BUSINESS leaders have warned the ability of Scotland to pursue its own policies must not be undermined by the UK Government’s internal market plans.

The Scottish Council for Development and Industry (SCDI) said the devolution settlement must be “protected and respected”.

Businesses must also be given clarity over numerous practical issues which members have highlighted in response to the White Paper, it urged.

Questions which have been raised by its members include whether all of the UK would have to allow the sale of a product – such as genetically modified crops – if one part of the UK permitted it.

Another issue is whether the proposals will affect Scotland’s Deposit Return Scheme – the first of its type in the UK – which will introduce a 20p deposit system for cans and drinks containers in a bid to improve recycling.

It also calls for reassurance over the protected status and identity of key food products in Scotland, such as whisky, salmon, lamb and beef, particularly in any new trade deals post-Brexit.

The SCDI response said, given the complexity and importance of the issues under consideration and the ongoing impact of the Covid-19 crisis, it was “disappointing” that only four weeks had been provided for the consultation.

“The path forward must protect and respect the devolution settlement, recognising the competencies and responsibilities of the Scottish Government and the Scottish Parliament,” it said.

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“The capacity of Scotland’s devolved institutions to pursue and achieve their own policies should not be undermined. These policies should, of course, be evidence-based and the subject of full and open consultation and scrutiny, including with business and civic organisations, as well as the UK Government and the other devolved administrations wherever appropriate.”

The SCDI said there are “well-evidenced democratic and economic rationale” for having different policies across the UK.

“For example, Scotland has environmental protection and building regulation policies which are designed to reflect the distinct challenges of Scotland’s climate and its net-zero target.

“The imposition of a single approach across the UK in devolved policy areas could be to the detriment of Scottish businesses and consumers.

“This is an approach which the UK Government must, therefore, take care to avoid.”

The Scottish Chambers of Commerce said it was important to recognise and allow devolved policy approaches where it could be justified, for example, for health or environmental reasons.

Responding to the consultation it said: “Whilst we welcome an approach to establish common standards to make it easier to sell goods freely throughout the UK, it is not clear as to how this will interact with devolved policies and legislation, and whether exceptions will be included within the legislation to recognise specific policies passed by the Scottish Parliament or other devolved administrations.”

The SCC said it recognised the UK Government has the responsibility for signing new trade deals, but called for its approach to also take account of devolved policies set, for example, by the Scottish Parliament.