Meeting of the Parliament (Hybrid)

Meeting date: Wednesday, December 23, 2020

Official Report 1132KB pdf

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Brexit

I remind members—those who are leaving and those who are coming into the chamber—that social distancing measures are in place and that they should take care.

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

14:37  

When I last addressed the chamber on our readiness for this stage of the transition period, I found it scarcely believable that, with only 23 days to go, we knew nothing about how the United Kingdom would trade with the European Union. Now, with a mere eight days to go and still no outcome, my reaction—and that of almost everybody else—is that we are now in the realm of the unbelievable.

Even if a deal is being done as we speak—I have no information that that is the case—time has run out for Westminster to approve the legislation before Christmas and for this chamber to consider the necessary legislative consent to aspects of the deal. Because we do not know what would be in any deal, it is also not clear where our consent would be required. The UK Government will have to formally ask us for that consent and this chamber will be asked to agree or disagree. Practically, the earliest that that can happen is next Wednesday; the Minister for Parliamentary Business and Veterans will keep the Presiding Officer and the Parliamentary Bureau closely informed and will notify them the moment that the Scottish Government receives a request for legislative consent—if it does. That also means that, if Westminster has to be recalled, it will be under stringent tier 4 lockdown regulations, and the same will be true here and across Scotland.

The evidence of the past few days tells us not only that the pressure of the pandemic is increasing again, but that the UK Government’s refusal—despite all the pleas—to extend transition was utterly foolish, reckless, arrogant and damaging. In addition, the past 48 hours remind us of the dependence of our supply chains and way of life on the closest of trading links with the EU and show that any action that disrupts those links has severe consequences.

If no deal is reached, disruption will resume. That is one of the many reasons why a no-deal scenario is a lunatic prospect, and anyone who asserts that any part of these islands will “prosper mightily” in such circumstances is woefully ignorant or deliberately deceiving; for a Prime Minister to do so beggars belief.

However, even with a deal—the lowest of deals, which, given the UK red lines throughout the past year, has been all that could be achieved—there will be disruption to trade and a major dislocating change in our status and relationship with other countries.

There will be—whether we have no deal or a low deal—a diminution in our safety and protection with regard to law and order, given the withdrawal from us of the Schengen information system, which means that Police Scotland will be less able to combat criminality at speed. We will also lose access to the European arrest warrant, which means that it will be harder to ensure that foreign criminals face justice in Scotland.

There will be—whether we have no deal or a low deal—a growing threat to the standards that we apply to and expect of food, the environment and a range of other issues. We will be able to mitigate some of that as a result of the passage last night, by a massive majority, of the UK Withdrawal from the European Union (Continuity) (Scotland) Bill, which I hope that the UK Government will not again try to destroy by means of changing UK law.

Food prices will rise—whether we have no deal or a low deal—as the UK Government admits, and the range and availability of food might be affected, particularly in the early days after 31 December. That will be felt most keenly at the end of supply chains, which means in Scotland.

It will be harder for Scots to live and work in the European Union, and visas are now required for prolonged stays overseas. Even a simple holiday—something that we have taken for granted for so long—will mean longer queues at borders and paying more for health insurance.

There will be a shortage of labour in some key Scottish sectors, and those shortages will get worse as the growing season starts.

There will also be—whether we have no deal or a low deal—an inevitable fall in our gross domestic product. Even in the very-best-case scenario of a basic trade agreement outcome, our modelling shows that it is estimated that Scottish GDP will be 6.1 per cent lower by 2030 than it would have been if we had continued to be a member of the EU. That equates to a cost to each person in Scotland of an equivalent of £1,600.

A catastrophic exit on World Trade Organization terms only could lead to a loss of up to 8.5 per cent of GDP in Scotland by 2030 compared with continued EU membership. That would be equivalent to a cost of £2,300 per person. My definition of “prospering mightily” does not include losing £2,300 for every man, woman and child in Scotland.

Some impacts will be felt almost immediately. On 8 December, I set out what the Scottish Government is doing, as far as it is able to do, to mitigate the worst effects of the end of transition, which—whether we have a low deal or no deal—will produce immediate changes.

I can report that the Scottish Government resilience room arrangements for EU exit and concurrent risks are now fully established, and that the stand-up of the national co-ordination centre and a single Scotland-wide multi-agency co-ordination centre is well under way. Those arrangements put us in the best possible position to deal in a co-ordinated way with the impacts of EU exit and the concurrent risks of Covid-19 and winter weather. We have already made use of the arrangements this week when considering the possible effects of the short straits situation.

We are now fully focused on protecting people, protecting imports and exports of essential goods, minimising the economic impact and ensuring that the necessary legislative changes are in place, in so far as we are able to do so.

We continue to do everything that we can to protect vulnerable people, our communities and the third sector through a £100 million package of support measures. We are—as we said that we would—providing £5 million-worth of support to Scottish wholesale food and drink businesses to help to support food supplies across the country. We will now need to do more, particularly for the shellfish and fishing sectors, which have been badly affected this week.

We are doing all that we can to ensure that patients will continue to receive the medicines that they need over the difficult months ahead, and we have confidence in those measures. We are also confident that the flow of vaccines will be protected.

We have implemented a wide range of measures to support businesses across all sectors of the Scottish economy. Our enterprise agencies are providing targeted advice and guidance to companies that are likely to encounter operational and financial challenges as a result of EU exit and Covid-19. Our multi-agency prepare for Brexit website, which is hosted by Scottish Enterprise, continues to provide advice, sources of financial support and online self-assessment toolkits.

Throughout the entire Brexit process, the Scottish Government has sought to engage constructively with the UK Government on preparedness issues. We will continue to advocate, as we have always done, for the interests of Scottish businesses and of the Scottish people, whenever possible. However, I must be entirely straight with Parliament and with the people of Scotland: regardless of whether we exit the transition period with a low deal or with no deal, jobs and living standards will be hit hard.

There are many things that we simply do not know, although they will change in eight days. For example, we still do not know any detail on complex issues such as rules of origin requirements. If a deal is agreed, rules of origin will be essential in gaining preferential market access.

We still do not know what the rules will be for importing and exporting industrial goods between Scotland and the EU, or whether there will be an agreement on mutual recognition of conformity or specific provisions for individual sectors.

We do not yet know whether there will be a data adequacy decision or when that would be in place. Even if there is one, there will now be a gap. We do not know how long that will last for or whether there will be bridging mechanisms in place that cover data flows to the business sector in Scotland.

What is certain, however, is that red tape and the costs of doing business will increase massively; it is estimated that the number of UK-wide customs declarations will go up by a staggering 215 million. Scottish food and drink businesses will face damaging and expensive new paperwork requirements, including the need for export health certificates, because goods will be subject to separate regulation in the UK and the EU.

The Scottish Government understands how difficult and damaging EU exit will be for Scottish businesses. That is why we will continue to engage closely with them and to implement the wide range of measures that I outlined in detail in this and my previous statement. As soon as information becomes available from the UK Government, we will ensure that refreshed advice and guidance is available through our prepare for Brexit website.

We have been engaging with the UK Government to advocate specific Scottish needs whether we have no deal or a low deal, particularly in border planning, but this week we have had to remind the UK Government that we had already been assured that fresh seafood exports would be prioritised in the event of traffic delays at the short straits crossing. Therefore, the UK Government must urgently set out further details on how those arrangements will operate and put them into effect, even though the business highlight and absolute necessity of the Christmas trade has been lost by so many.

We are also working with partners to develop traffic management contingency plans for south-west Scotland, including plans for heavy goods vehicles, should capacity at the Cairnryan and Loch Ryan ports be exceeded. The plan is owned by the Dumfries and Galloway local resilience partnership, and we will provide further details in due course.

Scotland did not vote for any of this, and it is with profound and deep regret that we find ourselves in this position today of all days, and at this difficult time of all times. The solution for Scotland, of course, is to choose its own future as an independent nation within the EU, and we can decide on making that choice in less than five months at the Holyrood election.

In the meantime, we will do everything that we can to support and help all who live in Scotland at this difficult time. We will continue to keep the chamber updated, and we will redouble our efforts to make sure that all our neighbours—all our neighbours—understand that we aspire to a better future and are working to achieve it.

This is not over. There are still difficult times ahead, but we believe that we are as best prepared for them as we can be and that, despite the present darkness, we should look forward with anticipation and confidence to our future.

I thank the cabinet secretary for an advance copy of his statement.

The cabinet secretary continues to suggest that the disruption at Dover is a precursor to Brexit. The disruption has nothing to do with Brexit—it is the result of a unilateral decision taken by French authorities, without notice, to close France’s borders because of Covid. Thankfully, that situation has now been resolved.

If we reach a trade agreement with the EU—which I hope that we do before the end of the month; EU trade negotiations always go down to the wire—we will have full access to the single market. The question today is whether the Scottish National Party will support such a trade deal, because in recent weeks we have heard conflicting answers from the First Minister, the cabinet secretary and others on whether they will support a free trade deal with the EU. That is not surprising, because we know that, deep down, the SNP is against free trade; it has failed to support every single trade deal in the past 15 years, including UK trade deals with Canada, Japan and Singapore—

That is not appropriate, Mr Lockhart.

—all of which are important markets for Scottish exports. I have two questions for the cabinet secretary. First, will the SNP support a free trade deal with the EU? Yes, or no? Secondly, why has the SNP failed to support every single trade deal during the past 15 years?

Oh dear—those are the questions that Mr Lockhart asked me the last time that I made a statement on this topic. Since then, we have seen the spectacle of Scottish goods not being able to get out of the country—I have constituents who have lost tens of thousands of pounds as a result of that. Since then, there has been no movement in the trade talks whatsoever, yet the dismal questioning continues.

I want to say three things to Dean Lockhart. This is the season of good will, so I will say them less forcefully than I might otherwise have. [Interruption.] There are noises off coming from a member who has strong connections with Orkney. He should remember the damage that is being done to the Orkney trade by what is happening, and when he returns to Orkney I am sure that there will be people who wish to remind him of that.

First, I cannot imagine that the current situation would have arisen had the UK been in good standing with, and been a full member of, the EU. The reality is that the UK is now a third country in a transition arrangement, so it is not true to say that there is no connection between what we have seen and what is taking place. Even if there was no connection, the situation still illustrates what could happen as a result of no deal. Even the firmest Brexiteer who sees no connection at all should read a lesson from that.

Secondly, apparently the UK Government will bring back an agreement on full access to the single market to the House of Commons, which would also come to this Parliament. It would be remarkable for that to happen, given that that is not being negotiated for and has already been ruled out. However, according to Dean Lockhart—who is in apparent daily contact with David Frost—that will take place.

I will be generous today as it is Christmas. Even if there is a proposal for us to be in the single market but not in the customs union, I would encourage my Westminster colleagues to support membership of the single market. However, I do not think that that is what we will be brought.

Finally, I support free trade, as does the SNP, this Government and the Parliament. We all know that that is the case. What we saw today and yesterday from Mr Lockhart is a rather unpleasant way of peddling half-truths, partially quoting things and trying to attack others. I wish him the compliments of the season; I also wish him a better approach in 2021.

We are eight days from the end of the transition period and there is still no remorse from the Scottish Conservatives. That is an unforgivable disgrace. Their behaviour would be unacceptable at any time, but is even worse in the midst of a global pandemic when thousands of our fellow citizens have lost their lives and hundreds of thousands risk losing their livelihoods. It is unforgivable.

I agree with the cabinet secretary and the Scottish Government that this is a shambles of the Tories and Boris Johnson’s making. I agree that the situation will cost jobs, damage living standards and diminish our place in the world. However, I seek consensus with the cabinet secretary on more than that. We must collectively put the national interest first. We must not compound chaos and division with more of the same. We must instead work together in the national interest to protect jobs, bring our country together and focus on our Covid recovery, not on another divisive referendum. I will work with the cabinet secretary on that. Will he commit to that today?

As ever, Mr Sarwar’s contribution was good in parts. I agree with him about the Conservative Party. It is astonishing that the Conservatives do not heed former Labour leader Clement Atlee’s remark to a departing cabinet member:

“A period of silence would be in order.”

That is what we should have heard. It might be too much to expect the Tories to apologise, although there are good Conservatives—well, I can see two out of the four—who, I am sure, feel embarrassed by the people who they sit among. A period of apology or of silence would be welcome.

On the question of a referendum, I am sorry to disappoint not only Mr Sarwar, but the leader of the Liberal Democrats, who was enthusiastically clapping Mr Sarwar. Willie Rennie is on a bit of a roll on that issue today. He clearly woke up and decided that independence would be his theme for today. I look forward to his question.

The reality of the situation is that Brexit and the pandemic present us with a choice about how we move forward. Should we do so by having decisions and choices made for us by the UK Tories as we currently do, and by a UK system that has failed us, that has not told us the truth and that did not tell us the truth during the 2014 referendum? Will we instead trust the talent in this Parliament—including Mr Sarwar and Mr Rennie—and choose for ourselves to make those decisions and how to move forward? If we make those decisions wisely among ourselves, we can have a prosperous future.

We move to open questions. There are quite a few and I doubt that I will get through them all. Please ask succinct questions and give succinct answers.

The Culture, Tourism, Europe and External Affairs Committee recently published a report pointing out that businesses will be outside the customs union and will face significant regulatory and bureaucratic burdens even if the UK manages to secure an 11th hour, bare-bones deal with the EU. For example, businesses do not yet even know which rules of origin requirements they must comply with. That does not mean membership of the single market, no matter what Mr Lockhart is trying to say. However, it does mean that queues of lorries could become a permanent feature at our borders. Does the cabinet secretary agree with the committee’s recommendation that the very least that business deserves is for the UK Government to request a period of grace—in effect, an extension of the transition period—to avoid such a calamity?

I do agree.

Well, that was useful—thank you, Mr Russell.

Scotland’s important fishing industry is looking forward to the United Kingdom becoming an independent coastal state and regaining control of our waters. However, although the cabinet secretary’s party’s former leader, Alex Salmond, used to believe that it was

“imperative that we remove the dead hand of Brussels mismanagement as soon as possible”

from our fishing sector, is it not true that Mr Russell and his SNP colleagues would take Scotland’s fishermen straight back into the hated common fisheries policy just as soon as they could?

The SNP Government would take the produce from Scottish producers straight into the European market—something that the Tories have prevented from happening.

The reality of the situation is that that was a fatuous question, because even the Tories now realise that they are going to sell out the Scottish fishing industry, as they have sold out everyone else. The object lesson is that, this week, we have seen people and companies suffering enormously, and they include fishing companies in my constituency, which I represent. [Interruption.]

If Mr Halcro Johnston could stop shouting for a moment, perhaps I will be able to get something through to him. Those fishing companies are on the brink of bankruptcy because of the Tories. A period of silence would be in order.

I call Annabelle Ewing, to be followed by Pauline McNeill.

That is misleading and the cabinet secretary knows it.

Mr Halcro Johnston, please.

That is misleading—

Mr Halcro Johnston, you are seated, so you should not be chuntering away and disrupting everyone.

Leaving to one side the wrongs of forcing EU citizens who live here to apply for rights that they already have, will the cabinet secretary take this opportunity to urge those who have not yet done so, both in my Cowdenbeath constituency and across Scotland, to apply to the settlement scheme? What message does the Scottish Government have for EU citizens who have chosen to make Scotland their home?

I entirely agree that anyone who has not applied should do so within the timescale. What has taken place is immensely regrettable and very upsetting for people. Again, unfortunately, that lies at the door of the Tories.

I encourage people to apply to the scheme. My message to them is that they are welcome, they are contributing wonderfully well, we are delighted that they have made this place their home and we want them to stay here. We hope that, before too long, we will all be back in the EU and some sense will have returned to the situation.

I remind members of the meaning of “succinct questions”. I call Pauline McNeill, to be followed by Stuart McMillan.

Ms McNeill, we cannot hear you. There appears to be a problem. We will move on to Stuart McMillan’s question and come back to you.

With a no-deal situation now looking likely, how many Scottish manufacturing jobs is it estimated will be lost? What is the estimated overall impact of that on the Scottish economy?

The sheer complexity of the supply chains for components makes the full impact of EU exit extremely difficult for companies to estimate. Undoubtedly, though, having no deal will make the calculation more difficult and the situation even worse.

On 5 November, Paul Sheerin, the chief executive officer of Scottish Engineering, said in evidence to the Parliament’s Culture, Tourism, Europe and External Affairs Committee that there will be a “substantial impact”, but even he could not say precisely what it will be. With the manufacturing sector in Scotland accounting for about 169,000 jobs, it is vital that we do everything that we can to protect it, but there will be job losses.

The cabinet secretary’s statement was just a long list of reasons why we should not follow independence after Brexit. That would be not to learn the lessons.

On a point of consensus, however, I am a particular supporter of the European arrest warrant, which has helped to track down criminals across Europe and return them to justice. What efforts is the Scottish Government making to maintain good relationships with criminal justice authorities and police forces across Europe so that criminals have nowhere to hide?

On the member’s second point, he is absolutely right to say that we need to ensure that the relationships between the police forces, the prosecutors and the legal systems continue to be maintained. Fortunately, we have a chief constable who wishes to do that, a Lord Advocate who wishes to do that and a Government that wishes to do that, so a lot of effort is going into making sure that it happens and that the disadvantages are mitigated to whatever degree is possible. However, the member will recognise that, in a legal system, it is not possible to mitigate everything, because a structure exists and the law is the law.

On the member’s first point, we must agree to differ. It is the difference between a glass being half full and half empty. Willie Rennie looks at the list that I gave and thinks that there is a problem with it; I look at the list and it convinces me that we must do something about the problem. The solution to the problem lies in the hands of the people of Scotland, thank goodness. What Mr Rennie must do is to support their right to say so.

The Erasmus+ scheme has been of immense benefit to young people in Scotland, and particularly those who attend colleges and youth groups in some of our most deprived communities. However, the UK Government apparently does not want to continue with full participation. Could the Scottish Government use some of the good will that has been generated for Scotland in the capitals of Europe and Brussels and make a direct request for full Scottish participation in the scheme if the UK Government is not willing to negotiate for that on our behalf?

The member is right to say that the UK Government has refused to negotiate even a partial deal that involves Scotland and Wales, for example, although the Welsh Government and the Scottish Government have been at one on that, and Northern Ireland is keen on it, too.

The member makes a good point. Alas, it will not be possible for us to do that until the UK decides what it is going to do. We believe that that decision is being made, but we do not yet know the final outcome. I agree with the member that, if there is a negative decision, we—along with Wales and possibly Northern Ireland—should make a direct approach to Erasmus. That will not be easy to do, but I think that the member is proposing something that is sensible, and I will be happy to work with him and like-minded people in the Parliament to see whether we can do something.

James Withers, the chief executive officer of Scotland Food & Drink, has warned that a no-deal Brexit would be an

“act of huge economic negligence”,

and the Andersons Centre’s analysis of Brexit impacts on Scottish agricultural sectors shows that the challenges for Scottish agriculture will be huge no matter what kind of exit from the EU we have. Will the cabinet secretary give his response to the findings of that report and talk about the impact that any kind of Brexit will have on this vital part of the Scottish economy?

I agree with James Withers, who has also been making some important points this week about the difficulties around the short straits, and I very much support him.

The Andersons Centre’s report is thoughtful. It sets out the challenges and risks that are faced by the agriculture sector and it points out that a no-deal Brexit would be hugely damaging and that there would be substantial and lasting impacts to overall Scottish agricultural output. The risks and potential impacts of a no-deal Brexit beyond the end of the transition period are well documented and are well backed up by the report, but I would contend that a low deal would also be damaging.

Does the cabinet secretary agree that it is a mistake for the Scottish Tories to support the negotiations going down to the wire, which Dean Lockhart attempted to justify earlier, given that we are close to having a disastrous no-deal Brexit, with food prices and living standards being impacted?

Can the cabinet secretary also say more about the £100 million fund for vulnerable communities and say how that might help ordinary families if there are rising food costs, which it looks like there will be?

I think that the remark that EU talks always go down to the wire was highly irresponsible. The talks going down to the wire means that, eight days before the deadline, people do not know what is going to happen to their businesses. In my view, that is a nonsense.

On the £100 million fund, I would be happy to get Aileen Campbell, the Cabinet Secretary for Communities and Local Government, to write to the member, but I know that there is a long list of allocations from the fund and applications to the fund. It is designed to get as close as possible to communities and individuals, and particularly those individuals who will be most disadvantaged.

The member knows well, because she is very knowledgeable in these areas, that the people who will be worst affected are those who are furthest from society. It is a difficult position for them, and we will do our best to help them.

In his statement, the cabinet secretary made much of the fact that, with days to go until the end of the transition period, no deal has been done. I am likewise anxious that we still have no deal. However, unlike Mr Russell, I do not blame our negotiating team for that state of affairs, and even he must realise that it always takes two to do a deal.

Will the cabinet secretary join me in condemning the completely unrealistic demands that the EU has made for continued unfair access to our fishing waters, and its expectation that the UK would sign a deal that would mean that we would be the only independent country in the world that did not control its own fishing waters?

Mr Chapman cannot know what the proposals are unless he has been told by the negotiators, and without being unkind to him, I doubt that that is the case, to be honest.

I say to him that I want the best possible deal for everyone who is involved so that we get the best deal for Scotland. Therefore, I will join him if, at any stage, he argues that what we want is a deal that is fair to the people of Scotland, that produces long-term results and that does not create an enormous amount of bad feeling.

However, if he is trying to say that it is all the fault of somebody else and not the fault of the party of which he is a representative, he is utterly wrong. Brexit is a disaster that is owned by the Conservatives—I am glad to see him nodding—and they must take responsibility for it, including the member.

I can squeeze in a short question from Kenny Gibson.

The Cabinet Secretary for Finance, Kate Forbes, wrote to the Chancellor of the Exchequer to request more funding from the UK Government following the announcement of a £400 million post-Brexit support package for Northern Ireland, which has already been given a comprehensive advantage over Scotland in Brexit deliberations. Pro rata, Scotland should receive £1.4 billion. What has been the UK Government’s response?

Can we have a short answer, please, Mr Russell?

There has not been a response. I think that that is very negligible of them—I mean negligent, of course, but they are negligible, too.

As that was the final question, I wish everybody a happy Christmas—even the Conservatives, despite the fact that they have done their best to ruin it.