DAVID Mundell has explicitly ruled out a central plank of Nicola Sturgeon’s proposal to keep Scotland in the EU single market after Brexit, increasing the chance of a second referendum.

The Scottish Secretary said the UK Government would not devolve immigration, meaning Scotland would not have the freedom of movement which is integral to the single market.

Published in December, the First Minister’s plan said Scotland could have a Norway-style membership of the single market, but only if major new powers were devolved to Holyrood.

If Scotland was “in the single market – upholding the principle of free movement of people – and the rest of the UK is not… Scotland would require powers over immigration to be devolved,” it stated.

Ms Sturgeon said another referendum was “all but inevitable” if the plan was rejected.

However speaking to the media at Holyrood after giving evidence to MSPs on Brexit, Mr Mundell said UK and Scottish officials were looking at smaller-scale alternatives around immigration, such as helping Scotland get the right seasonal workers for agriculture.

He also said that if the SNP wanted to attract more people it shouldn’t make Scotland the highest taxed part of the UK, a reference to the 2017-18 Budget making high earners pay £400 more income tax in Scotland than England.

He said: “We are not minded... to having a Scotland-specific immigration policy.”

He said UK and Scottish government officials had instead set up a workstream “to look at whether there are other ways of… encouraging people to Scotland which are not at heart either current freedom of movement within the EU or devolving immigration.”

He denied this meant Ms Sturgeon’s plan for a differentiated deal was dead in the water, as the two governments were still talking.

However he added: “What we’re clear on is that we’re not minded to devolve migration, that’s why we’ve set up this workstream, that we can look at other ways we can look at the migration issue, other than the traditional freedom of movement within the European single market.”

On tax, he added: “Of the people who come into the United Kingdom at this moment, only 4 per cent of those people end up in Scotland. The Scottish Government has many powers and responsibilities to encourage people to Scotland.

“Making Scotland the highest taxed part of the United Kingdom is not necessarily the way to attract medical professionals to come to Scotland.

There are lots of powers and responsibilities they have that would make Scotland more attractive for people to come to, and that is one of the issues that they need to focus on, rather than simply saying it’s about having the power over immigration policy.

“Everyone accepts that we want people to come to Scotland and part of that is making Scotland an attractive place to come to. I don’t think that’s by having higher taxes than elsewhere in the UK for example. Because the other thing that Scotland relies on is people coming from elsewhere in the UK, and we certainly don’t want to be putting in place any impediments which would impact on people coming here from other parts of the UK.”

Mr Mundell, Scotland’s only Tory MP, appeared to accept Scotland was on the cusp of another referendum, urging Ms Sturgeon to take the issue off the table “even at this late, late hour”.

Asked to explain the remark, he said: “In this process, as it has proceeded, we have gone from very to very very to very very very very likely. I mean, I don’t know how likely very very likely is.

“My call to Nicola Sturgeon today remains that it [a referendum] should be taken off the table.”