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Artillery Row

Nicola Sturgeon knows where to look the Brexit gift-horse

Regulating Brexit Britain’s internal market provides the SNP with fresh causes for grievance

Alok Sharma, the Business Secretary, has launched the Government’s White Paper on the UK internal market. It proposes transferring 111 powers that are currently held by the EU to the Scottish government, 70 powers to the Welsh government and 157 to Northern Ireland without any competences currently enjoyed in Edinburgh, Cardiff or Belfast being transferred in the other direction to Whitehall.

To this one-way handover of authority, Nicola Sturgeon responded with characteristically unminced words. “Make no mistake,” she proclaimed, “this would be a full scale assault on devolution – a blatant move to erode the powers of the Scottish Parliament in key areas. If the Tories want to further boost support for independence, this is the way to do it.”

It’s a line of attack that exemplifies how Scotland’s First Minister confounds – perhaps bamboozles would be closer to the mark – her opponents. They simply do not know how to respond to a politician who combines such uncompromising steadfastness with crystal clear clarity of language. Critics may harrumph at her audacity in rebranding a gift as theft. But they might as well castigate Donald Trump for mastering Twitter.

Much as the word will grate, “gift” is the correct term, for this is not about returning powers that had previously been in the recipient’s possession. Devolution to Scotland began in 1999, at a time when all the powers now scheduled to be transferred to Holyrood were held by Brussels. Brexit has devolved them from the EU to the UK government. It is the latter’s task to determine at what level they should be exercised within the UK when EU single market rules cease to apply on New Year’s Day.

Six in ten Scottish voters opposed Brexit in the referendum and the SNP has been the main beneficiary of Remainers’ anguish at the UK-wide verdict ever since. But the reality of sovereign powers returning to the UK generates a cross-wind for the SNP to master. Committed to taking an independent Scotland back into the EU and in doing so to hand back powers to the EU contradicts the assurance that a vote for independence is a vote for Scots to be masters of their own house.

To divert attention from this awkward reality, the SNP seeks to implant the belief – the grievance – that the Brexit bounty of returned powers should, of right, be Scotland’s. In this interpretation Brexit and “the Tories” are merely dolling back a fraction of the birthrights they have stolen from Scots.

What are these fractional gains? For Wales and Scotland they range from the right to determine support for farmers and to regulate on a wide range of competences, from food labelling, animal welfare, air and water quality, to energy efficiency and public procurement.

Especially to the Scottish Government these are mere trifles. Much more valuable are the powers to be transferred from Brussels to Whitehall. Principal among these is state aid policy. There are examples in the world of regions within a nation state enjoying greater latitude on subsidising business within their jurisdiction, so the Nationalists’ demand is not without precedent. But whether the UK economy would be improved by four different state aid policies is moot and the White Paper provides international evidence that suggests harm. The SNP wants variance within nation states that within the EU it did not support between nation states.

In reclaiming internal market powers from Brussels, the UK government cannot just return to the governance structures that existed in the UK between its creation in 1707 and entry into the EEC in 1973 because in the meantime devolution has happened. This White Paper’s intention is therefore to provide the thinking that will inform future legislation in ensuring that leaving the EU does not bring distortions to the UK’s internal market and that none of its four nations pursue policies that hinder the uninhibited flow of business between them.

Where the four nations enjoy devolved powers, the White Paper supports mutual recognition (professional qualifications, services, and goods lawfully recognised and tradeable in one nation are equally valid in the other three) and non-discrimination (“a requirement not to discriminate between individuals or businesses based on residence or origin within the UK”). As Alok Sharma illustrates in his forward to the White Paper:

if a baker sells bread in both Glasgow and Carlisle, they will not need to create different packaging because they are selling between Scotland and England. Likewise, engineering firms in Scotland using parts made in Wales will know that the parts are compliant with regulations across other home nations. …  These principles will not undermine devolution, they will simply prevent any part of the UK from blocking products or services from another part while protecting devolved powers to innovate, such as introducing plastic bag minimum pricing or introducing smoking bans.

A UK internal market functioning in this way is particularly in the interests of businesses in the devolved authorities given that the rest of the UK accounts for 75 percent of Wales’s exports, 60 percent of Scotland’s exports and 50 percent of those from Northern Ireland.

In the EU’s single market, it was the European Commission’s responsibility to umpire cross-border compliance. Within the UK, the white paper envisages the dispute avoidance and resolution mechanism being undertaken by a new body charged with monitoring the internal market and engaging with businesses and consumers.

the SNP narrative of a nation betrayed (again) by Scottish democracy-crushing Tories in London will resonate

The exact nature and composition of this body has yet to be determined. It may be an expert panel, or a body directly accountable to the UK Parliament or one at arms’ length but reporting to both Westminster and the devolved parliaments. The guiding principle however appears to be that it “should be carried out at arms’ length from the UK Government in a way that is both visibly and practically independent.” Potential models include Australia’s Productivity Commission or Switzerland’s Competition Commission.

This is anathema to the Nationalists. Ian Blackford, the SNP’s leader at Westminster, has described it as a “plan to impose an unelected, unaccountable body to rule on decisions made by the Scottish parliament” adding, “the decisions of the Scottish parliament must and will be decided by the Scottish people.”

Few at Westminster can match Blackford for baroque rhetorical flourish, even if he restrained his disgust when that same will of the Scottish people was being determined by the unelected, unaccountable European Commission. In fact, the independent monitoring envisaged by the white paper appears to involve exercising considerably fewer powers than were at the disposal of the European Commission. In monitoring indirect discrimination and reporting recommendations to the UK and devolved parliaments, the White Paper is explicit that the panel’s deliberations “will not lead to third-party determinations that directly overturn the actions of elected administrations.”

But work will need to be done, and soon, on providing clarity where currently there is sketchiness. If not, the SNP narrative of a nation betrayed (again) by Scottish democracy-crushing Tories in London will resonate and the reality of Scotland gaining powers it has never previously held within the United Kingdom will be a lost detail. In a contest of soaring rhetoric and indignation, who are most Scots likely to hear more clearly, Nicola Sturgeon or Alok Sharma?

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