Scotland’s Future in the EU
Culture Secretary Fiona Hyslop
9 November 2015
SCOTLAND’S FUTURE IN THE EU: A RENEWED VISION OF SOLIDARITY, SOCIAL PROTECTION AND MUTUAL SUPPORT
Tanaiste, Minister, Members of Parliament, Ambassadors, Ladies and Gentlemen. It is my very great pleasure to have been asked to give today’s keynote address at the launch of the European Movement Ireland’s National Conversation about the UK’s EU Reform Agenda and Referendum. I am going to highlight the importance to Scotland of the UK remaining in the EU and the Scottish Government’s perspective on the EU referendum. I will also outline our own agenda for constructive reform within the EU and, where I have sufficient detail on the proposals, I will also give our views on the UK Government’s renegotiation agenda.
The European Movement Ireland- -
I want to start by paying tribute to the work that the European Movement Ireland has been doing for over 60 years. It is striking that the Movement predates Irish Membership of the Union by over 20 years and this is a positive message in favour of collective action.
I applaud the work of those connected with the European Movement Ireland, both now and those that have gone before, and would encourage the Movement to continue making their reassured, robust and rational case.
The value of EU Membership
A closer relationship between Ireland and Scotland
Scotland’s relationship with Ireland, our closest European neighbour, is a clear demonstration of nations working together which symbolises exactly what the EU is all about.
Since the beginning of 2015 there have been 12 Ministerial visits between Ireland and Scotland and I have made 3 ministerial visits to Ireland. These ministerial visits are made with the objectives of identifying common approaches and policies; establishing areas where joint action benefits both nations; enabling our businesses to operate effectively in Scotland and Ireland; and bringing our nations and peoples closer together. These objectives are shared by the EU, albeit on a grander scale, and membership of the EU for citizens of Ireland and Scotland has helped to facilitate all of these things.
As an illustration, the Single Market has enabled our economies to be brought closer together facilitating an increase in trade in goods and services. Ireland is now Scotland’s 8th largest export market with over 1 billion Euros’ worth of goods exported in 2013 which increased 8% from 2012 – a sure sign of deepening economic integration. Scotland and Ireland’s economies are now so inextricably linked through the Single Market that the removal of Scotland from the EU would have a severely detrimental effect on both our economies. Currently, Ireland is the 2nd largest export market for Scottish food, while it has been estimated that Irish investment in Scotland is responsible for over 5,000 jobs and turnover of nearly 3 billion Euros.
It is not only the Single Market which has brought Scotland and Ireland closer together. EU funding has also enabled our nations to work better together for a common purpose. For example, the INTERREG Funded Access 6 programme which ran from 2013 to summer 2015 has encouraged cross border collaboration and has fostered relationships in the food and drink sector. The programme has provided a number of SMEs in both countries with the skill-sets, mentoring and logistics support which has helped them to supply main markets in the UK, the wider EU and other major international markets. The businesses involved have experienced over 25 million Euros’ worth of sales growth, 87% export growth and have created 160 new jobs. Scotland’s removal from the EU would preclude similar collaborations from occurring in the future.
The Scottish Government is not, however, planning for a future outside the EU and we are working on deepening, not cutting, our ties with a number of Member States, with a particular focus, of course, on Ireland as our closest European neighbour. During the First Minister’s visit to Dublin in June this year, she announced the establishment of a permanent Scottish Government presence in Ireland which will work to strengthen inter-governmental co-operation and increase collaboration between enterprises and academic institutions in Scotland and Ireland. I am pleased to announce today that, in January 2016, the Scottish Government will open its first innovation and investment hub in the British Embassy in Dublin to be headed by John Webster, currently a British diplomat at the Embassy who is here today. Please take the opportunity to speak to John if you have any views on how together we make this new initiative a success.
The economic benefits of EU membership
The benefits of EU membership to Scotland and Ireland stretch far beyond our close relationship. EU membership brings indisputable economic benefits to both countries’ enterprises by placing them in the Single Market - the world’s largest trading area comprising of 20 million businesses and 500 million consumers and which accounts for 16 per cent of global GDP. Indeed, the EU is a vital export market for Scottish companies accounting for nearly half of our international exports in 2013, worth over 18 billion Euros. It has also been estimated that over 300,000 Scottish jobs are either directly or indirectly supported by exports within the EU.
Scotland now trades more with Denmark than with Australia, Canada and South Africa combined. Moreover, the free movement of capital enhances our ability to attract investment from within the EU. In 2014, of over 2,000 foreign-owned companies operating in Scotland, around 40% of these were owned by shareholders based in the EU.
Being a part of the Single Market has also helped facilitate better access to international markets for enterprises located in Scotland and Ireland by being part of a larger trading bloc. Only last month, concerns have been expressed by the US and China, two of the world’s largest economies about the future of the UK’s EU membership.
A UK exit from the EU would jeopardise all of this. Indeed, the Economic and Social Research Institute have estimated that trade between the UK and Ireland will fall by at least 20% in that event. Even if the UK were to have some form of looser arrangement with the EU allowing access to the Single Market, similar to that of Norway, it will still have a significant impact on trade and, as the former Foreign Minister of Norway pointed out they "pay but have no say".
The wider value of EU membership
The EU is not, and nor should it be, simply an economic union. The EU is also about solidarity, social protection and support.
(1) A Union of Solidarity
The Scottish Government’s determination to remain in the EU doesn’t simply flow from self–interest; we want to remain in a union of solidarity.
We recognise the importance of the European Union in promoting solidarity and common action in tackling problems that Member States, acting alone or bi-laterally, could not hope to. These challenges include energy security; climate change; unacceptably high levels of youth unemployment across the Union; and welcoming and integrating displaced people, refugees and migrants. These challenges require a collective response to succeed – not isolationism, inward procrastination and abdication of responsibilities. History will judge us on how effectively we, the peoples of the EU, collaborated to make our societies inclusive and sustainable.
So let’s not diminish the importance to Europe, and indeed the wider world, of solidarity and cooperation. After all, they have replaced war and conflict and cemented relationships in the process and are the key to tackling the challenges of the future.
(2) A Social Union
I also believe in a social union. The EU has given our people valuable social protections that prevent the exploitation of workers and a race to the bottom which cannot deliver genuine prosperity but instead creates division and poverty.
EU regulation has guaranteed significant employment rights and protections across the entire territory of the EU – the right not to be discriminated against on the basis of age, gender or race; the right to maternity, paternity or parental leave; the right to 20 days’ paid leave per year; and the right to work for no more than 48 hours per week. The whole of society benefits from these rights, not just our workers.
(3) A Union of Support
I also believe in a union of support. A union which supports the ambitions of its peoples to improve their lives; the ambitions of its businesses to innovate and grow; and the ambitions of governments for economic prosperity.
Free movement of persons
EU membership also gives our people the right of free movement in pursuit of education, training and employment. The right to live, work and study in any Member State without fear of discrimination on the grounds of their nationality. Migration from the EU has also been beneficial for Scotland. 173,000 EU nationals have already chosen to make Scotland their home and are contributing to our society, our culture and our economy. That figures includes 23,000 Irish citizens according to our 2011 census.
Scotland greatly values both the contribution that EU migrants bring to our economy and society, and the benefits of freedom of movement enjoyed by our own citizens, to live, study and work in all European Economic Area (EEA) countries. EU migrants who move to Scotland to exercise their right to free movement within the terms of European law have a legitimate reason to be in Scotland and will always be welcomed, not only for their contribution to our economy but also the vibrancy and diversity they bring to our nation.
Access to EU funding programmes has also made a real difference to Scotland’s economy. Between 2007 and 2013, European Structural Funds supported 30,000 new jobs and improved skills for 135,000 people.
I am also pleased to see Scottish farmers benefit from EU funding. 3.5 billion Euros have been awarded to Scottish farmers under the Common Agricultural Policy for the period between 2014 and 2020 which will contribute to keeping farming in remote and rural areas in Scotland sustainable. I know that Irish farming benefits in the same way with the European Movement Ireland/Red C poll showing that support for Ireland remaining IN the EU rises to 95% for your farmers.
Our academic institutions also benefit from EU funding. Scottish universities won over half a billion Euros in competitive funding between 2007 and 2013 - supporting innovation and skilled jobs in Scotland.
Accessing EU competitive funding programmes has also allowed Scotland to develop partnerships with other Member States and by doing that promote the exchange of skills, expertise and knowledge. The importance of EU membership to promoting knowledge exchange in addition to the exchange of goods and services cannot be undervalued.
The EU Referendum
As I hope I have already demonstrated, the Scottish Government is committed to making the positive case for EU membership between now and the proposed referendum on the UK’s membership of the EU.
It is important to draw a very clear distinction between the referendum and the UK Government’s renegotiation agenda as they are not interdependent. The words on the ballot will not be about renegotiation but will simply ask the voters: "Should the United Kingdom remain a member of the European Union or leave the European Union?" That is why I have continued to argue that we cannot afford a situation whereby voters judge the EU question through the narrow prism of any renegotiated settlement. That simply ignores the many benefits that membership brings to the people of Scotland and the UK right now.
The Referendum Bill has not yet passed through the Westminster Parliament and there are several issues that the Scottish Government has raised with the current form of the Bill.
Recent YOUGOV polls suggest that in the UK as a whole, 38% of people would vote to remain in the EU, 41% to leave and 21% were undecided. In Scotland 53% would vote to remain, 27% to leave and 20% were undecided. Scotland has been consistently more pro-European in successive polls. David Cameron described the UK as family of nations and that is why we have continued to argue that, in order for all four members of that family to be removed from the EU, the Bill should require a majority vote to leave in all four. As the Referendum Bill makes no such provision, there is a real risk of Scotland being removed from the EU against the will of our population. That is why the Scottish Government will be making a strong, positive case for the EU and we will be looking to take this message beyond Scotland which, of course, is why I am here today.
It is also a matter of great concern to the Scottish Government that the majority of EU citizens living in the UK will not have a vote in a decision that directly affects them and could threaten their rights to live, work and study in Scotland and the wider-UK. I am, nonetheless, pleased that Irish citizens living in the UK will have a vote and this is, particularly, reassuring to the population of Scotland when the European Movement Ireland/Red C Poll shows that 86% of Irish citizens want Ireland to remain in the EU. I suspect that that figure will be even higher for those that have exercised their right of free movement to live in the UK.
It is also extremely disappointing that all 16 and 17 year olds have been excluded from the franchise in the current draft of the Referendum Bill. As a government, we continue to make the argument for this citing the example of the referendum on Scottish independence in which 16 and 17 year olds showed, beyond doubt that they were able to participate in important, political debate as mature and conscientious citizens. They deserve to have their say, as this issue will not come around every five years, and will have a profound impact on their futures. There is speculation that the House of Lords may amend the Bill to entitle 16 and 17 year olds to vote and should the Commons be unable to defeat the amendment then this may also affect the timing of the referendum.
And so to the case for EU reform. While I have spoken of the value of Scotland being in the EU, Scottish Government Ministers and I also spend a large amount of time trying to influence and improve the way that the EU functions – to make it work better for the people of Scotland and all EU citizens. Last year we published our priorities and agenda for EU reform and a consultation response on the Europe 2020 Strategy while every year we also publish and submit a copy of our own National Reform Programme to the European Commission. All of these documents are available on the Scottish Government website.
I believe, fundamentally, that the future of the EU lies in making it more relevant to and work better for, the people of Europe. It is clear that there is a growing disconnect between the EU and its citizens and this was exemplified by the low voter turnout in the elections for the European Parliament in May 2014 and the increasing share of votes secured across Europe by populist parties on the extreme left and right wings.
This was in marked contrast to the level of engagement in Scotland during the referendum on Scottish independence where the voting population saw a clear opportunity to influence their own futures. It culminated in an 85% voter turnout as our people engaged with politics on a level never previously seen.
As a collective, we should not allow extreme parties to dominate the European agenda because of the inability of the institutions or mainstream political parties to connect. And collectively we should not allow our fundamental rights and freedoms to be eroded. The Scottish Government is, therefore, determined to work with the EU institutions and our European partners to influence EU reform with the aim to make the EU better connected with, and more relevant to, our people.
It is already clear from the Agenda of the European Council and the recently published Commission Work Programme that the EU institutions are taking reform seriously and we will continue to work with the Commission in implementing reform through the Europe 2020 Strategy and the Regulatory Fitness Programme.
I’d like to pick up on four examples of reform in the remainder of this speech: delivering economic growth; better regulation; climate change and energy security and the free movement of persons before addressing the UK Government’s renegotiation agenda.
Delivering economic growth and increasing competitiveness
First of all, the Scottish Government believes that the EU should be the focal point for delivering economic growth and increasing competitiveness across the entire territory of the Union. To that end, we have advocated the reinvigoration of the European Commission’s 2020 Strategy and a renewed emphasis on the Commission delivering smart, sustainable and inclusive growth. Economic growth should not, however, be viewed as an end in itself but as a means of delivering a better, more prosperous and fairer society. The Europe 2020 Strategy must, therefore, strike the right balance of growth, which reduces inequalities, allows all EU citizens to realise their potential, and reduces disparities across, and within, Member States. Inclusive growth has to be the way forward.
The Scottish Government believes that in order to be delivering for its citizens, the EU must not only look inward but outward. The UK’s competitiveness agenda also has a strong emphasis on taking forward trade deals.
Collective action by the EU on the global stage, particularly in relation to trade is vital to augment the pursuit of smart, sustainable and inclusive growth. But we believe that the potential economic benefits of the EU-US Transatlantic Trade and Investment Partnership (TTIP) in this respect must be accompanied by action by the Commission and Member States to address concerns about issues such as the impact of TTIP on the NHS and Investor State Dispute Settlement mechanisms; and that there must be transparency in the negotiations process.
Secondly, a reinvigorated economic strategy should be accompanied by progressive regulatory reform to facilitate a supportive business environment. And by this, I am not, necessarily, talking about less regulation for its own sake. The Scottish Government recognises that EU regulation has been, and will continue to be, absolutely essential in order to achieve the objectives of the EU Treaties, including the establishment and maintenance of the single market as well as the social objectives to which I have already referred. Nonetheless, we recognise that the volume and complexity of EU regulation affecting businesses in Scotland may sometimes impose inappropriate and avoidable administrative and financial burdens on them (particularly SME’s).
We consider that regulatory reform can be effected through further action under the European Commission’s Regulatory Fitness and Performance programme. The Scottish Government will continue to actively encourage regulatory reform with a view to making better regulation at the EU level which has, at its heart, the concurrent purposes of protecting citizens and the environment, creating jobs and increasing growth. Regulatory reform should also, where appropriate, allow maximum flexibility for the Member States and accord with the principles of subsidiarity and proportionality – the key to returning power to national and regional parliaments and local authorities.
Climate Change and Energy
Thirdly, the Scottish Government sees a clear need for certain developing energy technologies to be addressed at a European level in order to tackle climate change and ensure sustainable growth. These technologies include offshore wind, marine energy and energy storage.
The Scottish Government will be part of the UK delegation at the crucial climate change negotiations in Paris next month where we will continue to push for a legally binding international agreement to limit global warming to less than 2 degrees Celsius and in so doing enhance the prospects for the EU’s low carbon economy with the associated benefits this could bring in terms of creating jobs and growth. Nearly 50% of Scotland’s electricity consumption in 2014 came from renewable sources.
Further collective action at EU level is also vital for the development of offshore interconnections between Member States. Future renewable development requires an increase in grid access and capacity as well as interconnection to provide a route to market. The Scottish Government sees integrated energy markets and interlinked regional network infrastructure as essential foundations to realise Europe’s decarbonisation goals, ensure security of supply and to allow consumers to benefit from increased competition in the form of lower energy prices.
Scotland is uniquely well placed to generate renewable energy – both onshore and offshore renewables – but its transfer capacity to EU markets is restricted by onshore grid constraints, high locational transmission costs and limited offshore interconnection.
Freedom of movement of persons
Last, but by no means least, we consider that the freedom of movement of persons enabled by the EU Treaties remains pivotal to the continuation of the single market and the success of the European Union.
If the EU is not to face a lost generation then it is vital that all of the Union’s citizens are economically mobile and are able to move freely in the entire territory of the Union in pursuit of employment. Scotland’s economy has benefitted enormously from migrant workers and we must be able to attract talented individuals to support the growth of our economy; and Scotland as well as the Irish are ourselves a migrant people populating US, Canada and Australia to name but a few.
Migrant workers make a big sacrifice when moving to another Member State and we think that all EU migrant workers should be entitled to be treated in the same fashion as home State workers – including entitlement to social assistance and benefits. A recent University College London study shows migrant workers have made a net contribution to UK public finances of over 30 billion Euros between 2000 and 2011. How would that gap in public finances be bridged if free movement of workers were to be removed?
The free movement of persons does, however, have the potential to impact significantly on particular sectors and communities and can lead to significant ‘brain drain’ from some of the poorer regions. The EU Treaties enable the EU to take action in these circumstances and the European Commission must show that it is able to take action in order to dispel the propagation of fear of migration spreading around Europe. Ensuring the benefits of economic growth are spread more evenly across Europe would also assist here.
The EU also needs a collective and coherent policy on external migration which will address the current refugee crisis. Scotland will welcome a third of Syrian refugees arriving in the UK before Christmas. The EU must also take steps to tackle the problem at source to avoid people embarking on dangerous journeys that have seen so many men women and children die needlessly. But the bottom line is that we have a moral obligation to help those who have already arrived in Europe. Over 700,000 migrants crossed into Europe in the first nine months of this year alone and we continue to press the UK to opt into the EU wide scheme to relocate 160,000 refugees already in the EU. We stand ready to take our fair share if the UK Government signs up to EU relocation and I must congratulate the Irish Government for already doing so.
The EU is facing its sternest test yet in finding a common approach to handling the current refugee crisis. Hundreds of thousands of desperate people are fleeing to Europe’s shores to escape persecution, hunger and war. The Scottish Highland Clearances and indeed the Famine still hang in our collective consciousness and memory and must direct our moral compass. Finding a way through this will not be easy. If we fail to talk to one another and countries act unilaterally then we are facing a humanitarian disaster as winter approaches. But I think the Member States acting together can make a significant contribution to improving the situation and, indeed, I think we are seeing some evidence of progress. However imperfect some may judge the EU’s response so far to be, without EU-led co-ordination, a continent-wide response any action would not be remotely conceivable.
The UK Government’s Renegotiation Agenda
Turning lastly to the UK Government’s renegotiation agenda - we still don’t know exactly what David Cameron wants though believe he should be wary of promising reforms that require Treaty Change that he can’t deliver. We will work with the UK Government when we are clear as to the full extent of its proposals and agree with their merits. That is not yet the case and there is still a great deal of uncertainty and ambiguity.
On sovereignty, we would support a greater role for national and sub-national parliaments in accordance with the principles of subsidiarity and proportionality. We note the UK Government’s concerns about "ever closer union". As Ireland’s Ambassador to the UK in London, Daniel Mulhall, noted in his evidence to the House of Lords’ EU Committee last month – it has already been acknowledged by the European Council that "the concept of ever closer union allows for different paths of integration for different countries, allowing those that want to deepen integration to move ahead, while respecting the wish of those who do not want to deepen any further".
On fairness and ensuring that the interests of those inside and outside of the Eurozone are fairly balanced. This will ultimately require some form of Treaty change in the future but it should not be rushed ahead and taken at a time when we are clear as to what deeper political and fiscal integration will mean for the Eurozone countries. Mutual acknowledgement and respect for the different needs of the 19 Eurozone countries and 9 non-Eurozone countries should not be a threat to the EU.
is the third strand of Mr Cameron’s package of reforms and you’ve already seen that we agree with much of this since is an important part of our ambitions for EU reform. I would stress that while we favour better regulation we do not want to see widespread deregulation or the removal of social protections.
As for restrictions on the freedom of movement of persons, I think I have already made myself clear. EU migration is critical to the development of Scotland’s economy, its social fabric and its culture. The principle of freedom of movement is a founding principle of the EU and cannot be torn up. The Scottish Government does not support measures to restrict benefits purely on the basis of nationality, particularly where people are working and contributing to the benefits system.
We shouldn’t forget the other side to this coin and the thousands of British people living around the EU who have access to those countries’ benefits system.
My ultimate hope for the reform process is that it will bring all the Member States together to act, not out of national interest, but in the collective interest with the aim of bringing governments and peoples together – not reinstating old divisions. Solidarity, social protection and mutual support should be the bedrock of the modern Europe.
I look forward very much to hearing Irish views on this important topic both today and beyond today and will be keen to work with you in the months and the years ahead – as we are seeking to do with the Dutch Government and the implementation of their subsidiarity review.
Ladies and Gentlemen, in closing I want to reiterate that the Scottish Government believes that the UK’s continued membership of the EU is in the best interests of Scotland, the rest of the UK, Ireland and the rest of the EU and that’s why we will continue to make the positive, constructive case for remaining in the EU.
l want Scotland to be part of a European Union in which the Member States and the EU institutions work together to put the interests of Europe’s citizens at the heart of their policies and moves with the times – a European Union which embraces solidarity and its social responsibilities; and mutually supports its peoples, enterprises and governments.
Thanks to the dreams of visionary leaders like Jean Monnet and Robert Schumann, which inspired the creation of the European Union, citizens of the EU live in a time of peace and stability which we so often take for granted. As one of Europe’s finest poets, WB Yeats, reminds us: "In dreams begins responsibility"".