Meeting of the Parliament (Hybrid)

Meeting date: Wednesday, June 3, 2020

Official Report 934KB pdf

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Brexit

The next item of business is a statement by Michael Russell on Brexit. The cabinet secretary, who joins us remotely, will take questions at the end of his statement, so there should be no interventions or interruptions.

14:31  

In the referendum in June 2016, people in Scotland voted overwhelmingly to be part of the European Union. That preference has been reinforced in two subsequent United Kingdom general elections and in a European Parliament election. Yet, on 31 January this year, the Conservative UK Government took Scotland out of the European Union. At the time, it said that that was “getting Brexit done” but, of course, Brexit is not done. All that has been agreed are the terms of withdrawal; nothing has been agreed regarding the future relationship between the UK and the EU.

Today, I will update Parliament on the Scottish Government’s view of the current negotiations on that future relationship. We believe that it is not and will not be possible to conduct and conclude those negotiations and implement the results within the truncated timescale that has been set for them and in the context of an unprecedented global pandemic and a catastrophic economic recession, which might turn out to be the worst in 300 years.

Therefore, in our view, it is essential that the UK indicates that it will seek to extend the transition period for up to two years, as provided for in the withdrawal agreement. To refuse to seek that extension—which the EU has indicated would be readily granted—is a reckless act that will destroy thousands of jobs, undermine an already fragile economy and devastate communities across Scotland when we are most vulnerable. After the end of this month, it will not be possible to extend under the terms of the withdrawal agreement, and no other plausible route to an extension has been put forward. The deadline at the end of June is therefore real.

Today, the Scottish Government publishes a new paper that sets out the consequences of refusing to seek such an extension. I shall outline its findings in a moment. First, I will describe to Parliament the highly unsatisfactory state of the current negotiations and our unsatisfactory engagement with them.

The original end date for the talks was set when the UK Government’s intention was to leave the EU at the end of March 2019; even then, the period of 21 months looked challenging. Of course, the UK did not leave the EU for another 10 months, so 21 months has become 11 months, and the period has been further truncated by the effects of the pandemic.

So far, there have been only three weeks of negotiation, with a fourth round currently under way. The UK negotiating mandate for the talks was not published until 27 February. The draft UK legal texts, on which the negotiations are meant to be based, were made available to the other EU nations only two weeks ago. We had virtually no involvement in producing them and saw the legal texts—with no possibility of changing them—only 24 hours before they were published.

Under its agreed written remit, the Joint Ministerial Committee (European Union negotiations) is meant to have “oversight” of the negotiations in so far as they affect devolved competences, and to “seek to agree” the UK position. In fact, the JMC(EN) has met only once since the discussions started, in a virtual session on 21 May. It previously met in Cardiff on 28 January.

The UK Paymaster General has conducted three sets of briefings for devolved ministers. Despite our efforts, the whole process is not about influencing what is happening and still less about deciding on crucial issues for which we are responsible; it is merely about hearing about what is happening.

It is clear even from those meetings that a no-deal outcome has become ever more likely. That is not only because the UK has set its face against accepting a more realistic and sensible timescale but because the negotiations have been so unproductive in addressing the political gulf in positions.

The negotiations are blocked on fundamental issues—of governance and a level playing field, and on fisheries—and in a way that no technical finessing will remedy. Indeed, to many in Brussels, it looks as if the UK is refusing to—[Interruption.]

Oh dear. We will give it a short while to see whether we can get Mr Russell back. He has returned. Welcome back, Mr Russell.

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.

The cabinet secretary will now take questions on the issues that were raised in his statement. Members who wish to ask a question should press their request-to-speak buttons.

I thank the cabinet secretary for advance sight of his statement. Sadly, both it and the related document are just more in the endless series of doleful pronouncements on Brexit from the Scottish National Party Government.

Mr Russell is the cabinet secretary who has spent the past year telling us that there will be no withdrawal agreement, that the UK will leave with no deal and that the UK Government is not even involved in serious negotiations. He is wrong on every single one of those claims and will be proved to be wrong again.

Further delay would achieve nothing, but would instead deliver more years of access to our fishing waters for EU nations, when our fishing communities are desperate to seize the sea of opportunity that awaits us. It is true that negotiations are proving to be difficult, but the talks need two willing parties. What is preventing talks from proceeding is not intransigence on the part of the UK Government, but on the part of the EU27, who demand unrestricted access to our fishing waters as a precondition of further discussions. There is no pragmatism on display on their side.

My question to the Scottish Government is a simple one. On whose side is it? Does it back the EU27? Does it support abandonment of our fishing communities, or will it stand with us and demand that the EU backs down and keeps its hands off our fishing waters?

I am fascinated to hear Murdo Fraser adopt, in an extraordinary approach, what one might call the Cummings gambit, which is to plough on regardless of what other people think, no matter the damage that is done, even to one’s own cause. I suppose that that is what one would expect from the Tories, these days.

I am very happy to answer the question about fishing. Strangely enough, I think that the Secretary of State for Scotland was put up to asking me the same question at the joint ministerial committee two weeks ago, so I will give Murdo Fraser the answer that I gave him. I am on Scotland’s side; I am on the side of the Scottish fishermen who need a good deal, but who will not get a good deal through the blustering and positioning of the UK Government. Genuine negotiation is needed, but everybody who is watching knows that there is no genuine negotiation.

As far as Mr Fraser’s other remarks are concerned, facts are chiels that winna ding. If he reads our paper, he will discover the facts of the matter. It would be best if looked at those facts and thought about them, rather than taking the knee-jerk Cummings position.

I know that it is tempting for people to hold conversations while there is some poor soul on screen doing their very best to answer members’ questions, but please do them the courtesy of listening to the answers.

As the cabinet secretary said, after the end of this month it will not be possible to extend, under the terms of the withdrawal agreement. I have read the paper that the Scottish Government published this morning; the likely impacts of a poor or no-deal Brexit can and will be devastating for Scottish business and jobs. That is why Labour in the Scottish Parliament will join all parties that want to put the interests of Scottish businesses and jobs before the interests of a Conservative elite in Downing Street.

Scotland is on the brink of an economic crisis that will be devastating for families up and down the country. Now that the UK has left the European Union, it is crucial that we get a deal that will give us access to European markets, and which will provide close alignment with the customs union. That is why Scottish Labour supports the call for extension of the negotiation period.

Will the cabinet secretary use his powers, and the powers of the Scottish Government, to build across Scotland consensus for an extension? Does he agree that, if the Scottish Tories put Johnson’s interests before the interests of the people of Scotland, they should be exposed for doing so?

I agree with Alex Rowley. The Scottish Tories have already been exposed by their behaviours. I noticed that there was not a word of pragmatism in what Murdo Fraser said, despite the use of that word by the Scottish Tory leader just a few weeks ago.

I am very happy to continue to build consensus. I believe that there is an overwhelming consensus in Scotland—which polling bears out—that opposes withdrawal at this time and wishes for an extension. However, the clock is ticking: the extension has to be done during June. I hope that we will all work together—I would welcome the Tories, if they were prepared to be pragmatic—to ensure that an extension is sought. I will be very happy to work with Alex Rowley on that basis.

I am grateful to the cabinet secretary for the advance copy of his statement.

The Scottish Greens certainly agree that an extension to the transition period is clearly necessary. It comes as no surprise that the same people who brought us the profoundly dishonest and xenophobic Brexit campaign are the same individuals who, during the Covid-19 crisis, have deliberately burned what little public trust the UK Government had, by clearly saying that the rules do not apply to them.

Has the UK Government given any clarity to the Scottish Government on who will pay for the primary and secondary infrastructure between Scotland and Northern Ireland, which will be necessary only because of the UK Government’s insistence on maintaining a Brexit position that will leave us outside the single market and the customs union? The UK Government has made that position clear, so it should fund the infrastructure that will result from the requirement for a customs border in the Irish Sea.

It is important that the Northern Ireland Assembly voted yesterday in favour of an extension. I believe that the Welsh Assembly will also indicate that it will take the same position. Once again, we are in a position in which three of the four countries of the UK are saying that the transition period should be extended. There is well-attested evidence for that on our side, which has been published today. As Patrick Harvie said, the UK Government does not wish to listen to evidence or to other points of view, but wishes merely to pursue its own highly damaging agenda.

There are many reasons why an extension would also benefit the situation with the Northern Ireland protocol. It is clear that, with seven months left, there is still a vast amount to be done to implement the protocol, but that is simply not happening.

The principle that I have mentioned previously to Patrick Harvie in the chamber applies: we will not pay for the infrastructure that is required. There is no reason why we should pay for it, so it must be paid for by the UK Government.

It would be far better if there was a sense of realism in the UK Government, and a sense of how people are feeling. It is not only in Scotland that there is opposition; opinion polls show that there is strong majority support throughout the UK for seeking an extension. That is on offer—an extension is also being sought by the EU, which has made it clear that one will be granted, if it is asked for.

Yesterday, I wrote to all the party leaders, inviting them to send a joint letter to the UK Government to ask it to extend the Brexit negotiations. However, my invitation has been rejected by Jackson Carlaw, who says that the UK Government can do two things at once.

That is true, but Brexit is not some minor piece of legislation. It is the biggest change to our constitutional, political and economic framework in decades. It needs careful negotiation, so it is reckless to carry on with it in the middle of a global pandemic. Although the leader of the Scottish Conservatives will not agree, does the cabinet secretary agree to our making a joint approach to the UK Government?

Yes—I am happy to agree to that. I think that it is a sensible thing to do. Of course, that happened at Westminster recently, when a number of parties joined together. I am happy to commit the Scottish National Party and the Scottish Government to that action.

I am intrigued by Jackson Carlaw’s argument that the UK Government can do two things at once, because it is perfectly possible to do two bad things at once, which is what we are talking about. It is possible to inflict two sets of damage. We know about the inevitable damage that will come from Covid-19, and our paper outlines that clearly, using well-accepted figures. Added that will be damage from Brexit. It is not necessarily a good thing to do two bad things at once, but one could try to mitigate one of the bad things by doing a good thing.

Jackson Carlaw’s argument is empty, I am afraid. It is threadbare. He needs to go back to the April Jackson Carlaw and to think about pragmatism—he should try to take a pragmatic view. We know from experience of the Cummings event that it takes a little bit of time for Jackson Carlaw to get to where he really should be. Let us hope that he does not take too long, because the clock is ticking.

Irrespective of the politics of Brexit, is it rational or reasonable that businesses that are struggling daily to survive the Covid-19 pandemic should be subjected by the UK Tory Government to the further economic shock of EU exit this December, with all the job losses that that will entail? Surely, we should instead take the opportunity that would be offered by the protections of a transition period of up to two years, which could so easily be agreed, so that we could give vital breathing space to our economy.

I entirely agree that it is irrational and unreasonable for the UK Government to pursue its course of action. I hope that rationality and reason will prevail, otherwise there will be companies that cannot survive—companies that would have survived one shock but cannot survive two. That will be the fault of the people who are pursuing the current course. There are no ifs or buts about it: it will be their fault, because there is action that they could take that would help and would save those companies. The UK Government is not only refusing to take that action, but is doubling down on that refusal.

Does it not give the game away that the only people who want to delay Brexit are the people who did not want it to happen in the first place? Rather than wasting everyone’s time and attempting to dress up his latest remoanfest as helpful negotiating advice, would not it be better for the cabinet secretary to admit that he simply does not want Brexit to happen and that he is perfectly happy—whatever he says—to leave Scotland’s fishermen stranded in the common fisheries policy for ever?

I ask Oliver Mundell to raise his eyes a little and look around his constituency. He should look at the businesses there that will not survive because of the action that he is supporting, which is placing the additional burden of Brexit on businesses that are already flat out because of Covid-19.

I notice that Oliver Mundell and Murdo Fraser keep calling in aid Scottish fishermen. I have made it clear that I want a good deal for Scottish fishermen, but they, too, will be disadvantaged by an economy that will be even worse if the Government that they support at Westminster goes ahead with its plans.

I will also point out a factual inaccuracy in what Oliver Mundell has said. The opinion polls show that a substantial number of leavers say that there should be a delay, so his characterisation of the situation is simply an error. He needs to look very carefully at what he says but, most of all, he should look at the people whom he knows around him in his constituency. They do not want there to be no extension. Unfortunately, however, if he supports no extension, he will be responsible for the damage that will be done.

How does the cabinet secretary respond to reports that the UK Government is considering a power grab of the responsibilities that the Scottish Government currently has with regard to EU structural funds when those funds are replaced by the UK shared prosperity fund? Has the Scottish Government been made aware of the potential attack on devolved responsibilities by the Tory Government? The Tory Government seems to be intent on taking such powers for itself, despite the Finance and Constitution Committee’s having stated categorically in its “Report on Funding of European Union Structural Fund priorities in Scotland, post-Brexit”, which was published in October 2019, that the

“powers that the Scottish Government currently exercise ... should not be reduced”.

Bruce Crawford has asked a very good question. Although we have not been formally notified, it is undoubtedly the case that the UK Government intends to centralise the shared prosperity fund—which will be made up of what used to be European funds—in its own hands, and to remove responsibility from the devolved Administrations. There has been a great deal of fear about that for some time. Given that we are getting very close to the edge, that is where things are going.

That would be a major betrayal of the promises that were made to the Scottish Parliament and to the other devolved Assemblies. When the referendum took place in June 2016, a commitment was given to increase powers. Not only have those powers not materialised, but there have instead, as we know, been attempts to erode powers through the frameworks, and there will be further attempts to erode them. That would be utterly unacceptable, so we must stand firm against it.

The UK Government is hostile to the idea of devolution and to powers being held elsewhere. I would not trust it an inch.

It is astonishing to see a Conservative Government that is intent on acting against the expressed interests of business and which is, by refusing an extension, remaining on a path that the majority of employers believe—now more than ever—will be damaging, and potentially catastrophic, for their businesses.

We are facing a crucial month. Has the Scottish Government had the opportunity to seek consensus with the other devolved Parliaments, so that we can express a united view?

I agree that that is a sensible idea. We are considering how that might be done. We have done it previously. Now that the Northern Ireland Assembly has voted in favour of an extension, we will seek every opportunity that we can to ensure that the voices of all nations of the UK are heard. We will certainly take part in all such activities, if we can.

I do not share Claire Baker’s astonishment at the Conservatives. Throughout the entire Brexit process, they have been heedless of the voice of business, of all reasonable voices and of people who have argued against ending freedom of movement. We now see the results of that. In Fife, which is in her region, Claire Baker will have seen shortages of labour emerging.

The whole thing has been done in an appalling manner, because it is an appalling idea. We need a sense of rationality in order to prevent things that will be even worse. That means that we must call for an extension. I suspect that the more sensible Conservatives here—there are some—know that. However, it is a great pity that they are not prepared to speak out. If they do not speak out, and if the UK Government’s plans go ahead, they will damage businesses in their constituencies and regions, and will cause unemployment and a greater economic shock.

The Road Haulage Association recently warned that the UK is hopelessly unprepared for even a free trade agreement, let alone a no-deal Brexit. Will the cabinet secretary confirm that the effort that is required to prepare for an EU exit at the end of this year will be borne not only by Government but by industry bodies and businesses, which are justifiably putting all their efforts into dealing with the impact of Covid-19?

Massive costs are involved for all the parties involved. For example, the Government is, apparently, setting up the largest customs school in the world. That is being paid for by the Government. Those are unnecessary costs. It is costing us far more to leave the EU than it ever cost us to have the benefits of membership, and the benefits of membership vastly outweigh anything that we will get out of leaving.

That being said, it is obvious that business will have to meet increased costs, given all the changes to processes and procedures. As the member rightly said, that will be an additional cost, over and above the damage of Covid, which some businesses simply will not be able to bear. There is no doubt about that.

This is a negotiation between the United Kingdom and the European Union and it is clear that the SNP is on the side of the EU and not on the side of Scottish fishermen when it comes to fisheries. Whose side is it on when it comes to what Barnier calls the level playing field but is, in truth, the loading of the dice in favour of the European Court of Justice? Is that another issue on which the SNP will just roll over and give the European Union whatever it wants?

I always think that it is such a shame when I hear Professor Tomkins talking in those terms, because he knows that this is a foolish set of activities; he also knows that the presentation that he has just made is so far from the truth as to be risible.

The reality of the situation is that, if there is to be a settlement, we want it to be a fair settlement, but we do not want Brexit in any case. I have never made any secret of that, and nor did Professor Tomkins. Indeed, not a single thing that has happened has changed my mind, and I do not believe that anything that has happened has changed his mind—it is unfortunate that what has changed his mind is that the UK Government is insisting on this foolish, foolish, disastrous course.

On a level playing field, quite clearly there would be advantages if we remained in the single market and the customs union. We said that from the outset. If we did that, we would, like other countries such as Norway, be on a level playing field and benefiting from the single market, rather than throwing away the advantages that we have as a member of it.

There is something deeply flawed in the argument, when we see how bad it will be, how disastrous it will be and how damaging it will be for the city of Glasgow and Mr Tomkins’s region, and all that the member can do is parrot the Tory line.

Does the cabinet secretary think that adequate Brexit negotiations can take place before the current leave deadline, when the UK Government’s focus at this time must be on tackling the Covid-19 crisis?

I think that the whole burden of my argument and the argument in the however many pages of our document is that no, that cannot be. It is obvious that that cannot be, and the UK Government should accept that now.

Does the cabinet secretary agree that calling for an extension does not mean that we are not leaving the EU but recognises that, if no deal was disastrous before Covid-19, it is acutely more so now? Has he noted that 57 per cent of leavers support a delay? That is the pragmatic, sensible approach, rather than the belligerent approach of UK negotiators, who are embarrassing the UK and Scotland and doing nothing to represent the 57 per cent of people who voted to leave the European Union but want a delay, for whom they claim to act.

I thank the member for the figure. Oliver Mundell should read, mark and inwardly digest that figure, which blows out of the water one of his specious arguments.

No deal and a low deal are equally bad; they will be equally disastrous for Scotland and the rest of the UK. I remain absolutely opposed to Brexit; it is an extraordinarily bad idea, which has no virtue to it at all. In these circumstances, my immediate concern is to make sure that the damage is made no worse by the irreversible action of refusing to apply for a delay. The delay will be required, no matter the position—[Temporary loss of sound]—and I think that making sure that the delay takes place should unite us across the chamber.

Does the cabinet secretary agree that a commonsense approach to the timing of the EU exit is well summarised by the managing director of the International Monetary Fund, who said that the

“unprecedented uncertainty”

of Covid-19 means that it would be

“wise not to add more on top of it”?

It is clear that across the board—both in the UK and elsewhere around the world, throughout business and commerce, in organisations and in Governments—the vast majority believe that a delay and an extension must take place.

That majority are on one side, and they tip the scale massively, but on the other side of the scale are Boris Johnson, Dominic Cummings and a few other supporters, like those we have heard from today, who—either so that they do not lose political face or for other reasons that are more nefarious—are determined to proceed. That will have a cost for every single citizen of Scotland, and on their heads be it if they refuse to heed the sensible advice that voices across the chamber have given today, and the very clear, comprehensive and well-sourced paper that we have published.