Speaking in the House of Commons on the 14th June 2018, Mr Mundell said:

With your permission Mr Speaker, I would like to make a statement on the operation of the Sewel Convention and its application to the European Union (Withdrawal) Bill in relation to Scotland. Mr Speaker, these are serious times and serious issues. I have come to the House today with respect and ready for constructive debate, and I hope that is the spirit of all sides.

Lord Sewel set out a commitment in 1998 that there should be a parliamentary convention to recognise that where the UK Parliament legislated in a devolved area it would and I quote ‘not normally legislate without the consent of the Scottish Parliament’. Throughout the passage of this Bill, the Government has demonstrated its commitment to the Sewel Convention and the principles that underpin our constitution. We have followed the spirit and letter of the devolution settlement at every stage.

The EU (Withdrawal) Bill is about ensuring that the whole of the United Kingdom has a functioning statute book on Exit Day. It is about providing legal certainty to businesses and individuals up and down the country.

From the outset we have been clear that as a result of the UK’s exit we would expect to see a significant increase in the decision-making powers of the devolved institutions. We have been clear that Exit would provide the opportunity to bring powers home from Brussels, not just to the UK Parliament, but to all of the legislatures of the United Kingdom.

We must remember that the powers in question were handed to the European Union through our membership in 1972, long before devolution existed in Scotland. Exit was neither anticipated nor provided for within the Scotland Act and the structure of the devolution settlement.
So it is certainly fair to say – as Mike Russell, the Scottish Government’s own Brexit Minister has said–‘these are not normal times’.

Nethertheless, we have sought to respect the devolution settlements at every turn and recognised the strength of feeling across this House, as well as within the devolved administrations, that the original measures set out in the Bill did not meet aspirations. No one could deny this Government has come a long way from that original position. Discussions have been conducted at multilateral level through the JMC(EN) and the JMC(P) chaired by the Prime Minister, bilaterally between administrations and extensive official level engagement. And we have made significant changes to the Bill.

These changes enabled agreement with the Welsh Government and to gain the approval of the Other Place and this House.

And these changes have seen the original Clause turned on its head. Now, all decision-making powers returning from the EU that intersect with devolved competence will pass directly to Cardiff, Edinburgh and Belfast, unless explicit steps are taken to temporarily preserve an existing EU framework.

The Inter-Governmental Agreement underpinning the new clause set out how those steps should be taken – with an emphasis on collaboration and agreement.

Together, this means we are emphatically delivering on our commitment to give significant further powers to the Scottish Parliament.

The clause also provides in certain, limited cases the current arrangements ‎we have under the EU will remain until we have implemented our new UK-wide frameworks. I want to stress that we have already agreed with the Scottish and Welsh Governments where this temporary preservation needs to be considered – the governments are agreed that “freezing” areas is likely to be in just 24 of the 153 areas of power returning to the UK from the EU.

And to anyone who has sought to present this as seeking to take powers back from that the Scottish Parliament already has, I repeat again here that the Bill includes a specific provision that makes clear explicitly that no decision making powers currently exercised by the Scottish Parliament can be taken away.

These amendments strike the right balance between ensuring that Exit results in increased decision making powers for the devolved legislatures, while continuing to provide certainty about how our laws will operate and protecting our UK internal market, a market so vital for Scotland’s businesses.

These amendments do not, and cannot, go as far as the Scottish Government want, because the Scottish Government want a veto over arrangements that will apply to the whole of the UK. But as Lord Wallace, the former deputy First Minister of Scotland set out when the Bill was being debated in the Other Place this was not part of the original devolution settlement.

Our approach also helps to ensure the continued integrity of the UK internal market, which is so vital to the people and businesses in Scotland. At every stage, the Scottish Government has disregarded the need to preserve this market and ensure there are no new barriers to working or doing business in the UK. The UK internal market is worth nearly four times more to businesses in Scotland than EU trade, and we must make sure it is preserved as we leave the EU.

We have reached a point now where, as the Welsh Government have stated clearly, these arrangements reflect and respect how the devolution settlements operate.

The devolved legislatures will have a formal role in considering where existing frameworks need to be temporarily preserved. That is what we have delivered.

However, Scotland has two democratically elected Parliaments, and it is only this Parliament, the UK Parliament, that can speak for the UK as a whole.

It is deeply regrettable that the Scottish Government were unable to sign up to the compromise solution brokered by officials from all the administrations working together.

But, Mr Speaker, as we all know, you can only reach agreement in a negotiation if both sides actually want to reach agreement.

The Scottish Government’s position from the outset was that they would be content with nothing less than a veto. However, such an unreasonable position would fundamentally undermine the integrity of that UK internal market. This would harm business in Scotland and the rest of the UK.

Despite the numerous attempts to find compromise, and the fact one was reached with the Welsh Government, the Scottish Government position has not changed. As a result this Government, which represents the whole of the UK, could not responsibly accept their position.

We are now therefore faced with the reality that the Scottish Parliament has not given consent for this critically important legislation that provides certainty across the UK.

This is not a situation any of us would have chosen. It is not however a crisis, nor is it unforeseen. While the devolution settlements did not predict EU Exit they did explicitly provide that in, situations of disagreement, the UK Parliament may be required to legislate without the consent of the devolved legislature.

In any situation agreement is our aim. And we will continue to seek legislative consent, take on board views, and to work with the Scottish Government on future legislation just as we always have done.

We on this side of the House have compromised. We have made efforts to reach agreement. We have sought consent. Now we are legislating in line with the Sewel Convention to ensure the whole of the United Kingdom leaves the EU with as much legal certainty as possible. That is what the people and businesses of Scotland need.

Part of the job of the Digital Secretary during London Tech Week, and we’ve never had a Digital Secretary during a London Tech Week before so this is very exciting, is to get out there and bang the drum.

And to make sure that we get our message across about the deep and rich ecosystem that we’ve got and that we’re building here in the UK.

We doubled tech investment in the last year.

We are the biggest destination for tech investment outside of the USA and China.

As a politician elsewhere elsewhere in Europe might put it, we are en marche. And this isn’t just about the rhetoric; it’s about the depth of the ecosystem and its richness.

But the reason I specifically wanted to come to this event is because whilst the enthusiasm for the potential that tech has is unambiguous and is very strong, we also must ensure that we harness it for the betterment of society.

And the question of the future of work and the impact of technology on work is of course a very live one, which is why we’re all here today.

I think that it’s very important that tech companies, big and small, are addressing this question. Firstly, we think that the exponential nature of artificial intelligence means that by its nature, by the fact that it learns for itself, it has the potential to have a bigger impact than almost any technology yet invented.

As I like to put it, people talk about accelerating change. I like to think of it the other way round. Which is that we are currently living through the slowest rate of change that we’re going to experience for the rest of our lives.

At the same time, we are living in an era of record levels of employment, both in the UK and around the world.

The figures out this week showed employment at record levels, both in absolute and percentage terms.

It showed womens’ employment at a new record high.

And it showed real disposable income at record levels.

So the labour market performance in the UK is very, very strong. And around the world there are record employment levels in many different countries.

And this is happening at the same time as an understandable concern about the impact of technology and a sense that people don’t feel this very positive economic performance for a complicated set of reasons.

So we need to understand it properly, not just with the ‘lump of labour fallacy’ that the robots are trying to take the existing jobs and therefore people will have nothing to do.

I think that view is static and wrong and it misses the point of human ingenuity. That it is people who create jobs and that the technology itself is creating jobs too.

But it seems to be that the risk is not that we adopt new technologies that will change jobs.

That is not the risk, because that’s going to happen whether we choose for it happen or not, because that is the nature of business.

I think the risk comes from not adopting new technologies and from failing to create jobs of the future.

And that means that we have this difficult balance between the need to support the disrupters who are creating new technologies, creating the new jobs and ultimately generating productivity growth.

And at the same time supporting those who are disrupted. Because whilst in the long term improvements in technology improve productivity, we live our lives in the short term.

And it’s no good having a job in the long term if you don’t have one in the short term.

So we need to make sure that we support those who are disrupted as well as supporting the disruption itself.

We want to see redeployment not unemployment, by creating the jobs of the future and making sure people have the skills and capabilities to excel to accept them and generate them.

And the nature of work of course is also changing as part of this. The mundane tasks and some of the dangerous tasks are going and this is a good thing.

Take the mining industry, which has far fewer people underground than they ever have before around the world. And at the same time capabilities and human skills like empathy will be more important than ever before.

I’m an optimist for human nature. I think there are things that human beings can do that machines will never be able to do, like connecting between people and having creative sparks that make life worth living.

And this greater productivity also has a big potential upside, not only in terms of prosperity but also in terms of work life balance.

People throughout time have always worried about the impact on employment.

I declare a historic interest because when I was researching this I discovered that my forebearers were leaders of the Luddites.

And a certain Richard Hancock in the early 19th century led a gang of a thousand people in Nottinghamshire, who had been employed in the hand weaving industry. And they went and smashed the Arkwright loom all the way across Nottinghamshire and he was eventually deported to Australia.

I’m glad to say that the Hancock family has learnt a thing or two over the following two centuries and now we accept that they should have been on a digital skills training programme…

But the advantage of this greater prosperity is also an improvement in work-life balance.

Since then the amount of work that anyone has had to do on average in the UK, in order to feed themselves or feed their family and live a decent life has collapsed, in terms of the number of hours. Even over the last couple of decades this has continued. In 1995, Britons worked on average 39 hours a week and now it’s 37.5 hours a week.

In my view that is using some of the increase in prosperity of the last few decades to work a bit less. Because whilst many of us love our jobs and work incredibly hard and probably work more hours than we absolutely need to, that is not true for everyone. They might prefer a better work life balance.

And then, of course, there’s the skills piece, which I’m glad is now an absolute core of the debate about the future of work.

And we need to make sure everyone is able to increase their skills and capabilities to succeed in the digital age.

People who have never been online before all the way through to the very top PhDs and that we are attracting the brightest and the best from around the world.

And we’re making progress on both of those matters as you may have seen in the news over the last couple of days.

Ultimately I’m optimistic that so long as we get the policy response right and so long as the tech industry more broadly responds to this challenge in the right way, then we can make a success of it.

After all, we are attracting the jobs to the UK that are building that technology driven future.

We are making sure that the UK is at the leading edge of these changes in order to try to bring that prosperity here.

And we’re doing everything we can to ensure that prosperity is shared. For instance, with the new National Living Wage, which has led to the fastest rise in pay to the lowest paid quarter of the population in history. So making sure that jobs are available, that people get the skills and that we can benefit from this technology.

But we cannot be complacent about it and we must make sure we get the analysis correct so we get the response correct as a society. And make sure that this great technological revolution that we are all involved in and living through works for everybody in our country.

That is our goal.