Leaving the EU: Implications for Scotland

Joanna Cherry Excerpts

Tuesday 3rd July 2018 Westminster Hall

[Patricia Gibson]

The hon. Gentleman is correct. We know that until everything is agreed, nothing is agreed. In that context it is hard to make final predictions. I say to him, however, that we have experts whose minds are more academic on this issue than his or mine, and their opinions matter. Independent forecasters, the UK Government’s own analysis, the Fraser of Allander Institute, Her Majesty’s Revenue and Customs, the Economic and Social Research Institute and the National Farmers Union have all expressed real concern about what Brexit means for Scotland. I direct the hon. Gentleman to those sources, not to what I am saying.

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

My hon. Friend is making a powerful speech and she makes the point, which Government Members cannot bear to hear, that business, the trade unions and all of civic society in Scotland are concerned about the impact of Brexit on Scotland. The hon. Member for Stirling (Stephen Kerr) said that we should be masters of our own fate. Does my hon. Friend agree that the whole point of this debate is that the people of Scotland are not masters of their own fate, because they are being taken out of the European Union against their democratic will?

[Patricia Gibson]

My hon. and learned Friend makes an excellent point, which needs no gilding from myself. I wholeheartedly agree. I will come on to the people of Scotland in a few moments.

An HMRC report showed that in 2013-14, European economic area nationals paid £12.1 billion more in income tax and national insurance than they took out in tax credits and child benefit in the UK as a whole. EU nationals working in Scotland contribute an average of £34,000 to GDP. The rights of Scotland’s current EU community must be protected and guaranteed as a matter of principle. One in 25 GPs in Scotland is an EU citizen. Losing them would affect 226,000 patients. Regardless of whether those GPs are allowed to stay in Scotland, the fact is that Brexit has created something of a hostile environment for those who choose to live and work in the UK. That may create challenges with retaining EU citizens across the UK, who have contributed so much to our communities. Although not necessarily a large sum for some of our EU citizens, asking them to pay £65 per person—the principle of asking people to re-subscribe to their own lives in a country where they have already contributed so much—is something that shames the Government and us as a society. It should be scrapped.

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[Patricia Gibson]

Sir Roger, you will forgive me for tittering when a Lib Dem asks me to be straight with the people. We in the SNP are absolutely straight with the people of Scotland, who are waking up to the fact that they have been misled. You do not need to take my word for it; you just need to speak to John Major, your former leader and Prime Minister, who openly says that the people have been misled over Brexit. Of course, the people of Scotland were not misled, because we voted overwhelmingly to remain in the EU, but that appears not to matter to the constituents that you represent.

[Joanna Cherry]

Does my hon. Friend agree that the Liberal Democrats and the Conservatives conveniently choose to ignore the fact that the majority of Scottish voters in 2016 voted for Scottish political parties that said they wanted to hold another independence referendum in the event of Scotland being taken out of the EU against its will? Whether they like it or not, there is a mandate in the Scottish Parliament for that second independence referendum. It is time that they respected the democracy of that vote.

[Sir Roger Gale (in the Chair)]

Order. I ask hon. Members to confine interventions to the length of a proper intervention and not to make speeches.

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[Patricia Gibson]

It doesn’t stop people shouting.

[Joanna Cherry]

Get some manners.

[Patricia Gibson]

They are really lacking. You do not get this in the Scottish Parliament, Sir Roger.

The hon. Member for Stirling (Stephen Kerr) should go back and look at the devolution settlement. Anything that is not reserved is devolved, and should correctly come back to the Scottish Parliament. When you start to ignore legislative consent, which has served that Parliament well for the 20 years it has existed, you cross a Rubicon and get to a point where you do what you like and ignore the Scottish Parliament anyway. I do not think that treats the sovereign people of Scotland with respect.

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[Colin Clark]

I thank the hon. Lady for the question, but I have an absolute respect for the institutions of this country, including the Electoral Commission, which will investigate funding, whether in Scottish elections or the EU referendum. I will respect its findings, because I have respect for UK institutions.

On day one after exit, more than 80 new powers will go directly from Brussels to Edinburgh—80 areas in which Scottish politicians can make decisions in the best interests of the Scottish people. The UK Government have rightly confirmed that they will presume devolution for all returning powers, meaning that only in exceptional circumstances will powers be temporarily held at UK level so that we can have some sort of framework, which Scottish industry and United Kingdom industry want. I believe that to be sensible and pragmatic. The UK Government travelled a significant distance from their original proposal, and we are now in a place where we can guarantee that Brexit will be to the advantage of the devolution settlement.

Of course, another upside of leaving the EU will be the ability to send more Scottish goods out to new markets, as we take control over our trade and chart a new course in the world. Scottish economic growth has been driven by exports, and the north-east of Scotland, where my constituency is located, is the largest exporting region in Scotland. In 2015, total exports from the north-east amounted to more than £8 billion—21.3% of total Scottish exports, in an area with 8% of the population. Leaving the EU will allow our exporting businesses to reach new markets and customers, and to grow those numbers further.

The hon. Member for North Ayrshire and Arran mentioned the food and drink sector and agriculture. It is a significant part of the north-east’s economy. It directly employs 22,000 people; 51% of those jobs are in agriculture, and a further 11% are in fishing. Leaving the EU will bring huge benefits to those people. We can finally design an agriculture policy that works for Scotland, and it will not be a DEFRA-centric, top-down policy. It will be a policy set by the Scottish Government for the unique needs of Scottish farmers—Members can see from my entry in the Register of Members’ Financial Interests that I am one myself.

Fisheries policy will also escape the clutches of the EU, and I am delighted that we are already having conversations on that. It is amazing that the Scottish Government wish to receive powers and then immediately hand them back to the EU, particularly on the common fisheries policy, which would not go down well in our fishing communities.

Leaving, therefore, provides opportunities and hope to some of Scotland’s key industries. It will allow us to be part of an internationalist United Kingdom and to embrace new trading opportunities.

[Joanna Cherry]

Apparently, the majority of sea fish caught at and off the coast of Scotland is sold into the European single market. Can the hon. Gentleman tell us where it is going to be sold after we leave the single market?

[Colin Clark]

That is a good question. As the hon. and learned Lady knows, we are not leaving Europe. We are leaving the EU. We would hope to form a market in a frictionless free trade arrangement with the EU. Norway is also a huge exporter and is not a full member of the EU. We hope to negotiate a free trade arrangement with the EU.

[Joanna Cherry]

Is the hon. Gentleman aware that Norway is a member of the single market, through the European economic area? Does he not even know that basic fact? Does he understand that the reason Norway joined the single market was so it could sell its produce into the single market? Will he answer my question—where will the fish caught in and off the coast of Scotland be sold after we leave the European single market?

[Colin Clark]

It will go to Europe, with us outside the EU. It will go to Japan, America and the rest of the world. Those are the enormous opportunities that we have. It is incredible that the hon. and learned Lady does not realise that the common fisheries policy means that British fishermen catch only 40% of their potential fish catch. We cannot go to other countries in Europe and take their agricultural production, so it is important that more of our fish should be caught by Scottish and United Kingdom fishermen. I look forward to that happening. I am interested in how the Scottish Government explain to people on the coast why they want to hand fishing rights back to Europe immediately.

To move on to other industries, which I am sure Scottish National party Members will ask me about, last year whisky represented 20% of the UK’s food and drink exports—£4.4 billion. Diageo and Macallan, in the constituency next to mine, have made multi-million pound investments because they have confidence in our international future. Ardmore, Glen Garioch and Glendronach in my own patch predict a huge improvement in sales, which is good news to me as a farmer, because hopefully that will happen with Scottish barley. The reason for the investment is confidence in an export future and not sharing the Scottish Government’s negativity. A free trade deal with India alone would massively boost whisky. We cannot actually grow enough barley in Scotland—and apparently not in the whole United Kingdom—to supply the Indian market, if we had full access to it.

Oil and gas in the north-east—a dollar-denominated industry trading around the world—is resilient after a massive price collapse: the industry still supports 300,000 jobs. Its international horizons are huge, and already the vast majority of its exports are outside the EU. It has no problems with taking on the opportunities of exporting outside the EU, and is investing vast sums in the north-east of Scotland. Financial services, from Aberdeen Asset Management to Artemis in Edinburgh, have global brands and huge international opportunities. They invest in international opportunities throughout the world, not just in the EU. The UK is the clearing bank of Europe and the world; it is the hub of mergers and acquisitions.

What is the threat? We do not have to go far to see bigger risks in Scotland than Brexit. INEOS, the largest private UK company, which has invested £2 billion in the North sea and Grangemouth chemical plant, plans to invest £2 billion in the north-west of Europe. Brexit? No, apparently: from listening to Radio 4 this morning it is about fracking gas—we have to be careful how we pronounce that—from the US. It is half the price of gas in Europe. However, the Scottish Government will not listen to science. They want to demonise fracking wherever it takes place—America, Scotland or England. High-tech companies will run a mile from an anti-business Government who believe in quasi-science and carry on peddling it.

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

It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) on securing the debate. I say gently to my friend the hon. Member for Strangford (Jim Shannon) that many of us in Scotland who come from the Catholic tradition find the marches he described that Arlene Foster attended last weekend intimidating, upsetting and quite offensive. There is no place for sectarianism in modern Scotland. Perhaps it was not a very good idea for his party leader to come to that Orange parade in Fife last weekend.

[Jim Shannon]

Will the hon. and learned Lady give way?

[Joanna Cherry]

I will make some progress. I just wanted to make that statement.

I want to speak about the implications of Brexit for security, judicial co-operation and law enforcement in Scotland, which the UK Government have overlooked to date. That is not my view; it is the view of the distinguished former judge at the European Court of Justice, Sir David Edward. He is also a distinguished former judge on the Scottish bench. When he gave evidence to a Select Committee at the Scottish Parliament last year, he said that so far in their negotiations with the EU, the UK Government have overlooked the significance of the separate Scottish legal system, the Scottish judicial system and the Scottish prosecution system in relation to justice and home affairs issues. He went on to describe the UK Government’s paper, “Enforcement and dispute resolution”, as

“an undergraduate essay that would have failed.”

He says that those writing such papers are not aware of the problems posed by the separate Scottish legal system and do not want to hear from experts who have offered to help.

I declare an interest, because in a former life I was senior advocate depute at the Crown Office. I worked in these fields, and I am well aware of how European Union law has become woven into the fabric of Scots law over the past 40 years. Serious organised criminality and terrorism do not respect national borders. If we leave the EU without securing continued participation in EU criminal justice measures, it could mean Scotland losing the common set of tools that allows law enforcement agencies in Scotland and across the EU to tackle international challenges effectively.

The Scottish Government have asked the UK Government on numerous occasions to share their planning on key issues that will have implications for justice and home affairs in Scotland, but they have failed to do so. Indeed, the UK Government’s future partnership paper, “Security, law enforcement and criminal justice”, which was published in September 2017, was prepared without any engagement whatever from the Scottish Government. It did not even acknowledge that Scotland is a separate legal jurisdiction with its own criminal justice, prosecution and police agencies. Just two months ago, the UK Government published presentation slides titled, “Framework for the UK-EU Security Partnership”. The slides cover internal and external security and were used in the EU negotiations, but they contain matters that directly affect Scotland, including operational matters that fall under the responsibility of the Lord Advocate, the head of Scotland’s prosecution system. The slides were prepared without any consultation with the Scottish Government or the Lord Advocate, nor were the Scottish Government advised of the publication of the slides.

Safeguarding Scotland’s independent justice system necessitates the Scottish Government’s full involvement in the negotiations between the UK Government and the EU. To date that has not happened. The Scottish Government have been cut out of any involvement in the negotiations, and the implications for justice and home affairs in Scotland are therefore not being recognised. I want to hear what the Minister is going to do about that.

Before I sit down, I will give way to the hon. Member for Strangford ).

[Jim Shannon]

I thank the hon. and learned Lady for giving way. I understand her position, but I want to put on the record that we are not a sectarian organisation. We are there to encourage people to enjoy culture, history and tradition, and no one should—nobody does—feel threatened by that in Scotland. We do not feel threatened by it in Newtownards whenever we are parading there on 12 July, or across the Province on other days.

[Joanna Cherry]

I am grateful to the hon. Gentleman for his intervention, but I can tell him that people from the Catholic community do feel threatened and offended by these demonstrations. I feel threatened and offended by them, and many of my constituents write to me asking how an organisation that traditionally marched to intimidate a section of the population can be allowed to continue to do so in a modern democracy. I realise the hon. Gentleman might like to change that, but that is the perception. Without doubt many people from the Catholic tradition will have cleared out of Cowdenbeath last weekend in fear of what they might experience if they remained.

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[Mr Walker]

I disagree with the hon. Lady completely. I think the environment has been welcoming. The Prime Minister’s own words were that we value the contribution of EEA citizens to the UK and we want them to stay—she has repeated that time and again.

The hon. Member for Glasgow North East (Mr Sweeney) referred to 150,000 EU citizens who work in Scotland. Just like with those who live in my own constituency, we want them to stay and we want them to enjoy the same pensions, healthcare and social security benefits. We have reached agreement on the legal text to ensure that that will be the case. The Government will continue to work closely with the devolved Administrations to ensure that the future arrangement for co-operation with the EU in this area takes account of the distinct justice systems in Scotland and Northern Ireland, and delivers legal certainly and clarity for everyone in the UK.

I listened closely to the points made by the hon. and learned Member for Edinburgh South West (Joanna Cherry). My Department and the Home Office have engaged with the Scottish Government on security and judicial co-operation, and we routinely share papers with the devolved Administrations prior to publication. Indeed, we discussed civil judicial co-operation with them last week at the second meeting of the ministerial forum, which I will return to in a moment. We recognise that Scotland and Northern Ireland have distinct legal systems, and that the Scottish Government engage directly with EU agencies such as Europol.

[Joanna Cherry]

A couple of weeks ago, the former Cabinet Secretary for Justice, my colleague Michael Matheson, to whom I pay tribute, and the new Cabinet Secretary for Justice, Humza Yousaf, published a paper entitled “Scotland’s Place in Europe” on justice and home affairs. It clearly states in the foreword that there has not been engagement of the kind I described in my speech. Does the Minister accept that the first paper that I mentioned does not deal with Scotland at all, and that there was no engagement on the slides that were produced in May?

[Mr Walker]

There has been engagement—I have just referred to engagement at the ministerial forum—and I assure the hon. and learned Lady that there will be more. Although some questions about the withdrawal agreement remain to be resolved, our negotiating teams are working hard to ensure that they are finalised. We are confident that we will reach an agreement by October.

The most important issue for us now across the UK is to focus on negotiating the right future relationship. Jointly with the Commission, we published the topics for discussion on the future framework. They incorporate economic and security partnerships, as the Prime Minister outlined, the institutional framework that will underpin them and other cross-cutting issues. The joint publication reflects both sides’ determination to achieve a broad partnership that stands the test of time after the UK leaves the EU.

We have committed to engaging the devolved Administrations on the negotiations, and they have had input into the development of the UK’s negotiating position. I have appeared before three Committees of the devolved legislatures to give evidence on the UK Government’s preparations for EU exit. The Joint Ministerial Committee on EU negotiations has now met 10 times, most recently at the British-Irish Council in Guernsey a couple of weeks ago, which I attended to provide an update on the negotiations.

Following our commitment to increase our engagement with the devolved Administrations, the UK Government established a ministerial forum on EU negotiations to discuss regularly a range of issues relating to the EU negotiations and the UK’s future relationship with the EU.

[Joanna Cherry]

Does the Minister accept that the most genuine way in which the British Government could show that they are engaging with the Scottish Government and Parliament would be to acknowledge that the Scottish Parliament withheld legislative consent to the European Union (Withdrawal) Bill and, as my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) said, to introduce emergency legislation to deal with that issue? All this talking and engagement means nothing if that single fact is not acknowledged.

[Mr Walker]

I will come back to the hon. and learned Lady’s point about the withdrawal Bill and the debate about legislative consent, but there is constructive engagement between the UK and Scottish Governments. I welcome the input we have had from the Scottish Government, both at a ministerial level and an official level, into the work of the new ministerial forum, which I co-chair with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Norwich North (Chloe Smith). The conversations we have had so far with the devolved Administrations have been constructive and useful. The inaugural meeting of the forum was held in Edinburgh on 24 May, and the second meeting was on 27 June in London. We use the meetings to have in-depth discussions about the proposed content of the UK Government’s forthcoming White Paper. Sections of the White Paper have been shared with the Scottish Government and the other devolved Administrations confidentially. I want to express my gratitude for the hard work of the Scottish Government officials who have worked with us on the White Paper and on other issues.

Discussions at the Joint Ministerial Committee and the ministerial forum have covered a wide range of areas. It is clear that we and the Scottish Government agree on much, including the need to ensure that Scottish universities and businesses have access to the best of European talent. We have also addressed other issues relating to attracting talent and skills. I note that the issues that have been raised in conversations I have had with growers in Scotland, including the Fife growers, about the importance of seasonal work are similar to the issues that have been raised with me in my own part of England—Worcestershire—by growers in the vale of Evesham.

Crucially, Scotland’s two Governments agree that EU exit should not create any new barriers to living and doing business in our Union. That has been one of our guiding principles and is a key priority for Scottish business. I have heard directly from Scottish business on many visits to Scotland of the issues and opportunities that EU exit creates for them. I have met representatives of a wide variety of Scottish businesses and business associations, including a number of chambers of commerce, the Scottish Retail Consortium, the Scottish Fishermen’s Federation, the Scottish Seafood Association, and of course the world-famous Scotch Whisky Association, which, as a number of my hon. Friends pointed out, is very excited about the international opportunities to be pursued as a result of the UK’s having an independent trade policy.

The Scottish Retail Consortium said:

“Scotland’s businesses benefit enormously from the existing and largely unfettered UK single market”.

Its interests and those of sectors across Scotland are actively informing our negotiating position. As the Prime Minister set out in her Mansion House speech, we want to remain part of bodies such as the European Medicines Agency and the European Chemicals Agency, which are vital for organisations in areas such as the Scottish life sciences sector and the oil and gas sector, representatives of which I met in Aberdeen in April. I have also had detailed discussions with Scottish businesses about the global opportunities for them. In any deal that we negotiate, we must ensure that we have the flexibility to take these opportunities.

The hon. Member for North Ayrshire and Arran spoke about food standards and animal welfare. The Government and I are clear that we want the highest standards of food and animal welfare for the UK, not just to ensure that we can continue to sell into European markets, but so we can make the most of the opportunities in the wider global market and ensure that British and Scottish products reach the widest range of markets and represent quality.

However, it is essential to remember that four times as much of Scotland’s business is with the UK as with the rest of Europe, as a number of hon. Members said. Indeed, the worst thing for Scottish jobs and businesses would be to split from our United Kingdom. As the hon. Member for Strangford (Jim Shannon) said, we are better together. We want to continue working together now to deliver EU exit for the UK in a smooth and certain fashion. That includes designing and implementing replacement frameworks, which the Scottish Government agree we will need, where we have a significant opportunity to work together to improve policy making across the UK.

As hon. Members know, EU exit will result in a significant increase in the devolved Administrations’ decision-making powers. New responsibilities will transfer to Edinburgh, Cardiff and, once a new Executive is formed, Belfast. We have published our provisional frameworks analysis of the 107 returning EU powers that intersect with devolved competence in Scotland across a wide range of policy areas. It shows that there are only 24 policy areas, such as food labelling, that are now subject to more detailed discussion to explore whether legislative common framework arrangements are needed in whole or in part.

At the moment, foods placed on the market across the EU have common labelling requirements that are set by EU legislation. If we do not agree to continue a common legislative approach to labelling, it is possible that different requirements will spring up, which would increase production costs for Scottish businesses and discourage cross-border trading within the UK. Divergent food labelling requirements would make it more difficult to enter into trade deals. That is why we are working together to consider a common food labelling framework.

Our frameworks, which will be designed together, can be lighter touch and UK-specific, offering bespoke policy arrangements that will ensure that power sits closer to the people than ever before. As we set up those arrangements one thing is clear: the success of each framework will rely on the strength of our relationships. It is vital that we work closely together to put arrangements in place that will stand the test of time and provide certainty for people and businesses living and operating up and down the UK.

A number of Members have mentioned the European Union (Withdrawal) Bill—now the European Union (Withdrawal) Act 2018. I remind them that the UK Government made substantial and reasonable modifications to provisions in the Act during its passage. Those changes were the result of joint working that we undertook with the Scottish and Welsh Governments.

As the Welsh Government acknowledged, the legislation respects the devolution settlement. We are, of course, disappointed that the Scottish Parliament did not choose to give consent. We will continue to offer the full provisions of the intergovernmental agreement, which was agreed with the Welsh Government, and to meet all of the UK Government’s commitments on frameworks. Those are open to the Scottish Government and Parliament. We believe that, throughout this process, the UK Government have acted in line with the Sewel convention. We worked with the Scottish Government to reach agreement in the hope that we would be able to achieve consent for the Bill.

I again thank the hon. Member for North Ayrshire and Arran for securing this debate, to which there have been many valuable contributions. We recognise that Scotland has two Governments, and that the interests of the people of Scotland are best served when they work together. We will proceed in that spirit. The hon. Member for Strangford spoke powerfully about the deep links between Northern Ireland and Scotland, and a number of other hon. Members spoke powerfully about the importance of this United Kingdom.

As the hon. Member for Glasgow North East pointed out, we have been members of the European Union together for 45 years, but for more than 400 years Scotland has worked with England on our international relations, and for more than 300 years we have been part of a United Kingdom that has served the people of Scotland and all other parts of the United Kingdom well. The implications of our EU exit mean that we must work more closely together in the years ahead.

Motion lapsed (Standing Order No. 10(6)).