Meeting of the Parliament

Meeting date: Wednesday, September 7, 2016

Official Report 878KB pdf

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Scotland’s Place in Europe

The next item of business is a statement by the First Minister on Scotland’s place in Europe. The First Minister will take questions at the end of her statement, so there should be no interventions or interruptions.

14:41  

Just before our summer recess, Parliament gave the Scottish Government a mandate to explore all options to protect Scotland’s relationship with the European Union. Over the summer I updated Parliament in writing on two occasions, and today I will provide further information on our work and priorities, and on how we intend to involve Parliament as we move forward.

Since the referendum, our first priority has been reassurance. That has included seeking to do everything that we can to reassure non-United Kingdom EU citizens who live here in Scotland. It is a disgrace that the UK Government has not yet guaranteed the position of EU citizens, and today I again call on the Prime Minister to do the right thing and stop using human beings as bargaining chips.

We have also taken targeted steps to support and promote economic stability. Last month, I set out a £100 million economic stimulus plan. Yesterday, I announced that a £500 million Scottish growth scheme will form a central part of our programme for government. In taking those steps, we are acting on our obligation to mitigate the immediate effects of the referendum result, and we will continue to do so.

However, we must also be realistic about the long-term consequences of leaving the EU. Those people who are complacently crowing that the sky has not fallen in on the economy would do well to remember that Brexit has not happened yet—it has not even started.

The reality, as every sensible economic commentator recognises, is that leaving the EU will weaken the economy. The damage will be even deeper if, as all the signals suggest, the UK is heading for a hard Brexit, outside the single market as well as outside the EU. Applying the UK Government’s own analysis to Scotland suggests that that could result in our gross domestic product being more than £10 billion lower than it would be if we remained in the EU. The impact of that will be felt on jobs, trade, investment and living standards.

The G20 summit at the weekend was a harsh reminder of the consequences of Brexit. The US made it clear that there would be no preferential treatment for the UK in trade talks, and the Japanese Government set out in detail the potential implications of leaving the single market: a loss of company headquarters, a hit to exports, turmoil in labour markets, damage to financial services, and cuts to research and development investment. There is no doubt that leaving the EU will be an extraordinary, self-inflicted blow to the UK’s competitiveness, which will be compounded if the decision is to leave the single market as well.

That is why it is so essential that we work to retain the benefits of our EU membership. Over the summer, I set out the national interests that are at stake: our democratic and economic interests, our interests in social protection and solidarity, and our interest in influencing the world in which we live. As I said on the morning after the referendum, we are committed to pursuing all possible options to protect those interests. Of course, our ability to fully assess the different options will be constrained until we start to get some clarity on what the UK Government is seeking to achieve.

That is one of the many reasons why, 10 weeks on from the referendum, it is frustrating that the Tories are no further forward in setting out what Brexit actually means. What we have in place of a policy is a meaningless, tautological soundbite. Indeed, the position of the UK Government became even more farcical this week, when the only scrap of substantive detail that David Davis volunteered in his statement to the House of Commons was immediately disavowed by the Prime Minister—a Prime Minister who then, earlier today, was unable or unwilling to answer the simple question: does she want to see the UK stay in the single market, yes or no?

However, as the position of the UK Government takes shape ahead of article 50 being triggered—as surely it must—it is essential that Scotland’s voice is heard. To that end, we have been working hard over the summer in discussions with UK Government officials, and we continue to press for urgent clarification of how the UK will deliver on the Prime Minister’s commitment to full involvement for Scotland. I hope to be able to confirm soon, along with the UK Government and other devolved Governments, how that engagement will work in practice. The Parliament’s approval of the appointment of Michael Russell yesterday ensures that we will have a dedicated minister leading for Scotland in the process. We are also working closely with the other devolved Administrations, the Crown dependencies and the Government of Gibraltar to make common cause where we can.

However, let me be crystal clear about this, and it is a point that I have made directly to the UK Government: the Scottish Government will not be window dressing in a talking shop to allow the UK Government to simply tick a box. We expect to have—along with the other devolved Administrations—a role in decision making and we expect our engagement to be meaningful. That was the commitment given by the Prime Minister, and it is one that I am sure this Parliament expects to see delivered in full. Assuming that it is, we will enter and take part in the discussions in good faith.

The approach that we will take will be exactly as I set out on the morning after the referendum. We will pursue all options to protect Scotland’s interests. First, we will seek to use whatever influence we have to shape the best—more accurately, the least bad—outcome, not just for Scotland but for the whole UK. In my view, that means the UK continuing as a member of the single market. I accept that the Prime Minister has a mandate in England and Wales to leave the EU, but I do not accept that she has a mandate to take any part of the UK out of the single market. Indeed, during the referendum, many leave campaigners said explicitly that leaving the EU did not mean leaving the single market. I hope that all parties in this chamber will back us as we make that case. I also hope that we can make common cause with others of like mind across the UK.

Secondly, regardless of the direction that the UK Government decides to take, we will seek to find ways to protect as best we can Scotland’s place in Europe and our vital national interests and embed them in the UK’s negotiating strategy. Our standing council of experts met for the second time last week and is already working on a spectrum of options to protect what matters most to Scotland and to consider the additional powers that our Parliament would need to make them work. For example, how can we protect the benefits to our businesses of the single market and free movement, and how can we protect workers’ rights, the place of our universities in horizon 2020, the continued ability of our students to participate in Erasmus, and the enhanced security that comes from Europol and the European arrest warrant? As they are developed, we will assess those options against the five key interests that I set out in the summer.

We will update Parliament further on the progress of that work in the coming weeks, and I will appear before the European and External Relations Committee next week. We also intend to propose a series of parliamentary debates over the next few weeks on the implications of Brexit in key areas such as the economy, rural affairs, education and the environment. Those debates will give all members the opportunity to have their say on the issues that the Scottish Government should be prioritising as our discussions with the UK Government develop. I also issue an open invitation to all party leaders today to submit to us their views on options that they think we should propose as part of the process. Mike Russell and his officials will be happy to meet them to discuss any suggestions that they wish to make.

We are determined to do everything and examine every option to protect Scotland’s interests. As I have said before, that must include the option to consider independence if it becomes clear that our interests cannot be protected within the UK. To give up the right to even consider that option would be to accept that we are at the mercy of Westminster decisions no matter how damaging or destructive they are to our economy, our society and our place in the world. That is not a position that anyone with Scotland’s best interests at heart should ever be prepared to accept.

Our focus in the months ahead will be very much on seeking to positively influence the UK’s negotiating position ahead of article 50 being triggered. As we do so, however, we will also continue our work to ensure an awareness and understanding of Scotland’s position across EU institutions and member states. Since the referendum, I have had direct discussions with the Presidents of the EU Commission and the European Parliament, the Taoiseach, the Prime Minister of Malta—who is likely to hold the EU presidency when article 50 is triggered—and the German minister for Europe. I also attended the extraordinary summit of the British-Irish Council at the end of July. In addition, Fiona Hyslop has met the ambassadors of a number of EU member states. Those discussions will continue in the weeks and months ahead.

The circumstances that we now face are not of our making, and they are certainly not of the choosing of most of us in this chamber. The responsibility for uncertainty lies not with those of us who are seeking solutions, but with those who have so recklessly taken us to the brink of EU exit against our will.

However, it is now for all of us to seek to shape the response. The Scottish Government will lead that process but, in doing so, we welcome the support, the contribution and, indeed, the challenge of Parliament. As we continue to consider the best way forward, my assurance is this: our guiding principle will continue to be—at all times—the best interests of the people of Scotland.

We now move to questions and I ask members to press their request-to-speak buttons.

I thank the First Minister for early sight of her statement.

First, there is no one here who is “complacently crowing” about the impact of Brexit. Perhaps the First Minister was not listening, but both the Prime Minister and I have said in recent days that there may well be difficult times ahead and that we should all acknowledge that.

I have some specific questions about the First Minister’s responsibilities. First, in the wake of the Brexit vote, a group of our leading trade bodies said that the Scottish Government should respond by

“reviewing ‘domestic’ areas of control including supportive taxation rates”.

Has the First Minister or her team held any discussions with those groups on their concerns?

Secondly, the UK Government has guaranteed funding for many EU-funded projects supporting economic development across the UK until 2020. Will the Scottish Government make the same commitment in devolved areas such as fishing?

Lastly, on her comments today on independence, when the First Minister first spoke to members in this chamber about the referendum result in June, we alone expressed our concerns that the SNP’s planned activities were concerned primarily with its on-going campaign. The summer has proved us right. I see that Willie Rennie has recognised that, too, and has now withdrawn Liberal Democrat support.

I note that in recent days the Scottish Government has rowed back on its earlier proclamations and is now talking of coalitions with UK Government ministers and co-operation with all the UK Administrations “in good faith”. Unfortunately, despite the new charm offensive from Mr Russell and the First Minister, our concerns remain. For example, the First Minister declares that independence will be considered only

“if it is clear it is the best or only way to protect our membership of the EU”.

Can the First Minister honestly tell the chamber under what circumstances and on what issue she has ever concluded that independence is not the best option for Scotland? More fundamentally, I repeat the question that I asked earlier in the summer: Nicola Sturgeon says that leaving the EU trading bloc is bad for Scotland, so why does she believe that leaving a bloc that is four times as important in terms of trade is the answer to any of today’s questions?

Let me answer each of Ruth Davidson’s questions in turn. I met the key business organisations in Scotland in the week following the referendum and we have responded positively to the suggestions that they made. Our decision earlier in the summer—I confirmed this yesterday—to set up a post-referendum business network was something that they specifically called for.

My announcement yesterday about the Scottish growth scheme came from a desire to see policies that will boost economic growth, and we will continue to consider other asks from the business community as we formulate our budget plans. A key responsibility of Mike Russell, along with Keith Brown and other ministers, will be to engage closely with affected interests across the spectrum in Scotland.

Secondly, we will guarantee interests in Scotland where we have the power to do so. Indeed, it was this Government—even before the UK Government had begun to work out its position on any of the issues—that guaranteed free tuition for European Union students coming to study here this year.

The UK Government’s guarantee on structural funds and support for farmers is partial and short term; I hope to see it give a guarantee that is full and long term in the not-too-distant future.

On the question of independence, I will always seek to act in the interests of the people of Scotland. I will say two things in response to Ruth Davidson. First, it really is unbecoming of anybody to stand up in this Parliament—or anywhere in Scotland—and talk about the prospect of Scotland seeking to protect its EU membership as somehow turning her back on a single market across the UK, when Tory colleagues of Ruth Davidson are going to Ireland and saying that Brexit does not mean a border with independent Ireland or barriers to trade. The Tories cannot say one thing in Ireland and then say the exact opposite here in Scotland.

Lastly, as I will always seek to behave in the best interests of the people of Scotland, so I will not rule out options that may be required to protect Scotland’s interests. Ruth Davidson should reflect very hard on this: why is it that two years ago she said to the people of Scotland that the only way to guarantee membership of the European Union was to vote against independence, but now that her party has taken us to the brink of exit she is still trying to say that in no circumstances is independence the answer to that? It is Ruth Davidson who is inconsistent and letting down the interests of the people of Scotland.

I welcome the First Minister’s statement and the invite to sit down with her new Europe minister.

As we have repeatedly made clear, the Labour Party supports the Government’s efforts to secure Scotland’s place in the European Union, including the First Minister’s efforts to meet Governments around the world to seek a means of retaining our EU membership and to make the wider economic case, emphasising that Scotland is very much still open for business. However, in recent days, there has been a shift in the First Minister’s approach. Previously, her stated aim had been to retain our EU membership, but on Monday she appeared to be seeking only access to the single market. Will she comment on that shift? Has she received any legal advice on the issue? If so, does she intend to publish that legal advice?

I appreciate the support that Kezia Dugdale has given and that her party—I think, in a unified sense—is giving. There is no shift in the Scottish Government’s position.

I have just seen a comment—I do not know whether it is true—to the effect that Jeremy Corbyn’s spokesperson has said that it is not Labour’s position to argue for continued membership of the single market. I certainly hope that that is not the Scottish Labour Party’s position.

I have said all along that I will examine all options to protect Scotland’s interests. There is no doubt that I see the best option to be to retain our membership of the European Union, and I will work to do that. Along the way I will also work to try to protect all the aspects of European Union membership that we possibly can. That is what I mean by keeping all options on the table; it is also what I mean by not ruling out any options, because if it does turn out that the only way to protect our membership of the European Union is to consider—I stress the word “consider”—whether we should be an independent country, then I do not think that it is right to take away that option from the people of Scotland. That is perhaps one of the differences between our positions.

The Scottish Government will take a range of advice. I mentioned the standing council of experts, which is in the early stages of giving us advice across a range of the issues that we have to consider. I will be as open and transparent with Parliament as possible. As I have said before, we are going into a period that will involve a range of different negotiations and we will have to develop a position depending on how the UK Government’s position develops. I want to make sure that we harness this Parliament’s involvement, so the offer to people across the chamber to be fully involved is genuine, and I hope that all party leaders will take it up.

I thank the First Minister for an advance copy of her statement.

On Monday, she told us that she was reaching out to build a coalition with pro-EU Conservative ministers in London, but that was not even mentioned in her statement today. Can she update me on that initiative? Have any Conservative ministers joined that coalition, or was it all just flim-flam?

Willie Rennie has clearly decided not to listen to what I have said. I have said that what we will do as part of examining all options is to try, as one of those options, to see whether we can use our influence to get the UK into the least worst position. In my view, that is about staying in the single market, and I think that I explicitly said in my statement that we will seek to make common cause with people of like mind across the UK. That remains the position.

I noticed over the latter part of the summer that Willie Rennie said that he was no longer part of the consensus to protect Scotland’s interests. Given how long it has been since the Liberal Democrats have ever done anything to protect Scotland’s interests, I do not think that anybody will notice the difference. This Government will continue to do everything we can, examine all options and leave no stone unturned to seek to protect the vital interests of Scotland that are at stake. Let me tell you: if we have to struggle along without the merry band of Liberal Democrats, we will just have to do that.

I welcome the First Minister’s statement and thank her for notice of it.

Given the concerns that were raised at this morning’s Education and Skills Committee, can the First Minister confirm when the Scottish Government will be clarifying the funding arrangements for EU non-UK students studying at Scottish universities in 2017-18 to ensure that we do not lose out on these talented international students? Moreover, given that the issue was raised in her statement, will the First Minister clarify what confirmation she has given to Japanese businesses in Scotland with regard to their place here after the publication of the letter from the Japanese Government?

On the member’s first and very important question about the position of non-UK EU students studying here, as I said in response to a previous question, we have given that guarantee for this academic year. Clearly we are now considering the matter and are engaging with the sector on extending the guarantee to those who will be seeking to come here to study in the next academic year. We hope to be able to confirm our position on that very soon.

With regard to our response to the Japanese publication at the weekend, I have to say that I find it quite extraordinary that the Japanese Government has managed to publish far more detail about the implications of Brexit than the UK Government has managed to publish two whole months after the referendum result. We will be engaging intensively with Japanese companies and indeed inward investors from all parts of the world here in Scotland in the period ahead. Keith Brown and Mike Russell will be leading that for the Scottish Government, and we will be seeking to use the information and intelligence that those people give us and feed them into the UK negotiations. Of course, that is all part of protecting Scotland’s interests and seeking to ensure that Scotland remains an attractive and open place for people to do business in, because that is absolutely essential for the health of our economy.

I welcome the First Minister’s statement and her appointment of Michael Russell to his new role. Mr Russell will have a tough job. On my visits to Brussels as part of UK delegations I found that the UK conducted two kinds of negotiations that affected Scotland: negotiations that the UK told us about and sometimes involved us in, and others that it kept us in the dark about. Is the First Minister satisfied that the Prime Minister and all her ministers will include Scotland in all formal and informal discussions and negotiations between the EU and the UK? Does she agree that, as far as intra-UK governmental relations are concerned, UK ministers must be fully transparent at all times about what is being negotiated and discussed in formal and informal settings?

I thank Richard Lochhead for those questions. On the first question, which was about whether Scotland would be fully and meaningfully engaged in the UK negotiations and the development of the UK position, the honest answer is that that remains to be seen. I hope that that is the case, because it is the commitment that we have been given by the Prime Minister and it is the commitment that we are right now working on with the UK Government to turn it into reality. We certainly want that to be the case. If it is, we will go into the discussions in good faith and will seek to play a constructive and positive role.

However, as I said in my statement, we will not be merely window dressing and we will not take part in a talking shop; we expect to be meaningfully engaged. I hope to be in a position to say more about that to Parliament very soon.

Transparency from the UK Government on the development of its position and how it seeks to achieve it is really important. I have been concerned by some of the Prime Minister’s comments today; for example when she said—I think that this is almost a direct quote—that she will not provide a “running commentary” on the negotiations. I accept that when negotiations are under way some aspects have to take place behind closed doors, but it is not acceptable to have a cloud of secrecy hanging over the UK Government’s negotiating position, and it is not acceptable to have a Prime Minister who is unable or unwilling to answer the simple question whether or not we should remain in the single market.

I suspect that the UK Government is using such phraseology to mask the fact that it does not yet have a clue what it is seeking to achieve—let alone what its chances of achieving that are. Before we get too much further in, there must be greater transparency from the UK Government so that people across the country can judge whether what the UK is trying to achieve will meet our national interests.

There will be time to debate the wider content of the statement next week. However, suffice it to say that her statement was one of the most belligerent and—if it was calculated to enhance Scotland’s immediate influence—self-defeating statements from any First Minister.

For the avoidance of doubt, can the First Minister confirm which heads of Government of EU member states she has not met or spoken to directly during her busy summer tours since 23 June? Is she just—to paraphrase her own words earlier and as her tone today suggests—destined to define herself as a window shopper in the negotiations?

The tone and lack of any substance in that question really expose just how little detail and substance at all there are in the Conservative position. I say to Jackson Carlaw, without a single word of apology, that when it comes to standing up for Scotland’s interests I get pretty belligerent, because my job as First Minister is to stand up for the interests of this country. Right now, the interests of this country are under threat because of the actions of the Conservative Government at Westminster. Somebody needs to stand up for Scotland, and that is the job of the Scottish Government.

I, too, thank the First Minister for early sight of her statement.

Beyond the autumn statement later this year, no guarantees have been given for key EU funds that are worth hundreds of millions of pounds in supporting jobs and infrastructure projects in communities right across Scotland. What reassurance has the Scottish Government had from the UK Government in that regard?

There is no reassurance whatsoever for anybody who is affected by the UK Government’s decision. Joan McAlpine has rightly said that no assurance has been given about structural funds or payments to farmers beyond the autumn statement, but the situation is actually much worse than that: we cannot even get the UK Government to confirm the date of the autumn statement, yet. As far as I can tell, there is no great expectation at the moment that it will even be in the autumn. There is no detail from the UK Government on its Brexit negotiating strategy, the date of its autumn statement or what its fiscal position is likely to be after the autumn statement.

In place of Government policy at UK level right now, all we have are meaningless soundbites, as I said earlier. That is not good enough. It might have got the new Prime Minister through the summer, but it ain’t gonna get her very much further.

The First Minister reports that the Government’s standing council is in the early stage of formulating advice on a spectrum of options for protecting Scotland’s vital interests, and that close working arrangements are already under way with other devolved Administrations. That is welcome, because both areas are critical. However, to set a good example of transparency, will the First Minister outline how that work will be supported over the period ahead, how many officials will support the new Minister for UK Negotiations on Scotland’s Place in Europe, how many are dedicated to working with the standing council, and what budget has been set aside for those purposes?

I am more than happy to provide that information. It is clear that we are putting together a team of officials—we have already substantially done that over the summer—who are able to support the Scottish Government’s work. We will be required to be flexible about that as the demands of the negotiations become clearer.

From day 1, I have made it clear that I want us to be fully equipped to deal with whatever we are required to deal with. That is why I set up the standing council and appointed Mike Russell as dedicated minister to lead the process. We will ensure that that is supported by the right officials across the Scottish Government. It is clear that there is a team of officials who support the work directly, but the work has an impact across most aspects of the Scottish Government’s work, so we must ensure that different departments and interests in the Scottish Government are also fully involved. Mike Russell will be absolutely happy to write to interested members setting out the structure and detail of that. From memory, I think that I wrote to Kezia Dugdale over the summer to provide an update on where the work was then. I am happy to develop that and to provide an update on it to members.

As someone who benefited from EU funding to undertake his university education, I have huge concerns about continued funding for exchange programmes. Can the First Minister confirm her support for EU exchange programmes and the Erasmus programme, and will she commit to ensuring that that international outlook is high on the agenda of any discussions that she has with the UK Government and EU member states?

I specifically mentioned the Erasmus programme in my statement. I think that Erasmus is hugely important. It is one of the benefits of EU membership that has very hard economic benefits, but also has more intangible benefits. When we speak to students—as, I am sure, most members have—who have either come here as part of Erasmus or are Scottish students who have gone overseas, what they tell us about the experience and development that they have enjoyed as a result underlines the importance of the programme. It would be tragic if we were to lose, in any way, the benefits of such schemes, so it will be very much one of the priorities that we take forward as we try to protect the interests that I have already spoken about.

That concludes questions on the First Minister’s statement. We will move on to the next item of business, which will be a continuation of the debate on the programme for government, but we will take a few moments just to change seats.