Exiting the European Union and Global Trade

Joanna Cherry Excerpts

Thursday 6th July 2017 Commons Chamber

[Hannah Bardell (Livingston) (SNP)]

I associate myself and other SNP Members with the Secretary of State’s comments about PC Keith Palmer—this debate was due to take place on the day of the attack on Parliament—and our thoughts continue to be with him, his family and his friends.

I welcome you to the Chair, Madam Deputy Speaker. It is nice to see that we have gender balance among the Speaker and Deputy Speakers.

I rise to speak for the first time in a substantive debate since my re-election as the MP for Livingston—I am grateful to the people of Livingston for re-electing me—and since my appointment as SNP spokesperson on international trade and investment.

I pay tribute to my former colleague and Member for Ochil and South Perthshire, Tasmina Ahmed-Sheikh, our previous spokesperson on international trade and investment. She was one of the hardest working MPs this Parliament has ever seen, and she was a doughty champion for the people of Ochil and South Perthshire. She pursued many matters—from international trade to the plight of the people of war-torn Syria and the UK Government’s involvement in the Yemen conflict—and her dogged work ensured that, time and again, UK Ministers were dragged to the Dispatch Box to answer the questions of SNP Members. We will continue to pursue such issues with vigour and passion.

My former colleague was a far cry from some of the Conservative Members who, sadly, have replaced her and other SNP colleagues. I do not mean to be entirely unkind—they are not in their places today—but they have been here for only a few weeks, and they have already rolled over on a distasteful deal with the DUP, failing to stand up for Scotland and their constituents. This Tory Government have found £1.5 billion to do a deal so that they can vote down pay increases for emergency service workers and public servants. In recent weeks and months, we have come to rely very heavily on those emergency workers and public servants, and the Scottish Conservatives should hang their heads in shame.

The Scottish Conservatives now have a choice: they can choose to do what is in the best interests of Scotland and of the constituents who voted them in, or they can fall into line with the rest of their party in support of a hard Brexit. I challenge them to use the opportunities that lie ahead to make sure that the Prime Minister reconsiders her position and joins us, and other Members in other parties, in defending Scotland’s place in the single market and the customs union.

The trade and customs Bills will seek to put in place a legislative framework to allow the UK to operate its own trade policy and provide new domestic legislation to replace EU customs legislation. The problem is that, despite all the bluff and bluster from the Tories, the UK had to cave in on the first day of Brexit talks and agree that the divorce deal will have to be established before any trade deals are agreed, leaving business, the economy and workers across our country in limbo. Michel Barnier said earlier today that frictionless trade in goods and services “is not possible” outside the single market and the customs union. We need to know from the Secretary of State and colleagues whether there will be transitional arrangements for our economy in relation to goods and services.

We know the track record of this Government on scrutiny and process: they avoid it at all costs. They had to be dragged through the courts even to give Parliament a say on the triggering of article 50, so what hope can we have that we will get to scrutinise properly the many laws and regulations that will be coming back from the EU? The Government’s plans for the great repeal Bill include so-called Henry VIII powers to avoid any scrutiny, as well as antiquated and back-door measures through the use of delegated legislation. What guarantees are the Government offering to ensure they will not abuse such powers? What guarantees are they offering to ensure they will not use antiquated and back-door measures to avoid scrutiny by and the need to obtain the consent of the devolved Administrations?

The public rejected the Prime Minister’s call at the last election to strengthen her hand in the Brexit negotiations, and she cannot carry on as if the election result has not happened. It would serve her and this Government’s flailing credibility better to build a much more consensual approach, because leaving the single market would be an unprecedented act of self-harm.

[Joanna Cherry (Edinburgh South West) (SNP)]

Does my hon. Friend agree that that would in particular be an act of self-harm for Scotland? At present, EU trade deals with the likes of South Korea mean that the tariff on our major export of Scotch whisky has been reduced to nil, whereas a 20% tariff has to be paid on other whisky entering South Korea. Are we not much more likely to get such favourable deals for Scotch whisky if we have the whole weight of the EU behind us, rather than if we are negotiating just as the UK?

[Hannah Bardell]

I absolutely agree with everything my hon. and learned Friend says.

The Secretary of State alluded in his opening comments to trade deals with countries such as India, particularly on whisky. Are he and his colleagues not concerned that when the Foreign Secretary visited India recently he was advised that:

“Mobility issues are of importance to us; we cannot separate free movement of people from the free flow of goods, services and investments”

Trade agreements are about give and take. The Government, the Ministers on the Front Bench and others who have spoken do not seem to understand that concept.

The plans for a hard Tory Brexit have already immersed the UK economy in uncertainty, with inflation escalating and companies preparing to move their operations outside the UK. [Interruption.] Conservative Members chunter from a sedentary position, but they only need to open the papers every day to see examples of that. Figures from the National Institute of Economic and Social Research suggest that Scotland’s exports could be cut by more than £5 billion if we fail to retain full membership of the single market. The research also shows that trade in goods could decline by 35% to 44%. If exports of Scottish goods were to fall by a similar amount, the additional cost would be about £3 billion. According to the UK Government’s own analysis, leaving the single market could reduce Scotland’s GDP by more than £10 billion.

At the end of this process, when we have clarity on whether there is a deal or no deal, if the Government have not taken on board Scotland’s position, which I will come on to later, we must have an insurance policy. We must have a say over our own future and be able to decide whether we want to be an independent nation within Europe. That is why Scotland’s main business organisations issued a joint statement on 8 July last year, confirming that Scotland’s businesses need continued access to the single market and free movement of labour.

Since then, those organisations have all repeatedly raised concerns about the impact of Brexit on business, including on access to labour, both skilled and non-skilled. For example, the loss of EU nationals will seriously harm our rural economy. About 8,000 EU nationals come to live in Scotland and work in the food and drink industry, and 15,000 seasonal migrant workers harvest our world-class fruit and vegetables. We cannot put their futures or the future of our vital sectors at risk. EU nationals also make a huge contribution to our NHS. One in 20 NHS doctors in Scotland comes from the EU. More than 1,000 companies owned in the EU employ over 127,000 people in Scotland and about 181,000 EU citizens live in Scotland, bringing vital skills and expertise. We heard only last week that the rate of applicants for nursing posts from the EU has dropped by 96%. That will be devastating across the UK.

Scotland is an open and modern economy. Our exports of goods and services account for about 50% of our GDP. That is why our membership of the single market is so crucial to our economy. Through the EU, Scotland trades with the world. The EU has signed free trade agreements with nearly 90 non-EU countries. Free trade agreements are already in place with 62 countries and the agreements with 28 countries are still to be applied. The Secretary of State said in his comments that he hoped they would be ratified soon. Those agreements are driving growth in Scotland’s trade with the rest of the world, which increased by 55% between 2007 and 2015.

If we are not able to continue with those trade agreements—we know how long many of them may take—then cumulatively it could be decades before we even reach the position we now have with full access to the single market. Scotland’s businesses are well placed to take advantage of the opportunities to sell their products across Europe and the world. If we leave the single market, we gamble with a market of 500 million people and free trade deals with 90 countries around the world.

The Tory manifesto contained a pledge to leave the single market and the customs union. Given that the Tories failed to gain a clear majority, they must think again, put those options back on the table and make them central to their negotiating position. It just went to show the contempt the UK Government have for Scotland when we heard the Brexit Secretary admitting to the Exiting the European Union Committee and, indeed, the rest of the UK in March 2017 that no economic analysis—none—had been done to address the impact of Brexit on the UK economy. How can we have been in a position whereby not only was an impact study not done before we went into the referendum, but in all of the time between then and coming to that Committee no work had been done? This was compounded by comments on “The Andrew Marr Show” recently, where the right hon. Gentleman, who is opening negotiations for the UK, was unable to confirm that the UK would get a free trade agreement with the EU; it was very much a case of, “Mebbe’s aye, mebbe’s no.” The Secretary of State’s comments show just how disorganised he and the Tory party are on Brexit and our future trading relationship with the EU.

Just this week, the Financial Times reported that the City of London was sending a delegation to Brussels to present a secret blueprint for a post-Brexit free trade deal on financial services. The City is left to do the work of the Government for itself.

Concern mounts over the damage facing employers if they are forced to move operations to the continent. Not every sector is able to do that, or should do that. We should have a Government who are listening to the devolved nations and all those sectors. This is just the latest indication that businesses do not trust the Tory Government.

The SNP Scottish Government put forward a very sensible compromise agreement on Scotland’s place in Europe, respecting the results in 2014 and of the EU referendum. It laid out a sensible and pragmatic approach to the situation we now find ourselves in: that Scotland could retain its membership of the single market and remain within the UK.

In Scotland, we are working hard to support SMEs and corporates with initiatives like the Borders enterprise agency, which was just launched, with a focus on meeting the region’s distinctive economic needs. We have also launched the Scottish-European Growth Co-investment Programme, the first part of the Scottish growth scheme, with £50 million from Scottish Enterprise and £50 million from the European Investment Fund, which will leverage at least £100 million from private sector fund managers. Evidence of the fruits of the Scottish Government’s labours were borne out by yesterday’s GDP data, which showed the Scottish economy defying recession concerns and growing at 0.8%, compared with the UK average of 0.2%.

But this is set against a backdrop of Brexit uncertainty giving businesses much pause for thought in investment decisions. The Chancellor has conceded that a “large amount” of UK business investment is being postponed, and urged early agreement with the EU on transitional arrangements. Our growth is under threat, and we need to hear more than warm words from the Government Benches. The Governor of the Bank of England, Mark Carney, spoke of “anaemic wage growth” and said he would like in coming months to see

“whether wages begin to firm, and more generally, how the economy reacts to the prospect of tighter financial conditions and the reality of Brexit negotiations.”

Scotland’s voice is being ignored. That is not democratic, and it is not acceptable. Scotland is the top destination in Europe for exports from the rest of the UK, so it is in everybody’s interests to have a close trading relationship, because the European single market is Scotland’s real growth market, and is eight times bigger than the UK market alone.

The Secretary of State for Exiting the European Union said on a recent visit to Ireland:

“Ireland will not have to choose between having a strong commitment to the EU or to the UK—it can and should have both.”

Why, then, can that not apply to Scotland?

In a press conference in Dublin on 30 January 2017, the Prime Minister said that the UK would maintain

“the common travel area and excellent economic links with Ireland.”

Again, I ask why that cannot apply to Scotland?

There must be a meeting of the UK and devolved Governments to decide objectives before the next cycle of negotiations with the EU this month, and there must be a commitment to take seriously, and act upon, the interests of Scottish businesses, universities and a range of other groups becoming increasingly alarmed at the way Brexit is being handled.

Scotland’s voice must be heard during the Brexit negotiations. Only recently we heard from a surprise supporter of that long-held SNP view. The Labour party leader, the right hon. Member for Islington North (Jeremy Corbyn), took time out from partying at Glastonbury to write for the Sunday Herald saying that Scotland needs a clear input into the Brexit negotiating process. He said:

“The Scottish Government must have regular and systematic access to the British negotiating team so that the Scottish perspective, especially in those areas for which the Scottish Parliament is responsible, is fully taken into account.”

That is very welcome; it is just a shame that his party cannot be united on access to the single market and the customs union. Will this Government finally acknowledge the overwhelming support for a Scottish seat at the Brexit table and extend the hand of friendship to all the devolved nations to enable them to take part in these negotiations, which will affect their people, their economies and their future?

This Conservative Government are cowed and reduced; they failed resolutely to start negotiating a trade deal with the EU at the same time as the exit deal. We in the SNP believe that it is important to maintain our international development goals and ensure an ethical trade policy. To ensure that our international development goals are maintained, the Scottish Parliament must have a real say on any trade deal that is negotiated. ActionAid has ranked the UK joint worst in the world for having the largest number of treaties with developing countries that most restrict the rights of poor countries to tax UK companies operating there. That is not acceptable and it does the UK’s reputation no good on the world stage. The SNP will continue to defend Scotland’s interests and prioritise maintaining Scotland’s membership of the single market and the customs union in the Brexit negotiations.