as well. This is the territory in which additional work has to be done to address some of those issues of how you would implement a differentiated solution. However, as I've said, and some other members of Standing Council have said, it is entirely technically feasible to do that, challenging the way it is. As somebody else has pointed out, there is no easy solution to Brexit. The only easy solution would have been if the UK, as a whole, had decided simply to slip naturally from EU membership to FTA membership. Everything else is complicated, whether hard Brexit is complicated. There are no easy solutions in this territory. When looking at the Scottish Government's paper, as you say, it is looking at differentiated solutions, the fundamental challenge that seems to me in making any of that work is seeking to operate as part of the United Kingdom, part of the United Kingdom customs union, as you say, but also to comply with the rules of the European single market, because although we could readily do that at the beginning of a transitional period, by the end of that transitional period, the United Kingdom will have already diverged from single market requirements, because that legislation and regulation is constantly developing within the single market. For me, the difficult question, which I'll be putting, I'm sure, to Michael Russell later in the morning, but I'd be very interested in your views, is how is it actually possible in the real world, in the real economy, to apply two different sets of rules without having to make a choice ultimately in some way as to which market and which customs union takes precedence? I do think it's possible to have a parallel market solution. That's essentially what's described here. I think what you would need to do is certainly have a look at the way in which business regulation is framed in the UK as a whole to ensure the word I've used when I've ever written about this in the media has been to tether, if you like, UK business regulation to, in some way, to European business regulation. I would come back to this point that actually it's in the interest of the UK given that whatever happens in terms of Brexit, 45 per cent of our exports in the UK as a whole are likely to go to the EU. It's actually in the UK's interest not to diverge marketally, otherwise those markets will collapse and so actually having Scotland within the single market in a differentiated solution might actually be a huge advantage to the UK as a whole in a differentiated solution. So, yes, it's technically challenging. You'd need to look at how you would run, you know, you could think of a competition in markets authority, for instance, and this is just one aspect of business regulation, of course. That is a setup on a federal structure, essentially, which looks at the relationship between these two elements. You're absolutely right, of course, European standards will evolve, but I repeat, unless we suddenly start exporting much more to the rest of the world relative to Europe and as an economist I think that's very unlikely given that we know that economies tend to trade much more with their geographic neighbours, then the UK will have to confront how it relates its business regulations to those of Europe. Again, to echo what Sir David Edwards said, we may be outside the EU, but the EU is not going away, it's still there, it's still the biggest market and therefore the rest of the UK will have to find some way of tethering its business regulation, et cetera, unless we decide to, you know, completely over, you know, change the way in which we do business and go for an all-out trade war. I mean, I know there's been some rash comments made in the press by, I think, the chancellor said something around changing the way in which we do business, but frankly, in the real world where we are going to still be trading with the rest of the, with the EU, it will be in the rest of the UK's interest to tether its regulations in some way to the... Very, very briefly, Professor Maskatelli, if the UK Government was to agree to tether its regulation in that way, would there be any need for a differentiated solution? It would make, actually, a differentiated solution much easier if we wanted to be fully members of a single market, actually. I mean, what is undoubtedly true is that the softer the Brexit, the easier it is to implement a differentiated solution. And I'll come back to also this other point. If we have a bespoke free trade agreement with the EU, given that 45 per cent of our trade depends on it, we're not Canada, we're not South Korea that are entering a free trade agreement with the EU, how would you ensure that you could maximise the benefits from that free trade agreement? That is the bit in the UK's plans that is totally unknown at the moment. We have no idea how they're going to implement that, and my view is that they're going to have to tether our business regulations at UK levels in some way to the EU. Thank you very much. I'm afraid I'm going to have to ask questions and answers to be as brief as possible if everybody's going to get in Richard Lochhead and then Tavish Scott. Two questions, and thanks for giving evidence this morning. My first question relates to my experience of European negotiations when I was Cabinet Secretary, whereby often we were told in EU negotiations, which clearly involved the 28 member states, that things weren't possible and that there was no precedent for them when one country was asking for something different to other countries, and then suddenly a political agreement would be struck and they got what they wanted. My question is given your diplomatic expertise and legal expertise, where's the boundary between legal constraints and precedence and what can be achieved through political negotiation in terms of Scotland achieving outcomes that we want to see with a differentiated relationship with a single market? Shall I perhaps take that one? First of all, it's not a free-for-all, so people who say to you with political will everything can be negotiated overlook the fact that in EU Europe there are treaties, there is a body of jurisprudence and so on, so it's not a question of always being able to negotiate absolutely anything provided there's a political will. But in the case of Brexit, the negotiations between the United Kingdom and the rest of Europe, and then what might happen between Scotland and the rest of the United Kingdom internally within the UK, it does seem to me the starting point is the political one, because actually the legal frameworks in terms of the EU treaty will have to be amended to take account of the UK's exit, there will have to be a revision of some of the financial provisions, some of the voting rights and so on, so once you start opening up treaties and ratification it is possible to open up a space in which other things get negotiated as well and that incidentally would also have to be true for EFTA and the EFTA conventions and agreements if anything were to happen on that front. So to say it is impossible to envisage any change to the legal provisions as they now stand is simply wrong. When it comes to what happens, first of all the absolutely crucial position seems to me to be the one of the United Kingdom government. If the United Kingdom government under our current constitutional arrangements refuses to take account of the wishes of the Scottish Parliament and government or indeed the Welsh Assembly and government to people in Northern Ireland, then it is very hard to see how we would make progress but if they did and if they came with a solution that was compatible with the spirit of European legislation compromise, the single market, the interests of the other member states I think things are possible in a world in which the other 27 know that Europe and its economy and its politics are under challenge at the moment. So whether it's doable is a question then of time will detail expertise not making silly mistakes but there is a space where things could be negotiated with skill and goodwill and anyone who says that's impossible for a legal reason is probably wrong. That's really helpful and my second question relates to your observations as a panel on the on-going relationship and negotiations between the UK Government and Scottish Government since the referendum to try and achieve those outcomes. What's your observations of how the negotiations are going? Party to those negotiations in the panel. The panel meets to give advice to the Scottish Government and it's the Scottish Government who's party to them so I can only speak for myself what I know is what I see in the press. I think it was extraordinarily unfortunate that the Prime Minister should the Scottish Government got out with its paper the one the committee is discussing today as the first bit of the constituent parts of the United Kingdom to say quite plainly what it wanted and where it saw the options. I think it was very unfortunate that the Prime Minister's speech seemed to set that aside at a point where it hadn't been considered in any detail in the Joint Ministerial Commission. As I understand it the paper is still under consideration in that Joint Ministerial Commission but with the clock ticking towards the British Government's own timetable of the end of March at the latest for its article 15 notification I find it hard to see how a serious and sincere attention could be given to this paper in all its details in that time along with all the other things on the agenda but that's a very personal observation. I think my colleagues will speak for themselves but I think it's fair to say that that's not part of the remit of the Standing Council to have a view on the politics of relations within the United Kingdom. I would echo again on a personal level what the marit has said. I would add one other bit that I do think it's really important and a run up to the triggering of article 50 that those discussions are intensified on what arrangers might be possible within the UK. I'm saying that because there are so many moving parts to these negotiations that unless you can at least have some traction and begin to join some of the moving parts within the UK then becomes really much more difficult to do that in the more dynamic environment that will of the negotiations post article 50 which is why I think it's really important that if I gather from the last meeting of the GMCP there was a commitment by the Prime Minister to intensify scrutiny of the proposals well I would certainly encourage that because I think this is a critical time. Okay, thank you very much. Did you want to come in so David? No, not on this. Okay, Tavish Scott. I wonder if the panel would agree that seems to quite a lot of people now there's a huge disconnect, that's a harsh word, a huge difference between business and trade and politics and the process of whatever's going to happen after article 50 is triggered. My observation is that Tuesday night in Lerwick I met the ferries Prime Minister and he was telling a group of us that trade discussions are already under way informally. The idea that nothing's going to happen for two years is cloud cuckoo land, it's for the ferries as said earlier on, it's already under way because there are lots of European companies who need to trade into the UK and will continue to do so. Have you any evidence or has the council taken any evidence on that? What seems to me now be a big difference between us all endlessly discussing things that we don't know any of the answers to and the reality of business just getting on with their lives? I've certainly spoken and as many of my colleagues with a number of different business sectors and I have to say it is it is variable, it depends on the nature of the sector. I think for those sectors that depend critically on the single market in the sense that the value chains are spread around Europe whether that be motor vehicles or aerospace, I think they are really genuinely worried because I mean I don't I think they'd see the dangers that my colleagues pointed out earlier which is that we will fall off the edge of a cliff because there simply isn't the time to negotiate a free trade agreement that will allow us to smoothly transition into a new post-Brexit world. Yes, of course there are, there'll be some sectors for whom actually transition to post-Brexit work will be less painful because actually the value chains are less integrated so what they're dealing with mainly is as long as our product or service is going to be allowed in the EU we will cope with that and as you say they will just get on with it but I have to say my my impression of speaking to business sectors across the UK is that there is considerable concern that none of this will be actually pinned down in the next two years properly and that there is a danger week that we could have a very hard Brexit without an FDA in place as most of us predict after two years and therefore essentially reverting to WTO rules which why aren't they seeing that more forcibly why aren't they seeing us jobs in every part of the United Kingdom well that's interesting I mean I think some of them are I mean if you look at financial services I think they have said very loudly I mean I sit on it on a group that is looking at a particular sector around you know the city of London financial services and I mean they are very worried and they I think they what they're trying to do is they're trying to make those points behind closed doors to UK ministers who at the moment the response seems to be it'll be okay don't don't worry we will deal with it I think I think this is a difficulty I think there is a such a political imperative to deliver Brexit that they're trying to do this behind closed doors but I do think my my impression is that with the exception of those sectors who will feel they won't be affected those that will be like financial services etc are making these points loud and clear behind closed doors it would mean that have a say at the table but we would have to abide by EU regulations I wondered if you had a comment on how that would affect the way that we're trying to deliver the result of the referendum let's be clear about how the EEA works the EEA does not directly adopt EU law EU law has no the way in which Norway Iceland and Liechtenstein are within the single market is because the EEA agreement includes provisions which mirror the treaties insofar as there is secondary legislation of the EU that is adopted international law by the member states of after by their own legislation so the the relationship is not one of dependence on the other on the other hand the undertaking is that the the after states will incorporate the law of the EU insofar as it applies to free movement of goods persons services and capital so I think it's it's important to to realise that that this is an illustration of the way in which participation in the single market can be there without the commitment of membership of the EU or subjection directly to the law of the european union or the jurisdiction of the court of justice but as I said before you don't escape the case law of the court of justice or certain aspects of the jurisdiction I don't know whether that answers the question could you well it was it was more to explore how we wouldn't actually have a say at the table so it's sort of going against where we're trying to shape shape our negotiations but we wouldn't necessarily have a say at the table well it is clear and one of the one of the problems for the after states and particularly I think for Norway is that they are compelled to adopt legislation domestic legislation to comply with the the rules of the single market so but if you want a full seat at the table you can't have a full seat at the table unless you're a member of the EU that's the short fact and you can ask for of course within certain areas like justice and home affairs provided you go fully into it then you may have a seat at the table in the discussions about that but your seat at the table is not assured so the idea that you can be in the on the island of Atlantis in the middle of the Atlantic ocean but still fully part of the system is for the ferries thank you going back to the customs union I think the Scottish Government's desire to prevent a customs border at Gretna is entirely understandable and if we are optimistically assuming that a differentiated agreement is possible a solution for that in particular needs to be found my reading of it is that there's far more political well and more importance placed on finding a solution for the island of Ireland for obvious reasons and that a solution can be drawn from that would hopefully be somewhat transferable to Scotland but there does seem to be huge concern that no solution for Ireland has actually been found yet are you aware of any options that would be possible for the north in the Republic of Ireland and that would have any ability to transfer to a Scottish English internal union my understanding is that from in terms of Ireland that really the the only solution sense of people movement is to maintain the common travel area which as the papers Scottish Government's paper points out that immediately you know validates what the approach could be as part of differentiated solution for Scotland which is that you would essentially enforce a differentiated approach to visas and right to work at the workplace as opposed to doing it at the border the border around the British Isles essentially would be the common travel area and that would would would be secured but you could then have differential arrangements and that's the only you know that's the only approach you could take if you have Ireland within that common travel area in terms of border arrangement for goods well I mean there are there are other examples around Europe of situations like you know Norway and Sweden for instance where Norway isn't within Efta within the single market but is outside the customs union and you know trade does work reasonably well within Scandinavia I think these are the sort of solutions that would need to be applied for Ireland which would then by extension of course apply if if a differentiated solution was offered for Scotland there's exactly the same principles would apply I think maybe I could just take this up by giving an example let us suppose that there is a free trade agreement between the United Kingdom and the United States and that free trade agreement requires the United Kingdom to accept hormone treated beef and let us suppose that the EU continues to ban hormone treated beef I don't see how you can without some form of customs control avoid a situation in which hormone treated beef is is imported into Belfast and then taken in a lori into Dublin and from Dublin taken to the other member states of the EEA of the EU and therefore they are going to require some form and I don't know what it might take but you cannot say that you're going to have a totally borderless situation in Ireland and once you start evolving solutions to deal with that to avoid a situation in which you have a form of hard border then you can discuss what is it's going to be like between it might be like between Scotland and the rest of the UK but I just I think it is it is not the case that you you can have such an arrangement within the island of Ireland where the Republic of Ireland remains a full member state of the EU and say no that cannot be applied to Scotland. How do you want us to come in on that particular point? It is similar to Rossi's question about that because Theresa May and Enda Kenney said this week that they wanted a seamless frictionless borders of the future and yet our Scotland in Europe document said that it's apparently a red line for the UK government to control the border so we do have serious obviously considerations because of our NHS and our staff movement of people and all the trade aspects as well so I guess any additional comments would be welcome. Might I come in here convener? I think people very often talk in a loose way about borders and about jurisdictions and control and controls when people are saying things like it is a red line not to have a hard border what they're usually talking about is the visible in your face appearances of a line across a piece of geography they're talking about not having something that's got two flags around a bit of road and people in uniform on either side of it so David Edwards is absolutely correct that you can't avoid some of these difficult questions of one set of controls applying in one jurisdiction and another set in another and you will have to have a means of policing that controlling it and enforcing it so it seems to me that the British government has a conundrum that it is trying to deal with and I simply don't know where it's got to on this yet to find a means of implementing such controls as is necessary without doing it via a geographical line that is very visible and therefore has a political connotation of its own by its very visibility now as Professor Muscatelli was saying there are examples elsewhere in Europe that could be drawn in if we want wanted between Sweden and Norway for instance they have an agreement that they implement each other's customs and people movement controls so a swede can implement them on behalf of Norway or a Norwegian official on behalf of the Swedish because they have a bilateral agreement to do that so that reduces some element of the visibility some of the controls do take the form of physical controls lorries get inspected but it doesn't happen on a border crossing they have a town that has been designated an office that has been designated and people who have goods in their lorry know that they won't be legally able to take it from one jurisdiction to the other without inquiring whether they have to have that goods controlled and if it is it goes to the depot and it gets controlled it's perfectly possible undesirable but perfectly possible if we are brexitting to envisage controls like that between the north and south of Ireland with with points of check that happen in other ways a lot of the things that control criminality fraud movement of people but also contraband goods and weapons and so on can take place via intelligence led police action between two jurisdictions without somebody having to stand at a border and ask every car driver to wind down his window and it seems to me that those sort of solutions are going to have to be found in Ireland I don't know what the detail will be and that likewise between Scotland and the rest of United Kingdom if something is legal and part of the regulation in Scotland but illegal and not part of the regulation in England or vice versa there are ways of implementing those controls without having somebody standing at Carter bar doing it very much as Stuart McMillan thank you very convener good morning panel the Ivan Rogers evidence to the House of Commons committee this week was extremely interesting and he suggested that the first argument will actually be on what the UK and the EU are negotiating with the EU wanting a sequence of negotiations but the UK wanting everything rolled up into one now earlier comments from from myself deem married you suggested that the two-year timescale is will be it will be unrealistic and also because of the French and German elections and last week a few of us were in Brussels and we we were informed that the last six months of the two-year period very little would actually take place at that point because that's when the member states would have to ratifying any any agreement that's been put on the table so the two-year period therefore seems to be cut down to a one-year opportunity for negotiations if also what you've said today is is to be considered everybody's playing hardball at the moment in practice if the EU institutions the other 27 member states the commission the parliament all agreed an end point for the decision but the ratification and the implementation took a bit longer if as a matter of pragmatic politics that's suited by unanimity all the 27 member states it would of course be possible to reach an agreement a bit later with ratification beyond that and implementation beyond that I think the politics of that because everybody is playing hardball at the moment is getting more and more difficult but it's not impossible that it might suit other people to avoid uncertainty and have a ratification process and therefore an implementation process that took a bit longer what I find inconceivable is that it will be possible to agree the article 50 UK exiting provisions and the totality of the detail of an arrangement for the future relationship between the United Kingdom and the rest of the EU which hasn't yet been defined let alone ratified agreed and ratified I find it very hard to envisage how that could be agreed all in one period within the next couple of years it is certainly true that the commission is saying and many member states are also saying this has to be sequential rather than simultaneous the article 50 stuff first and the second thing later but it's also true and and Sir David is an expert on this that if you look at the text of article 50 it is visage is that that procedure of leaving takes place taking account of the future framework for the relationship between the exiting state and the rest and at least the broad outlines of that future framework what the rough heads of agreement might be what the areas it ought to cover and its shape it seems to me ought to be part of that article 50 process but how you get from there to the full agreement and whether there is any will or indeed political bandwidth and negotiating capability to have some transitional arrangement that stands between the two I'm much more sceptical about because it's very rare as Lord Kerr and other of the members of the standing council has often reminded the public it's very rare for negotiation negotiators to concede in an interim agreement or something that they think they might be unwilling to concede in the final agreement just one point I think one of the issues regarding the discussions going forward will be that on goodwill as you said a moment ago this everyone seemed to be playing hardball at the moment it was we were reminded last week that the treaty of Rome was signed on the 25th of march 1957 and it certainly suggested that for the UK to trigger article 50 not to do it on the 25th of march it's something that you would recommend to the UK government I think all gesture politics that suggests a lack of respect for other parties to the negotiation are to be avoided and that's true of pretty much any negotiation I think and one of the aspect of gesture politics which is best would have been best to avoid is any sort of feeling that in terms of current EU residents that these should be part of the negotiation I think that would have been actually a very good signal of goodwill to indicate that frankly current EU residents rights would be maintained I think very quickly you would have had reciprocity on the other side and that would have engendered some goodwill that is another bit of the of the posturing I don't simply don't understand at the moment on that particular point and goodwill the recent overtures the handholding between the prime minister and the new president of the United States who's been very very upfront about his hostility to the European Union how do you think that's going to affect the UK's position in terms of negotiating with the EU one of the things I don't want to comment on that particular point but I'm a thing on a related point I think one of the things that Lord Kerr pointed out in a lecture he gave in Glasgow quite recently is that the the atmosphere out there whether you're looking at the United States or other parts of the world is increasingly mercantilist and protectionist and so actually we mustn't think as a country that you know life outside the EU is going to be a bed of roses there aren't many countries out there that will enter free trade agreements which aren't putting at the top what their main interests are so let's you know let's not kid ourselves these are going to be an easier discussions and negotiations than they would be with the EU okay thank you very much did you want to come in professor I just wanted to come back on one point of a mate and that is the question of Scotland's position vis-a-vis the EU and compliance remember that there are there is a an EU certification mark the CE and that says this product complies with European regulations similarly in the field of free movement of the professions for example the profession of doctor is regulated under directives and if somebody has followed through the if the universities and the professions comply with these rules then a person who is qualified as a doctor in this country is entitled to practice in other member states so it is not impossible it would not be impossible for Scotland to incorporate rules regarding products or rules regarding the professions which enabled that certification to continue but I do warn that the problem of ensuring continued compliance is does require manpower both in the field of ensuring that the internal regulations comply and are adapted as the EU requirements are adapted and also ensuring that there is compliance by the professional bodies by the producers of goods so it is a it is a complex idea but it is a way in which at least in part Scotland could continue to comply with the EU rules and its products possibly with a special Scottish certification mark accepted in Europe presumably require additional devolution of powers to Scotland to enable Scotland to do that if necessary yes okay thank you very much again to our witnesses thank you and I'll just briefly suspend before our next panel of witnesses arrives welcome back we now continue the evidence session and I welcome the minister for UK negotiations on Scotland's place in Europe Michael Russell and Ian Mitchell deputy director of external affairs with the Scottish government I'd like to invite the minister to make an opening statement thank you very much convener and thank you for the invitation i'm pleased to be back at the committee again and can I compliment the information and evidence gathering which you've been undertaking and the publication of your second report which I think presents a significant and important document in the debate that is taking place on the 20 of december the Scottish Government published Scotland's place in Europe this document and it is the Government's proposals to tackle the diverging democratic outcomes among the nations of this island it is a compromise set of proposals and I want to start with that they require political implementation above all and it is now for the UK government to show its willingness to be flexible to come to the table with a compromise and to understand the politics of the matter this the proposals we make we believe will not only benefit Scotland they could benefit the whole of the UK the central feature is that it does not impose a hard border between the different parts of the island the public and parliamentary debate on the Scotland's place in Europe has been positive and mostly constructive voices from all sides of the political spectrum have welcomed the opportunity to engage with what has been described as the first credible proposal for a post-Brexit relationship with Europe the prime minister has given a promise to give it serious consideration and indeed on Monday at the jmc plenary in Cardiff a commitment was made to intensify the process of discussing this document and the Welsh paper in the run-up to triggering article 50 which is expected to take place within four to six weeks I'd be happy to answer further questions about the jmc process and where we are in that I think there was greatest appointment that the prime minister did not wait to present her government's outline of plans without discussing them with the jmc en which took place 48 hours after she had made her speech and it'll be similar concern today when the government's white paper appears as apparently will appear today that has not been discussed with the jmc en or even the jmc plenary hopefully in the next period we will see more effective engagement and whilst time is running out we still think there is time for an agreement to be reached we don't believe that the prime minister's hard brexit position does reflect the democratic will or the vital interest that scotland has the decision to leave the single market in order to end the freedom of movement for UK and EU citizens essentially declines the first proposal in this which is a proposal that the UK should remain part of the world's largest single market but there are two other proposals in this document which remain live and on the table and I'd be very happy to enter into discussion of them last week statements by the home secretary appear to decline differentiated immigration rules despite recommendations from house of commons committees but we believe that those differential rules which work well in other places could work well in scotland too last Thursday this committee heard reactions to the paper from stakeholders you've heard further discussion today and I welcome the committee's genuine engagement with the proposal I look forward to discussing it with you can I finally say that there are hard choices to be made ahead this paper recognises the difficulty of those choices but I believe the same standard of discussion should apply to the UK government as applies to ourselves and many of the assertions of the UK government are not backed by the same quality of evidence as we have in this paper thank you thank you very much minister I'd like to start off by exploring that the intergovernmental relationships and the GMCEN process now the last time you were in front of the committee you told us that you would keep us informed about your negotiations through the GMCEN and we're pleased to know that I have all your letters since then in front of me and I just wanted to make a couple of comments about those letters 7th of November the 5th of December the 12th of January you wrote to us about forthcoming GMCEN meetings what struck me is that in each case you seem to have received very little notice of the the GMC meetings and in each letter you you kind of rather apologetically say that you're unable to provide us with a detailed agenda of the meeting so I that suggests to me that the Scottish government doesn't really have that much influence over the timing of these meetings or the agendas of them well they can't take place without us convener which probably means that we do have some influence on the dates it has proved difficult to set accurate dates we are beginning to plan ahead but added complication now is the situation in northern Ireland and it is the part of the GMC process that it is expected that there is a presence from all the member constituent parts on the meeting in January it was only late in the day that there was an agreement that two northern Irish ministers should attend and they can now attend if they choose to do so but only to participate in discussion they cannot take things away for decision or make decisions we will have to on a meeting by meeting basis work out whether that continues through to the northern Irish elections on the 2nd of March and then in the process northern Ireland endeavoring to put to place in place an administration we are I think beginning to plan ahead but we don't get given a clear timeline for example on the triggering of article 50 I mean the article 50 is then there's now a piece of commons legislation passed at least article 50 will be triggered according to the prime minister before the end of March that gives us something less than 60 days not only do we not know the day you know we have not seen a single piece of paper that either is a draft of the letter or a paper that says what might be in the letter or indicates what the option should be in the letter in fact it wasn't even on our work programme as recently as January and I think we've made very significant contributions to ensuring that that is not the case from now on officials agree the agenda in consultation with ministers and although you know I wouldn't want Ian Mitchell to go into enormous detail about how difficult it is I'm sure I say a word or two about the fact that this is not a process without frustration and in addition agreeing papers sometimes appear very late in the day and actually having the time to go through them and to sort them is quite a challenge this hasn't been made easy by the United Kingdom Government but we continue to do our very best to engage with determination in the process and we'll go on doing so I mean both as an illustration of our good faith because we do are genuinely trying to get the best out of the situation I mean Ian might want to say a word or two about about that process between officials which goes on all the time yes thank you minister I mean very briefly I would agree it's not so much the timing of the meetings that are the issue but the lateness of papers and not knowing what the papers are going to cover it makes it very difficult indeed to to to brief properly and to think properly before before going into the GMC meetings the other issue of course is the work programme I have to say it has been an uphill struggle to get a work programme that is genuinely discussing some of the really key strategic issues of importance to us especially with article 50 coming up very soon issues such as the single market such as the customs union as the minister said we've tended to find out through speeches rather than any discussions with officials so that they are the two main main issues that's very concerning particularly because there was a community issue when the GMC en was set up and the first minister in her letter to the committee of the fourth and November included the communique and the terms of reference for the GMC en and I just wanted to go through those terms of reference with you and ask you whether you feel that they're being adhered to were four terms of reference the first one is that there was a commitment that the governments would collaborate to discuss each government's requirements for the future relationship with the EU has that happened there is discussion on papers that are submitted largely from the UK government although there has been a paper from Northern Ireland and there is now the Scottish paper in the Welsh paper but the context of that is the discussion is usually focused on positions and then further consideration is is deferred to officials indeed one of the issues I've raised at the last meeting which will be coming to this meeting is an update on where those discussions are second term of reference was that you would collaborate to seek to agree a UK approach to and objectives for article 15 negotiations I've indicated we've seen no paper or draft letter the matter was raised at the GMC plenary on Monday with the prime minister there was a commitment to intensify the discussion of our materials in the run-up to that but there was no commitment that I can take out of Monday of any timescale for seeing the options or the document and certainly there is and I must stress this there is no agreed UK position on triggering article 50 that does not exist at the present moment the last two terms of reference seem to refer to the situation after article 50 is triggered in there that you'll collaborate to provide oversight of negotiations with the EU to ensure as far as possible the outcomes agreed by all four governments are secured from the negotiations and discuss issues stemming from the negotiation process which may impact upon or have consequences for the UK government, Scottish government, Welsh government and Northern Ireland executive looking ahead your experience so far how confident are you that those last two terms of reference will be adhered to we've seen some movements since the first meeting in the role of the chair David Davis and I must pay tribute to him I think he's genuinely tried to ensure that he has conduit both for what is discussed in the meeting to the UK government and then from the UK government back into the committee and I think that is a role that he wishes to play it is an extension of that role is to ensure that he does that during the negotiating process though the ourselves and the Welsh government have raised the issue of participation in the negotiations on the issues of devolved competence we have not yet entered into full discussion of that but that is on the agenda and it would be important that we have representation within that process have you received any indication as to what the UK government's position is on that no no okay I think I have a brief supplementary from Tavish scott I got a number of questions right okay well I'll move to Lewis and then Tavish scott thank you very much and thank you for that introductory section when the UK government says that and we understand said that the plenary that there will be intensified consideration of the proposals from the Scottish government and the Welsh government what is your understanding of that what's your expectation of that process what is being considered is it principal is it detail is it practical issues well it just if I might correct you it's not the UK government said there will be intensification that was the agreement of the plenary that is in the that is in the communique from the plenary there's not much in any of these communiques but that's in it so that was an agreement at the jmcp which was incidentally and it's perhaps worth noting that was the first time the jmcp had met outside London in its entire existence so that does tell you about the nature of this process and you know it needs to be born in mind essentially mark drakeford and I wrote on Tuesday to David Davis to say we believe that those changes essentially must be qualitative not quantitative it's not about meeting more often it is the nature of what we discuss and we have said very clearly first of all to the secretary of state for Scotland last Thursday in a meeting which he sought but to which he brought nothing alas we have said that we now want to see what is on offer in other words they have this paper it contains concrete proposals the we want to see what they are going to say is that proposal accepted or is that proposal rejected or is this proposal should it be the subject of bilateral discussion between myself and David Davis or somebody else and that's what we now need and we need that in the context of saying as the article 50 letter is drawn up whether it's in the letter or in or in subsidiary documentation there is a commitment to say at the very least we will place the issue of a differentiated solution on the agenda for negotiation with the other 27 and in actual fact even if you believe that this cannot be achieved that would be the right thing to do because that would place this within the place it within the discussions and allow the decisions to be made about it in there rather than ex-cathedra by the prime minister or or or the Tory cabinet so we expect that to happen that's what we're looking to happen that would be intensification it would actually talk about the detail of the document as opposed to talks about talks we've had a lot of talks about talks we're done with those we need to have detail you mentioned you mentioned putting those differentiated propositions into the body of the negotiations with other member states surely a first stage that you would perhaps expect is a detailed discussion within the gmc that actually goes beyond well principles i'm keen to understand what I would like to have that detailed discussion but i for in my view that detailed discussion clarifies the issues that should be placed into negotiation you know and and it you know or to say no we're not going to do any of this you know and you know we don't want to do any of this but there has to be discussion about what's in the paper as opposed to the means by which we sit down and discuss which has been the burden of the discussion in too many meetings then a central point in both your proposition and that from the Welsh Government is the issue of access to the single market and what that might look like and i was i was well i was well that's that's really the point i was going to make that the Welsh Government's paper talks about participation in the single market but defines that as full and unfettered access now that is different from what is in the Scottish Government's paper and therefore i'm keen to again to understand how you see that difference and what how the how the different positions can be moderated within the context of the gmc i think there's a spectrum of positions which are complementary but are not exactly the same and then there is the use of language and language in this is is bedevils it membership of the single market in our definition is had in two ways it's had by being a member of the eu or it's had by ea membership through after so that's membership and our proposal is quite clear you know we actually believe that you know the eu is the right place to stay but for a variety of reasons that doesn't appear to be the UK Government's view in those circumstances membership through after the ea is the right thing for the UK they have rejected that apparently so now it's for Scotland the situation i think for the Welsh government is different the Welsh vote was different there are different circumstances prevailing but there it's a complementary position because it is some form of special status and that is the two words that is used by Sinn Fein in their paper which we should not forget does not have the status of a of a northern island executive paper because you know there's no agreement in the northern executive and indeed that does not exist anymore but the Sinn Fein's paper in december which i would commend if people haven't seen it is much shorter talks about special status so i think all of these are in in the broadly the same space i think ours contains the most detailed and clearest proposal of how it could be done but there are you know the Welsh paper has much to commend it and of course the Welsh paper is a joint paper between the Welsh Assembly government which is Labour with one Lib Dem member and a Plaid Cymru so it has a very substantial level of support yes indeed looking at the substance of the proposals in the Scottish government paper one of the issues that was raised in the previous evidence session with members of the standing council was the issue of the compatibility or incompatibility of membership of the European single market by Scotland while remaining as fully part of the United Kingdom customs union and one of the answers we had from Professor Muscatelli was that in order to avoid divergence that would require to be some tethering of business regulation in the United Kingdom with that of the European Union does that therefore mean that the workability the practical ability to make that work really depends on buying to the United by the United Kingdom not just to the idea that there should be a differentiated solution but that the whole of the United Kingdom's approach to the regulation of business and the things that flow from that would have to itself be tied to that of the European Union broadly yes and that is i think what the strangely enough what United Kingdom companies will find themselves having to do um there is a uh you know it is essentially the issue of parallel marketability you know which is addressed in the paper uh if you have these two ways of operating how do they operate seamlessly now the answer to that is we both inherit the same thing at the same time you know on day one we have the same position and then the the level of variation to that position is the issue at risk here or at dispute here now from our position we would want to keep that would be required to keep that within the european context the United Kingdom government might want to and you know there are some indications that they would might want to significantly decrease social protections employment defence safety standards a very interesting issue of that but in reality if they're going to continue to sell into the the eu as it exists they cannot do that because they will they have to observe those if they are going to meet whatever tariff arrangements they come to so per force there is an enormous pressure upon them to to keep that regulatory system the same that's why you know this overblown talk of you know freedom is pretty nonsensical because it's not going to work in that way so the reality is there would be those those things would be together if the uk the rest of the uk began to fall off in those regards then that would have severe implications for its own economy you know but scotland would be able to continue to operate in the way that it operates and of course to sell at a higher standard elsewhere it is interesting this issue of regulation and future i i'm happy to provide this to the committee but it's only come to my attention in the last 24 hours but the there's a statement by the united nations special rapporteur on human rights and hazardous substances and wastes who visited the uk between the 17th and the 31st of january and this relates to regulation about hazardous human rights as it relates to the handling and storage and use of hazardous substances substances and wastes and he draws a conclusion that brexit poses a real threat without a detailed plan brexit appears to be a pandora's box or an opening for deregulation and regression from human rights standards and he goes on to point out the way in which the uk government appears to be moving in that direction now that's bad enough for citizens but actually be disastrous for trade because there would be no company wishing to trade if they felt that there was a dangers in terms of dangerous substances and things of that nature so there requires to be an understanding that there will be a requirement upon the UK no matter what happens on that on that basis and again reflecting some of the evidence we heard previously if the united kingdom enters into trade deals which permit goods for example to be imported that would not be permitted within the european single market what then happens how does that impact on any differentiated arrangements that exist well clearly there would be a major impact upon its own trade and ability to trade and therefore that would be a an action that would damage its own ability to trade it would not per se damage the trade between scotland and the rest of the uk but that scotland would be observing still the highest standards and therefore doing not only the right thing but the thing that gives it the best access because it would be doing things well that's tended to be what works you know it's a bit of a fallacy to say that what works is you you slash you know protections or terms and conditions and you just get on with it unless the intention is to make the rest of the uk a low cost you know sweatshop manufacturing nation then they're not going to do that and indeed the potential for that is probably nonexistent given what happens in the rest of the world i mean there is a great deal of this that is difficult to predict because the uk does not appear to have a consistent or a clear view about how this is going to work for them but the implications you can read uh you know if they refuse to accept that the standards that exist they will suffer economically and thanks and can i ask questions and answers to be kept as brief as possible so we can get as many questions in to have a scout thank you um let's try some facts did the prime minister at the jmc on monday mr rustle say that immigration was the top priority of the uk government i don't know whether she said it on monday i've heard it so often that i don't think i'm in any doubt that there are two priorities one is migration and the other one is judgments of courts outside the uk but in terms of the explaining her government's formal position to the other governments in the united kingdom did she lay that out in crystal clear terms uh or has she evidence or at the gmc i'm driving at the community's questions but point to the gmc i mean it has been laid out at the gmc i can't say whether she did it and we don't normally attribute individual views of an occasion i'll be prepared to but i have heard it laid out in in very clear terms yeah i mean she says it to the Lancaster house speech so you'd think she'd like to say it she may well have said it yeah i may be inoculated against it now well you probably best not to be given it to the yeah quite secondly is business seeing enough on what they judge to be the consequences of an exit from the single market in a uk not scolish business because we know what scolish business position is but in a uk context are you aware of what they're seeing and are they seeing it visibly and authoritatively to the uk government that is interesting i had a meeting with a representative of the uk cbi esti who was in in end we're giving evidence to the house of lords a committee in the xdm euw which i was giving evidence to to the euw committee of the house of lords they published an interesting document which lays out their requirements and they are particularly concerned about free movement of labour or rather about barriers to employment and barriers to trade but i think there is a recognition that whilst they wish to work closely with the uk government and with ourselves and that was a commitment they made and it was a positive discussion they don't it doesn't appear that they're being listened to in terms of some of their key concerns so i think they will and i said this to them and i've said this to a number of business gatherings i think they need to be very clear and explicit about what will work and what won't work and if you have a position on migration which is a position the current position in the uk government you are going to cause very considerable economic damage and has the in that context of has the financial institutions we have here in scotland aligned to the city of london being making that clear they've been continuing to make a number of things clear but they seem to be reluctant to lay down the line that they have they feel to have need to follow i can understand that this is such a fluid situation but you know for many of them without passporting there are severe difficulties but it goes up back also to to free movement you know free movement is a sophisticated thing it's not just about labour moving from one place to another it's about the right to go and and and open up branches or premises to start companies for individuals in the creative industries the digital industries to work elsewhere and to do so as if you were going into the next town and making that point is really really important and the second point that they they need to make us the whole of scotland needs to make 90 percent of population growth in scotland in the next generation is predicated to lie from migration so we write that off at a stroke if we can't we do not have a free movement and given the positive net benefit of migration in scotland which is entirely provable then we also look at a decline in the economy because of that attitude but isn't it isn't for large business both scottish and uk large business whatever happens with brexit for them will be straightforward because they'll just set up a european operation and they'll run out of europe it's the smaller businesses who don't have that ability you're going to be much potentially much more damaged certainly if you're a major bank as major banks are looking at situations you know they're setting up already subsidiaries in or companies in ireland moving to frankfort if you look at the creative the startup digital side advertisements in the media last week from france saying you can have a residency and a special deal if you come and base yourself in paris so that is going to happen and yes those who are not mobile and by that smaller companies and older people not that i'm including you mr scott in that but older people those who are not mobile small companies will be the ones who will pay the price when i had a mobile discussion with the ferries prime minister and lower con tuesday he said there was no disadvantage to being outside the european union if your economy was based on selling fish the conditions i represent is what's the government's what's not going to do about that and i have sections of my constituency that is the economy is based on selling fish i recognize their concerns that's being profound and the issues of the common fisheries policy as mr lockhead knows did not favor many scottish fishermen as a result of actions of the UK government many years ago so i'm quite happy to discuss and have been discussing with fishing interests how we take that forward the prime minister's reference to fishing in her speech was very interesting because she was referring to fishing being a trade-off deal to the spanish and i think that is a great fear it would be really appalling if what we saw was a repeat of history so i'm very happy to see scottish management of waters that is not only possible but what would happen under the ea option because ea you know that type of membership does not involve fishing or agriculture indeed but the point that ferries by mr was making is that their economy is going at 9 per cent per an and we can only hope to be at anything like them and it's based on being outside the EU with fishing as their major exports around the world and including to europe so no to the downside and i have met ferries representatives and been to the ferries and understand that but without wishing to diminish the the importance of the ferries their economy is not our economy thank you thank you very much Richard Lochhead good morning minister i detect quite a lot of frustration in terms of your dealings with the UK government over what is the biggest issue facing future generations we face at the moment and i know that Theresa May's speech referred to her wanting Europe to take into account differences across Europe and for everyone to use their imagination and ingenuity to find solutions to address how each nation's differences could be taken into account do you feel that principles been reflected in terms of the UK government's dealings with the Scottish government and other devolved administrations no i mean demonstrably not shows a lack of understanding of the UK constitution because the approach appears to be that the UK constitution is is uniform and that there is no divergence of course devolution is differentiation there is a different settlement in Scotland and the settlement in northern Ireland the settlement in Wales you know the act of union is an act of differentiation because the act of union says here are the things that won't be the same you know so there is a lack of understanding of what devolution is about and what the united kingdom has been about so far and that's a problem but also doesn't recognize you know pays lip service to it doesn't recognize a diversity arrangement that's the EU have you know France has arrangements for the territories you trim your you know i mean that those are different arrangements if you look even in in these islands the arrangements of the channel islands in the Isle of man are very different they are in the customs union and because of the nature of that there's essentially a de facto membership of the single market that it's not quite the same that's a different set of circumstances from the circumstances that prevail to other sub-state arrangements within Europe Europe has also been very flexible you know if these points are put into negotiation you know they will be seriously considered and there will be if there is a political will the possibility of finding that solution so that is the reality of what happens in Europe and therefore if she puts them on the table the likelihood is that we'll be able to find a resolution in terms of the other debates which is very pertinent to this it is that relating to powers automatically being repatriated to scotland's post-brexits and indeed the debate over extra powers being built into devolution settlements as well have we had any positive response in UK government in terms of all the powers automatically repatriating to devolved administrations no there is a commitment given by the prime minister herself and my apologies a range of other ministers which says the devolved administrations will not lose any of the powers that they presently have you know which is a sort of not an overwhelming promise because if we were to lose any of them i think things would be even worse however when the discussion turns to the automatic repatriation of those issues which are lie within the devolved competencies and issue for example you know which campaigners like Michael Gove said it with the Scottish Parliament would be immensely strengthened you'll buy all these powers it would automatically come here the attitude has changed very substantially what is being said now is that there needs to be a discussion of where those powers should go the right places in verticomas now of course the question is who makes the decision that is the right place and also discussion about frameworks and you know you are very familiar with the European framework for agriculture and you know the implication certainly is that you would have a UK framework so those powers would transfer to UK and then you know the devolved administrations would not then get any additional power but of course the the European framework operates on the basis of a council of ministers it operates on the basis of co-decision making between the members there's been no discussion of how that would operate so i think there is a very considerable concern about what is being said even about powers with devolved competencies let alone as the paper indicates other areas where additional devolution is required for two reasons one is because leaving the EU will change everything and therefore there needs to be a rethink in the devolved settlement but secondly if these powers are to go forward then they would need to be other changes to the to the devolved settlement to allow them to take place including what we think the best way to implement these would be would be to give the scotland distinct legal personality in the same way as exists in Flanders and Hulonia and one final brief question i mean clearly what you're saying there's very alarming and everyone in scotland should be extremely concerned to hear what you're saying given your frustrations over the lack of notice in terms of papers for meetings and dates of meetings and so on and so forth and some of the other frustrations you've been expressing do you feel that the idea of a bespoke arrangement for scotland has been taken seriously by the UK government or do you feel you've been strung along they're going through the motions of being seen to listen to devolved administrations with no intention whatsoever of actually doing anything well the engagement is still in place so to that extent i want to see it through to in the hope that it will produce the results which were promised as a prime minister not only said but as the convener has indicated in the terms of reference that they require us to be in a greed position on triggering article 50 and that's what we're endeavoring to get to and it is perfectly possible to have a solution based on what is in this proposal so i am still discussing and negotiating you know the lot of any human being is to be frustrated from time to time and annoyed from time to time and not entirely pleased with what's taking but there are other advantages and other times you think it's going well i don't see this process going well but i'm going to stick with it in the hope that we'll get something out of it thank you Emma Harper thank you you mentioned that engagement is in place and that Secretary of State David Mundell was here last week i mean can you clarify i mean did he call the meeting what was the purpose was there advanced agenda and what were the outcomes goals i mean where was the fanfare when the secretary's state is coming i'm always i'm always happy to see David he's a former member of this parliament i've always got on well with him you know if he wants to chew the fat from time to time i'm happy but he was very keen to have a meeting with with Derek Mackay as the cabinet secretary with overall responsibility for the constitution and myself specifically to discuss devolved matters in this paper i had assumed that in those circumstances he would come along with a view of the proposals that we have no such view was forthcoming he talked about the need to talk about them which you know is true but it didn't actually advance things very far he did tell us that there would be a white paper on the great repeal bill and i have asked formally for an advanced copy of the draft on that as it's so important to us now that at some stage we'll touch on the great repeal process and he indicated to the press thereafter that there would be a an LCM on the great repeal bill although the actual formal position on that is that there is no decision on whether there's an LCM or whether there's Scottish legislation and that is the position that we are in in formal discussion apart from that he he came out and there were cameras outside so presumably he had told the press that he was here and he talked to the press and i talked to the press but i don't think it took us an inch further forward okay it was a stunt well i can't see much point in the stunt because he had nothing to say about i mean you know if he wanted to wish to while away and are and my company and Derek's company who is to blame him thanks to me to be honest minister i'm absolutely no clearer what intensification means after this and that's no criticism of yourself i don't believe you're any clearer on what the UK government mean by intensification particularly on what you want it to be but looking at a specific detail if we're to assume that a differentiated agreement for Scotland some kind of compromise is still possible which i don't personally believe but if we're optimistic a key part of that is the Scotland being in the single market with the rest of Europe but in a customs union with the rest of the UK to avoid customs barrier at Gretna. I asked this question of the council of expert witnesses that we just had have there been any discussions between yourselves and the UK government in regards to their attempts to find a solution for the island of Ireland because we've seen that again this week with Theresa May and Enda Kenny there is clear will to find a solution for Ireland that it seems to me could in some way be transferred to Scotland yes i mean we are we're not party to the discussions on Ireland as clearly we wouldn't be party but you know they do they do crop up in discussion that takes place at JMC and elsewhere our view is of course there are very special circumstances prevailing in Ireland those are circumstances which you'll need to be understood and respected but nonetheless if there is a technical means of producing no a completely porous border between what is an external border with the EU then and with the customs union because presumably Northern Ireland will not be in the customs union if if the rest of the UK if if England and Wales are then if it is possible to do that based upon freedom of travel which has been established for a long time then it should be perfectly feasible to do it elsewhere had you previous to its dissolution had you had any discussions with the Northern Irish Executive or in fact with the government of the republic of Ireland in regards to proposals that they were thinking of solutions that they thought viable the position of the the government of the republic of course is that they are not pre negotiating with the UK as a member of the EU but they have made it clear that this is something that is a priority and it is obviously clear also that the EU would be guided by the position of the Irish government on this matter i mean that is essentially in terms of the northern Irish parties we have not discussed in detail their proposals we have supported however the initiative which is held cross community in northern Ireland to have that open border and that's what we will continue to do but it's not our place and it would not I don't think add anything to the discussion you know we were to be involved in that except to support it but equally to make the point fairly you know without overdoing it that if that solution can be found in Ireland then surely it can inform a solution in this island thanks i'm one final brief question if that's okay at what point has time run out on this if the UK government are are not making it clear what intensification means if they're not genuinely intensifying these options at what point has time run out on a solution for Scotland that fits with the well the proposals you laid out the terms that communicate say intensify in the run-up to trigger article 50 and thereafter so you know intensification means a step change in the process and I suppose we'll know it if we see it you know I mean like you I mean I'm not entirely sure I know what this beast looks like but you know what Mark Drakeford and I are trying to do is to come to a common agreement with David Davis about the nature of the discussion we have when the GMC meets next so that we can do things differently but your crucial moment in this is the triggering of article 50 that tells us not just that the starting point that the UK has and it may be high level we don't know but also how we've been involved in that you know if the UK government publish submits and publishes in article 50 letter which you know GMC EN has not seen has not been involved in discussing you know whatever way you know locked in conclave for days to look at it you know whatever way I think it says something pretty significant which we you know is what has happened with the Prime Minister's speech on single market which has happened with a white paper if it would happen a third time you know and particularly in there I think we would say to ourselves are they is there's no genuine attempt here so that's a crucial moment there will be other crucial moments which come along this is a very fast moving and difficult situation so we don't know but I think that one stands out thank you thank you Rachel Hamilton I wanted to ask you about what Charles Grant had said and he said it would be extremely difficult for Scotland to stay in the single market if as indicated from the Prime Minister that the rest of the UK doesn't stay in the single market and you know we have touched on these points that legally technically and politically it would be very difficult for Scotland to stay in the single market the basic point being that we would have one set of business regulations for the rest of UK and one set of business regulations for Scotland and possibly there would have to be customs checks at the borders how do you think that this might work for Scotland I don't think there'll have to be customs checks on the borders I've made that point but I think I've given an indication of the answer to Lewis MacDonald where I think the solution to this lies and it lies in in the force of the European market for the rest of the UK but I know it's not my place to ask a question but I might gently put back here how difficult do you think it will be for the United Kingdom to negotiate tariff free access to the EU given the position they are in now I think the answer to that is very difficult indeed so I don't think we've made any secret in the paper of the difficulties of the position in this negotiation I think it is important to recognise the extraordinary difficulty that the United Kingdom has put itself in in these matters too and therefore that will require a great deal of imagination and flexibility just as our proposal will require imagination and flexibility I agree with Charles Grant you know I've talked to him on many occasions in his position as a member of the Council of Experts it will be difficult but you know the United Kingdom has put itself in this most extraordinary position in which it is thinking of you know if I may quote Alice in Wonderland it doesn't difficult impossible things before breakfast so we just have to accept that we've been landed in this situation and we did not vote for it we've been landed in this situation and we're going to have to be imaginative logical thoughtful and bring forward proposals exactly what we're doing and then we'll try and resolve those difficulties just in the way I imagine the UK government wishes to do in its difficulties okay um Stuart McMillan uh thank you convener um iller on this morning um we had evidence from Dame Marriott Leslie and the discussion at the time was regarding the two-year timescale and Dame Marriott had suggested that the really detailed discussions won't take place until after until after the French and German elections and last week a few of us from the committee went to Brussels and we met a number of individuals and organisations and one of the points that came back a couple of times was that the last six months of the two-year period will be difficult for discussions because in those six months that's when it has to go to the the member states for ratification so in theory the two-year window for discussions is actually cut down to one year do you think that's a I think that's a realistic assessment of the situation yes I think you have to however segment what's going on there's there's a set of discussions to be had about the essentially the technicalities of the divorce you know the money aspects now those won't be easy you know and are being flagged up as considerable I think Ivan Rogers and his evidence has a common chest he indicated you know that the scale of of what the EU demand will be I think the UK hopes that that will take place in parallel with discussions about what the future framework might look like but it may not take place in parallel you know the best way to to get a solution on the money is to refuse to talk about anything else until you get it sorted so there's that issue I think when you get into the technical details of what happens next it will be very difficult to conclude it and it's not that final six months period it's also the period in which the European Parliament will vote and they have a yes no vote and if in that yes no vote you know it's in the last six months two of the present parliamentary mandate as I call it you know all history shows that the European Parliament that six months could do anything you know it's the last six months it's inclined to do anything so that's a really difficult period so I don't think you know and Ivan Rogers is a real expert unless he's made it clear and maric lesley knows the system very well too I don't think that timescale is realistic I think things are going to take a lot longer the question then is what's the transition if you can you know if you can get a heads of agreement on where things are going then you might get an agreement on a transition period what does that look like what is it involved you've also got the parallel process of repatriation of legislation and that's not a small process you know I mean the great repeal bill that's now announced we now know you know when the government has spoken about this there will be a number of other bills quite a number of other bills that will deal with the detail of that so you've got a pretty big legislative logjam which you want to get through so that on the day of exit which is whenever it is you know there is not a gaping black hole within any legislative provision these are all tall orders at the present moment and I think even the most generous commentator says that there will have to be something at the end unresolved now that would be a problem depending on what the something is and how that's handled you know and in our terms that will be a problem if it means that there is a hiatus with you know membership of the single market that's why we're putting these proposals so that that doesn't happen and that's all on the macro level and then convener with your permission let me just touch on the micro level because there are many many organisations for example are dependent upon European funding you can take SRDP you know you can take a whole range of things you can take infrastructure funding you know tomorrow I shall hopefully whether permitting be on the island of Ling whether it's being in my constituency substantial discussion about a new the possibility of a bridge the obvious place to seek funding for part of that bridge would be rural development funding or infrastructure funding there's absolutely no idea what will happen post 2019 to such funding so even with the best will in the world there's going to be a hiatus while somebody works out where that money's going to come from so this begins to trickle into every aspect of our lives this is why you know it is such in my view a foolish thing to happen but it is happening and therefore it's really important we try and make sure that Scotland is protected to the best degree possible well this takes a takes moment by second point and that's regarding the transition period it was suggested last week that the longer the transition period then the less likely that's actually going to take place the example was given that potentially a transition period of up to 10 years but obviously EU member states that the EU 27 are not going to agree to that obviously with the UK then having a potentially similar a similar set of arrangements for that length of time so in terms of the transition how do you how do you see those discussions actually taking place and are you have you had any any discussions with the UK government through the through the GMC no transition has been mentioned as an issue that we will have to discuss but it's not yet in any degree on the table but you know that there is I have heard you know an opinion of transition in in some Tory circles at Westminster which says if you allow transition to take place it just gives us civil service and others an encouragement to think that we won't believe in the EU so what you have to do is you have to make sure that transition is exist is the shortest period possible so that there's no illusion about staying now that's pretty brutal because industry will require a much longer transitioning period and you know the political dynamic of this would mean that some harder Brexiteers are pushing for very limited transition I mean the hardest of Brexiteers of course who do not just include UKIP any longer although times it looks if UKIP is running the UK government but the reality of this the hardest Brexiteers are the ones who're saying get out as quickly as you can I saw one UKIP MEP saying it was just like leaving a golf club you just sent a letter and saying I'm off and I've stopped paying my subscriptions I think that at best could be described as a naive of you just on that final point then in terms of the funding it has been suggested that the UK government's financial liabilities will be between 40 and 60 billion pounds do you think that's a fair assessment oh I would have to say that I I have no idea whatsoever that that it's not only above my pay grade I have to say it's probably an element of complexity which none of us in room with the exception of professor Keating could probably understand but a that is the figure that is being talked about as of all park and as Ivan Rogers mentioned it yesterday I suspect that probably has the ring of truth there's then the question of what you'd go on paying you know that's that's that's essentially the divorce settlement but then you've got to say you know are we going to stay in horizon 2020 if so there's a formula for paying for that are we going to still be involved in things which we can subscribe to so then you get into you know murky waters thank you thank you thank you very much you talked about the this sort of blinkered nature of the some of the Brexiteers that you've encountered how far up does that attitude go because certainly in in Europe it was pretty clear to us that all the Europeans were looking at a sequential arrangement that they did not think that a free trade agreement was going to be agreed within two years as someone said today that's for the fairies but certainly in my discussions with UK level they seem to honestly believe that they can agree a free trade agreement within two years and there just seems a complete disconnect there I hope at the most senior level there is a level of reality on this I mean transition will be required there's no question about that and indeed to be fair I have heard they're not going to name them some very senior figures six months ago or five months ago talking about no transition or now seem reconciled to transition so I think you know this does change but the length of transition the nature of transition is very important I mean you know there is no great repeal bill yet and we are at the very at the very most two years away from leaving that is a massive job to be done to put in place that great repeal bill that has to come into effect you know as the clock strikes midnight you know as we leave as the UK leaves EU that has to come into effect otherwise there will be wholest ways of national life which you know nobody has the faintest idea what's going to happen and there's no necessarily a law that covers them and you know that's a big issue for this parliament too and the issue of how we tackle that for the next two years will be quite considerable there will be a even with an LCM there will be a major workload on this parliament to to take that forward and on the transition that you say is going to have to happen have you had any indication as to whether the European Union would agree to transition and particularly to agree to transition on the UK's terms presumably they're not going to agree to a transition that gives the UK all the advantages that they have at the moment I mean we are hearing a great deal from the UK about what they want we're not hearing anything much apart from principles what the response of the EU is and that's significantly self I would suggest that the harmony between the EU 27 continues in place in terms of what their proposal will be so we don't know but transition is to everybody's advantage if it can be made to work but clearly you know the principle that the no country that is not in the EU should get terms better than or equivalent to a country that is a member will govern this and that will govern the whole process you know and that needs to be born in mind too because some of the rhetoric even in the Prime Minister's speech seems to imply that nothing changes in the sense of the advantages and that cannot be true yes surely on that point the the fundamental thing that happens at the beginning of the transition is that you lose your political participation in the decision making so there is immediately a loss relative to the current position but in terms of for example single market and other arrangements presumably a transition arrangement starts with those in place and then the judgment and the negotiation is simply how far and how fast those cease to apply yes that was a fair assessment of how it might work I think the question is how quickly you could move for example in this business of trade how quickly you would move to other arrangements I noticed yesterday a significant concession by Liam Fox so apparently now says the trillion pound target cannot be met and you know I read the hands art of the article 50 debate yesterday morning and I was very struck by the absolute absence of detail of where these alternative trading opportunities lie you know a trillion not a trillion pounds it's difficult to find any specific concrete example of a trading opportunity that would be could be taken up outside the EU that could not be taken up inside the EU and that actually is a crucial issue that the committee might want to think about because the rhetoric around this and it was true in the article 50 debate is that there are these extraordinary pots of gold which lie just outside our reach because we are tethered to the EU and the moment we're not tethered these fall into our hands it is there is no example I mean the example I've heard the only example I've heard quoted in recent years is India and access to the Indian market because of the length of time that an Indian EU trade deal has taken but it has been absolutely obvious from the Prime Minister's visit onwards that the condition of a deal with India will lie in the area of migration and particularly migration of skilled younger people who want to get experience in other countries if there is no concession on migration and Mr Scott's earlier point on the the primacy of migration in UK government thinking there will be no deal and therefore I just I remain very skeptical I think fishing is a separate area where there is a clear beneficial advantage as far as fishing as far as the fishing community not necessarily the processing community but the fishing community the catching community sees an advantage but it is very very difficult to find any others and I do ask for them. Thank you very much minister just before before you go I just wanted to check a point of detail in your last letter to committee you said that GMCEN the next one is going to take place on the 8th of February can you just confirm that and perhaps tell the committee whether you expect another GMCEN after that given that speculation has been that article 50 will be triggered on the 9th of March? There is one on the 8th of February there is one penciled in for 16th of March middle of March anyway whether or not that is brought forward I mean I know no more about the date of triggering than anybody else does which perhaps speaks volumes. If it is I've seen the speculation on the 9th of March I've seen the speculation that to do it towards the end of March would coincide with the anniversary of the Treaty of Rome and that would be seen as a wrong thing to do we don't know but there's certainly one next Wednesday and there will be another one in March there continues to be official engagement and I would expect to have a number of bilaterals in that intervening period given as Rosbears indicated whatever the word intensification means it should probably mean more bilateral engagement on the specifics of the paper I don't know if he might want to say a word about intensification I know he's got a view on it. As I pointed out earlier there has been frustrations with the process but I think it's safe to say that Monday's GMC is given officials a spurt to engage on a bilateral basis and this week that process has started you could say it has intensified so we are certainly making good efforts with UK Government officials leading into next Wednesday's meeting and beyond that so it has intensified. Okay thank you very much for that and no suspends the committee.