Damian Green told Scottish ministers it was time to “get serious” about which powers will be devolved after the UK leaves the EU, and which will remain at Westminster to prevent barriers to trade with England.
Mr Green, the First Secretary of State, will meet with Deputy First Minister John Swinney in London along with Scottish Secretary David Mundell, in a bid to thrash out a deal to prevent a constitutional crisis derailing Brexit.
The Scottish and Welsh Governments have accused Mrs May of a “power grab” that threatens the future of devolution by seeking to retain powers in areas currently administered in Edinburgh, Cardiff and Belfast.
SNP ministers accept that common rules will be needed in some areas to facilitate trade, but Mr Green said Scottish Government demands for all 111 powers to be devolved before talks on UK-wide frameworks would hit jobs and harm consumers.
‘The UK Government’s priority is providing continuity and certainty, so not to damage our hugely beneficial internal market and not to burden businesses with extra barriers to trade,” he said.
“We know that this is what people and businesses in Scotland want.
‘EU law intersects with devolved competence at Holyrood in 111 policy areas. We need to start working through this list of areas with the Scottish Government in a serious manner to determine what areas will require a UK approach, and where different practices will be acceptable.”
Mrs May’s deputy has previously warned of a “subsidy war” if control of agriculture funding is devolved. Mr Green said the Scottish Government’s demands were “back to front” and would cause “gridlock and uncertainty”.
“The Scottish Government position is that we should devolve absolutely everything to them and only then start to talk about how we rebuild the internal UK market,” he said.
“But this logic is back to front. We are not going to take risks with the UK market, risks that could cause real hardship to businesses and consumers.
“It makes no sense to potentially dismantle or disrupt large parts of our UK internal market and then hold talks on how we might be able to rebuild it - that is sure to result in gridlock and uncertainty.”
Welsh and Scottish ministers have put forward a joint list of changes they want to see made to the EU Withdrawal Bill, which will transfer European law into British statute and ring-fence powers in devolved areas at Westminster.
Nicola Sturgeon and Carwyn Jones have threatened to block legislative consent motions if their demands are not met, triggering an unprecedented constitutional crisis.
Speaking at the weekend, Scotland’s Brexit minister Michael Russell urged the UK Government to stop what he called an “attack on devolution” through the bill.
Mr Russell said: “This meeting provides a fresh opportunity to set out the fundamental flaws in the bill and to encourage the UK Ministers to take on board our amendments.
“This situation is easy to resolve and our amendments would, if adopted, enable the bill to go forward for the consent of the Scottish Parliament.”