Article 50

Hannah Bardell Excerpts

Tuesday 24th January 2017 Commons Chamber

[Mr Davis]

I agree with my hon. Friend. For my part, I will endeavour to make the Bill as straightforward and as comprehensible as possible. I say that not just for speed, but because the public will be watching us. The public will want to know what we are voting on and to be able to understand it, so nothing will be opaque. We will aim to present a straightforward, simple Bill that we will take through as fast as is consistent with proper scrutiny.

[Hannah Bardell (Livingston) (SNP)]

Paragraph 151 of the Supreme Court ruling says:

“The Sewel Convention has an important role in facilitating harmonious relationships between the UK Parliament and the devolved legislatures.”

What will the Secretary of State do to ensure that there is a harmonious relationship? Does he agree with the ruling, and will he produce a White Paper, as the SNP has proposed, and actually write something down, which he did not do ahead of the EU referendum?

[Mr Davis]

If I remember correctly, that section ends with the phrase, “nobody has a veto”—no devolved Administration has a veto. In terms of involving and looking after or trying to help assist the interests of the devolved Administrations and the people they represent, we have a whole process in place with the Joint Ministerial Committee, which does nothing but consider these matters. It considers the interests of the nations of the United Kingdom to ensure that none of their special interests, none of their special political situations and none of their special economic situations is harmed in any way.

Leaving the EU

Hannah Bardell Excerpts

Wednesday 18th January 2017 Westminster Hall

[Gordon Henderson]

I welcome my hon. Friend’s intervention, but he will not be surprised to know that I do not agree. I believe that when the Government hold a referendum in which they make it clear, as the then Government did, that the will of the people will be listened to, and when this Parliament—of which he and I were both Members at the time—decides to allow a referendum and for the British people’s view to be heard, we should hear it.

I talked earlier about those of us with a long political memory, and I want to remind people what happened in Winchester at the 1997 general election. The Conservative candidate lost by two votes to the Liberal Democrats, but after a successful petition, there was a rerun of the election, at which the Lib Dems won by a majority of more than 21,000. It is ironic that it is the Lib Dems leading the charge for another referendum. They appear not to have learned anything.

I mentioned the Government’s negotiating position. There are repeated calls from all sides of the House for Ministers to allow Members to scrutinise their plans in advance and vote on them. In my view, that would be quite ludicrous and could only be suggested by people who have little experience of business or absolutely no experience of negotiating. I have experience of both.

I left school at 16 and worked in the real world of business and commerce for almost 50 years before being elected to this House. For some of that time, I worked as a senior contracts officer for GEC-Marconi Avionics, which was then bought by British Aerospace. In that role, I negotiated with various customers, including the UK Ministry of Defence and McDonnell Douglas in America. There are no circumstances on earth that would have enticed me to reveal to those with whom I was negotiating information in advance about my negotiating stance. To have done so would have been akin to committing commercial suicide, so why should Ministers let our European neighbours know in advance what the Government’s strategy is? That would be stupid.

[Hannah Bardell (Livingston) (SNP)]

I congratulate the hon. Gentleman on securing this debate. I am listening carefully to the great detail he is going into and, indeed, to his business experience. Could he tell us whether, in making any business decisions that would mean going through a significant period of change, the companies he worked for consulted the board or its employees? How would he compare that to how the UK Government consulted people on the detail of their plans in the run-up to the Brexit vote?

[Gordon Henderson]

I welcome the hon. Lady’s intervention, and I have a very easy answer for her. My experience in business is that shareholders elect a board of directors. The board of directors then employs people to manage the business, including negotiators, and does not expect to be kept informed of what is going to happen. If a negotiator messes up on a deal, they get the bullet. It is exactly the same thing here: if the Government mess up on this deal, they will not get re-elected at the 2020 election. That is the deal.

One thing I learned as a contracts officer was never to enter into any negotiation without a line beyond which I was not prepared to go, and to be prepared to walk away rather than cross that line. The Prime Minister said yesterday that in her view, no deal is better than a bad deal. I hope our negotiators remember her words and are prepared to walk away rather than accept a bad deal.

We often hear remainers talking about hard Brexit and soft Brexit. No one has explained to me exactly what those terms mean. I am assuming that by “soft exit” the remainers mean we should remain in a single market, even if that means we have to accept the free movement of labour in exchange. I also assume that they are happy for us to continue paying the EU billions of pounds a year for the privilege of having full access to the single market and accepting all the obligations that come with being a full member. If that is the case, soft exit means no exit and they should be honest enough to admit it. As for me, exit means exit. Full stop.

--- Later in debate ---

[Hannah Bardell (Livingston) (SNP)]

It is a pleasure to speak in this debate on what is a hugely important issue—the issue of our generation.

It is fair to say that, as the hon. Member for Sittingbourne and Sheppey (Gordon Henderson) said, we should put the various political platitudes and soundbites of hard Brexit, soft Brexit and red, white and blue Brexit to one side and realise they are pretty meaningless to voters and the people who elected us. We must stop patronising the people of the UK and letting this Tory Government off the hook by trivialising or minimising this complex issue to pitiful political platitudes. It is hugely important to have debates such as this as we go through the process and to remind ourselves that exiting the EU will be hugely complex and time-consuming; in fact, to quote the now Chancellor of the Exchequer, it could take

“longer than the Second World War.”

That is why it still seems to me—and, I am sure, to many people across these islands of the UK—incredible that ahead of the EU referendum vote the Tory Government had no plans and nothing written down about the options and plans.

For a number of years before coming to Parliament, like the hon. Member for Sittingbourne and Sheppey, I worked in the oil and gas sector, particularly in areas of business change. Like any business, when we embarked on large-scale change we drew up a road map of where we wanted to go. We started with where we were, what we wanted to do and how we would do it. Along with that were extensive details of what departments of the business would be affected, who might lose their jobs and how we could mitigate and protect any threats to our business. I can almost see the coloured Post-it notes and the mind maps.

I am pretty certain that every business person, organisation and individual across the UK looked at the proceedings and the details that came out in the press in the run-up to the Brexit vote—or, it would be fair to say, lack of detail—and assumed that at the very least the Tory Government had a basic analysis of the impact of exiting the EU and what the processes would be. However, it seems that the nation was mistaken. The press reported:

“Civil servants will be secretly working on ‘Brexit’ plans but not writing them down”.

Can anyone imagine a CEO going to the board of a company and saying, “Don’t worry. Our company won’t fail. I have been doing lots of thinking and it’s all in my head. Success means success, it will be red, white and blue and you can all now vote on whether you are with me or against me”? They would be laughed out of the boardroom.

Even the First Minister of Scotland, Nicola Sturgeon, thought the former Prime Minister was pulling her leg when he said that he did not have a plan for the UK if it should vote to leave the EU. However, he was not kidding, and we now know what happens to Prime Ministers who do not have a plan.

By contrast, when we held a referendum on Scottish independence in 2014, we did have a plan. We consulted people the length and breadth of the country. We even wrote things down. We may not have had all the answers, but we engaged and prepared, and presented a pretty extensive White Paper that people could read, digest and consider before they were taken to the polls on such an important issue. We felt that we had set the gold standard for referendums. When the then Prime Minister bumbled into Brexit without any proper forethought, he put the economy of the United Kingdom, people’s livelihoods and our international reputation on the line. I hope that as the Government enter into the process of exit from the EU they will reflect long and hard on how badly they have failed the people of the UK with respect to a proper planning process.

There are questions that are important to people and businesses across the nations of the UK, about the working of the process but also about what it means for their lives and livelihoods. We so often get caught up in technical jargon and doublespeak. Brexit has been the ultimate case in point. People and businesses need to be able to plan for the future, and the Tory Government need to be open and transparent about what they are doing and how they are doing it, and to ensure that, as they promised, they will consult all the nations of the United Kingdom.

To use my own constituency as an example, Livingston was a new town, built in the 1950s and designated in 1962. It attracted significant EU structural funding. I have heard from people in my constituency who came from other parts of Europe to set up homes and businesses in Livingston, where business relies particularly on workers from the EU. The town is Scotland’s third major retail hub, with the McArthurGlen outlet drawing in thousands of shoppers every week. The retail sector employs no fewer than 2 million workers in the UK, many of them in my constituency; and many of them are worried about their status.

My constituents and local businesses are not the only ones with concerns. The report published by the Exiting the European Union Committee earlier this month, entitled “The process for exiting the European Union and the Government’s negotiating objectives”, warns of an urgent need to

“provide certainty and reassurance to the individuals, their families and the businesses and services that rely on them.”

JP Morgan commented yesterday, after the Prime Minister’s Brexit speech, that not to have clear details, particularly for trade, was “very dangerous”.

The Prime Minister said yesterday:

“Brexit must mean control of the number of people who come to Britain from Europe.”

In Scotland, EU membership supports more than 300,000 jobs directly and indirectly. The Fraser of Allander Institute has predicted that Scotland could lose up to 80,000 jobs.

I know from the cases that come through my constituency office that the Home Office has rules and new regulations coming out of its ears; they change every week. It is so disorganised that there are no proper, efficient systems for dealing with immigration. As the UK sets out the process for exit from the EU, I want to ask the Minister specifically, will the Government review the current processes? It is apparent that those processes are not working and therefore, instead of looking to review and improve them, they are going to close the door and not let in anyone else from the EU. The Minister shakes his head, but the fact is that people do not know what their status is going to be.

Just before we returned from the recess, both the CBI and the Federation of Small Businesses expressed serious concern about the lack of clarity as to EU workers, their status, and the impact on business. As we look forward, it is essential that the Prime Minister should stick to the commitment that she gave today in Prime Minister’s questions to work with the devolved nations. She made specific reference to the Scotland plan and gave a commitment to working with the Scottish Government on the way forward. That is welcome news but the process is complex and Scotland’s position and the result of the EU vote in Scotland must be respected.

The Scottish National party strongly believes that the best way to build a more prosperous and equal Scotland is to be a full member of the EU, and certainly advocates staying within the single market, even if the rest of the UK leaves. According to the UK Government’s own analysis, leaving the single market could lower Scotland’s GDP by more than £10 billion. Furthermore, the National Institute of Economic and Social Research suggests that Scotland’s exports could be cut by more than £5 billion if we lose access to the single market. The EU is the main destination for Scottish exports; it receives 42% of Scotland’s international exports. As the negotiations take place, it is vital that there is a more transparent process than we have seen today and that there is greater detail.

Triggering article 50 will directly affect devolved interests and rights in Scotland. The UK’s current constitutional arrangements are underpinned by membership of the EU. Leaving the EU therefore requires reconsideration of the devolution settlement. Critically, the Exiting the European Union Committee report commented on the work that the Government still need to do before triggering article 50. It stated that

“it is essential that all the devolved governments, and the different regions of England, are duly involved in the process and have their views taken into account.”

Separately, there is a need to devolve more powers to Scotland, in order to safeguard current EU rights and social protections in areas such as employment and to allow the Scottish Parliament to protect Scotland’s wider interests, including any differential relationship with Europe.

The Secretary of State for Exiting the European Union told me directly in the Chamber yesterday that he wanted to ensure that there was no detriment to workers in Scotland from other parts of the EU. Yet the Tory Government have pursued pernicious and damaging policies such as those set out in the Trade Union Act 2016. Many of us wonder what they will do when the powers are transferred from Europe.

Of course any proposal to remove Scotland from the EU will need legislation from Westminster, but the First Minister of Scotland has made it crystal clear that any such legislation would require the consent of the Scottish Parliament. The people of Scotland voted, by a majority, to remain in the EU. As we go through the process of exiting the EU, the UK Government must take account of what the people of Scotland voted for. They must not take us off a cliff edge into a hard Tory Brexit. They must do everything they can to accept the will of the people of the devolved nations by considering the plans that have been put forward.

[Mr Adrian Bailey (in the Chair)]

I intend to call the Front-Bench spokespersons by 5.10 pm.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)]

It is always a pleasure to serve under your chairmanship, Mr Bailey. I congratulate my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) on securing this debate and on his excellent speech. He said that he was a simple soul, but he went on to demonstrate a grip of the facts and an erudition that rather belied that comment. He did a good job of not only representing his constituents but sharing the benefit of his commercial and negotiating expertise, which we welcome.

After the Prime Minister’s speech and the Secretary of State’s statement yesterday, I agree with the hon. Member for Livingston (Hannah Bardell) that it is a good thing that we debate these matters and the process of exiting the European Union. This is not the first time that I have stood in this Chamber in a debate while another debate on this process is going on in the main Chamber. That demonstrates the degree of parliamentary attention and scrutiny that the process is receiving.

[Hannah Bardell]

On a point of clarification, I am pleased that we are now debating the detail, but I hope that the Minister shares the view—I am sure it is held by many people across the country—that it would have been great if we had had that detail in the run-up to the vote so that people had the full information about what this Tory Government are taking us into through this process.

[Mr Walker]

The hon. Lady expresses an opinion about the past and the arguments that we had during the referendum. I think it is important to focus on the future and the process.

In the time that I have, I will make some brief remarks about the Government’s key objectives. First, in answer to the direct question that my hon. Friend the Member for Sittingbourne and Sheppey asked, I want to clarify that the Government are committed to respecting the will of the British people and delivering on the referendum result. That is why I welcome this debate and the opportunity to focus on the process and how we can get the best deal for the UK. As the Prime Minister has said, we will trigger article 50 and begin the process of leaving the EU by the end of March. That timetable has given us a bit of time to prepare the negotiating strategy and engage constructively with stakeholders. Yesterday’s announcements about our aims were informed by that consultation, which is ongoing.

We want a smooth departure from the EU and a new, positive, constructive and equal partnership for Britain and the EU—a partnership that will be good for Britain and good for the rest of Europe. That is why in her speech yesterday the Prime Minister set out a serious and ambitious vision of a new partnership with the EU for a global Britain, including a comprehensive plan covering our 12 negotiating objectives. I will not repeat them all, because all hon. Members will have followed that speech closely, but it is important that I reiterate their importance and, with the hon. Member for Strangford (Jim Shannon) in the room, say that one of the key principles is to maintain the common travel area with Ireland. In answer to the hon. Member for Livingston’s point—[Interruption.] I will not give way, because I have limited time to deliver quite a lot of detail, but in answer to one of the points that the Scottish National party has made regularly, the Prime Minister put an emphasis on protecting the rights of EU nationals in Britain and British nationals in the EU.

To deliver those objectives, officials in my Department and Ministers have carried out a programme of sectoral regulatory analysis and engaged with every devolved Administration and regions across the whole UK to identify the key factors for businesses, communities and the labour force that will affect our negotiations. We are also building a detailed understanding of how withdrawing from the EU will affect our domestic policies to seize the opportunities and ensure a smooth exit process.

As my hon. Friend the Member for Sittingbourne and Sheppey said clearly, the way to start a negotiation is not to tell the people we are negotiating with exactly what we plan to do. Indeed, the House agreed without a Division on 12 October last year that nothing we do or say should undermine the UK’s negotiating position. That was supported by a majority of more than five to one in a Division on 7 December. I welcome the support of my hon. Friend and the hon. Member for Strangford, and indeed that of the hon. Member for Greenwich and Woolwich (Matthew Pennycook), who sits on the Opposition Front Bench, for the article 50 process. My hon. Friend is right that we must leave the EU in accordance with the process set out in article 50 of the treaty on European Union, which he read out. That is the only lawful route for withdrawal from the EU under the treaties.

We expect the process to follow three stages: notification, negotiation and conclusion. First, we will notify the European Council of our intention to leave the EU under article 50. The Prime Minister has been clear that we will trigger article 50 by the end of March, and the House backed that timetable by a large margin in December. Triggering article 50 is the first step in making the United Kingdom a fully independent, sovereign country, free to make our own decisions. Our position remains that triggering article 50 is a matter for the Government, but as the House knows, we await the Supreme Court’s judgment, which I note is expected to be handed down next Tuesday. I do not want to comment on possible scenarios until that judgment has been made, but let me be clear: whatever the outcome, the Government remain committed to triggering article 50 by the end of March.

Secondly, once article 50 has been triggered, we will then negotiate a withdrawal agreement with the EU. Article 50 makes it clear that there are two years to negotiate such a withdrawal agreement. The Prime Minister has been clear that by the time the two-year period ends we also aim to have reached an agreement about our future partnership. Article 50 itself, as my hon. Friend pointed out, talks about taking account of that relationship in the withdrawal agreement. From that point onwards, we believe a phased process of implementation in which Britain and the EU institutions and member states prepare for the new arrangements will exist between us.

The Government’s priority is to ensure that we get the best deal for the UK. The UK is leaving the EU, but we are not turning our backs on Europe. If we approach the negotiations in a constructive spirit, as we intend to, we can build a partnership for a strong UK and a strong EU. Although we are confident that a fair deal along these lines can be achieved, we are clear that, for the UK, no deal with the EU is better than a bad deal. My hon. Friend has made his support for that approach very clear.

Thirdly, the precise timing, terms and means by which we conclude the process will be determined by the negotiations. However, the Prime Minister has confirmed that the final deal that is agreed between the UK and the EU will be subject to a vote in both Houses of Parliament before it comes into force.

New Partnership with the EU

Hannah Bardell Excerpts

Tuesday 17th January 2017 Commons Chamber

[Mr Davis]

My hon. Friend makes a point that goes to the heart of the approach to the customs union. The reason we are not going to be a part of the common commercial policy is to enable us to make the deals that enable black country industrialists to make the maximum out of international trade.

[Hannah Bardell (Livingston) (SNP)]

EU workers in Scotland contribute £7.5 billion to our economy, not to mention the huge contribution they make to our social fabric. What is the Secretary of State going to do to protect their rights and Scotland’s place in Europe, which they voted for by a majority in the EU referendum?

[Mr Davis]

There is a part of the Scottish Government’s report that relates to this issue. As I said to one of my colleagues earlier, we will not be managing the immigration policy or migration policy in a way that harms the national interest. That means not causing labour shortages or shortages of talent and so on. That applies not just globally, but to each nation state of the United Kingdom.

Next Steps in Leaving the European Union

Hannah Bardell Excerpts

Monday 10th October 2016 Commons Chamber

[Mr Davis]

My right hon. Friend is right that more than 20 countries have had more success in growth terms when trading into the single market than we have had in the past 10 or 20 years. He is absolutely right that it is not necessary to be a member of the single market to trade incredibly successfully inside it.

[Hannah Bardell (Livingston) (SNP)]

The press reported over the weekend that hate crime was up following the Brexit vote. In particular, homophobic attacks were up 147%. Given that members of the Secretary of State’s Government and party fostered an atmosphere of division and intolerance, what will they do during the negotiations to ensure that the human rights of everyone in our society are protected?

[Mr Davis]

I will be blunt. I will not take lectures on fostering division from the Scottish National party.

EU Exit: Devolved Governments

Hannah Bardell Excerpts

Thursday 21st July 2016 Westminster Hall

[Ian Murray]

That is precisely my point: immigration enriches society. Politicians have to be much braver about making the positive case for immigration. The arguments are not mutually exclusive; they all have to be set alongside the fact that if we have an influx of people, whether through migration or for other purposes such as work, public policy has to respond. The previous Labour Government had the migrant impacts fund, which was precisely that kind of response for local communities in need of additional resources to deal with the impact of the movement of people, whether immigrants or otherwise. That was scrapped in 2010 by the Tory Government, and we should look seriously at bringing it back. None of these issues is mutually exclusive, and I absolutely agree with the hon. Gentleman. He was not only wonderful at intervening, but has successfully made me lose my place. I will get used to being back on the Back Benches shortly.

I was saying that we should reassure those who voted to leave and those who voted to remain that we are listening to them by demonstrating not just through speeches, but by our actions, that we are firmly on the side of everyone who voted in the EU referendum. In doing so, our first priority—it is a priority that needs to serve the interests of people across the entire country—should be to secure the best deal possible in the Brexit negotiations. That means adopting a negotiating stance that takes into account all views: those of people who voted to leave and those of people who voted to remain. The building blocks for the negotiations must be what we want to retain from the European Union.

As Scottish Labour’s Westminster spokesperson, my focus today is obviously on Scotland, but I am sure many people from the other devolved Administrations, such as Northern Ireland, which voted to remain, and Wales, which voted to leave—my hon. Friend the Member for Llanelli (Nia Griffith) is here—will have their say in the negotiations. I am sure Members from Wales and Northern Ireland will make those points.

Let us reflect on the vote in Scotland for a moment. Some 62% voted to remain, and 38% voted to leave. In my constituency, 78% voted to remain. I assume that was in no small part due to the contribution of the significant financial services sector to the economy in Edinburgh, the large number of businesses that export and the world-class universities that rely on EU funding for some of their world-leading research. Those factors all have to be taken into account as we set out our negotiating stance, so I will go through Labour’s priorities and principles.

[Hannah Bardell (Livingston) (SNP)]

The hon. Gentleman mentions his voters and the financial sector in Edinburgh. Does he accept that Scotland remaining within the EU would provide an opportunity for businesses to look north to Scotland, particularly in the financial sector? For those who are considering leaving London, there is an opportunity for his constituents, for Edinburgh, other cities in Scotland and Scotland overall.

[Ian Murray]

When I conclude my remarks, I will say that we should be looking at this as an opportunity, not only for Scotland, but for the whole United Kingdom. We are where we are. We need to ensure that the Government’s negotiations reflect what has happened, not only in Scotland but across the component parts of the UK, and make those arguments. I hope the financial services sector in the UK and in particular in Edinburgh reflects on where we are and makes those decisions accordingly. The uncertainty brought about by the decision to leave the EU is similar to the uncertainty that comes from any constitutional change that we have to deal with. I am delighted that the hon. Lady intervened, because she gave me an opportunity to mark my paper when I sat down. I am getting the hang of it.

I will go through the founding principles from which everything else in these negotiations should flow. We must be mindful of respecting and upholding the will of the Scottish people, not just in this referendum, but in the 2014 independence referendum. Those results have shown that Scots wish to remain part of the United Kingdom and retain the advantages of European Union membership. I understand that that is not a particularly easy thing to achieve, but they should be the founding principles of what we want to achieve in these negotiations. That is Labour’s starting point and forms the basis of what we believe should be Scotland’s negotiating platform.

That platform is informed by an excellent and aptly named paper written by Professor Jim Gallagher of Nuffield College, Oxford, entitled “The Brexit shambles: charting a path through the rubble.” Hon. Members can probably guess from the title where he is coming from on the issue. The paper identifies and delineates four priorities that should guide the Scottish and UK Governments—I have added one to make it five, because it does not mention the role of EU nationals and it is important to put that on the record as well.

As matters stand today, Scotland belongs to two Unions and gets significant advantages from both. The people of Scotland recognise that and have recently voted overwhelmingly for both Unions to be continued. The result of the referendums should be respected, but instead, they are being ignored. The political context in Scotland at the moment is that the Conservatives want Scotland in the UK but out of the EU, and the Scottish National party wants Scotland in the EU but out of the UK. Only the Scottish Labour party is clear that we want Scotland to remain in the EU and in the UK. The UK and Scottish Governments have an obligation to pursue every avenue in pursuit of that outcome, and to facilitate that, we should look at the priorities that should be put in place. Scotland’s first priority should be to urge the UK Government to accept a Norway-type option, if I can use that terminology.

[Ian Murray]

When giving way, I should have asked the hon. Gentleman whether he would sign my early-day motion—he probably will not, given its content. If he had been listening properly, he would have heard me say that what the people of Scotland have voted for in the two referendums is a position where Scotland is in the UK and retains the advantages of being in the EU. I did not say that the UK will remain in both, because that is quite obviously not so.

[Hannah Bardell]

rose—

[Ian Murray]

I will give way to the hon. Lady if she confirms whether she will sign my early-day motion.

[Hannah Bardell]

I will need to read the hon. Gentleman’s early-day motion before I make a decision; it would not be appropriate to make a comment either way without prior knowledge. I have a brief point. Does he not recognise that many people in Scotland voted for independence on the basis that his party and other UK parties said that the only way to retain Scotland’s place within the EU was to vote against independence?

[Ian Murray]

I am sure that you will rule me out of order, Mr Bailey, if we rehearse the well-trodden paths of the arguments about the Scottish referendum. If the hon. Lady does not mind, I will touch on some of them as we go through my contribution. Knowing the time, that it is the last day of term and that everyone is desperate to head to the shores of Spain—without a visa—to enjoy the sunshine with their families, I will get on to that as we go through.

The first priority—the Norway-type option that I referred to—is that we would have membership of the European economic area. UK, and hence Scottish, membership of the EEA would mean maintaining much of the same conditions of trade and freedom of movement as currently exist. I am not sure whether the Government’s position in the negotiations is to maintain the free movement of people, but the Norway-style option would allow that to continue. It is worth putting in context why that is important.

The value of Scotland’s unfettered access to the EU single market is well established. The Scottish Government’s figures value Scottish exports to EU member states at around £12 billion annually, but it is worth reflecting on similar figures that show Scottish exports to the rest of the UK, which is why this is such an important debate. Those exports are worth four times that amount at £49 billion a year, which is why I think that the Scottish people have voted twice to stay with the advantages of being in both Unions. It makes scant economic sense to prioritise the EU market over the UK market. In this debate, it cannot be an either/or—we should strive to maintain full access to both.

UK membership of the EEA would allow Scotland to continue to trade undisrupted with both the EU and the UK. If that becomes impossible, a separate trading deal would have to be negotiated and nobody knows what that would look like. The other option at the other end of the spectrum, which I think unpalatable, would be to abide by World Trade Organisation rules. That would have significant impact on UK and Scottish trading capacity.

The second priority should be to protect Scotland’s public services and public spending by securing a continued fiscal and political union with the UK. These are the building blocks for the negotiations. The Scottish Government attach huge importance to the fiscal relationship with the UK; in his own words, the former Finance Secretary strained “every sinew” to protect it during the negotiations on the fiscal framework underpinning the Scotland Act 2016. The Scottish Government’s accounts and independent analysis show that Scotland is carrying a substantial budget deficit. It is incredibly important that Scotland’s position in the UK is maintained through the block grant and the Barnett formula.

Without those mechanisms, the Scottish Government would have to undertake dramatic spending cuts or increase taxes to balance the books, based on their current annual accounts. That point was reflected on by the hon. Member for East Lothian (George Kerevan), the SNP’s representative on the Treasury Committee, who said that not having those fiscal transfers would be incredibly difficult—I think that the word he used was “catastrophic”—for Scottish public services.

The third priority is the protection of Scotland’s currency union with the rest of the UK. Many of these arguments were covered in 2014, as we have just discussed in the intervention by the hon. Member for Livingston (Hannah Bardell), but it is worth revisiting them in this context, because it is incredibly important for the debate on how the negotiations with the EU proceed. If the first principle is to ensure that Scotland remains in the UK and with the benefits of the EU, we know that the euro is a non-starter, so that should come off the table—we owe the former Prime Minister and Chancellor Gordon Brown a debt of gratitude for keeping us out of that—but what of the other currency options that may be available? We know that the best available currency option at the moment is the current settlement. As part of the Scottish and UK Governments’ Brexit negotiations with the EU, we must make sure that Scotland’s position in the UK is protected, because Scotland’s fiscal and economic union with the rest of the UK is beneficial for the currency argument. I am conscious of the time, so I will not go through the currency arguments, but they are all on the record. The preferred arrangement in terms of Scotland’s fiscal, currency and economic position is the current arrangements, and the negotiations must underpin that point and reject all other arrangements.

I will quickly skirt through the fourth priority, which is to explore all options for Scotland’s future relationship with the EU. If we view this positively, it could turn the Brexit negotiations on their head, transforming a vexatious trial into an unprecedented opportunity. The hon. Lady mentioned that earlier. No one has ever suggested that the EU is a tremendous success and there are elements that Scotland may wish to relinquish. Equally, there are parts that Scotland may wish to retain. One aspect of the Brexit debate rarely mentioned is that it will greatly empower the Scottish Parliament. Many of the competencies, such as control over fisheries, agriculture, university research funding and environmental policy, will transfer directly to the Holyrood Parliament.

[Hannah Bardell]

I am grateful to the hon. Gentleman for being so generous; I promise this will be the last intervention. He makes the point about the EU not being perfect. Does he accept that, with a seat at the top table, Scotland could have a greater voice and influence in reforming the EU as an independent country within the European Union?

[Ian Murray]

That flies in the face of the arguments of economic, currency and political union with the United Kingdom; that is essentially Scotland turning its back on a much more successful Union, to be part of the European Union. What people have said quite clearly is that they want Scotland to be part of the UK and part of the EU. If where we want to get to in the negotiations is an independent Scotland—I am sure that it is for the hon. Lady; if it was not, I would be incredibly surprised—the journey and the pathway to get there are slightly different from the pathway and journey towards an outcome that keeps the UK together and keeps Scotland with many of its current advantages within the UK as a member state of the EU. That should be the genesis of the negotiations. I appreciate that the Labour party perspective and the Scottish National party perspective on the outcome of that journey are different, but my contention is that it has to be about keeping both Unions together.

Michael Keating recently observed that, given the new powers that will fall within the competence of the Scottish Parliament, the Scottish Government could choose to align themselves with the EU and the directives that currently exist, rather than the UK, and that they can have either an informal or a formal relationship. The key thing is that there will be new and interesting opportunities. For example, the responsibility for delivering air quality lies with the Scottish Parliament but falls under the EU directive. The inter-governmental working between the UK and Scottish Governments means that the English and Welsh policy and the Scottish policy to deliver that directive can be different, but they are under the same umbrella. Strong inter-governmental working will be needed to ensure that example and many others are delivered across the UK.

Lord Falconer, the former Secretary of State for Constitutional Affairs, commissioned a piece of work in the other place to set out options for a federalised membership structure. Many people say that that is impossible to achieve, but we are in uncharted territory and everything should be on the table when we examine the possibilities for protecting the component parts of the UK and the advantages they get from membership of the EU.

The fifth and final principle that should guide these negotiations, particularly from a devolved perspective, is that we must protect the rights of EU nationals who live, work and contribute to the UK. Conversely, we must protect the right of UK nationals to work, study and live in other EU countries.

The UK’s political landscape is changing rather rapidly. A week is certainly a long time in politics these days. Brexit is perhaps the reckoning that the political system has been needing for a long time. It enables us to readdress where we are in the political landscape and think about how we respond to the big issues for communities. There is no doubt that the basic things that people took for granted—a job, a decent wage, a home of their own, a secure pension in old age and the idea that the next generation will do equally well if not better than the current generation—are increasingly becoming unattainable. Whether that is fact or perception, it is what people tell us. They are working harder and doing the right thing, but they are not receiving the benefits. I think that is the genesis of why the UK voted to leave. That is a failure not of the EU but of national Government.

Let us reflect on where we are. I would like the Minister to address some of these issues. The principle that the UK should come out of the EU but Scotland should stay in the UK and retain many of the advantages of being in the EU should guide the Government’s negotiations with the devolved Administrations and the EU. The Minister has the opportunity to set out the UK Government’s position on the devolved nations and Administrations today and be clear that the Brexit negotiations will protect their interests. He should reaffirm that the UK Government will recognise that Scotland voted to be in the UK and to keep the advantages of the EU. Those will be the foundation stones and building blocks for the negotiations. If we are optimistic about this, and if we all want the same journey and outcome, those should be the conclusions that we seek.

The former leader of the Labour party, my right hon. Friend the Member for Doncaster North (Edward Miliband), said last week in his Tony Benn memorial lecture:

“This can be a progressive moment. In any case, there is no point in the left sinking into gloom. The only answer is to rise to the challenge. The optimists have always been the people we need at times of greatest adversity. Today we need them more than ever.”

I hope the Minister is indeed an optimist and will respond positively to this debate.