Tuesday 20 December 2016

Scotland's Place in Europe: Comments on the Scottish Government's new proposals

Professor Steve Peers

Today, the Scottish government published its long-awaited discussion paper on ‘Scotland’s Place in Europe’. Although, as the paper points out, that government supports both EU membership and Scottish independence, the paper focusses on what should happen in the event of Brexit with Scotland remaining part of the UK. It would therefore be quite dishonest for anyone to dismiss the paper as simply ‘rejecting the referendum result’ (either the Brexit or the Scottish independence referendum result) or as ‘banging on about independence’.

So what does the paper propose? Essentially it discusses two options: a) a UK-wide approach to Brexit that would address the concerns of Scottish voters (among others); and b), failing that, a distinct approach for Scotland. It also makes c) the argument for further devolution of powers within the UK in light of the Brexit process. I’ll address mainly points a) and b), although there’s a necessary link between b) and c) – ie a distinct approach for Scotland/EU relations post-Brexit would more obviously require further devolution. Some of this ground is covered in a previous blog post, but it makes sense to revisit the issues in light of the new paper.

UK-wide response to Brexit

The paper primarily argues that the UK should stay in the EU’s single market as extended to non-EU countries like Norway and Iceland, in the form of the European Economic Area (EEA) treaty. It also argues that the UK should remain inside the EU’s customs union, which governs EU trade relations with non-EU states. As the paper rightly points out (at para 104), these are two separate issues – it would be possible to join one but not the other. It’s sometimes argues that being part of the single market entails being part of the customs union, but this is false, as the case of Norway (in the single market, but not the customs union) and Turkey (in the customs union, but not the single market) indicate. Although to date no non-EU state is part of both the single market and the customs union, there is no legal reason this cannot take place.

While it’s sometimes argued that staying in the single market is the same as staying in the EU, and would therefore be a rejection of the referendum result, this is false. As already noted, the EEA agreement doesn’t include the customs union, so the UK would be free to reach trade agreements with non-EU countries. It also does not extend to issues such as fisheries and agriculture (as the Scottish government paper points out), as well as EU foreign and defence policy, tax, and justice and home affairs issues. Norway and Iceland have agreements with the EU on some of these issues, such as participation in the Schengen open borders deal, but these are separate from EEA membership.

Today’s paper tackles a number of the objections to EEA membership.  It correctly notes (at para 100) that EEA membership does not mean being subject to the jurisdiction of the European Court of Justice (ECJ), which is a ‘red line’ for the UK government. However, it does mean being subject to the jurisdiction of an EFTA Court, which usually follows the ECJ where a case concerns an issue within the scope of the EEA treaty. It should be remembered, though, that some EFTA Court judgments (those following references from national courts) are not binding, unlike EU court rulings.

As regards the UK’s budget contribution to the EU, it points out correctly (at para 103) that contributions by non-EU EEA members are calculated differently (they don’t go straight to the EU budget, for instance), and may end up being less for the UK than at present. On the issue of immigration from the EU, the report fails to mention (at para 101) that a safeguard clause could be used to limit EU citizens coming to the UK. The Scottish government would have no interest in using this clause, but it could be invoked on a regional basis – for instance allowing screening of job applications from EU migrant workers at the employer level in England and Wales. While the report notes that non-EU EEA countries are consulted on new EU laws within the scope of the EEA, it doesn’t mention the possibility of non-EU EEA states rejecting the extension of those new laws to them.

Some things could be clearer in the report. There’s a list of areas besides trade where it advocates UK retains a strong relationship with the EU, but it’s not always clearly spelled out whether these are part of the EEA or not. For instance, private law (para 78), discrimination law besides sex discrimination law (para 79), EU funding to Scotland (para 89), research funding (para 92), refugee  issues (para 94) and criminal law (para 91) are outside the scope of the EEA, and so would need to be the subject of separate deals between the UK and the EU. Conversely, consumer law (para 79) and employment law (para 81) are within it. The report does make clear that many – though not all – EU environmental laws are inside the scope of the EEA (see para 93).

In particular, while the report advocates an interim arrangement for the UK leaving the EU, it does not suggest any details of what that might entail – and does not discuss the possibility, favoured by some ‘liberal Leavers’, that the UK could stay in the EEA only on an interim basis, pending negotiation of a comprehensive trade agreement.

Scotland-only approach

The report correctly notes that there is already geographical asymmetry (ie different application of the law in different parts of a country), not only in the application of EU law to parts of Member States and in the application of the EEA, but also in the UK’s planned response to Brexit. It proposes to follow the same approach to Scotland, which would participate in the EEA either via ‘sponsorship’ of the UK or directly (while still part of the UK).

This raises issues concerning the movement of goods or people between Scotland and the rest of the UK, if the two have different arrangements as regards relations with the EU. Some of these issues are discussed in detail in the paper, but it largely relies on arguing that whatever solutions are found for the Northern Ireland/Irish Republic border (as promised by the UK government) can be applied by analogy to relations between Scotland and the remaining UK.


The prospect of the UK staying in the EEA (or a comparable system) is legally much easier to arrange and negotiate than any Scotland-only approach to Brexit. However, as the report notes, EEA membership seems unlikely for political reasons, since the UK government seems unenthusiastic about any obligations regarding the free movement of people. On this point the report could have done more to address these concerns by discussing the possible use of the EEA safeguard clause. It could also at least have advocated participation in the EEA as an interim measure, given that the UK government in recent weeks has appeared increasingly open to the idea of some interim arrangement following Brexit in principle.  

Equally – although the report does not discuss this – a Scotland-only approach has political problems, as neither the UK government nor the remaining EU seem willing to discuss the idea.

However, the Scottish government might in theory have more success with its proposals relating to devolution. As it correctly notes, devolution issues are bound to arise once the Westminster Parliament examines the planned ‘Great Repeal Bill’ next year – since the conversion of EU law to UK law necessarily raises the question of how this process relates to the powers of the UK’s devolved governments. And on this issue, there is possibly more broad political support: the paper refers in particular to the interest of the Labour party in rethinking devolution, whereas that party does not seem interested in EEA membership for the whole UK and has not (to my knowledge) expressed any view on Scotland-only solutions for Brexit.

In this context, there is the prospect of a coalition of opposition MPs and rebel Conservatives with a number of common (and linked) concerns about the future Bill: ruling out lower standards for environment and employment law, addressing concerns of the devolved legislatures, and limiting the executive’s power to amend Acts of Parliament to reduce standards.

Beyond that is the specifically Scottish political context. If the Scottish government’s proposals on all three issues are rejected by the UK government – given the willingness of today’s report to accept both Brexit and Scotland remaining in the UK – this might be the occasion to argue that a further referendum on Scottish independence is justified, although other factors (such as opinion polling) will also play a big role in that decision.

Barnard & Peers: chapter 27

Photo credit: Business for Scotland


  1. What kind of powers should be devolved and what is the appropriate amount and scope?

    1. Have a look at the discussion paper. Mostly it relates to issues where competence is returned from the EU (agriculture, fisheries) or where the Scottish government and Parliament might want to ensure that standards are not lowered (employment). Plus there is the question of whether this is time for a general rethink of the constitutional structure.