Ministerial Statement: Update on the EU-UK Future Relationship Negotiations
Statement by Cabinet Secretary for Constitution, Europe and External Affairs Michael Russell
Presiding Officer, in the referendum in June 2016, people in Scotland voted overwhelmingly to be part of the European Union.
That preference has been reinforced in two subsequent UK general elections and in a European Parliament election.
Yet despite on January 31st this year the Conservative UK Government took Scotland out of the European Union.
At the time they said this was “getting Brexit done”.
But it of course it is not done.
All that has been agreed was the terms of withdrawal. Nothing has been agreed regarding the future relationship between the UK and the EU.
Today I wish to update Parliament on the Scottish Government’s view of the current negotiations on that future relationship.
Let me start by saying that we believe it is not and will not be possible to conduct and conclude those negotiations, and implement the results, within the truncated time scale set for them and within the context of an unprecedented global pandemic and a catastrophic economic recession, which may turn out to be the worst in 300 years.
It is therefore in our view essential that the UK indicate that it will seek the extension of the transition period for up to two years which is provided for in the Withdrawal Agreement.
To refuse to seek that extension – which the EU have indicated would be readily granted – is a reckless act which will destroy thousands of jobs, undermine an already fragile economy and devastate communities across Scotland at a time when we are most vulnerable.
After the end of this month it will not be possible to extend under the terms of the Withdrawal Agreement – and no other plausible route to an extension has been put forward.
The deadline at the end of June is therefore real.
Today the Scottish Government publishes a new paper which sets out the consequences of refusing to seek such an extension. I shall outline its findings in a moment but let me first describe to Parliament the highly unsatisfactory state of the current negotiations and Scotland’s even more unsatisfactory engagement with them.
The original end date for these talks was set when the intention of the UK Government was to leave the EU at the end of March 2019. That period of 21 months looked very challenging even then.
But of course, the UK did not leave the EU for another 10 months.
So 21 months has become 11 months.
And that time has been further truncated by the effects of the pandemic.
So far there have been only three weeks of negotiation, with a fourth round currently underway.
The UK “negotiating mandate” for the talks was only published on the 27th of February. The draft UK legal texts on which the negotiations are meant to be based were only made available to the other EU nations two weeks ago.
We had virtually no involvement in producing them and indeed only saw the legal texts – with no possibility of changing them - only 24 hours before they were published.
The Joint Ministerial Committee on European Negotiations is, by its agreed and written remit, meant to have “oversight” of these negotiations in so far as they affect devolved competences, and to seek to agree the UK position.
In fact, it has met just once since the discussions started, in a virtual session on the 21st of May. It previously met in Cardiff on the 28th of January.
The UK Paymaster General has also conducted three sets of “briefings” for devolved ministers .
Despite our efforts, that whole process isn’t about influencing what is happening still less deciding on crucial issues for which we are responsible. It is merely about hearing what is happening.
But what is clear even from these meetings is that a no deal outcome has never been more likely.
This is not just because the UK has set its face against accepting a more realistic and sensible time scale.
It is also because the negotiations have been so so unproductive in addressing the political gulf in positions
The negotiations are blocked on fundamental issues: of governance; of level playing field; and on fisheries – and in a way that no technical finessing will remedy.
Indeed to many in Brussels it looks as if the UK is refusing to negotiate on such key matters.
Resolution looks to be far off and the situation was not helped by an extraordinary letter from David Frost, the UK chief negotiator, to his counterpart Michel Barnier.
We have long been opposed to the substance of the UK Government position – but the tone of this confrontational letter was an error of even greater proportions.
I made it clear at the JMC that in using it Mr Frost did not speak for Scotland and I do so again now.
And he certainly does not speak for Scotland in his desire to secure the most unambitious of trade deals - sometimes called a low deal - failing which he seems to be entirely prepared to accept a no deal .
It will be no surprise to this chamber that the Scottish Government believes that the best future for Scotland is to be an independent member of the EU.
Others in this place differ but that is not the point at issue today.
The imminent danger lies in the failure of the UK to seek an extension coupled with their drive towards a no deal, or low deal, outcome.
In April, Jackson Carlaw said he was a pragmatist on this matter.
I hope he still is for pragmatically the issue is clear – there must be an extension to allow people and businesses in Scotland to continue to benefit from most aspects of EU membership whilst they attempt to recover from the current crippling crisis.
In order to further flesh out the very strong case for that extension the Scottish Government has today published a detailed examination of the damage that proceeding with Brexit at this time will cause.
For a start there are thousands of practical problems in day to day business procedures - such as in inspection and customs regimes - to take into account if transition is to end in less than seven months’ time.
Even if we knew today the nature of the many agreements that are required this would be an impossible challenge.
But we do not know about any of them.
Bluntly therefore it is now absurd to continue to pretend otherwise.
As Carolyn Fairbairn of the CBI wrote in an op-ed for yesterday’s Politico
“For many firms fighting to keep their heads above water through the crisis, the idea of preparing for a chaotic change in EU trading relations in seven months is beyond them. They are not remotely prepared. Faced with the desperate challenges of the pandemic, their resilience and ability to cope is almost zero.”
Almost zero – and yet the UK Government is pressing ahead.
There are also many grave difficulties for Government and wider society.
To take just one, the technical changes required to the way that Scotland can access information in the European Criminal Records Information System, if access of some kind is in the end negotiated, would take months to design and implement.
But any gap in coverage would have a serious effect on Scottish Ministers’ vetting and barring functions under the Protection of Vulnerable Groups Act 2007. That is a crucial element in the protection of children and vulnerable adults.
Moreover, this is just one new system to deliver one part of the arrangements for one part of the future relationship.
Many, many more are required, across the breadth of areas where UK and Scotland cooperate with the EU.
These issues must also be considered against the background of a global pandemic, where the finite resources of both the UK and Scottish Governments have rightly concentrated on responding to the health emergency.
We will continue to try to save lives but we will also have to divert some of our scarce resources into frantic, and well nigh impossible, preparations for whatever new relationship with the EU which will be thrust upon us at the end of the year.
And we will be doing so in the teeth of an economic downturn the like of which none of us have ever seen.
The global economy – including the Scottish economy –is already declining fast.
We must do everything we can to give businesses the best support for recovery. The next couple of years will be crucial.
But ending the EU withdrawal transition period at the end of the year would subject Scotland – and the UK as a whole – to an entirely unnecessary second economic and social shock on top of the COVID-19 crisis.
More jobs would be lost, living standards would be hit and essential markets and opportunities for recovery would be damaged. For many businesses which manage to survive the COVID-19 crisis, this second, Brexit, shock would be the final straw.
The new modelling we have published today indicates that ending transition this year would result in Scottish GDP being between £1.1bn and £1.8bn lower by 2022 (0.7 to 1.1% of GDP), compared with ending transition at the end of 2022. This would be equivalent to a cumulative loss of economic activity of between nearly £2bn and £3bn over those two years. A proportionate impact would be likely for the UK economy. That will clearly hamper recovery from the impact of the pandemic.
But beyond this – and in addition to the economic impacts identified by the modelling – exiting the current transition period before Scotland has emerged from the COVID-19 crisis would greatly increase the costs of Brexit to the Scottish economy, in comparison to a two year extension. This is for two main reasons:
And ending the transition period will have further direct impacts.
There will be lost opportunities to participate in EU-funded programmes, including for COVID- and health-related research and procurement. Just last week, the EU Commission proposed a new stand-alone health programme, EU4Health aiming to support post-COVID-19 recovery.
And given the contribution of EU nationals to our health and social care sector, never has the ending of freedom of movement looked more damaging and inappropriate.
I understand that many businesses and communities across Scotland have been focussed 100 per cent on tackling the immediate impact of Coronavirus.
But extending the transition should be seen - not as a separate event – but as part and parcel of the recovery effort from COVID.
It is in fact the one action we could all agree on which would have no adverse effect on the R number but would protect our economy from further severe damage, would be this one.
During this crisis, despite our different political beliefs, we have come together as a Parliament to help Scotland get through this.
Today, I hope we can send a message to the UK Government in that same spirit of consensus – do not inflict further unnecessary damage and agree an extension with our EU partners.
Now. Before it is too late.