"All pro-Europeans must step up" - Willie Rennie's speech to the David Hume Institute

We must wake up to the threat that Brexit poses and the threat that choking off good immigration would bring. And we must seize the opportunity of a Brexit deal escape chute. All pro Europeans must step up. The time is approaching fast.

By Willie Rennie Feb 14, 2018 1

This series of lectures is called “Scotland after Brexit”.

I’m not going to speak about that.

I’m not going to accept the premise.

If I started talking about life after Brexit people might think that even I think it is unstoppable, inevitable, irreversible.

So that is not what I will address this evening.

Especially as in 2018 people are starting to think again.

And we now know Article 50 can be stopped.

It’s remarkable that 20 months on from that vote, the UK Government is still no clearer on what it wants to achieve by Brexit beyond broad wishful thinking and formulaic incantations.

Tonight I am going to look at the new evidence on the costs of Brexit to the UK and Scotland.

I am going to show how the public is taking note of these costs and that minds are changing.

I will set out what needs to happen to allow the public mood to be given a voice.

I will take the time to talk about the value of immigration – which is perhaps the biggest and most controversial Brexit issue.

And finally, I will suggest how, if we can have a future without Brexit, we cannot just go back to how things were before.

So perhaps, after all, I will be talking about the future.

Not, I hope, after Brexit.

But after the Brexit debate.

 

The costs of Brexit

David Hume said “A wise man apportions his beliefs to the evidence”.

So, I want to use my first section this evening to set out some of the new evidence of the impact of Brexit.

There is a lot of evidence. I struggled to decide the order to put these to you, there are so many. So let’s just take them as they come.

Mark Carney, the Governor of the Bank of England, has said that the UK economy has lost £200m a week in growth because of Brexit. At Davos he was clear that £10bn had been forfeited in GDP since June 2016.

The IMF confirms that the UK is underperforming. The tragedy is that this has happened just as the rest of the world experiences a burst of growth.

In fact, one of the few positives in the economy is that export figures have improved because of surging growth elsewhere in the world.

I don’t think people signed up to become a servant state that relies on the purchasing power of booming foreign economies.

St Andrews University has found that small and medium-sized enterprises are likely to be hit hardest by Brexit.

Academics found that smaller entrepreneurs in the supposed growth “superstars” of innovative and export-oriented companies are the most concerned about investment.

The CBI’s director, Carolyn Fairbairn, has warned that losing the customs union through a no-deal Brexit would increase costs on UK goods sold to the EU by between £4 billion and £6 billion per year and imported goods tariffs between £11 billion and £13 billion.

The costs of regulatory red tape and border delay would be even greater.

So this is all bad news on the horizon.  Well, not on the horizon, but living amongst us now.

And, against that, the Scottish economy is worryingly flat.

The Scottish Government’s chief economist Gary Gillespie produced a report in January.

Growth at 0.2% in Quarter 3 is

“notably below its long term trend”,

“the outlook for business investment plans remain fragile”,

“Labour productivity fell”,

“consumer sentiment remains weak”.

 

It’s all in the government papers

You don’t have to have followed all of that or written any of it down. All of this has been brought together for us.

The UK Government has a set of papers that show how our UK economy will suffer by between 8% and 2% depending on the details of the final deal.

Worse off under every scenario.

The Scottish Government has a set of papers that show how our Scottish economy will suffer between 8% and 2% depending on the details of the final deal.

For once the Scottish and UK Governments agree about Europe.

But I don’t think that’s a coincidence.

This is the fifth year that the David Hume Institute has held this winter series. It is the fifth time I am going to use the following paragraph.

I can’t believe it either.

It’s the same words. I have said them every lecture.

In 2014 it was a warning to SNP about independence, in 2015 it was a warning to the UK about Brexit, for 2017 it was the UK again.

This is what I said:

Our relationship with the EU was “at risk”.

I said how “we are part of a European market with 500 million customers” worth trillions.

I warned that the “border effect between the United States and Canada had reduced trade by 44 per cent.”

Simply having a border harms trade and hits businesses and consumers with costs. It weakens growth.

This year I am aiming the words at both the UK and Scottish governments.

We have two governments who each ignore inconvenient facts.

The UK ignore the cost – and try to hide – the economic damage of leaving the EU single market.

And the SNP ignore the cost to Scotland of dismantling the UK single market.

They unite to cheer export figures which simply confirm that UK and Scottish prosperity is dependent on Euro-zone prosperity. Or perhaps dependent on the 7-9% GDP growth in India and China.

Or they celebrate increased tourism because of the collapse of the pound.

It’s not a very positive ambition is it?

Ah, says the UK Government, we haven’t modelled our new, outstanding, bespoke model yet.

But the question is this: Why not?  Why on earth haven’t you modelled the bespoke model you seek. 

Surely any government would want to settle the nerves of everyone in the country by revealing the huge potential of such a deal. 

Even a widely optimistic, best case scenario would be a start. 

But they haven’t.

And we know why they won’t. 

It’s because there is no such deal that would boost trade, that would grow our economy and that make us better off.

They are fooling no-one but themselves.

 

Growing support for an exit from Brexit

As I recorded earlier David Hume said, “A wise man apportions his beliefs to the evidence”.

People are wise.

Opinion is changing.

Straight after the 2016 referendum, support for a vote on the deal was tiny.

Even last summer people were against it.

Now that has changed.  Now it is 58 per cent in favour. I have watched it grow month, by month.

The Guardian poll was a landmark.

Every age group, except pensioners, in every part of the country.

I have been calling for the opportunity for the public to be able to veto a bad deal, to exit from Brexit, all that time.

But even my closest and most cheerful confidants are not telling me that this change in public opinion was my doing.

So what is going on?

I think it’s like this.

There is a section of the population who does think that when a decision is made, you simply have to get on with it.

Especially if it sounds like there is no choice and no way back.

In the aftermath of the referendum that section of people will have thought, “It’s over and it’s decided”.

After Article 50 was triggered those people would have thought, “there’s no way back, it can’t be stopped.”

But in 2018 people are thinking again.

Because we know Article 50 can be stopped.

The man who wrote itLord Kerr, the UK's former ambassador to the EU, has set out very clearly how it's possible to reverse course.

We have heard clearly how we can get out of this mess.

Now in 2018 we can feel the early consequences of Brexit and have also seen the evidence of what is likely to happen next.

We have seen how the architects of Brexit, in the Conservative Party have no clue what they want or how they are going to get it.

Britain is at the mercy of the warring factions in the Conservative Party. 

It is therefore little surprise that people are beginning to think that they have had enough of it.

It is the economy that is the driver.

Look at the shift in Sir John Curtice’s public opinion survey released in December.

The number of people who now expect a bad deal has shot up from 37% last February to 52% - across the UK.

Concerns are now as strong in the rest of the UK as they are in Scotland.

The Guardian poll showed more people expect Brexit to harm the economy than help it.  That’s the case in every part of the UK and in every age group apart from pensioners.

The queue for a public vote on the deal is growing.

Most people want one. Most people fear for the economy if we don’t get one.

Everyone who wants that to happen needs to make sure they stand up and be counted, and that moment will be very soon.

Look at the list of people who are prepared to say this is important:

Andrew Adonis, Peter Hain, and John Major who called it “credible”.

Some people hedge and say they can see the arguments but stop short. People like Nicola Sturgeon, Mike Russell, Diane Abbott.

Just this week there were new supporters: Chuka Umunna and Anna Soubry.

David Hume wrote, “There is no such thing as freedom of choice unless there is freedom to refuse”.

Well the time is coming fast when people should have the freedom to refuse a bad Brexit deal.

People need to get on board.

The national interest can be saved.

 

Labour

So support for a Brexit deal referendum is growing in the country.

There is a new argument that has crystallised in recent weeks that might encourage even more people to step up to support a Brexit deal referendum. 

It is the UK Government that has presented the facts. 

The new assessments show that it is the poorest parts of the country that will be hit the hardest with Brexit.

The North East, West Midlands, the North West, Northern Ireland, Scotland and Wales will see an above average reduction compared with other parts of the country.

So not only will Brexit make everyone poorer but it will exacerbate the divisions in our country.

We will be poorer, we will be more divided and we will be rejecting our neighbours. 

And the Labour Leadership is just letting this happen.

I know many in the Labour Party feel very frustrated by Jeremy Corbyn’s approach to Europe.

His long standing Bennite antipathy.

His lacklustre participation in the referendum.

His failure to put any real pressure on the Conservative Government.

His oscillating position on our future relationship with our neighbours.

When we look back at this time people will be astonished at the leader of the opposition.

Labour has a big responsibility.

It cannot stand by as we are made poorer, are more divided, and are rejecting our neighbours.

My warning to Labour moderates is this.

The people are running ahead of the people’s party. People want the final say on Brexit.

Jeremy Corbyn is not playing a long game on Brexit. He does not have a masterplan to swing into action at the last minute.

You will get to the last minute.

You will check your watch and he won’t be there but Brexit will be.

It is time for pro-EU progressives in the Labour Party to speak out.

To those who are angry and frustrated with their leadership now is the time to speak out.

Vague complaints about Brexit won’t be enough. 

You need to show how to escape from it. 

Join us to make that case before it is too late.

 

SNP

But the SNP must end the hesitation too.

They have set up independence as their Brexit escape chute but they must know two important facts.

A Brexit deal referendum for the whole UK has a better chance of success than an independence referendum. 

Support for a UK wide vote has a 14-point lead – a margin the SNP could only dream of for independence.

Breaking from the UK at the time that the UK is breaking from the EU would be a level of turmoil that would be deeply damaging.

Giving up on the UK’s position in the EU would be as damaging for an independent Scotland as it would be for the United Kingdom.

I appreciate that the SNP do not support the continuation of the United Kingdom but it is surely in all our interests for the whole of the British Isles and Ireland to remain in the EU. 

This is a time for unity.

So the SNP should put aside their antipathy to the UK for once and support a Brexit Deal referendum that is in all our interests.

 

The benefits of immigration

I mentioned just now it is the economy that is the driver.

Immigration and the economy are fundamentally connected.

I want to thank the Scottish Government for publishing its “Scotland’s Place in Europe” paper earlier this year.

It reads:

“The overwhelming number of EU nationals in Scotland make a dynamic and positive contribution”.

“On average they contribute £10,400 in government revenue”.

“Each additional EU citizen working in Scotland contributes a further £34,400 in GDP.”

Those are astonishing figures.

And with Scotland’s population ageing, we will all need younger migrants to live and work in Scotland as the rest of us get older, to take care of us and take care of the country’s bills.

EU nationals who come here tend to be bright, healthy and working.

They also tend not to have families here. 

Many go home once they have earned enough.

They are not a burden to our welfare, health or education system.

They have helped turn around the long-term decline in Scotland’s population and mitigate the effects of an aging society.

The demographic challenge Scotland still faces will see more deaths than births every year for the next 25 years.

By 2041 there is projected to be as many as 10,000 more deaths than births that year.

Migration could account for all of Scotland’s population growth over the period.

Ensuring EU citizens are free to continue to live and work here is essential for maintaining that population growth, which underpins future economic growth and the sustainability of our public services.

In Fife I know this. I see that amazing range of industry and enterprise that is damaged by the threat to EU migration.

Take Allanhill fruit farm outside St. Andrews – it has 500 EU workers at peak.  Pittenweem – 200.  Barnsmuir - 270. 

Since the Brexit vote the farms have been struggling to get the workforce they need. 

Their workers have faced a pay cut because of the fall in the value of the pound against the Euro that followed the Brexit decision. 

The distance from home and the Scottish weather become more important when you don’t get paid as much. 

And they are wondering whether Britain really wants them when they hear that immigrants are a problem.

This is not just Fife.

10,000 EU nationals work in the food and drink sector across Scotland. 

In 10 years the food and drink sector has grown 44% to £14billion.  The Scottish Food and Drink strategy aims to double that by 2030 to £30billion.  That will be impossible without the workforce to drive that growth.

At St. Andrews University, one fifth of the staff come from elsewhere in Europe. 

And just over 10% of all students are from the EU. 

The University’s exposure to Brexit is huge.

Professor Sally Mapstone, Principal at the University has said any weakening of EU ties through Brexit would lead to “impoverishment way beyond the financial”.

Professor Sir Pete Downes, the principal of Dundee University, spoke of the risk of staff and students leaving the city because of the “hostile” Brexit vote.

Anton Muscatelli at Glasgow spoke of the repellent effect of Brexit on researchers considering a career in the UK. 

He says that the effect is on researchers from across the globe – not just from the EU.

From the world-leading research carried out at St Andrews University, to the cabbages and kale harvested from the surrounding fields.

A hit to the economy, a hit to tax income from the businesses and workers, a hit to our world class reputation in research and our world class universities, a hit to locally grown quality produce in our shops and a hit to our reputation in food and drink.

Yet there is an expectation that with Brexit immigration will be cut.

There was Nigel Farage’s Breaking Point poster during the campaign.

There’s was Boris Johnston’s warning that if we remained in the EU 80 million Turks would flood over our borders.

A mega opinion poll after the referendum found that one third of Leave voters chose to back Brexit as they saw it "offered the best chance for the UK to regain control over immigration and its own borders." 

It was the second biggest motivation for Leave voters.

Without a cut to immigration there will be fury with the Leave campaign and the Conservative Party promises.

Yet that very cut to immigration poses a direct threat to the country.

The Conservative Government faces a choice: damage the economy or admit they were wrong on immigration.

Risk the international status of our best universities.

Undermine the potential of the food and drink sector.

Fail to address the shortage of workers to pay for our public services.

Undermine the sustainability of our society.

And what is the alternative.  For politicians to admit finally that there is a cost to cutting immigration.

It is at the centre of the Brexit debate but it is not being talked about.

This is a clash of conflicting priorities and the Government are making no attempt to explain to the British people that they cannot choose both. 

That must change. 

There must be a debate. 

Government must face up to its responsibility.

Things can’t go back to how they were before

And the story of Brexit is a lesson for the way in which the UK should be governed going forwards.

David Steel, Lord Steel, was right a fortnight ago when he said that the Scottish Government and Scottish Parliament had not been treated well by the UK Government over Brexit.

The joint ministerial committees haven’t met. The devolved administrations haven’t been involved in shaping the position.

A lot of that is because the Conservative Government is too riven with factions to have a coherent position anyway.

Now, I subscribe to the theory that the Clause 11 debacle is just a rush-job mess by the Conservatives rather than a deliberate conspiracy.

Nonetheless, powers were about to be grabbed.

The heart of the debate is how do we have a UK-wide framework for devolved powers which is sensible for everyone involved?

I think the answer is Federalism.

Federalism involves devolved administrations coming together to agree common frameworks.

We should do more of it in this country.

Most countries in the world do it and they can’t understand why the UK seems so incapable of undertaking modern, common-sense governance.

The key to federalism is that the different administrations all may have different priorities and nuances within a framework. But they all have an eye and a care for the success of the whole.

This is where, perhaps, the SNP need to reflect. I think people would worry about whether the SNP were truly committed to the success of a UK-wide framework for anything.

Their narrow political interest is to suggest that the UK cannot really ever be made to work.

So whereas abroad, federal administrations may argue fiercely to get the framework shaped to their needs, in the end they will all agree to something that promotes the common good.

Nationalists might prefer to give the impression that the common good is impossible. So that breaks the mutual trust that is needed for federalism to work.

So that’s why I agree with my colleague Malcom Bruce in the House of Lords a fortnight ago.

Malcolm said:

“something like federalism will eventually have to be enshrined in our constitutional arrangement if the union is to hold together.”

When I asked Sir Ming Campbell to prepare a report on federalism in 2012, he argued for:

“a distribution of powers among the nations of the United Kingdom, for joint action where that is necessary and effective”.

There has been a new distribution of powers since then. What is missing is the joint action.

For example, the UK Government published a UK industrial strategy without consulting any of the devolved administrations.

Given that skills training, enterprise support and business taxation are devolved, that sounds a ridiculous mistake to make.

The UK policy is weaker because it does not promote joint action.

And now with the need to construct jointly agreed frameworks for returning powers, the UK Government is caught out again.

They can do better.

The Economy

In closing, I want to sum up some of the points I have made in previous years about how to build a successful long term economic future for Scotland.

The immediacy and urgency of Brexit means I am not able to dwell on these tonight.

After all, the points I have made in previous years about the economic impact of our excellent universities, the financial services industries, and food and drink exports are all at risk under Brexit.

So those are at the front of my mind.

At our heart we want every individual to achieve their potential.

To be a successful country Scotland will need the skills, talents and creativity of everyone who lives here to participate in the economy and society, to get a good job and to feel they belong.

It’s a drive for participation and productivity.

Diversity and education will be the twin engines that drive invention and creativity to enrich our country and provide a bright, liberal future.

Business needs a Scotland where they can draw on the well-educated and trained talents of people from all backgrounds, with a government that supports education, innovation and science.

To achieve these great goals, we must wake up to the threat that Brexit poses and the threat that choking off good immigration would bring.  

And we must seize the opportunity of a Brexit deal escape chute. 

All pro Europeans must step up.  The time is approaching fast.


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