Ian Murray – 2016 Speech on EU Exit for Devolved Governments

Below is the text of the speech made by Ian Murray, the Labour MP for Edinburgh South, in Westminster Hall on 21 July 2016.

I beg to move,

That this House has considered devolved governments and negotiations on the UK leaving the EU.

It is a great pleasure to serve under your chairmanship, Mr Bailey. One of the great privileges of being back on the Back Benches is that I can not only participate in these debates, but apply for them. I am grateful to the House for allowing me this debate. It follows on the back of early-day motion 325. One of the other unenviable privileges of being on the Back Benches is that I can now table early-day motions. I hope that all Members will sign my EDM once they have heard this debate.

Normally, I would say it is a great pleasure to hold this debate, but in many ways I would rather we were not. The repercussions of our vote to leave the EU will be profound and far-reaching in Scotland and across the United Kingdom and the European continent as a whole. We are already beginning to see the impact on our economy. The value of sterling has fallen against the euro, the dollar and most other international currencies, and remains highly volatile. Many businesses have predicted that Brexit will have a negative impact on their fortunes. The International Monetary Fund has revised down its forecasts for UK growth and said that Brexit risks throwing

“a spanner in the works”

of the global economy. Those of us who campaigned to remain in the EU warned of those obvious consequences and others as a probable outcome of our vote to leave. What was dismissed as “Project Fear” by many, we are now seeing as “Project Fact”, emphasised by today’s survey of German businesses, which concluded that 56% of them would want a hard bargain when negotiating with the UK.

We have to deal with what is in front of us and get the best possible solution for the UK and, for the purposes of this debate and my responsibilities, for Scotland. The evidence suggests that support for leaving was strongest in the most deprived areas of our country. I witnessed that myself at the Glasgow counting centre. In my constituency, the more affluent the area, the larger the remain vote. We have a responsibility and a duty as politicians to reach out to those who voted leave to strive to understand why and to respond to their concerns. I suspect that increasingly they feel that they have no stake in society. In general terms, although this is not necessarily always true, these are communities where the ravages of deindustrialisation have hit the hardest and where the economic recession has bitten deepest.

In many ways, there are pronounced similarities with the Scottish independence referendum in 2014, where some of the most deprived communities in Scotland voted to leave the UK. They also felt disillusioned and disfranchised in large numbers. Many of them had not cast a vote in many years, if at all. There is a clear problem for us to address, and we must find an amicable solution that reconnects communities to the political process and proves that politics can and will be a power for good in their lives. We must not let the Conservative Government or the Scottish Government—or any Government, for that matter—abdicate their responsibilities and abandon those who need help the most.

Immigration is an issue that came to dominate the EU referendum debate, and that concern must be addressed, but is immigration the true cause of the deep dissatisfaction felt in communities, or is it other things? There are six years of public sector austerity, the lack of a proper house building strategy, the failure to recruit adequate numbers of GPs, a dearth of well-paid, progressive, highly skilled work and crushing pressure on schools and hospitals. Those are failures not of the EU, but of national Governments north and south of the border. As such, they can all be resolved by a sea change in UK and Scottish Government policy. We should not allow the UK Government in particular to hide behind the EU over those public policy failures.

Ian Blackford (Ross, Skye and Lochaber) (SNP)

We in Scotland have a demographic challenge that can only be aided by people coming to live and work in Scotland, and we need to encourage people to do so, perhaps with the post-study work visa, and there are EU citizens who still wish to come. We need to talk about how immigration enriches us and not demonise those who wish to come here to live, work and make a contribution to our society.

Ian Murray

That is precisely my point: immigration enriches society. Politicians have to be much braver about making the positive case for immigration. The arguments are not mutually exclusive; they all have to be set alongside the fact that if we have an influx of people, whether through migration or for other purposes such as work, public policy has to respond. The previous Labour Government had the migrant impacts fund, which was precisely that kind of response for local communities in need of additional resources to deal with the impact of the movement of people, whether immigrants or otherwise. That was scrapped in 2010 by the Tory Government, and we should look seriously at bringing it back. None of these issues is mutually exclusive, and I absolutely agree with the hon. Gentleman. He was not only wonderful at intervening, but has successfully made me lose my place. I will get used to being back on the Back Benches shortly.

I was saying that we should reassure those who voted to leave and those who voted to remain that we are listening to them by demonstrating not just through speeches, but by our actions, that we are firmly on the side of everyone who voted in the EU referendum. In doing so, our first priority—it is a priority that needs to serve the interests of people across the entire country—should be to secure the best deal possible in the Brexit negotiations. That means adopting a negotiating stance that takes into account all views: those of people who voted to leave and those of people who voted to remain. The building blocks for the negotiations must be what we want to retain from the European Union.

As Scottish Labour’s Westminster spokesperson, my focus today is obviously on Scotland, but I am sure many people from the other devolved Administrations, such as Northern Ireland, which voted to remain, and Wales, which voted to leave—my hon. Friend the Member for Llanelli (Nia Griffith) is here—will have their say in the negotiations. I am sure Members from Wales and Northern Ireland will make those points.

Let us reflect on the vote in Scotland for a moment. Some 62% voted to remain, and 38% voted to leave. In my constituency, 78% voted to remain. I assume that was in no small part due to the contribution of the significant financial services sector to the economy in Edinburgh, the large number of businesses that export and the world-class universities that rely on EU funding for some of their world-leading research. Those factors all have to be taken into account as we set out our negotiating stance, so I will go through Labour’s priorities and principles.

Hannah Bardell (Livingston) (SNP)

The hon. Gentleman mentions his voters and the financial sector in Edinburgh. Does he accept that Scotland remaining within the EU would provide an opportunity for businesses to look north to Scotland, particularly in the financial sector? For those who are considering leaving London, there is an opportunity for his constituents, for Edinburgh, other cities in Scotland and Scotland overall.

Ian Murray

When I conclude my remarks, I will say that we should be looking at this as an opportunity, not only for Scotland, but for the whole United Kingdom. We are where we are. We need to ensure that the Government’s negotiations reflect what has happened, not only in Scotland but across the component parts of the UK, and make those arguments. I hope the financial services sector in the UK and in particular in Edinburgh reflects on where we are and makes those decisions accordingly. The uncertainty brought about by the decision to leave the EU is similar to the uncertainty that comes from any constitutional change that we have to deal with. I am delighted that the hon. Lady intervened, because she gave me an opportunity to mark my paper when I sat down. I am getting the hang of it.

I will go through the founding principles from which everything else in these negotiations should flow. We must be mindful of respecting and upholding the will of the Scottish people, not just in this referendum, but in the 2014 independence referendum. Those results have shown that Scots wish to remain part of the United Kingdom and retain the advantages of European Union membership. I understand that that is not a particularly easy thing to achieve, but they should be the founding principles of what we want to achieve in these negotiations. That is Labour’s starting point and forms the basis of what we believe should be Scotland’s negotiating platform.

That platform is informed by an excellent and aptly named paper written by Professor Jim Gallagher of Nuffield College, Oxford, entitled “The Brexit shambles: charting a path through the rubble.” Hon. Members can probably guess from the title where he is coming from on the issue. The paper identifies and delineates four priorities that should guide the Scottish and UK Governments—I have added one to make it five, because it does not mention the role of EU nationals and it is important to put that on the record as well.
As matters stand today, Scotland belongs to two Unions and gets significant advantages from both. The people of Scotland recognise that and have recently voted overwhelmingly for both Unions to be continued. The result of the referendums should be respected, but instead, they are being ignored. The political context in Scotland at the moment is that the Conservatives want Scotland in the UK but out of the EU, and the Scottish National party want Scotland in the EU but out of the UK. Only the Scottish Labour party is clear that we want Scotland to remain in the EU and in the UK. The UK and Scottish Governments have an obligation to pursue every avenue in pursuit of that outcome, and to facilitate that, we should look at the priorities that should be put in place. Scotland’s first priority should be to urge the UK Government to accept a Norway-type option, if I can use that terminology.

Stewart Malcolm McDonald (Glasgow South) (SNP)

I am very grateful to the hon. Gentleman for giving way—he is a decent man. He said that he does not want to see referendum results ignored but went on to state that Scottish Labour’s position is to keep Scotland in the UK and the UK in the EU. Given that that is not what people voted for across the UK, does he perhaps consider that his party is behind the curve on the issue?

Ian Murray

When giving way, I should have asked the hon. Gentleman whether he would sign my early-day motion—he probably will not, given its content. If he had been listening properly, he would have heard me say that what the people of Scotland have voted for in the two referendums is a position where Scotland is in the UK and retains the advantages of being in the EU. I did not say that the UK will remain in both, because that is quite obviously not so.

Hannah Bardell rose—

Ian Murray

I will give way to the hon. Lady if she will confirm whether she will sign my early-day motion.

Hannah Bardell

I will need to read the hon. Gentleman’s early-day motion before I make a decision; it would not be appropriate to make a comment either way without prior knowledge. I have a brief point. Does he not recognise that many people in Scotland voted for independence on the basis that his party and other UK parties said that the only way to retain Scotland’s place within the EU was to vote against independence?

Ian Murray

I am sure that you will rule me out of order, Mr Bailey, if we rehearse the well-trodden paths of the arguments about the Scottish referendum. If the hon. Lady does not mind, I will touch on some of them as we go through my contribution. Knowing the time, that it is the last day of term and that everyone is desperate to head to the shores of Spain—without a visa—to enjoy the sunshine with their families, I will get on to that as we go through.

The first priority—the Norway-type option that I referred to—is that we would have membership of the European economic area. UK, and hence Scottish, membership of the EEA would mean maintaining much of the same conditions of trade and freedom of movement as currently exist. I am not sure whether the Government’s position in the negotiations is to maintain the free movement of people, but the Norway-style option would allow that to continue. It is worth putting in context why that is important.

The value of Scotland’s unfettered access to the EU single market is well established. The Scottish Government’s figures value Scottish exports to EU member states at around £12 billion annually, but it is worth reflecting on similar figures that show Scottish exports to the rest of the UK, which is why this is such an important debate. Those exports are worth four times that amount at £49 billion a year, which is why I think that the Scottish people have voted twice to stay with the advantages of being in both Unions. It makes scant economic sense to prioritise the EU market over the UK market. In this debate, it cannot be an either/or—we should strive to maintain full access to both.

UK membership of the EEA would allow Scotland to continue trade undisrupted with both the EU and the UK. If that becomes impossible, a separate trading deal would have to be negotiated and nobody knows what that would look like. The other option at the other end of the spectrum, which I think unpalatable, would be to abide by World Trade Organisation rules. That would have significant impact on UK and Scottish trading capacity.

The second priority should be to protect Scotland’s public services and public spending by securing a continued fiscal and political union with the UK. These are the building blocks for the negotiations. The Scottish Government attach huge importance to the fiscal relationship with the UK; in his own words, the former Finance Secretary strained “every sinew” to protect it during the negotiations on the fiscal framework underpinning the Scotland Act 2016. The Scottish Government’s accounts and independent analysis show that Scotland is carrying a substantial budget deficit. It is incredibly important that Scotland’s position in the UK is maintained through the block grant and the Barnett formula.

Without those mechanisms, the Scottish Government would have to undertake dramatic spending cuts or increase taxes to balance the books, based on their current annual accounts. That point was reflected on by the hon. Member for East Lothian (George Kerevan), the SNP’s representative on the Treasury Committee, who said that not having those fiscal transfers would be incredibly difficult—I think that the word he used was “catastrophic”—for Scottish public services.

The third priority is the protection of Scotland’s currency union with the rest of the UK. Many of these arguments were covered in 2014, as we have just discussed in the intervention by the hon. Member for Livingston (Hannah Bardell), but it is worth revisiting them in this context, because it is incredibly important for the debate on how the negotiations with the EU proceed. If the first principle is to ensure that Scotland remains in the UK and with the benefits of the EU, we know that the euro is a non-starter, so that should come off the table—we owe the former Prime Minister and Chancellor Gordon Brown a debt of gratitude for keeping us out of that—but what of the other currency options that may be available? We know that the best available currency option at the moment is the current settlement. As part of the Scottish and UK Governments’ Brexit negotiations with the EU, we must make sure that Scotland’s position in the UK is protected, because Scotland’s fiscal and economic union with the rest of the UK is beneficial for the currency argument. I am conscious of the time, so I will not go through the currency arguments, but they are all on the record. The preferred arrangement in terms of Scotland’s fiscal, currency and economic position is the current arrangements, and the negotiations must underpin that point and reject all other arrangements.

I will quickly skirt through the fourth priority, which is to explore all options for Scotland’s future relationship with the EU. If we view this positively, it could turn the Brexit negotiations on their head, transforming a vexatious trial into an unprecedented opportunity. The hon. Lady mentioned that earlier. No one has ever suggested that the EU is a tremendous success and there are elements that Scotland may wish to relinquish. Equally, there are parts that Scotland may wish to retain. One aspect of the Brexit debate rarely mentioned is that it will greatly empower the Scottish Parliament. Many of the competencies, such as control over fisheries, agriculture, university research funding and environmental policy, will transfer directly to the Holyrood Parliament.

Hannah Bardell

I am grateful to the hon. Gentleman for being so generous; I promise this will be the last intervention. He makes the point about the EU not being perfect. Does he accept that, with a seat at the top table, Scotland could have a greater voice and influence in reforming the EU as an independent country within the European Union?

Ian Murray

That flies in the face of the arguments of economic, currency and political union with the United Kingdom; that is essentially Scotland turning its back on a much more successful Union, to be part of the European Union. What people have said quite clearly is that they want Scotland to be part of the UK and part of the EU. If where we want to get to in the negotiations is an independent Scotland—I am sure that it is for the hon. Lady; if it was not, I would be incredibly surprised—the journey and the pathway to get there is slightly different from the pathway and journey towards an outcome that keeps the UK together and keeps Scotland with many of its current advantages within the UK as a member state of the EU. That should be the genesis of the negotiations. I appreciate that the Labour party perspective and the Scottish National party perspective on the outcome of that journey are different, but my contention is that it has to be about keeping both Unions together.

Michael Keating recently observed that, given the new powers that will fall within the competence of the Scottish Parliament, the Scottish Government could choose to align themselves with the EU and the directives that currently exist, rather than the UK, and that they can have either an informal or a formal relationship. The key thing is that there will be new and interesting opportunities. For example, the responsibility for delivering air quality lies with the Scottish Parliament but falls under the EU directive. The inter-governmental working between the UK and Scottish Governments means that the English and Welsh policy and the Scottish policy to deliver that directive can be different, but they are under the same umbrella. Strong inter-governmental working will be needed to ensure that example and many others are delivered across the UK.

Lord Falconer, the former Secretary of State for Constitutional Affairs, commissioned a piece of work in the other place to set out options for a federalised membership structure. Many people say that that is impossible to achieve, but we are in uncharted territory and everything should be on the table when we examine the possibilities for protecting the component parts of the UK and the advantages they get from membership of the EU.

The fifth and final principle that should guide these negotiations, particularly from a devolved perspective, is that we must protect the rights of EU nationals who live, work and contribute to the UK. Conversely, we must protect the right of UK nationals to work, study and live in other EU countries.

The UK’s political landscape is changing rather rapidly. A week is certainly a long time in politics these days. Brexit is perhaps the reckoning that the political system has been needing for a long time. It enables us to readdress where we are in the political landscape and think about how we respond to the big issues for communities. There is no doubt that the basic things that people took for granted—a job, a decent wage, a home of their own, a secure pension in old age and the idea that the next generation will do equally well if not better than the current generation—are increasingly becoming unattainable. Whether that is fact or perception, it is what people tell us. They are working harder and doing the right thing, but they are not receiving the benefits. I think that is the genesis of why the UK voted to leave. That is a failure not of the EU but of national Government.

Let us reflect on where we are. I would like the Minister to address some of these issues. The principle that the UK should come out of the EU but Scotland should stay in the UK and retain many of the advantages of being in the EU should guide the Government’s negotiations with the devolved Administrations and the EU. The Minister has the opportunity to set out the UK Government’s position on the devolved nations and Administrations today and be clear that the Brexit negotiations will protect their interests. He should reaffirm that the UK Government will recognise that Scotland voted to be in the UK and to keep the advantages of the EU. Those will be the foundation stones and building blocks for the negotiations. If we are optimistic about this, and if we all want the same journey and outcome, those should be the conclusions that we seek.

The former leader of the Labour party, my right hon. Friend the Member for Doncaster North (Edward Miliband), said last week in his Tony Benn memorial lecture:

“This can be a progressive moment. In any case, there is no point in the left sinking into gloom. The only answer is to rise to the challenge. The optimists have always been the people we need at times of greatest adversity. Today we need them more than ever.”

I hope the Minister is indeed an optimist and will respond positively to this debate.