First Minister speech at the RSA
London, 15 October 2018
Thank you, Matthew (Taylor), for your introduction.
I should perhaps start today with something of a confession. For those of you who don’t know, Matthew wrote a blog last week with the title “Can politics ever be a source of wisdom rather than anxiety?”.
And that gives me a problem. After all, I’m here to talk about Brexit – and any politician who talks about Brexit without a significant level of anxiety, clearly doesn’t have any wisdom!
However, I will do my best to add some notes of hope – and, who knows, perhaps even some words of wisdom too – in my remarks today.
And let me say at the outset what a pleasure it is to be able to do that in such a magnificent and, in many ways, appropriate setting.
This room was designed by the Scottish architect, Robert Adam, who also designed Bute House in Edinburgh which is now, of course, the official residence of the First Minister.
Robert Adam drew heavily on the lessons and traditions he learned during his travels across Europe.
Indeed, this room was purpose-built as a venue for discussion and debate - and so, in some senses, it really does evoke the values of the European enlightenment in which Scotland and this institution played such a proud part. These values continue to be reflected in the RSA’s mission, and is exemplified in the work you do.
In fact, it is striking how many connections there are between the RSA’s recent priorities and those of the Scottish Government – on issues that range from mental health in schools, universal basic income, inclusive growth and support for fair work.
So the RSA is in many ways an ideal host for a discussion about Brexit – an issue that will have profound implications for our economy, the shape of our society and our place in the world, for many decades and generations to come.
Now of course - in the interests of complete transparency - I come at the Brexit challenge from a very specific perspective, as does the government that I lead.
We oppose Brexit and deeply regret it. Even now, our strong preference would be to remain in the EU. Scotland, after all, voted by 62% to 38% in favour of that outcome.
However, since the vote took place, we have sought to recognise the result of the referendum across the whole of the UK - even if we don’t entirely understand it.
And so for the last two years, we have put forward constructive suggestions on how Brexit might be implemented in a way that finds common ground rather than in a way that further deepens division.
In fact, when the Scottish Government policy paper “Scotland’s Place in Europe” was published in December 2016, it was the first detailed set of proposals to be produced by any government in the UK. It preceded the Chequers white paper by 19 months.
It is fair to say that our proposals have not so far had the impact on the UK Government we would have wanted. The UK, throughout these negotiations, has shown little inclination to pay serious heed to Scotland - or, for that matter to Wales, London, or the different regions of England.
Indeed, one of the lessons from our experience of the last two years, which I suspect has not been lost on the Scottish people and which will be remembered in Scotland for a long time to come, is the stark contrast between the EU’s treatment of independent nations, and the UK’s treatment of devolved nations.
The European Union has supported Ireland and shown it nothing but solidarity as it confronts the challenges of Brexit; by contrast, the UK has dismissed and ignored Scotland’s concerns.
Looking at the UK and the EU, it is fair to say that only one has looked like a partnership of equals. And over the past two years that has not been the UK.
However, the Scottish Government is determined to continue to put forward constructive proposals and to exhaust all opportunities for compromise that would allow Scotland’s interests to be protected.
After all, the decisive moments of this phase of the negotiation are now upon us.
Speculation is rife as to what will emerge from Brussels in the next few days. It is clear from developments yesterday - or rather the lack of developments yesterday - that tough issues still require to be resolved.
Perhaps they will prove incapable of resolution - though we must all hope that that is not the case.
But I believe we can see enough about the potential shape of any possible deal, should it emerge, to draw some conclusions and set out an alternative way forward.
That is why the Scottish Government is publishing a further document today, ahead of this week’s EU Council, setting out again the case for compromise and common sense.
I make no apology for the fact that on many issues, it reaffirms our existing position. After all, the Scottish Government’s analysis over the past two years has largely been vindicated by events.
Firstly and very importantly, we still believe that continued membership of the EU would be the best outcome for both Scotland and the UK.
Secondly, failing continued EU membership, we think that the UK as a whole should remain in both the customs union and the single market.
Thirdly, if the UK Government is determined to pursue a more distant relationship with Europe, we have argued for two years now - reflecting the strong vote for remain in Scotland - that there should be the possibility of a differentiated approach which allows Scotland to remain in the European Single Market.
Let me be clear that, in relation to Northern Ireland, we fully support the Good Friday Agreement and the maintenance of an invisible border. And so the Scottish Government will do nothing to stand in the way of Northern Ireland achieving a special relationship to the EU, if that is what is required.
However, if that is the outcome, the case for Scotland having a similar arrangement - to avoid us being placed at a severe economic disadvantage - becomes even stronger.
And, fourthly and finally, given that none of these compromise options are guaranteed, we believe that when there is greater clarity about the terms of Brexit than exists today, Scotland must have the option to choose a different course, as an independent member of the EU.
All of these points are important. But today, because of the critical stage we are reaching in the UK’s negotiations with Europe, I want to focus in particular on the second of them.
I will set out why, if the UK is determined to leave the EU, it should remain in the customs union and single market. In my view, that is the least damaging alternative option for the UK as a whole, as well as for Scotland.
To make that point, I will first of all highlight the fact that the current option being pursued by the UK Government –the so-called Chequers proposal – is impractical, undesirable and undeliverable.
And that, whatever it is that the House of Commons comes to vote on later this year, it will not be the Chequers proposal.
Indeed, if a Withdrawal Agreement can be reached, it will in all likelihood be accompanied by a very vague - probably highly fudged - political declaration on the future relationship between the UK and the EU.
It is my strong view that such a deal should be rejected - not in favour of no deal as some will try to suggest, but as a way of getting a better deal back on the table.
So I will then set out what I think is the real choice the UK Government should be talking about – the trade-offs between a free trade agreement similar to the one the EU has with Canada; or continued membership of the single market and customs union. Of those, customs union and single market membership is - by some considerable distance - the better option.
And finally, and I am well aware that this is the most difficult part of all, I will set out my thinking on how this option might yet be achievable - indeed, why it may be the only option capable of commanding a Commons majority, and why the moment for getting to this decision could be emerging.
But, let me begin with the UK Government’s current position.
As most people here know, the UK and the EU are currently negotiating on two issues at present.
The first is the withdrawal agreement. There are a number of issues there that still require resolution, including governance arrangements and geographic indicators, an issue that is extremely important to Scotland.
However, as everyone knows, the most vexed issue that needs to be resolved is how to maintain an open border on the island of Ireland.
And, of course, without a withdrawal agreement, there will be no transition period. Let me say at this stage, as an aside, that I hope the withdrawal agreement, if it can be concluded, includes provision to extend the transition period beyond the end of 2020. If the last two years have shown us anything, it is surely that more time will inevitably be needed to agree the future relationship and so being able to extend the transition period will be vital to avoid another cliff edge scenario.
The second issue under negotiation is the political declaration accompanying the withdrawal agreement. This will set out the framework which will determine the long-term relationship between the UK and the EU.
That long-term relationship is what I want to focus on today.
At the moment, the UK Government persists in saying it should be based on the Chequers proposal. But there are no grounds whatsoever for believing this will happen.
It’s worth being crystal clear about this. When the EU rejected the Chequers proposals at Salzburg last month, the Prime Minister’s subsequent statement tried to give the impression that the rejection of the proposals was a shock.
But anyone who was surprised by the substance of what was said at Salzburg, cannot have been paying very much attention to what the EU had been saying up until then. Indeed, that in itself might provide a clue as to why the negotiations have been going quite so badly over recent months.
Indeed we see a similar phenomenon at play today with the UK Government expressing surprise at positions that have been articulated and held by the European Union now for quite some time. The UK Government this morning expressing surprise that it is being held to a Northern Ireland backstop that it signed up to in December of last year.
And one of the casualties, and again this is an aside but it’s perhaps an important one, may actually prove to be the UK’s international reputation as a trusted, reliable, good-faith partner and negotiator. That would indeed, I think, be tragic.
Salzburg was however useful in one way. The UK Government has been trying to say that the only possible choices we have are the Chequers deal or no deal.
Salzburg showed – beyond any reasonable doubt – that that is not correct.
It is incorrect because the EU was never likely to accept some of the key elements of Chequers. Chequers relies on the UK collecting tariffs on the EU’s behalf through an untried set of bureaucratic and technological processes. Even more fundamentally, by keeping free movement for goods - but not services or people – Chequers undermines the essential unity of the single market. This has always been unacceptable to the EU.
In addition, Chequers would be deeply damaging to the UK - and Scottish - economy.
I have just mentioned that it takes services out of the single market. Services constitute 4/5 of the UK’s economy, and 2/5 of its exports going to the EU. The UK has a trade deficit with the EU in goods, but a trade surplus in services. It makes no sense at all for us to leave the single market in services – it’s a market that brings huge benefits, and has enormous potential for growth in the future.
And finally, Chequers is unworkable because even if it were acceptable to the EU, there appears to be no political majority for it at home.
The Prime Minister, even after Salzburg, maintains that Chequers is “the only serious and credible option on the table”. However it is not a serious and credible option.
And the only reason it is the only option on the table, is because the UK Government has refused to countenance any others.
But let's be clear - a head in the sand approach won't make the Chequers ostrich fly.
So when it comes to a vote in the Commons later this year, it will not be Chequers that MPs are voting on.
Now, as of today, it remains to be seen if a withdrawal agreement can be reached. Alarmingly, it seems increasingly doubtful that any deal can be struck that will satisfy both the EU 27 and her own colleagues.
If no withdrawal agreement is reached, the need to change course becomes all the more necessary and urgent.
However, if a withdrawal agreement can be struck, I would expect the political declaration on the future relationship, due to follow thereafter, to lack precise detail - leaving both sides to interpret it in the way that suits them, but with no one knowing what it actually means and with all the hard issues that have defied resolution in the last two years simply kicked into the long grass.
That then raises the grim prospect of the UK leaving the EU next March with no idea of what the future relationship looks like.
This scenario – a blindfold Brexit - is in my view completely unacceptable.
It would replace a no deal Brexit with a no detail Brexit.
It would keep the public and businesses in the dark. It would leave the long term position with the Irish border unresolved. It would require the House of Commons to vote on whether to accept a deal, despite there being no way of knowing what that deal will lead to in reality.
By delaying key decisions until after we had left the EU, the UK Government would reduce its influence, and diminish its status, just before conducting the most important negotiations in its postwar history.
And the cliff edge, no deal scenario would not be avoided - it will simply be deferred.
No responsible government should contemplate such a course of action.
But this government is contemplating it. And its tactics are extremely clear.
They will present, with ever increasing levels of desperation, a completely false choice - the idea that the only alternative to a bad deal of the blindfold nature is no deal at all.
It’s actually quite breathtaking when you stop to think about it.
The UK Government has spent two years asserting that no deal is better than a bad deal.
But they will almost certainly now try to railroad MPs into accepting a bad deal, on the grounds that no deal will be a catastrophe.
They are threatening us with fire, to try to make us choose the frying pan.
But MPs do not have to fall for that false choice. Indeed, I would argue that no self-respecting Parliament would fall for it.
The fact is that other options are available.
The single market and customs union option that I have consistently argued for - and will set out again today - is one.
A so-called People’s Vote - which I’ve said the Scottish Government would support, even though it wouldn’t necessarily protect Scotland from the same outcome as in 2016 - is another.
These alternative options of course may necessitate more time and therefore a request to extend Article 50 - but that surely must be preferable to pressing ahead in a reckless and damaging manner.
And, actually, that is the key point I want to make this morning.
Voting against a bad or a blindfold Brexit deal isn’t a vote for no-deal. It would be a vote for a better deal.
Indeed, voting against a bad or blindfold Brexit when the opportunity arises later this year is the only chance the House of Commons will have to reset these negotiations and to think again before it is too late.
In doing so, it would finally prompt an honest and open discussion about the real long-term choice the UK faces - if it is intent on leaving the EU - and the genuine trade-offs that it involves.
The hard fact is that leaving the EU - and this has been the case from the very start of this process - ultimately involves a choice between a Canada-style free trade agreement, which would be even more damaging than Chequers, because it would make trade in goods more difficult, or membership of the single market and customs union. That reality has to bite sooner or later.
The head of the CBI spoke about a Canada style agreement just a few weeks ago. She pointed out it would be the first trade deal in history that increased barriers to trade rather than reduced them. It would lead to job losses. And it would not solve the Irish border issue.
By contrast, membership of the single market and customs union would end the current impasse in negotiations, it would guarantee an open border both on Ireland and across the Irish Sea, and it would be by far the better option for exporters of goods and services.
Yes, it would enable continued free movement for workers, which in my view is both good and necessary, as it gives opportunities to individuals in Scotland and the UK to work overseas, and allows businesses and public services to recruit from across the continent.
But it would also still enable the UK to apply existing restrictions on rights of movement for people who aren’t choosing to work or study.
For all of these reasons, it is by far the least damaging form of Brexit for the economy.
For Scotland, and, I know, for many others across these islands, it also speaks more strongly to our European identity - to our desire to be a constructive partner to our neighbours across this continent.
And, although as someone that voted remain I see single market and customs union membership as being second best to membership of the EU - for many people who voted leave, it would surely be preferable to EU membership.
The UK would, after all, have left the EU. There would be no sense of being part of a growing political union.
The UK would no longer have to be part of the common agricultural and fisheries policies. And – although divergence from EU rules and regulations would certainly have consequences - this approach would leave Westminster with the final say on whether particular single market rules applied here in the UK.
Now, in saying this, I am acutely aware that, so far, the UK Government has been consistent in its rejection of membership of the single market and customs union. But that’s for two related reasons – neither of which stand up to much scrutiny.
The first is that it has established red lines in the negotiations – such as ending free movement of people, and being able to sign independent trade deals.
But these red lines contradict some of its other stated positions. In particular, the further away from Europe we are in terms of immigration and trade policy, the harder it will be to keep the Irish Border open.
And of course the red lines are completely self-imposed – they are not essential consequences of the referendum. Indeed, as I recall, the ability to sign trade deals was hardly an issue in the referendum.
That is an important point. After all, the second reason the UK Government gives for its current stance is democratic legitimacy. The Prime Minister said after Salzburg that single market membership would “make a mockery of the referendum”.
But in 2016, the winning side was not obliged to put forward a clear proposal. So the referendum outcome was not a mandate for hard Brexit.
In fact I would go further than that - it told us nothing about what sort of Brexit people might want. If it had done, it surely would not have taken the UK Government more than two years to come up with the Chequers proposal.
In addition, 48% of voters voted to remain in the EU; so did two out of four nations of the UK.
In that context, membership of the single market and customs union is surely the obvious democratic compromise. It is certainly in my opinion a better reflection of the referendum outcome than anything the UK Government has so far proposed.
Indeed, what is happening at the moment is quite extraordinary.
The UK Government is ploughing on with a strategy that it knows will reduce household incomes and cost jobs.
It has appointed a Minister for food supplies; its own departmental notices are setting out plans to stockpile medicines; on Friday it announced that the M26 was being adapted for use as a lorry park.
It is having to do all of this only because it has chosen an extreme interpretion of the referendum result – while overlooking the obvious fact that, whatever most people voted for, it surely wasn’t where we are right now.
That stance, in my view, is the one which makes a mockery – not just of the referendum result, but of basic common sense. It is not justified on democratic grounds, and it should not be countenanced on economic grounds.
But of course, in many ways, diagnosing these issues and these problems is relatively straightforward. The harder part is answering the fundamental question –where do we go from here?
After all, the UK Government’s rhetoric over the last two years has put it in an awkward position. Any move now to accept single market and customs union membership, is likely to be seen as a climbdown rather than a compromise.
I understand that. But fundamentally, that is a problem of the UK Government’s own making. It should not and must not stand in the way of the wider public interest.
And of course, in the weeks ahead, it won’t simply be the UK Government which has to make important decisions. A heavy responsibility will also rest with parliament and with individual MPs.
For MPs to support a bad or blindfold Brexit – a cobbled together withdrawal agreement and a vague statement about our future relationship – would in my view be a real dereliction of duty.
So what happens if they reject that and instead force an honest discussion about a Canada-style deal or continued free trade and customs union membership?
Well, it seems to me impossible to envisage a Westminster majority for a Canada-style deal. The Labour Party has said that it would vote against such an agreement. The SNP certainly would. A few weeks ago, Amber Rudd said that 40 Conservative MPs would vote against that as well.
In fact, in these circumstances, it is probably the case that the only option with any chance of commanding a parliamentary majority is single market and customs union membership.
Now, I am not saying that the way to such a solution would be easy. But it might well be the only option which is not completely impossible at this stage.
It should be acceptable to the EU. It avoids the worst economic damage that Brexit will wreak. It resolves the Irish border issue. And it comes closest to reconciling the different views of leavers and remainers.
And while it is an outcome which might still look some distance away, it is not unachievable.
What it requires, is commonsense, and a willingness to compromise.
And it’s worth adding at this point that a willingness to compromise – when it comes to the UK Government - cannot simply be an attempt to find the centre of gravity between the most vocal elements of their own party.
It must instead be a genuine attempt to find some common ground across what is currently a divided parliament and a divided UK.
I’m prepared to play my part. After all, I am First Minister of a country which voted – by 62% to 38% - to remain in the EU.
However, as we have made clear for two years now, the Scottish Government - albeit with a heavy heart - would support an outcome that secures continued membership of the single market and customs union.
In short, we have long demonstrated our willingness to compromise - it is time the UK Government did likewise.
And as the crucial vote looms closer, it is also time for individual members of the House of Commons to consider what compromises they see as justified - and which are not - if they are to serve their constituents, and the wider public interest.
If they do that, I do believe that a commonsense outcome could yet be found.
There is one final point I want to make. I mentioned earlier that this room evokes Scotland’s historic connections with Europe. It highlights the fact that Scotland is and always has been a European nation.
Indeed, our European identity has been strengthened in recent years. Next month sees the 20th anniversary of the passage of the Scotland Act, which paved the way for devolution and the establishment of the Scottish Parliament.
When that Act was being debated at Westminster, Donald Dewar – Scotland’s first First Minister - predicted that devolution would add “a new dimension” to Scotland’s role in Europe. His words have been proven right.
In the last 20 years, Scotland – with the support of all political parties at Holyrood - has expanded its presence in Brussels. We have collaborated with partners on European projects from renewable energy to healthy ageing. Our businesses and our universities have enjoyed ever greater benefits from our international ties.
And Scottish society has been enriched by the presence of more than 230,000 EU citizens from outside the UK.
We have seen at first hand the benefits that we gain from working with allies from across the continent. And so we are determined to work to enhance rather than diminish our ties with the EU.
In the last two years alone, the Scottish Government has established new offices in Berlin, Dublin and Paris. Here in London as well. Our enterprise agency has doubled its representation in Europe.
And even if the UK Government opts for a hard Brexit, Scotland will do everything we can to ensure that our policies remain consistent with European priorities and values.
The basic ideal behind the EU appeal to us – we like the idea of independent nations co-operating closely for the common good.
And, as we watch the Brexit negotiations unfold, the case for Scotland becoming one of those independent nations becomes ever stronger.
But of course, whatever happens, we will always seek to work closely and constructively with the other nations on these islands. It is in all of our interests that we find a better approach to Brexit – one which avoids the worst economic harms of a hard Brexit, and maintains the key benefits of free trade and other ties that unite countries across Europe.
If we can help to deliver that commonsense Brexit, we believe it will be the best – or perhaps the least bad outcome – not just for Scotland, but for the UK, and indeed the whole of Europe. My hope is that such an outcome might still be in reach. The Scottish Government will do everything we can to help to achieve it.