Taking Stock: Scotland and Brexit

With little more than six months to go before the UK leaves the EU on 29 March 2019, the position of Scotland vis-à-vis the EU is not much clearer than it was in the immediate aftermath of the EU referendum more than two years ago. The Scottish Government has put the question of a second independence referendum on the back-burner and discussions around a differentiated Brexit deal for Scotland have died down. More happened in recent months within the UK, which saw the passage of the EU (Withdrawal) Act without the consent of the Scottish Parliament and a challenge to the Scottish Parliament’s EU Continuity Bill before the UK Supreme Court.
 
Time to take stock: in legal terms, what has Brexit meant for Scotland so far and what developments can we expect?
 
Scotland and the EU
Shortly after the EU referendum, Scotland’s First Minister Nicola Sturgeon announced that she would intended ‘to take all possible steps and explore all options to […] to secure our continuing place in the EU and in the single market in particular’, which resulted in a white paper by the Scottish Government outlining various options for a differentiated Brexit for Scotland. It is no secret that these early attempts at changing the Brexit dynamics by coaxing the UK Government either into a soft Brexit with continued participation in the single market or, at least, into negotiating single market membership for Scotland, were not successful.
 
Differentiated Brexit?
The key legal difficulties with a differentiated Brexit for Scotland – though not unsolvable – were identified early on: if Scotland remained in the single market, this could lead to regulatory divergences between the rest of the UK and Scotland, potentially hindering trade between them. Furthermore, it would require a differentiated immigration policy for Scotland; and devolution of almost all domestic law-making powers.
 
In theory, there is still time to revive this proposal. Provided there is a deal struck between the EU and the UK over the withdrawal agreement, the transition period – envisaged to last until the end of 2020 – allows additional time to negotiate the future EU-UK relationship. However, the time-frame will be rather tight already for getting a workable EU-UK relationship in place, let alone a differentiated one for Scotland on top of it.
 
Piggybacking on the Irish Backstop?
Might the Irish backstop provide a ready-made solution for Scotland? As the EU’s chief-negotiator Michel Barnier reiterated only last week: without the backstop, there will be no withdrawal agreement. The backstop as provided for in the draft withdrawal agreement will mainly concern trade in goods as its aim is not to keep Northern Ireland in the single market, but to avoid any visible border infrastructure on the island of Ireland. This will in all likelihood require Northern Ireland to remain part of the EU customs territory and to participate in most aspects of the single market for goods. It would therefore fall considerably short of the Scottish Government’s aim of staying in the single market, but it would equally bring Scotland closer to the EU than the rest of the UK.
 
Assuming the UK Government agreed, would an extension of the Irish backstop be desirable for Scotland? And would it be acceptable for the EU? As for the latter, it might encounter the same allegations of cherry-picking that a UK-wide operation of the backstop, which the UK Government is arguably trying to come close to with its Chequers proposal.
 
As for its desirability, it is important to reiterate that the backstop is tailor-made for the unique situation of Northern Ireland: it is the only part of the UK sharing a land border with an EU Member State; and its violent history makes the avoidance of a visible border infrastructure a key concern in light of fears that any such infrastructure might become the target of attacks. Under any scenario, its attractiveness would therefore be rather limited for Scotland, which – due to its service industry – should be keen to be part of the single market for services and which – due to its demographic situation – has expressed a desire to continue to be part of the free movement of people. Depending on the overall EU-UK relationship, therefore, copying the Northern Irish backstop may either not be necessary or add relatively little. It could, on the other hand, erect barriers to trade between Scotland and England/Wales as it would possibly result in Scotland being outside the UK’s customs territory with checks being much more difficult to conduct along the 96-mile long Scottish-English border compared with a handful of seaports and airports in the case of Northern Ireland and Great Britain.
 
Indyref 2?
The First Minister has promised an update on whether she wants to call another independence referendum in October. Should she opt for it, there would be two key challenges as regards Scottish EU membership. First, the time-frame would be tight. Independence before 29 March 2019 is practically impossible and could at best be achieved before the end of the transition period on 31 December 2020, but whether Scotland could then – fairly seamlessly accede to the EU – is questionable. Single market membership via EEA/EFTA might be the more achievable solution in the shorter term. Second, a key question in any independence referendum is likely to be the English-Scottish border: will there be customs (and other) checks or not if Scotland is in the EU or EFTA/EEA. The main problem for any campaigner during transition would be that this would very much depend on the EU-restUK trading relationship, which will not be finalised until transition is almost over.
 
Scotland and the UK
By contrast to the Scottish-EU relationship, quite a few developments have occurred in the Scottish-UK relationship, which may have long-term implications for the devolution settlement.
 
Brexit was always going to affect the powers of the Scottish Parliament, which is currently prevented from legislating in a manner that is contrary to EU law.  Furthermore, there are a number of substantive policy areas that are technically devolved, but largely determined by EU law: these include agriculture, the environment, fisheries and certain aspects of civil and criminal law (in particular on cross-border issues). In theory, Brexit should mean that these ‘come back’ to the Scottish Parliament.
 
European Union (Withdrawal) Act
During the passage of the European Union (Withdrawal) Bill, there were fears of a ‘power grab’ by Westminster as far as these devolved, but EU-determined powers were concerned. The original Bill envisaged that the Scottish Parliament should continue to be prevented from legislating on these matters putting Westminster in control of releasing those powers back to Scotland at its discretion.  This resulted in the Scottish Parliament and the Welsh Assembly refusing to grant legislative consent to the Bill (on which later). The UK Government then presented an amended provision, which we now find in section 12 of the EU (Withdrawal) Act.
 
According to this amendment, there is no longer a blanket restriction on the Scottish Parliament when it comes to legislating on retained EU law that falls into devolved competence.  Instead the UK Government has the power to designate which elements of retained EU law shall be outside the competence of the Scottish Parliament and thereby amendable by the UK Government. While in practice the UK Government could choose to do this with regard to all retained EU law that is devolved, there are procedural hurdles that may make this difficult.  First, the UK Government must seek a consent decision from the Scottish Parliament (though importantly, it can ignore it if the Scottish Parliament does not consent); second, the power to reserve retained EU law can only be used for two years from exit day; and third, any such restriction ceases to have effect five years after its entry into force.  This means that, at the latest, seven years after Brexit the Scottish Parliament will have full powers to legislate on all devolved matters currently dealt with by EU law.
 
Sewel Convention
By contrast to the Welsh Assembly, the Scottish Parliament did not grant legislative consent to the EU (Withdrawal) Bill under the so-called Sewel Convention.  That Convention – as laid down in section 28 (8) of the Scotland Act – says that it ‘is recognised that the Parliament of the United Kingdom will not normally legislate with regard to devolved matters without the consent of the Scottish Parliament.’
 
As confirmed by the UK Supreme Court in Miller, the Convention is not legally binding, so that the fact that Westminster ignored the Scottish Parliament’s refusal to give its consent has no legal consequences. The fact that Westminster legislated notwithstanding Holyrood’s refusal – without debating that refusal in any detail – was unprecedented and raises fundamental questions over the future of the Sewel Convention (a discussion can be found here).
 
Common Frameworks
Section 12 of the EU (Withdrawal) Bill means that at the very latest seven years after Brexit, the Scottish Parliament and the other devolved legislatures will gain full legislative powers over all devolved matters currently dealt with by EU law. This fact points to a further likely development: common frameworks.  Both the devolved and central governments recognise that in certain devolved areas there will be a need for common approaches, e.g. on the question of agricultural subsidies, in order to preserve the functioning of the UK’s own internal market (itself a concept needing further development).  The big question will be how these common frameworks will be developed.  Will they be underpinned by a need for consent or will they be Westminster-imposed?
 
Many of the questions surrounding devolution will soon be informed by the Supreme Court decision on the Scottish EU Continuity Bill.  The Scottish Parliament adopted that Bill – in its approach very similar to the EU (Withdrawal) Act – in order to plug any gaps in Scots law in case the adoption of the EU (Withdrawal) Act would be delayed. The UK Government challenged the validity of the Bill before Supreme Court.  This will give the Supreme Court an opportunity to clarify the limits of devolved competences.  As the UK Government advocated a rather narrow understanding of these powers, the Supreme Court’s judgment could have far-reaching consequences.
 
Conclusions
While this short blog post could not do justice to the intricate details of any of the developments outlined, it aimed to show that for Scotland Brexit is playing out on two levels. At the EU-level not much concrete has happened so far; and until the Withdrawal Agreement is adopted nothing will. If the Scottish Government remains serious about achieving a differentiated Brexit, however, it will then be necessary to renew its efforts to bring this across.
 
At the UK-level, the devolution settlement is in flux and it will remain to be seen whether Westminster will firmly establish itself in the driving seat or whether Scotland and the other devolved nations will gain true additional powers. Much will depend on the outcome of the Supreme Court’s decision; but a lot will also depend on the precise governance of those common frameworks: will Westminster manage to impose these from above or will they be a truly collaborative effort amongst equals?
 
This article first appeared on the European Futures blog of the Europa Institute, University of Edinburgh.   http://www.europeanfutures.ed.ac.uk/article-7084
 
 

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Tobias Lock's picture
post by Tobias Lock
Edinburgh Law School
6th September 2018

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