Oral evidence: The EU Referendum and its impact on Scotland, HC 81Wednesday 25 May 2016

Oral evidence, 25 May 2016.

Witness

Tom Harris, Campaign Director, Vote Leave, gave evidence.

Chair

Mr Harris, welcome to the Committee. It is very good to see you once again. I think you know quite a few people around the table here. We would normally ask you for an opening statement and you could probably include what you would possibly like to see anyway by maybe telling us, in as long as you want, why Scotland should vote to leave the European Union.

Tom Harris

I think for many of the same reasons that the UK should leave, but there are specific Scottish reasons, some of which may appeal to individual members of the Committee and others that might not. For example, the Scottish Parliament would inherit some fairly important new powers. There would be no need for another Smith Commission, no need for a Cameron Commission, no need for primary legislation in this place. Automatically by default, new powers, particularly on fishing and agriculture, would be automatically devolved to the Scottish Parliament on the day that we left the EU. My own view is that Scottish fishing would be far better run by Scottish Ministers than by Brussels, and I think that will resonate with a lot of Scottish voters. The second thing is it would give us the power to protect long-term free tuition for university students in Scotland. At the moment, an EU student has exactly the same right to free tuition as any Scottish student. Unusually, any other overseas students from outside the EU must pay full tuition fees. If we were able legally to charge EU students, we would not only save the £80 million that we are spending at the moment on free tuition, but they would also pay whatever the overseas student level would be, so it is kind of a double-whammy. That money could be used for anything that Scottish Ministers wanted to use it for, but I would expect they would want to use it to protect in the long term free tuition for Scottish students and also to create bursaries for poorer students, if they chose, but once again that would be a matter for Scottish students. Thirdly, there is a demographic deficit. Five years ago, the SNP were elected on an overwhelming majority in the Scottish Parliament, which no one expected, and in their manifesto they had a mandate to introduce minimum pricing for alcohol. That was supported not just by the SNP but by other parties and yet the European Court of Justice struck it down and we do not have it because of our membership with the EU. Now, just today there is another report saying that alcohol sales, particularly through supermarkets, means that we are selling per head 20% more alcohol in Scotland than in England. Whether or not you think that was the right solution is not relevant. What is relevant is that a mandated political party that won a democratic election has the right to introduce its policies, and in this particular occasion it was not allowed to because of interference by the European Court of Justice. Lastly, Chair, it is simply the bonus. However much we want to argue about what the payment is that Scotland or Scottish taxpayers contribute as part of the EU’s membership dues, when we are out of the EU, that money simply does not have to be spent. That money will come to the Scottish Parliament, partly because there is more money available because of the difference between what we pay and what we get back, but also because with those extra powers will come the ability or the necessity to have money to spend, for example, on agriculture payments. That is something that Scottish Ministers again would be in charge of. On agriculture, recently the SNP Government have fallen victim to how complicated agricultural payments are in Scotland. If we were outside the EU, they could construct their own way, a much simpler method of paying agriculture subsidies, if they chose but, as I say, that is entirely a matter for Scottish Ministers and I think it should be.

Chair

I am grateful. Just sticking on the financial issue, the Leave case claims that it is something like £350 million per week that is contributed to the EU, which makes Scotland’s share of this some £1.5 billion. This has always failed to take into account the UK’s rebate. There is a model that I just saw on the BBC before we left to come to this Committee, which once that was taken into account, once the Treasury was taken into account and the support for the private sector, this figure significantly diminishes. Just how realistic is this as a figure and do you accept that there is money that comes back to the UK, which therefore comes back to Scotland, and all the rebate support to the private sector and support to the Treasury?

Tom Harris

I absolutely accept that some of the money that we give to the EU is spent in Britain. None of that is EU money, of course. It is all Scottish and UK taxpayers’ money, which is spent without our control, without our say-so back in Scotland. For instance, this year I have a tax bill that I will pay. Next year I will get a rebate on that. That does not affect what I pay on my tax this year. The EU rebate is similar, because it is not a rebate on this year’s payment. It is a rebate that is paid retrospectively a year later. What we are paying out is being paid out. The £350 million a week comes from the Office for National Statistics’ Pink Book. It is not made up. It is quite legitimate to use the gross amount and, if we want to have a debate about what the difference is between what we pay out and what we get back, then that is absolutely fine, but people should be aware that the level of money we are paying for the privilege of being in the EU is hundreds of millions of pounds a week.

Chair

If this money is returned to the UK, as is claimed, and it will go to the Treasury, how confident are you that Scotland would therefore, once that money goes to the Treasury, secure a fair share in terms of that spending that was going to come back? We are dealing just now with a Conservative Government who perhaps might not look so benevolently on spending in Scotland. Surely this is a massive risk to Scottish people, just to trust the man from the Treasury to ensure that Scotland will get its fair share of the return?

Tom Harris

I am certainly not asking anyone to trust a Conservative Party Treasury. Scottish Leave is a non-party organisation, but we do have the Barnett formula. Conservative Ministers have made it quite clear that payments, for example, to agriculture—which is one of the biggest budget areas—would inevitably continue for political reasons as well as agricultural. We understand why. If that means a public spending increase in England, there will be a related public spending increase for Holyrood through the Barnett formula. It is in nobody’s interests. I totally understand the political dynamic, but it is in no one’s interest, either at Westminster or at Holyrood, to start a kind of spending war. The fact is there will be extra money available. It is a question of how the extra money will be divvied up.

Chair

Just this, then we will open the questions. I think the case and the debate about the European Union referendum could be characterised around trade, about sovereignty and immigration, but increasingly about immigration. Do you recognise in the Leave campaign that Scotland’s immigration requirements are significantly different from the rest of the United Kingdom? The issues that we have when it comes to immigration are possibly emigration and sluggish population growth compared to the rest of the UK.

Tom Harris

Yes, I absolutely recognise that different reality. But it is interesting, I was listening to a Scottish MP on “Any Questions?” two or three weeks ago and, in defence of our EU membership—I paraphrase—he said, “We have skills gaps in the Scottish economy and therefore we need to attract people with certain skills from the EU”, and he is absolutely right. What a pity that would be illegal under EU law. We cannot decide which professions, which qualifications we can attract from the EU. We must accept anyone who is an EU citizen, irrespective of their qualifications, irrespective of the skills that they bring. Not only that, it is a bit of a double-whammy, because there is unlimited immigration from the EU that we cannot control or manage, therefore the UK Government has to limit immigration from non-EU countries. If you are a businessman in India who wants to get a visa to come to Britain, it is much more difficult because of the arrangement we have with the EU. Non-EU citizens are being stung particularly badly on this. If you will forgive me, Chair, I think the whole debate about—

Chair

Just on that point, what you want to try to create, therefore, is that EU citizens should be treated very much the same as citizens from anywhere else in the world, is that the idea?

Tom Harris

Yes.

Chair

The type of model that you have in mind—the one that would be applied to Scotland—is that we would have this free movement of populations across the European Union area and that anybody who wishes to come to Scotland to live, work and study in Scotland would have to go through the same sort of tests and checks as people from outwith the EU currently experience just now. Is that roughly it?

Tom Harris

Essentially, yes. Immigration is popular because, first of all, it is recognised as being economically beneficial, but, secondly, because ever since the end of the Second World War, immigration has been limited and it has been managed, and the voters have been reassured by consecutive Governments that that is the case. In fact, every single mainstream political party agrees, in principle, that immigration must be managed and limited. Within the EU, we cannot manage or limit immigration, so what I am saying is that what has held sway ever since the end of the Second World War was the right policy, but that policy is being undermined by our membership of the EU and that, if you are a dentist or a doctor from Beijing, you have to wait in line behind a non-skilled worker from Poland. That is not helping our skills gap in Scotland.

Chair

We just saw an example today with Prime Minister’s Questions about a family in the Highlands of Scotland who are outwith the European Union. What we are observing is the UK Government not acting particularly benevolently towards them in forcing a deportation next week. It is staggering to think and suggest that we would like to treat the rest of the people from Europe in that same sort of manner and means and way. How does that assist some of the issues that we have to deal with in Scotland? We are looking at a demographic gap that is greater than the rest of the United Kingdom, one that we need to quickly close, but what you are suggesting to us is that we should have further controls on immigration. Surely that cannot possibly help the growth and development of the Scottish economy?

Tom Harris

With respect, Chair, I think you are looking at this through the wrong end of the telescope. The reason that the UK Government feels it has to be this strict with non-EU citizens is because, if you have an unlimited and unpredicted number of EU citizens coming in, irrespective of their abilities or skills or qualifications, then something else, pressure has to be put elsewhere. We cannot put it on EU numbers coming in, so we have to put it on non-EU numbers coming in. If you could have the same rules applied to everybody, you could afford to be realistically more flexible with people of all nationalities.

Chair

Can I just say that I have never detected in any of the speeches that have been made by Nigel Farage, one of your partners when it comes to this exercise, that what he is looking to do is to try to increase and equalise the entry allowances for people from outwith the EU. I get the impression that what this is all about is controlling immigration and ensuring immigration to the UK is stopped and stemmed. I have never heard anything from some of your colleagues within the Leave campaign that this is all about trying to equalise it and trying to encourage more people who are outwith the EU to come to the UK.

Tom Harris

If you will forgive me, Chair, Nigel Farage is no more a partner of mine in the Scottish Leave campaign than David Cameron is of yours. Nigel Farage is in a different campaign. I am the Scottish Vote Leave, which is part of the Vote Leave officially recognised campaign, not Nigel Farage’s.

Kirsty Blackman

I want to ask about red tape. We heard last time we took evidence on EU red tape, about the fact that a lot of people talk about red tape but they cannot give us tangible examples of where this has been an issue. Can you give us some tangible examples of where red tape has been a concern?

Tom Harris

Yes, I can. Before I do that, let me put it in context, because I think there has been some concern about the UK Civil Service gold-plating over EU regs. That is an historical thing, because the legal system in Europe is different from the legal system as it pertains in the UK, Scotland and England. The continental tradition is if something is unregulated it tends to be illegal—that is how they look at it—whereas in Britain regulation tends only be applied if you want to limit excess, so there is a different kind of political and cultural approach to regulation. But I will give you an example. There is a certificate of professional competency, mainly for the haulage industry, where drivers have to go and get this qualification every few years, which is an EU qualification, an EU obligation. There is not a pass or a fail on it. Once you have the test, you have your CPC certificate for the next few years, but there is no pass or fail. The time it takes drivers to take off work to go and sit that test is basically empty hours. That is where the cost is to that particular industry. There is another thing called the CE mark, which is applied to the construction industry, so any company that hopes to bid for local authority contracts or which hopes to apply for planning permission for projects, any product that they use must be CE approved. The CE mark is quite difficult to get. I have had reports from people in the construction industry that it is a barrier to new people coming into the construction industry, but, like the CPC, it does not guarantee a level of quality or standard; it is an approved European mark that all of these companies must apply for or else they are not allowed to operate. I think it would be wrong for Vote Leave to say that, “Vote leave, we will come out of the EU and we will get rid of all these regulations”. That is not what it is about. What it is about is saying that an EU regulation should only apply basically to companies that do import or export into the single market. It should not apply to companies that don’t, so it should only apply to one in 20 companies in Scotland. We are saying that regulation does not have to be done on a trans-continental basis. It should be done on a national level that is appropriate to our circumstances, and I would hope that Scottish Ministers would have an input on that.

Kirsty Blackman

Just a wee follow-up, I heard good things said about things like the CE mark and I think that people do consider it as a mark of quality. In terms of this red tape, the EU rules and the gold-plating, I am not sure that what you have said is necessarily an issue with the EU rules. Is it the way that local government, for example, are implementing these rules and are making them happen?

Tom Harris

I think that is valid. From what I hear, over the last five years there has been less gold-plating. I think the coalition Government made some advances in reducing the unnecessary levels of gold-plating. I think the problem isn’t so much in the gold-plating. It is in the number of EU regulations, but particularly the number of EU regulations that apply to companies. You wonder why it applies to a company that has no import or export relationship with the EU. If you are a foreign company outside the EU exporting into the single market, you must comply—of course, absolutely right—with the standards that the EU dictates. But that does not mean that every single other company in America, for example, has to comply with those same rules, because only the companies that export into the single market have to apply them. I think that is just commonsense.

John Stevenson

We all take an interest in opinion polls and the view of the opinion polls from Poll Star suggest that Scotland or Scottish voters are more in favour of the EU than the rest of the United Kingdom. Would you agree with that?

Tom Harris

We will see. I think sometimes the gap is exaggerated, but there clearly is a difference. I am asked about this quite a lot. From a personal point of view, not an official Scottish Vote Leave point of view, there are a number of reasons for that. For the last 50 years or so, whenever there has been a debate about the constitution of Scotland, it has been about one thing, and it has not been about Europe, it has been about Scottish independence. So I think to a certain extent, in a way, that that has not happened in England. The EU debate has not had any level of attention. Also, importantly, the demand for so-called Brexit has been seen as a peculiar obsession of the Conservative Party. In Scotland, that means it has been isolated. It has been cast aside, “No, we don’t pay too much attention to it, because it is a bit of a Tory argument”. I think there is some validity in that, and that is a shame because these are issues that should have been debated for much longer and more in depth in Scotland. My own view is that is one of the reasons for the, “If the Tories hate it, then it must be good” sort of attitude.

John Stevenson

Therefore you don’t anticipate Scotland voting to come out and the rest of the United Kingdom voting to stay in?

Tom Harris

I am an optimistic person, so I am still aiming for a majority of Scots. That is absolutely my aim. Most of the polls are showing that SNP supporters, for perfectly understandable reasons, are more likely to be the ones that vote to leave. As I know from personal experience, SNP voters are the largest group of voters in Scotland so that is something I welcome. Obviously I excuse elected Members on this, Chair, but you can see why an SNP voter, offered the chance for new powers for the Scottish Parliament by default, without a big argument and a big rally down at Westminster, you can understand why that is an attractive prospect.

Chair

Surely, if it was the majority of SNP members, then we would see more movement in the opinion polls towards Vote Leave. I think it is quite something to characterise this as a Conservative issue that, because the Conservatives like it, therefore, there must be something that the Scottish people must react against. Isn’t it a fact that the Scottish people quite welcome the membership of the European Union? It is something that we think is important and it is something that we have enjoyed in the course of the past 30, 40 years.

Tom Harris

That remains to be seen, Chair. I think the turnout will dictate how strongly people feel about it and how engaged they are in this debate but, from my own discussions that I have had, first of all with fellow Labour Party members, with neighbours, with parents at my kids’ school, I don’t detect a great deal of knowledge. I don’t mean that in a condescending way. I just think it is something people are not all that interested in. It is almost like, it is a fact of life, it is there, a shrug of the shoulders, rather than enthusiastic. I have said this before: I think support for the EU in Scotland is very, very wide; I don’t think it is very deep. I think that, once people hear the very reasonable, middle road arguments against its membership, I am confident that they will listen to them and act on them.

Chris Law

I have numerous questions and I don’t know where to begin, but I will start with the first ones I have now. Tell me, why is it the Leave campaign has no White Paper? It is a basic thing that most people need to see: what is the case for leaving the EU? We have heard a few scare stories today and a few remarks about some of the benefits, but why isn’t there a White Paper, something clearly laid out for everyone to see? Because I think you said 25 years this has been going on, so surely that is plenty of time to produce a White Paper, is it not?

Tom Harris

Sorry, what do you mean “25 years”?

Chris Law

I think you said Goldsmith had brought up the argument 25 years ago, so we have been waiting for this vote for 25 years, so surely there should have been a White Paper by now. Or was it John Edward previously? I do apologise; my apologies.

Tom Harris

Yes, I think that is a valid criticism. If you remember—and I don’t want to trespass on personal grief—during the Scottish independence referendum, let’s just speak to the elephant in the room, the SNP did produce a White Paper. I don’t think that did their campaign any good. I think all it did was set up a number of targets for the Better Together campaign to attack. I came into this campaign at a relatively late stage, only back in March, so I have not been involved at senior level up until March, so I was not involved in any debate about whether we should produce a White Paper. There is a lot of advice and information on the Vote Leave website about what practically would happen after 23 June if we vote Leave in terms of informal discussions, followed by formal negotiations, followed by the actual practical effects of leaving and the implementation of whatever new agreements there were. But I think it is a perfectly reasonable criticism to make. I am not personally convinced that it would help the campaign.

Chris Law

Just to take the White Paper in Scotland, before they published a White Paper in Scotland for the Yes campaign, we had around about 25% to 28% support. By the referendum date, we had about 45%. In fact, that is exactly what it was, so surely that is showing it did work. But I am astonished that, in all these years there has been this campaign for Brexit, there has not been a single White Paper published. I would also like to ask you a couple of questions about the things you brought up at the beginning of your presentation. You said that Scottish students lose out on the tuition fees from the EU. Is it not also the other way around that, when Scottish students go to the EU, they also don’t have to pay tuition fees?

Tom Harris

That is the case, yes.

Chris Law

So that is a benefit both ways then, is that correct?

Tom Harris

That is a benefit both ways. I am not going to be one of those campaigners who say that everything about the EU is dreadful and everything about leaving is wonderful. I think there are benefits to the EU, and you have mentioned one of them. The corollary of that is that there are fewer Scottish students at university today than there were 10 years ago, 5% fewer—and I will give you the actual figures—but there has been a concomitant increase in the number of EU students. For example, it is not in grads, it is not in free tuition that we have to treat EU students as Scottish students on a level playing field, it is on actual applications to university. I think that if you are a Scot applying to a Scottish university, you should be given preferential treatment. That cannot happen under EU law and the result is that fewer Scots are going to university in Scotland. They may well be going abroad and that is great for them but, I will be honest, I am more concerned about access to Scottish universities.

Chris Law

Why is it the case that not a single university in Scotland has made the case they want to join the Leave campaign? In fact, every single one of them, bar one, has joined the Remain and one is sitting neutral.

Tom Harris

You are absolutely right, I am not aware of a single organisation that is in receipt of huge amounts of EU money that has advocated a Leave vote.

Chris Law

What you are saying is the EU does benefit the universities, is that correct?

Tom Harris

No, I am saying that the money that we get back from the EU, once we pay for every single penny of activity and investment that the EU nominally gives to any British institution, we would have a lot of money left over. We can afford to pay to the universities exactly what they are getting from the EU at the moment, but the fact is that, if you are receiving very large quantities of money ostensibly from the EU, then it is not very surprising that those academics are going to advocate a Remain vote.

Chair

Surely there will be much more money available to the universities in your scenario, where all this money is going to be returned. Why aren’t they rushing off to join your campaign?

Tom Harris

Presumably they are as sceptical about that as you are, Chair.

Chris Law

I want to ask about the campaign movements, because there are two: there is one called Grassroots Out and another one called Leave, which reminds me of the “Life of Brian”, where you have the Judean People’s Front, not to be confused with the People’s Front of Judea. Can you tell me what the difference is between the two and if one is comprehensively already covering the key evidence of the other?

Tom Harris

The two campaigns have to be completely separate for legal reasons, so we cannot co-ordinate our activities because they have a separate budget, we have a separate budget and the Electoral Commission would frown, quite rightly, on any co-ordination, because it would look like it was a single budget and we don’t want that to happen. We need them to be entirely separate from what the Scottish Vote Leave and the Vote Leave campaign is. Grassroots, I am not particularly familiar with them. I have to reiterate, I have only been involved in this campaign since March. I think there were more than the two organisations originally, and there is a long history about why there are separate organisations and the personalities involved. I feel quite privileged in not ever having been involved in any of those discussions.

Chris Law

Because I understand that Liam Fox is leading up the Grassroots Out campaign, and he was up in Scotland talking about it in April. I am a little bit confused what the differences are between the two and, if I am confused, what is the general public perceiving between the two?

Tom Harris

I don’t think the public could care less. We are not asking for support for a particular campaign. We are asking for support for a Leave vote, and if they vote Leave because someone in Grassroots Out has spoken to them or they vote Leave because I have spoken to them, I don’t care. We just want people to vote Leave.

Kirsty Blackman

I want to come back about CE markings, because I knew I had seen them before and it has got through my brain. Toys are CE marked. That is a mark of the toy being safe. It means it is not flammable. It means it is safe for children to have. Surely you are not suggesting that that is unnecessary red tape?

Tom Harris

No, I am not and, let’s be honest, outside the EU we would still want to have those safety markings. That particular CE marking that I was talking about in the construction industry, as it applies to the construction industry for any company that wants to bid for a local government contract or for planning permission, in those circumstances, in the construction industry, it is not only a barrier to entry to the industry but it does not guarantee any level of quality at all. But you are absolutely right on child safety. The Vote Leave campaign is in favour of child safety, just in case there is any doubt about that.

Kirsty Blackman

I was just getting clarification of that. Thank you very much.

John Stevenson

The Prime Minister has said that the Leave campaign, rather than UK Government, needs to answer the questions about what the UK will do in the event of a Leave vote. What do we do in the event of a Leave vote?

Tom Harris

Can I preface my answer by pointing out that if there is a Leave vote on 23 June, every single Member of Parliament, including everyone around this table, will be full-square behind making sure Britain gets a good deal out of any new negotiations. Irrespective of how you feel about it, whether you are disappointed or whether you are angry or whatever, surely anyone in public life is going to say, “Right, let’s get behind the UK negotiating a new deal”. So people should be reassured that it is not going to be the Leave campaign negotiating. It is going to be the British Government. It is going to be Scottish Ministers. It is going to be, I hope, talent from across the parties, from civic society and from business, however they feel about the result, all working together for the UK’s benefit. I think it is important to say that, because people should be reassured that it is not going to be a minority interest.

John Stevenson

On that very simple point, would you, therefore, agree that every single European Government and politician in Europe will be doing their absolute best to make sure that Europe gets absolutely the best deal for them in any negotiations with the UK?

Tom Harris

I would certainly hope so, because a good deal for Europe would be a good deal for the UK. On the day that we leave the EU, we become the largest export market for the EU, with however many jobs depend on trade with the UK. There is no contradiction there; there is no conflict of interest. What is a good deal for the UK would be a very good deal for the EU. We are told by the Remain camp that the EU nations are our friends. They want to keep us close. They want to look after us. They want us to prosper, “But if you leave we will destroy you”. I don’t think that is what they are saying. I don’t think there is a single EU nation who wishes us ill. Once we are out, once we can have the right to negotiate our own trade deals, which most people are unaware that we are not even able to do at the moment—given how close we are in terms of regulation, in terms of the relationships that already exist—there is absolutely no reason in the world why the EU would not want to trade with us.

John Stevenson

What do you think we should do in the event that we do have a—

Tom Harris

There are number of technical things you have to do. First of all, there would certainly be no need to immediately revoke our membership of the EU right away. The negotiations would last as long as they last. We would have to go into negotiations on a trade deal first of all with the EU but, at the same time, we have the facilities, we have the resources to start looking at trade deals with other big players, like India and China and the United States. There is absolutely no reason. Interestingly enough, I was speaking to the Scottish Whisky Association, who is supporting the Remain camp, and I was asking them about the barriers to having a trade deal with India. The EU, representing 28 different countries, have been trying to negotiate a trade deal with India for nine years and we are still not there, and yet Scottish whisky only has about 2% of the market over there and it is facing tariffs of 150%. We need a trade deal. When I asked the Scottish Whisky Association what the biggest block to a deal was, it was visas for Indian citizens to the UK. They are not going to get what they want from the EU because they cannot, because—going back to the immigration issue—as long as we have unlimited immigration from the EU we cannot significantly increase the number of visas we give to non-EU countries, but we can if we are outside the EU.

Chair

That is getting back to the suggestion in this proposal that the UK Government are going to look much more generously and benevolently in giving visas to people from the Indian subcontinent. Again, there is no evidence that the UK Government is of a mind to do anything to fulfil that.

Tom Harris

On the contrary, Chair, historically, given the political and cultural links we have had with, for example, the subcontinent, there is a reason why Urdu is the second-most popular language in Scotland.

Chair

You are asking me to take a leap of faith. I think it is taking a massive leap of faith to think that the UK is going to change its immigration views about accepting people outwith the EU more benevolently and generously.

Tom Harris

It is not about a leap of faith. It is about what our vested interest is.

John Stevenson

Getting interrupted does interrupt the train of thought. Carrying on with this theme, just out of interest, do you think the present Government is doing enough with regards to planning for a potential leave?

Tom Harris

Honestly, I cannot address that. I don’t know what is going on behind closed doors with the Civil Service. I imagine that certain boxes have been ticked as far as the Civil Service is concerned, but I could not speak to that at all, I am sorry.

Chris Law

I want to come back to the Scottish Whisky Association. I thought I would have a look at their position. David Frost, who is the chief executive, said, “The EU’s single market, including its regulation of food and drink, and its single trade policy, are central to Scotch Whisky’s success. The single market lets us trade across the EU simply and easily”. It does go on and say a little bit about, “The agreement secured with the EU includes a welcome re-statement of the importance of a deeper and freer single market and for the EU to be more ambitious and free-trading internationally”. So, while it welcomes some reform, there is no talk of it supporting any leave or a major criticism of the EU. They say it is vital to the future of Scottish whisky.

Tom Harris

No. For the record, Mr Law, I did say to the Chair that when I made my comment to Scottish Whisky, they are unequivocally in favour of the Remain campaign and in favour of a Remain vote and I want to make that clear. I am not praying in aid their support at all for my campaign. I am simply pointing out what I think is a flaw in their strategy for achieving a trade deal within India. I don’t think it is going to be possible, or at least on the terms that will benefit us as if the EU were negotiating on our behalf. You did quote David Frost, the chief executive of the SWA. He did say last year that the membership of the EU was not important, what was important was the quality of the product. This is an argument I have been making for a very long time. It is not about trade deals. You can trade without a trade deal. It is not about tariffs. It is about the quality of the product. The market will decide whether you have something that it wants to buy. If we produce things of high quality, the world will buy it. In France we sell more Scotch whisky in a month than they sell Napoleon brandy in a year, and that is because it is a high-quality product. I think we should have confidence in what we produce because people will buy it.

Margaret Ferrier

Before I come on to the main question, the EU single market rules are underpinned by a strong core of social rights, especially for workers, for example, health and safety provision, temporary agency workers’ rights, parental leave, paid annual leave are a lot of what is included. At the moment we see the UK Government wants to downgrade human rights and they are bringing in a British Bill of Rights. I could go on then and mention food labelling and cosmetic regulations—I am sure Mr Harris will not be interested in the cosmetic regulation, but I certainly am—and it strengthens the safety of these products. We only need to look at the Transatlantic Trade and Investment Partnership as well, where USA law is not really as sturdy as EU law. That is some of the benefits of being part of the EU and having sturdy laws at the moment.

Tom Harris

First of all, can I say that the recent publicity about the Conservative Government wishing to downgrade human rights by introducing a Bill of Rights, that is being done at the moment inside the EU. The EU is not offering any protection at all to what the Government is doing. Inside or outside the EU that is something that is happening. That is proposed by the Home Secretary, who supports the Remain camp. Secondly, if you look at some of the great leaps forward in workers’ rights in this country, protection against discrimination on the grounds of sex, protection against discrimination on account of race, the national minimum wage, maternity leave of a year, they were all brought in at the UK level. In fact, the first two I mentioned on race and sex discrimination were brought in before we joined the EEC.

Chair

They were also brought in when we were members of the EU.

Tom Harris

Yes, and completely separately, with no influence from the EU. The national minimum wage, for example, that the Government—

Chair

I don’t understand your point. These things happened as members of the EU, so there is nothing that would stop us from doing it as members of the EU.

Tom Harris

Absolutely correct, but what I am saying is that those advances were made completely outside the institutions of the EU. They were made by British politicians elected here, accountable to our electorates. The biggest steps forward in workers’ rights did not happen because of EU law.

Chair

Do you not have any concerns with British politicians here, which is currently a Conservative Government, being solely in charge and in power when it comes to things like employment rights, when it comes to things like human rights, which is currently decided within the European Union level? We are going to have to leave that up to Westminster. We are going to have to leave that up to the Conservative Government who, again, don’t take the most enlightened view on these issues.

Tom Harris

As I say, the attack—if you want to call it an attack—on human rights, with the introduction of the Bill of Rights, is happening at the moment and we are still within the EU. It is being done by politicians who support the Remain camp. But, yes, I am still a member of the Labour Party. I was a Labour MP until a year ago. Of course, I would rather have a Labour Government than a Conservative Government. I make no apology for that, but let us remember this current Conservative Government, any Government, still wants to be re-elected. I am not convinced. When the minimum wage came in, I remember vividly people saying, “When the Tories get back in they will get rid of the minimum wage”. We now have a living wage. I am not making a defence for the Conservative Government, but Governments do what they need to do to get elected. They legislate for popular things.

Chair

Isn’t the European Union our guarantee of these basic rights? Can we not rely on that to ensure that they are always going to be there, whether it is a Labour Government—which might do wonderful, enlightened things—or whether it is a Conservative Government, that with these mechanisms in place, British workers, human rights across the European Union are always going to be in place and we can rely on that and count on that as being a feature of our democratic life?

Tom Harris

I would invite you to ask trade unionists how they feel—

Chair

We have spoken to the trade unionists.

Tom Harris

—about the level of protection they have had against the latest Conservative Government Trade Union Bill, which I think is introducing all sorts of unpleasant areas to public policy. I don’t think the European Union has done very much in protecting workers’ rights in that respect.

Margaret Ferrier

I have one more question. You have been putting across a strong argument for a Leave vote on 23 June, but previously you said that you pretty much assumed that you would vote Remain at the referendum, but when the Prime Minister came back after his meeting in Brussels and presented his deal, to quote you, I think you said, “The red mist descended” and you changed your mind. So where do you think the Prime Minister’s deal falls short?

Tom Harris

We don’t have enough time for me to tell you all my problems with it.

Chair

We don’t have enough time, so if you can make it as brief as possible on this point.

Tom Harris

Yes. Essentially, I have a particular problem with my own party, who constantly will say, “Yes, the European Union is flawed. It does this wrong. It does that wrong, but you can only reform from within”. What I realised, belatedly, when David Cameron returned with nothing from his negotiations was that you cannot reform it. If a Conservative Europhile Prime Minister goes to the EU and goes to other national leaders and says, “Look, I need these reforms. I have a referendum happening in three months’ time and Britain, the second-largest contributor, might leave the EU that is how important it is that you give me these reforms” and they turn around and say, “No”. If you cannot reform under those circumstances, I promise you, you will never get reform.

Chair

You have only one minute left.

Mr Christopher Chope

Can I make the point that at a press conference earlier today, Steve Hilton made that very point? When asked why the Prime Minister thought that he was going to get a better deal, Steve Hilton said that he genuinely thought the Prime Minister believed that he would be able to persuade his European partners that, because we felt so strongly about this issue, they would make concessions, and because he did not win those concessions, to use Steve Hilton’s words, “The Prime Minister and the Chancellor of the Exchequer found themselves in a rather confused position”. That is why Steve Hilton is very strongly saying we must leave. Chairman, going back on what you were saying earlier, you were challenging as to whether or not anybody else was saying, as our witnesses, that we need to have control over all migration from across the world. What Steve Hilton has said was, “Because we have no control on EU immigration, we have to clamp down on everything else. In a globally-connected world where talent lies everywhere, this old-fashioned discrimination is counter-productive economically and culturally, turning away brilliant Chinese students, Indian mathematicians and so on. Don’t you think it would make more sense if we had an immigration policy that was open to the brightest and best from across the world, not a small part of it?” That is not possible within the EU, and isn’t the situation in Scotland, which has always been outward-looking, that Scots would be much more prepared to have open borders with the whole of the rest of the world, on the basis of merit, in the same way as Scots themselves have made such a big contribution globally?

Chair

If you could, Tom, briefly answer that.

Tom Harris

Of course. It comes back to the immigration debate. The EU referendum is nothing to do with race. It is about skills. It is about wanting to attract people who have a particular skillset, which we cannot do in the current situation. It is also about whether or not you have confidence in the Government to provide the homes, the services and the school places for the 3 million EU citizens who will be living here by 2030, according to the last Treasury report.

Chair

We are very grateful. We know we have detained you and you have answered all these questions very fulsomely. Thank you very much for that.

Tom Harris

It has been a privilege.

Chair

If you have anything further, let us know what your views are on that. Thank you for that. Examination of Witnesses

Witnesses

Rt Hon David Mundell, Secretary of State for Scotland, and Rt Hon David Lidington, Minister of State for Europe, gave evidence.

Chair

I am very grateful to both of you for coming along to this session this afternoon. We do not have much time, so we hope to rattle through as many questions as possible, so we are not going to ask for any opening statements. Maybe we could kick off because we know that the Prime Minister is renegotiating the UK’s relationship with the EU and is campaigning for the UK to remain in a reformed EU. How will these reforms affect Scotland? If we take it from you, Mr Lidington.

Mr Lidington

In terms of how the reforms achieved in February specifically will affect Scotland, I think in particular Scotland, like the rest of the UK, will benefit from the principles that will define the future relationship between those countries in the euro and those that have chosen to remain outside. I think if we look to the long term, this was a very important element of the overall renegotiation, because I believe that economic logic will require our neighbours who have committed themselves to a currency union, a single monetary policy, a single interest rate, a single central bank, over time to integrate their fiscal and economic policies more closely, and that in turn will require some mechanism to create political accountability at eurozone level for those decisions. The test for Europe, for the Union as a whole, is how to make that possible, and I believe that it is in Scotland’s and the UK’s interests that the eurozone should be stable as a currency union, not moving from one crisis to another. How do you do that, while at the same time respecting the integrity of a single market of 28 and the right of those countries that are outside the currency union to have their interests properly respected? I think the principles agreed in February: non-discrimination on grounds of currency against any company or Government, a principle that eurozone integration must take place in a way that does not compromise the single market at 28, including financial services at 28, and no liability of non-euro countries for bailouts of eurozone countries, those are really important principles. The other thing, since our time is limited, Chairman, what I referred to in the February European Council conclusions was the declaration on economic competitiveness and the commitments on smarter regulations, because those touched on matters that were of particular concern to the Scottish Government when they put forward their own proposals on European reform and negotiation.

Chair

We are grateful for that. There were lots of words in there I am struggling to sort of process. Where we are just now is that we have this renegotiation that the Prime Minister secured in February. I think you could ask 100 people in Scotland exactly what the Prime Minister secured and I am pretty certain next to none would be able to tell you what they were. I am pretty certain if we went around this table here it would be quite hard for anybody to recall exactly what the Prime Minister secured and negotiated back in February. Isn’t this absolutely nothing whatsoever to do with renegotiation and it is more about the themes of sovereignty, about trade and about immigration?

Mr Lidington

I think both sovereignty and trade are important issues, but if I had to sum up the central achievement of February, it was a commitment by all member states of the European Government at head of government level that the future model for development should be one where we all accept that different levels of integration could be chosen by different EU members, that it is no longer a question of perhaps different speeds to a single destination, but of a permanent choice by some countries not to proceed to the degree of political integration or the fiscal and economic integration that other members of the Union, for their own reasons, may choose to do.

Chair

We have tried to identify what the big themes are in Scotland, the things that people are debating when it comes to this EU referendum and it seems to be pretty much similar to what is happening in the UK debate. They do seem to be around sovereignty. We are hearing less and less about trade because the Leave campaign is less likely to touch on that, but it is mainly about immigration. It has become a case about immigration. I would like to ask the Scottish Secretary this question: given that this has become such a big theme, do you recognise that there is a different immigration requirement in Scotland than the rest of the UK, and this is a debate that is possibly not helping a real, considered case in Scotland that people have now had a good look at the issues involved?

David Mundell

Chairman, I don’t recognise your characterisation of the debate in Scotland. I think that the focus of the debate in Scotland is around the economic issues and the economic benefits that Scotland gains from being within the single market, the impact that that has on the hundreds of thousands of jobs in Scotland that are affected by membership of the EU, and what the likely impact on individual citizens in Scotland would be if Scotland and Britain left the EU. That is the debate I hear in Scotland. Obviously, I think we would all accept that the debate in Scotland is at a different place because we have had the Scottish parliamentary elections, which have been the focus of the electorates’ intention in Scotland for the last couple of months. But my interpretation of the debate, as I see it, in Scotland is focused on those economic issues.

Chair

In your conversations, have you noticed a distinct debate in Scotland then about the EU referendum? Are there any themes that have emerged that Scotland is considering when it is looking at this question that is maybe distinct from the rest of the UK?

David Mundell

I would not say “distinct”, in that a number of the issues could arise in other parts of the United Kingdom, but obviously as was raised at Scottish Questions last week, the Scotch whisky industry is an enormously important industry to Scotland and the Scottish Whisky Association have been very, very clear that for their industry it is vitally important that they remain in the EU, because of all the trade arrangements, because of all the arrangements that are in place in relation to labelling and tagging, all these things that are in place that would have to be opened up if Britain was to leave the EU. Obviously farming I think is an industry that has a disproportionate importance still in Scotland compared to some other parts of the United Kingdom, and you took evidence yourself that the farming community in Scotland is very, very clear of the benefits to that industry, which then leads through to the food processing industry. I think the distinct elements within Scotland necessarily shape our debate, but I am sure that there are farming interests in England and there are spirit producers in England who would echo those arguments.

Chair

As a last question and an opening question from me, do we need perhaps a different type of conversation in Scotland, given the experience with the referendum? You and I were on other sides in the last referendum debate and curiously find ourselves fighting on the same side in this one, but some of the more exaggerated claims that have been made, particularly from UK Government, things that you and I would remember as the scare stories and the self-styled Project Fear, do you think this has a more negative impact in Scotland, given our experience of the last referendum? Is there anything that you can maybe do to caution the Minister, who is going to be speaking on behalf of the UK Government, to maybe tone it down a little bit when it comes to some of the more exaggerated claims about leaving?

David Mundell

My first point, and it is one that I would make again to the First Minister, to yourself and your colleagues in your party, I have heard the calls for a positive campaign, but then they are usually followed up by a whole range of negative statements about the way the campaign is being run or process, or even the impact that it would have on having a second independence referendum in Scotland. I think those people who are positive about Scotland remaining in the EU should be out there making a positive case. That is all of us, and I think we can all shape the debate in Scotland by making a positive case. It is not enough just to say, “Make a positive case”, you have to go out and do it. You will recall that 10 days ago I appeared on the “Question Time” programme from Aberdeen making the positive case from the EU. Of course, the person making the case for Scotland leaving the EU was Jim Sillars, the former deputy leader of the SNP.

Chair

Just on this, for the Ministers before we move on, these things, like mentioning war and pestilence and economic ruin, it was all the things that we are familiar with around this table from the Scottish referendum. Do these things help an educated, informed debate and how can we characterise this positively?

Mr Lidington

I would always caution, Chairman, against reading too much into the headlines in some of the tabloid newspapers. If you look, for example, at the Prime Minister’s recent speech about the security and foreign policy dimension of our membership of the EU, what you will find there is a very positive case being made, both for the way in which the EU has been able to reconcile ancient hatreds that did in the past lead to bloodthirsty conflict between the nations of Europe, but also the Prime Minister referred to how the membership of the European Union amplified the United Kingdom’s own ability to secure our global diplomatic and commercial objectives. There are issues that face us all, instability and poor economic growth in many countries in Africa, which is one of the key driving forces behind the mass movement of people northwards towards the European continent. Not we, not France, not Germany can solve that on our own. Working methodically together, using development aid, using diplomatic action, training police and military border forces in those countries, using trade access agreements to give people in those countries some hope of a decent living and fulfilling their ambitions without having to move, we stand a chance over time of managing those challenges.

John Stevenson

The Prime Minister recently said there was remarkably little difference between Scotland, England, Wales and Northern Ireland in terms of whether people supported a referendum. Contrary to that, there seems to be polling evidence that the Scots are more enthusiastic about the EU than the rest of the United Kingdom. What do you make of that?

David Mundell

I would interpret his remarks—which I think were in some questions that Mr Wishart had raised with him, I believe, in committee—about whether there was demand within Scotland for a referendum. The last time that a specific poll was taken in Scotland by Ipsos MORI, it indicated 58% of people in Scotland supported there being a referendum on whether Scotland and Britain remained within the EU. I think having a referendum on EU membership is entirely consistent with having a referendum on whether Scotland remained within the United Kingdom, which obviously we did in 2014. People in Scotland, just as people across the United Kingdom, will be able to have their say in the debate. Clearly, I support Scotland and Britain remaining in the EU. I think we have to acknowledge that there are people within Scotland who will vote to leave. I don’t think it is right to characterise the number of people who support leaving the EU in Scotland as the number of people who voted for UKIP in the Scottish Parliament elections. Clearly significantly more people than that do, but I expect Scotland to vote and I expect the United Kingdom to vote to remain in the EU.

John Stevenson

You see no significance that the Scottish vote is significantly higher than the rest of the United Kingdom in terms of support for—

David Mundell

This is clear. We have had a number of debates, obviously, as the EU referendum bill was passed, but this is a UK-wide vote. Everybody’s vote counts the same, whether they are in John o’Groats or in Land’s End and the result will be determined on the UK-wide vote.

Chair

I am very conscious of the time and we hope to get through as many questions as possible, so if I could ask colleagues to ask brief questions and brief replies too, if that is okay, from our assorted Ministers.

Margaret Ferrier

In a speech on 9 May, the Prime Minister said that, “A vote to leave the EU could lead to the disintegration of the United Kingdom”, so does this mean that the UK Government has accepted that a vote to leave the EU would mean that there would be a second independence referendum in Scotland, and, if not, what did the Prime Minister mean by that statement?

David Mundell

I certainly don’t believe that the Prime Minister meant or would wish to indicate—and I certainly don’t wish to indicate—that the EU referendum has anything to do with the Scottish independence referendum. We have had a Scottish independence referendum. People have voted decisively to remain within the United Kingdom. This referendum is not about Scottish independence. It is about whether it is best for Scotland and Britain to remain in the EU. I think what the Prime Minister was clearly indicating is that, if Britain does vote to leave the EU, then there will be a pretty chaotic situation within the country as we adjust to the changes that that would bring about and the likely lengthy period that that would take to negotiate a new settlement of whatever kind of relationship that we were going to have with the remaining EU.

Chair

Can I say I am not particularly sure if that was exactly what the Prime Minister was intending by these comments? Because I remember listening to him very carefully and my perception was not what Ms Ferrier took away from it. But can I ask you: is there now a possibility—maybe even a likelihood—that Scotland will vote to remain within the European Union? Every opinion poll is indicating and suggesting that, where the opinion polls in the rest of the United Kingdom seem to be 50:50, some for, some against, so there is a possibility that Scotland might get pulled out against its national collective will, given that we might vote to remain, where the rest of the UK will vote to pull out. What would be the UK Government’s message to the people of Scotland in that scenario? Are we to get over it, shrug our shoulders and say, “Oh, that is part of being in the UK, we have to accept it”? Would you have a message for the people of Scotland in that situation?

David Mundell

What I am quite clear, Mr Wishart, is that when we had the independence referendum in 2014, there was a lot of discussion as to whether we would have this referendum in relation to membership of the EU.

Chair

If you don’t mind, Secretary of State, how I recall that conversation about the EU is it would only be in voting in “No” in the independence referendum that would almost guarantee an EU membership. Now this Government has taken us to the brink of leaving.

David Mundell

Obviously, we are not going to agree on that interpretation of the debate around the independence referendum. I recall, on many occasions, those who favoured Scotland leaving the UK arguing that there would be an EU referendum and that there was a potential for Scotland and Britain to leave the EU in that referendum. I think that issue has been debated.

Chair

If we are taken out against our will?

David Mundell

But my message to people in Scotland, and I would hope that it was the SNP’s message, was, “Come out to vote to remain”.

Chair

Yes, we will do all that.

David Mundell

Yes, but you have to follow it through because, between the UK general election, when 1.5 million people voted SNP and the Scottish Parliament election when 1 million voted SNP, nearly 400,000 people did not come out to vote. I think your energy should be out there getting people out to vote to remain in the EU, if that is what you really believe in.

Chair

Could I say to you, Secretary of State, that the support for the Remain in Scotland, according to all opinion polls, is significantly higher than it is throughout the whole of the United Kingdom, so obviously—

David Mundell

Yes, but you will understand, Mr Wishart, that votes and polls and the number of people who turn out to vote at elections are two quite different things. Therefore those of us who want Scotland to remain in the EU our effort is to get people out to the polls to cast these votes, so that we get a Remain vote in Scotland and a Remain vote across the United Kingdom.

Chair

Absolutely, agreed. I will try for the last time, and I think I have asked you this in Scottish Questions, but I will ask again here today: if Scotland is dragged out of the European Union against its collective will, what will the UK Government do in response?

David Mundell

The message from the UK Government is that this was a UK-wide vote, which will be determined across the UK. I think it was very interesting to note the polls at the weekend, and we are talking about polls that indicated very clearly that the majority of people in Scotland, if Scotland was to leave, if there was a vote to leave the EU, even though Scotland had voted to remain in the EU, would not favour a second independence referendum.

Chair

All right, I think I have tried my hardest with that one.

David Mundell

I think that was very, very clear from that poll.

Kirsty Blackman

Just a very quick question then. In terms of encouraging people to vote, the best way to encourage people to vote is to make it relevant to them, so can you tell us the positive tangible benefits to individuals and families in Scotland of remaining in the UK—in the EU?

David Mundell

Yes, I can certainly do the former. The latter is, first and foremost, employment, the hundreds of thousands of people in Scotland who are currently in a job because of the opportunities for Scotland within the EU; the opportunity for Scots to move around the EU to secure employment in other parts of the EU; the opportunity to pay lower prices within the shops and within your household bills than would otherwise be the case. I think these economic arguments are the ones that are the strongest for ordinary Scots, but I also believe that we are safer, that we are more secure, that we have more influence as part of the EU. I think that the EU in Scotland has been positive for our remote and island communities, for example, and delivered a lot of specifics there. I think that people’s lives generally in Scotland have been enhanced by being part of the EU. On the other hand I don’t accept, though, to set out that I think that there would be less so because we left, is necessarily a negative campaign. I think it is important that we do set out to people what would happen.

Chair

We are grateful, yes.

Mr Lidington

Can I perhaps come in in response to Ms Blackman’s question? Let me give a list of some of those gains. Scottish people when they travel to any other country in the EU will be able to have very low mobile phone data charges. Those charges will be phased out entirely within the next year or so. If you are running a financial services company in Edinburgh or Aberdeen or Glasgow, your company has a passport to operate anywhere in any of the 28 other European countries, employing people and making wealth and work back in Scotland. You can fly from a Scottish airport inexpensively to all parts of the European Union because a common system of aviation regulation across Europe, Single European Sky, has swept away the old national restrictive practices and protection of national flag carriers that kept European airfares at prohibitive levels in the past. If you are lorry driver in Scotland or you own a road haulage business, you could drive from a depot in Aberdeen to Athens with a single set of paperwork to cover your driver and your consignment without any extra Customs or inspections anywhere along the way. If you are producing food or drink in Scotland, if they meet the Scottish, therefore the UK, therefore they will also meet the European phytosanitary and other standards, and can be sold freely anywhere around the European Union. Of course Scots can travel, they can take work and they can study at universities or colleges anywhere else in the European Union on the same basis as the citizens of those other EU countries. This is a real positive advantage.

Chair

We are grateful, Minister. That is a very comprehensive list and thank you for that.

Mr Christopher Chope

I am going to address this to the Secretary of State for Scotland. The Prime Minister said, “So let me say this about Scotland, you don’t renew your country by taking a decision that could ultimately lead to its disintegration”. That is what he said on 9 May in a prepared speech. Was that negative campaigning, was it scaremongering or what was it? It certainly does not fit in with the interpretation put on it by the Secretary of State in his earlier remarks.

David Mundell

I think you would be clear from some of those remarks, and some of the things that are said within Scotland, that there is no doubt that some people would attempt to use a vote by the UK to leave the EU as an opportunity to put extra effort into a campaign for independence of Scotland from the rest of the United Kingdom.

Mr Christopher Chope

So it was scaremongering, because you already said that they would not succeed in that. By reminding the people of England and the rest of the United Kingdom of this, the Prime Minister was basically scaremongering, wasn’t he? Don’t you agree that this referendum should be a fair and free referendum? If you believe that, why do you think it is acceptable that, at this session of our Committee, we are not able to have evidence from the United Kingdom Fisheries Minister on the very important issue of fishing, we are not able to have evidence from the United Kingdom Justice Secretary, because both those members of the Government happen to take a different view and support the Leave campaign? Is it not unfair that they are not allowed to give evidence to this Committee because of the stance that they are taking?

David Mundell

My understanding is that both of those Ministers have set out clearly their views, and if you wish to know what their views are, you would be able to clearly understand them. But I would accept, Mr Chope, that there is a UK Government position in relation to this referendum and, in terms of setting out that position, that is the role of UK Ministers who are not for leaving the EU. That is the basis on which it was agreed that members of the Cabinet and other Ministers would still be able to remain members of the Cabinet and Ministers while making a case against the position that the Government has adopted. I don’t deny that these are somewhat unusual circumstances, but when the process began, and the Prime Minister made clear the modus operandi for Ministers who did not accept the Government position, I think everyone did understand where we stood and that it would be unlikely that Ministers offering a different position would be giving a view as part of the Government.

Mr Christopher Chope

Today—you may not have had the chance to be present—Steve Hilton, the former adviser to the Prime Minister, was making a speech and basically saying that all Conservative modernisers should be supporting the Leave campaign, because that was where the optimistic future, decentralised, devolved and global, lay. I don’t know whether you have regarded yourself as a Conservative moderniser and whether you feel you have been left behind as a result of what has happened. But can I ask you this? Financial transactions tax: the Chancellor has said that financial transactions tax may apply to the United Kingdom extraterritorially from those countries that wish to introduce it. He has said that he will fight that in the European Court of Justice, but in the same way as the European Court of Justice ruled against the Scottish Government in relation to minimum alcohol pricing, the European Court of Justice could do exactly the same on financial transactions tax and damage the Scottish financial affairs industry, couldn’t it?

David Mundell

On the first point, I have always had a high regard for Mr Hilton, but I think he was someone who always took a view of producing a number of ideas, some of which would be accepted, some of which would not. I am prepared to look at his different statements and take different views on different statements he has made. I don’t agree with the statement that he has made today. I do think that if you are the member of a larger organisation, those organisations have rules, and indeed a legal framework, and you have to accept the judgments that come from that. You cannot, within that environment, always have your own way and get the judgment you would want, but, likewise, I don’t accept that if Britain was outwith the EU, we would be able to do everything that we wanted. Of course we would still be bound by the realities of the international community

Chair

I am grateful, Secretary of State. We only have 10 minutes or so left, so I am quite keen to get as many members as possible in with their questions and I know that Chris Law had a question.

Chris Law

Very quickly, it is a supplementary question and it is one that probably people back home are watching. Tell me, don’t you wish that the Prime Minister had never put this question to the people of the UK? It seems every party in the UK has a fairly strong position apart from the Conservatives, both south and north of the border. I am reading now there is almost 10 now, some of which are brand-new MSPs in Scotland, who are backing a Brexit. When you talk about the UK Government position, how do you include or exclude the 141 that are not going to be supporting down here and the 10 in the north?

David Mundell

Mr Law, I don’t think that you are going to argue that every single person in Scotland supports Scotland remaining.

Chris Law

No, I am talking about political party members, MPs, MSPs.

David Mundell

You mentioned the Scottish Parliament. I think it would demonstrate that the Scottish Parliament was not in touch with the people of Scotland if every single member of the Scottish Parliament was in favour of Scotland remaining in the EU. That would not be reflective of public opinion in Scotland. I expect there to be a decisive vote in Scotland to remain in the EU, but I am not pretending that every single person in Scotland is supporting remaining in EU. I know one person, in the shape of Jim Sillars, for example, who is not. There were reports in The Sun newspaper today that there is going to be an SNP group of Brexiteers.

Chris Law

But my point is if they have elected an individual who—

David Mundell

I think it is important that public opinion is reflected in the Scottish Parliament, but I have enormous faith in the people of Scotland and the people of the United Kingdom. The people of Scotland made what I consider to be the biggest decision in our lifetime by voting to remain in the United Kingdom. I trusted them with that decision. If they voted to leave the United Kingdom, I would have respected that decision. I trust and respect the people of the United Kingdom to make this choice.

Chris Law

But my point is: do you not agree that the elected members of the Conservative Party are ill-divided over this very issue?

David Mundell

I think that when we see the result in the EU referendum, a large number of people have voted to remain in the EU—hopefully the majority—and a large number of people will have voted to leave the EU. It is quite right that their views are reflected in Parliament. We have said it is not for MPs to decide. It is not for the Prime Minister. It is not for Mr Chope. It is not for me. The people of the United Kingdom will decide and then we will respect that result and move forward.

Chris Law

I fully appreciate that, but the key point I am trying to make here is the UK Government’s official position is to remain, which I fully support and so does the SNP and most other parties, for that matter, with the exception of UKIP. The point is though, from a public perception, it is a party that is divided over this issue and it is very difficult to get that clear message to remain within the EU across as a result.

David Mundell

My colleagues who are in favour of remaining in the EU are obviously part of the Remain campaign, and colleagues who are part of the Leave campaign want to leave. It is as simple as that. Am I acknowledging that there are people in the Conservative Party who want to leave the EU? Yes, there are. Are there people that want to stay? Yes, there are. They will not decide whether Britain remains in the EU, the people of the United Kingdom will decide.

Chair

Is there anything you can help us with here, because I think to most of the Scottish people this is very much a Tory referendum, and I think somebody said—and sorry to John here—it is like two bald Tories fighting over a comb. This is how it is perceived. I am sorry, John, about that. But you brought this referendum. It was a Tory Party manifesto commitment to bring this referendum. It seems like you have taken Scotland to the very brink of possibly getting pulled out Europe against their will. How do we make it much more about what has gone on in the Conservative Party and how do you help us to achieve this? There was no desire, and I know you are going to quote this opinion poll again, but nobody voted for parties that wanted to have an EU referendum. It was only you that was determined on that manifesto commitment. Everybody else was determined on the basis of “No”, so how can you expand it out to help us?

David Mundell

Let us look at it. I am very happy to obviously take your advice on such matters. Obviously we had two referendums in the last Parliament: one to change the voting system to AV and one for Scotland to leave the United Kingdom. I think the SNP was on the losing side on both those referendums, but what happened in the 2011 election, when the SNP supported the adoption of AV, the people of Scotland rejected it but still voted for an SNP majority Government. I think that shows how savvy the Scottish public are. They can separate out these issues. They can separate out where they stand on the issue of Scotland remaining in EU. But if you want Scotland to remain in the EU, be positive about it. I have not heard a single positive thing from you, Mr Wishart, in this whole session. I know it has been short—

Chair

I know it has been a few questions, but that is all right, that usually works.

David Mundell

—but you be positive as well, your party be positive, the First Minister be positive and then we will all achieve our common objective—other than Mr Chope—of Scotland and the UK remaining in the EU.

Chair

I know the Minister was desperate to come in.

Mr Lidington

Yes, the reality is that Mr Chope does represent a significant number of people on the subject of Europe, in Scotland as well in the UK as a whole. We cannot ignore that reality. It is not a view I share, but it is a position many people do hold. I think to answer your question directly, Chairman, I would say go out and say, first of all, how people in Scotland benefit from the free trade single market in the European Union; how people in Scotland benefit from the leverage in global trade of 500 million; Scottish businesses benefiting directly from the Korea free trade deal negotiated in 2010; tell people in Scotland about how the UK shaped the EU and, through that, the global position on climate change; tell them how EU membership makes Scots safer because we can opt in to the European arrest warrant and to data-sharing, information-sharing arrangements between police forces across Europe, and tell them how it has magnified our diplomatic reach globally, brought Iran to the negotiating table over her nuclear programme, and enabled piracy in the Indian Ocean—which was a fearsome menace—to be weakened enormously.

Chair

I think we need to see more of the Minister on TV and not the Chancellor, given the style of positiveness—

Mr Lidington

You will get me into trouble.

Chair

—that we very rarely see in terms of this campaign, so more Lidington on TV and less Osborne.

Margaret Ferrier

If the UK does leave the EU, there would be significant changes to the powers of the Scottish Parliament, as areas of policy currently controlled by the EU would then revert to Scotland, agriculture and fisheries to name a few. Have you looked at how Brexit would affect Scotland’s devolution settlement?

David Mundell

We have not made, as has been indicated on a number of occasions, contingency plans for Brexit, because that is not the UK Government position. The UK Government position is obviously to argue that Scotland and the rest of the Britain remain in the EU. Obviously the point you make is self-evident: there would be significant changes for the Scottish Parliament as well as for the rest of the UK if there was a vote to leave.

Mr Lidington

There would be a huge amount of uncertainty. To take one of those issues, which is fisheries, it is simply not the case to say if the UK left the European Union there would be instant control by UK authorities over UK waters. We would still be subject to United Nations conventions governing migratory fish stocks and fish stocks that straddled national maritime frontiers. The UK would have to find a way to negotiate rights of access to third-country waters, which our fleets fish in, but which currently have been negotiated through EU-wide agreements with those countries. We would also have to deal with the issue of many cases of longstanding reciprocal rights of access by our fishermen to other European countries’ waters and theirs to elements of our waters. Yes, then Ms Ferrier is right that under the terms of the Scotland Act the operations of such a new regime would then largely I think fall to the devolved administration, but there would be massive uncertainty, which I fear would drag out over a period of some years to resolve that.

Chair

You are a bit responsible for this, you brought this referendum. If we are taken out—particularly if we are taken out against our will—this Conservative Government will have delivered that. To hear the Secretary of State say that there is no contingency if we are dragged out, I think the people of Scotland will find that absolutely appalling. Most of the legislation, as you will know, Secretary of State, as a former Member of the Scottish Parliament, is proofed by the EU. It is subjected to EU law. Are you saying that there is nothing planned if Scotland is taken out of the European Union?

David Mundell

I am surprised, Mr Wishart, given that the SNP did play quite a significant part in the various debates on the EU, that you had not heard that stated before, because that is clearly the position. The position is we, the UK Government, are arguing for Scotland and Britain—

Chair

No contingency whatsoever.

David Mundell

—to remain in. Mr Lidington has made it clear that, in a vast number of areas, everything would have to be then subject to negotiation. I think that you and your colleagues, for example, would want to echo the points that Mr Lidington made in the complexities of fishing post-EU, because when I was in Aberdeen for the “Question Time” programme, there was a large number of people in that audience who were from the fishing communities who were wanting to vote to leave the EU, because they believed that it would make this change, but clearly it would not.

Chair

I am grateful to both of you, this could have gone on for another half hour and I think we have all enjoyed this session. As I said, I think we need to see more of the Minister with that positive case there. Unless any colleagues have absolutely pressing questions, we are going to have to get set up for the Scottish Government. We are very, very grateful for both of you coming along and answering these questions so fully. Sorry to colleagues if they did not get around to asking anything further, because we could have gone on but we are trying to cram as much as possible in, but thank you both very much. Sitting suspended. On resuming— Examination of Witness

Witness

Alasdair Allan, MSP, Minister of International Development, gave evidence. [This evidence was taken by video conference]

Chair

Can you hear us?

Alasdair Allan

I can, yes.

Chair

Gosh. It all works. We cannot believe this. The minute we dialled through we got through to you. It is incredible. So much for the technology. Minister, we know you are under real pressure because there is a big debate going on in Parliament and we understand that there may be a vote at 3.50 pm, so we are going to crack on if that is okay. We are very, very grateful to you for attending this session today, particularly with the challenging technology we have in front of us, but hopefully this will work and we will be able to get a few questions to you, if that is all right. Are you able to see perfectly well, because we can see you?

Alasdair Allan

Yes, delighted to be here. Yes, fire away.

Chair

Thank you. We know that the Scottish Government does favour a Remain position, for the UK to stay within the European Union. Can you tell us briefly why the Scottish Government favour this position? Also, in replying to this, are there any distinctive issues that you identify that are peculiarly Scottish when it comes to this referendum?

Alasdair Allan

You are right to say that the Scottish Government does favour a Remain position. We favour that for lots of reasons, many of them economic. Some of the arguments will be familiar to you and your Committee but, from Scotland’s point of view, 300,000 jobs depend on our relationship with the European Union; we had more than £12 billion-worth of exports going to the European Union last year. But it is much bigger and wider than that. There are the social issues. There are rights for workers that are there largely because of Europe, the rights that we have in Europe to things like maternity leave as well. So we see it as part of a much bigger package. It is partly economic but obviously we see rights that are hard-fought for being protected by Europe too.

Chair

Are there any particular concerns that you have if the UK does indeed vote to leave the European Union? What would be the practical implications and difficulties for the Scottish Government?

Alasdair Allan

There would certainly be practical difficulties. You asked for distinctive things about Scotland. One of the distinctive things about Scotland of course is the importance of our rural economy, and the role that Europe plays to ensure support for agriculture, for instance, is something that would certainly be missed. From my point view, one of the things that is very striking about the Leave campaign is that there is very little real explanation as to what, if anything, might replace what Europe provides in terms of support for agriculture. That would be one example. Then of course there is the fascinating question, to put it mildly: what happens if Scotland is taken out of the European Union without the consent that was expressed in the referendum by the people?

Chair

We did put that to the UK Government Ministers. You probably did not get an opportunity to hear the responses to that. We have consistently tried to get UK Ministers to explain to the Scottish people, if they are taken out of the European Union against the national collective will, what would be the message, say, and do they recognise this as being a constitutional issue. We have not had that back from UK Governments. What would your concerns be if this were to happen?

Alasdair Allan

Well, for instance, in the course of the independence referendum one of the big themes was the danger that we might end up having to leave the European Union. Of course, ironically, we now find ourselves in the position where, to my disappointment, Scotland did not vote for independence and we face the danger, not only of coming out of the European Union but—if the polls are to be believed—the potential for pulling out of the European Union against our own voted intentions. That in itself raises huge questions about the seriousness with which UK Governments in the past have made claims about Scotland being a valued member of the family; that our views matter. My concern on that point would be that, if we reached that scenario, then it would not really indicate that our views were being taken cognisance of. All of that said the Scottish Government’s intention now, over the next four weeks, is to focus on the matter at hand. That is to ensure that the Remain side prevails, not only because we think it is in Scotland’s interests but because—without telling anyone in England how to vote—we think it is in the interests of people throughout the UK too.

Chair

I am grateful, Minister. Christopher Chope.

Mr Christopher Chope

Good afternoon. Can I say that we had the opportunity earlier today to hear from the Agriculture and Fisheries Minister from the United Kingdom, but the Government will not allow that Minister to give evidence because the Minister takes the view that the United Kingdom, and indeed Scotland, will be better off if we left the European Union. That is one of the problems that the Government is creating for those of us who wish to leave the European Union. But can I ask you this? You very much favour self-determination for the Scottish people, the Scottish Parliament and Scottish democracy. Why is it you don’t, therefore, support the idea of the Scots being able to take control over their own fishing grounds and their own agriculture policy, which would be two of the major benefits to Scotland of leaving the European Union?

Alasdair Allan

I think there is a curious position that Members of one Government can produce such dramatically different views, but it is not for me to offer any comment beyond that. In terms of the point you make about autonomy and independence, I can only point to the 28 members of the EU. I can only point to Denmark or Ireland—or I can choose bigger examples if you want—and contrast their situation with the situation of Scotland. By anybody’s definition, I would have thought, these are independent countries in the way that Scotland simply isn’t. The practical solution to the Scottish Government is ultimately to be a member state of the European Union. It involves an enormous increase in autonomy for Scotland. I think these are the questions that will not be on our paper. The question on our paper now is: do we want to be in the European Union? The Scottish Government will make a very positive case for that. In terms of fishing specifically, since you raise it, I think it is important to say that Britain—whatever happens and whatever circumstances it finds itself in—will still have to negotiate some kind settlement with the European Union on fishing, for the simple reason that fish don’t respect international boundaries. The weakness I would feel in the position of being outside the EU at that point is that, in trying to renegotiate those positions, we would not have the rights that we would have as a member state. I don’t accept the argument about the economy and I don’t accept the argument about fish.

Mr Christopher Chope

Surely, as a Minister in the Scottish Government, you are not so lacking in self-confidence to believe that you would not be able to negotiate a really good deal for fishing and agriculture in Scotland on behalf of the Scottish Government and the Scottish people? Surely you would be able to deliver that?

Alasdair Allan

I think it would be a great deal easier to negotiate such settlements from within the European Union, rather than from a position of having no say in the Commission, no say in the Council of Ministers. I think that most countries around Europe would agree with that position. The other point to be made about fish, of course, is that two-thirds of the exports of our fish go to the EU, so there is a question of who your market is. While the important issues are—and you have raised them—about negotiation of fish stocks, we have to remember in Scotland as well that there is a huge benefit to being part of a single market when two-thirds of our fish exports are going to the European Union.

Mr Christopher Chope

Why, in that case, do you think that Iceland and Norway, both of which have significant fishing industries, don’t wish to join the European Union? They are very happy looking after their own fish outside the European Union.

Alasdair Allan

Much as I am a big fan of Norway and regularly praise Norway, I think people in Norway are very aware of the fact that, although they are not members of the European Union, they do have to pay large sums of money every year to Europe and they do have to abide by the vast majority of regulations that come out of Europe. The difference is they don’t have any say over how that money is spent or how those regulations are made. I cannot offer Norway advice but it is not a situation I would choose for this country.

Chair

Thank you. I know we have limited time so thank you for those answers, Minister.

Margaret Ferrier

I want to welcome you to your position as Minister, first of all. Congratulations.

Chair

Yes, we should have said that, initially. Congratulations, Minister.

Alasdair Allan

Thank you.

Margaret Ferrier

Just a question about the funding at the moment, because in the event of a Brexit the money that we currently receive via the EU is a greater level per head of population than it is in England. My question is: if it reverts back to the UK, we are out of Europe and the Treasury is in control of the money. What guarantee do we have that those funds would be distributed fairly to the regions, the devolved administrations?

Alasdair Allan

As far as I can see, we simply don’t have that guarantee. One of the things that have been noticeable about this debate is that there has been very little said, by way of detail, about how those who advocate exit from the EU would renegotiate the UK’s relationship with Europe and, indeed, if they did that, how they would then spend or constitute the funds that would have to be replaced. For instance, in the course of the independence referendum in Scotland a couple of years ago, quite rightly, there was great pressure on the Scottish Government to put together a detailed case explaining how the scenario of independence would be managed; how that would be done economically and how that would be done constitutionally. It is very noticeable that issues like the one that you have raised are not clearly explained in this debate by those advocating exit, and there is a poverty of information from them about the very point you made.

Margaret Ferrier

Thank you, Minister. We heard earlier from the Secretary of State for Scotland that the UK Government have no contingency plans, whatsoever, in the event of a Brexit. That surprised the Committee very much. What are your thoughts on that?

Alasdair Allan

Again, I cannot speak for the UK Government. I do know that the Scottish Government are following very much and advocating very strongly in favour of the positive arguments for remaining inside the EU. We don’t make our plans on the basis of the UK leaving Europe. We argue for the UK to stay, and we do believe that both Scotland and the UK benefit from that.

Chris Law

The Scottish Government have expressed mixed feelings about the deal that was done by the Prime Minister on reforming the UK’s relationship with the EU. I want to know what ones you agree with and what other ones you perhaps have reservations about.

Alasdair Allan

Certainly, the deal that has been agreed has caused some surprise in Brussels I think. The first thing I did when I became Minister was to go to Brussels. I think there is a feeling of surprise around Brussels that, having gone to a great effort to renegotiate many aspects of the UK’s relationship with the EU, the next thing we are talking about is leaving essentially. I think welfare is one of the most difficult issues that there would be—for instance, how we could find ourselves in a position where we could be discriminating against EU nationals. There would also be aspects of economic governance that would all be big issues in the event of the UK leaving the EU.

Chris Law

Was the Scottish Government involved in these negotiations with the Prime Minister or were they excluded?

Alasdair Allan

I think we were told about the results, but I don’t think it would be fair to say that the Scottish Government featured tremendously highly in the thoughts and priorities of the UK Government.

Kirsty Blackman

A follow up from that one. In terms of the relationship between the Scottish Government and our ability to have influence in the EU, do you think that moves are being made to improve that? David Mundell said previously there was a protocol being drawn up in order to ensure that there was more of a Scottish voice heard at an EU level. Do you think that is improving and, if not, can you see it improving in the future?

Alasdair Allan

I did not hear the Secretary of State’s comments there now. Obviously I would welcome anything that would show that Scotland was being given more consideration when it came to the way it was represented in Europe. I think one of the first tests of that would be the UK’s presidency in Europe. There are lots of things that could be done if the UK Government put their mind to it. For instance, I mentioned fishing before. Having somebody from the Scottish Government to chair fisheries’ meetings would be an interesting way of evidencing and proving that there was a better relationship. Certainly at this end we are working on that. We feel that, for instance, a consultation on EU policy by the Scottish Government is a good way through that. But we need the UK Government to show, in practical terms during the UK’s presidency in Europe, that they are willing to give Scotland that better and bigger role.

Chair

Minister, I think you said in response to Mr Chope that there did not seem to be a prospectus on offer for any sort of Brexit, and of course you and I are familiar with the independence referendum where there was a very substantial White Paper that tried to answer practically every question about the possibility of an independent Scotland. It seems the Prime Minister has done that work on behalf of the Remain campaign. I think we have three versions or varieties of Brexit around. I want to ask you how each of them might suit Scotland. One seems to be the Norway/Switzerland example, where we remain in the EEA but outwith the European Union. The second is the bilateral arrangement and agreement, the one that is referred to as the Canada model, where we renegotiate an arrangement with the EU. Another is ordinary WTO membership. What impact would any of them have on Scotland’s ability to trade with what, therefore, would be our former partners in the EU?

Alasdair Allan

The example of Switzerland, for instance, is of a country that has had to negotiate bilateral deals on issue after issue. I think they dealt with hundreds of issues to try to reach any accommodation between themselves and the EU. That is a matter for Switzerland but, again, it is not really a situation that we in Scotland would choose to find ourselves in. If we were left in a WTO situation then, obviously, we would have no formalised relationship with the single market. I mentioned that if we found ourselves in the situation of Norway—and it is the same for the UK—we would find ourselves paying into a system over which we had no direct influence. One of things that you were looking at is the benefits that people in the UK get from free movement of goods and free movement of people. I think that certainly, if you went down the route of a WTO option, you would be losing that. You would certainly be risking that, without paying large sums of money, if you went down either the Swiss or the Norwegian routes.

Chair

There is another practical problem, too—and maybe you could talk a bit about this—that if we did leave the European Union so much of Scottish legislation and laws that are passed are reliant and dependent upon European law. I can think of the European Convention on Human Rights, which is enshrined in most legislation that is passed in the Scottish Parliament. Have you any thoughts about how all that would be untangled and, if we were to leave the European Union, where this would leave Scottish legislation and law?

Alasdair Allan

I have to answer that by saying that we certainly have not been told the answers to these things by those who are proposing the UK exit. As I say, I would be glad to have a positive case but you are quite right to be asking questions about what happens in that scenario. For instance, the human rights area would be extremely complex to disentangle. I also think there would be concern across the political spectrum in Scotland with some of the talk there is in the news away from existing European understandings of the human rights to a British Bill of Rights. That is of concern. Human rights are very central, for instance, to the Scotland Act of 1998, which we established as Parliament. I think that these are some of the reasons why—all of the implications around the principle of European membership—there is likely to be a very, very substantial vote by Parliament in favour of Scotland continuing to enjoy the benefits of being in the Union.

Chair

Is there any frustration in the Scottish Government that it seems to be a Conservative Government that have taken us possibly to the brink of Scotland being pulled out of the European Union, possibly against their national collective will? We heard from the Secretary of State that, if this eventuality were to happen, there is absolutely no provision or contingency for that. I don’t know if you have any particular views on that. I hear a bell in the background, which I suspect means that you are going to have to leave and go down and do whatever is next.

Alasdair Allan

That is the bell I am afraid.

Chair

If you cannot answer that quickly—

Alasdair Allan

There are of course many people with differing views in Scotland, but it is noticeable that all the parties that have aligned increasingly to the new Scottish Parliament are parties that do have a ticket of remaining within the Union.

Chair

Great. Minister, we are very grateful for your time. I know it has been a short session but it has been very helpful to this Committee. Good luck with your voting and we will see you soon.