Examination of witnesses
Professor Nicola McEwen, Professor Jim Gallagher, and Professor Alan Page.
Q25 The Chairman: Welcome, and we appreciate hugely the efforts made to come here. As you know, it is a Select Committee. I think you know the ground rules under which we operate: militantly cross-party, usually pretty independent in thinking. We are just trying to come to terms with the whole series of implications of Brexit, particularly as it affects the devolved nations, and that is why we are here. There is the background that we have good working relationships with Parliament through the consultative machinery that already exists for the Commons, the Lords and the three devolved assemblies or parliaments. We have addressed some of these issues in general in the past and tend to let some of our responsibilities to our Constitution Committee, but clearly there are legal and constitutional aspects, and as we are hearing already some pretty high-end fiscal aspects, which we might want to look at, economic ones, legal ones and political ones, that is a good range.
If we may, we will kick pretty well straight off. This is, of course, a public-record session, and we will send you a transcript afterwards. Perhaps beginning on my left, could we ask you, Nicola, and the others to introduce yourselves for the record?
Professor Nicola McEwen: I am Professor Nicola McEwen from the University of Edinburgh, and I am Associate Director of the Centre on Constitutional Change.
Professor Jim Gallagher: Jim Gallagher, visiting professor in Glasgow and a member of Nuffield College Oxford and, by trade, a former public servant.
Professor Alan Page: Alan Page, Professor of Public Law at the University of Dundee.
Q26 The Chairman: That is really helpful. I would like to start with a question you may have anticipated, which is about your reaction, in brief but in general, to the Prime Minister’s speech setting out the UK Government’s approach to Brexit, which, of course, is now under process, as it were, now, leading up to the triggering of Article 50. In particular, what are the political, economic and legal implications for Scotland of the Brexit model the UK Government are now pursuing? You might like to talk about, either in that or reflect whether you want to come back on it, your own fields of expert research. In those, how can the challenges of Brexit be met?
Professor Nicola McEwen: That is a big question. I will restrict comments to the aspects that affect devolution and all the devolved nations perhaps, but also Scotland in particular. Certainly, the commitment to ruling out single market membership effectively rules out the first priority of the Scottish Government in their paper, which was to influence the UK position. A couple of aspects of the speech that referred to avoiding any new internal barriers to trade or living and working in the UK, coupled with the statement that pertained to no courts outside of the UK having oversight of UK laws and regulations, seems to me to rule out the second part of the Scottish Government’s paper, which is a differentiated solution for Scotland. That is not formally ruled out at this stage and apparently is still the subject of negotiation, but if the Prime Minister was to follow through on the implications of what she said in her speech about those two things, then it becomes very difficult to foresee that differentiated solution for Scotland being accommodated within that UK approach.
It also, I have to say, makes it difficult in relation to Northern Ireland too, although there is clearly a more obvious political will to have some sort of solution for Northern Ireland that would avoid the imposition of a hard border on the island of Ireland. The will is there but how you follow through with that in terms of making it happen seems to me to be deeply problematic.
The Chairman: Thank you. I am just going to pick you up on one sentence, because we have reported separately on British-Irish relations, although, obviously, the devolved side of this will be part of our inquiry on the subject of the particular operational difficulties in Ireland at the moment. I just wonder: is there any significant talk in Scotland, as there is in order to dismiss it in Ireland and the island of Ireland, about a hard border? Does anyone really think that the customs posts are going up at Gretna, or is that regarded as fanciful and unlikely?
Professor Nicola McEwen: It is a matter of political debate within the context of a possible Scottish independence, as you would expect.
The Chairman: But short of that, as it were.
Professor Nicola McEwen: Short of that, the Scottish Government’s position is to remain within a UK customs union, should the UK withdraw from the EU customs union, which was a more ambiguous part that seemed to be implied by the Prime Minister’s speech, but with a little less clarity than around the single market.
Professor Jim Gallagher: To put my cards on the table, I, of course, like many people, thought Brexit was a crazy idea and regret the result. Having had to live with it, as it were, the Prime Minister’s speech had the advantage of at least telling us what she thought Brexit would mean and ruling out some options. That is a political decision by her and by her colleagues, so a decision to leave the single market and prioritise immigration control reflects perhaps the Prime Minister’s personal interest and her political priorities. Whether it is the right decision or not is arguable, but let us for the moment take it as a given.
As Nicola says, she was ambiguous on the customs union, and that matters for the impact on all of the devolved nations, but especially for Ireland. It does not seem to me to be possible to solve the Irish border problem if the UK is not inside a customs union with the rest of the EU. That will take us back to where we were when I used to go to Ireland in the 1960s and 1970s, when I saw a customs post at the edge, and that is deeply problematic, not in a practical sense for Ireland—it is entirely doable—but it is problematic for the stability of the institutions. It is also economically undesirable because it is bound to lead, in good, traditional Irish fashion, to large amounts of smuggling across that border, which there was, of course, before 1972. That is undesirable.
Nevertheless, I would prefer that the Prime Minister prioritise maintaining the UK single market and the customs union and, therefore, I agreed, to that extent, with the Scottish Government that staying in the single market was the best solution for everyone. As Nicola says, if that is ruled out, one then falls back on the Scottish Government’s second option of Scotland being in the single market and the UK not. I think that is utterly implausible. It is implausible in two senses: first, if it were simply to happen as it was, then there would be a market barrier at the border. It would not be a customs barrier necessarily, but one set of trade rules and one set of product rules would apply north of the border and another would apply south of the border. That is exactly the problem of leaving the single market for the EU. You would create a single market problem between Scotland and England.
The Scottish Government’s approach appears to be that that problem can be solved by ignoring the algebra in this and saying that England can have exactly the same set of single market rules by agreeing that there will be a pan-UK authority that ensures that Scottish rules are the same as English rules, and that Scotland has the authority to make Scottish rules the same as European rules; therefore, English rules will be the same as European rules and there is no trade problem. That means that England—or the rest of the UK, strictly speaking—applies the European single market rules without being in the single market, on the authority of the Scottish Parliament. That is just crazy.
The Chairman: “Challenging”, I think, is the word.
Professor Jim Gallagher: Crazy—utterly crazy. It is also undemocratic because, of course, there is no English representation in the Scottish Parliament. That arrangement would require England to hand over all of its trade, product and services rules to the devolved Parliament in Edinburgh and take what it gets in order to preserve Scotland’s relationship with the single market, so that one is not going to happen. It was never going to happen, irrespective of what the Prime Minister had to say, and I am quite sure that the EU 27 would not have it, because it would be a back door for England into the EU market without agreeing freedom of movement, which, of course, is exactly what the EU will stand firm on. It also a Heath Robinson sort of arrangement. That one, then, I regard as not a runner.
That does not, however, in my view, mean that there is not scope for a differentiated approach to Scotland, Wales and Northern Ireland: remaining inside the UK but having a differentiated approach in respect of Europe. It seems to me that there are three consequences of Brexit that make that possible. The first is that, no matter what, Brexit will empower the devolved Administrations in ways in which they have not previously been empowered. That is because European rules have hitherto required certain areas of policy to be uniform across the UK but which are already devolved—agriculture, fisheries, justice, environment and a long list of small ones. Unless something changes, those will remain devolved, and I think they should remain devolved or, more particularly, they should remain devolved unless the devolved Administrations agree with the United Kingdom some common approach.
The Chairman: There is at the moment no suggestion that HMG is seeking to take those powers back.
Professor Jim Gallagher: There are sometimes hints that they might be, and it is hard to differentiate between hints of that and perfectly sensible propositions that we will need a common UK approach on certain matters.
The Chairman: In international trade, for example.
Professor Jim Gallagher: Let us take agriculture. Agricultural subsidy and international trade in food are closely linked and, therefore, there will have to be some UK co-ordination. The mistake that my former colleagues in Whitehall sometimes make is thinking that UK co-ordination means that they decide it, which is not the same thing. That is the first reason why there will be empowerment of the devolved Administrations and, therefore, greater differentiation.
The second is that, as a consequence, there is certainly scope for the devolution of matters that are currently reserved but European to the devolved Administrations. If it is, indeed, the case that Scotland and Northern Ireland are more pro-European and like some of the things that Europe does, why not enable them to make different choices? Let us take the example of workers’ rights and working hours, which certainly some people have argued should be devolved. That is certainly the case.
More challenging for the UK Government, but I still think possible, is that a differentiated solution could involve the devolved Administrations being empowered, or at least not forbidden from entering into relations with the institutions of the European Union in respect of devolved matters. If you go to Europe today and you fall ill and you have been sensible, you are carrying your E111 health card. You would not need it for coming to Scotland.
The Chairman: I did know that—not yet.
Professor Jim Gallagher: Not yet. You then have reciprocal rights to healthcare. There is no reason, in my view, why the Scottish, Welsh and Northern Irish Administrations should not be empowered to enter into that kind of relationship with the European institutions in respect of devolved matters. There would have to be some constraints on that, because there is a boundary between devolved and reserved matters—trade is an obvious example—but, nevertheless, putting all those things together, there is first still scope for a differentiated solution, though not the one the Scottish Government had proposed, and secondly, as a result of that, in my view, a rebalancing of the UK’s territorial arrangements, largely in the favour of the devolved and adding up to what I would describe as a confederal solution for the United Kingdom.
Q27 The Chairman: Can I just probe a couple of points in that presentation about Scottish relations with Europe? I am aware that there are already Scottish representative institutions in Europe and talking to the European Union, as, indeed, there are from Wales. I would be interested, from your Whitehall experience, in the extent to which those are seen as being effective channels of communication on which one might want to build this kind of differentiated relationship or solution. Secondly, which is not quite the same point, given that the whole of the United Kingdom will be, at some stage, in a post-Brexit situation but will have important continuing association with Europe—and I am not necessarily talking about the trade pattern but things like security and other types of co-operation—do you see there being a machinery, not necessarily defined yet, for Scottish participation in what might be termed pan-European issues as well at a later stage?
Professor Jim Gallagher: I think the short answer to your question is, “Yes, probably”. Back in the 1990s, I was involved in the setup of what is now called Scotland House in Brussels. It is one of a large number of institutions in Brussels that represent regions or sometimes interests, most of whose work is largely fruitless; let us be frank about this. The real power lies elsewhere but, nevertheless, they are part of the Brussels machinery. Scotland House and the Scotland Government representation gained most of its leverage, when it had leverage, by its access to UKRep and its capacity to influence there, rather than in the wider Brussels maelstrom. Nevertheless, post-Brexit—and I am assuming that there will be a post-Brexit world in which the UK has some sort of relationship with the EU—I think the UK will find itself rather in the position of Switzerland, which has probably the largest representation of any nation in Brussels, including member states, because it has to form a differentiated relationship over a whole series of areas. The UK will still be in Brussels, probably in the same building, and I imagine that Scottish representation will still attach itself to that, as well as being part of the general Brussels excitement. That is a long way of saying, ‘Yes, probably’.
Professor Alan Page: If I could just follow on from what Jim, Professor Gallagher, said, my particular interest is in the implications of withdrawal or Brexit for the devolution settlement. I did some work on this right at the very beginning, in the immediate aftermath of the referendum, for the Scottish Parliament, in which I, essentially, mapped the reserved areas set out in Schedule 5 of the Scotland Act onto EU competences with a view to establishing which were devolved and which were reserved.
The Chairman: Is that a public document?
Professor Alan Page: Yes, it is. I might have a copy of it somewhere.
The Chairman: That would be invaluable.
Professor Alan Page: What I took from that was that certain areas were devolved, and Jim has already mentioned them—justice and home affairs, agriculture, fisheries and the environment—but the real point that I took from it, which came as a surprise to me, but probably would not come as a surprise to Jim or possibly Nicola, is that the vast majority of EU competences are, in fact, reserved. That is to say, they will go to London not Edinburgh—
The Chairman: Unless a decision is made to change them.
Professor Alan Page: If one looks for an explanation for that, the answer lies, in large part, in the fact that they are integral to the maintenance and the functioning of the UK single market and single market powers. That is the background to Theresa May’s Lancaster House speech where she talks about the undesirability of setting up new boundaries and so on.
That then raises the question—and this is not a party political point—about how you secure or protect Scottish interests in relation to those competences that will go to London rather than Cardiff, Belfast or Edinburgh. There are two immediate answers to that: one is independence; another is to adjust the devolution settlement in some way. I wonder, however—and I am just throwing this out as a thought at the moment—whether there is not here the opportunity to make a reality of what is sometimes referred to as shared rule, which is the key weakness of the current devolution settlement.
The Chairman: Does that mean the possibility of sharing a competence?
Professor Alan Page: Yes, which I think the Steel commission talked about way back in about 2005 or 2006. You would have a much more thorough-going system of intergovernmental relations, possibly centred on a joint ministerial committee or EU law revision committee or whatever, in which all UK nations would be represented and which could, in certain circumstances, extend as far as a joint decision. I wonder whether that would not be a more profitable way of approaching a post-Brexit world than arguing simply about which competences belong where and, at the same time, ignoring what I think is, by general agreement, a key weakness of the current devolution settlement.
Q28 Baroness Suttie: If I could go on to political and public opinion post-Brexit, how have the Scottish people reacted to Brexit? There was a presumption, before the referendum, that the Scottish people would feel more and more pro-European. Do you think that is something that has actually happened, or has it been the opposite since the referendum last year?
Professor Alan Page: Neither, really. There has not been what is sometimes referred to as a Brexit bounce, so the opinion in favour of independence remains roughly where it was.
The Chairman: It was not necessarily the same people.
Professor Alan Page: That is right.
Professor Nicola McEwen: There is a little bit of mobility there.
Professor Alan Page: Some yes supporters have become no.
Professor Jim Gallagher: That is the opinion on independence but you are asking about public opinion on Europe.
The Chairman: On Brexit, yes.
Professor Jim Gallagher: The interesting thing is that, when one looks at Scottish and English public opinion going back over a long period, the lazy assumption is that Scotland is more pro-European. All of the public-opinion data suggest that those differences are quite marginal, but Scottish elite opinion is different. Scottish elite opinion is very pro-European, so all of the leaders of the major parties in the Scottish Parliament campaigned for remain. There is a difference around the elite and the ordinary, and there is a bit of indication that Scottish public opinion is a bit more pro-European, but it is not hugely so.
Professor Nicola McEwen: I would say “moderate” rather than “marginal”. To answer your question directly, we do not really know. We do not have enough of an insight into the precise views around attitudes to the EU since the Brexit referendum. We know about how people voted and why they voted, but we do not have enough to chart opinion since, except on the big constitutional issue that still dominates our politics, which is where surveys of opinion tend to focus. There is some mobility there in both directions.
Baroness Suttie: You picked on the elite, but would you agree that the rural-metropolitan divide is the same in Scotland as it is in England, although it is not a perception that you would hear very much in Westminster?
Professor Nicola McEwen: If you look at the counting areas in terms of the Brexit vote, there are some that tended to be a bit more favourable in metropolitan areas, particularly the city of Edinburgh, of course, but it was not the case necessarily that the least favourable areas were always the rural areas, nor was there a Highlands/Central Belt distinction. Those patterns did not quite fit, if you look at the pattern of the vote in June.
The Chairman: What about social class? Was that markedly divergent from England?
Professor Nicola McEwen: That does not really fit either. The areas of most deprivation in Scotland are in the city of Glasgow, and Glasgow was favourable to the EU in the referendum. I agree with Jim on the point about the importance of the political elite shaping some of those broader attitudes and patterns of political behaviour. People in Scotland were exposed to the UK-wide debate in the referendum campaign but, in terms of a Scottish debate, there were not very many prominent voices advocating a leave position.
Professor Jim Gallagher: It is quite interesting. Two things are worth remembering. I was listening to Ruth Davidson on this last night. The first is that there was not the same level of engagement in the EU referendum in Scotland as there was in the rest of the UK, and that may have been weariness, having been through one debate already—“We have done this; we would rather not do it again”—so the turnout was lower, and that is quite striking. The second is the extent to which the issue was, in many people’s minds—and particularly many politicians’ minds—seen as secondary to the independence question. In particular, the discipline of the Scottish National Party, which is notoriously strong, meant that there was surprisingly little dissent from the leadership’s position, although maybe 400,000 people who voted for independence are actually in favour of Brexit as well, and we see the working out of that in positioning of debate subsequent.
Professor Nicola McEwen: You might be interested to see that YouGov did an analysis last week. They have a very simple graph that shows the percentage of people who voted remain and no, leave and yes, and so on, and it is quite an interesting portrayal.
The Chairman: We have seen some of John Curtice’s work too. Many of us individually have.
Q29 Earl of Kinnoull: I wanted to stray on to the judgment. I did not want to really talk about the 8-3 bit but I wanted you to reflect on the 11-0 bit. I wondered what you felt about that and how it related to that question and what it said about things more widely. It has clarified something which seemed to me not to be clear before.
Professor Alan Page: I thought the Lord Advocate was always going to have an uphill struggle in persuading the Supreme Court, and it was not quite clear what it was he was trying to persuade the Supreme Court of.
The Chairman: That the word “normally” meant “always”.
Professor Alan Page: This was a matter on which they could pronounce and should pronounce, so he failed in that. Some people have responded to that by saying, “This means that the Sewel convention is not worth the paper it is written on”. It is written on paper, now that it is written in the statute. I think that that is completely wrong. All that the Supreme Court decided was that it is not legally binding, it is not justiciable, it is not legally enforceable, but that does not mean that it is not politically binding, and it continues to have exactly the same force as it had before and, therefore, remains a key element of intergovernmental discussions about the revision of the devolution settlement, et cetera, in the wake of Brexit.
Professor Jim Gallagher: I agree with that and I would add something to it. The Sewel convention is and always has been a constitutional convention, and the Government’s Scottish Law Officer argued successfully before the court that the courts do not make judgments on constitutional conventions. The statutory enactment of it was declaratory rather than blackletter law. On reading the statute, and certainly if you read the parliamentary proceedings on its enactment, that is perfectly plain.
Nevertheless, I am a little disappointed in the Supreme Court judgment, for two reasons. First, I did think it was a little dismissive, or rather patronising, about the convention and rather superficial about it: “It is not a matter for us. It is very important”, they said, “but not important enough for us to say very much about”, which I thought was a bit of a disappointment. In particular, the disappointment I have is that we have not parsed the convention in a way that helps us decide how it is relevant to the present circumstance. Constitutional conventions get enunciated in general terms and kind of evolve—this is their flexibility or their undesirability, on one view—as circumstances change. The interesting question is: what does the Sewel convention mean in the present circumstance of Brexit?
It seems to me—and later today I publish a paper that I sent to the clerks, who can put it in your bundle—that it cannot be that the Sewel convention enables the Scottish Government or the Scottish Parliament to exercise their veto in Brexit. To be fair to all the devolved Administrations, none of them is claiming that. A consequence of that, however, is that it cannot be that the convention applies to any legislation that is an inevitable or necessary consequence or prerequisite of Brexit. In particular, I thought that that means that it does not apply to the tiny Bill that is currently before the House of Commons empowering the Prime Minister. If the devolved Administrations were able to say no to that Bill, they would, as a result of the Supreme Court judgment, be able to say no to Brexit, and that cannot be right.
However, to the extent that the process of Brexit, whether in the great repeal Bill, if that ever becomes the case, or more likely in a series of subsequent legislation that sets up UK frameworks for things that are currently European, impinges on devolved matters, the consent of the devolved Administrations is, under the convention, necessary, in my view. That will give them a surprising amount of leverage and, if the UK Government are wise—and I hope they will be wise—the consequence of that is that, when they are making the administrative choices and beginning the negotiating process in Brussels, they will have to take the devolved Administrations with them. Otherwise, at a later stage, when they are promoting the necessary legislation, they are going to stub their toes very badly.
At the moment, first of all, UK Ministers are struggling to find space and bandwidth to deal with that, and that is perhaps understandable. At the other end, one does, I am afraid, see the temptation for the devolved here in Scotland to see this as not about negotiating Brexit but about campaigning for a further independence referendum.
Professor Nicola McEwen: On the Supreme Court, it is important to see it as a judgment rather than a ruling, because the judgment was that it ought not to rule on matters that are, in its view, political and matters for politics, but that does rather shift the focus back to the intergovernmental process. There is a whole set of issues around whether that engagement, which is more intense than anything that has happened in the intergovernmental arena before, has meaning inasmuch as whether it creates opportunities for the devolved Governments to influence the negotiating position or the outcomes that the UK takes over Brexit. They are being consulted through that process, but the UK Government have not conceded it necessary to invoke legislative consent procedures before triggering formal negotiations with the EU.
There is a whole issue, it seems to me, about implementation of whatever is the conclusion of the negotiations, whether it is, as Jim said, the great repeal Bill or any other legislation. The Scottish Government paper mentioned this. The Welsh Government paper mentioned it even more strongly, in the sense of the need for the devolved Governments to give consent to the repatriation and what it might mean for their competences. The Supreme Court said it was not for it but it did not say it was not important. It has, however, never been clear, it seems to me, what the consequences would be of the devolved legislatures not giving their consent or withholding consent.
Professor Alan Page: It has no legal consequences. You take the political hit.
Professor Nicola McEwen: You take the political hit but then what happens to the broader political debate? That is a bridge you have to cross.
Q30 The Chairman: I want to bring Baroness Suttie in, but first, in terms of political signalling, if I may say—not party-political signalling but in terms of the importance of these issues—and looking at Jim in particular, with his civil-service experience, is the penny dropping in the central departments of government in Whitehall and the Brexit Department that these issues are sensitive? Is the fact that we have not heard about them merely a reflection of their future sensitivity and because they are being held back for a late stage in the process, or is that they have not got the point yet?
Professor Jim Gallagher: That is quite hard to judge from outside because one can never fully tell what is going on in the mind of the Whitehall machine. My own impression is that the issue is, as it were, on the agenda or on the table. Just whose table it is on is hard to say. One of the striking things about the first six months of Mrs May’s Prime Ministership was certainly, looking at it from the outside, the extent to which the behaviour was to draw things into the centre and hold decision-making. She was heavily criticised, for example, by the Economist for her indecision on that.
To be fair to her, the speech that she made took a step forward. It might not have been in the direction one would have wanted but it had substance to it. It is not yet my impression that the very centre of government have fully hoisted on board the nature of the process that it is going to have to go through. There is a degree in which it looks rather as if, from the outside, proper words are being said but their significance has not fully been understood.
That is, in part, because it is very difficult for Ministers to distinguish the issues of intergovernmental co-operation, which Nicola and I have been talking about, from, as it were, the higher politics of referendums and independence and so on. Both sides have to take a bit of a leap of trust here. The UK central Government have to be prepared to believe that St Andrew’s House up the hill is not solely concerned with another independence referendum and, conversely, St Andrew’s House has to believe that it is going to get some space to be heard and have some influence over the content.
The Chairman: Nicola introduced a new element, which had not occurred to me previously, that, as you get into the implementation stage of what would be an agreement pursuant to Article 50, presumably the European Union is going to have an interest in the integrity of the compliance with that agreement on the part of the UK. There could be potential issues. If there are issues about jurisdiction, for example, they could go through to or could cause issues both within the British system, with the devolved Governments, but also vis-à-vis the European Union, which could say, “You said you were going to do this on fisheries” or “It was agreed that you did and it did not work” or “We do not think you are compliant”, so there is another raft of complication there, is there not? It is a potential.
Professor Nicola McEwen: Possibly, although that already exists, in a sense, and there are obligations on the part of the devolved institutions to adhere to EU law.
The Chairman: We have not looked at the great repeal Bill yet but there would have to be a separate domestic legal process, which would have to stand up to the agreement.
Professor Nicola McEwen: Yes, or an intergovernmental one. When the Prime Minister talked in her speech about the need for common standards and frameworks, that was partly what she was alluding to. My hunch is that whatever agreement the European Union reaches with the United Kingdom, it will be with the United Kingdom Government and it will be their responsibility to ensure adherence to it through whatever are their domestic arrangements for doing so.
The Chairman: They would not structure it through local enforcement; it would be our responsibility.
Professor Alan Page: As is currently the case.
Professor Nicola McEwen: As is currently the case. The exception to that may be if there was to be any differentiated arrangements for Scotland or Northern Ireland in particular, or London or Gibraltar, that would require them to have some sort of external-relations responsibility or treaty-making responsibility, but that is a big if.
Q31 Baroness Suttie: If I can just very quickly ask a technical question, there was some talk about seconding Scottish civil servants into DExEU. Do you know if that has happened?
Professor Nicola McEwen: I do not.
Professor Jim Gallagher: I do not, I am afraid. I can think of at least one Scottish civil servant who is on secondment into the centre at the moment, but whether it is DExEU or not, I do not know.
The Chairman: We can pursue that with Mike Russell, perhaps.
Lord Whitty: You have answered pretty straightforwardly that a differentiated settlement, with Scotland being within the single market and the rest of the UK not, is not on politically.
Professor Jim Gallagher: That is my view.
Professor Nicola McEwen: That is what he said.
Lord Whitty: Do you dissent from that?
Professor Nicola McEwen: I think the words that you used, Jim, were that it is “completely implausible”. That would not be my view. I think it would be complex and extremely difficult, and probably unlikely, but that is not quite the same thing as saying it is completely implausible. You can work through those complexities, if there is the political will to make that happen. I do not think there is the political will to make it happen and it would create difficulties. If I may say so, I think Professor Gallagher was perhaps over-interpreting some of the statements in the Scottish Government paper, which gloss over a lot of the complexities, so there would have to be an awful lot of work undertaken to try to develop a set of systems and processes that could make it work, and that would require an awful lot of commitment. I do not think it is completely implausible but I think it is very difficult.
Lord Whitty: It does require political will at three different levels.
Professor Nicola McEwen: Absolutely. Yes, it does.
Lord Whitty: And three different approaches—or 27 different ones.
Professor Jim Gallagher: Nicola is right: I was going beyond what was in the Scottish Government’s paper. I was relying on the papers produced by the chairman of their advisory group, Professor Muscatelli, which I find unpersuasive.
The Chairman: Alan, join the party.
Professor Alan Page: I am listening with interest. The point that I took from what Jim and Nicola were saying earlier was, in terms of two parallel sets of negotiations—one between the UK and the other 27 of the EU and one between the UK Government and the devolved Administrations—and the need to secure the agreement via the Sewel convention on the devolved Administrations to be taken into account in the negotiations with the EU, they cannot be approached as completely separate activities.
I guess the other point that I would make is, going back to the Sewel convention, that, of course, we have been here before. Both the 2012 and 2016 Scotland Acts were negotiated in the shadow of the Sewel convention and, although people were sceptical at various points in these process, agreement was, none the less, at the end of the day, reached. The Scottish Parliament did consent to what was proposed in that legislation.
The Chairman: On the machinery of government point, we know who is going to be negotiating with the European Union, which is primarily DExEU—or at least they are going to be co-ordinating that, although there will be national officials on specialist areas. In terms of negotiating with the Scottish Government, however, is it clear whether there will be a DExEU function or will this be the traditional Departments that have done that?
Professor Nicola McEwen: It presumably will be the Joint Ministerial Committee (EU negotiations), which is the forum that has been set up for that purpose and which is chaired by the Secretary of State for Exiting the European Union.
Professor Alan Page: In terms of the detail, it is my sense that the Scotland Office will have the lead.
Professor Jim Gallagher: The departmental lead will lie with the Scotland, Wales and Northern Ireland Offices, but the Cabinet Office will have a co-ordinating responsibility in that.
The Chairman: There is a degree of coincidence between the Cabinet Office and DExEU.
Professor Jim Gallagher: It is not always agreement, I suspect.
Q32 Lord Whitty: To press a differentiated solution short of Scotland remaining in the single market and the rest of the UK not, what are the main points of that and what are the financial implications of that, including the issues of where what are currently European-funded programmes would end up—the CAP—or if you wanted to buy your way back into, for example, the R&D programmes or whatever, from the Scottish level, how would that all work and how quickly could that be sorted?
Professor Jim Gallagher: I will have a go at that, shall I? First, I think that such a differentiated solution is possible, as I said earlier. The workings of it depend on how differentiated it is. Let us take agriculture as the most obvious example. We spend about £500 million a year in Scotland on agricultural subsidies, which is proportionately more than England, as you would expect, because there is more agricultural land. It is about 16% of the UK total, roughly. The Barnett formula does not work for that and does not include sheep, as I understand it, so a different solution would be needed for financing agricultural subsidy. That puts the UK Government in quite a strong position in any negotiation, because they will have the financial resources; on the other hand, the Scottish Government have leverage because of the Sewel convention.
There are a number of ways in which you might do it. The most obvious one is the way in which the Stormont Parliament, before 1972, and social security since devolution has been funded, which is the so-called parity principle: in other words, the UK says, “Our policy in relation to subsidy is this and we will guarantee you that we will give you the money that would have been necessary to fund our policy. If you wish to fund a different policy, you can spend the surplus or supplement the budget accordingly”. That is certainly a potential solution.
As for something like buying your way into EU programmes on research, that is already devolved money, so that is not problematic.
Lord Whitty: Previously, it was EU money that was funding it.
Professor Jim Gallagher: There are a number of subsets here. There are some places where universities use their own funding to contribute to joint work, and that is already in place. The UK will have the cash insofar as, other things being equal, money that currently goes to Europe will remain in the Treasury. Other things will not be equal, but that is a different matter. To the extent that that is then spent on university research, that will be Barnett-ised, so that will fall into the Scottish budget automatically.
Lord Whitty: A lot of that will also have principles about the basis of the reallocation of the Barnett formula and how all of that works. All those issues, then, are raised simply, even if you just take agricultural subsidies.
Professor Jim Gallagher: Agriculture has never been part of Barnett.
Lord Whitty: Exactly, but that is because it came from Europe.
Professor Jim Gallagher: More or less everything else is.
The Chairman: We want probably to have one more squeeze of the devolved-powers lemon, just in terms of what is practically possible at least to contemplate. Lord Selkirk, would you like to lead us on that?
Q33 Lord Selkirk of Douglas: First of all, I thank very much Professor Alan Page, for his document on the implications of EU withdrawal. I note that the last paragraph says, “The policy responsibilities that would fall to the Scottish Parliament are correspondingly few, the principal ones being in respect of justice and home affairs, agriculture, fisheries and the environment”, and then you state qualifications. You will appreciate that the Calman commission, on which Professor Jim Gallagher and myself served, and the later Smith commission did not look at this whole issue, and I wonder if you have any specific recommendations, and what they are, about the qualifications? I suspect what could happen is, when there is a very strong recommendation with a lot of qualifications, it is a lot less likely to happen.
Having said that, you may not be able to give an answer today but, if it is possible to let us have it in writing, where do you think the case is strongest for transferring to the Scottish Government any powers, if that is your view? That was the first question.
The Chairman: Can I just interpose there? I think our interest is across the piece, both in terms of existing UK powers, which might want to go either for goodwill or for good order, and also its EU competences coming down, at first blush, to the United Kingdom Government, but it may be appropriately taken on, given that some of those will already have devolved implications and also bearing in mind the point that we made about the possibility you might be sharing competences or sharing an approach.
Lord Selkirk of Douglas: I am trying to keep my remarks very short because of the time. Can I also ask, as far as the devolution financial settlement is concerned, what exactly are the impacts likely to be and whether there should be adjustments made accordingly, and, finally, whether there is sufficient capacity and resources for devolved institutions such as the Scottish Government and Parliament, and what steps need to be taken to ensure that they have the necessary resources, if additional responsibilities are to be given to them?
Professor Alan Page: That is a lot of questions.
Lord Selkirk of Douglas: I am sorry.
Professor Alan Page: No.
The Chairman: Perhaps the simple question is whether those are the right questions to be asking?
Professor Alan Page: Certainly, the questions about which competences might be devolved over and above those that are devolved currently is a question worth addressing in the light of both the Scottish Government and the Welsh Assembly’s paper. One could probably come up with a reasonably concrete answer to that.
The question of shared competences is an interesting one, as is something that we have not talked about so far: the disentangling of UK law from EU law consequent upon the great repeal Bill, which I cannot see being done, other than through secondary legislation or delegated legislation—a Brexit equivalent of Section 2(2) of the European Communities Act 1972—which takes you back to this question of joint working or shared decision-making in relation to how they exercise all these powers. That is a massive area, where we have very little knowledge of what goes on. The Scottish Government have, in many cases, as Jim will know, been quite content to rely on what has been done at the UK level. It is called “putting a kilt on it” or “tartanising it”. It is quite easy to see that continuing in the light of the resource point that you made. This will be the easiest way of addressing this but it does raise questions about the extent of parliamentary oversight of that process.
The Chairman: We of all Houses are very likely to be very sharpened to that.
Professor Alan Page: For the devolved legislatures as well.
Professor Jim Gallagher: Alan is absolutely right on those points and, in particular, the extent to which no one has fully understood how we are going to disentangle EU law. The so-called great repeal Bill, I understand, will carry everything forward, whether it is the regulation under 2(2) on things that have indirect effect, and it will undoubtedly have a Henry VIII power of some sort, which will undoubtedly impinge on devolved matters. Take agriculture as the most obvious example, but there are many. If I was sitting in St Andrew’s House, I would be saying, “What kind of say are we going to have over that process?” and that is a perfectly reasonable question to ask.
To answer Lord Selkirk’s question more explicitly, there is a list of things that could well be considered for further devolution. I have mentioned those parts of EU law that can constrain wicked employers—workers’ rights—and, if it is, indeed, the case that Scottish opinion differs, why should it not have the opportunity to maintain that set of regulations?
Secondly, and more interesting, I think, if we are to have a system of work permits for persons from the EU, which I think is quite likely, it is almost inevitable that we will have visa-free travel, as we had before 1972, so that persons from the EU 27 who wish to arrive in the UK will not be stopped at the gate. Therefore, immigration will be what is called point control—control in country rather than at barrier. Point control involves things like work permits, capacity to take up jobs, capacity to claim benefits, capacity to register for public services and so on.
The Chairman: There are distinctions between freedom of movement, which is something that we are implying will continue, and freedom of establishment, which might be specifically a condition.
Professor Jim Gallagher: Freedom of movement in EU terms carries with it a whole baggage of ability to take a job and so on, but visa-free travel—i.e. not to be Trumped at the border, if I can use that phrase—is inevitable, for the simple, practical reason that Heathrow could not cope, and nor could Larne. We know that from pre-1972. In-country control of migration from the EU is inevitable. It seems to me that there are perfectly good arguments for saying that in-country control of migration should be either devolved or, as Alan says, maybe a joint responsibility.
The Chairman: You might wish to look at our British-Irish report, which discusses the implications of that across the Irish land boundaries.
Professor Jim Gallagher: I think it works well for the Irish land boundary. Of course, irrespective of the EU, there will continue to be the common travel area, we understand, so folk can wander back and forth across that border. Irish citizens can do so and take up a job, because we have always done that, but what about a Frenchman who has gone to Dublin and fancies going to Belfast? Who is going to manage that? That will have to be managed from Belfast. There are good arguments for differential migration controls in a part of the UK whose issue is reducing population—or relatively reducing population—and those areas where there is pressure. A differentiated solution there seems to me to be part of the story.
The third one, which no one has mentioned so far, which I think is really very important, is that, for the first time since 1972, the United Kingdom will have the capacity to have its own regional economic development policy. Those who are very long in the tooth will remember that the UK used to have regional economic development policies, but they were all replaced by the EU framework, and that framework is going to go. That, on the face of it, is a devolved matter but, of course, go back to resource. The money, to the extent that there is any, will reside in Westminster and Whitehall, and there is a good argument for saying that the UK Government at the centre should be able to allocate money to those parts of the UK that are the poorest. That is what regional economic policy is about. We will no longer, perhaps, be constrained in the same way by the state aid rules, so there is scope for imagination. Mrs May calls it industrial policy; the content is yet thin. Finding the right relationship, however, between the devolved powers in that respect and the UK powers will be an interesting opportunity. As for finance, Lord Selkirk, the only really big issue is agricultural subsidies.
Professor Nicola McEwen: I do not think it is possible to say that there is an optimal allocation of competences at different levels. These are all politically contested matters. It depends on where you come from.
The Chairman: They could conceivably change over time.
Professor Nicola McEwen: Absolutely it could change over time. Perhaps one way to approach it might be to think about what sources of tension we can envisage, and that also could change over time, depending on who is in Government, at which level and so on. Even if you think about it within current devolved competence and without any changes to the allocations, one aspect of the Prime Minister’s speech that I wanted to draw attention to, which has not been mentioned yet, is when she said, “I should equally be clear that no decisions currently taken by the devolved Administrations will be removed from them.” That is very different from saying that the repatriation of competences will bring a barrel-load of new powers, which is an alternative view that has been expressed, not least from the Secretary of State for Scotland.
The Chairman: It does not preclude that.
Professor Nicola McEwen: It does not preclude it, but taking that and the issue of no barriers alongside the positions that the Welsh Government, along with Plaid Cymru, in their document and the Scottish Government have taken seems to me to suggest that there is a possible source of tension there, unless there are the mechanisms of co-decision-making put in place to ensure that, where there are common frameworks, all of the Governments have some sort of influence in setting those frameworks.
Just one final thing on shared competences: shared competence or shared rule does not mean that you agree. It is important to note that, when probably all of the devolved Governments but particularly this devolved Government in Scotland enter into the intergovernmental arena, it is not for the sake of harmony but to maximise decision-making autonomy and to maximise influence.
Professor Jim Gallagher: I would hope it would be to maximise the benefit for the population, not power for the politicians.
Professor Nicola McEwen: From that perspective, however, it is in the interests of the population that they serve that they would make decisions on their behalf. That is a perspective. It is maximising autonomy, maximising influence and defending what they regard to be the Scottish interest. That is also the case for the other devolved Governments. Yes, shared rule and shared competence is one avenue to go down but it is not necessarily problem-free either.
Professor Jim Gallagher: The risk then is that it is autonomy at the expense of voice: you could have all these powers, but what about the other ones?
Professor Nicola McEwen: Is there a trade-off there? There is an issue there.
Q34 Earl of Kinnoull: This is a very simple question: during the 2016 Scotland Bill debates, from all sides of the House concern was expressed that the Scottish Parliament had been built to exercise one lot of power and one lot of competences, and more and more competences have been tipped into it. Do you think that it would be reasonable, if there is going to be a further discussion about shared competences and additional powers, to put on the table to ask, “What are you going to do to make your Parliament change so that it can deal with the exercise of this additional power?”.
The particular thing expressed in a number of speeches was that the scrutiny function in the Scottish Parliament was felt to be weak. Would it be reasonable to put that on the table and say, “We are going to talk about competences. Let us talk about the structure of the Scottish Parliament and see whether the scrutiny element at least can be improved”?
Professor Nicola McEwen: I think it is already on the table. You will be aware, I am sure, of the commission that has been set up by the Presiding Officer to look into some of those issues, including the scrutiny function of the Parliament, in light of the new competences that it has already assumed. It is already there and already on the table. I suspect there would be a bit of kickback from within that institution if it was seen to be a decision taken by others, if you see what I mean. I think I would be a little bit careful with that.
One issue that is perhaps related to the broader issue of the new competences and sharing powers and everything that falls out from that is the position of England. If you are going to have a more complicated system, where the four Governments are coming together to agree common frameworks for the United Kingdom, who speaks for England within that framework? The default position is that a UK Government Minister takes the position of speaking on behalf of England, which may be satisfactory or may not, but I think that the issue of the governing of England has to be part of that discussion.
Professor Jim Gallagher: I agree with both those points. The one I would add is that the challenge is also the capacity of the Scottish Government. It has been interesting. We have had an avalanche of new powers in a short period. I have been largely happy with them as an allocation of powers, but I watch with some concern the capacity of my former colleagues in St Andrew’s House to cope with them. That is not a criticism; it is merely that this huge particular set of taxation powers has arrived on an institution whose only habit hitherto has been to spend money.
To be absolutely fair to the Scottish Government and the Parliament, institution-building is going on, particularly with the Fiscal Commission, which is properly, I think, now at some distance from the Government, but that has a long way to go. Some of the experience with the land and buildings transaction tax, which is about the simplest tax in the world, has not been all that encouraging. It has gone up and down and has been found rather difficult. Similarly, in the Parliament, the experience with the budget-setting process, which is bubbling right at the top of the agenda today, suggests that maybe we need to think again about quite how putting tax and spend together is done. There are a lot of lessons to be learnt, but Nicola is right that that should not be approached from outside, unless the institution manifestly fails, which it is not doing.
Professor Alan Page: I simply add that the commission to which Nicola referred is expected to report by June, so that, by the time we get into this process, we will have a better sense of how Parliament sees the future in that respect.
The Chairman: Can I close at this point? We are all very grateful to you. We are filling out our knowledge piece by piece. We are becoming aware of the complexities of this piece by piece as you unveil them and, as you were rather implying, as the administrative machinery itself is discovering them all the time. It would seem to me—and I will close on this note—that the ability to operate with political goodwill and to have some machinery where these things can be rehearsed and transmitted into the legislatures to ensure a smooth outcome is critical, and we will take an interest in that.
Meanwhile, in thanking you, please feel that it is a continuing relationship as far as we are concerned. If you want to add anything—you kindly indicated there may be a bit of information upcoming—or any thoughts, we would be delighted to hear at any time but, meanwhile, thank you.
