Scotland's Place in Europe: First Minister's statement

Can I start by expressing my condolences to those who have lost their lives in the attacks in Berlin. My thoughts are with them and their families.

I am pleased to have published today 'Scotland's Place in Europe'.

This is a paper containing detailed and practical proposals to mitigate the very real economic, social, democratic and cultural risks that Scotland now faces as a result of the UK-wide referendum on EU membership in June.

Let me clear – Brexit is a problem that is not of Scotland's making.

Scotland voted overwhelmingly to remain within the European Union.

And yet – notwithstanding the fact this problem is not of Scotland's making – this paper is actually the first and only detailed plan for dealing with the implications of Brexit to be published by any government in any part of the UK.

Six months on, the fact that there is still no clarity, no plan, no direction and no leadership from the UK Government on an issue of such profound importance to every individual and every business across our country, quite frankly beggars belief.

This should be of particular concern to MSPs in this chamber – as there are many here who believe and who argued that the case for Leave was sold on a false prospectus.

As everyone knows, I believe Scotland should be an independent country – and as an independent country, that we should be full members of the EU.

Indeed, if we were independent, we would not now be facing the situation of being taken out of the EU against our will.

The manifesto on which I was elected as First Minister, just eight months ago, said expressly in relation to independence that Scottish Parliament should have the right to hold another referendum if there is a significant and material change in the circumstances that prevailed in 2014, such as Scotland being taken out the EU against our will.

That change of circumstances has occurred and there can – therefore – be no question about the legitimacy of the Scottish Parliament and the Scottish people considering, afresh, the question of independence if that is necessary to protect our interests.

I have made clear – and do so again today – that the option of independence must remain on the table.

Without this option, Scotland would simply have to accept the inevitability of whatever decisions the UK Government makes, no matter how damaging they are to Scotland's interests.

That is not a position, in my view, that any serious politician or party should ever be content for Scotland to be in and as First Minister it is my duty to ensure that all options are open to Scotland in these unprecedented times.

However, as I have also made clear, independence is not the focus of the paper that we have published today.

The paper we published earlier today is about fulfilling in full the commitment I made to the Scottish people in June.

The day after the referendum, I promised to explore – not just my preferred option of independence – but all options to protect Scotland's place in and relationship with Europe.

This paper delivers on the mandate that was given to this government by Parliament on 28 June to, and I quote: 'explore options for protecting Scotland's relationship with the EU, Scotland's place in the single market and the social, employment and economic benefits that come from that'.

I said specifically that we would seek to find a solution that would enable Scotland's voice to be heard and our interests protected from within the UK.

This paper fulfills that commitment.

Indeed it goes further and sets out ways forward that I believe would also be in the interests of the rest of the UK – and indeed in the interests of other European nations.

'Scotland's Place in Europe' sets out practical proposals to keep Scotland in the European single market.

It also details the additional powers the Scottish Parliament will need to serve, protect and promote Scotland's economic and social interests in the post Brexit landscape.

Now, let me be very clear: these proposals fall short of what I consider to be the best option for Scotland and the UK – full membership of the EU.

In the unlikely event that the UK Government has a change of heart and decides to remain in the EU, they would have my support.

But that is clearly not an outcome in my gift. I am therefore seeking to set out a sensible way forward for Scotland that respects the reality of the situation we find ourselves in.

In that regard, these proposals represent a significant compromise on the part of the Scottish Government – not a high bar for the UK government to pass.

The proposals in this paper are a serious and a genuine attempt to build consensus – to square the circle created by the referendum result, and to unify the country around a clear plan to protect our interests.

I hope and expect that the UK Government, in considering these proposals, will demonstrate the same flexibility and willingness to compromise.

I also hope that opposition parties will consider these proposals seriously.

To those who say they want to protect Scotland's place in Europe, but won't get behind these proposals, the question will be – if not this plan, then what?

Simply criticising the Scottish Government's proposals without coming up with alternatives will be tantamount to telling Scotland that it simply has to 'suck up' whatever the Tory Brexit government at Westminster decides, no matter how damaging.

Now, I suspect – and they may prove me wrong, but I doubt it – that will be the position of the Scottish Tories. It will be a much harder – I'd suggest impossible – position for Labour and the Liberals to explain.

Let me turn now to the detail of the paper.

It sets out in some considerable depth why keeping our place in the single market matters so much.

It matters principally to our economy – to jobs, trade, living standards and investment.

It is estimated that being outside the single market could cost the Scottish economy 80,000 jobs. Workers could lose £2,000 a year after a decade of a hard Brexit.

Being in the single market also ensures protection for workers' and consumer rights.

It facilitates the flow of skills that our economy depends on and allows all of us to travel, work, study and live across Europe if we so wish.

It will guarantee the rights of EU citizens already living here – something that, disgracefully, the UK Government has still not done six months on.

And it provides a platform for co-operation on some of the major issues of our times, like climate change.

The paper sets out the primary ways in which Scotland's place in the single market can be protected.

It has three principal strands.

Firstly, we propose that the UK as a whole should stay in the single market – by remaining a party to the European Economic Area (EEA) Agreement – and that it should also stay in the customs union.

It is important to remember that membership of the EU and of the single market are not one and the same. They are, in fact, two distinct propositions – as the position of three of the four European Free Trade Association (EFTA) countries demonstrates.

I accept that there is a mandate in England and Wales to take the UK out of the EU. However, I don't accept that there is a mandate to take any part of the UK out of the single market.

It would make no economic sense whatsoever for the UK to leave the single market. In fact, it would be economic folly of the highest order. And it would be entirely democratically justifiable for the UK to remain within the single market.

So the Scottish Government will continue to argue – and seek to build consensus with others of like mind across the UK – for continued UK membership of the single market.

However, I reluctantly accept that as things stand – given the rhetoric of the Conservative Government – that seems at this stage unlikely outcome.

The Tories – quite unbelievably in my view – seem intent on placing a higher priority on cutting immigration than on absolutely anything else – the economy, jobs and living standards all lag way behind on their list of priorities.

As a result, the second strand of this paper proposes ways in which Scotland could stay in the single market – through EFTA and the EEA – even if the rest of the UK chooses to leave.

The paper doesn't shy away from the challenges associated with such an option.

On the contrary, the paper specifically identifies the key challenges that would be faced – for example, how continued membership of the single market could be achieved without Scotland being an independent country; the legislative and regulatory requirements; the issue of financial contributions; and the practical implications around free movement of goods, services and people.

But, crucially, it then sets out the basis of how each of these challenges could be overcome if the political will exists to do so.

It is also very important to note – and I know that many across this chamber have emphasised this point – that this option does not prioritise membership of the EU single market over continued free trade across the UK.

Talk of a hard border for Scotland has always rung hollow – and will continue to do so – from a UK government that says no such hard border will be required between a post Brexit UK and the Republic of Ireland, a continuing member of the EU and customs union.

But that argument aside, this paper sets out clearly how free movement of goods, services and people would continue across the UK, even with Scotland in the single market and the rest of the UK not.

In that respect, it is worth emphasising that what we propose would not see Scotland having a different relationship with the customs union to the rest of the UK.

Now, we hope the UK will stay in the customs union. If it does so, then this proposal would enable Scotland to be in both the single market and the customs union.

However, if the UK opts to leave the customs union, then Scotland – in common with other EFTA EEA countries – would not be in the customs union either.

There will of course be disadvantages to Scottish businesses if we are not in the customs union – which is why I will argue that the UK should stay in it – although those disadvantages would be minimised if Scotland remains in the single market.

However, under this proposal the border between Scotland and England would not be an external EU customs border.

What is in effect a customs union now between Scotland and the rest of the UK would continue.

Now, here will be those who say, I know, that a differentiated option for Scotland such as the one we propose would be too difficult to achieve – and as I have said already, the paper does not underestimate the challenges.

However, it is important in response to that suggestion to consider these three points.

Firstly, it is the case that there are already, today, a range of asymmetric and differential arrangements in operation within the EU and single market framework.

Denmark, Greenland and the Faroe Islands is one. The Channel Islands another.

There are many others.

The solution we seek for Scotland would be different, of course, in detail and scale to many of these arrangements, but it would not be different in principle.

Secondly, the UK government already appears open to a 'flexible Brexit' approach in relation to different sectors of the economy as we have already seen in their approach to Nissan.

It will also be necessary to take a flexible approach in relation to Northern Ireland and to Gibraltar.

There is – quite simply – no good reason why such flexibility should not also apply to Scotland.

And, lastly, as we now see on an almost daily basis, everything about Brexit will be difficult, challenging and unprecedented.

The negotiations ahead will be characterised in all respects – particularly if the UK does intend to leave the single market and customs union – by a need to find practical solutions to a whole range of complex issues.

So it is in that spirit that we seek to find solutions that will respect the voice and protect the interests of Scotland.

Presiding Officer, the final strand of the paper deals with the powers of this Scottish Parliament.

It is in my firm view, time for a fundamental reconsideration of the devolution settlement in light of Brexit.

The paper argues that in light of the removal of rights and responsibilities provided by EU law – and whatever the outcome of the Brexit negotiations – Scotland's interests within the UK demand considerably enhanced and strengthened powers for this parliament.

So the paper we have published today looks at three broad categories of powers that must now be considered.

Firstly, it looks at the powers set to be repatriated from the EU which currently sit within Scottish Parliament responsibility – for example, fishing, the environment, justice and agriculture.

Now, I hope all members will agree unreservedly that these powers must remain firmly and unambiguously within devolved competence. If there is a need to agree UK-wide arrangements on any matter – for example such as animal welfare – that must be done by agreement, not by imposition. Brexit must not become an excuse for a Westminster power grab.

Secondly, powers to be repatriated that are not currently devolved should also now be considered for devolution.

Powers in areas such as employment law and social protection would allow this parliament to protect key rights and avoid the risk of a deregulated race to the bottom by Westminster.

And, thirdly, a much broader range of powers to protect Scotland's interests and support a differentiated solution of the kind proposed in this paper must also be considered – for example, power over immigration.

Indeed, it is worth noting, I think, that growing support across the UK for greater flexibility over immigration is now increasingly being expressed.

Presiding Officer, in short, the proposals in this paper are detailed, they are serious and they are reasonable.

They are designed – deliberately and unashamedly – to respect Scotland's voice and protect our interests, whilst also acknowledging and respecting the vote in other parts of the UK and the position the UK government now finds itself in as a result.

Let me now, briefly, set out how we intend to take these proposals forward.

We accept absolutely that the negotiation that will start on the triggering of Article 50 will be between the UK and the EU.

We are not seeking a separate, parallel negotiation with the EU institutions or member states.

That is why these proposals are aimed, first and foremost, at the UK government.

We want the UK government to make clear when it triggers Article 50 that it intends to stay in the single market and the customs union.

If it will not do so, we want the UK Government to seek, as part of its negotiation, a differentiated solution for Scotland as set out in this paper.

We will submit these proposals formally to the UK Government through the Joint Ministerial Committee framework for discussion in the new year.

I intend that this parliament will continue to be involved and informed at every step of the way just as it has been already through 11 parliamentary debates on aspects of Brexit to date.

The Prime Minister, when I met her in Edinburgh in July, pledged to fully and fairly consider the proposals we brought forward.

She repeated that commitment without reservation when I spoke to her yesterday and I welcome that.

Presiding Officer, it is beyond any doubt that the Brexit vote – with its different outcomes in different parts of the UK – has raised fundamental questions for all of us. It has raised fundamental questions about our relationship with Europe, but it has also raised fundamental questions about how political power is exercised across the UK.

So to the Westminster Government, my message could not be clearer – your response to these proposals will tell us much, perhaps it will tell us everything we need to know, about whether the UK is, in reality, the partnership of equals you claim it to be.

To our European partners, I want today to reaffirm our belief in, and commitment to, the core values of solidarity, co-operation and democracy that underpin the European Union.

And to the people of Scotland I pledge this: I will continue to do everything I can to protect your interests as we navigate the challenging times ahead.