Devolved matters are the responsibility of the Scottish Parliament and Scottish Government, which are accountable to the Scottish people for policy and funding decisions in these areas. The arrangements for funding of the Devolved Administrations are set out in the Statement of Funding Policy.

The Scottish Government is always willing to consider proposals to increase funding for public services in Scotland but these must respect the responsibilities of the Scottish Government and Parliament under the devolution settlement and be consistent with the well-established funding arrangements. Any attempt by a UK Government to bypass this Parliament or the Scottish Government would be unacceptable.

The failure of cross party talks demonstrates both the unwillingness of the UK Government to compromise on its self-defeating red lines and also the confusion at the heart of the position held by the Labour Party. The Scottish Government has experienced UK Government intransigence over the course of the Brexit process to date. Despite our repeated efforts to propose compromises or alternative solutions, our proposals have been ignored.

This has once again raised the prospect of a catastrophic no deal Brexit- with its attendant consequences for medicines, transport, rural matters and food supply.

If a deal is approved by the Westminster Parliament it must be put to a second referendum with remain on the ballot paper and if the UK is facing no deal then Article 50 must be revoked.

With the announcement on 22 May that the Prime Minister had abandoned plans to introduce the Withdrawal Agreement Bill during week commencing 3 June, there is currently no new Brexit deal on offer.

The Scottish Government had no meaningful input when the Prime Minister’s deal was first published in November 2018 and this continued to be the case with her proposed new offer to Members of Parliament on the 21 May 2019.

Despite commitments from the UK Government to an enhanced role for the devolved administrations, the Scottish Government, the Scottish Parliament and indeed the people of Scotland have been ignored throughout this process. A fundamental change of attitude is required from the UK Government.

The Scottish Government is clear that any Brexit deal must be put to a second referendum with remain on the ballot paper and that if the UK is facing no deal then Article 50 must be revoked.

The Scottish Parliament passed the UK Withdrawal from the European Union (Legal Continuity) (Scotland) Bill (‘the Continuity Bill’) on 21 March 2018 by 95 votes to 32. On 17 April 2018, the Attorney General for England & Wales and the Advocate General for Scotland referred the Continuity Bill to the Supreme Court under section 33 of the Scotland Act 1998. While the Reference was pending before the Supreme Court, the UK Parliament passed the EU (Withdrawal) Bill and that Bill received Royal Assent as the EU (Withdrawal) Act 2018 (‘the Withdrawal Act’). Upon Royal Assent, the Withdrawal Act amended the Scotland Act 1998 in terms which meant that it would not be within the legislative competence of the Scottish Parliament to modify the Withdrawal Act.

The question for the Supreme Court was whether the Bill would be within the legislative competence (that is, the powers) of the Scottish Parliament. The case raised significant issues of general importance for the legislative competence of the Scottish Parliament, including the scope and effect of a number of reserved matters and the extent to which an Act of the Scottish Parliament is susceptible to challenges on common law grounds.

The case was heard by the Supreme Court on 24 and 25 July 2018. The court comprised Lady Hale (President of the Supreme Court), Lord Reed (Deputy President), Lord Kerr, Lord Sumption, Lord Carnwath, Lord Hodge, and Lord Lloyd-Jones.

As the respondent to the Reference, the Lord Advocate, both in his written case and during the hearing, presented arguments supporting the conclusion: (i) that it was within the legislative competence of the Scottish Parliament to prepare for the consequences for devolved matters of UK withdrawal from the European Union; and (ii) that the Bill would be within the legislative competence of the Scottish Parliament. He addressed the range of significant issues which the case presented. The Lord Advocate was supported by a team of counsel.

The Supreme Court handed down its unanimous judgment on 13 December 2018. This judgment confirmed: (i) that, subject to the provisions of the Withdrawal Act, it would be within the legislative competence of the Scottish Parliament to prepare for the consequences for devolved matters of UK withdrawal from the European Union; (ii) that, with the exception of one section, the Continuity Bill would have been within the legislative competence of the Scottish Parliament at the time when it was passed; but (iii) that, as a result of the Withdrawal Act, parts of the Continuity Bill would no longer be within the legislative competence of the Scottish Parliament.

Details of expenditure incurred in relation to the Supreme Court case is set out in the following below. The external legal fees include fees of counsel and solicitors.

The Lord Advocate's expenses are not included, as Ministerial costs are routinely published by the Scottish Government. The cost of internal legal advice is not included as that is provided by Government lawyers who are civil servants as part of their normal duties supporting Scottish Government Ministers; and in line with usual practice, details of individual tasks carried out by civil servants, including the number of hours spent on them are not recorded, because there is no business need to do this.

In June 2018, the Cabinet Secretary for Finance, Economy and Fair Work announced that the introduction of Air Departure Tax (ADT) in Scotland would be deferred until the issues raised in relation to the Highlands and Islands exemption had been resolved. The Scottish Government has been clear that it cannot take on ADT until a solution to these issues has been found, because to do so would compromise the devolved powers and risk damage to the Highlands and Islands economy.

Since then the Scottish Government and UK Government have continued to work together to try to find a solution. The Scottish Government also established a Highlands and Islands Working Group last year to provide independent, expert input into the examination of the issue. The Group has made a valuable contribution to the evidence base by publishing new analysis that underlines the importance of the exemption to the region, and by providing external scrutiny of both evidence and process. However, a solution has not yet been found that would be ready for introduction at the beginning of the next financial year. This, taken together with the continued uncertainty around Brexit, means that that we have to defer the introduction ADT beyond April 2020.

The Scottish Government has a longstanding commitment to reduce ADT by 50%, and we are doing all we can to work with airlines and airports to help grow the direct routes which are important for our tourism sector and Scottish businesses. While we work towards a resolution to the Highlands and Islands exemption, we continue to call on the UK Government to reduce APD rates to support connectivity and economic growth in Scotland and across the UK.

I have today, with the Minister for Local Government, Housing and Planning, launched a consultation seeking views on whether Energy Efficient Scotland can be accelerated and how the risks of doing so can be overcome or the opportunities realised. This consultation also sets out more detail about the suite of legislation the Scottish Government will bring forward to support the delivery of Energy Efficient Scotland, including district heating.

The consultation will run for 12 weeks. Kevin Stewart and I have also written to the Conveners of the Local Government and Communities, the Environment, Climate Change and Land Reform and the Economy, Energy and Fair Work committees. The Government looks forward to engaging with all interested parties on this important issue.

The following table sets out a comparison of the Small Business Bonus Scheme in Scotland with the equivalent schemes in England (Small Business Bonus Rate Relief) and Wales (Small Business Bonus Rates Relief):