Leaving the EU: Implications for Scotland

Colin Clark Excerpts

Tuesday 3rd July 2018 Westminster Hall

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I beg to move,

That this House has considered the implications for Scotland of leaving the EU.

It is a pleasure to serve under your chairmanship, Sir Roger. I am delighted to have secured this debate and I thank my colleagues on the Backbench Business Committee for supporting my application. I begin this debate in the hope that we can have a measured, clear analysis of the facts and challenges that lie ahead, which are of material importance to Scotland and her prosperity.

The implications for Scotland of leaving the European Union are profound and significant. First, we need to consider the damaging effect that leaving the EU will have on Scotland’s vital interests both at home and abroad. Nobody can deny that the UK’s governing party is hopelessly divided against itself, as the UK faces arguably the biggest challenge and upheaval since the second world war. The Cabinet speaks not with one voice, but with several confused and contradictory voices. How can it enter into negotiations with the EU and inspire confidence from any quarter?

[Colin Clark (Gordon) (Con)]

Does the hon. Lady accept that almost a third of Scottish National party voters also voted to leave the EU and that, therefore, the SNP is divided on this issue too?

[Patricia Gibson]

That is quite an interesting point. I hope to maintain a respectful dialogue in this debate. I gently remind the hon. Gentleman that the former Tory leader and Prime Minister, John Major, has called the handling of Brexit “bad politics” and a “grand folly” dictated by “ultra Brexiteers”. He has also said:

“Many electors know they were misled”.

How people voted in the EU referendum, therefore, is beside the point. I want to focus on the damage that is being done to Scotland, because a lot of people have watched the unfolding of the Brexit process with horror and alarm.

The UK Government’s own leaked analysis has shown that Scotland’s GDP could face a hit of up to 9%, with analysis from the Fraser of Allander Institute showing that a hard Brexit could cost Scotland up to 80,000 jobs. The final figure could be higher or lower—we have no idea at the moment. The Governor of the Bank of England, Mark Carney, has revealed that Brexit has already cost each household £900.

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[Colin Clark (Gordon) (Con)]

Thank you very much, Sir Roger. It is a pleasure, as ever, to serve under your chairmanship, and to follow the hon. Member for North Ayrshire and Arran (Patricia Gibson).

As a Scottish Conservative and Unionist, I strongly believe in democracy. The Scottish people rejected independence in 2014, just as the British people voted to leave the EU two years later. Both referendums were massive exercises in democracy and in both many people voted for the first time, and we must respect that. If we are to retain that level of interest and keep people’s trust in our system, those results must be respected—both the independence referendum and the Brexit referendum.

While a majority of Scottish people voted to remain in the European Union, 1 million of them turned out to vote leave. More Scots voted to leave the European Union than voted for the Scottish National party in the last general election.

[Peter Grant (Glenrothes) (SNP)]

Following the hon. Gentleman’s logic, the number of people who voted for independence was 60% higher than the number who voted to leave the European Union. What, then, does his logic suggest we should do about the 1.6 million people who voted to leave the United Kingdom?

[Colin Clark]

I thank the hon. Gentleman very much for that question; I absolutely respect that point, and I covered it in the first line of my speech. People voted to stay in the United Kingdom, and we had a United Kingdom vote in the European Union referendum.

[Patricia Gibson]

rose—

[Colin Clark]

I will make some progress.

The Scottish people now expect politicians to carry out their wishes. I was disappointed to hear the hon. Member for North Ayrshire and Arran take quite such a negative tone. Nobody on the Government Benches is denying the challenges that surround our exit from the EU, nor are we naive to the scale of the work still to be completed, and much work has been done.

However, the situation is not doom and gloom—far from it, in fact. Done correctly, Brexit can provide many exciting opportunities for Scotland. Overnight, the Scottish Parliament will become considerably more powerful as a result of our exit from the EU. Sovereignty and control over our own laws was a major driver of the leave vote, and I am delighted that the Government, through the European Union (Withdrawal) Act 2018, have already taken steps to bring powers home to the United Kingdom. Brexit will give us the opportunity to bring decision making closer to people, not only through Westminster but through the devolved institutions in Edinburgh, Cardiff and Stormont.

[Patricia Gibson]

As the hon. Gentleman was speaking, one thought occurred to me that I would like to ask him about, because I am sure he has thoughts on it. He talked about the importance of respecting democracy, and I am sure we all agree with that, but does he share the concerns that many in his party have about the lack of transparency regarding the funding for the EU leave campaign, the dirty money that appears to have been involved and the lack of ability to trace the source of that money? Does he have any concerns about how that might have influenced the result?

[Colin Clark]

I thank the hon. Lady for the question, but I have an absolute respect for the institutions of this country, including the Electoral Commission, which will investigate funding, whether in Scottish elections or the EU referendum. I will respect its findings, because I have respect for UK institutions.

On day one after exit, more than 80 new powers will go directly from Brussels to Edinburgh—80 areas in which Scottish politicians can make decisions in the best interests of the Scottish people. The UK Government have rightly confirmed that they will presume devolution for all returning powers, meaning that only in exceptional circumstances will powers be temporarily held at UK level so that we can have some sort of framework, which Scottish industry and United Kingdom industry want. I believe that to be sensible and pragmatic. The UK Government travelled a significant distance from their original proposal, and we are now in a place where we can guarantee that Brexit will be to the advantage of the devolution settlement.

Of course, another upside of leaving the EU will be the ability to send more Scottish goods out to new markets, as we take control over our trade and chart a new course in the world. Scottish economic growth has been driven by exports, and the north-east of Scotland, where my constituency is located, is the largest exporting region in Scotland. In 2015, total exports from the north-east amounted to more than £8 billion—21.3% of total Scottish exports, in an area with 8% of the population. Leaving the EU will allow our exporting businesses to reach new markets and customers, and to grow those numbers further.

The hon. Member for North Ayrshire and Arran mentioned the food and drink sector and agriculture. It is a significant part of the north-east’s economy. It directly employs 22,000 people; 51% of those jobs are in agriculture, and a further 11% are in fishing. Leaving the EU will bring huge benefits to those people. We can finally design an agriculture policy that works for Scotland, and it will not be a DEFRA-centric, top-down policy. It will be a policy set by the Scottish Government for the unique needs of Scottish farmers—Members can see from my entry in the Register of Members’ Financial Interests that I am one myself.

Fisheries policy will also escape the clutches of the EU, and I am delighted that we are already having conversations on that. It is amazing that the Scottish Government wish to receive powers and then immediately hand them back to the EU, particularly on the common fisheries policy, which would not go down well in our fishing communities.

Leaving, therefore, provides opportunities and hope to some of Scotland’s key industries. It will allow us to be part of an internationalist United Kingdom and to embrace new trading opportunities.

[Joanna Cherry]

Apparently, the majority of sea fish caught at and off the coast of Scotland is sold into the European single market. Can the hon. Gentleman tell us where it is going to be sold after we leave the single market?

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[Colin Clark]

That is a good question. As the hon. and learned Lady knows, we are not leaving Europe. We are leaving the EU. We would hope to form a market in a frictionless free trade arrangement with the EU. Norway is also a huge exporter and is not a full member of the EU. We hope to negotiate a free trade arrangement with the EU.

[Joanna Cherry]

Is the hon. Gentleman aware that Norway is a member of the single market, through the European economic area? Does he not even know that basic fact? Does he understand that the reason Norway joined the single market was so it could sell its produce into the single market? Will he answer my question—where will the fish caught in and off the coast of Scotland be sold after we leave the European single market?

[Colin Clark]

It will go to Europe, with us outside the EU. It will go to Japan, America and the rest of the world. Those are the enormous opportunities that we have. It is incredible that the hon. and learned Lady does not realise that the common fisheries policy means that British fishermen catch only 40% of their potential fish catch. We cannot go to other countries in Europe and take their agricultural production, so it is important that more of our fish should be caught by Scottish and United Kingdom fishermen. I look forward to that happening. I am interested in how the Scottish Government explain to people on the coast why they want to hand fishing rights back to Europe immediately.

To move on to other industries, which I am sure Scottish National party Members will ask me about, last year whisky represented 20% of the UK’s food and drink exports—£4.4 billion. Diageo and Macallan, in the constituency next to mine, have made multi-million pound investments because they have confidence in our international future. Ardmore, Glen Garioch and Glendronach in my own patch predict a huge improvement in sales, which is good news to me as a farmer, because hopefully that will happen with Scottish barley. The reason for the investment is confidence in an export future and not sharing the Scottish Government’s negativity. A free trade deal with India alone would massively boost whisky. We cannot actually grow enough barley in Scotland—and apparently not in the whole United Kingdom—to supply the Indian market, if we had full access to it.

Oil and gas in the north-east—a dollar-denominated industry trading around the world—is resilient after a massive price collapse: the industry still supports 300,000 jobs. Its international horizons are huge, and already the vast majority of its exports are outside the EU. It has no problems with taking on the opportunities of exporting outside the EU, and is investing vast sums in the north-east of Scotland. Financial services, from Aberdeen Asset Management to Artemis in Edinburgh, have global brands and huge international opportunities. They invest in international opportunities throughout the world, not just in the EU. The UK is the clearing bank of Europe and the world; it is the hub of mergers and acquisitions.

What is the threat? We do not have to go far to see bigger risks in Scotland than Brexit. INEOS, the largest private UK company, which has invested £2 billion in the North sea and Grangemouth chemical plant, plans to invest £2 billion in the north-west of Europe. Brexit? No, apparently: from listening to Radio 4 this morning it is about fracking gas—we have to be careful how we pronounce that—from the US. It is half the price of gas in Europe. However, the Scottish Government will not listen to science. They want to demonise fracking wherever it takes place—America, Scotland or England. High-tech companies will run a mile from an anti-business Government who believe in quasi-science and carry on peddling it.

[Peter Grant]

Is it the policy of the Scottish Conservative party that fracking should be allowed in Scotland and that decisions about it should be taken by Westminster?

[Sir Roger Gale (in the Chair)]

Order. I am sure that the hon. Gentleman will be creative enough to relate his reply to the matter under debate, the European Union. I am interested to hear his response.

[Colin Clark]

I will only point out that my party, and this Parliament, will listen to science. I hope that the Scottish Government will also do so; on many things they do.

I want finally to mention farming, the oldest industry. Just under two weeks ago I was at the Royal Highland Show, as I am sure were many other hon. Members. I learned that the Scottish Government’s climate change ambitions pose a bigger threat to farming than Brexit—that is the view of Jim McLaren, chairman of Quality Meat Scotland and the former president of the National Farmers Union of Scotland. He has said that the Scottish Government setting a net zero carbon target in law means zero livestock production in Scotland. Members speak about the risk that Brexit poses to the EU, but there is a report out there saying that livestock farming in Scotland will no longer be viable if there is a zero carbon target. I did not write the report: I read it for the first time at the highland show, and it was remarkable. That situation is potentially devastating to Scottish farming.

My final point, and my overall point as a businessman, farmer and investor, is that whether we are talking about whisky, oil and gas, petrochemicals, finance or farming, investor confidence is paramount, and the Scottish Government are damaging it. Her Majesty’s Government are working for the best Brexit possible; the SNP would sabotage the Brexit vote and Brexit.

[Several hon. Members rose—]