European Affairs

Drew Hendry Excerpts

Wednesday 14th March 2018 Commons Chamber

[Ross Thomson (Aberdeen South) (Con)]

As someone who actually represents, I hope, the young people of the next generation, I do not share the pessimism of the hon. Member for Streatham (Chuka Umunna), because the great Brexit prize will be regaining our ability to strike new free trade deals across the world. Not only will Britain rejoin the rest of the world, but we will have the opportunity to lead the rest of the world as a global free-trading nation, championing trade liberalisation and taking on the voices of protectionism. Let me be clear that we are not leaving Europe or turning our backs on our European neighbours and partners. Rather, the Prime Minister has been explicit that the Government are seeking a deep and comprehensive trade deal with the EU that covers goods and services.

By leaving the customs union, the UK will regain its ability to set its own independent trade policy. Our trade with the EU is in deficit and declining. As the Minister stated in his opening remarks, it was 56% in 2006 and is now down to 43%. However, our trade with the rest of the world is in surplus and rising. We should not play down the importance of Europe as a trading market and partner, but we must orient ourselves towards the thriving economies in the rest of the world, such as in south and east Asia, and their growing demand for goods and services. Fifty-seven per cent. of Britain’s exports are now to outside the EU compared with only 46% in 2006. Furthermore, the International Monetary Fund estimates that 90% of global economic growth in the next 10 to 15 years will originate from outside the EU.

International demands for British goods is growing, and Aberdeen, which I represent, is well placed to take advantage of that as 90% of the city’s manufacturing, which is mainly in oil and gas and environmental engineering, gets exported. The oil and gas industry is truly global, and anchored right here in the UK. Current industry exports accounted for 43% of the UK supply chain turnover in 2017, up from 41% in 2016. Oil & Gas UK’s “Vision 2035” has the ambitious aim of doubling the supply chain share of the global market from 3.7% to 7.4% in 2035.

The Balmoral Group, based in my constituency, provides an example. It was established back in 1980 and specialises in sub-sea buoyancy, renewable energy and engineering solutions. It employs about 500 people in Aberdeen. It is highly dependent on the export market: it is currently focusing on west Africa, South America and the gulf of Mexico. Its representatives have been clear with me that their only opportunity for growth is in the export market. They have already been working closely with the Department for International Trade on trying to exploit those opportunities.

Thanks to the investment from the UK Government, the Oil & Gas Technology Centre in my constituency was set up. It is working with the oil industry in developing solutions, new technology and innovation to maximise the full potential of the UK North sea—from asset integrity to maximising recovery from small pools, from drilling to decommissioning. The technology, developed in my constituency, is exportable and the opportunities are massive.

As my hon. Friend the Member for Banff and Buchan (David Duguid) highlighted, the north-east is home to a thriving food and drink industry. It is also known for its whisky exports. The story of whisky is well known; perhaps a less told story is that about our other domestic exports. Here are just a few examples. In fishing, there are companies such as Macduff Shellfish, Denholm Seafoods and Lunar Freezing, which export to countries such as Nigeria, China, Vietnam, Uruguay and Ukraine.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

During the EU referendum campaign, the hon. Gentleman was pictured outside the Scottish Parliament with a placard saying, “Vote leave to bring control of our fishing back to the democratically elected Scottish Parliament”. Will he be recirculating that image?

[Ross Thomson]

I am grateful to the hon. Gentleman for raising that. As is so clear, we are leaving the European Union and taking back control of the more than 200 nautical miles of our waters, giving us the opportunity to rejuvenate our coastal communities. We are supporting Scottish fishermen. The party that wants to sell them down the river back to Brussels, handing all the powers right back and keeping people trapped within the confines of the common fisheries policy, is every single Member from the SNP. I will take no lectures from those on the SNP Benches about the benefits of Brexit for fishermen.

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[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

My hon. Friend the Member for North East Fife (Stephen Gethins) gave a compelling exposition of what we have and the benefits that we enjoy within the single market and the customs union, and what we stand to lose from being outside them. I again urge the UK Government to have genuine, not token, engagement with the devolved Administrations.

My hon. Friend the Member for Dundee East (Stewart Hosie) pointed out why it is absolutely vital for the Scottish Parliament to bring through a continuity Bill to protect the laws of Scotland. He also highlighted the naivety over trade with the US—the hope, and the “rainbows and unicorns” that the hon. Member for City of Chester (Christian Matheson) spoke about—and again urged the UK Government, as I will, to engage meaningfully with the devolved Administrations. It can still be done, even at this late date.

Everybody is getting a bit frustrated by the idea that a bespoke agreement is going to be magically produced here. There is a “hit it and hope” attitude from Government Front Benchers, completely ignoring the realities of the modern world. The UK Government tell us that all will be well, and we are supposed to take it on trust that that is the case, yet through this entire process to date, they have sought to exclude Parliament. They have had to be forced to share impact assessments. They have not listened to or respected the position of the devolved Governments. In this place, we still do not have answers even about the process, never mind what the impacts will be.

As the hon. Member for Greenwich and Woolwich (Matthew Pennycook) mentioned, there will be a vote, but that vote in itself is a bit like Brexit: it is shrouded in confusion. How much time will there be between the publication of the final agreements and a vote in this place? Nobody knows. Will Committees be able to take evidence and publish reports on the final agreements? Nobody knows. How long will there be between the vote and exit day? Nobody knows. What additional documentation will the Government publish to accompany the agreement and declaration? Nobody knows. There are lines and lines and lines of things that to date nobody knows about this process. It is yet another Brexit boorach.

We do not have answers to these questions on the parliamentary process, never mind answers to the key questions being asked by business and constituents. That is why the Scottish Government have introduced the continuity Bill and why everyone in the Scottish Parliament, apart from the Tories, understands the need for it. It retains in domestic law the EU law currently operating in devolved areas. [Interruption.] Scottish Conservatives can chunter from their Benches, but it is clear that they are not standing up for Scotland. The Bill gives Scottish Ministers the powers needed to ensure that devolved law continues to operate effectively after the UK withdrawal, and that is a very important point, given the range of powers that so far have not been agreed to be devolved directly. These powers should go straight back to the Scottish Parliament. Just today, an Ipsos MORI poll showed that the Scottish people are unconvinced by the UK Government’s position. One in eight people in Scotland think it will damage the economy. Only one in seven think there will be any benefit.

What do we know about the economy and trade? The analysis by the Financial Times that my hon. Friend the Member for North East Fife mentioned suggested that Brexit was already costing the economy £18 billion a year, or £350 million per week, as he pointed out. That is not money on the side of a bus; it is money thrown under a bus—lost to us completely. The London School of Economics estimates that Brexit has already cost the average household £404 a year as a result of the fall in sterling and the higher inflation since the vote. The UK Government’s own leaked impact assessment confirms that under all scenarios the UK will be worse off after leaving the EU and that the UK could be forced to borrow £120 billion more after Brexit between 2019 and 2033.

Leaving the EU customs union and single market would be disastrous for Scotland’s trading position. It will create barriers to trade, such as EU tariffs, customs checks, rules of origin and divergent regulatory regimes, and could impede Scottish trade with the rest of the world, as we stand to lose the benefit of 36 EU free trade agreements covering 53 markets. When the UK Government talk about trading with nations outside the EU, they should remember that those very agreements have been facilitated by our being in the EU. So there are many benefits to lose. For the food and drink sector in Scotland, we know that a hard Brexit risks access to Scotland’s biggest overseas regional food and drink export market; it risks Scottish competitiveness and increased costs for business; it risks the value and reputation of Scottish produce; and it substantially risks food production through the loss of our workforce.

We know that there is no trade without transport and that maintaining and improving physical access to European countries and allowing transport operators and service providers registered in the UK to operate across the EU, and vice versa, remains a vital component of trade. Minimising administrative arrangements for crossing borders for international freight and logistics is vital, as is access to labour. They are crucial for our transport network.

If I had more time, I would talk about what will happen to rural Scotland or the energy market if we do not get a meaningful deal, but I will finish by saying that so far we do not know what will happen about Parliament’s role. We know that the continuity Bill is a much-needed piece of legislation to protect the interests of the Scottish people and their devolution settlement. We know that the protections businesses seek and the questions they still have remain unanswered by the UK Government. We know the impacts and concerns for our economy and trade. Similarly, we know the impacts and concerns for the food and drink sector, health and social care, transport, rural Scotland and our energy market and tourism, among much more. We do not need more rhetoric from the Government about “scaremongering”. These are genuine, real concerns, and we need answers.

Will the Minister answer the questions about the parliamentary process, so that we can do our job of representing our constituents and ensure that there is a transparent and open process? Will he recognise that the Scottish Government are being asked to sign away the Scottish Parliament’s powers with no idea how UK-wide frameworks will work, how they will be governed and how we will proceed from the temporary restrictions that the UK want to agreeing longer-term solutions? In doing so, will he accept that this is not a constructive way in which to engage with the devolved Governments?