UK Economy

Callum McCaig Excerpts

Wednesday 29th June 2016 Commons Chamber

[Stewart Hosie]

No, I will not give way at the moment.

I was pointing out that the fall in the pound was twice that in 1992. By Monday the 27th, it fell another 2%, to $1.32—a three-decade low. [Interruption.] There are mutterings from people who want everything to be fine. We have had a near three decade low in the pound because of the actions taken by the Brexit campaign, which failed to have a plan to deal with this eventuality—that is the crux of the matter. The value of the pound against the euro fell almost 6% on Friday the 24th, and it fell again on Monday the 27th.

Most alarming, given the stock placed on it, was that the UK lost its triple A credit rating from Standard & Poor’s following the Brexit vote. Standard & Poor’s said the referendum result could lead to a

“deterioration of the UK’s economic performance, including its large financial services sector”.

It was the first time that Standard & Poor’s had downgraded a triple A-rated sovereign by two notches in one go. On Friday the 24th, Moody’s cut the credit outlook from stable to negative, saying the result could lead to a prolonged period of uncertainty. By changing its outlook to negative, it has warned that the UK’s Aa1 rating is also at risk of being lowered, and with that, obviously, comes the risk of higher borrowing costs.

And that is before we get to the real world and job security. The Institute of Directors surveyed 1,000 of its members. It found that a quarter plan to freeze recruitment. Two thirds said the vote was negative for their business. The BBC has reported that HSBC plans to move up to 1,000 staff who process payments in euros from London to Paris. Others are deeply concerned about the loss of passporting arrangements, which mean that firms do not have to have different authorisations for individuals in individual countries. These are very real concerns, but they are being whitewashed and brushed over by those who are desperate to leave, because of the absence of a plan to deal with issues that should have been considered in advance.

[Callum McCaig (Aberdeen South) (SNP)]

The leaders of the Brexit campaign are conspicuous by their absence from this Chamber, which is perhaps not a surprise, given the embarrassment they face. One of those leading voices—the Minister of State for Energy—said the volatility we are seeing is not unusual. Does it not just underline the complete economic illiteracy of their case that they think these unprecedented changes are not unusual?

[Stewart Hosie]

If the pound falls by twice as much as its record fall ever, I suppose that no one sensible should describe that as minor, normal or run of the mill. My hon. Friend is absolutely right.

With regard to the indices, it is true, as I said, that the FTSE 100 has pretty much bounced back to its pre-referendum level, as of earlier today. The FTSE 250 is not yet back to the position it was in on Monday 27 June. The pound versus dollar is unchanged since its collapse and is bouncing along the bottom. The pound versus the euro is unchanged since the fall and is bouncing along the bottom. The real concern—

--- Later in debate ---

[Stephen Gethins (North East Fife) (SNP)]

May I, too, thank the Labour party for giving us the opportunity to debate this matter? The European referendum result has been debated by the European Parliament, the Welsh Assembly and the Scottish Parliament, so it was high time we had the opportunity to do so, notwithstanding the time the Prime Minister has given us in his statement. As always, it is a privilege to follow my hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford), as well as my hon. Friend—and neighbour—the Member for Kirkcaldy and Cowdenbeath (Roger Mullin).

The decision that has been made will have a huge impact on Scotland. My hon. Friend the Member for Kirkcaldy and Cowdenbeath mentioned research. In my constituency, I have the University of St Andrews, which has argued that for every £1 of Scottish Funding Council grant it receives, it returns £12 pounds to our economy. To turn that on its head, for every £1 that St Andrews loses, Scotland will lose £12. That has a significant impact on the economy locally.

I speak from personal experience, as somebody who benefited from the right to live and work in the European Union, and as somebody who benefited from Erasmus. I know the opportunities that that gave me and the opportunities that young people are now missing out on, and I wonder whether the Government will reflect on the training and educational opportunities that will be lost to not only individuals but the broader economy.

It is worth remembering, on a question of democracy, that Scotland voted overwhelmingly to remain part of the European Union. If we take the electoral regions throughout the United Kingdom, we find that the highest proportion for any side—remain or leave—was the 62% gained in Scotland, with every single local authority area voting remain, including the two that voted not to join back in 1975. That was a phenomenal mark of support for European Union membership, and one that it would be ill-advised to ignore.

On the point about democracy—I made this point to the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) earlier, but it is important—this place will gain powers and responsibilities, and it will have more say over the day-to-day lives of our citizens. So why—I would be delighted if anybody can tell me this—do we maintain the unelected affront to democracy that is the House of Lords when Vote Leave argues on a point of democracy? It is a disgrace.

Given the issue of stability, which is so important for the economy, and the huge uncertainty around Scotland remaining part of the United Kingdom, I am delighted that over the past few days the Scottish Government have shown a huge amount of leadership. I pay tribute to the Scottish Government, who, it would appear, represent the only functioning party of Government left in the United Kingdom. The vacuum that has been left by the Conservative party and the Labour party, which is reflected in this Chamber right now, is doing no credit to this place whatsoever. What is more, just as the people of Scotland are being well served by the Scottish Government, the people of England are being ill served by their two biggest parties. The people of England—who have made their decision, and we respect that—deserve much more than they are receiving at the moment.

Let me say more broadly—my hon. Friend the Member for Kirkcaldy and Cowdenbeath has worked very hard on this—that we have a rich heritage of European citizens who have made their lives and their homes in the United Kingdom. European citizens have made, and continue to make, a huge contribution in my constituency. They enrich our economy, and they enrich our society more broadly as well. I wish that more leading politicians had said what the First Minister of Scotland said:

“I want to take the opportunity this morning”—

the morning after the referendum—

“to speak directly to citizens of other European countries living in Scotland—you remain welcome here, Scotland is your home and your contribution is valued.”

We all need to repeat that over the coming weeks and months.

[Callum McCaig]

As other hon. Members have said, there is no impediment against this Government—indeed, this House—making a positive statement about the rights of those EU citizens, whom we value and who make an unbelievable contribution to our communities. That can and should be done. We need to press all those seeking the Tory leadership on this. If they all unite on it before going through the rigmarole of electing a new leader, we can end this uncertainty, which must be unbearable for these people.

[Stephen Gethins]

My hon. Friend, as usual, makes an excellent point. We should have some commonality of purpose, and a few more people should repeat that, because of the richness that these people bring to our society—the Scots Germans, the Scots Irish, who would include my family many, many years ago—[Interruption.] And the Scots Australians as well. We are a richer country for it. If the leadership contenders, in no matter which part of the House, could make that commitment, it would be valuable to these people, and to us.

Things have changed, and changed utterly. Over the past few days in Scotland, a number of people who voted no in the independence referendum are coming round to the idea of independence—or certainly coming round to the idea of working together to maintain Scotland’s place in the European Union. I give credit to members of the Labour party, the Liberal Democrats and the Green party who are working with the SNP in the Scottish Parliament to maintain Scotland’s place in the European Union. It is interesting that the Scottish Liberal Democrats have now been reported as urging their party to support independence and drop their opposition to it. Henry McLeish, the former Labour First Minister, has said that he is “very, very attracted” to independence and it is a “game changer”.

Outwith domestic politics, internationally and from a European perspective, we are seeing welcome support from people such as Guy Verhofstadt, the former Belgian Prime Minister, who has said:

“it’s wrong that Scotland might be taken out of the EU”

against its will. Manfred Weber, the leader of the European People’s party, has said:

“Europe is open to new member states…Those who want to stay”—

and we are staying—

“are welcome”.

I pay credit to Micheál Martin, who thinks that, as an issue of fairness,

“Ireland ought to be”

our

“friend and demand fair play”.

I welcome all those comments from our European friends and allies.

Historically, and as a matter of fact, Scotland may be on the geographical periphery of Europe, but we sit at Europe’s heart politically, and that is where we want to stay and will stay.