European Free Trade Association

Peter Grant Excerpts

Wednesday 7th February 2018 Westminster Hall

[Stephen Hammond]

My right hon. Friend is completely right. I am grateful to her for making that point, because such points need to be heard loud and clear so that the misconceptions can be fought off.

[Peter Grant (Glenrothes) (SNP)]

I was a bit concerned when the hon. Gentleman referred to pragmatic Brexiteers and pointed at me; I may be pragmatic, but I would certainly not call myself a Brexiteer. I am interested in his suggestion that the UK would be welcomed into EFTA. Can he give us his basis for that? Three expert witnesses appeared before the Exiting the European Union Committee yesterday—I understand three more will appear today—and all of them thought it extremely unlikely that the four EFTA members would want the UK to join, partly because the UK’s population is about four times bigger than the current total population of EFTA, and there would be significant concerns about upsetting the balance of EFTA. What indications has he had from the four Governments of the current EFTA countries that they wait with open arms to welcome the United Kingdom in?

[Stephen Hammond]

I apologise if I, with a sweeping hand gesture, put the hon. Gentleman into the Brexit camp, which he does not wish to be in; that was certainly not my intention. I have had lunch with the president of the EFTA court, and I had lunch with the ambassador to the United Kingdom of one of those countries yesterday, but let me quote the Norwegian ambassador to the EU:

“We would maintain an open-minded stance in the event of an application for EFTA membership. Overall, it is in Norway’s interest to maintain as close trade policy cooperation with the U.K. as possible”.

There is a lot of scaremongering about this point, yet it is clear from speaking to any of the ambassadors that the reality is that they would welcome our application.

--- Later in debate ---

[Peter Grant (Glenrothes) (SNP)]

I am grateful for the opportunity to begin the winding-up speeches. Scotland’s preferred option was not to leave the European Union at all. It is dangerous to conduct this debate on the basis that all the arguments have been lost. I sympathise with a great deal of what hon. Members have said today, but their starting point seems to be, “We have now lost the argument—we are in for a hard Brexit and for coming out of the customs union and the single market, but let’s see how much we can salvage.” It is not too late for the Government to come to their senses and decide not to leave the single market or the customs union.

It is important that we continue to compare the benefits and disadvantages of EFTA membership not with the hard Brexit that we are heading for, but with where we are now. As hon. Members have said, we had a referendum over membership of the European Union but nobody in the United Kingdom has ever voted in a referendum on the single market or the customs union, so none of us has the right to say that we know how people feel about our membership of them.

I must remind hon. Members of the likely economic impact. Some have decided that the economic forecasts are not worth the paper that they are written on. Presumably they think the billions of pounds it costs to run the Department that produces those forecasts are not worth it either, so I look forward to the Estimates debate in a few weeks’ time—I can think of a big saving to our spending on the Treasury. The Scottish Government’s paper “Scotland’s Place in Europe” indicates that over the 10 years after Brexit, GDP in Scotland is likely to fall by £11 billion a year and public spending is likely to fall by £3.7 billion a year, on top of any reduction imposed from Westminster. That is twice Scotland’s total expenditure on further and higher education, which demonstrates the scale of economic damage that we face.

The UK Government say that they have not done any impact analysis, but they have done analysis of the impact, which is not the same thing. I have not yet seen those papers in their Fort Knox establishment on Parliament Street, so I can only quote from what has already been put in the public domain. The Buzzfeed papers show that the Treasury think that at best we will see a 2% reduction in economic growth, even if we remain in the single market, and at worst we could face an 8% reduction, which would be a recession like none that we have ever seen or ever want to see. We are talking about a serious threat to the economic and social wellbeing of these islands.

I recognise that membership of EFTA—if we are allowed in, although it is still not guaranteed that the four existing members will want us to join—would not be as bad for us as falling off the cliff edge, but it would still be significantly worse than where we are now. I hope that all hon. Members who have argued for EFTA today will not accept that the argument about full membership of the single market or the customs union has been lost. EFTA countries are not in the customs union; we heard evidence from several witnesses in the Exiting the European Union Committee yesterday about what that means for Switzerland. In some ways, the Swiss position appears to be closest to what the Government want, because officially it does not include free movement of people, although in practice it pretty much does.

[Heidi Alexander]

rose—

[Peter Grant]

I will give way once, but I am conscious of time.

[Heidi Alexander]

I understand the note of caution that the hon. Gentleman articulates about EFTA, but I also understand that Scottish National party policy is to remain in the single market. If his party does not favour remaining in the European economic area by staying in EFTA, how does it propose to remain in the single market?

[Peter Grant]

As I said, our best option is to respect the wishes of the 62% not to be dragged out of the European Union, but if that option is taken off the table—

[Paul Masterton]

indicated dissent.

[Peter Grant]

I note that Scottish Conservatives want to pooh-pooh the idea that 62% of the population of Scotland can just be ignored. My concern about EFTA is not that I do not like what it offers, but that it does not offer nearly as much as we have now. In particular, it does not involve membership of the customs union.

Switzerland does not have what it regards as a hard border with the European Union. Apart from its border with Liechtenstein, it is completely surrounded by land borders with EU countries, but most people travelling in and out do not notice anything like a hard border. Nevertheless, it estimates that approximately 2% of vehicle traffic is stopped and searched. Applying that model to the only land border that the United Kingdom will have with the European Union would result in 200 stop-and-searches a day near the border on the island of Ireland. That is simply not acceptable, and it cannot be allowed to happen.

Even the most favourable—or least unfavourable—scenario for leaving the customs union is likely to create significant security problems in Ireland. It is not just about having a hard border. We have an agreement on all sides that there will be no infrastructure on the Irish border, but it is very difficult for somewhere inside the customs union to have a border with no infrastructure whatever with somewhere outside it. There will be significant repercussions for the whole of Ireland if the United Kingdom leaves the customs union.

[Kevin Hollinrake]

Will the hon. Gentleman give way on that point?

[Peter Grant]

I really do not have time.

Those repercussions are among the reasons—they are possibly the single most pressing reason—why we have to persuade the Government that they have got it wrong. The unilateral and politically motivated decision to leave the customs union was a mistake, but there is still time for it to be rectified. There is still time for the Government to accept that they got it wrong and that they do not have a referendum mandate to take us out of the customs union or the single market.

I was interested in the point made by the hon. Member for South Suffolk (James Cartlidge) that the four EFTA countries are among the wealthiest in the world by GDP per capita. It is not only EFTA countries that are in the top 15 or 16, and certainly above the United Kingdom; so are Luxembourg, Ireland, Sweden, Belgium, Finland and Denmark, none of which are in EFTA but all of which are in the single market. Membership of the single market and the customs union may be a factor, or it may be that all the countries I mentioned and all four EFTA countries have the status of being small, independent, modern European nations—perhaps that is what we should be looking at, but that is an argument for another day.

I must sound a final word of caution. Although hon. Members have referred favourably to the Norwegian and Swiss situations, we were told yesterday in the Exiting the European Union Committee about the Swiss People’s party, which is a bit like UKIP with a Swiss accent but is the biggest single party in the Swiss Parliament. It has initiated the process of calling a referendum—a popular initiative, as the Swiss constitution describes it—to extricate Switzerland from EFTA and pull out from agreements with the European Union. Although a lot of countries originally saw EFTA or the European economic area as part of an accession process to get from nowhere to full membership of the European Union, it appears that there is a big danger of the hard right in Switzerland treating EFTA as a way of cutting its links with the European Union. So let us be careful: we may think that the minority in this House who want a hard Brexit will be satisfied and let things lie if we somehow persuade the Government to go for EFTA, but it will not be long before they seek to follow the Swiss example. They will agitate for a referendum as they did before, not on leaving the European Union this time but on the hardest of all hard Brexits.

As I have said before, and as I think the vast majority of hon. Members believe, a hard Brexit would be economically and socially calamitous for the people of these islands. It is still not too late for the Government to give a guarantee that they will not go for that kind of Brexit. They should not simply say that they want to join EFTA, but go further and say that they want to remain in the single market and the customs union—not for two or three years after we leave the European Union, but for as long as we possibly can.