Thank you—my apologies for that.
As I was saying, to many in Brussels, it looks as if the UK is refusing to negotiate on such key matters. Resolution seems to be far off, and the situation was not helped by an extraordinary letter from David Frost, the UK chief negotiator, to his counterpart, Michel Barnier. We have long been opposed to the substance of the UK position, but the tone of that confrontational letter was an error of even greater proportions. I made it clear at the JMC(EN), and I do so again now, that, in using that tone, Mr Frost did not speak for Scotland. He certainly does not speak for Scotland in his desire to secure the most unambitious of trade deals—sometimes called a “low deal”—failing which, he seems entirely prepared to accept no deal.
It will be no surprise to the chamber that the Scottish Government believes that the best future for Scotland is to be an independent member of the EU. Others in this place differ, but that is not the point at issue today. The imminent danger lies in the failure of the UK to seek an extension, coupled with its drive towards a no-deal, or low-deal, outcome.
In April, Jackson Carlaw said that he was a pragmatist on this matter. I hope that he still is, because, pragmatically, the issue is clear. There must be an extension to allow people and businesses in Scotland to continue to benefit from most aspects of EU membership while they attempt to recover from the current crisis.
In order to flesh out that very strong case, the Scottish Government today published a detailed examination of the damage that proceeding with Brexit at this time will cause. For a start, there are thousands of practical problems in day-to-day business procedures—such as in inspection and customs regimes—to take into account if transition is to end in less than seven months’ time.
Even if we knew today the nature of the many agreements that are required, that would be an impossible challenge—but we do not know about any of them. Bluntly, therefore, it is now absurd to continue to pretend otherwise. As Carolyn Fairbairn of the Confederation of British Industry wrote in an op-ed for yesterday’s Politico:
“For many firms fighting to keep their heads above water through the crisis, the idea of preparing for a chaotic change in EU trading relations in seven months is beyond them. They are not remotely prepared. Faced with the desperate challenges of the pandemic, their resilience and ability to cope is almost zero”—
“almost zero”, yet the UK Government is pressing ahead.
There are also many grave difficulties for Government and wider society. To take just one, the technical changes required to the way that Scotland can access information in the European criminal records information system—if access of some kind is, in the end, negotiated—would take months to design and implement. Any gap in coverage would have a serious effect on Scottish ministers’ vetting and barring functions under the Protection of Vulnerable Groups (Scotland) Act 2007. That is a crucial element in the protection of children and vulnerable adults.
Moreover, that is only one new system to deliver one part of the arrangements for one part of the future relationship. Many, many more are required, across the breadth of areas where the UK and Scotland co-operate with the EU.
We are having to consider these issues against the background of a global pandemic, during which the finite resources of both the UK and Scottish Governments have rightly been concentrated on responding to the health emergency. We will have to continue to try to save lives, but we will also have to divert some of our scarce resources into frantic and well-nigh impossible preparations for whatever new relationship with the EU will be thrust upon us at the end of the year—and we will be doing so in the teeth of an economic downturn the likes of which none of us has ever seen.
The global economy, including the Scottish economy, is declining fast. We must do everything that we can to give businesses the best support for recovery, and the next couple of years will be crucial. Ending the EU withdrawal transition period at the end of this year would, however, subject Scotland and the UK as a whole to an entirely unnecessary second economic and social shock on top of the Covid-19 crisis. More jobs would be lost, living standards would be hit and essential markets and opportunities for recovery would be damaged. For the many businesses that manage to survive the Covid-19 crisis, this second—Brexit—shock would be the final straw.
The new modelling that we have published today indicates that ending transition this year would result in Scottish gross domestic product being between £1.1 billion and £1.8 billion lower by 2022 than if the transition finished at the end of 2022, equivalent to a cumulative loss of economic activity of between nearly £2 billion and £3 billion over those two years. A proportionate impact would be likely for the UK economy. That will obviously hamper recovery from the impact of the pandemic.
Beyond that, in addition to the economic impacts that the modelling identified, exiting the current transition period before Scotland had emerged from the Covid-19 crisis would increase the costs of Brexit to the Scottish economy in comparison with those after a two-year extension.
Ending the transition period this year will have further direct impacts, such as lost opportunities to participate in EU-funded programmes, including for Covid and health-related research and procurement. This past week, the European Commission proposed a new stand-alone health programme, EU4Health, that aims to support post-Covid recovery. Given the contribution of EU nationals to our health and social care sector, never has the ending of freedom of movement looked more damaging and inappropriate.
I understand that many businesses and communities across Scotland have been 100 per cent focused on tackling the immediate impact of coronavirus. Extending the transition should not be seen as a separate event, but as part and parcel of the effort to recover from Covid. That is the one action that we could all agree on: it would have no adverse effect on the R number but would protect our economy from further severe damage.
Despite our different beliefs, we have come together as a Parliament to help Scotland get through this crisis. Today, I hope that we can send a message to the UK Government in that same spirit of consensus, and ask it to not inflict further unnecessary damage and agree an extension with our EU partners now, before it is too late.