Current Trade Bill unacceptable

The Scottish Government cannot recommend that the Scottish Parliament gives legislative consent to the UK Government Trade Bill as currently drafted.

The UK Government has recognised the role of the Scottish Government in implementing trade deals and the Trade Bill confers powers on Scottish Ministers to do so.

But the bill imposes unacceptable constraints on the way that these powers can be used.

In a letter from Cabinet Secretary for Economy, Jobs and Fair Work Keith Brown to Minister of State for Trade Policy Greg Hands he explains that it is the Scottish Government’s intention to produce amendments in consultation with the Welsh Government which will address our concerns.

Full text below.

20 December 2017

Dear Greg,

Thank you for your letter of 7 November in which you confirmed that the UK Government had introduced the Trade Bill and tabled resolutions for the Taxation (Cross-Border Trade) Bill. We agree with your analysis that Part 1 and Schedules 1 to 3 of the Trade Bill affect the devolved competence of Scottish Ministers and will therefore require the legislative consent of the Scottish Parliament.

It remains a matter of regret to the Scottish Government that the UK plans to withdraw from the EU. Nevertheless we accept that preparations should be made for withdrawal from the EU, including maintaining continuity in trading relationships, and ensuring continued access to government procurement markets.

My officials will work with yours on developing the detailed provisions of the Bill to ensure that, as far as they go, they support the interests of the Scottish economy.

However, as the Trade Bill is currently drafted the Scottish Government cannot recommend that the Scottish Parliament gives its legislative consent to those parts of the Bill which fall within devolved competence.

The UK Government has acknowledged that the implementation of trade agreements falls to the devolved administrations and accordingly the Trade Bill confers certain powers on the Scottish Ministers. The Scottish Government welcomes these powers but cannot accept the constraints placed on the use of them which are analogous to those in relation to the way in which powers are conferred in the European Union (Withdrawal) Bill.

We have therefore lodged a legislative consent memorandum in the Scottish Parliament which explains our detailed objections to the Trade Bill and our intention to produce amendments in consultation with the Welsh Government which will address our concerns. I hope that these amendments will be supported in due course.

As you point out in your letter the Trade Bill does not relate to trade agreements with countries other than the EU’s existing trade agreement partners. It does not deal with future trade agreements. I welcome the commitment you made in your letter (and those made by Liam Fox when we met on 2 November) about the need to engage in more detailed discussions with the Scottish Government about our involvement in the development of future trade agreements and their implementation.

If a more inclusive approach from the UK Government is to be delivered then it will require a step change from the lack of any meaningful engagement on trade matters up to now. When I met Liam Fox I mentioned the lack of substantive discussion of the proposals contained in your Government’s Trade White Paper before publication; the fact that the Scottish Government was only given a few hours’ notice of the contents of the White Paper on 9 October; and the reluctance of DIT officials to discuss any of the detail following the publication of the White Paper. Following that meeting, Scottish Government officials were only given two working days’ notice of the contents of the Trade Bill before its introduction and no opportunity for input, even though the UK Government has since acknowledged that the Bill affects devolved areas and therefore requires the legislative consent of the Scottish Parliament. Most recently, and despite your Government’s recognition that the devolved administrations have a critical role to play in the Industrial Strategy and that we should be consulted on it, I received a draft of the Strategy at 9pm on the evening of Saturday 25 November ahead of publication on 27 November.

However, our officials began discussions about future arrangements in a constructive meeting in Edinburgh on 19 December and I look forward to building on this early next year. The Scottish Government believes the UK should remain in the EU Customs Union. But if an alternative path is taken, it will be vital that the Scottish Government (and other devolved administrations) are fully involved at every stage of the process leading to future trade agreements. This should not be limited as at present to an explanation after the event of what the UK Government has done but should deliver engagement at a point where the aims, objectives and coverage of any trade deals are still in play. We would, for example, expect the UK Government to seek agreement with us before embarking on discussions with third countries about future trade agreements, and the opportunity to be part of those discussions.

I am copying this letter to the Deputy First Minister, the Minister for UK Negotiations on Scotland’s Place in Europe, the First Secretary of State and the Secretary of State for Scotland.

Keith Brown