Leaving the EU: Impact on the UK

Ian Murray Excerpts

Wednesday 17th March 2021 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

May I start by paying tribute to the hon. Member for Glasgow Central (Alison Thewliss), who set out the severe impacts that this Brexit proposition is having on the Scottish economy? It is a shame; the title of the debate is “Leaving the EU: Impact on the UK”, but I think we will need more than one debate to go through all the impacts. She ran very quickly through a lot of the impacts that are affecting Scottish business.

May I take Members back to Christmas eve? I am sure we can all just about remember that. We were all turning our attention to our family Christmas traditions. We were putting on our Christmas jumpers, double-checking we had everything for Christmas day, cutting sellotape with our teeth, examining the TV guide to see when we could watch “It’s a Wonderful Life”, and perhaps even thinking about a small libation or two. I am sure our thoughts would have been turning to family and friends who were unable to celebrate Christmas with us due to the lockdown. Then, out of the mulled wine haze appears not Santa Claus but the Prime Minister, sitting in front of the Downing Street Christmas tree delivering an “all I want for Christmas is as an EU trade deal” address to the nation.

The Prime Minister gleefully proclaimed that the UK and the EU had come to a last-minute trade and co-operation agreement, there would be no tariffs on goods, the Northern Ireland protocol would be maintained so the Government would not break international law, and, rather surprisingly,

“there will be no non-tariff barriers”.

I hope Santa was listening very clearly, as he really should not be delivering gifts to those who do not tell the truth. Going all the way back to the day after the EU referendum, it was always going to be the case that the cold reality of Brexit would one day disinfect all those undeliverable Tory promises given to the British people at the time and since, and that is exactly what has happened.

The bare-bones Brexit deal that was so lauded by the Prime Minister falls way short of what was promised and what was needed. It is not “get Brexit done”, as the Minister said; it is “get done by Brexit”. With our country facing one of the biggest economic recessions of any developed nation and with our businesses under increasing strain from the pandemic, they have to try to navigate new trading rules with the UK’s largest trading partner that have reduced exporting output by 60%. What will happen when the EU economies start to reopen fully? That is when the deal will truly be tested. It is holding back British businesses with reams of new red tape and unnecessary bureaucracy. Businesses were promised no non-tariff barriers, but the Government’s lack of leadership and clarity and their constant dither and delay mean that businesses are facing challenges that they certainly were not prepared for.

It did not have to be this way. The Government, instead of sticking their head in the sand, could have worked with industry to get ready. They could have focused on practical action to support businesses—measures such as recruiting and training the promised 50,000-plus customs agents we knew were needed to get the checks done. They could have used the transition period for what it was designed for—transitioning to the new arrangements. Instead, they wasted that period on negotiating the deal.

The Government think that the deal they got on Christmas eve is the end of the matter, but sectors of the economy know that this is just the beginning of huge difficulties and challenges, and for some it is unfortunately the beginning of the end for their business. It is certainly the beginning of the end for many that export, none more so than the Scottish fishing industry. That the Brexit deal is neither what Scotland’s fishing sector needed nor what it was promised will not surprise anyone. The devastating delays that the sector is facing were entirely predictable. There is anger and frustration from our fishers, who have been very badly let down. Elspeth Macdonald, the Scottish Fishermen’s Federation chief executive—I am glad I was not drinking at lunch time, Mr Deputy Speaker; that was my impression of Sean Connery as well—was scathing:

“This deal falls very far short of the commitments and promises that were made to the fishing industry by those at the highest level of government.”

It is a pattern, isn’t it?

What about Scottish agriculture? There has been nothing positive for farmers in leaving the EU with this deal. They are happy that no deal was avoided, but where are the sunny uplands they were promised? They, too, see something familiar. The Prime Minister is getting a reputation not just for overpromising and underdelivering, but for overpromising and then delivering nothing.

[Douglas Ross]

I am grateful to Ian Murray for giving way, because I just had to check—

--- Later in debate ---

[Ian Murray]

That was a boring and predictable intervention. The hon. Gentleman knows that we voted for the deal to avoid the very no-deal that his Government were threatening. He also knows—he is just about to rejoin the Scottish Parliament, assuming he wins his seat, and I hope he gets the rules in train before he does so—that that is not what the debate was about in the Scottish Parliament. It was about something completely different, not whether Members there accepted or did not accept the deal. The hon. Gentleman knows that not to be the case. [Interruption.] Rather than chuntering, it would be much better for the hon. Gentleman to give some reassurance to the fishing industry and the Scottish farming industry. This is what they are saying to us. It is what they are putting on the record. I am not making this up. It might be a good starting point to give them some reassurance and to work together to resolve some of the problems.

The trade deal leaves a huge amount of uncertainty and falls short of what is needed and what was promised. Scottish farmers are clear that they will not stand by and see a weakening of import standards for food and allow Scottish and British produce to be undercut by others. We need concrete guarantees that food and farming standards will remain at least as high as they are now.

What about services? The financial services sector in Scotland maintains 162,000 jobs and accounts for nearly 10% of GDP. Across the UK, the financial services sector contributed £75.6 billion to the Treasury in the year before covid. There is nothing in the agreement for the 80% of our economy that supports millions of jobs and livelihoods. I hope the Minister can tell us that the EU-UK memorandum of understanding with the financial services sector that is due to be signed by the end of March will give the sector what it was promised. The Government need to secure long-term agreement with the EU on financial services equivalence and to improve access to EU markets for the wider professional services industry, so that the UK and Scotland can remain global hubs for financial services.

I have mentioned just three sectors—the hon. Member for Glasgow Central mentioned others—that have been disadvantaged by this deal, but we could have talked about so many others, including chemicals, petrochemicals and energy. The list is endless. No wonder there is frustration, as it transpires that deals could have been done that would have made things easier for people. We could have stayed in the Erasmus programme. While I welcome aspects of the new Turing scheme, the Government could have done both. That would have been a truly global Britain—stay in Erasmus+ and do the Turing scheme for non-EU countries.

We could have had a deal for our performers and production tours—it was on offer, but it was turned down. Why? Government policy seems to be to cut off our nose to spite our face. I hope that a solution can be found, or it will be more damage to another jewel in the UK’s crown—our creative industries. Those issues do not need Government platitudes. We want not more promises to be broken, but action and resolution now. The Brexit reality includes everything from shellfish rotting on a motorway to stopping our musicians touring Europe. The sunny uplands that we were promised mean a 4% hit to GDP—the equivalent of £3,600 for every household in the UK, according to the House of Commons Library. It is a shame that we do not have time to deal with the Northern Ireland protocol and the effects on the Good Friday agreement.

It is worth coming on to the SNP’s approach to the EU, as the party has initiated this debate in the Chamber. We have heard time and again, in the Chamber and elsewhere, that the UK has left the EU so Scotland needs to leave the UK. The former Labour MP and Europe Minister, Douglas Alexander, said this week in an article in The New European:

“Independence for Scotland would represent a reckless ‘hold my beer’ response to Brexit”.

All of us who campaigned to stay in the EU and strained every sinew to ensure that the case was made are disappointed. Of course we are angry. Many are still grieving after leaving the EU, but if the response is ripping Scotland out of the UK that would add catastrophically to that position.

The UK has left its largest trading partner, the EU. Of course that is bad, and we will hear that throughout the debate. Scotland leaving its largest trading partner, the UK, would be immeasurably worse. We need a remedy for Brexit, not a hugely damaging “I told you so” moment from Scotland. I did not vote remain for my vote to be misappropriated—

[Alan Brown]

We hear a lot about the fact that England is our biggest trading partner—that is true—but does the hon. Gentleman accept that 62% of goods manufactured in Scotland go to the EU, so it is our biggest trader in manufactured goods?

[Ian Murray]

The London School of Economics report—the LSE used to be lauded by the First Minister—said that Scottish independence would be three times worse than Brexit. Everything that the hon. Member for Glasgow Central said has to be multiplied by at least three. Then we can see the impact of what would happen—[Interruption.] Here we go again. I am trying to shine light on the facts of what would happen. I am trying to shine light from the LSE, an organisation that used to be lauded and cited in the Chamber every single day by Scottish National party Members, and all we get is, “Are we better together?” We need answers to those questions. That is what people are crying out for—they want people to be honest and answer those questions.

I did not vote in the EU referendum for my vote to be misappropriated by the nationalists to break up the UK. It is not their vote to do that with. I wonder whether the no-deal SNP regrets spending less on the EU referendum than it did chasing a few thousand votes in its failed bid to win the Scottish parliamentary by-election for Shetland.

The most extraordinary aspect of the debate in Scotland is the SNP’s promising a seamless transition back into the EU if the public vote for a separated Scotland. That is another in a long line of assertions that are not based on fact and not backed by any satisfactory answers. Indeed, we heard the hon. Member for Moray (Douglas Ross) ask the SNP’s finance spokesperson what the currency would be. There was no answer. Can the House imagine the shadow Chancellor or the Chancellor standing at the Dispatch Box unable to tell the country what its currency would be? They would be laughed out of the Chamber. They would have to resign before they reached the Speaker’s Chair.

One thing is for sure: Brexit shows us that breaking up is incredibly hard to do, and I am disappointed again that the SNP has introduced a debate on the EU but not taken any time at all to set out how, why or whether it can get a hypothetically independent Scotland back into the EU. Perhaps it will answer some key questions, as its separation strategy seems to be very similar to the strategy of Nigel Farage and the Brexiteers. It wants to cherry-pick the best bits of the EU, but not take the bits that it knows the public would find unpalatable.

The SNP’s proposition is that Scotland would seamlessly rejoin the EU as an independent nation, but not take the euro, or sign up to Schengen, or meet the deficit and debt requirements, or have its own currency, or meet the exchange rate mechanism rules, or re-enter the common fisheries policy. The sterlingisation plan excludes it from entering the exchange rate mechanism.

Most astonishingly, the Scottish Health Secretary said on “Question Time” last month that Scotland would not need to sign up to the very trade and co-operation agreement that we are debating today between the EU and the UK, which I and the SNP are rallying against in this debate. How is that even possible? Scotland would become an independent nation and would seamlessly go back into the European Union, and then would not even have to implement at the border at Berwick the trade and co-operation agreement that was signed between the UK and the EU? That is just implausible.

We know that the relationship between Scotland and the rest of the UK, in the hypothetical event that Scotland was ripped out of the UK, would be determined by the very trade and co-operation agreement that was signed on Christmas eve by the Prime Minister. All the problems that are being faced by Scottish industries such as fishing, manufacturing, agriculture, exports and financial services that we might hear about this evening would increase fivefold or more, as the rest of the UK is far and away the largest market for Scottish goods and services. This just does not make sense, and it is about time the SNP faced up to those key questions and was straight with the Scottish public. That is all I ask: be straight with the Scottish public and answer the questions.

Scotland has two Governments making promises to the Scottish people that they cannot deliver, and making promises to the people and businesses of Scotland that they have no intention of delivering. The problem is that the UK Government see the relationship achieved with the limited last-minute deal between the UK and the EU as the ceiling of their ambition—we heard that tonight from the Minister—but we do not. We see it as being the floor from which to build. We need to work hand in hand with industry, business, our trade unions and our European partners and friends to achieve practical solutions so that we can face the challenges thrown up by this deal with the EU and grab those future opportunities.

This deal must be built on; it must be the start, not the end. We have to live in the reality, and while we would not have taken us to this position, that is where we are. The deal has to be about a deeper, mutually beneficial relationship that means businesses can thrive. That means repairing the tattered relationship with our EU partners. It means putting aside the ideological nationalist agenda from both Governments and working in the national interest. Now more than ever, we need what the Scottish public are crying out for, which is both Governments, Scottish and UK, working together to mitigate aspects and disadvantages of covid and Brexit, but I fear that I should not hold my breath.

[Mr Deputy Speaker (Mr Nigel Evans)]

There is now a four-minute limit.