Brexit: UK government prepared to 'trade off' Scotland's fishing industry MSPs told

The UK government is prepared to "trade off" Scotland's fishing industry in Brexit negotiations to ensure Britain's financial services sector is protected, a Holyrood committee has been told.

Scotland's fishing industry could be "traded" to protect the UK's financial services sector MSPs have heard.

Charles Grant, the director of the Centre for European Reform, told MSPs that a senior Whitehall official had indicated they would “trade-off” or “bargain” with Scottish fishing to “get a better deal on financial services.”

Mr Grant, who was giving evidence to the Scottish Parliament's Europe committee on the EU Withdrawal Bill, said that fishing could become one of the "nastiest" areas in the forthcoming trade negotiations between the UK government and the 27 European Union members.

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He said: "Fundamentally, politically the issue is the notion of sequencing. The political declaration says first two things we're coming to agreement on are financial services and fisheries, and they're not easy and it's not obvious there'll be an agreement on those, and if the EU says we want to get these out the way first, there aren't any quick wins in my view."

Mr Grant then revealed he was aware government officials were already considering a "trade off" between the two economic sectors.

"Fish could be the most difficult part of the entire negotiation," he said. "I've been told by some member state governments they will not agree to any deal on anything unless the British give in on fish quite quickly.

"And I've heard a senior person in London, part of the government, say we may have to give on fish, we may have to give the EU access to our waters or we won't get anything for the city of London, so I think for the Scottish people in particular, this could be a very important issue. There's a strong point of view in London that British fish can be sold to get a better deal on financial services and I think the EU is going to be absolutely very hard on this."

Pressed on who had told him this, he said he would only say it was a "senior official in the government", and that it had happened "within the last week." He added: "He didn't say 'we will sell Scottish fish to buy financial services', it wasn't that brutal. He said this is the kind of thing we may well have to do - to give access to EU boats in UK waters otherwise we won't be able to get anything on financial services. He was implying such a trade off or bargain was to be something seriously considered, and quite plausible."

The MSPs were also told by Dame Mariot Leslie, a former UK diplomat and a member of the First Ministers’ Standing Council on Europe, that in terms of what would be discussed first, the cards were all held by the EU.

"The UK has long entertained the hope that it has an offer the EU will find irresistible on security," she said. "That that will be its trump card. That's why sequencing is so important, but if it [the EU] says we have to discuss fish before security, I don't think the UK will have a lot of leverage on the sequencing of the issues that will allow it to play the security card early."

Dr Fabian Zuleeg, Chief Executive and Chief Economist of the European Policy Centre, said that a trade negotiation was about negotiating and what either side was "willing to concede". "It is important to find out what is the UK's offer, what are the areas the UK is willing to concede," he said. "If the UK is not clear what the offer is, these negotiations are not going to go anywhere.

"For the EU to have something to negotiate with there has to be a clear understanding of what the UK's priorities are."

“With just over a week until we crash out of the EU – Scotland’s fishing industry has no certainty, and no clarity, over future trading arrangements. We don’t even know if workers from Europe will be given continued access to come and work in the industry. It’s time for the Tories to be held to account for their false promises – the industry will expect answers.”

However a UK government spokesperson said: “When we leave the EU we will be an independent coastal state, outside of the Common Fisheries Policy and able to control access to fish in our waters.

“We will be negotiating as an independent coastal state with the EU to secure the best deal for British fishermen.”

The committee had also heard that the experts believed there was little time to do more than negotiate the "bare bones" of a trade deal over the next year.

Dr Zuleeg said: "It certainly is a major challenge. The EU hasn't concluded a treaty like this within 11 months, even taking into account a lot of goodwill on both sides, which we can't guarantee, there are a lot of technical steps which have to be gone through, so in my view it will be almost impossible to conclude.

"If you can conclude something it will have to be very basic. Many of the areas which are difficult will have to be postponed into the future and even then there's no guarantee. If there's major conflict around any issue there simply isn't the time to work that out. if you lose a month because you can't move forward on an issue then the time will not be sufficient."

Professor Menon added: "Take the issue of equivalence in financial services, there are way over 20 areas in which equivalence has to be assessed, and the two sides have said they'll get to an agreement by the end of June - the workrate that employs for the assessors it's very tight indeed

Asked about UK government preparations for negotiations on trade, Professor Menon said it was "very hard to know".

"The contrast with what we're doing with the EU and with the United States, Australia and New Zealand is very striking," he said. "The Department of International Trade has been relatively open about all the other trade deals, but the EU negotiation is being handled by this unit from No10 and it is largely impenetrable to the outside world. So what they're planning in the way of negotiation remains absolutely obscure at the moment in terms of the detail."