Brexit

Part of the debate – in the Scottish Parliament on 23rd December 2020.

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Photo of Michael Russell Michael Russell Scottish National Party

When I last addressed the chamber on our readiness for this stage of the transition period, I found it scarcely believable that, with only 23 days to go, we knew nothing about how the United Kingdom would trade with the European Union. Now, with a mere eight days to go and still no outcome, my reaction—and that of almost everybody else—is that we are now in the realm of the unbelievable.

Even if a deal is being done as we speak—I have no information that that is the case—time has run out for Westminster to approve the legislation before Christmas and for this chamber to consider the necessary legislative consent to aspects of the deal. Because we do not know what would be in any deal, it is also not clear where our consent would be required. The UK Government will have to formally ask us for that consent and this chamber will be asked to agree or disagree. Practically, the earliest that that can happen is next Wednesday; the Minister for Parliamentary Business and Veterans will keep the Presiding Officer and the Parliamentary Bureau closely informed and will notify them the moment that the Scottish Government receives a request for legislative consent—if it does. That also means that, if Westminster has to be recalled, it will be under stringent tier 4 lockdown regulations, and the same will be true here and across Scotland.

The evidence of the past few days tells us not only that the pressure of the pandemic is increasing again, but that the UK Government’s refusal—despite all the pleas—to extend transition was utterly foolish, reckless, arrogant and damaging. In addition, the past 48 hours remind us of the dependence of our supply chains and way of life on the closest of trading links with the EU and show that any action that disrupts those links has severe consequences.

If no deal is reached, disruption will resume. That is one of the many reasons why a no-deal scenario is a lunatic prospect, and anyone who asserts that any part of these islands will “prosper mightily” in such circumstances is woefully ignorant or deliberately deceiving; for a Prime Minister to do so beggars belief.

However, even with a deal—the lowest of deals, which, given the UK red lines throughout the past year, has been all that could be achieved—there will be disruption to trade and a major dislocating change in our status and relationship with other countries.

There will be—whether we have no deal or a low deal—a diminution in our safety and protection with regard to law and order, given the withdrawal from us of the Schengen information system, which means that Police Scotland will be less able to combat criminality at speed. We will also lose access to the European arrest warrant, which means that it will be harder to ensure that foreign criminals face justice in Scotland.

There will be—whether we have no deal or a low deal—a growing threat to the standards that we apply to and expect of food, the environment and a range of other issues. We will be able to mitigate some of that as a result of the passage last night, by a massive majority, of the UK Withdrawal from the European Union (Continuity) (Scotland) Bill, which I hope that the UK Government will not again try to destroy by means of changing UK law.

Food prices will rise—whether we have no deal or a low deal—as the UK Government admits, and the range and availability of food might be affected, particularly in the early days after 31 December. That will be felt most keenly at the end of supply chains, which means in Scotland.

It will be harder for Scots to live and work in the European Union, and visas are now required for prolonged stays overseas. Even a simple holiday—something that we have taken for granted for so long—will mean longer queues at borders and paying more for health insurance.

There will be a shortage of labour in some key Scottish sectors, and those shortages will get worse as the growing season starts.

There will also be—whether we have no deal or a low deal—an inevitable fall in our gross domestic product. Even in the very-best-case scenario of a basic trade agreement outcome, our modelling shows that it is estimated that Scottish GDP will be 6.1 per cent lower by 2030 than it would have been if we had continued to be a member of the EU. That equates to a cost to each person in Scotland of an equivalent of £1,600.

A catastrophic exit on World Trade Organization terms only could lead to a loss of up to 8.5 per cent of GDP in Scotland by 2030 compared with continued EU membership. That would be equivalent to a cost of £2,300 per person. My definition of “prospering mightily” does not include losing £2,300 for every man, woman and child in Scotland.

Some impacts will be felt almost immediately. On 8 December, I set out what the Scottish Government is doing, as far as it is able to do, to mitigate the worst effects of the end of transition, which—whether we have a low deal or no deal—will produce immediate changes.

I can report that the Scottish Government resilience room arrangements for EU exit and concurrent risks are now fully established, and that the stand-up of the national co-ordination centre and a single Scotland-wide multi-agency co-ordination centre is well under way. Those arrangements put us in the best possible position to deal in a co-ordinated way with the impacts of EU exit and the concurrent risks of Covid-19 and winter weather. We have already made use of the arrangements this week when considering the possible effects of the short straits situation.

We are now fully focused on protecting people, protecting imports and exports of essential goods, minimising the economic impact and ensuring that the necessary legislative changes are in place, in so far as we are able to do so.

We continue to do everything that we can to protect vulnerable people, our communities and the third sector through a £100 million package of support measures. We are—as we said that we would—providing £5 million-worth of support to Scottish wholesale food and drink businesses to help to support food supplies across the country. We will now need to do more, particularly for the shellfish and fishing sectors, which have been badly affected this week.

We are doing all that we can to ensure that patients will continue to receive the medicines that they need over the difficult months ahead, and we have confidence in those measures. We are also confident that the flow of vaccines will be protected.

We have implemented a wide range of measures to support businesses across all sectors of the Scottish economy. Our enterprise agencies are providing targeted advice and guidance to companies that are likely to encounter operational and financial challenges as a result of EU exit and Covid-19. Our multi-agency prepare for Brexit website, which is hosted by Scottish Enterprise, continues to provide advice, sources of financial support and online self-assessment toolkits.

Throughout the entire Brexit process, the Scottish Government has sought to engage constructively with the UK Government on preparedness issues. We will continue to advocate, as we have always done, for the interests of Scottish businesses and of the Scottish people, whenever possible. However, I must be entirely straight with Parliament and with the people of Scotland: regardless of whether we exit the transition period with a low deal or with no deal, jobs and living standards will be hit hard.

There are many things that we simply do not know, although they will change in eight days. For example, we still do not know any detail on complex issues such as rules of origin requirements. If a deal is agreed, rules of origin will be essential in gaining preferential market access.

We still do not know what the rules will be for importing and exporting industrial goods between Scotland and the EU, or whether there will be an agreement on mutual recognition of conformity or specific provisions for individual sectors.

We do not yet know whether there will be a data adequacy decision or when that would be in place. Even if there is one, there will now be a gap. We do not know how long that will last for or whether there will be bridging mechanisms in place that cover data flows to the business sector in Scotland.

What is certain, however, is that red tape and the costs of doing business will increase massively; it is estimated that the number of UK-wide customs declarations will go up by a staggering 215 million. Scottish food and drink businesses will face damaging and expensive new paperwork requirements, including the need for export health certificates, because goods will be subject to separate regulation in the UK and the EU.

The Scottish Government understands how difficult and damaging EU exit will be for Scottish businesses. That is why we will continue to engage closely with them and to implement the wide range of measures that I outlined in detail in this and my previous statement. As soon as information becomes available from the UK Government, we will ensure that refreshed advice and guidance is available through our prepare for Brexit website.

We have been engaging with the UK Government to advocate specific Scottish needs whether we have no deal or a low deal, particularly in border planning, but this week we have had to remind the UK Government that we had already been assured that fresh seafood exports would be prioritised in the event of traffic delays at the short straits crossing. Therefore, the UK Government must urgently set out further details on how those arrangements will operate and put them into effect, even though the business highlight and absolute necessity of the Christmas trade has been lost by so many.

We are also working with partners to develop traffic management contingency plans for south-west Scotland, including plans for heavy goods vehicles, should capacity at the Cairnryan and Loch Ryan ports be exceeded. The plan is owned by the Dumfries and Galloway local resilience partnership, and we will provide further details in due course.

Scotland did not vote for any of this, and it is with profound and deep regret that we find ourselves in this position today of all days, and at this difficult time of all times. The solution for Scotland, of course, is to choose its own future as an independent nation within the EU, and we can decide on making that choice in less than five months at the Holyrood election.

In the meantime, we will do everything that we can to support and help all who live in Scotland at this difficult time. We will continue to keep the chamber updated, and we will redouble our efforts to make sure that all our neighbours—all our neighbours—understand that we aspire to a better future and are working to achieve it.

This is not over. There are still difficult times ahead, but we believe that we are as best prepared for them as we can be and that, despite the present darkness, we should look forward with anticipation and confidence to our future.