Covid-19: Future UK-EU Relationship

Drew Hendry Excerpts

Wednesday 15th July 2020 Commons Chamber

[Penny Mordaunt]

Bear with me.

I want to address the issues the report raises, because the reasons why we are having this debate are illuminating. The report proposes a two-year delay to our timetable and claims that not having one would reduce Scotland’s GDP. The version of the report I have seen says that that will be by £1.8 billion, but the hon. Gentleman refers to £3 billion—a figure that many dispute. However, some say that the cost to UK GDP of a delay would be around 2%.

There are a number of interesting graphs to support the right hon. Gentleman’s points, but I would ask any SNP Member present to add an additional line—one illustrating the hit to Scottish GDP from the break-up of the United Kingdom. Pre Brexit, the Scottish Economic Association put the cost of Scottish independence at 5.5% of Scottish GDP, stating that that would be even greater after Brexit. So why does £1.8 billion or £3 billion matter, when £5.5 billion does not?

The right hon. Gentleman cannot wring his hands about the 144,000 jobs contingent on exports from Scotland—jobs that we are determined to protect—while discounting the 545,000 jobs reliant on trade with the United Kingdom. He cannot claim to mourn the end of EU funding mechanisms that bring benefits to Scottish citizens—and that will be replaced, I might add—and at the same time discount the very real United Kingdom dividend to the taxpayers of Scotland of about £2,000 per household. He cannot complain about the results of negotiations, on the grounds that he thinks he has not been consulted, and at the same time advocate extending a transition period that would make us subject to EU laws, schemes and decisions over which he has had no say whatever. He cannot claim to use economic forecasts to make one argument, but disregard them for another. And he cannot claim to be a democrat, while ignoring the results of votes.

This debate is simply about creating conflict and division, just as the right hon. Gentleman’s press release today is. He has not seen the details of the proposal he alluded to at Prime Minister’s questions earlier, but he does not need to, because the facts are irrelevant to his case, as were many of the things he said in his speech about these proposals.

I want to turn to the substance of what we are doing to support business, because, after all, that is what matters. There will be significant changes and opportunities ahead, and we will help businesses and citizens to manage the necessary adjustments in a very practical and flexible way in order to minimise the challenges and maximise the opportunities. None of those schemes did the right hon. Gentleman mention.

In the withdrawal agreement struck by the Prime Minister, we removed several significant uncertainties that were a feature of our contingency planning ahead of 31 October. We are now taking the necessary steps to ensure that the UK is ready to take advantage of the opportunities. That includes the £705 million of investment announced to make sure we have the right infrastructure, tech and border personnel in place. That is in addition to the £84 million to boost the capacity of the customs intermediary sector. The border operating model and the phased approach we announced earlier have been put in place after extensive consultation with the sector and provide further clarity and certainty for the border industry and businesses.

While we have already made good progress in getting ready for the end of the year, there is still more to do. There are actions that we would strongly encourage businesses and citizens to take now to ensure we are ready to hit the ground running as a fully independent United Kingdom. That is why, earlier this week, we launched a new, major campaign to communicate the steps that we must all take to prepare for the end of the transition period.

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

I thank the Minister for eventually giving way. She asked many times why we have brought this debate today. Let me just pick out one sector and give her another 1.8. Scotland’s quality food sector exports £1.8 billion of food per year, 70% of which goes to the EU. My question to the Minister is, how many businesses in Scotland has she spoken to about the effects on them, because that, in just one sector, is why we are bringing this debate?

[Penny Mordaunt]

When I came into office I spent a considerable amount of time working with the central office of information and all Government Departments to improve our communications with business. An enormous number of meetings and forums take place not just with me and the Chancellor of the Duchy of Lancaster but with every single Department across Whitehall. Our officials continue to have those discussions and consultations, as do Ministers.

I would say to the right hon. Member for Ross, Skye and Lochaber, who mentioned one or two sectors: you have not spoken about any of the Government schemes. You have not spoken about the phased approach. You have not spoken about free services that are available from Her Majesty’s Revenue and Customs and how they can be improved. You have not called for any of that.

The right hon. Gentleman began the debate calling for leadership and for the Government to adapt. Indeed, the past few months have been an inflection point for nations and individuals. I call on the SNP to adapt: try co-operation; try finding some common ground for the sake of all our businesses and citizens. I would say that to you at any time but now more than ever, against the backdrop of this unprecedented time that we face.

--- Later in debate ---

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

It is a pleasure to follow the hon. Member for Leigh (James Grundy), who at least tried to make his point, even if I did not agree with a word of it. He at least tried to make a point that was worth making—by contrast with the bitter and twisted rant by the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont)—and even managed to get the Loch Ness monster in, so he gets an extra point.

The Minister asked why we brought this debate to the Chamber. We did so because it is the right thing to do for people and communities and businesses across Scotland, who are facing a treble whammy of hits in terms of the economy, their lifestyle, their jobs and their family status. There are people living across Scotland, including in my constituency in the highlands and islands, who will be dealt a serious blow come January if there is no extension to the transition. The UK Government are not sleepwalking into this; they are running towards a cluster crisis.

My constituents—and Scotland—never voted for this and they do not want it. It is bad enough that the combined loss of economic activity in leaving the EU is estimated to be up to £3 billion. But on the covid emergency, the UK Government’s language—unlike that of the Scottish Government, whose aim is elimination of the virus—shows that they are planning for a second wave, with the forethought that we shall be going into a second wave while we are faced with a no-deal-Brexit exit—

[Douglas Ross]

Will the hon. Gentleman give way?

[Drew Hendry]

I will give way later.

No matter how the Prime Minister tries to cover it up by calling it an Australia-style deal, it is simply nothing and does no good for any of the people who will be affected in Scotland.

[Douglas Ross]

I seek clarity on the point the hon. Gentleman makes. He seems to be criticising the Government for planning for all eventualities in a pandemic. Is he honestly saying that Nicola Sturgeon and the SNP Scottish Government are not planning for all eventualities on covid-19?

[Drew Hendry]

The hon. Gentleman is a former Minister who resigned because his boss’s boss took a trip to Barnard Castle and so broke the covid regulations, so fair play to him, but of course that is the problem. He has left a legacy there and it is now an issue that the Government have to plan for that second wave. To clarify, in Scotland we are planning for elimination of the virus. That is the right thing to do.

We are facing a calamity. The Minister, who is not in her place now, said that she wanted us to focus on the policies of the UK Government—or should we say promises, or rather broken promises. For communities around Scotland, especially in regions such as the highlands and islands, there is another pressure caused by this reckless course. According to research by the Conference of Peripheral Maritime Regions, locally we will lose over £160 million and, Scotland-wide, over £800 million. That is the extra punch that our communities are losing out on in terms of EU structural funding. This is funding that underpinned further education, youth employment, smart cities, connectivity for islands and communities, small and medium-sized enterprises, apprenticeships, regeneration, innovation, productivity, social inclusion, and a whole lot more.

People in Scotland, across our cities, towns, villages and communities, are now seeing that the promises will not be delivered through the so-called shared prosperity fund, because it is not coming. Communities and charities have used the EU funding to benefit people, especially the most vulnerable and disadvantaged. They have been waiting now for years to find out what funding will be available post-Brexit, and in spite of promise after promise it is becoming clear that come January there will be none. The Minister had the opportunity to answer the question from my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) about the shared prosperity fund earlier, and she chose not to do so.

I have been asking for clarification on this point since 2017, as have many others. A succession of Ministers, including the Prime Minister, have all promised details. They said they would consult widely. In 2018, the mantra was: “before the end of the year”. Time and again, they repeated that. In 2019, it turned into “shortly” and “soon”, and in 2020, it is morphing into “in due course”. In fact, we are now at the end point. There is no funding in place. Nobody can bid for anything as we enter 2020. All those promises have been broken, it has all been a glaik.

If the fund ever is established—let us imagine that it could happen somehow—it looks like yet another power grab will be at centre of it, with, ironically, as is proposed, another unelected body telling the devolved Parliaments what to do about the funding. In Scotland’s case, these should be decisions for the Scottish Parliament. It is no wonder—this has been repeated, because people are noticing these things—that polling in Scotland is showing support for independence consistently above 50%. It is no wonder that people who voted no in 2014, who said, “We just can’t do it”, are now coming to me and my colleagues and saying, “You know what? It was a big mistake. We were sold a packet of goods they had no intention of delivering. If they had, we would have had some of it and we have had none of it”.

As this Government ride roughshod over our people’s rights, and ignore the needs of our communities, it is important that they think again. Let me recall the words of the Minister of State, the right hon. Member for Rossendale and Darwen (Jake Berry), during a Backbench Business Committee debate on shared prosperity that I secured in 2019. He twice made the promise that devolution would be respected. Indeed, his second clarification stated:

“To be absolutely clear and to repeat what I said in my contribution, the Government will fully respect the devolution settlement in respect of the UK shared prosperity fund and, I am sure, in all other respects.”—[Official Report, 5 September 2019; Vol. 664, c. 445.]

At that time I told him that he would be judged not on those words, but on the actions of his Government. Let me tell hon. Members, and those watching the debate, that the people of Scotland are making that judgment, and seeing that Westminster is not working for them. It is not listening to them or delivering what they need, and that is why more and more people are convinced that Scotland would be better served by taking our place as an independent nation.

There is another unique hit that we will take as a result of this Government’s actions. This is the worst of all possible times for young people across our constituencies for the economic crisis to be coupled with Brexit. That is not in Scotland alone, as it affects all nations of the UK, but it is particularly harsh in places such as the highlands and islands, where we have been working incredibly hard to turn around the demographic of losing our young people.

[Christine Jardine]

Will the hon. Gentleman give way?

[Drew Hendry]

I am going to continue. The jobs that will be lost in the coming weeks and months will predominantly be of those in the 16 to 25 age bracket. Why? It is because they are cheaper to make redundant; they are usually on zero-hours contracts, if they have a job, and they normally have a lower length of service than anyone else. Young people will be disproportionately affected, so if for no other reason than to protect the next generation who will want to deliver a lifestyle that is suitable for them and their families to which we should all aspire in this century, surely the Government should now ask for that extension. Nobody would blame them, because everybody understands that this is a unique crisis. They should ask for that extension and protect our young people.