UK government says Scottish Brexit proposal could disrupt trade - letter

By Elisabeth O'Leary EDINBURGH (Reuters) - Trade between the United Kingdom's four nations could be disrupted if Scotland wins a different divorce deal with the European Union, a letter from Brexit minister David Davis published by the Scottish government said on Friday. Scotland, where a majority voted to stay in the EU though the United Kingdom as a whole voted to leave at a June referendum, last December proposed a separate trade carve-out for itself in London's upcoming divorce talks with the EU. The core of Scotland's proposal is for it to remain fully within the EU's single market for goods and services, whereas British Prime Minister Theresa May wants to take the UK out of it to restore control over immigration. Scotland's First Minister Nicola Sturgeon says May's government has not taken the proposals seriously, and she wants a new vote on independence from Britain before its expected March 2019 exit from the EU. "There are clear barriers to making your proposals a reality," Davis said in a photocopy of the letter dated March 29 and addressed to Michael Russell, the Scottish minister for UK negotiations on Scotland's place in Europe. Russell published the correspondence despite a request from May's government not to do so. "Scotland's accession to the EFTA and then the EEA would not be deliverable and, importantly, would require the consent of all EFTA and EU member states," Davis wrote. The European Free Trade Association and European Economic Area include non-EU states Norway, Switzerland, Iceland and Liechtenstein. "Any divergence between EU and UK law - as a result, perhaps, of new EU regulation - could lead to the creation of new barriers to trade within our Union," Davis said. "DISRUPTION" He added that it could create potential "significant disruption to the internal UK market". The letters offer some insight into the British government's thinking on a separate deal for Scotland after its vote to remain in the EU, as well as the strained relations between London and Edinburgh. "There is every reason to suggest that with the necessary political will and commitment, these issues could have been addressed," Russell said. He said he had "repeatedly expressed disappointment that the substance of (joint) meetings has not enabled proper discussion or engagement on the strategic choices we face. "The result is a negotiating position set out solely by the UK government rather than what was set out in the terms of reference, namely to agree a UK approach." Russell said his government's aim of keeping Scotland in the single market was distinct from the May government's goal of "access or partial access" to the single market which would, he said, undermine Scotland's economy and society. Sturgeon says Scotland needs a new referendum on secession to avoid being dragged out of the EU against its will, and she has secured Scottish parliamentary approval for that course. This has been rebuffed by May's government. Polls show that while support for independence stands at around 45 percent, nearly half of Scots do not want another vote on secession to be held between the autumn of 2018 and the spring of 2019 - the timetable Sturgeon has proposed. Scots rejected independence by a 10-point margin in 2014. Davis said that, with more powers from Brussels to be repatriated to the UK after Brexit, "the outcome of this process will be a significant increase in the decision-making power of each devolved administration", boosting the role of the assemblies in Northern Ireland, Scotland and Wales. Britain hopes to continue collaboration with the EU on security and environmental issues and major science, research and technology initiatives to mutual benefit, Davis said. (Reporting by Elisabeth O'Leary; editing by Elizabeth Piper and Mark Heinrich)