At-a-glance: Scottish government's post-Brexit plan

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The Scottish government has published what it would like to see happen after Brexit. Here is a summary of the 49-page long "Scotland's Place in Europe" paper.

Foreword - By Scotland's First Minister Nicola Sturgeon

  • On 23 June, the people of Scotland voted categorically and decisively to remain within the European Union (EU).
  • At the heart of the proposals in this document, and our proposals for any EU negotiations, we are determined to maintain Scotland's current position in the European Single Market.
  • There are various ways in which Scotland's place in the European Single Market could be maintained. One option - in my view, the best option - is to become a full member of the EU as an independent country.
  • However, the focus of this paper is to explore if we can find common ground with the UK Government around a solution that would protect Scotland's place in the European Single Market from within the UK.
  • Scotland's interests within the UK demand that the powers of the Scottish Parliament be fundamentally revisited.

Chapter One - Introduction

  • The Scottish government believes that, short of full EU membership, the "least worst outcome for the UK as a whole" would be to retain full membership of the European Single Market through the European Economic Area (EEA), and to remain in the Customs Union.
  • The paper argues that if the UK does not remain in those European unions and bodies, the UK government should support Scotland remaining within the European Single Market.
  • For businesses in Scotland to maintain access to the EU market of 500 million people.
  • Protect the rights of EU citizens to settle in Scotland with reciprocal arrangements for "our citizens living, working and studying" in other EU countries.
  • Ensuring the continued protection of workers' rights and maintaining social, environmental and human rights advances.
  • Safeguarding Scotland's ability to shape the laws and policies that define our future economic and social development.
  • A fundamental review of the devolution settlement - the Scottish Parliament must retain responsibility in already devolved areas like farming and fisheries - there "must be no question of re-reserving or qualifying powers already devolved".
  • New powers to support Scotland's interests, and any differentiated relationship with Europe, will also be required.
  • A draft Referendum Bill has been published for consultation so that the option of a referendum on independence will be available if it is concluded that Scotland's interests "cannot be protected by other means".

Chapter Two - What is the European Single Market and why does it matter?

  • Leaving the European Single Market and the EU Customs Union "will damage our economy and undermine our wider social interests".
  • As a result of the European Economic Area (EEA) Agreement, three of the four countries of the European Free Trade Association (EFTA) - Norway, Iceland and Liechtenstein - became members of the European Single Market even though they were not, and are not, members of the EU.
  • It is, therefore, possible for the UK to leave the EU but to be in the EEA and thereby protect Scotland's membership of the European Single Market.
  • It is also highly desirable that the UK remains part of the EU Customs Union allowing goods entering the UK from outside the EU to be subject to EU rules of origin and the Common External Tariff. This would then mean that goods exported from the UK to the EU would not incur the additional costs arising if the UK is outside the EU Customs Union.
  • The impact of a changed relationship with the EU will be variable across sectors and regions with some sectors, where tariffs are reintroduced, regulatory barriers are prominent.
  • Rural Scotland may face particular issues from a changed relationship with the EU, including in the areas of superfast broadband, business development, housing investment.
  • The Centre for Economic and Business Research estimates that Scotland's exports to the EU "ultimately support over 300,000 jobs across Scotland". Retaining membership of the European Single Market and the EU Customs Union, as proposed by the Scottish government, "is essential to facilitating this trade".
  • There are 1,000 EU-owned companies in Scotland employing 127,110 people. There have been reports, says the paper, that "a number of companies are re-evaluating their investments in the UK".
  • Within Scotland's growing services sector "there is little doubt" that financial services providers are particularly vulnerable to Brexit.
  • Exiting the European Single Market "will also jeopardise Scotland's research and innovation activities".
  • Membership of the EEA "would allow" Scottish institutions to continue to participate in the Erasmus programme and other exchange schemes.
  • Scotland's remote and rural communities depend on workers from the EU in a range of sectors, with tourism providing more than 200,000 jobs in total. The paper argues that free movement of people is also vital for essential public services. Approximately 3% of health and social care staff in Scotland are from other EU countries.
  • There are "understandable and real concerns" that Brexit will place at risk a number of worker rights protections which represent a "floor" or "baseline" beneath which national rules cannot fall.
  • If Scotland finds it is no longer a member of the European Single Market, then "it is imperative that the necessary powers to protect the rights our workers and citizens presently enjoy are devolved to the Scottish Parliament".
  • The chapter also addresses the importance of maintaining a role over climate change and energy policy; law enforcement, criminal law and civil law measures and access to EU funding for universities.

Chapter Three - Protecting Scotland's Interests

  • The Scottish government says it is primarily seeking to influence the UK government to maintain membership of the European Single Market for the UK as a whole.
  • If the UK "chooses not to take this path", the paper sets out how Scotland could maintain membership while the remainder of the UK leaves.
  • The Scottish government believes that the UK's continued membership of the European Single Market - through the EEA Agreement - and the EU Customs Union is both feasible and desirable.
  • The paper says the UK should remain a full member of the European Economic Area (EEA). This would likely mean the UK joining EFTA in the first instance and, thereafter, retaining - or renewing - its membership of the EEA Agreement or by direct association to the EEA.
  • It is the Scottish government's "firm view" that, alongside remaining in the European Single Market, the UK should remain within the EU Customs Union. This would reduce to a degree the disruption of years of negotiating new FTAs, with no evidence that the eventual outcome will be better.
  • In the event that the UK government does not pursue the option of retaining membership of the EEA, the Scottish government is committed to exploring with the UK government the mechanisms whereby Scotland could remain within the EEA and the European Single Market.
  • It goes on to state that there are examples of differential deals such as Denmark and the Channel Islands.
  • The paper proposes an integrated solution for Scotland which ensures continued membership of the European Single Market, and collaboration with EU partners on key aspects of policy and participation in EU programmes such as Horizon 2020. This has been described by some as the "Norway option".

The Norway Model

  • It would allow Scotland to continue to trade in both goods and services within a European Single Market of 500 million people.
  • Scottish people would retain the right to travel, live, work and study in other EU and EEA countries, "with the same social, economic, health and consumer protections that EU citizens would continue to enjoy here".
  • There would also be economic advantages to the UK as a whole in having at least part of its territory still within the European Single Market and able to retain and attract indigenous and inward investment on that basis.
  • However, there are a number of questions that will be asked about the feasibility of Scotland remaining with the European Single Market while the rest of the UK leaves. Some are related to free trade and movement within the UK. Others are legal considerations and involve the capacity of Scotland to operate within the single market framework without being an independent country.
  • In order for Scotland to continue in membership of the European Single Market the Scottish government would require to make financial contributions to the administrative and operational expenditure of the EU, just as other EFTA EEA countries do.
  • The amount of such contributions would be a matter for negotiation in due course but they could be met from Scotland's pro-rata share of current UK contributions to the EU.

Questions and answers

  • If Scotland were independent there would be no domestic legal impediment to us joining EFTA and becoming party to the EEA Agreement.
  • However, as long as Scotland remains part of the UK there will need to be some form of sponsorship for any Scottish membership of EFTA. That is because membership of both the EFTA Treaty and the EEA Agreement is - formally - open only to "states".
  • In order to continue "our membership of the European Single Market through the EEA", Scotland would continue to meet the obligations of the EU Acquis as set out in the EEA Agreement regarding the free movement of traded goods and services, as well as the associated flanking measures, as is currently the case.
  • If the UK opts to be in the EU Customs Union, Scotland would also be out but remain in the UK customs union "and goods and services could continue to be traded freely within the UK".
  • The laws of the European Single Market would apply only to those goods and services traded between Scotland and the rest of the European Single Market.
  • There is a "strong and increasingly urgent case for greater flexibilities on immigration for different parts of the UK". The Scottish government says it is increasingly clear that a one-size fits-all approach is not in the best interests of Scotland. For these reasons, Scotland needs to explore a distinctive approach, whatever its future relationship with the single market turns out to be.
  • Free movement within the UK would continue to be facilitated by the Common Travel Area (CTA) as it is now. The CTA operates across the UK, the Isle of Man, the Channel Islands and the Republic of Ireland.
  • The main issue that would have to be addressed is the prospect of people from other European countries with the right to live and work in Scotland seeking to use Scotland as an access route to living and working in the rest of the UK. There will, however, be immigration rules applied in the rest of UK that will deal with that issue.

Chapter Four - Further devolution and consequences of Brexit

  • The Scottish government believes agriculture, fisheries and education must remain the responsibility of the Scottish Parliament after Brexit.
  • The Scottish Parliament should be allowed to protect key rights, including over employment law, and health and safety.
  • The current division of responsibilities between the Scottish Parliament and Westminster "must be reconsidered" to reflect the change that will be effected to the UK's constitutional settlement by leaving the EU.
  • New powers to secure any differentiated relationship with Europe should be part of this, but "additional devolution is necessary in any case to ensure that the parliament is able to protect Scotland's interests in this new context".
  • The Scottish government cites immigration as an area which will need to be looked at.
  • The Scottish Government believes it will need to take part in trade negotiations that impact on devolved competences. It will also need the ability to speak in international forums and to secure agreements with other countries.
  • The exact approach to ensuring that the Scottish Parliament and government have the necessary powers "will need detailed consideration and a constructive approach from both the UK and Scottish governments".

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