The date on which the United Kingdom is scheduled to leave the EU is now 38 days away. That equates to 18 sitting days in this Parliament, including today. Yet there is still no resolution of the chaos that prevails at Westminster, no consensus about the way forward, no relief from the incompetence of the current UK Government and no respect for the decision of this country and this Parliament decisively against Brexit. Indeed, with every day that passes, the unrealistic, irresponsible and—in terms of realisable outcomes—impossible approach of the Prime Minister serves only to heighten uncertainty for communities, citizens and businesses across Scotland to an intolerable degree and increase the risk of a no-deal exit.
The well-connected Politico website reported yesterday:
“In European capitals there is now mounting alarm that Theresa May has set Britain on course for a diplomatic disaster ... One minister from a major EU power was left so shocked after a meeting with a U.K. counterpart last week they concluded Britain is now hell-bent on pushing the crisis to the wire in the hope of a last-minute concession from EU leaders, which will not materialize.”
Of course, last week, the House of Commons had the opportunity to agree to an extension to article 50 to allow us to avoid the economic damage of a no-deal or hard Brexit outcome. I pay tribute to those members of Parliament who supported the Scottish National Party amendment—the Liberal Democrats, the Green MP, Plaid Cymru, two Tories and 41 members of the Labour Party. Of the seven Scottish Labour MPs, three walked into the division lobbies to do what Scotland clearly wants. All the Scottish Tories opposed it, showing yet again that, for a Scottish Tory parliamentarian—there as here—the needs of their fractured and fractious party come a long way before the needs of their suffering country.
The Scottish Government continues to believe that the best outcome for the UK as a whole and for Scotland is to remain within the EU and that now, given the impasse that exists at Westminster, the best democratic way forward is to give the people the final choice. However, we have, over the past two and a half years, been very clear about our willingness to compromise, setting out credible and achievable positions in December 2016 and subsequently, which have been ignored or summarily dismissed by the UK Government.
No doubt, at some stage this afternoon, the Tory members will brazenly insist that the only way to avoid no deal is to support the Prime Minister’s very bad deal. However, surely even their certainty in that mantra must have been shaken a little this week when no fewer than 40 senior retired diplomats signed a letter that pointed out just how awful the Prime Minister’s deal actually is. That deal would not only make Scotland poorer, removing us from the European single market, risking a fall in Scotland’s working, tax-paying population and putting us at a competitive disadvantage to Northern Ireland. It would also, in the words of those very knowledgeable diplomats, result in what they call a “Brexternity” of endless uncertainty about our future for both citizens and businesses alike.
If there was ever to be an end to that Brexternity, the best that could be hoped for at that far-distant date, given the Prime Minister’s red lines, would be some sort of free trade agreement, which our modelling indicates would mean that, by 2030, our gross domestic product would be around £9 billion lower than if we had stayed in the EU—equivalent to £1,600 for every person in Scotland. As things stand, even if the withdrawal agreement were approved by the UK and European Parliaments, it is entirely possible, even probable, that a no-deal exit will only have been postponed rather than avoided. Such is the chaos that now engulfs Westminster, it is impossible to say with any confidence that the terms of any future trade deal with the EU would be approved by MPs.
Next week, the House of Commons will again get the opportunity to pass further judgment on the Prime Minister’s efforts, and we will continue to provide a voice for common sense. A no-deal outcome is not inevitable, but—alas—it is becoming more likely with every day that passes and with every attempt that the Prime Minister makes to bludgeon and frighten MPs into accepting her threadbare and damaging plan.
As a responsible Government, we must act wherever we can to minimise and mitigate the impact on Scotland as far as we are able to. In doing so, we must—as always—be very straight with the people of Scotland. Later this week, my colleague the Cabinet Secretary for Finance, Economy and Fair Work will publish a paper on the likely economic costs and impact of a no-deal Brexit. It is vital that this chamber and Scotland should know that things will change—and change very fast for the worse—if a no-deal Brexit is forced upon us. For example, we estimate that a no-deal Brexit could result in an increase in unemployment in Scotland of around 100,000 people, more than doubling the current unemployment rate. We would go from a record low to a level not far off that which was reached at the depth of the last recession, with all the human cost that that would entail.
Whatever we, as a Government, do—and we will do everything that we can—we simply cannot avoid that sort of damage being done to our economy and our country. One person could: the Prime Minister could, if she were to immediately agree to an extension to article 50 and rule out, with concrete legislative steps, any no-deal outcome. Getting such an extension would not be difficult. Indeed, President Juncker said yesterday:
“Any decision to ask for more time lies with the UK. If such a request were to be made, no one in Europe would oppose it.”
The only opposition to an extension lies within the House of Commons.
The work of the Scottish Government’s resilience committee and the Scottish resilience partnership on planning, mitigation and preparing arrangements to respond to the risks and impacts of leaving the EU without a deal is continuing and intensifying, as the First Minister made clear last week after our special Cabinet meeting. The resilience committee met in Glasgow last week—its ninth session—prior to that Cabinet meeting, and it will meet again tomorrow.
I will be in London tomorrow, attending yet another UK Cabinet EU exit sub-committee, and I will seek firm answers to the many questions that we still have. For example, we do not yet know how much ferry capacity is available, on what routes it will exist or exactly what priority goods will be carried. Nor do we know what priority will be accorded to each category of goods, nor what arrangements will be made to service Scottish requirements including the particular challenges of rurality. We have also not yet heard whether export of foodstuffs can be integrated with special arrangements for import, consolidating inbound and outbound capacity to maximise the benefits. There are many more matters on which we need clarity and on which we will continue to seek it, given that such clarity is essential for our preparations.
Leaving those difficulties aside, although we are working as closely as we can with the UK Government, we do not now believe that, even if there were a perfect information flow, there would be the time or the resource to ensure that absolutely everything required would be in the most effective place, in the most effective way, by the required dates. That is not a criticism of anyone who is working very hard on these matters north or south of the border; it is simply a fact, given the shortness of the time that is available and the size of the task to be undertaken.
There are those who seem to seek to normalise no deal or who, with a profoundly concerning sense of misplaced optimism, suggest that its effects will somehow not be as serious as has been widely predicted. They are utterly wrong. It is clear—it will be made even clearer in the chief economic adviser’s paper, which will be published on Thursday—that a no-deal Brexit remains a significant and live risk that would lead to a major dislocation to the Scottish economy. The impact of any shock would likely vary across sectors as well as across regions according to their economic structure and, if prolonged, could lead to significant structural change in the economy. In addition, the uncertainty about Brexit is already impacting key economic indicators for Scotland, including consumer confidence and business investment.
Let me indicate what we are doing, against the clock. Transport Scotland is working with providers and ports and airports in Scotland to assess existing capacity and to identify how that capacity could mitigate disruption to imports and exports. With regard to trade, although the UK Government is currently negotiating with 40-plus trading partners in an attempt to roll over existing EU third-country agreements, there is now no possibility that all or even a majority of those agreements will be in place. Access to some markets will therefore be considerably disrupted. Nonetheless, we are working to secure as consistent and wide-ranging a food supply as possible and to enable improved or new supply chains to get to every part of the country. We are trying to overcome barriers to the export of food and drink as well.
If free movement is curtailed, as seems very likely, that will have serious and immediate consequences for workers in health and social care, among other sectors. The Scottish Government is absolutely committed to doing all that it can to speak up for and support EU citizens who work in those roles and many others at this uncertain and anxious time. We passionately want relatives, friends, neighbours and colleagues from other EU countries to stay in Scotland. We have already committed £800,000 to Citizens Advice Scotland to provide advice and support to EU citizens in Scotland who are affected by changes in the immigration rules as a result of Brexit, and we will shortly intensify our information campaign to encourage EU nationals to stay.
In my statement earlier this month, I urged MSPs to reach out to small businesses in their constituencies and encourage them to seek the information that they need on Brexit. It remains of concern that so many small businesses, in particular, have not yet engaged in sufficient detailed planning and preparation. Undoubtedly, the normalcy bias is well established in Scotland, but the UK Government is not functioning as a normal Government. It may well allow a no-deal exit to come about either by accident or by design, contrary to all norms of government. Accordingly, I strongly urge all businesses to seek out the information that we have provided through our Brexit webpages on www.mygov.scot or the website for the prepare for Brexit campaign, which is a one-door online approach that is jointly delivered by Scottish Enterprise, Highlands and Islands Enterprise and Skills Development Scotland—and to do it now, whether or not they export.
The chief constable recently announced plans to put 360 officers on standby from mid-March to deal with any incidents that may arise across the country, such as disruption at ports. That is just one more example of an initiative that seeks to align existing financial and staff resources to the challenges that we face to ensure that we have the right people with the right skills in the right places to respond quickly and effectively.
We have made it clear that any cost related to EU exit should not have a detrimental impact on Scotland’s public finances. Derek Mackay again raised that matter with the Chief Secretary to the Treasury when they met last week, although no satisfactory response was forthcoming. We are actively pursuing with the UK Government the issue of funding for the consequences of a no-deal outcome, along with a number of other matters. However, it is abundantly clear that Brexit is going to cost Scotland at every level of governance, in every business sector and in every part of the country far more than the existing consequentials.
I turn to the important matter of our legislative preparations. To date, only 30 of the 114 UK statutory instruments to which we have consented have completed their passage through the UK Parliament. I have made clear to the UK Government my concerns on that matter, and I have impressed on it the importance of ensuring that the deficiency fixes to which we have given our consent are delivered. We are still on track to have processed both parts of the programme—UK SI notifications and Scottish SIs—through the Scottish Parliament by the end of March, so our laws should be as ready as they can be for the shock of EU exit.?
However, the Prime Minister has now indicated that, in the event of an agreement being reached, she would intend to push through the European Union (Withdrawal Agreement) Bill, as well as a range of other Brexit-related legislation, before 29 March. That could mean passing laws of the profoundest importance, with consequences for all the devolution settlements, in a few days. That cannot and should not be done. If that bill is presented to this chamber for legislative consent, the Scottish Government will recommend that such consent be refused because of that impossible timetable and because the UK Government has moved not an inch on the issue of essential changes to the Sewel process.
In conclusion, I reiterate the First Minister’s message from last week. The Scottish Government remains absolutely committed to preparing as best we can and to safeguarding the interests of businesses and communities in Scotland as far as possible. However, the way in which this has been approached by the Prime Minister is reckless and irresponsible. It is now clear beyond any doubt that the Conservative Party and the UK Conservative Government pose a real danger to Scotland. The only sensible solution now available is a delay to article 50, a ruling out of a no-deal exit and a people’s vote. We will continue to press for those things with every legislative and political tool and with every ounce of energy at our disposal.