Brexit - update: statement by the Cabinet Secretary for the Constitution, Europe and External Affairs

Statement by Michael Russell, Cabinet Secretary for the Constitution, Europe and External Affairs to the Scottish Parliament on Wednesday 23 December 2020.

When I last addressed this Chamber on the readiness of the state of the transition period I found it scarcely believable that with only 23 days to go we knew nothing about how the UK would trade with the EU.

Now, with a mere 8 days to go and still no outcome I would say that my reaction – and that of almost everybody else - is that we are now in the realm of the unbelievable.

Presiding Officer, even if a deal is being done as we speak – and I have no information that is the case – then 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 that will be required.

Of course we do not know what would be in any deal, so where our consent would be required is also not clear. The UK Government will  have to formally ask us for that consent and this chamber will, in turn, of course be asked to agree or disagree.

Practically it seems clear that the earliest that that can now happen is next Wednesday and the Minister for Parliamentary Business will keep you, Presiding Officer,  and the Bureau closely informed and will notify you the moment the Scottish Government receives any request for legislative consent if it does.

This also means, of course, that if Westminster has to be recalled it would be under stringent Tier 4 lockdown regulations and the same would be true here and across Scotland.

The evidence of the last few days tells us not only that the pressure of the pandemic is increasing again, but also that the UK Government’s refusal to extend transition – despite all the pleas – was utterly foolish, reckless, arrogant and very damaging.

In addition the last 48 hours remind us of the dependence of our supply chains and our way of life on the closest of trading links with the EU and show that any action which disrupts that has severe consequences.

Presiding Officer if there is no deal then disruption will resume.  

That is one of the many reasons why a no deal is a lunatic prospect and anyone who asserts in any part of these islands will “prosper mightily” in such circumstances is either woefully ignorant or deliberately deceiving. For a Prime Minister to do so beggars belief.

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

There will be – no deal or 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 Police Scotland will be less able to combat criminality at speed. We’ll also lose access to the European Arrest Warrant, which means it will be far harder to ensure that foreign criminals face justice in Scotland.

There will be – no deal or low deal -  a growing threat to the standards we apply and expect to food, the environment and a range of other issues though we will be able to mitigate some of that as a result of the passage last night of the EU Continuity Bill by a massive majority here – which I hope the UK Government will not again try and destroy by means of changing UK law.

Food prices will rise – no deal or low deal - as is admitted by the UK Government and range and availability may 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 also 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 we have taken for granted for so long, will mean longer queues at borders and paying more for health insurance.

And there will be a shortage of labour in some key Scottish sectors , which will get worse as the growing season starts.  

There will also be – no deal or low deal - an inevitable fall in our GDP.

Even in the very best case scenario of a basic trade agreement outcome, our modelling shows that Scottish GDP is estimated to be 6.1% lower by 2030 compared to continued EU membership. This equates to a cost to each person in Scotland of an equivalent to £1,600.

A catastrophic exit on WTO terms only, could lead to a loss of up to 8.5% of GDP in Scotland by 2030 compared to continued EU membership – equivalent to £2,300 per person.

My definition of “prospering mightily” does not include losing £2,300 for every man, woman and child in Scotland.

But some impacts will be felt almost immediately. 

Presiding Officer, on the 8 December I set out what the Scottish Government is doing, as far as it is able, to mitigate the worst effects of the end of transition which will produce immediate changes, low deal or no deal. 

I can therefore report that the Scottish Government Resilience Room arrangements for EU Exit and concurrent risk are now fully established and the stand-up of the National Coordination Centre and a single Scotland-wide Multi Agency Coordination Centre (MACC) is well underway. These arrangements put us in the best possible position to deal in a coordinated way with the impact of  EU Exit , the concurrent risks of Covid-19 and winter weather.  We have already made use of them this week when considering the possible effects of the short straits situation.

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

We continue to do everything 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 we would, providing £5m worth of support to Scottish wholesale food and drink businesses to help support food supplies across the country and we will now need to do more, particularly with respect to the shellfish and fishing sectors badly affected this week.

We are doing all we can to make sure that patients continue to receive the medicines 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 both EU-Exit and COVID-19. Our multi-agency ‘Prepare for Brexit’ website, hosted by Scottish Enterprise, continues to provide advice, sources of financial support and online self-assessment toolkits.

Throughout this entire Brexit process the Scottish Government has sought to engage constructively with the UK Government on preparedness issues and we will continue, as we always have done, to advocate for the interests of Scottish businesses and of Scottish people whenever possible.

However I must be entirely straight with this Parliament and with the people of Scotland. 

Regardless of whether we exit transition with a low deal or no deal jobs and living standards will be hit hard.

And there are many things that we still simply do not know, though they will change in 8 days’ time.

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 are essential in gaining preferential market access.

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

We don’t yet know if there will be a data adequacy decision and when this would be in place. Even if there is one, there will be a gap and we don’t know how long that will be or whether there will be bridging mechanisms in place that cover data flows to the business sector in Scotland.

It is however certain that red tape and the costs of doing business will massively increase,  with UK-wide customs declarations estimated to go up by a staggering 215 million. Scottish food and drink businesses will face damaging and expensive new paperwork requirements, including Export Health Certificates as goods will be subject to separate regulation in the UK and the EU.

Presiding Officer, 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 I outlined in detail in my previous statement. As soon as this information becomes available from the UK Government we will ensure 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 for a no deal or a low deal and in border planning particularly but we have this week 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.   

The UK Government must  urgently therefore set out further details on how these arrangements will operate and put them into effect, even though the business highlight  (and absolute necessity) of the Christmas trade has been lost.

We are also working with partners to develop traffic management contingency plans for south west Scotland, including plans for HGVs, should capacity at Cairnryan and Loch Ryan ports be exceeded.  The Plan is  owned by the Dumfries and Galloway Local Resilience Partnership (LRP) and we will provide further details in due course.

Presiding Officer,

Scotland did not vote for any of this and it  is with profound and deep regret that we find ourselves in this position today or 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.

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

Presiding Officer, all this is not over. There are still difficult times ahead but we believe 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.

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