Thank you, convener. This is the first occasion on which I have appeared before the committee or, indeed, done anything formal, since I was given my new title. I am honoured to take on portfolio responsibility for Europe and external affairs. I pay tribute to my long-term predecessor, Fiona Hyslop, who had responsibility for those areas for more than 10 years. She took on the role from me about 11 years ago, so it is good to be back. I look forward to working with the committee on those topics, as well as to continuing to engage on the other areas in my portfolio.
Members are aware that the Scottish Government’s preferred compromise, if Brexit was to happen, was to remain in the single market and the customs union. We have argued that case since 2016 and we continue to contend that, as all the evidence shows, anything short of that will be deeply damaging. Theoretically, that position could still be achieved, which is why we have sought to influence the United Kingdom Government on the matter, and why we continue to do so through the joint ministerial committee process.
However, the Prime Minister’s speech on 3 February, the statement from Michael Gove on the inevitability of friction on trade on 10 February, and Monday’s lecture in Brussels by the chief negotiator David Frost, make it certain that the UK Government does not intend to follow such an approach: far from it. We now know that it is determined to tread a much more dangerous and damaging isolationist path. The UK Government intends to seek and deliver a hard, uncompromising and extreme Brexit that rejects co-operation and sensible collaboration, and seeks instead to retreat to some mythical “Empire 2” ideological purity. Regrettably, there is no doubt—none at all—that the UK Government has made that choice.
That choice can lead only to an outcome that is, at the very best, the most basic of free trade agreements. Such an agreement will, in the words of the former permanent secretary at the Department for Exiting the European Union, Philip Rycroft, impose
“regulatory barriers to trade”
that make it certain that
“the conditions for doing business between the UK and the EU will change.”
It will not be Canada plus, or even Canada minus; it will be Canada minus minus. It will be minus, most probably, zero tariffs and zero quotas unless there is some degree of alignment, which David Frost has completely ruled out.
There could even be something worse. According to Tory sources there could be an “Australian-style” relationship. That is their code for no deal, because there is no EU deal with Australia. That is the no deal that has been predicted this week by Fabian Zuleeg, from whom the committee has heard evidence. We must be very clear what that will mean. In comparison with EU membership, a Canada-style deal will lead to a fall of £9 billion in Scotland’s national economic output. An Australian-style deal—more accurately, no deal—will lead to a fall of £12.7 billion. Trade, inward investment and productivity will be hit. In 2018, overseas exports of food from Scotland were valued at around £1.6 billion, of which £1.1 billion, or about two thirds, went to countries within the European Union. That will be hit.
The end of freedom of movement, particularly if it is allied to the UK Government’s stringent and ridiculous new immigration plans, will mean a fall in Scotland’s working population. Social care and the national health service will be particularly vulnerable.
That all means that there will be a turning away from the idea of mutual co-operation and the shared values that underpin the European Union, and it will make us poorer.
The UK Government has now drawn that hardest of hard lines in the European sand. The Scottish Government must re-assess its position. We will do all that we can to limit the damage and to try to talk some sense into the UK Government. We must now also prioritise not persuasion, but defence. We will have to work even harder on securing Scotland’s rights and on mitigating the negative impacts of Brexit, while also seeking every opportunity to give Scotland the right to choose a different and more sensible path.
The Scottish Government will do all that we can to maintain dynamic alignment on environmental and labour standards, and close co-operation with the EU. That is in recognition of the positive outcomes that EU membership has delivered for Scotland and of our objectives to have continued alignment with a view to re-accession. That is also in recognition of what the Scottish people actually voted for.
One of our main tools will be the new continuity bill, which will be introduced in Parliament soon. We will assert our right to operate in our areas of competence in the closest and most dynamic alignment that we can secure with the EU. We will defend that right vigorously if it is challenged by the UK Government. It is our firm view that the extent to which devolved law aligns itself with the law of the EU should be a decision for the Scottish Parliament, and no one else, to take.
We will be clear about our priorities and we will make sure that they are emphasised in all our dealings with the UK Government and the EU. We will, for example, press the case for continued full participation in programmes such as horizon Europe and Erasmus+ We will seek to secure a good agreement on services, especially around mobility of people and data, which would be well beyond the kind of free trade agreement that the UK government wants to impose.
We will argue for protection of our exports, particularly those such as seafood and red meat, which are especially vulnerable to tariffs and to the trade friction that the Prime Minister—remarkably—sees as being acceptable.
Regarding internal security, our citizens will be less safe unless we put in place replacement arrangements for tools like the European arrest warrant and for access to key EU databases.
We will continue to protect Scotland’s interests as best we can, but people in Scotland have to be realistic about the extent to which the Brexit ideologues who are in charge of UK Government strategy are prepared even to listen. We cannot leave the people of Scotland under any illusion. The position that the UK government has taken will be very damaging, and it is a position that it alone has chosen. Devolved Administration ministers have so far been given no chance even to look at it, let alone to influence it. UK ministers cite plenty of meetings taking place, especially among officials, but as yet there has been no sharing of the text of the deal, no role for the devolved Governments in deciding the UK position, and no meaningful ministerial discussion.
It is, I regret, obvious that even with the best relationship in the world with the UK, UK ministers would still be hell-bent on the destructive and damaging hard Brexit that they have defined with their aggressive rhetoric and their indelible red lines. No matter what we, Wales, or Northern Ireland say in or out of the JMC, that is the stark truth.
We will, of course, continue to try to protect Scotland’s interests because that is our job, but unless something fundamental changes, the UK now intends to do to us the hardest of Brexits, rather than negotiating with us the type of Brexit that we want. We will have to stand up for ourselves to stop that happening.