Scottish Affairs Committee

Oral evidence: Secretary of State for Scotland, HC 1278

Monday 22 May 2023

Ordered by the House of Commons to be published on 22 May 2023.

Watch the meeting

Members present: Pete Wishart (Chair); Deidre Brock; Wendy Chamberlain; David Duguid; Sally-Ann Hart; Christine Jardine; Douglas Ross; Dr Philippa Whitford.

Questions 1-89

Witnesses

I: Rt Hon Alister Jack MP, Secretary of State for Scotland, Scotland Office, John Lamont MP, Parliamentary Under-Secretary of State, Scotland Office, Lyn McDonald, Director (Temporary), Scotland Office, and the Lord Offord of Garvel, Parliamentary Under-Secretary of State, Scotland Office, Parliamentary Under-Secretary of State, Department for Business and Trade

Examination of witnesses

Witnesses: Rt Hon Alister Jack MP, John Lamont MP, Lyn McDonald and Lord Offord of Garvel.

Q1                Chair: Welcome to the Scottish Affairs Committee. We are delighted to be joined by the Scotland Office team in its entirety. We will hand over to you, Secretary of State, to introduce yourself, your colleagues and anything by way of a short statement.

Mr Jack: Thank you and good afternoon, Chair and members of the Committee. I am delighted to be making my seventh appearance before the Committee in my role as Secretary of State for Scotland.

I will break with tradition, and not call for the First Minister to appear before your Committee. I note that the last request you made to her, she had a diary clash, could not attend and instead appeared on “Loose Women”. When asked by journalists later why she had done that, rather than the Scottish Affairs Committee, she said that she was not answerable to this Parliament. That is one to note for the future.

I am joined today by my ministerial colleagues, John Lamont and Lord Offord of Garvel, and by Lyn McDonald, director of the Scotland Office, covering for Laurence Rockey, who is currently on paternity leave.

Quite a lot has happened since I last gave evidence to the Committee in November last year. I felt that it would be helpful to mention a number of issues at the start of the session. You kindly gave me a few words, Chair, and it really is not a long opening statement.

I am delighted that the UK and Scottish Governments are collaborating and working effectively together in a number of areas. In January, we jointly announced the creation of two freeports, centred on the Firth of Forth and on the Cromarty Firth. They are making good progress towards completing their business cases and, after I visited the Cromarty freeport with the Prime Minister in January, it was a pleasure for me to be back there last week to see progress at first hand.

Our joint city and region growth deal programme continues to create jobs and deliver new economic opportunities across Scotland. Of the hundreds of projects taking shape, I would just like to highlight one, following the coronation of His Majesty the King, and that is the new Perth museum, which has £10 million of UK Government investment; Mr Chairman, I know you will be very pleased about that. The museum will provide a permanent home for the Stone of Scone, the coronation stone, which was obviously so prominent during the recent coronation in Westminster Abbey. What we plan with the museum is to bring this amazing, centuries-old story to life, using cutting-edge technology, in a purpose-built exhibition space that will be just a few miles away from the stone’s ancient home of Scone Palace, where Scottish kings were once crowned upon it.

The UK Government are also now working with the Scottish Government on transport projects. I am delighted to say that the Scottish Government have agreed to work with us on—this is one for me now, Mr Chairman—a feasibility study for upgrading the A75, following Lord Hendy’s review of vital UK transport links. I look forward to that partnership developing.

Of course, inevitably, areas of disagreement have emerged between the two Governments. I am disappointed that the Scottish Government have chosen to challenge my decision to use section 35 of the Scotland Act in relation to their gender recognition Bill, but the UK Government will defend that very, very robustly in court.

I hope that the Scottish Government will work with the UK Government as they seek to address the problems with their deposit return scheme. The UK Government want to work with the Scottish Government to realise our shared ambition of improving the environment while meeting the needs of consumers and businesses across the United Kingdom.

Finally, I note the Scottish Government’s criticism of the new FCDO guidelines on supporting the devolved Administrations on overseas visits. In my view, that criticism is misplaced. The new guidelines do not, as claimed, hinder the Scottish Government’s ability to engage overseas; rather, they confirm the ongoing support provided by the FCDO for legitimate work in devolved policy areas.

I know this Committee is inquiring separately into how Scotland is promoted abroad, and my Department’s submission, compiled jointly with colleagues across Whitehall, sets out the huge effort being made by the UK Government in this area.

As I said at the beginning, despite inevitable disagreements, my assessment of how the UK and Scottish Governments are working together is a very positive one. In conclusion, I would say that we are collaborating on an increasing range of projects that will make real differences to people’s lives, and that is exactly what the people of Scotland want and expect from their two Governments. Thank you, Mr Chairman.

Q2                Chair: Thank you, Secretary of State, for a very concise introduction and for introducing your team. Welcome, Ms McDonald; this is your first time at the Committee. And you have been here seven times, Secretary of State. I think we have got you for a further one in the next few weeks. We are obviously keen to get the most out of you before we lose you to the House of Lords, so we will try to come to your door more often—

Mr Jack: I think we cleared that matter up last week in the press. I am not going anywhere.

Q3                Chair: Oh, you’re not? Well, that’s a relief to this Committee. Thank you, and thank you once again for referencing Perth museum. I think we are all celebrating the bounteousness of the UK Government when it comes to projects in our constituencies.

You mentioned a lot of things that involve the working arrangements between the Scottish and UK Governments. This is just my observation and I’ll see what you think of it: I don’t think that intergovernmental relations have ever been at such a low ebb between the UK and Scottish Governments. They seem to be characterised by mistrust, never-ending conflict and a sense of diktat. You will possibly disagree with that, but I think you must sense that we are not in a particularly good place with all this. I know that you will be tempted to lay the blame on the Scottish Government for a lot of that—it would be quite fair of you to do so—but what are you doing personally, and what is your office doing, to try to improve the atmosphere, and the culture of operation and working, between the two Governments?

Mr Jack: I have tried to bring to the job honesty and a clear position from the UK Government, so that the Scottish Government know where we are on positions. I have tried not to fudge any issues; it’s not the way I do things. We spoke about the inter-ministerial group programme when I was last here, in November. We now have 15 inter-ministerial groups up and running. There have been regular meetings developing in most policy areas, with not all but most policy areas being covered. That is obviously a positive. This morning, I attended a DEFRA inter-ministerial group meeting with the Scottish Government, Ministers from Wales and Scotland, and representatives from the civil service in Northern Ireland.

I feel that we are working well together behind the scenes. We are delivering on freeports. We are getting on with city and region growth deals. We are talking to the Scottish Government about two investment zones in Scotland. As I have said to you in the past, the Scottish Government get up each day and go to work to destroy the United Kingdom, and I get up and go to work each day to strengthen the United Kingdom. We know that that is opposition. In conversations that I have had with First Ministers and others in the past, we acknowledge that we are polar opposites. At the beginning of the discussions, we say, “We completely disagree on that matter, but let’s see what we can agree on,” and then we get on with the job in hand.

When the press write, there is obviously the disagreement around the independence issue, Brexit and UKIM. I understand all that, but my job is to strengthen the constitution and defend devolution, and I think the Scottish Government want to break up the United Kingdom, which would bring devolution to an end. I know that Minister Lamont has had a lot of meetings—

Q4                Chair: Just before we bring in Minister Lamont—I am very keen to hear his perspective on all this—I just wonder how helpful you think language such as “destroy the UK” is.

Mr Jack: I think it’s honest. I said at the beginning that I am honest. It is an honest position: they want to destroy the United Kingdom.

Q5                Chair: There is being honest, and then there is using language that is not in the least bit constructive or helpful. I think it is worth making that distinction. I asked you directly exactly what you would do to try to improve the situation, and all I heard was a comment that was actually going to make the situation worse. What are you doing directly to try to improve the situation and culture of working between the Scottish and UK Governments?

Mr Jack: I think if we come at this honestly and acknowledge that they want to destroy the United Kingdom, bring it to an end, break it, or whatever language we want to use, and if they know that I want to strengthen it by having more UK Government investment into local authorities—real devolution, as I call it—and we are open with each other that that is my strategy and that is theirs, we then find the bit in the middle where we can meet and work together.

We find lots of areas where we can do that—as I listed in my previous answer, there are freeports, investment zones, and city and region growth deals. There are more things coming down the track. There is the Union connectivity review. We are beginning to work on those things, because they are good for the people of Scotland and because they bring jobs to Scotland—high-skilled, high-paid jobs. That is what I am focused on: improving the economy.

But I am not going to pretend that I am giving any ground on, for instance, powers that would allow a referendum to take place—on section 30. I am not going to pretend for a minute that I am going to do that, because I am not. It is easier to be clear about that and then get on with the business end of things.

Chair: I am not sensing much of anything from you about how you are trying to improve the situation. We will leave that, because I know you were keen to bring in Minister Lamont. I do not know whether Minister Lamont is going to refer to the joint ministerial working groups.

John Lamont: I can do, Chairman.

Q6                Chair: Just before that, here is a question for you. Back in 2022, 22 of these groups were supposed to be set up, and the Secretary of State said that there are now 15 in operation. Why is it taking such a long time to get these groups up and running, particularly when there seem to be a number of difficulties and issues in the working arrangements between the Scottish and UK Governments? Why is it taking such a long time?

John Lamont: I can confirm that 15 inter-ministerial groups have been established. I think Wendy Chamberlain raised the workings of these groups in the last Committee session that I appeared at. It is a testament to this United Kingdom Government’s commitment to the jointly shared structures between this Government and other parts of the United Kingdom. It is a whole-Government approach as well, in that all parts of Government recognise the important of intergovernmental working.

How often the groups meet obviously depends on Departments, Ministers and the topicality of the issues being discussed. I think you said that there should be 22, and, as I said, there are 15. I can confirm that health and transport are now also operational. The first meeting of the inter-ministerial group on justice will be taking place shortly.

Q7                Chair: The UK Government’s intergovernmental relations annual report 2022 recorded that there was a total of 277 intergovernmental ministerial meetings in 2022, down from 446 in 2021. That is not exactly progress, is it?

John Lamont: The frequency of these meetings will depend on the issues being discussed and the Departments affected. It is also important to recognise that that is not the only forum by which Ministers are engaging. Certainly, the inter-ministerial groups are very much at the heart of it, but I know from personal experience that there are many informal discussions that I have with my counterparts in the Scottish Government, which very often produce the same outcomes as IMGs.

Q8                Chair: Going back to you, Secretary of State, I asked you last week at Scottish questions about our ongoing work in promoting Scotland internationally and you gave us a positive response about both Governments working well together. I think what we have found as a Committee in our visits—and I know that Minister Lamont was in New York at the same time as us—is that this is seen to be pretty constructive, and that we work quite well together.

I think it was characterised to us that the Scottish Government give added value and help to promote Scotland internationally, so wasn’t that rather a clumsy letter from the Foreign Secretary, when he got in touch with the Cabinet Secretary in Scotland, laying down new guidelines, which almost seemed unnecessary and provocative? Surely that was not helpful at all in this joint working. We are trying to be constructive today: seeing what we can do about working together; not using inflammatory language; and ensuring that we have set the parameters for good working arrangements. But that did not seem to go down particularly well at all in terms of joint working, did it?

Mr Jack: It didn’t go down very well with old “air miles” Angus for a very good reason. That is because he took offence at us calling him out for visiting Governments and talking to them about matters that we know are reserved: the constitution and foreign affairs; our relationship towards Brexit; our relationship with other countries; the Scottish Government leaving the United Kingdom; and straying into territories of the constitution and foreign affairs. We do not think that our high commissions, embassies or consulates should be used for that purpose.

We believe that the United Kingdom infrastructure—those missions—should be used for the Scottish Government to promote trade, culture and other things, as we have agreed. With all the devolved areas, we have no problem, but once you go into the reserved areas and start talking about those, we take exception. I completely agree with the letter that the Foreign Secretary sent.

Q9                Chair: I am just going to quote Henry McLeish, the Minister who got the Scotland Act 1998 through. Obviously, he is very much aware of what is included in that. He described that letter as “political control and coercion” and asked that the Foreign Secretary withdraw it. He has got a point, hasn’t he? This is somebody who helped to design the whole of the Scotland Act framework and is very much aware of the responsibilities that Governments have. When he is asking for that, surely that is quite serious?

Mr Jack: I saw those comments from Henry McLeish; I think he got himself into a muddle, to be quite frank. The Foreign Secretary made it very clear in his letter: we want to work with the Scottish Government and other devolved Administrations to promote areas that are devolved, but not to facilitate straying into areas that are reserved, as I say: the constitution, Brexit, undermining our—

Chair: The one example that I think we heard was about a trip to Iceland—

Mr Jack: Sorry, Chair, just to be clear—when these meetings are taking place, and we have representatives from the Foreign Office in the meetings, and discussions are taking place to undermine the UK’s position on Brexit and other parts of foreign affairs, or to discuss the break-up of the United Kingdom, that is where we take exception. It is as simple as that. On everything else, we want to facilitate and to work together.

Q10            Chair: I know that Lord Offord wants to come in on this, but could you give us the detail about all these conversations and where, if any, unhappiness has been raised? Could you do that? Could you write to the Committee on that basis?

Mr Jack: I would say that you should speak to the Foreign Office on this. I will not today discuss the detail of what I have seen, but I have seen many examples. There was an indication given in November that that needed to stop. It was ignored and it actually got worse. There were five or six other examples brought to light to the Secretary of State—

Chair: Would you be able to write to the Committee with those examples?

Mr Jack:—of transgressions and of what we thought was the right position. That is when the letter went. I feel that it was the right letter. I saw it and I absolutely approved of its content, despite what Henry McLeish may say, because I think it is wrong for us to facilitate, using our embassies and high commissions, Members of devolved Administrations to go and meet foreign Government Ministers and undermine our foreign policy, which is what they were doing. That had to stop, and that is all we are asking to stop—nothing else. That is entirely reasonable.

Q11            Chair: It is just so disappointing because of, again, the tone and tenor of what we found in this Committee—that things are working well together. All that did was seem to create difficulties.

Mr Jack: But it doesn’t work well together when a Minister turns up from a devolved Administration and undermines the position of the UK Government. If you speak to consuls and ambassadors from countries like France and Spain and say to them, “How would you feel if the UK Government facilitated meetings for the Catalans in Westminster or the French embassy”—there is 60% support for separation in Corsica—“facilitated the Corsicans to come and meet UK Government Ministers?”, I think President Macron might take a dim view.

Q12            Chair: You are going to write to the Committee with these examples.

Mr Jack: I haven’t said I am.

Q13            Chair: Well, if you could please write to the Committee—

Mr Jack: I will see what communiqués I have, because there is a piece where it cuts into the Foreign Office’s rules, but I will discuss with the Foreign Office’s rules what I can share with you.

Q14            Chair: Thank you. Just lastly from me, we have obviously all seen the remarks from Lord Frost about the reversing of devolution. Can you just assure this Committee that that is not this Government’s intention at all? He talks about having some sort of support within the Conservative party for his views. Again, I think we would just like to be assured that this is not the current thinking of this Government.

Mr Jack: I can assure you that not only have we not reversed devolution in any shape or form; since Brexit, more powers have gone to the Scottish Parliament. We have in no way undermined devolution, and that is not the plan.

Q15            Chair: We can take that as a categoric assurance, then.

Mr Jack: A categoric assurance that that is not the direction of travel; quite the contrary. We are the people who want to strengthen devolution, which is why we have more engagement with local authorities, and why we want people in Scotland to know they have two Governments and the two Governments are working for them.

Q16            Deidre Brock: Just continuing the line of questioning about the FCDO’s diktat—it is a question that I think I put to the Foreign Secretary a couple of weeks ago—exactly how will those diplomats intervene if Ministers from other Governments start going off-piste in terms of the topics they are supposed to be discussing? What are they going to be doing in those meetings to stop that happening?

Mr Jack: Again, you will have to ask the Foreign Secretary what his plans are for that. He has been very clear that our missions and our posts are not to be used for undermining the UK Government’s reserved policies—it is as simple as that. As to what happens next, that is a matter for the Foreign Secretary. But to date, since the diktat went out, we have actually seen a change of approach and attitude, and we are back to where we were maybe a year ago, when things were going fine. It is only of late that things have gone off the rails. We are now back to steady as she goes.  

Q17            Deidre Brock: You often go on overseas trips yourself and meet with Ministers from other Governments. Can you describe to me the circumstances under which you can imagine diplomats intervening on your conversation and saying that what you are discussing is not appropriate? How does that work?

Mr Jack: I think you are getting confused, if I may say, about the position of the UK Government, as opposed to devolved Administrations. We saw this with the Supreme Court judgment in November last year. What is reserved and what is—

Q18            Deidre Brock: I appreciate reserved versus devolved areas. What I am talking about is those diplomats saying to Ministers from other Governments and from other countries or other areas that you cannot discuss this when they are meeting with Scottish Ministers. 

Mr Jack: As I said, we would not be having meetings with Catalan or Corsican separatists.

Q19            Deidre Brock: Are you equating the country of Scotland to those regions?

Mr Jack: I am saying that the Scottish Government want to break up the United Kingdom. As I say, the reason devolution works is because there is a Scotland Act. If we all adhere to the Scotland Act and the principles behind it, devolution works perfectly well. The Scottish Government put in their manifesto the removal of Trident from Faslane, which is a reserved matter, so I would not expect the Scottish Government to go off and talk to foreign countries about removing Trident from Faslane, because it is entirely in the reserved area. It is just common sense. In the MoD, the Secretary of State for Defence speaks on behalf of Trident—no one else. That is how the system works.

Q20            Deidre Brock: We will leave that there for the moment. I am still not hearing any practical examples of how that might work, but anyway.

Mr Jack: And I am saying you will get them from the Foreign Secretary as and when the moment comes.

Q21            Deidre Brock: I thought you might have discussed it with him in some detail—

Mr Jack: I might have done, but I am not sharing it with you.

Q22            Deidre Brock: Is that right?

Mr Jack: Indeed. That is right.

Q23            Deidre Brock: I am delighted that you have brought up the city and regional growth deals and your defence of devolution. I came across an article by an academic, Janice Morphet, who writes on policy in the public sector and planning issues. She had an article published online in the Local Economy journal on 27 April this year. It is entitled “Deals and devolution: The role of local authority deals in undermining devolved decision making.” She talks about what she sees as a Westminster agenda to recentralise powers back to London from devolved nations.

She raises a number of concerns about the city and regional deals in Scotland. Among them are that the projects in those deal programmes were assessed using “criteria set by the Whitehall government”. Whitehall had the final say on agreeing those projects even though they are in devolved areas, and “the UK Government has only made a partial direct funding contribution.” She says, “The deals provide a double bonus to a Westminster recentralising agenda, as the Scottish Government provides 50% funding and so reduces its capacity to spend these funds on projects to deliver their own priorities.” What are your thoughts in relation to those concerns?

Mr Jack: I do not recognise that at all to be the case, and I don’t think the Scottish Government would, either. On the city region and growth deals, some things are fully funded by the Scottish Government and some are fully funded by the UK Government. A good example would be the one I referred to earlier: the new museum in Perth, fully funded by the UK Government.

There are other projects that we fund with local authorities and the Scottish Government—we share it. Some things we fund only with the Scottish Government and some things are in the separate structural funding directly with local authorities. There is a huge mix of things. The lead funder undoubtedly has more say in the business case and getting it because they are responsible for it. It is the accounting manager who has to take responsibility. That is how this works. So I think what is written there does not reflect the reality.

Q24            Deidre Brock: Okay, but on the point that she makes about the Scottish Government having to provide 50% funding, I think they have provided more than 50% funding. And on not having the capacity, as a result of spending those funds on projects, to deliver their own priorities, isn’t that a point worth making?

Mr Jack: I would not accept that.

John Lamont: My experience of growth deals in my own area with the borderlands growth deal is both Governments working together on the projects that they want to deliver for the south of Scotland. It has worked very well in terms of identifying the projects that were to be funded, the allocation of funding between those projects and then the delivery of those projects in co-operation with and working with the local authority. One of the keys for the success of these growth deals has been the involvement with local communities and local authorities in developing plans and proposals with the Scottish Government and the UK Government delivering them.

Q25            Deidre Brock: But these are examples of the UK Government stepping into devolved areas.

John Lamont: It is both Governments working in partnership together to deliver projects for the betterment of the communities that we all represent.

Q26            Deidre Brock: You spoke of being answerable to Parliament, Secretary of State. I presume that is a very important thing. But Janice Morphet also points out the issues of accountability. The reports of both Audit Scotland and the National Audit Office “indicate that neither has the power” to scrutinise the deal agreements specifically in relation to the UK Government’s actions. She describes it as “operating within a devolution loophole.” She states: “the accountability for these deals…appears to fall between the Audit Services” for the devolved authorities or administrations and the National Audit Office. Is that something you recognise?

Mr Jack: I cannot hear what you are saying, sadly, because I have terrible tinnitus, but Lord Offord is going to answer.

Lord Offord: I have been in post now for 18 months. A large part of what I have been doing is on the levelling-up agenda and city region deals, the result of which is that the UK Government through the Scotland Office is now in direct contact with 32 local authorities. We speak to them a lot and they say to me that they are delighted with the engagement with the UK Government. They have never had such positive engagement with the UK Government. We are not prescriptive with them on their projects. They bring their projects up. It is real devolution because it is real people in their communities coming up with the projects, not being dictated to.

The other observation that they make is that, in terms of their relationship with the Scottish Government, their budgets have been cut, and indeed ringfenced, so the message that I get a lot is that their flexibility is increasingly diminished, but that the arrangement with the UK Government gives them additional firepower. That is from SNP-led councils as well.

Q27            Deidre Brock: Forgive me, Lord Offord. I appreciate that you want to get those points across, but my question related to accountability and whether it operates within a devolution loophole, in that neither the National Audit Office nor Audit Scotland is able to properly scrutinise the UK Government’s actions within Scottish devolved areas. There are lots of puzzled faces looking at me. Perhaps you can write to the Committee on that.

Mr Jack: No, I think you are conflating two things, I’m afraid.

Deidre Brock: Well, it is not me; it is the academic.

Mr Jack: I am afraid it is. You are conflating two things, and that is why we are all looking slightly puzzled by what you are saying. Well, it is partly because I cannot hear everything that you are saying. We have structural funding, and that is audited through the Treasury and the various audit functions that we have for the UK Government. That is the structural funding side, which was previously audited by the EU, but we are in the place of the EU on that. Then we have the city and region growth deals, and those are audited in Scotland.

The actual growth deals sit with the lead delivery partner. Even on the pieces that we do, whether it is the garden in Clackmannanshire that was brought back or whatever else, we still channel that money through the Scottish Government and into the local authority with the city and region growth deals. The money still flows in that direction, so I think you are looking for a grievance that does not exist on something that is actually delivering very good news for—

Q28            Deidre Brock: I am just looking at an article written by an academic who was making those points.

John Lamont: I certainly have not seen the article, and I am not sure that my fellow witnesses have seen the article, but my understanding is that both the UK Government and the Scottish Government support the growth deals and are working with local authorities. If that is not the case, I am happy to be corrected, but I thought that both the Scottish Government and the UK Government supported the growth deals, working in partnership with local authorities, and the funding delivered through those growth deals is accounted and audited in the usual way.

Q29            Deidre Brock: One of the things she comments on as well is the opacity of the negotiation of agreements. I wonder whether much has been learned, given those criticisms, with regard to things like the spend allocated in the last UK Budget to Scotland, specifically in relation to the money announced for the Edinburgh Festival Fringe and of course for the bridge in Mr Ross’s constituency. Could you talk us through the role the Scotland Office had in those particular decisions, or did the Scotland Office play no part in those decisions at all? Maybe Ms McDonald could answer.

Lyn McDonald: Sure. I was not here, but I am more than happy to say that the money that goes through the Treasury particularly for the Edinburgh Festival will go through the DCMS. As far as I am aware, in my very long career here, the National Audit Office has oversight of all the money spent through Departments, and the Public Accounts Committee then has oversight of all the money spent, so wherever the money lands, whether it is abroad as part of what we spend through the FCDO or whether it is in Scotland as part of the DCMS paying the Edinburgh Festival, it would be scrutinised through the National Audit Office and through the accountants. Of course, the accounting officer, as I am myself, would be responsible for all that money. We absolutely have discussions with the Treasury when it comes to fiscal events about where money should be spent, and we were very happy to support the Edinburgh Fringe and the Edinburgh Festival in asking for more money.

Q30            Deidre Brock: Can I just ask about the mechanics? The director of the Edinburgh Festival Fringe indicated that she had spoken directly to someone in Government regarding that fund. Did she approach the Scotland Office, the Treasury or DCMS?

Lyn McDonald: Probably a number of people, if I am honest. These things come together through a grouping of people. The cultural team in DCMS would have an interest, and obviously so would the Treasury and the Scotland Office, and it would probably involve DLUHC with intergovernmental relations. There are usually a number of conversations about how receptive Government could be, what money we have and stuff like that. That helps us be able to say what we are looking for and join up how we do these things.

Q31            Deidre Brock: Minister Lamont, did you have something to add to that?

John Lamont: No, I was just going to reiterate the point that Lyn McDonald just made. On a personal level, I engage with Shona from the Edinburgh festivals, and I know how positive and pleased they were about the funding they received from the UK Government.

Deidre Brock: Of course.

John Lamont: And I am sure you welcome it too.

Deidre Brock: Oh yes, but I am thinking about the many other cultural organisations, particularly in Edinburgh but throughout Scotland, that were surprised about that allocation. There have certainly been questions raised about the bridge in Mr Ross’s constituency.

Douglas Ross: Can you name the bridge, Ms Brock?

Deidre Brock: No, I can’t.

Douglas Ross: Well, maybe don’t ask about something—

Deidre Brock: Perhaps you can name it, because it is in your constituency.

Chair: Order.

Douglas Ross: I have been asked a question. It is called the Cloddach bridge. Ms Brock has spent a large chunk of time—

Chair: Right, okay.

Douglas Ross: If I can, Chair—

Chair: No, you can’t.

Douglas Ross: So you’re not allowing a Member to speak?

Chair: We are going in a particular order, and Ms Brock is asking some questions just now.

Deidre Brock: I have finished, Chair.

Douglas Ross: Thank God, because it has been going on for quite a while.

Chair: Philippa Whitford put her hand up for a supplementary.

Q32            Dr Whitford: This is just about the Ayrshire growth deal, which is in my constituency. I presented it to the former Prime Minister, the right hon. Member for Maidenhead, in December 2016, and it was agreed, but my understanding is that it is taking an eternity to get business cases approved and for money to arrive. Surely with inflation at 10%, the original vision of what that money was going to achieve seven years ago is evaporating in front of us. If that is happening to other growth deals, do you not need to get a shift on and get the money to the projects before they disappear into the sand?

Lord Offord: There is no doubt that some councils—the bigger ones—have more resources to put into the growth deals, and we see some of those moving faster. At the end of the day, because of the need to account for public money, these businesses cases need to be sound and solid.

We accept that with some of the non-city deals, there has been slow progress in those local authorities, and we now have resource available to help push that through. There is absolutely no concept of us dragging our feet on this at all. North Ayrshire—in fact, all three areas of Ayrshire—has been through quite a lot in the past 12 months, and there is a lot of appetite for the levelling-up agenda. There are a lot of good projects. The Ardeer project on nuclear fusion was a terrific project, and it was a great shame that, because the Scottish Government does not have a policy on nuclear, we couldn’t progress that.

Q33            Dr Whitford: But that wasn’t a levelling up project.

Lord Offord: Yes, but there is a lot of enthusiasm—

Dr Whitford: But they didn’t win. North and south both put in levelling-up projects and spent money doing business cases that obviously didn’t go through. That is a change from the former funding that they used to get from the EU. They got that funding every year, but now they are all competing with each other, and they go through about eight per raft. For the Ayrshire growth deal, South Ayrshire Council said that its business cases were lying here for a long time in between. It is not that the business cases are coming back quickly with people saying, “Fix this and get more information here”; it is that each step is taking a long time—from outline business case, to next outline business case, to actually getting to the point of money in the bank being spent on concrete and tarmac or whatever it is.

Lord Offord: But you would expect us to have a thorough process, and these business cases need to be cleared. There is no concept of anyone dragging their feet. I will look into the specifics of the Ayrshire situation.

Dr Whitford: But it was agreed before covid, and we are now facing 10% inflation.

Q34            Chair: Okay, so that is a commitment to look at it and get back in touch with her?

Lord Offord: Yes.

Chair: Christine Jardine, did you want to come in here?

Q35            Christine Jardine: Very briefly. First, I declare an interest: I may have been one of those many parties who made representations to DCMS and the UK Government to support the Edinburgh Festival and some other cultural organisations. To clarify, presumably I was not the only one: a lot of local MPs speak to the UK Government about funding.

Mr Jack: Yes. Even SNP ones.

Q36            David Duguid: I want to talk about the retained EU law Bill briefly—well, maybe not so briefly. There has been a lot of talk about what the Bill does and what it does not do. There has been a lot of speculation in the press: “bonfires of regulations” kind of stuff. I was wondering—it looks like Minister Lamont is getting ready to respond to me—if you could give us an overview of the benefits of the REUL Bill, in particular to the society and economy of Scotland.

John Lamont: As you will be aware, Mr Duguid, the Government have set out their plans in terms of the repeal of those bits of legislation that are no longer applicable. The structure has been put in place to ensure that we’ve been engaging with the Scottish Government to deal with those bits of legislation that affect devolved spaces. My colleague, Nusrat Ghani, who is the Bill Minister, attended the inter-ministerial standing committee on 17 May, which was an opportunity to discuss the amendments to the Bill with the Scottish Government, particularly the amendment around the sunset clause, which the Government have tabled recently.

Q37            David Duguid: You mentioned Nusrat Ghani’s being the Bill Minister. I know that you are not here to talk for her Department, but how often would the UK Government and the Scottish Government get together to discuss the progression of this Bill?

John Lamont: The inter-ministerial standing committee has been the most recent opportunity; that was on 17 May, I think. There is also the Brexit Opportunities Unit, which has been having ongoing engagement with the Scottish Government and the other devolved Administrations at official level around the EU retained law Bill. There is also the working group meeting, which has been meeting on a fortnightly basis since March 2022, I believe.

Q38            David Duguid: How many of the retained EU laws—I think it is close to 600—that are currently planned to be revoked cover policy areas that are devolved? Do you have that number to hand?

John Lamont: Mr Duguid, as you will know, the schedule to the Bill—the repeal schedule—currently includes 587 pieces of legislation. Of those pieces of retained EU law, it is estimated that around 39% are devolved in some areas or are of mixed competency, so they are split between the devolved and the UK Parliaments. The schedule also includes legislation that applies only to devolved areas.

I think this approach in the Bill sets out the previous approach in relation to the sunset, which applied to both reserved and devolved areas, and will ensure a greater degree of certainty and consistency across the whole UK.

Q39            David Duguid: Okay, thanks. Finally, I know of another concern that has been raised recently, especially in light of the amendment. Can you, as UK Government Ministers, confirm that the Bill will still fulfil the Government’s manifesto commitment to end the supremacy of EU law across the UK?

John Lamont: I think that commitment has already been delivered on, Mr Duguid.

Q40            David Duguid: I just want to get it on the record because there are concerns out there that it is somehow backtracking on it.

John Lamont: Yes. I believe the date is part—

Mr Jack: From 31 December this year, that will be the case.

David Duguid: Perfect.

Chair: I think that was announced last week, wasn’t it? Okay. Thank you. Philippa Whitford.

Q41            Dr Whitford: Staying with retained EU law, obviously on 10 May there was quite a big change of direction. We were looking at nearly 4,000 laws and regulations that would have collapsed by the end of this year; now it is about 600. But as you have just highlighted, almost 40% of those are either devolved or mixed, and obviously Scottish Ministers in the devolved areas will get to decide whether to re-stage or preserve.

If EU laws are revoked at Westminster but regulations are protected in Scotland, how exactly do the UK Government plan to deal with divergence? Will that be through the common frameworks? What about in policy areas that don’t have common frameworks?

John Lamont: This was anticipated when we left the European Union. That was why we developed the common frameworks structure and the common frameworks, as you will know, have been developed to ensure there is this common approach for those powers being returned from the European Union that intersect into policy areas that are devolved and are the competency of the Scottish Government and Scottish Parliament.

We should also note that the UK Government and all the devolved Governments have agreed that where the common frameworks are operating, they are the right mechanism for agreeing informally to a position on retained EU law reforms in the areas that they cover. My understanding is that the Scottish Government agree with that too. If the EU retained law falls into a common framework area, the UK Government expect to use the processes within that framework to discuss the plans for those laws with the devolved Government—in this case, the Scottish Government.

Q42            Dr Whitford: But is it likely that things such as the Internal Market Act will then be used to block decisions made in Scotland to stick with a regulation that Westminster wants to get rid of? I will come on to the deposit return scheme in my next question. Although that is devolved and has been discussed in the common frameworks, at the moment it is sitting in limbo. Are we going to see lots of that kind of thing happening in the coming years?

John Lamont: I think it is important to understand that the frameworks work in parallel with the UK Internal Market Act. As I said, the frameworks are there to ensure that there is this approach where the policy areas fall into a framework. Clearly, the UK Internal Market Act also exists to protect the integrity of the United Kingdom market. In the same way as the EU protected the EU single market, the UK Government have a need and desire—rightly, I believe—to protect the integrity of the UK market, and to ensure that no significant divergence impacts trade and employment opportunities across Scotland. So they work in parallel.

Q43            Dr Whitford: Obviously, the single market specifically allows derogations for public health and environmental protection, for different countries to do things in different ways. Why does the Internal Market Act not have derogations for public health or the environment when those are the responsibilities of the devolved Governments?

John Lamont: As we have seen with the deposit return scheme, the Scottish Government have applied for a derogation on the UK Internal Market Act, which I suspect your next question is going to lead into.

Q44            Dr Whitford: Yes. In 2021, the Environmental Audit Committee called for the UK Government to get on with a deposit return scheme. It said it was urgent, and called for an all-in scheme that included not just glass, but cartons. Under the hints that we had in February from the Secretary of State, why exactly would the UK Government want to block the Scottish Government—and, as we understand, the Welsh Government—from having a more inclusive deposit return scheme?

Mr Jack: I will answer that. Let us be clear about something. I seem to be able to clear this up in these sorts of meetings. The first formal request to Ministers was on 6 March. That was cleared up again this morning in the DEFRA IMG meeting. I saw some raising of eyebrows over there when I made that remark, but I want to be absolutely clear. I know that one of the Green MSPs said to me that they had written to the Speaker of the House and to the Cabinet Secretary, Simon Case, to say that was not the case. I responded to both the Speaker and the Cabinet Secretary, and I copied the letter to the Presiding Officer and the relevant MSP. I laid out exactly what had happened in the minutes and at the meetings between officials, and where we had got to when a formal request was made on 6 March.

Funnily enough, that letter made it clear as day that I was correct in what I had said. The First Minister also received a letter from the Prime Minister laying it out, and on we go. We have been very clear about it. It absolutely was first requested formally—and we started to look at it formally across Whitehall—on 6 March. That is not up for dispute.

Q45            Dr Whitford: But the process did start last October.

Mr Jack: Sorry?

Q46            Dr Whitford: The process through the common frameworks, which your ministerial colleague said is part of the structure of the IMA, started in October and was completed in February.

Mr Jack: But the common framework says that these things should be dealt with across Whitehall before they actually go into the common framework process. That is in the instructions and the protocols of how common frameworks work. On this occasion, the discussions were taking place with DEFRA, but not with the Department for Business and Trade, which owns the UKIM legislation. They were not taking place with the Welsh Office, the Scottish Office or DLUHC, which will represent local authorities and the impact of these matters on them.

On it goes. Discussions were taking place that had not taken place at ministerial level, and, effectively, the Scottish Government went ahead and put in place Circularity Scotland with no impact assessments post UKIM—the only impact assessments were pre UKIM. We needed to see the Department for Business and Trade impact on consumers, consumer choice, cost to consumers, businesses, trade within the UK and international trade. Those impact assessments, as I said in the meeting this morning, still have not been done, but it is important that they are done. Before you go and build your house, you should seek planning permission. The Scottish Government have built a house and are now asking for planning permission—that is the wrong way round.

Q47            Dr Whitford: But Secretary of State, you just said that the Scottish Government should have been in touch with all the Ministries across Whitehall before even going in—

Mr Jack: Minister to Minister—that is what the frameworks protocol says.

Q48            Dr Whitford: So the common frameworks is not where these things are discussed and refined before taking them to a Minister? You would be writing to a Minister with an empty page asking for permission.

Mr Jack: The Scottish Government, after the UKIM legislation, should have come and talked to us about an exemption, Minister to Minister. That did not happen. The first ministerial engagement was on 6 March.

Q49            Dr Whitford: But without being able to describe the scheme in detail. They say they raised it in principle in 2020.

Mr Jack: This is the point. They didn’t have a scheme for us to discuss in detail because it has been evolving ever since. Officials have been talking to officials, but Circularity Scotland have come along and changed the rules.

Now we have less than 5,000 units that you have not included. Since then, we have seen online retailers across the UK, including Tesco, the largest retailer, say the scheme is not fit for purpose. They have also said, along with other online retailers that deliver to your home, that they will not deliver anything recyclable in their model now, because they have been told they have to collect it. They have to collect the bottles from the elderly and the infirm who they deliver online to; they have said that it is not in their business model, and they cannot do it. I challenged the Minister on it this morning, and she said to me, “Well, of course, that’s a matter for the Scottish Government to sort out”. I said, “If you think that then you don’t understand how UKIM works”.

This is a matter for the largest retailer in the United Kingdom. It is a matter for the 85% of product that comes into Scotland, which is from around the world and the rest of the UK—that is what the exemption is being sought for. That directly impacts their sales, it directly impacts consumers, and it directly impacts jobs. To think that it is not a UKIM matter is naive in the extreme.

Q50            Dr Whitford: You are suggesting that they didn’t engage at all. This has been under detailed discussion since last October. Maybe the process is not clear enough.

Mr Jack: What I am saying is, Minister to Minister, the Secretary of State for Business and Trade, who owns this—let’s be honest, they own UKIM, because UKIM sat with BEIS and now it sits with DBT—was not engaged in this until the official request came through on 6 March. I have discussed this with her on many occasions.

Q51            Dr Whitford: Yet, we are told that it is DEFRA that will make a decision, not the Business Secretary.

Mr Jack: No, you are not told that DEFRA will make a decision. The decision will be made across Whitehall; it will be made by the Wales Office, the Scotland Office, DLUHC, the Cabinet Office, and No. 10. It will be made by all the people who are directly impacted.

Q52            Dr Whitford: There are similar schemes in multiple countries across Europe—for example, in Finland where there is a 95% to 98% collection rate. Big companies such as Coca-Cola are asking why you are holding this back. Why are you holding it back?

Mr Jack: What I would say to you is that I think you are going off-piste.

Q53            Dr Whitford: It is the DRS—

Chair: Order. I think we have exhausted this line of inquiry.

Mr Jack: Just to be clear, Finland is not a devolved Administration. There are not examples of devolved Administrations running schemes that are not run by the national Government; they may have slightly different schemes, but the national Government—

Q54            Dr Whitford: Yet, the environment and waste are devolved.

Mr Jack: You are just talking over me.

The point is that it is very difficult not to create trade barriers within the United Kingdom. UKIM is there to protect that. I have had over 1,000 businesses write to me. I have had people who supply wine from France saying they won’t supply their wine into Scotland, because the market is too small, and they won’t relabel. It is affecting consumer choice and it is affecting jobs. The impacts are massive, and I have that in detail.

I am asking the Scottish Government those questions, and I want answers. Then we can do a proper assessment, but at the moment I have not got answers to those questions, nor do we have answers to the fact that Tesco online will not deliver bottles or cans to their customers. Some of those customers do not have the choice of going to supermarkets—

Chair: Order. Secretary of State, I think we have given this a good run.

Mr Jack: When I say things they don’t like hearing, I often get interrupted, I find.

Chair: Order. We have lots of questions. David Duguid, do you want to come in?

Q55            David Duguid: If we are moving on from intergovernmental relations, I wanted to ask about one more topic—you didn’t think I was going to let you go without talking about fishing!

Highly protected marine areas, a bit like the deposit return scheme, are something that both of Scotland’s Governments are looking at. Both Governments have different responsibilities at different levels. With HPMAs, for example, it is the difference between what is done onshore versus offshore. Could the Secretary of State or Mr Lamont say something about how the two Governments have discussed not so much the principal of HPMAs—I think people generally agree with conservation, sustainability and marine protection—but how best to approach them?

Mr Jack: The Prime Minister has said that he would like the Scottish Government to do a U-turn on it only because there are pilot schemes being run by DEFRA that we want to share with the Scottish Government. We know there is outrage among fishing communities. We believe that fishing communities are best at preserving their stocks and creating a sustainable future. We won’t be doing HPMAs in Scotland outside the 12-mile nautical limit, which is the UK Government’s responsibility. It is up to the Scottish Government whether they want to do them inside that.

My opinion, and the Prime Minister’s—he said this at PMQs—is that we would prefer it if the Scottish Government waited until we see the results of the pilots before pushing ahead, because we think that is what fishing communities would like to see. There have not been detailed discussions. It is just an opinion. It is a devolved matter. If they want to go ahead and create these HPMAs, that is entirely a matter for them; we will not interfere, but we will still offer to share the results of our pilot schemes.

Q56            David Duguid: Minister Lamont, is the idea of spatial squeeze—the increased use of our marine environment for not just fishing but also offshore wind and so on—something you have been discussing more directly with industry in Scotland?

John Lamont: Yes is the short answer. It has come up both in my ministerial role and as MP for a constituency with a large coastal community—certainly around the margins of the seafood industry action group, whose concerns I share. I know that the representative bodies have concerns about how the marine space is being used and how we ensure that we get the balance right between all the different pressures and, at the same time, maintaining a healthy and sustainable fishing industry.

Q57            David Duguid: What discussions are you having between different Government Departments as well as devolved Administrations to make sure those concerns are not only raised but heard and acted on?

John Lamont: As the Secretary of State has said, from a UK perspective we are very keen to share the evidence we have been gathering on highly protected marine areas with the Scottish Government to ensure they are better informed to make decisions. I am sure the fishing industry would support such a move.

David Duguid: Thank you.

Q58            Christine Jardine: The concerns of the fishing community are very real and very important, but there is also the question of the subsea structures for the oil and gas industry and for renewable energy. Those subsea structures, as I understand it, are a reserved matter. Has that been discussed with the Scottish Government, and has it been taken into account in discussions?

John Lamont: We are having discussions around ensuring that the new offshore wind resources are connected to the grid. We also had a meeting recently with Minister Bowie on the connection rates and capacity within the networks. It is being discussed within Government, and we have had discussions with the Scottish Government. More widely, businesses in the sector and those connected with it have raised the issue with me.

Q59            Wendy Chamberlain: Lovely to see you all. Funding is what I would like to move on to. Dare I say it, funding—how much it is and whether it is more or less than before—is something that always comes up in the political narrative. My basic question is: to what extent were the Scottish Government consulted in changes to allocation, particularly around in-year funding decreases? I would be interested to understand what role the Scotland Office plays in those discussions or notifications.

Lord Offord: The answer to that question is it is extraordinarily transparent. The discussions between the Scottish Government and the UK Government are all published and are all available—the money, obviously, being the most important thing. The Treasury is in constant communication with the Scottish Government on money. Obviously, there is a three-year rolling framework within the Barnett formula, then there are year-on-year interventions. We have seen, for example, the consequentials that come from Barnett as well. I think there is very strong dialogue in this area, as you would imagine, and the Scotland Office has its voice in that as well. What is interesting is when we come to the Barnett consequentials under the scheme, which is a very flexible scheme for Scotland, London is not prescriptive to the Scottish Government as to how to spend those consequentials, so it is not required that Scotland follows exactly the same spending formulations that have been given rise to in the first place in England. But it is on the record, and the discussions on money are very transparent that there are UK Government funding decisions and the impacts on devolved Administrations, and there is full transparency on that.

Q60            Wendy Chamberlain: So your position would be that nothing can be done to increase that transparency. Do you feel comfortable with where things are?

Lord Offord: I think the transparency is extraordinary. The issue is we know the Barnett formula is trying to make the UK fairer, and, obviously, population size is one element of it, but you also have the whole deprivation argument and population density. Isn’t the whole point of the United Kingdom that we want all citizens to have the same public services wherever they live? If you live in Stornoway or Streatham, you get the same level of public services. That is actually the strength of the United Kingdom. When you boil it down, we have 8% of the population in Scotland and 33% of the geography, so therefore Scotland, by definition, is a more expensive place to run. The UK Treasury completely understands that and funds that. When it comes down to it, for every £100 spent for one person in England, UK Government spends £125 in Scotland.

Q61            Wendy Chamberlain:  We have seen, dare I say, a degree of churn within the UK Government over the last year or 18 months, particularly in terms of leadership. That has resulted in policy decisions that have the Barnett consequentials that you have described, but has potentially put in ones that are more unexpected. Do you not think there is potentially an opportunity to ensure the Scottish Government are better placed to make the right decisions about the consequences of increased funding in non-devolved areas?

Lord Offord: There is a rolling three-year framework. The way the UK works is it cannot just be subject to a change of Ministers. It cannot be run on a whim like that. The UK is run on a much more constant basis than that, and it is run by the Treasury in consultation with Scottish civil servants. The underlying financial deal for Scotland is not subject to the whims, or revolving door, of Ministers. There may be particular issues where there are in-year funding discrepancies, but even then, it is done within the overall formula. The only real big difference on the annual basis is really the city and growth deals that we have talked about. They are funded on an annual basis in discussion between, again, the UK Government and the Scottish Government.

Q62            Wendy Chamberlain: My other question is in relation to the role of the Scotland Office. I declare that I am the new chair of the Scotch whisky APPG. I think it would be fair to say that the Scotch whisky industry had an expectation of the spring Budget that did not materialise in relation to spirit duties. I got the impression that there was a degree of sympathy within the Scotland Office for that. Are you the right interlocutor in relation to the Treasury to ensure Scotland’s best interests and relationship to Scotland are there?

Lord Offord: Yes, absolutely.

Mr Jack: Before Lord Offord answers, we have succeeded nine years out of 10.

Wendy Chamberlain: But I suppose most recently not. 

Lord Offord: We have talked to the Scottish whisky industry. They are an awesome lobbying group, as you know, so they talk to a lot of people, and they are always very popular wherever they go because you get little treats along the way. We talk to them a lot. The reality is that, as the Secretary of State said, they have had nine Budgets in a row with a freeze. Last year, our exports of food and drink from Scotland went up by 22%, 10% ahead of when we were in the EU, by the way. Brexit seems to have been very good for Scottish food and drink exports; we are 10% ahead of where we were before, and they have had a record year for profitability. Meanwhile, we have spent £400 million on covid and £100 million on the cost of living crisis, and we are going to certain sections of our community to say, “Can you please pay a little more?”

In the meantime, to mitigate that, we are working incredibly hard to make sure that those businesses get access to new markets. We are getting them access to international markets by removing tariffs in America, and we are working hard to get them something in India—we are opening the world up, which is where that 22% increase in growth comes from, and that employs a lot of people in Scotland, provides higher wages and is good for our society. We are absolutely all over Scottish whisky, but on this particular occasion, on balance, it was the fair and right decision.

Q63            Wendy Chamberlain: Moving on to needs-based accounts, we all heard this morning about the deal that has been agreed or discussed with the BMA in Scotland for junior doctors. Looking forward, given the inflation pressures that we are still seeing and public sector pay demands, is any account being taken of that in relation to future funding for Scotland?

Lord Offord: Inflation applies to everyone. Inflation does not respect borders—

Wendy Chamberlain: No, of course not.

Lord Offord: A funding settlement was given to the Scottish Government; it is up to the Scottish Government to prioritise where they want to spend that money. It is up to them to cut their cloth, as the English have to do in the UK settlement. This is devolution in action: this is the Scottish Government making a decision about where they want to prioritise their funding. But there is no mechanism for them to say, “Can we please have 10% more?”, because inflation applies to the whole UK Treasury Budget, so the question you asked me, you should be asking the Scottish Government, which is, “As you balance your books and give more to one section of the community, what are you cutting for another section of the community?” That is really for Holyrood, rather than here.

Q64            Wendy Chamberlain: I want to ask about a couple of other things. On levelling-up funding, we have had two rounds—I am sure that the constituencies of some people in the room have been successful, and others otherwise. What are the plans for any future rounds? What does that mean potentially for areas that have and have not been successful?

Mr Jack: There is another round—levelling-up round 3 is on its way—

Q65            Wendy Chamberlain: What are the expectations of it?

Mr Jack: My expectations of it are that we will get some very good bids, because a lot of local authorities now have bids prepared—they might not have been successful in earlier rounds. I am hopeful that we will get a good number of those bids over the finishing line.

Q66            Wendy Chamberlain: Do you feel that, potentially, Scottish local authorities were slightly on an unlevel playing field, given that they had to adapt to UK Government rules that might have been more predicated on English local authorities than what local authorities are used to with the Scottish Government?

John Lamont: May I come in on that? I was lucky enough to be in Peterhead when we announced the last round of awards. My reflection is that a change in approach is required. Previously, many councils were very used to applying for funding from the European Union; now they apply for funding from the UK. There is a willingness among Scottish councils to understand the new process to ensure that they put in applications that are as strong as possible, so that they are successful. As I am sure you know, in your own area, Fife Council got £32 million in levelling-up funding, which included funding from round 2, and had £13.4 million from the UK shared prosperity fund—

Wendy Chamberlain: In the Glenrothes constituency.

John Lamont: And £24.5 million to the University of St Andrews’s Eden campus—

Wendy Chamberlain: Which was an early success of the city deal.

John Lamont: I think what that demonstrates is that, where councils engage, they are being successful. Hopefully, in round 3 the councils in those areas of Scotland that have not been successful in previous rounds will see greater success.

Q67            Wendy Chamberlain: It sounds like you are looking for those councils that were not successful in the first instance, as opposed to constituencies. Is that what I am picking up?

John Lamont: I am making the point that I think councils now recognise that there is a new process; it is not what was there before for the EU funding. I know that our colleagues at DLUHC are very keen. They have given feedback to those councils that were not successful—I am sure that your council has had that feedback as well—to ensure that when they go into round 3, they are putting in the very best applications that they possibly can, but I think we need to accept that there is a new process of UK Government funding, compared with what was there before with the EU.

Q68            Wendy Chamberlain: My final question is about broadband, which is particularly an issue for more rural constituencies such as mine. Last year, when former Finance Cabinet Secretary Kate Forbes appeared before this Committee, I raised my concern about the very low take-up of R100 vouchers, which is a Scottish Government scheme. Project Gigabit is obviously looking at what it is going to be doing in Scotland. Do you have an update on what that might look like? How will it work alongside the Scottish Government’s own project?

John Lamont: First, I agree with you, Wendy, that having access to good broadband is absolutely essential in this day and age. I view it as like having access to mains water and mains electric. Everybody should have access to good-quality broadband.

Wendy Chamberlain: Yes, in Maslow’s hierarchy of needs, it is right at the bottom.

John Lamont: There have been issues with the Scottish Government’s R100 scheme. The Government now have Project Gigabit under way. If there are any particular examples or points that you want to have checked, you could give me the details separately.

Wendy Chamberlain: I will write to you separately.

Q69            Douglas Ross: Good afternoon, Secretary of State, Ministers and Ms McDonald. I want to ask about a number of issues, but I want to pick up on some of the evidence that we have heard so far. The Chair opened his questions to you, Secretary of State, by speaking about inflammatory language. Earlier this morning, we heard the deputy leader of the SNP on Radio Scotland referring to the UK as acting “like a rogue state”. The former First Minister accused people who disagreed with her Gender Recognition Reform (Scotland) Bill as “transphobic…deeply misogynist, often homophobic” and “some of them racist as well.” Do you think that that is potentially some of the inflammatory language from Governments that the Chair was referring to?

Mr Jack:  It is inflammatory language. As I said at the beginning, I am always open. If I was talking to the former First Minister or the new First Minister, as I have done, I always get what divides us out of the way quickly in a light-hearted but firm way up front, and then we try to get on to the things that we can sort out between us. I think that that sort of language is very inflammatory.

Q70            Douglas Ross: We also heard from Ms Brock; I think you, Secretary of State, described her as trying to agitate for grievance where there was none—on growth deals, levelling up and other funding from the UK Government to the Scottish Government. It was clearly ill informed, because Ms Brock could not even name Cloddach bridge, which received £1.5 million. But in her line of questioning, the one group of people Ms Brock missed out were the people who benefit from that funding. Whether funding comes from the Scottish Government, the UK Government or, in the case of growth deals, the two Governments jointly, surely the most important point is that it is investment in Scotland. Was that not missing from Ms Brock’s questions?

Mr Jack: That is why I was slightly questioning whether we were looking for a grievance where none existed. City and region growth deals have been incredibly successful. The Scottish Government have never complained to us about their operation or structure. The structure was put in place before my time, but that is the structure. We have not had any push-back on the structure, and we certainly have not had anyone say, “Don’t give us that money.”

Q71            Douglas Ross: Minister Offord and Minister Lamont, is there anything that you would like to add on the working relationships with the communities in particular, rather than the two Governments, on growth deals or levelling up?

Lord Offord: I think it has been really energising. We have a lot of conversations with local authorities of all political parties, and what is really interesting is that the politics disappears. There is one common theme among all local authorities, which is that they all want to make their communities better, and they come up with the projects that they think will help to do that. We in Government are only a catalyst to allow local people to make their own decisions to improve their own communities. It has unleashed a whole amount of energy in local authorities, and it has been a joy to be a part of.

Mr Jack: I agree.

John Lamont: The Prime Minister has been very clear that he wants both the UK Government and the Scottish Government to work well together. I think the growth deals are an example of that happening in practice, for the betterment of all the communities that those of us around this table who are elected represent. Certainly, my own constituency has been very welcoming of both the UK and Scottish Government funding being delivered through the growth deal.

Q72            Douglas Ross: Can I return to the topic of the deposit return scheme? Last week, the Minister in charge in Scotland, Lorna Slater, suggested that if an exemption from the UK Internal Market Act is not granted by the end of this month—just over a week away—the whole scheme is in jeopardy. First, Secretary of State, do you recognise that timescale? Has that been passed on to you? Do you believe that an exemption will or will not be issued in that period?

Mr Jack: It's a timescale that I have read about. It’s a timescale that was mentioned in the IMG this morning, where it was alluded to that Circularity Scotland would fail if there was no exemption by the end of this month. I would say that that is entirely a matter for the Scottish Government; they have set up Circularity Scotland. What I am concerned about is the money that may be lost by companies in the event of—

Q73            Douglas Ross: I will come on to the money in a moment, but while it is clearly a Scottish Government proposal and they set the timeframes and so on, ultimately it will be up to you and, I think you said to Dr Whitford, other Departments deciding on that exemption. Do you envisage it being a decision taken before the end of this month? I think that when you appeared before us last time, you made an analogy with the previous request for an exemption and the time period. What was the time period with that one?

Mr Jack: That was just over three months. That request came formally in writing, Minister to Minister—Lorna Slater to George Eustice. Actually, I alluded to this letter again this morning when we were meeting. That came in December. It was replied to in January—I cannot remember the specific years, so I will not quote them—then we said that it would take circa three months. As it was, the whole thing had washed through between March and May—there was one step in March and then another step in May—but what was given there was an exemption on plastic cutlery, on the basis that the scheme was six months behind the UK Government scheme, it was identical, and it was a time-limited exemption until the two schemes caught up with each other. So it was a relatively straightforward one to give, whereas there is much more divergence on these two schemes this time. It is much harder. We had no businesses writing to us saying this is terrible; everyone accepted it.

My position is that we should be building recycling as fast as we can. Some areas are more successful than others. I am very pro recycling, but what I am not pro is costing huge inflation to the consumer, removing choice for the consumer, damaging businesses, costing jobs or damaging our trade within the UK, because 60% of Scotland’s trade is with the rest of the UK. I am told by one of the product manufacturers that they will have to add 10p to a plastic bottle to charge the consumer. Coca-Cola have told me it is 5p for a plastic bottle and 2p for a can, but their figures are lower because they have volume on their side. That is inflationary. Twelve bottles of water from Aldi are £1.69. Under this scheme—I have said this at the Dispatch Box and I have said it in ministerial meetings, and no one has contradicted me—that would have gone up to £5.29 in August, from £1.69 in the shopping basket. Some £2.40 of that you could recover—20p a bottle—but the other £1.20 is not recoverable. That is hugely inflationary when we have cost of living challenges, and I want to see the impact of that done in proper, grown-up assessments. The impact that it has is important when we come to make our decisions on that, on trade and on the damage it does to trade.

Q74            Douglas Ross: The point I am trying to get at is that we are nine days away from this deadline, which became public on Thursday.

Mr Jack: I am avoiding your point.

Q75            Douglas Ross: Is it even possible for the UK Government to make that determination in the next nine days? Since the informal request went in on the date that the Greens and the Scottish Government use—or the formal letter and the actual trigger for this mechanism to be established—the scheme has changed considerably, so how can the UK Government accept the exemption?

Mr Jack: Correct, and there are still problems to be ironed out around, as I said earlier, online retailers not supplying recyclable products to homes. Tesco online and all the others have said they cannot do it, and there are a number of other issues. What I would say is this: at the inter-ministerial government meeting on 17 April, I asked for impact assessments to be done on consumer choice and consumer costs to businesses, to trade within the UK and to international trade—in other words, what effect it has on trade deals. Will France, Australia and New Zealand not change their labelling runs to not supply Wales or Scotland if they include glass, because the market is not big enough, they can sell it elsewhere and all these things? I have not seen those proper impact assessments yet, and I cannot come to a decision on an exemption until I see proper impact assessments, so that we know we are making the right decision and we are not causing unnecessary consequences.

Q76            Douglas Ross: I am looking at the consequences for businesses, which are significant. Indeed, there are reports that potential compensation claims could run to hundreds of millions of pounds. At the weekend, Humza Yousaf suggested that it would be the UK Government paying that compensation. My colleague Maurice Golden, who has led on this issue in the Scottish Parliament, said that it would be “utterly delusional” for Humza Yousaf to think that the UK Government should be liable for that. Do you agree?

Mr Jack: It has absolutely nothing to do with the UK Government. We were formally asked to consider this on 6 March. I have asked for impact assessments that are post UKIM, not pre UKIM, which is absolutely the right thing to do. I haven’t seen those yet. I have suggested, but it hasn’t been agreed with the Scottish Government, that the Department for Business and Trade would do those. I would suggest that they should be doing them and I have suggested that in meetings, because I think then everyone can feed in. I can feed in on behalf of all the stakeholders who have come to me and businesses with their concerns. DEFRA can feed in their views, the Scottish Government can feed in theirs, the Welsh Government can feed in theirs, and the Treasury can feed in theirs. Then we have a process that takes us to a proper assessment of the impacts to internal UK trade. Mutual recognition and non-discrimination are what we are trying to protect across the United Kingdom. That is a serious factor here. I have yet to see the workings that could let me take a responsible decision on this—one way or the other—with any confidence.

Q77            Douglas Ross: Is there any correspondence that you could find or share with the Committee in terms of the First Minister, Humza Yousaf, putting in writing a request that the UK Government pay the compensation for the failure of his scheme—the SNP-Green scheme—in Scotland? Had he even approached the UK Government about this before announcing it to the media on Saturday?

Mr Jack: No, that letter has not been received.

Q78            Douglas Ross: Can I move to you, Ms McDonald? JP Marks, the head civil servant in the Scottish Government, has dismissed some of the criticism of Humza Yousaf appointing a Minister for Independence. As the head civil servant—acting—in the Scotland Office at the moment, what is your view on the First Minister appointing a Minister for Independence?

Lyn McDonald: I would not want to comment on the First Minister, because it is entirely up to them to appoint who they want as a Minister. In terms of the civil service, we work under a code that allows us to work on non-political matters. Every civil servant is aware of that code and aware of how to go about it if they have any problems with it. As a lead civil servant—as the person who looks after my own office—I make it very clear with my staff that if and when they feel uncomfortable or that the work they are being asked to do is not within that code, they absolutely have a right to come to me and speak about it or to put in; I am very pleased to say that has never happened, to my knowledge, and that Ministers are more than aware of when it’s political and when it’s within our remit. It has worked well: I have been here for 36 years and I have never had occasion to raise it as an issue.

Q79            Douglas Ross: Secretary of State, you wrote to, I think, the Scottish Government or maybe the permanent secretary in the UK Government about the appointment of this Minister. At the same time that Humza Yousaf appointed a Minister for Independence, he removed the Ministers for social security and tourism from the Scottish Government portfolio of Ministers. What is your view? I asked Ms McDonald to bring her into these discussions. It’s good that we have her here today, but she naturally has to take a neutral view on this. What is your view as Secretary of State for Scotland?

Mr Jack: My view is that taxpayers’ money could be better used elsewhere. We have record drug deaths in Scotland. We have falling attainment standards in education, NHS waiting list issues, ferry failures left, right and centre—I could go on and on, but I won’t. The point is that I just think that money could be more wisely spent on delivery for the people of Scotland and the public services that are devolved. I have made it clear that I do not think there should be a Minister for Independence any more than there should be a Minister for removing Trident from Faslane, which was also in the SNP manifesto. My view is this: it’s a UK civil service—I don’t think civil servants should be working on policy documents to remove Trident from Faslane any more than they should be working on policy documents to break up the United Kingdom. We know, from the Supreme Court judgment in November of last year, that this is entirely reserved to the UK Government; that area is entirely reserved.

Q80            Chair: There was no indication of a time limit for your appearance here today. I am hoping that we have still got time for questions—

Douglas Ross: Sorry, on this point, can I just check, Chair, that there was a discussion in the pre-meeting that the Secretary of State would be here till 4.30 today? You allowed 46 minutes for SNP Members—

Mr Jack: I have a Cabinet Sub-Committee at 4.45 pm.

Chair: That was not communicated to our Clerks, unfortunately. There was nothing communicated from the Scotland Office.

Mr Jack: I will be leaving at 4.30 pm, because I have a Cabinet Sub-Committee on a very important matter at 4.45 pm.

Chair: It would have been really helpful if you had let the Clerks know that that would be the case.

Mr Jack: I apologise if my office did not tell you that, but I was told that your Clerks had been told there was a hard stop at 4.30 pm.

Chair: We didn’t get that message.

Mr Jack: We will confirm. If there was a communication, we will send it to you, but that is what I was told.

Chair: We have questions from Sally-Ann Hart and Christine Jardine.

Q81            Sally-Ann Hart: I want to focus on the section 35 order. It appears that many SNP members of the Scottish Government believe that there is no evidence that predatory and abusive men could exploit the SNP’s self-ID gender reforms, despite evidence to the contrary, the most recent incident being the trans woman butcher who sexually assaulted a primary schoolgirl over a 27-hour period. There have been other concerning incidents. Given that, do you think it is possible that the Scottish Government would consider making changes to reform their gender recognition reform Bill so that its measures seek a balance and will not impact on the rights of women and girls, let alone have an adverse effect on the Equality Act? What work have you done, if any yet, with the Scottish Government and the Minister for Women and Equalities to identify such changes?

Mr Jack: In the case of Andrew Miller, the Melrose butcher, he has plead guilty. It is no longer an ongoing legal or police inquiry. I am being straight with you that that is the case. Despite that being the case, I am going to step back from that in my position and just say that it is not the role of the UK Government to amend a Bill or get into discussions with the Scottish Government on their Bill. It is for the Scottish Government and the Scottish Parliament to reconsider the Bill if that is what they choose to do. They have chosen to challenge the Bill in the Court of Session. That is something we will robustly defend. I have my legal advice on that; I cannot share it with you, but I can assure you that I did not take this decision lightly when I took it. I took it because there are adverse effects on GB-wide legislation.

It is as a defence of devolution that I take that decision. I noted the First Minister saying it is an attack on devolution. It is not an attack on devolution. The Scotland Act 1998 has section 35 in it, and it has it there for a very good reason. Similarly to section 33, which covers when legislation cuts into reserved areas, section 35 covers when legislation has adverse effects on UK-wide legislation. That is why I took the decision. I believe there are adverse effects on the GB-wide Equality Act 2010. Rather than have legislation by a devolved Administration clashing with GB-wide legislation, I thought it was right to use section 35. That is all very clear in my statement of reasons. It is up to the Scottish Government what changes they want to make, if any. I do not think that is their plan. I think their plan is very clearly that they want to go to court—so be it.

Q82            Sally-Ann Hart: Do you know of SNP Member who tabled a prayer motion to oppose or to use an Opposition day to debate the statutory instrument laid on 17 January—the Gender Recognition Reform (Scotland) Bill (Prohibition on Submission for Royal Assent) Order 2023? Has this been taken up here?

Dr Whitford: A prayer was laid against the section 35.

Mr Jack: I think it was probably led by Stephen Flynn. The decision I took was prayed against. It was not debated because only when statutory instruments are prayed against by the Leader of the Opposition is there then a debate. That is the convention in Parliament.

Chair: I am conscious of giving Christine Jardine an opportunity to ask a question.

Q83            Sally-Ann Hart: One more clarification: you are waiting for the Scottish Government, or the judicial review—

Mr Jack: Just to be clear about the timetable, the Scottish Government have chosen to pursue a judicial review, so the timetable is now a matter for the court.

Sally-Ann Hart: Thank you. I have no further questions.

Q84            Christine Jardine: Briefly, if the Secretary of State does not mind, I will take him right back to the beginning when he said he wanted to talk about freeports and the progress being made with city and region growth deals. In my constituency, Edinburgh airport is included in one of those freeports; the other one is in Cromarty—so one in the Firth of Forth and one in Cromarty. One of the main aims is job creation, so how will the Government ensure that those jobs that are created will be new jobs and not just relocated, particularly in Cromarty, where there is a feeling that it might need to be community-led or in consultation with the community?

Mr Jack: That is a very fair question. Those successful in bidding for freeports have already gone through an extensive bidding process, and they have had to explain why, for example, their choice of tax site locations will minimise displacement, and how they will create new jobs, so there was a barrier to get over there. I was at Cromarty Firth on Thursday, when there was a very good announcement from a Japanese company bringing 150 direct jobs and 350 ancillary jobs, with the wider support jobs that happen above that. That is a £200 million investment. Also, at Ardersier port, Quantum Energy—I am pretty sure it is that—has announced a £300 million investment. Again, that is creating new jobs, as is the high-tech work that will be done. I think the Japanese company is called Sumitomo.

Q85            Christine Jardine: Are you confident that those will be highly skilled jobs? Will you be able to ensure that that is the case?

Mr Jack: Yes, absolutely. Those are ticking the boxes. The Sumitomo jobs are certainly highly skilled and high-wage jobs. There are training academies being built around that as well.

Q86            Christine Jardine: The other priority set out is decarbonisation. Particularly in the Firth of Forth, where we have INEOS on one side of the firth and Edinburgh airport on the other, decarbonisation will be a high priority. What measures will you put in place to ensure that the climate commitments of the green freeports are met, and that decarbonisation targets are achieved?

Mr Jack: That will be assessed by the UK Gov and the Scotland Gov together. There are criteria within the bids that had to be achieved. Now, going forwards on the delivery of the projects, they have to meet targets. That is entirely and carefully monitored. Doing so is a UK Gov-Scot Gov joint venture.

Q87            Christine Jardine: One of the criticisms is that this might be greenwashing. How would you answer that criticism, and what will you do to ensure that that does not turn out to be the case?

Mr Jack: I just don’t think it is greenwashing. What is happening in the Cromarty Firth—I will come to the Forth in a minute—is a huge investment in offshore wind delivery. Where the Cromarty Firth was leading in refurbing and updating oil rigs—in doing all that work, I think they said that they had had over 700 rigs in over the years—they will now be making the floating wind platforms, the actual sticks, the turbines and everything. All that is happening, and yet they are having to do it in a decarbonised move towards net zero kind of way.

Equally, we are going to see great things with the brownfield site at Grangemouth, which as you know had a refinery and petrochemical industry. I am absolutely sure that the port authorities—which I have met and had detailed discussions with—are very much focused on the ambitions for net zero and for delivering long-term sustainable jobs towards net zero.

Q88            Christine Jardine: One thing I am interested in finally is the potential marry-up between INEOS on one side, at Grangemouth, and Edinburgh airport on the other, and the potential for using that to drive the introduction of sustainable air fuels in Scotland and then in the United Kingdom. Is that something that the Government are looking at?

Mr Jack: Yes, it is. There is ongoing work on that, and it is absolutely the sort of thing that fits the bill. There is no question about that. There are already links for potential investment between Forth and Cromarty, and there is work going on that we want to fast track—hopefully Acorn will be successful—on the next carbon, capture, usage and storage project. There is the pipeline from Grangemouth up to the north-east—I think Peterhead will be where the heavy lifting is done on this—and that pipeline will be utilised for moving industrial carbon back up.

Christine Jardine: It is almost as if it were planned.

Mr Jack: It is all beginning to make sense.

Q89            Chair: We are very grateful for the whole team turning up once again. I think you are coming to the Committee again soon, Secretary of State, which we are very much looking forward to. You said that you would write to the Committee about a couple of things—I am sure that notes have been taken of what is required. See what you can do.

Mr Jack: I will check the minutes for what I agreed to write on.

Chair: We will expect that in due course. Thank you for your attendance this afternoon.