Tuesday 3 July 2018
[Sir Roger Gale in the Chair]
Leaving the EU: Implications for Scotland
I beg to move,
That this House has considered the implications for Scotland of leaving the EU.
It is a pleasure to serve under your chairmanship, Sir Roger. I am delighted to have secured this debate and I thank my colleagues on the Backbench Business Committee for supporting my application. I begin this debate in the hope that we can have a measured, clear analysis of the facts and challenges that lie ahead, which are of material importance to Scotland and her prosperity.
The implications for Scotland of leaving the European Union are profound and significant. First, we need to consider the damaging effect that leaving the EU will have on Scotland’s vital interests both at home and abroad. Nobody can deny that the UK’s governing party is hopelessly divided against itself, as the UK faces arguably the biggest challenge and upheaval since the second world war. The Cabinet speaks not with one voice, but with several confused and contradictory voices. How can it enter into negotiations with the EU and inspire confidence from any quarter?
That is quite an interesting point. I hope to maintain a respectful dialogue in this debate. I gently remind the hon. Gentleman that the former Tory leader and Prime Minister, John Major, has called the handling of Brexit “bad politics” and a “grand folly” dictated by “ultra Brexiteers”. He has also said:
“Many electors know they were misled”.
How people voted in the EU referendum, therefore, is beside the point. I want to focus on the damage that is being done to Scotland, because a lot of people have watched the unfolding of the Brexit process with horror and alarm.
The UK Government’s own leaked analysis has shown that Scotland’s GDP could face a hit of up to 9%, with analysis from the Fraser of Allander Institute showing that a hard Brexit could cost Scotland up to 80,000 jobs. The final figure could be higher or lower—we have no idea at the moment. The Governor of the Bank of England, Mark Carney, has revealed that Brexit has already cost each household £900.
The hon. Lady makes an excellent point: we do not really know at the moment. That is true of all forecasts in any context. We do not really know. What we need to do, however, is pull together our Governments, countries and peoples, to make a success of what will inevitably happen, given the passing of the European Union (Withdrawal) Act 2018. We are leaving the European Union, therefore we need to work together. No one knows what will happen, but we are responsible for making our own future. We are the masters of our own fate.
The hon. Gentleman is correct. We know that until everything is agreed, nothing is agreed. In that context it is hard to make final predictions. I say to him, however, that we have experts whose minds are more academic on this issue than his or mine, and their opinions matter. Independent forecasters, the UK Government’s own analysis, the Fraser of Allander Institute, Her Majesty’s Revenue and Customs, the Economic and Social Research Institute and the National Farmers Union have all expressed real concern about what Brexit means for Scotland. I direct the hon. Gentleman to those sources, not to what I am saying.
My hon. Friend is making a powerful speech and she makes the point, which Government Members cannot bear to hear, that business, the trade unions and all of civic society in Scotland are concerned about the impact of Brexit on Scotland. The hon. Member for Stirling (Stephen Kerr) said that we should be masters of our own fate. Does my hon. Friend agree that the whole point of this debate is that the people of Scotland are not masters of their own fate, because they are being taken out of the European Union against their democratic will?
My hon. and learned Friend makes an excellent point, which needs no gilding from myself. I wholeheartedly agree. I will come on to the people of Scotland in a few moments.
An HMRC report showed that in 2013-14, European economic area nationals paid £12.1 billion more in income tax and national insurance than they took out in tax credits and child benefit in the UK as a whole. EU nationals working in Scotland contribute an average of £34,000 to GDP. The rights of Scotland’s current EU community must be protected and guaranteed as a matter of principle. One in 25 GPs in Scotland is an EU citizen. Losing them would affect 226,000 patients. Regardless of whether those GPs are allowed to stay in Scotland, the fact is that Brexit has created something of a hostile environment for those who choose to live and work in the UK. That may create challenges with retaining EU citizens across the UK, who have contributed so much to our communities. Although not necessarily a large sum for some of our EU citizens, asking them to pay £65 per person—the principle of asking people to re-subscribe to their own lives in a country where they have already contributed so much—is something that shames the Government and us as a society. It should be scrapped.
I agree with the hon. Lady that we are asking EU citizens to do something unthinkable. Many of them have paid tax and national insurance in this country. If the SNP is so opposed to what is happening, why does it not back the people’s vote, or be straight with the people of Scotland that it is just trying to churn up the argument for independence? It should be straight with the people and tell them that, or back the people’s vote.
Sir Roger, you will forgive me for tittering when a Lib Dem asks me to be straight with the people. We in the SNP are absolutely straight with the people of Scotland, who are waking up to the fact that they have been misled. You do not need to take my word for it; you just need to speak to John Major, your former leader and Prime Minister, who openly says that the people have been misled over Brexit. Of course, the people of Scotland were not misled, because we voted overwhelmingly to remain in the EU, but that appears not to matter to the constituents that you represent.
Does my hon. Friend agree that the Liberal Democrats and the Conservatives conveniently choose to ignore the fact that the majority of Scottish voters in 2016 voted for Scottish political parties that said they wanted to hold another independence referendum in the event of Scotland being taken out of the EU against its will? Whether they like it or not, there is a mandate in the Scottish Parliament for that second independence referendum. It is time that they respected the democracy of that vote.
I will make some progress. We in the SNP believe that the Government should negotiate to stay in the single market and the customs union, not least to protect the exchange of citizens’ rights between the EU and the UK.
Another area of huge concern is the importance of the single market and the customs union to protecting our social, trade and investment partnerships with EU businesses and Governments. The Scottish Government’s impact analysis has shown that a failure to remain in the single market and the customs union, or to secure a free trade agreement, would see Scotland’s GDP around £12.7 billion lower by 2030 than it would be under continued EU membership. That would mean a loss equivalent to £2,300 per person in Scotland. In addition, the impact analysis shows that a so-called Canada-type deal with the EU would still leave Scotland’s GDP £9 billion lower by 2030, or £1,610 per head.
Scotland’s food and drink exports have reached £6 billion—the highest level ever—with the EU being the largest market. However, the Economic and Social Research Institute reported that a hard Brexit would result in up to a 90% fall in exports to the EU from Scotland. Those are important voices from industry, and everybody who cares about Scotland’s economic prospects should listen to them. A hard Brexit would leave the UK isolated on the world stage and expose the country to a regulatory race to the bottom, compromising our trading relationships and consumer standards.
The right hon. Member for Witham (Priti Patel) has said that Brexit was an opportunity for widespread deregulation. The Foreign Secretary has said, “Scrap social Europe”. Daniel Hannan, a Tory MEP, said that all contracts between employers and employees should be “free contracts” with no statutory protection. There is no question but that Brexit will see a bonfire of British workers’ rights, given that those words come from the governing party. I do not claim to speak for the people of England, and nor should I, but we in Scotland are alarmed by those comments, which go against the values and beliefs that the people of Scotland hold dear.
The Secretary of State for International Trade is on the record as being “relaxed” about the diminution of food standards post Brexit, although the Secretary of State for Environment, Food and Rural Affairs has said he is opposed to it. The Prime Minister simply responded that the questions were “hypothetical”. Food standards that are currently banned across the EU may become permissible in the UK post Brexit, which precipitates concerns about the proverbial race to the bottom. More relaxed standards have implications for animal welfare and raise potential environmental and public health concerns. Will Scotland really have to endure such standards post Brexit? Is that what was meant by taking back control?
The UK will seek to pursue new trade deals, particularly with the US. Since we already know that procurement and public contracts are important objectives for the US in negotiating a trade deal, as demonstrated by the Transatlantic Trade and Investment Partnership negotiations, Scotland’s public services are at risk of being bargained off in new agreements. For the people of Scotland, that is simply unacceptable. Hon. Members across the House will know that, because they, too, will have received countless emails from constituents about it. If any hon. Member in the Chamber has not received any emails about the issue, they should feel free to intervene now.
A growing number of people in Scotland are bewildered. In Scotland, we had a referendum on EU membership, which there was no evidence that Scotland wanted. We in Scotland voted to remain in the EU by a convincing majority, but we are now being removed against our will from a family of nations of which we wish to remain part. To add insult to injury, Scotland’s voice in the UK negotiations has been summarily ignored. We all witnessed the farce on 12 June. Despite the implications of Scotland being dragged out of the EU, we were allocated a mere 19 minutes. Not one Scottish MP from any party was permitted to speak and there was no protected time for the debate. We witnessed an unprecedented ripping up of the devolution settlement, with Scotland’s voice silenced.
On timing, does the hon. Lady recognise that in this Parliament, we have spent 252 hours debating Brexit, and we will spend several more, whereas the Scottish Parliament has spent only 25 hours on legislation that was rushed through on an emergency basis? It is not right for her to take a high hand when it comes to time.
The hon. Gentleman may not be aware of this, so I will enlighten him: Scotland did not vote for Brexit and the Brexit negotiations are being carried out by the UK Government. They are therefore duty-bound to allow Scottish MPs, who represent people who did not vote for Brexit, proper time to debate the implications of Brexit and the fact that the devolution settlement has been torn up, about which he appears to have no concern.
Let us be clear: in the democratically elected Scottish Parliament, every single party save the Tories—the SNP, the Liberal Democrats, Labour and the Greens—voted overwhelmingly against repatriating powers to London, by 95 votes to 32. During the Standing Orders debate in the Commons Chamber on 13 June, I was stunned to hear Scottish Tory MPs dismiss that lack of legislative consent—that power grab—by saying, to paraphrase them, “What does it matter? It is only powers over this, that or the other.” They may say that, but when you ignore the entire concept of consent and ride roughshod over democratic institutions elected by the people of Scotland, to which the Tory Government in Westminster have not listened, you do so at your peril.
On the issue of a power grab, last week the Scottish Government and the First Minister attempted a Government reshuffle, which created the biggest Scottish Government in history and reflects the Scottish Government’s expanding power base. How can the hon. Lady claim there has been a power grab when there are more Ministers and Cabinet Secretaries in the Scottish Government than ever before, and when 80 new powers are coming to the Scottish Government after Brexit?
It is interesting that a Tory Member is concerned about the expanding public purse in these times of austerity and the expanded Scottish Government. That is good. Perhaps he should take up those concerns with the ever-expanding, dripping roast that is the House of Lords. I am sure that the Prime Minister would be happy—
I am dealing with this intervention—one at a time! The hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) will find that the Prime Minister’s Cabinet has also expanded as she tries to hold together an unholy coalition of Brexiteers and people with a bit of sense, of whom there are increasingly few in the Cabinet.
It is that kind of attitude that has seen my party’s membership soar by 10,000 people in a short period of time. The hon. Gentleman says “if there has been a power grab”, which suggests there has not been one—[Interruption.] If you make an intervention, you have to let me answer. That is how the game works. It appears that this is a game for some people, but it is about your country of Scotland and the people you represent. If you let me speak, we might get somewhere.
To dismiss the fact that there has been a power grab shows a breath-taking contempt for devolution and the Scottish Parliament. Under the Scotland Act—
They are really lacking. You do not get this in the Scottish Parliament, Sir Roger.
The hon. Member for Stirling (Stephen Kerr) should go back and look at the devolution settlement. Anything that is not reserved is devolved, and should correctly come back to the Scottish Parliament. When you start to ignore legislative consent, which has served that Parliament well for the 20 years it has existed, you cross a Rubicon and get to a point where you do what you like and ignore the Scottish Parliament anyway. I do not think that treats the sovereign people of Scotland with respect.
I will make some progress.
Holyrood is not Westminster. In Scotland, sovereignty lies with the people of Scotland. Under the constitutional rules, the Government should not proceed with any measure that affects Scotland without the Scottish Parliament’s consent. For the record—there has been some perhaps wilful confusion about this—the kind of powers being clawed back by Westminster are in 24 areas where they want to retain power in the wake of Britain’s exit from the EU, including agriculture, fisheries, food labelling and public procurement. Public procurement is interesting, because that could constitute an attack on our public services. I have listened to Scottish Tory MPs rubbishing concerns about those powers being clawed back as though they do not matter, as we have heard today. They do matter and anyone who doubts it only has to look at the SNP’s soaring membership after the power grab was brought to public attention, as I have already said.
The SNP has been accused of effectively trying to veto Brexit. However, legislative consent was withheld by every party save the Tories, so the argument—
I am in the middle of a point.
The argument that it is some kind of SNP plot simply does not wash. Let there be no mistake: the Scottish Government and the Scottish Parliament recognise that there may be times—this is the point that Conservative Members really have to listen to because I have heard them rubbish this in the past—when UK-wide frameworks are required post Brexit and when they would be in Scotland’s interests. However, the way to achieve such frameworks is through negotiation. That is what a statesman or stateswoman would do; that is grown-up politics. Achieving UK-wide frameworks should not be achieved by strangling the voice of those who were democratically elected to speak for Scotland.
The stand-off that we have is in no one’s interests and that is why it is important to bring forward emergency legislation to remove section 11 from the European Union (Withdrawal) Act 2018. Devolution cannot operate on the terms of grace and favour. To take powers restricting the competence of Holyrood and to exercise those powers in the face of an explicit decision by Holyrood that they should not be exercised is, whatever way you look at it, a power grab.
Under devolution, that which is not reserved is devolved—it is as simple and as important as that. Make no mistake: this process is about being able to adjust the terms on which devolution operates through delegated legislation without the consent—and even against the wishes—of the Scottish Parliament. I am fleetingly reminded of the fact that we were told how important it was to have English votes for English laws. I wonder when we will have Scottish votes for Scottish laws.
Many who are hostile to the Scottish Parliament have tried to dismiss the concerns that it has raised about a hard Brexit and Scotland’s voice being silenced as a ploy to promote independence, but that is not the case. This is about something, Sir Roger, that some people in this Chamber would do well to remember—it is about standing up for Scotland, and it is supported even by those in the Scottish Parliament who do not support independence and who are not yet convinced of the case for independence.
I am finishing up.
I say today that those who value the Union should beware the next referendum on Scottish independence—and it will come—because the debate has crystallised. [Interruption.] There is chuntering from a sedentary position, Sir Roger. The debate has crystallised like never before. The people of Scotland will be asked simply, “Who do you trust most to govern in the best interests of Scotland: Westminster or Holyrood?”. Given what we have witnessed over recent weeks and months, it does not take too great a leap of the imagination to guess what the answer will be from the people of Scotland.
The matters that we are discussing today are not just about Brexit or devolution or Scotland’s economic interests; they are ultimately about trust. Every day, this Tory Government demonstrate just a little bit more that they cannot be trusted by the people of Scotland. We are not the “valued and equal” partners we were told we were when we were love-bombed during the 2014 referendum campaign, and the people of Scotland know it. I urge all who care about Scotland to be her voice now and to stand up for her interests. The people of Scotland are sovereign and will not have their voices overridden by Westminster without consequence. Dismiss them at your peril.
Before we proceed, I understand that in the Scottish Parliament, it is—[Interruption.] Order. I understand that in the Scottish Parliament, it is customary to use the word “you” when referring to another Member. In the Westminster Parliament, “you” refers to the Chair. The Chair has no responsibility for party political matters, so I would be grateful if all hon. Members respected that convention.
We have six Members seeking to make contributions. It should be possible to accommodate everybody, provided that a degree of self-restraint is exercised. That is in your hands, not mine.
Thank you very much, Sir Roger. It is a pleasure, as ever, to serve under your chairmanship, and to follow the hon. Member for North Ayrshire and Arran (Patricia Gibson).
As a Scottish Conservative and Unionist, I strongly believe in democracy. The Scottish people rejected independence in 2014, just as the British people voted to leave the EU two years later. Both referendums were massive exercises in democracy and in both many people voted for the first time, and we must respect that. If we are to retain that level of interest and keep people’s trust in our system, those results must be respected—both the independence referendum and the Brexit referendum.
While a majority of Scottish people voted to remain in the European Union, 1 million of them turned out to vote leave. More Scots voted to leave the European Union than voted for the Scottish National party in the last general election.
Following the hon. Gentleman’s logic, the number of people who voted for independence was 60% higher than the number who voted to leave the European Union. What, then, does his logic suggest we should do about the 1.6 million people who voted to leave the United Kingdom?
I will make some progress.
The Scottish people now expect politicians to carry out their wishes. I was disappointed to hear the hon. Member for North Ayrshire and Arran take quite such a negative tone. Nobody on the Government Benches is denying the challenges that surround our exit from the EU, nor are we naive to the scale of the work still to be completed, and much work has been done.
However, the situation is not doom and gloom—far from it, in fact. Done correctly, Brexit can provide many exciting opportunities for Scotland. Overnight, the Scottish Parliament will become considerably more powerful as a result of our exit from the EU. Sovereignty and control over our own laws was a major driver of the leave vote, and I am delighted that the Government, through the European Union (Withdrawal) Act 2018, have already taken steps to bring powers home to the United Kingdom. Brexit will give us the opportunity to bring decision making closer to people, not only through Westminster but through the devolved institutions in Edinburgh, Cardiff and Stormont.
As the hon. Gentleman was speaking, one thought occurred to me that I would like to ask him about, because I am sure he has thoughts on it. He talked about the importance of respecting democracy, and I am sure we all agree with that, but does he share the concerns that many in his party have about the lack of transparency regarding the funding for the EU leave campaign, the dirty money that appears to have been involved and the lack of ability to trace the source of that money? Does he have any concerns about how that might have influenced the result?
I thank the hon. Lady for the question, but I have an absolute respect for the institutions of this country, including the Electoral Commission, which will investigate funding, whether in Scottish elections or the EU referendum. I will respect its findings, because I have respect for UK institutions.
On day one after exit, more than 80 new powers will go directly from Brussels to Edinburgh—80 areas in which Scottish politicians can make decisions in the best interests of the Scottish people. The UK Government have rightly confirmed that they will presume devolution for all returning powers, meaning that only in exceptional circumstances will powers be temporarily held at UK level so that we can have some sort of framework, which Scottish industry and United Kingdom industry want. I believe that to be sensible and pragmatic. The UK Government travelled a significant distance from their original proposal, and we are now in a place where we can guarantee that Brexit will be to the advantage of the devolution settlement.
Of course, another upside of leaving the EU will be the ability to send more Scottish goods out to new markets, as we take control over our trade and chart a new course in the world. Scottish economic growth has been driven by exports, and the north-east of Scotland, where my constituency is located, is the largest exporting region in Scotland. In 2015, total exports from the north-east amounted to more than £8 billion—21.3% of total Scottish exports, in an area with 8% of the population. Leaving the EU will allow our exporting businesses to reach new markets and customers, and to grow those numbers further.
The hon. Member for North Ayrshire and Arran mentioned the food and drink sector and agriculture. It is a significant part of the north-east’s economy. It directly employs 22,000 people; 51% of those jobs are in agriculture, and a further 11% are in fishing. Leaving the EU will bring huge benefits to those people. We can finally design an agriculture policy that works for Scotland, and it will not be a DEFRA-centric, top-down policy. It will be a policy set by the Scottish Government for the unique needs of Scottish farmers—Members can see from my entry in the Register of Members’ Financial Interests that I am one myself.
Fisheries policy will also escape the clutches of the EU, and I am delighted that we are already having conversations on that. It is amazing that the Scottish Government wish to receive powers and then immediately hand them back to the EU, particularly on the common fisheries policy, which would not go down well in our fishing communities.
Leaving, therefore, provides opportunities and hope to some of Scotland’s key industries. It will allow us to be part of an internationalist United Kingdom and to embrace new trading opportunities.
That is a good question. As the hon. and learned Lady knows, we are not leaving Europe. We are leaving the EU. We would hope to form a market in a frictionless free trade arrangement with the EU. Norway is also a huge exporter and is not a full member of the EU. We hope to negotiate a free trade arrangement with the EU.
Is the hon. Gentleman aware that Norway is a member of the single market, through the European economic area? Does he not even know that basic fact? Does he understand that the reason Norway joined the single market was so it could sell its produce into the single market? Will he answer my question—where will the fish caught in and off the coast of Scotland be sold after we leave the European single market?
It will go to Europe, with us outside the EU. It will go to Japan, America and the rest of the world. Those are the enormous opportunities that we have. It is incredible that the hon. and learned Lady does not realise that the common fisheries policy means that British fishermen catch only 40% of their potential fish catch. We cannot go to other countries in Europe and take their agricultural production, so it is important that more of our fish should be caught by Scottish and United Kingdom fishermen. I look forward to that happening. I am interested in how the Scottish Government explain to people on the coast why they want to hand fishing rights back to Europe immediately.
To move on to other industries, which I am sure Scottish National party Members will ask me about, last year whisky represented 20% of the UK’s food and drink exports—£4.4 billion. Diageo and Macallan, in the constituency next to mine, have made multi-million pound investments because they have confidence in our international future. Ardmore, Glen Garioch and Glendronach in my own patch predict a huge improvement in sales, which is good news to me as a farmer, because hopefully that will happen with Scottish barley. The reason for the investment is confidence in an export future and not sharing the Scottish Government’s negativity. A free trade deal with India alone would massively boost whisky. We cannot actually grow enough barley in Scotland—and apparently not in the whole United Kingdom—to supply the Indian market, if we had full access to it.
Oil and gas in the north-east—a dollar-denominated industry trading around the world—is resilient after a massive price collapse: the industry still supports 300,000 jobs. Its international horizons are huge, and already the vast majority of its exports are outside the EU. It has no problems with taking on the opportunities of exporting outside the EU, and is investing vast sums in the north-east of Scotland. Financial services, from Aberdeen Asset Management to Artemis in Edinburgh, have global brands and huge international opportunities. They invest in international opportunities throughout the world, not just in the EU. The UK is the clearing bank of Europe and the world; it is the hub of mergers and acquisitions.
What is the threat? We do not have to go far to see bigger risks in Scotland than Brexit. INEOS, the largest private UK company, which has invested £2 billion in the North sea and Grangemouth chemical plant, plans to invest £2 billion in the north-west of Europe. Brexit? No, apparently: from listening to Radio 4 this morning it is about fracking gas—we have to be careful how we pronounce that—from the US. It is half the price of gas in Europe. However, the Scottish Government will not listen to science. They want to demonise fracking wherever it takes place—America, Scotland or England. High-tech companies will run a mile from an anti-business Government who believe in quasi-science and carry on peddling it.
I will only point out that my party, and this Parliament, will listen to science. I hope that the Scottish Government will also do so; on many things they do.
I want finally to mention farming, the oldest industry. Just under two weeks ago I was at the Royal Highland Show, as I am sure were many other hon. Members. I learned that the Scottish Government’s climate change ambitions pose a bigger threat to farming than Brexit—that is the view of Jim McLaren, chairman of Quality Meat Scotland and the former president of the National Farmers Union of Scotland. He has said that the Scottish Government setting a net zero carbon target in law means zero livestock production in Scotland. Members speak about the risk that Brexit poses to the EU, but there is a report out there saying that livestock farming in Scotland will no longer be viable if there is a zero carbon target. I did not write the report: I read it for the first time at the highland show, and it was remarkable. That situation is potentially devastating to Scottish farming.
My final point, and my overall point as a businessman, farmer and investor, is that whether we are talking about whisky, oil and gas, petrochemicals, finance or farming, investor confidence is paramount, and the Scottish Government are damaging it. Her Majesty’s Government are working for the best Brexit possible; the SNP would sabotage the Brexit vote and Brexit.
That gives me five minutes, and I shall follow your instructions, Sir Roger. I thank the hon. Member for North Ayrshire and Arran (Patricia Gibson) for bringing the matter forward. I want to speak from the perspective of the relationship between Northern Ireland and Scotland, and the importance of maintaining it. It is essential to enhance and strengthen our centuries-old connection, regardless of how we all exit the EU.
I read an interesting article about the history of our two nations. Long before the first plantation of Ulster in the 1600s, there was a very close connection between Ulster and Scotland. Lowland Scots speech was introduced to Ulster at the beginning of the 17th century, becoming Ulster Scots, which, according to the 2011 census, is still spoken by about 8% of the population of Northern Ireland, many of whom live in my constituency. I am proud to say that I am descended from the Stewarts of the Scottish lowlands. My maiden speech in this place was in Ulster Scots, which an important part of my heritage and culture. I am a proud Ulster-Scot. My wife sees my frugal ways and perhaps wishes that there was not so much Scots in me, because I can be very tight when it comes to looking after the purse strings.
We are looking forward to the Orangefest celebrations on 12 July, when we will have numerous Scots bands walking our streets, as well as our home-grown bagpiping bands. Bagpiping is another Scottish import that many in Northern Ireland excel at—a Northern Ireland band has won the world pipe band championships in five of the past seven years. My party leader, Arlene Foster, spoke at a 12 July parade in Scotland only this weekend.
Our nations have been linked for years. From Ballyhalbert, which is not far from my home, the coast of Scotland can be clearly seen—it is only 12 miles away. There is talk of building a bridge. I am not sure whether that will ever happen, but it underlines the important connection between the nations of Scotland and Northern Ireland. The bridge would be a way of supporting that, if the Government were minded to invest the money. The DUP has proposed a feasibility study of the business and tourism potential. Indeed, my local council recently passed a motion stating that
“as the Council’s vision is to promote the Borough as a key destination, it is recommended that the Council writes to the First Minister for Scotland, the Secretary of State for Northern Ireland and in the absence of the Executive the Permanent Secretary of the Department for Infrastructure welcoming these discussions and requesting the east coast of the Borough be considered in any feasibility study or business case as a possible connection point for a new bridge between Northern Ireland and Scotland”.
The vision is clear. We should make the most of the ability to be more easily connected, but even without a bridge we can still be connected, and not just by culture and history but by a closer post-Brexit relationship. That is the desire of the people and businesses of Northern Ireland. It is my belief that our enhanced connectivity, after Scotland and the rest of us leave the EU, can be used for external opportunities and will be useful to our shared agricultural and fishing industries, and many other links. The hon. Member for Gordon (Colin Clark) referred to farming and fishing, which are two sectors that we want to build on in Northern Ireland. We can do that better working alongside our Scottish brethren and sisters, in a way that enhances our relationship.
As with Northern Ireland, the biggest part of Scotland’s trade remains with the rest of the UK. “Export Statistics Scotland”, the Scottish Government’s annual trade statistics, show that in 2016 Scotland exported more than £45 billion in goods and services to England, Wales and Northern Ireland, while exports to the EU totalled £12.7 billion. The figures speak for themselves. Exports to the rest of the UK make up 61% of Scotland’s total exports—nearly four times the amount of its trade with the EU market. Independent research shows that around 560,000 jobs in Scotland—nearly one in four of all jobs—are supported by demand for Scottish goods and services from the rest of the UK. It is clear that we are better off together. That is the fact of the matter. I sit alongside my Scottish National party friends and colleagues because I value their friendship. I do not agree with everything they say, as they know, and they do not agree with everything I say, but we are friends and colleagues and we try to do our best in the Chamber for our constituents.
Greater connectivity between Scotland and Northern Ireland would strengthen the business links that have already been built up and make it easier to attract inward investment. The implication of Scotland leaving the EU alongside Northern Ireland, Wales and England will be a closer relationship with Northern Ireland. That will be to the benefit of all four nations within the great United Kingdom of Great Britain and Northern Ireland. We will be better together, for everyone’s mutual benefit.
There is a Scottish comedic character, made famous by Rikki Fulton, by the name of the Reverend I.M. Jolly. He is famed because he is miserable. He can never bring himself to be upbeat, positive or optimistic. I am afraid that that caricature is one that the SNP seems to have voluntarily adopted. It is being so cheerful that keeps it going. It fits the SNP’s narrative to spread doom and gloom and to talk down our country’s future. As a Scottish Conservative, I insist that our best days lie ahead of us as part of the United Kingdom, the world’s most successful political and economic union.
The SNP wants to create an air of constitutional crisis, but Scotland is not buying any of that talk, and people are sick and tired of the SNP’s obsession with a second independence referendum. Keith Brown MSP, who was sacked last week by Nicola Sturgeon as Cabinet Secretary for the Economy, was only recently elected deputy leader of the SNP. He now claims to be focusing all his energy on building up readiness for a campaign for a second independence referendum as early as next April. Yet at the weekend Andrew Wilson, the former MSP who produced the so-called growth commission report, the SNP’s blueprint for independence that promised only a generation of misery, said that he was interested only in the softest possible form of independence—presumably in name only. He recognised that people in Scotland were not interested in another independence referendum.
The hon. Gentleman is once again trying to make this out to be some kind of SNP plot. What are his views on the fact that the SNP, the Labour party, the Greens and the Liberal Democrats in the Scottish Parliament also withheld consent for Brexit? Are they involved in the SNP plot?
I can only imagine that Scottish Labour and the Scottish Liberal Democrats regret deeply ever getting into any kind of alliance with the Scottish National party, but it is not for me to speak for them.
What is important to Scotland and Scottish business? Liz Cameron, the chief executive of the Scottish Chambers of Commerce, has said:
“The ability to trade freely between the constituent parts of the UK without additional compliance measures is absolutely vital to a large proportion of businesses, and we need to see both Governments co-operating and making decisions together, enabling the private sector to create jobs and grow the economy.”
To underline the importance of the UK single market to Scotland, it cannot be said too often that Scotland exports four times as much to the rest of the United Kingdom as it does to the EU. That is £46 billion going to the UK, and only £12 billion going to the EU. No one on the Government Benches is saying that trade with the rest of the European Union is not important—it is vital—but just because we are leaving the European Union does not mean that we are going to cease trading in any scenario. Other countries that are outside full EU membership, the single market and the customs union trade successfully with countries that are members.
We need to forge a new, deep and special relationship that is founded upon the principles of free and fair trade. That will inevitably include an arrangement on customs. Only in the minds of the obsessive and negative SNP is the answer to leaving the EU to break up a Union that is four times more valuable to Scotland. As my hon. Friend the Member for Gordon (Colin Clark) said, just last week we saw that UK exports to India have grown by 31% year on year. That is just a sample of what we can achieve once we leave the EU in March 2019 and have the chance to strike our own trade deals. He also mentioned the Scotch Whisky Association and the opportunity there. In India, Scotch imports account for just 1% of total whisky consumption. There are massive opportunities.
Brexit is seen by too many as only being a challenge. We see it as an opportunity too. Leaving the EU will give more powers to Holyrood and Westminster, yet we have seen little imagination and creativity at Holyrood on how the powers will be used. Indeed, the Scottish nationalists would rather see those powers kept in Brussels. As was said earlier, why on earth would Nicola Sturgeon reshape her Cabinet and add Ministers if it was not to handle increased powers? Leaving the European Union needs to be treated as an opportunity.
In closing, I will quickly mention one thing. If there is one area of professional activity that can change the productivity landscape and enhance our prospects as a nation exporting to the world, it is sales productivity. We need to uplift our commercial proficiency and effectiveness in professional sales and be a nation that values its salespeople. I feel strongly about that. A few weeks ago I had the privilege of welcoming the Secretary of State for International Trade and his ministerial team to Stirling, alongside the Secretary of State for Scotland and other Government officials, for the first meeting of the UK Board of Trade in Scotland for hundreds of years. A reception was held that evening in the great hall of Stirling castle. The room was abuzz with anticipation and excitement for the export opportunities that lie ahead for businesses in my constituency and throughout Scotland as we leave the European Union.
In Stirling we have some fantastic businesses that are ready to take up the challenge and the new opportunities, including Fallen Brewing, which I will be visiting later this week. This brewery in the town of Kippen has been exporting across the UK, and like so many other local businesses, it needs only the slightest encouragement to push into the significant overseas markets for British beers. A great national effort is required to sell our products and services around the world. To summarise, I believe that Scotland’s professional sales talent and capability will be key to a prosperous post-Brexit global Britain.
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) on securing the debate. I say gently to my friend the hon. Member for Strangford (Jim Shannon) that many of us in Scotland who come from the Catholic tradition find the marches he described that Arlene Foster attended last weekend intimidating, upsetting and quite offensive. There is no place for sectarianism in modern Scotland. Perhaps it was not a very good idea for his party leader to come to that Orange parade in Fife last weekend.
I will make some progress. I just wanted to make that statement.
I want to speak about the implications of Brexit for security, judicial co-operation and law enforcement in Scotland, which the UK Government have overlooked to date. That is not my view; it is the view of the distinguished former judge at the European Court of Justice, Sir David Edward. He is also a distinguished former judge on the Scottish bench. When he gave evidence to a Select Committee at the Scottish Parliament last year, he said that so far in their negotiations with the EU, the UK Government have overlooked the significance of the separate Scottish legal system, the Scottish judicial system and the Scottish prosecution system in relation to justice and home affairs issues. He went on to describe the UK Government’s paper, “Enforcement and dispute resolution”, as
“an undergraduate essay that would have failed.”
He says that those writing such papers are not aware of the problems posed by the separate Scottish legal system and do not want to hear from experts who have offered to help.
I declare an interest, because in a former life I was senior advocate depute at the Crown Office. I worked in these fields, and I am well aware of how European Union law has become woven into the fabric of Scots law over the past 40 years. Serious organised criminality and terrorism do not respect national borders. If we leave the EU without securing continued participation in EU criminal justice measures, it could mean Scotland losing the common set of tools that allows law enforcement agencies in Scotland and across the EU to tackle international challenges effectively.
The Scottish Government have asked the UK Government on numerous occasions to share their planning on key issues that will have implications for justice and home affairs in Scotland, but they have failed to do so. Indeed, the UK Government’s future partnership paper, “Security, law enforcement and criminal justice”, which was published in September 2017, was prepared without any engagement whatever from the Scottish Government. It did not even acknowledge that Scotland is a separate legal jurisdiction with its own criminal justice, prosecution and police agencies. Just two months ago, the UK Government published presentation slides titled, “Framework for the UK-EU Security Partnership”. The slides cover internal and external security and were used in the EU negotiations, but they contain matters that directly affect Scotland, including operational matters that fall under the responsibility of the Lord Advocate, the head of Scotland’s prosecution system. The slides were prepared without any consultation with the Scottish Government or the Lord Advocate, nor were the Scottish Government advised of the publication of the slides.
Safeguarding Scotland’s independent justice system necessitates the Scottish Government’s full involvement in the negotiations between the UK Government and the EU. To date that has not happened. The Scottish Government have been cut out of any involvement in the negotiations, and the implications for justice and home affairs in Scotland are therefore not being recognised. I want to hear what the Minister is going to do about that.
Before I sit down, I will give way to the hon. Member for Strangford ).
I thank the hon. and learned Lady for giving way. I understand her position, but I want to put on the record that we are not a sectarian organisation. We are there to encourage people to enjoy culture, history and tradition, and no one should—nobody does—feel threatened by that in Scotland. We do not feel threatened by it in Newtownards whenever we are parading there on 12 July, or across the Province on other days.
I am grateful to the hon. Gentleman for his intervention, but I can tell him that people from the Catholic community do feel threatened and offended by these demonstrations. I feel threatened and offended by them, and many of my constituents write to me asking how an organisation that traditionally marched to intimidate a section of the population can be allowed to continue to do so in a modern democracy. I realise the hon. Gentleman might like to change that, but that is the perception. Without doubt many people from the Catholic tradition will have cleared out of Cowdenbeath last weekend in fear of what they might experience if they remained.
It is a pleasure to serve under your direction this morning, Sir Roger. I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing the debate. She started by saying she wanted a constructive debate, and I prepared my remarks on that basis. However, as she was giving her speech it was clear that I would not need those remarks, so I will speak off the cuff.
SNP Members made a lot of noise about how they are the voice of Scotland and speak for Scotland. I am not so arrogant. I was elected as the Member for Ochil and South Perthshire, so that is who I speak for—I do not speak for all of Scotland, but I speak for my constituents. It is time SNP Members started to be a little more modest and speak for their constituents rather than claiming to speak for the whole nation.
A point was made about GDP and business confidence; apparently, Scotland was doing really well before Brexit. In fact, it is clear that GDP and business confidence lagged behind the rest of the UK before 2016. Some 20 years after devolution and after 11 years of the SNP Administration, Brexit is not responsible for our below-par economic performance compared with the rest of the UK. It is not responsible for the fact that we are slipping in all the international education league tables or for the fact that we have not bucked the trend in the challenges that the NHS faces in Scotland, as it does in every other part of the UK. That is not down to Brexit; it is down to the SNP and its flawed Administration.
My next point is about scaremongering. The hon. Member for North Ayrshire and Arran and others talked about EU citizens. That issue has been clearly dealt with. It was dealt with in the December agreement and then in the March transitional agreement. They should not stoke up fears among EU citizens in my constituency when they know that an agreement is on the table between the UK and the EU. In fact, the UK has unilaterally guaranteed some rights, and I am sure the Minister will talk about people’s right to remain. Some people’s family members will even come to the UK to join them. I am sure the Minister will reiterate those points, but I ask the hon. Member for North Ayrshire and Arran to reflect on her comments, because they do nothing but undermine the confidence of people who contribute so much to my constituency.
Another point was raised about a bonfire of workers’ rights, but how can that be? We have just passed legislation in the European Union (Withdrawal) Bill that bakes all the EU legislation into British law, which means that rights will be respected across the United Kingdom and we will not fall below them. If anything comes up in subsequent debates about reducing rights, I will certainly not vote for that. Again, the hon. Lady should reflect on the facts, not the fiction.
The Transatlantic Trade and Investment Partnership was mentioned. For members of the audience who might not be so familiar with the TTIP negotiation, the European Union negotiated a specific clause to protect public health systems in the EU, so at there was no risk of United States companies coming and taking over our NHS or any of the other public health systems in Europe, unless those countries individually opted for that. That clause was part of the negotiation. If we are to have these fundamentally important debates, let us have them on facts, not fiction.
Finally—I am conscious of the time—we have to remember that this is not a zero-sum game. A power for Westminster does not mean a power taken away from Scotland. That is why we are all here. Like the European Parliament, the United Kingdom Parliament has directly elected Scottish constituency MPs. We are directly elected by our constituents to be in this place and have these debates. Several of my colleagues are proudly serving in the Government at the moment. I could go even further: Scottish MPs who have served the Prime Minister for the entire United Kingdom have led us forward in peace, in war, in economic arrangements and in international and domestic engagements, reforming the health service and education or looking at infrastructure throughout the United Kingdom. Scottish MPs should not be undermined. We are here to make a difference, to fight for our constituents and to make sure a good deal is achieved on Brexit. Let us stick to the facts, not fiction. We will be here defending our constituents and working for the whole United Kingdom.
It is a pleasure to serve under your chairmanship, Sir Roger. I appreciate your allowing me to leave a little earlier to attend to my commitments. I commend my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) for securing the debate. Because of the time limit I have had to hack out most of my speech.
We know that 62% of Scots voted to remain in the European Union, and I was one of them. I did not just vote but proactively campaigned for the remain side. I have always been a passionate European; with a German surname it is difficult to be anything other than proud of my European citizenship. I say that as someone who has both lived and worked in Brussels and personally benefited from the principle of free movement of people and labour. I remain bitterly disappointed that free movement of people became a major issue during the campaign, that the issue of EU citizens settling in the UK was weaponised and that such xenophobic language was deployed and normalised. For far too long in this country we have tolerated right-wing rhetoric around immigration—some parties have even gone so far as to put it on the side of mugs—and it has led to swathes of society viewing EU migrants as somehow a negative thing, especially in the context of low-skilled jobs.
The reality is that leaving the European Union and pulling up the drawbridge will be deeply damaging to our economy. My first frustration relates to migration. All the EU nationals who pick our fruit, who work on our factory lines or who provide support in our care homes are now shamefully being asked to pay £65 each simply to continue their lives here. For most of us in this Chamber, £65 is not a lot of money, but it sends a fundamentally negative message to people to effectively ask them to re-subscribe to being citizens and a part of our society.
My second frustration when discussing Brexit is the complete denial of the calamitous impact of Brexit on our economy. We know from the British Government’s own leaked analysis that Scotland’s GDP could face a hit of 9%; we know from the Fraser of Allander Institute that a hard Brexit is forecast to cost 80,000 jobs in Scotland, and we know from the Bank of England that Brexit has already cost constituents, including in Gordon, Ochil and South Perthshire and Stirling, £900 per household. That is why it is imperative that our compromise position of leaving the European Union but remaining in the single market and the customs union is implemented.
The stark reality is that, when we all walked into the polling booths on 23 June 2016 to cast our votes, there was nothing—absolutely hee-haw—on the ballot paper about leaving the single market or the customs union. People did not vote for a Brexit that meant they would be poorer, but I am afraid that is the trajectory we are currently on.
So my message to the Minister today is absolutely crystal clear: he should stop listening to the Brexiteers on his Back Benches and instead listen to businesses and ordinary families who stand to lose so much as a result of our driving over the cliff edge to a hard Brexit. If the British Government will not listen to the warnings about a hard Brexit cliff edge, they might find that Scotland has unhooked the tow bar and taken a different path of independence.
I am pleased to begin the summing up in this debate. It has certainly been interesting. I congratulate my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) on securing it and on the well-informed and comprehensive way in which she set out the social and economic impact that leaving the European Union threatens to have on our country. My hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry) commented very knowledgeably on the potential legal and judicial impact and correctly pointed out that the UK Government have simply refused to acknowledge the issue.
We have had some interesting contributions from the Scottish Conservatives about Scottish independence; somebody forgot to tell them that we are actually talking about the European Union. I did not hear a single word from the Scottish Conservatives about why ending the free movement of people is a good idea for Scotland. We heard a lot of words about why the SNP is bad, why independence is bad, why the SNP is still bad, and why independence is even worse, but there was not a single word of justification for what the UK Government keep telling us was the single biggest reason for people voting to leave the European Union. I wonder why that might be. I wonder why they are scared to talk about the impact that ending the free movement of people will have on our nation.
My hon. Friend the Member for Glasgow East (David Linden) made an excellent contribution about the huge benefits that the free movement of people creates for all of us. Those benefits cannot be measured just by counting how much people pay in tax or generate for the economy. The free movement of people and the exchange of beliefs and ideas is probably more important than the movement of labour, workers or anything else. People coming here from other places and cultures enrich our place and our culture. It will always be a negative, backward and regressive step to try to prevent people from doing that by asking them to pay to exercise rights that they already have, or by putting in place some completely arbitrary, picked-out-of-the-sky number to limit who is and is not allowed to come here.
The single biggest impact of Brexit on Scotland is the one that my hon. Friend the Member for North Ayrshire and Arran referred to her in her introduction. The Scottish Conservatives will try to hedge around it with the creative use of statistics, but it is an inalienable fact that 62% of people in Scotland voted to stay in the European Union. The hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) was muttering at one point, “Have you seen the opinion polls?” I have not seen an opinion poll since then that puts support for EU membership in Scotland at less than 62%. I have seen quite a few that put it significantly higher—75% in some places.
As my hon. Friend the Member for Ochil and South Perthshire (Luke Graham) said, we were elected last year on a manifesto commitment to take our country, the United Kingdom, out of the European Union, the single market and the customs union, and to do so in a way that protects jobs and our economy. That is why we are here. The hon. Gentleman can quote statistics about the cumulative referendum vote in Scotland until the cows come home, but we were elected on that manifesto and are here to see that the interests of our constituents in our part of Scotland are well represented and protected as we leave the European Union.
The hon. Gentleman makes a valid point on a United Kingdom basis, but I gently remind him that we were elected with a substantial overall majority of Scottish seats in this place. As has been pointed out, the Scottish Government were elected on a manifesto commitment as well, which they will put into practice. Incidentally, his party was elected in 2015 on a manifesto that said it would keep us in the single market, so I do not know what its manifesto will be in next year’s general election.
As I said, 62% of the sovereign people of Scotland voted to remain in the European Union. We ignore that at our peril. If Scotland votes a different way from other parts of the United Kingdom, or if the Scottish Government and the UK Government, or their Parliaments, disagree, that does not create a constitutional crisis. It might create a political crisis, but a constitutional crisis happens only when those in power refuse to accept the will of the people. Clearly the UK Government intend to ride roughshod over the demand—not the desire, request or plea—of the people of the Scotland that our voice will be heard and that our links with our European partners will not be sacrificed on some altar of far-right ideology in a vain attempt to keep the Conservative party together.
The hon. Gentleman makes a fine point about respecting the will of the people. Will he now publicly, for everyone in the Chamber, finally respect the will of the people in 2014, who voted by a 10-point margin, rather than by a four-point margin such as in the 2016 referendum, to stay in the United Kingdom? Here is your opportunity, sir—please take it.
I do not know whether the hon. Gentleman has noticed, but we are in the United Kingdom Parliament. That is a kind of acceptance that, for now, Scotland is part of the United Kingdom. However, there is a legal principle that subsequent legislation always trumps previous legislation if the two are incompatible. What about the mandate in 2016 for the Scottish Government to give the people of Scotland a choice if Scotland is threatened with being taken out of the European Union against our will? Nobody forces the Scottish people to do anything. The Conservative party want to deny the people of Scotland the right to set our own future. They want to deny the people of Scotland the right to remain in the European Union, which 62% of us have demanded. In percentage terms, the majority to stay in the European Union was almost 2.5 times bigger than the majority to stay in the United Kingdom.
The Conservatives do all this fancy footwork—I call it the Maradona trick. They take the vote on one side in one referendum, and to back up their argument they compare it with the vote in a different election on a different day on a different question. I call it the Maradona trick because it would mean that Argentina were still in the World cup—Argentina scored three goals and Brazil scored only two, so Argentina stay in the World cup and Brazil go out. Totally ridiculous, but no more ridiculous than the attempts of the Scottish Conservatives to set one part of the electorate against another based on an election or referendum held on a completely different day.
The fact that the Scottish Conservatives turn up to a debate about Scotland’s place in Europe and spend most of their time arguing for the lost cause of Scotland’s place in the United Kingdom says it all. They cannot argue the benefits to Scotland of leaving the European Union, because there are none. The damage done to Scotland by being forced to leave the European Union against our will is even greater than the damage that would be done if we left on our own terms and with the will of the people.
The people of Scotland are our masters; they are our sovereigns. There is no absolute parliamentary sovereignty in Scotland. There is no absolute sovereignty of the monarch, nor will there be of anyone who replaces the monarch in the future. The people are the absolute sovereigns, and our sovereigns have told us what to do. Brexit threatens to deny the people of Scotland the right to have the country that they have decided they want to have. Anyone who ignores the people in that context does so at their peril, because the people of Scotland will not be kept silent.
The hon. Member for Stirling (Stephen Kerr) shakes his head, with that smug smirk that he is so fond of.
I will try to make it worth the hon. Gentleman’s while. I am still caught on the Maradona comment; if only I could rival those skills. Does he not realise that not only Scotland but London, Manchester and Bristol voted to remain? Should all the different parts of the UK that did not vote the same way threaten to leave? I do not think so. There are different views across the United Kingdom. Everyone should be respected, and not threatened.
I am trying very hard to think of a way of saying, “The people of Scotland are sovereign,” in words of one syllable. The difficulty that some Government Members have is that the word “Europe” is more than one syllable, so some of the arguments seem to be beyond them. The people of London are not sovereign over London. I would argue that the people of England are sovereign over England—I am quite happy with that. England is a nation. What a fall from grace it is, in just over a year, for someone who came down here to stand up for Scotland to say now that Scotland is a city of England and has no more rights to self-determination than the great cities of England. Scottish Conservatives came down here saying that they would stand up for Scotland, and suddenly they are not speaking for Scotland, but talking about Scotland as some kind of equivalent to Leeds, London, Manchester or anywhere else.
Scotland is an “equal partner” in this Union of nations. Those are not our words, but the Government’s words from 2014. It is not an equal partner of a city, region or county council, but an equal partner of the other nations in the Union. The sovereigns of that equal partner have said, “We want to stay in the European Union.” If that choice is not made available to the people of Scotland within the United Kingdom, it will be made available to them by some other means.
As always, it is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing this debate on what is a fundamentally important issue.
We are leaving the European Union—that much is clear. The discussion that we should be having now—although it has not been entirely possible due to the inability of the Tories to come to an agreement in their own Cabinet—is how we leave, on what terms we leave and how we ensure that when we leave, we do not suffer economically or socially as a result.
Before we get into the detail of today’s debate, I would reflect on one thing: if Brexit has taught us anything at all, it is just how difficult it is for the UK to leave a political and economic union that we have been part of for just 40 years. That should be cause for concern for not only Members of the Scottish National party here today, but also the Scottish Government and the First Minister. As the hon. Member for North Ayrshire and Arran said, she and her colleagues have a desire for Scotland to leave a political and economic union that we have been part of for more than 300 years. I can only begin to imagine the difficulties that would be thrown up were people in Scotland to decide that they agreed with that proposition—thankfully, they do not. The SNP’s own confusion over the matter is laid bare by its recent growth commission, which ironically proposes to leave the UK but to surrender all control of interest rates, inflation and capacity to introduce fiscal stimulus in Scotland. What an absurd, worst-of-all-possible situations that would be.
There are three main areas I want to focus on: the constitutional, social and economic implications. It is undeniable that there are constitutional implications for Scotland arising from the decision to leave the EU. The Scottish devolution settlement was written in 1998 and our membership of the European Union is integral to it. A couple of weeks ago, we saw the UK Government shut down debate in the Commons, leaving a mere 15 minutes to discuss devolution. Not allowing one single Scottish Member of Parliament to speak was disgraceful; it showed nothing but contempt, not only for Scottish Members, but for those we represent.
I point out to the hon. Gentleman that it was the insistence of his Front Benchers on holding 11 pointless votes that led to that 19 minutes of debate. We agree that it was shameful, but it was because the Labour party—his party—insisted on those 11 stupid votes.
It is a myth. Labour proposed to extend the time allowed under the programme motion to provide ample time to discuss all the amendments. I tell the hon. Gentleman that all 11 votes were necessary and vital. He might dismiss them as ridiculous, but they were essential.
The hon. Gentleman is making a point about how fundamental the issue is and how important it is for the UK Parliament and for debates in this place. Does he not feel that the strength of feeling in his party is accurately represented by the number of attendees in this debate?
It is a matter of logistics. My hon. Friend the Member for Midlothian (Danielle Rowley) was an observer at the Mexican elections and is still in Mexico. The shadow Secretary of State is at shadow Cabinet. Other hon. Members are at the Scottish Affairs Committee. They are all working hard in other forums for the people of Scotland, and the hon. Gentleman’s accusation is entirely unfair.
The Opposition realise that that incident of shutting down debate is not likely to be the only time that Scotland’s voice is shut out of the Brexit talks. It is definitely not the only time we will witness a fight between the UK Government and the Scottish Government. I would be surprised if we did not see the same approach taken by both Governments when it comes to the Trade Bill, the customs Bill, the agriculture Bill and the fisheries Bill. Each and every one of those pieces of legislation will have implications for people in Scotland and for our constituents, and we must not forget that. What people want is not for the Governments in different parts of the UK to be at each other’s throats, arguing about technicalities; they want the Governments to work together in a collaborative, respectful manner and to find solutions to problems. That is why we see the need for a dispute resolution mechanism to be formally agreed. I refer Members to the speech by the shadow Secretary of State for Scotland in this place on 20 June if they are struggling for ideas on what those mechanisms might be.
Constitutionally, we are in this mess because of the Tory Government. Their complete and utter lack of understanding about devolution has been quite astounding and astonishing to witness. From the original drafting of clause 11 of the European Union (Withdrawal) Bill, all the way through to the shutting down of debate, it is clear that they neither care about nor respect people in Scotland.
Moving on to the social implications, in December 2017, 150,000 European Union nationals were working in Scotland—5.7% of all people in employment in Scotland. Some 18,000 of those EU nationals work in the public sector, predominantly in our education system and our national health service, yet it took the UK Government more than a year to guarantee that they would even be allowed to remain in the UK. Even now, we know that they will have to pay £65 a head to stay in their own homes and continue to work in the vital public services upon which we all rely. It is an utter shambles. I ask the Minister a simple question: what happens to our public services if the EU nationals decide that they no longer want to be subjected to this country’s hostile environment and return to their country of origin, because without them, our national health service would crumble and our schools would grind to a halt? Have the Government made contingency plans for every eventuality?
We have not even got to the economic implications of Scotland leaving the EU. I made clear in my opening remarks that the Labour party respects the result of the referendum and accepts that we will be leaving the European Union. That does not mean that we are giving the Government a blank cheque or a free hand to negotiate any kind of deal they see fit. While we accept the result of the referendum, we must now focus on what our relationship with the European Union will look like. We have been clear throughout that the relationship must be a close and collaborative one that affords us the benefits of membership of the single market and also keeps us in a customs union.
There are many Tory Members who want to have a clean break from the European Union, but the Scottish Government’s analysis shows that Scotland could see its GDP fall by 8.5% by 2030 in a no-deal scenario. If Government Members do not like that analysis, they just need to look closer to home: the UK Government’s analysis shows that Scotland could see its GDP fall by 9% in the same timeframe if we have a no-deal scenario. I am not entirely sure what planet Members on the Government Benches live on, but that would be absolutely devastating for the Scottish economy. I cannot for the life of me see how anyone could advocate that as a policy.
I use this opportunity to issue a plea to Scottish Tory Members: it is time for them to stand up and use their leverage on the UK Government to ensure that the madness is stopped, and that we have a reasonable and logical approach to addressing the shortcomings of negotiations as they currently stand with the European Union. We have heard rhetoric about a deep and special relationship with the European Union for more than two years now, but the timeframe we have left amounts to a mere six weeks of negotiating time. I ask the Minister one question: when will we know what the UK Government’s plans are, from an economic point of view? Time is fast running out and the whole country cannot wait until after the Prime Minister’s Mad Hatter’s tea party at Chequers to get some answers.
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing this important debate. It is an important opportunity to reflect on a wide range of matters relating to EU exit and the implications for Scotland. I congratulate my many hon. Friends who have contributed powerfully to the debate, as well as those who have spoken from parties across the House.
I turn first to our negotiations with the European Union. The Government are clear that we want a deal that works for the whole United Kingdom. We have built on the significant progress we made in March by locking down the text of the majority of the withdrawal agreement. Taken with the agreement that we reached in March on the implementation period—something that Scottish businesses have been very clear in meetings with me that they want to see—on citizens’ rights and on the financial settlement, we have now reached agreement on many of the most important issues. That provides certainty for businesses and individuals across the UK, including in Scotland.
The hon. Member for North Ayrshire and Arran spoke passionately about the impact on EEA nationals. As my hon. Friend the Member for Ochil and South Perthshire (Luke Graham) pointed out, we have reached agreement on the crucial areas of citizens’ rights. The agreement is fully reciprocal between the UK and the EU. The Prime Minister has said consistently to those people that we want them to stay. We have now reached an agreement that means that we are providing the certainty and the mechanism for them to stay.
Whether an agreement has been reached or not, the point is that the hostile environment that has been created will drive EU citizens, who contribute so much to our communities, to simply leave the UK. Does the Minister not accept that that is an issue and that there is evidence of it?
I disagree with the hon. Lady completely. I think the environment has been welcoming. The Prime Minister’s own words were that we value the contribution of EEA citizens to the UK and we want them to stay—she has repeated that time and again.
The hon. Member for Glasgow North East (Mr Sweeney) referred to 150,000 EU citizens who work in Scotland. Just like with those who live in my own constituency, we want them to stay and we want them to enjoy the same pensions, healthcare and social security benefits. We have reached agreement on the legal text to ensure that that will be the case. The Government will continue to work closely with the devolved Administrations to ensure that the future arrangement for co-operation with the EU in this area takes account of the distinct justice systems in Scotland and Northern Ireland, and delivers legal certainly and clarity for everyone in the UK.
I listened closely to the points made by the hon. and learned Member for Edinburgh South West (Joanna Cherry). My Department and the Home Office have engaged with the Scottish Government on security and judicial co-operation, and we routinely share papers with the devolved Administrations prior to publication. Indeed, we discussed civil judicial co-operation with them last week at the second meeting of the ministerial forum, which I will return to in a moment. We recognise that Scotland and Northern Ireland have distinct legal systems, and that the Scottish Government engage directly with EU agencies such as Europol.
A couple of weeks ago, the former Cabinet Secretary for Justice, my colleague Michael Matheson, to whom I pay tribute, and the new Cabinet Secretary for Justice, Humza Yousaf, published a paper entitled “Scotland’s Place in Europe” on justice and home affairs. It clearly states in the foreword that there has not been engagement of the kind I described in my speech. Does the Minister accept that the first paper that I mentioned does not deal with Scotland at all, and that there was no engagement on the slides that were produced in May?
There has been engagement—I have just referred to engagement at the ministerial forum—and I assure the hon. and learned Lady that there will be more. Although some questions about the withdrawal agreement remain to be resolved, our negotiating teams are working hard to ensure that they are finalised. We are confident that we will reach an agreement by October.
The most important issue for us now across the UK is to focus on negotiating the right future relationship. Jointly with the Commission, we published the topics for discussion on the future framework. They incorporate economic and security partnerships, as the Prime Minister outlined, the institutional framework that will underpin them and other cross-cutting issues. The joint publication reflects both sides’ determination to achieve a broad partnership that stands the test of time after the UK leaves the EU.
We have committed to engaging the devolved Administrations on the negotiations, and they have had input into the development of the UK’s negotiating position. I have appeared before three Committees of the devolved legislatures to give evidence on the UK Government’s preparations for EU exit. The Joint Ministerial Committee on EU negotiations has now met 10 times, most recently at the British-Irish Council in Guernsey a couple of weeks ago, which I attended to provide an update on the negotiations.
Following our commitment to increase our engagement with the devolved Administrations, the UK Government established a ministerial forum on EU negotiations to discuss regularly a range of issues relating to the EU negotiations and the UK’s future relationship with the EU.
Does the Minister accept that the most genuine way in which the British Government could show that they are engaging with the Scottish Government and Parliament would be to acknowledge that the Scottish Parliament withheld legislative consent to the European Union (Withdrawal) Bill and, as my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) said, to introduce emergency legislation to deal with that issue? All this talking and engagement means nothing if that single fact is not acknowledged.
I will come back to the hon. and learned Lady’s point about the withdrawal Bill and the debate about legislative consent, but there is constructive engagement between the UK and Scottish Governments. I welcome the input we have had from the Scottish Government, both at a ministerial level and an official level, into the work of the new ministerial forum, which I co-chair with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Norwich North (Chloe Smith). The conversations we have had so far with the devolved Administrations have been constructive and useful. The inaugural meeting of the forum was held in Edinburgh on 24 May, and the second meeting was on 27 June in London. We use the meetings to have in-depth discussions about the proposed content of the UK Government’s forthcoming White Paper. Sections of the White Paper have been shared with the Scottish Government and the other devolved Administrations confidentially. I want to express my gratitude for the hard work of the Scottish Government officials who have worked with us on the White Paper and on other issues.
Discussions at the Joint Ministerial Committee and the ministerial forum have covered a wide range of areas. It is clear that we and the Scottish Government agree on much, including the need to ensure that Scottish universities and businesses have access to the best of European talent. We have also addressed other issues relating to attracting talent and skills. I note that the issues that have been raised in conversations I have had with growers in Scotland, including the Fife growers, about the importance of seasonal work are similar to the issues that have been raised with me in my own part of England—Worcestershire—by growers in the vale of Evesham.
Crucially, Scotland’s two Governments agree that EU exit should not create any new barriers to living and doing business in our Union. That has been one of our guiding principles and is a key priority for Scottish business. I have heard directly from Scottish business on many visits to Scotland of the issues and opportunities that EU exit creates for them. I have met representatives of a wide variety of Scottish businesses and business associations, including a number of chambers of commerce, the Scottish Retail Consortium, the Scottish Fishermen’s Federation, the Scottish Seafood Association, and of course the world-famous Scotch Whisky Association, which, as a number of my hon. Friends pointed out, is very excited about the international opportunities to be pursued as a result of the UK’s having an independent trade policy.
The Scottish Retail Consortium said:
“Scotland’s businesses benefit enormously from the existing and largely unfettered UK single market”.
Its interests and those of sectors across Scotland are actively informing our negotiating position. As the Prime Minister set out in her Mansion House speech, we want to remain part of bodies such as the European Medicines Agency and the European Chemicals Agency, which are vital for organisations in areas such as the Scottish life sciences sector and the oil and gas sector, representatives of which I met in Aberdeen in April. I have also had detailed discussions with Scottish businesses about the global opportunities for them. In any deal that we negotiate, we must ensure that we have the flexibility to take these opportunities.
The hon. Member for North Ayrshire and Arran spoke about food standards and animal welfare. The Government and I are clear that we want the highest standards of food and animal welfare for the UK, not just to ensure that we can continue to sell into European markets, but so we can make the most of the opportunities in the wider global market and ensure that British and Scottish products reach the widest range of markets and represent quality.
However, it is essential to remember that four times as much of Scotland’s business is with the UK as with the rest of Europe, as a number of hon. Members said. Indeed, the worst thing for Scottish jobs and businesses would be to split from our United Kingdom. As the hon. Member for Strangford (Jim Shannon) said, we are better together. We want to continue working together now to deliver EU exit for the UK in a smooth and certain fashion. That includes designing and implementing replacement frameworks, which the Scottish Government agree we will need, where we have a significant opportunity to work together to improve policy making across the UK.
As hon. Members know, EU exit will result in a significant increase in the devolved Administrations’ decision-making powers. New responsibilities will transfer to Edinburgh, Cardiff and, once a new Executive is formed, Belfast. We have published our provisional frameworks analysis of the 107 returning EU powers that intersect with devolved competence in Scotland across a wide range of policy areas. It shows that there are only 24 policy areas, such as food labelling, that are now subject to more detailed discussion to explore whether legislative common framework arrangements are needed in whole or in part.
At the moment, foods placed on the market across the EU have common labelling requirements that are set by EU legislation. If we do not agree to continue a common legislative approach to labelling, it is possible that different requirements will spring up, which would increase production costs for Scottish businesses and discourage cross-border trading within the UK. Divergent food labelling requirements would make it more difficult to enter into trade deals. That is why we are working together to consider a common food labelling framework.
Our frameworks, which will be designed together, can be lighter touch and UK-specific, offering bespoke policy arrangements that will ensure that power sits closer to the people than ever before. As we set up those arrangements one thing is clear: the success of each framework will rely on the strength of our relationships. It is vital that we work closely together to put arrangements in place that will stand the test of time and provide certainty for people and businesses living and operating up and down the UK.
A number of Members have mentioned the European Union (Withdrawal) Bill—now the European Union (Withdrawal) Act 2018. I remind them that the UK Government made substantial and reasonable modifications to provisions in the Act during its passage. Those changes were the result of joint working that we undertook with the Scottish and Welsh Governments.
As the Welsh Government acknowledged, the legislation respects the devolution settlement. We are, of course, disappointed that the Scottish Parliament did not choose to give consent. We will continue to offer the full provisions of the intergovernmental agreement, which was agreed with the Welsh Government, and to meet all of the UK Government’s commitments on frameworks. Those are open to the Scottish Government and Parliament. We believe that, throughout this process, the UK Government have acted in line with the Sewel convention. We worked with the Scottish Government to reach agreement in the hope that we would be able to achieve consent for the Bill.
I again thank the hon. Member for North Ayrshire and Arran for securing this debate, to which there have been many valuable contributions. We recognise that Scotland has two Governments, and that the interests of the people of Scotland are best served when they work together. We will proceed in that spirit. The hon. Member for Strangford spoke powerfully about the deep links between Northern Ireland and Scotland, and a number of other hon. Members spoke powerfully about the importance of this United Kingdom.
As the hon. Member for Glasgow North East pointed out, we have been members of the European Union together for 45 years, but for more than 400 years Scotland has worked with England on our international relations, and for more than 300 years we have been part of a United Kingdom that has served the people of Scotland and all other parts of the United Kingdom well. The implications of our EU exit mean that we must work more closely together in the years ahead.
Motion lapsed (Standing Order No. 10(6)).
Local Government in Gloucestershire
I beg to move,
That this House has considered the future of local government in Gloucestershire.
I am delighted to serve under your chairmanship, Sir Roger, and I welcome the Minister to his place, although everyone else is leaving—this debate might not matter to those in Scotland, but it certainly does to those in Gloucestershire. It has taken me longer than most to secure—I have put in six times for a debate on the subject—so I shall make the best of it, but I will give the Minister as much time as possible to explain how he can help us in Gloucestershire.
Gloucestershire remains the only authority in the south-west without either any unitary government in at least part of the area, or even a move towards unitary government. I have long believed that unitary authorities are the way forward in local government—I have a long track record on that—and I have been a councillor for many years. During the whole time I was twin-hatting—or triple-hatting, given that I was always a member of the parish and town council when I was a district and county councillor—I always believed that the primary authority should be the one body. That is the reason for this debate.
The one thing that has been left out of my proposed title for the debate is the question mark at the end. I know that the House authorities do not like question marks, but I deliberately included one because there is a real question mark about where we go to and where we have come from with local government in Gloucestershire.
The debate has three main parts. First, as I have intimated, every other part of the south-west, let alone other parts of the country, is now moving towards unitary local government. It is about time that Gloucestershire grasped that nettle. Secondly, the county of Gloucestershire is under financial constraint. To a greater or lesser extent, the seven different authorities have real financial burdens, which have come on the back of austerity. I shall not labour the point, but now is a crunch time so we have to consider all options. Thirdly, we need a strategic authority that speaks for those who live within the county of Gloucestershire—I shall not remove the county—because we need to recognise that local government must speak with a much more coherent and co-ordinated voice than it does now.
I shall not call for a specific reform, which is the business of a proper consultation, led by councillors. Many ideas have been suggested, such as a unitary county—not my preferred solution—east and west being split, a doughnut with Cheltenham and Gloucester in the middle and a rural authority around it, including my area of Stroud, or indeed allowing authorities such as Stroud that could go to South Gloucestershire, an existing local authority, to do so, and seeing what else might happen to the rest of the county. In reality, we have to do something, and I shall be asking the Minister to look at ways in which he can encourage and, dare I say it, cajole those who make decisions in Gloucestershire to consider how we move forward on local government reform.
Within the seven counties of the south-west, every other authority is now looking at some form of unitary arrangement. It is important that we consider it too, but we have no mechanism for doing so. The leaders and chief executives get together, but they have no authority to bring the debate to a proper conclusion, the result of which, I believe, would be local authorities choosing the unitary route, with the support of the people.
For the financial case, I obtained funding figures and compared unitary authorities with those areas, such as Gloucestershire, that still have tiers. The demarcation is obvious. At the moment the Government seem to be encouraging unitary authorities because the finances seem to follow that trend. Under a previous Secretary of State—the recently ennobled Lord Pickles—the clear view was that unitarisation was not the way forward, but I am pleased that the new Secretary of State is much more open. The Secretary of State told the Local Government Chronicle in May 2018:
“There is a clear space and scope for unitary authorities. Obviously it is seeing where there is a need for that and yes, there are proposals on the table that my predecessor had been considering and I will now be looking at.”
I take that to be a green light. I am not saying that day will necessarily follow night, but the Government’s clear view is that unitary authorities are the way forward. Also, the simple fact is that I know of no unitary authority that wishes to go back to a two-tier form—bar Torbay, due to funding issues. The direction of change is obvious.
The finances suggest a change and, in a way, impose it on us. I could moan about how Stroud District Council has had no funding through the revenue support grant this year, but I am pleased that the Government have offered Gloucestershire the opportunity of the business rates initiative, so we have moved forward. Furthermore, that has demanded a degree of collaboration among our authorities, so the Government are pushing on finance.
A final financial point that I wish to make arises from the attitude of staff working for two-tier authorities. Unison conducted a survey of its members in Stroud District Council, and the figures were stark: 80% were not confident about the future of local services under the existing arrangements; none felt that vulnerable local residents were cared for safely; 60% were not confident of the financial situation of their employer; and 53% were thinking about leaving their job for something less stressful. Indeed, sadly some very good staff—the bedrock of local government—are being laid off. They have served Stroud for generations but are being laid off, all because of the cuts and because we have the wrong local government arrangements in Gloucestershire.
To come to the strategic case, the main problem is that with seven authorities, dare I say it, there is no obvious strategy. What strategy there is results from outside pressures, rather than a clear directional movement following decision making by the county council. The county council has severe problems. It is enduring ongoing inspection of its children’s services, where were deemed inadequate last year. I was pleased to see in the last letter I received, dated 8 June, that some improvement has been noted, but the county council is still subject to ongoing investigation. Yesterday, the chief fire officer resigned. I do not know the full details, but again the county council seems to have a degree of crisis associated with it. My favourite topic is the waste incinerator, which is being built at such great expense—£500,000. I argue that the case for the incineration of waste is entirely dubious, with regard to cost, environmental impact and health implications, which I shall talk about later.
Gloucestershire needs to move forward, to see how it can address its own issues by embracing change. We almost went through that process some time ago. I remember the Widdicombe investigation back in the mid ’80s. You might do too, Sir Roger, but other Members here might not even know what the Widdicombe investigation was—the Minister’s eyes are glazing over. It was an attempt, under a Conservative Government, to look at how local government could be reframed. It was not about unitary local government per se; it was about how services could be provided differently. All I remember about the Widdicombe report is that in Gloucestershire we did not adopt any change whatever. In fact, it ended up as a bit of a bloodbath, with all councillors attacking each other because they felt that their authority was the most important in their area, and with no meeting of minds at all. I do not want to go through another Widdicombe report.
I want pressure from the Government, in the nicest possible way, to say to places such as Gloucestershire, “You have to consider the options now.” We know what has happened in Northamptonshire and what is happening more voluntarily in places such as Leicestershire, which is considering the options and what is happening elsewhere in the south-west, where there has been a clear directional shift. Councillors have been sufficiently grown up to recognise that the only way they can deal with the financial pressures is by considering some form of amalgamation, so that they can at least deal with back-office costs and pressures. In particular, it will allow them to develop a stronger strategic direction, in line with the way in which I hope the Government can see us going.
I have two questions for the Minister—I will give him an awful lot of time to answer them, but I am sure that he will not mind if I intervene occasionally to prompt him. First, without top-down demand, what is the Government’s approach to unitarisation? Are there finance and strategic service delivery pressures that the Government could bring to bear to encourage local authorities, such as Gloucestershire, that have been laggards in the whole process? Secondly, as a sequitur of the first question, if parts of the country refuse, for whatever reason, even to consider this option—not necessarily to choose it—what will central Government do? We cannot have a situation in which every other authority has looked at this and many have gone along with it, bar Oxfordshire, which I gather is still looking at some element of a unitary authority.
We still have relationships with our local enterprise partnership, which in Gloucestershire appears to be performing very well. We have a unitary police commissioner and a unitary health arrangement through the NHS, so why not local government? How do we do it? And if we do not do it, what are the Government prepared to do to help us do it?
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for Stroud (Dr Drew) on securing this important debate. I very much recognise and respect his long-standing personal views on the topic, no doubt informed by his many years of service at various tiers of local Government, which I am sure he draws on today. He will have heard me say before that, when requested, the Government are committed to consider locally led proposals for unitarisations and mergers between councils. He will also know that we recently legislated to create two new unitary councils in Dorset, as well as mergers of district councils in Somerset West and Taunton, East Suffolk and West Suffolk. In each of those cases, the councils developed their proposals locally, as is currently happening in Northamptonshire, where a public consultation is underway to help inform the councils’ proposals for the Secretary of State.
Turning to Gloucestershire, there is currently the county council and the six district and borough councils, and adjacent to the administrative county there is also the unitary council of South Gloucestershire. It is important to state for the record that the Department has received no proposals from the county council or any of the district councils for local government reorganisation in Gloucestershire. I am not aware of any other plans in development that are to be presented to me imminently. The Government’s stated policy is to consider any locally led proposals that are submitted.
To answer the hon. Gentleman’s first question, it might be helpful for me to talk a little about the processes for unitarisation. There are two legislative processes that can be used. First, the Cities and Local Government Devolution Act 2016 allows a process to proceed if at least one affected authority consents. This process was used recently for the creation of the two unitary councils in Dorset. Secondly, we can use the Local Government and Public Involvement in Health Act 2007, as we are currently doing for Northamptonshire. Regardless of the legislative process used, the Government have been clear on what our criteria for unitisation are and how the Secretary of State will assess any proposal.
I want to spend a moment outlining the three main criteria. First, the proposal has to be likely to improve local government in the area, by improving service delivery, giving greater value for money, yielding cost savings, providing stronger strategic and local leadership, delivering more sustainable structures and avoiding fragmentation of major services. Secondly, the proposed structure has to be for a credible geography, consisting of one or more existing local government areas, and the population of any unitary authority must be substantial.
So many authorities are under significant financial pressure, as the Minister described. The majority of those named are smaller, more rural authorities. In that light, is it not appropriate to go through this exercise as a matter of course, to explore what sort of cost savings could be made? In Warwickshire that would enable us to understand what sort of savings and efficiency improvements in the services delivered could be made.
We are here to talk about Gloucestershire today and not Warwickshire, but I will address the hon. Gentleman’s underlying question about the Government’s role in this process when I answer the second question from the hon. Member for Stroud.
The third criterion for judging a proposal is that it commands local support. In particular, the structure must be proposed by one or more existing councils in the area and there is evidence of a good deal of local support, including from business, the voluntary sector, public bodies and local communities.
The hon. Gentleman anticipates what I was about to say, so let me elaborate on what the Government mean by a good deal of local support. The Government would like that to be assessed across the area from business, the voluntary sectors, public bodies and local communities. That does not mean unanimous agreement from all councils, stakeholders and residents, but it is vital that any proposals to change structures in local government are truly locally led. That is why we feel that a public consultation is so important.
That has been the experience of recent proposals, where the councils involved have used opinion services or consultants to engage extensively with the public through discourse, surveys and events, to ensure that they have captured the state of public opinion on the proposals they are due to submit to the Department. Having received those proposals, following an invitation, the Secretary of State must consult all affected local authorities that are not signed up to the proposal, and any other persons he considers appropriate, before reaching a decision, judged against the three criteria I outlined. The extent of any consultation would depend on the extent of the consultation that those making the proposal have already carried out.
It is essential that those making a proposal carry out an effective consultation before submitting their proposal, not least to provide evidence about the level of local support. The Secretary of State may then implement the proposal by order, with or without modification, or decide to take no action. Such an order is subject to the affirmative resolution procedure but does not require the consent of any council.
Let me turn to the question from the hon. Member for Stroud about the Government’s role. He will hopefully have seen as I have been outlining the process that our role is to receive proposals developed locally in a particular area; it is not to enforce or dictate from on high the organisation of any local area’s affairs. It is for local councils and local people to develop those proposals. However, as he said in alluding to the new Secretary of State’s remarks, the Government remain open and willing to engage with areas that want to embark on this journey and will willingly receive proposals and adjudicate on them in due course.
For Northamptonshire—thankfully, we are not quite in that situation—the Government came up with solutions, seemingly with the support of Northamptonshire’s MPs. Whatever the Minister means by “receiving” a particular idea, when do the Government intervene to say, “This is right and proper, and we need to get on with it”?
To differentiate, there was a statutory intervention in Northamptonshire because of the situation that council found itself in. A statutory inspection was carried out and, after careful consideration, the Secretary of State appointed commissioners to go into the authority. However, Max Caller, who carried out the inspection, recommended that unitarisation might be part of the solution, which prompted the Secretary of State to issue an invitation. It is important to note that those proposals are being developed locally by the authorities in Northamptonshire. That remains a fundamental point: proposals come directly from councils, in consultation with local people. The process in Northamptonshire originated from a situation that no one would want to see in Gloucestershire—no one is suggesting that it is close to that, as the hon. Gentleman said. In that sense, the two counties are not directly comparable.
Turning to Gloucestershire, all councils should plan for and embrace the future and ensure that they can provide for their communities. I was heartened to see “Gloucestershire 2050 vision”, the extensive consultative exercise on which the county is embarking. The hon. Member for Warwick and Leamington (Matt Western) alluded to the need for councils to consult the public, and that is what Gloucestershire County Council is doing. More than 600 members of the public and 30 exhibitors attended the “big conversation”, the launch of the exercise in February at Cheltenham racecourse, where the council discussed its plans for the future to ensure that Gloucestershire remains a vibrant place to live, raise a family, grow old and, indeed, work and start a business.
The Minister is being most generous in giving way. Of course, one of the proposals was for unitary local government, but sadly that was not one of the preferred solutions to Gloucestershire’s future needs. Will the Minister at least look at the earlier proposal and see that as a trigger for a proper discussion in Gloucestershire?
The hon. Gentleman keeps tempting me, but I will keep saying that it is not for me to dictate to the people of Gloucestershire the appropriate way for them to organise government in their area. It is for the people, the councillors and all those involved locally to develop such proposals. Indeed, many ideas will be debated as part of that conversation, such as those I saw for a new cyber-park, a “super city”, a regional area of natural beauty and a water park to attract tourism. It may be that not everyone agrees on them, but the point of the exercise is to think about the best way to serve the people of Gloucestershire and ensure that their area remains a vibrant, prosperous, safe and healthy place to live. I am delighted to see Gloucestershire carrying out that exercise and wish it every success.
The hon. Member for Warwick and Leamington touched on the financial situation, and it would be remiss of me not to respond. I pay tribute to councils up and down the country, which have done an extraordinary job of maintaining a high level of public services in the face of a difficult financial climate in the past few years as the Government embraced the difficult task of ensuring that the country lives within its means again. I am pleased to say that, in both this financial year and the next, the county of Gloucestershire will see a significant real-terms increase in core spending power, which is the total amount of money available to spend on its residents.
I am grateful to the hon. Member for Stroud for alluding to the fact that Gloucestershire is one of the 10 or so 100% business rates retention pilot areas. That programme, which will ensure that many millions of pounds in extra revenue will flow to Gloucestershire this year, was not available to everyone, and I know that the county is delighted to have access to it. Although there have been challenges in children’s services—it is right that those receive urgent attention—I am pleased to see a strong performance in social care in reducing delayed transfers of care. The latest statistics show that Gloucestershire reduced delayed transfers by 58%, considerably exceeding the national average of 35%. Indeed, its performance is now 20% better than the national average. I pay tribute to the county council for that excellent performance in tackling a difficult social care challenge.
First and foremost, it is imperative that the councils of Gloucestershire and those elsewhere in the country consider how best they might serve their residents, deliver high-quality services and ensure financial sustainability. Of course, the creation of unitary councils can lead to service improvements for residents and achieve savings, which may be of interest to residents. However, it is ultimately for the councils and people of Gloucestershire to decide, having informed views locally. If they so choose, it is for them to submit a proposal to the Government, which we will consider.
I commend the hon. Member for Stroud once again for securing the debate on an issue that he has thought about long and hard. I wish Gloucestershire County Council well with its 2050 vision and hope that the conversations it has with its residents prove fruitful, ensuring a bright and prosperous future for its people.
Question put and agreed to.
[Mr Nigel Evans in the Chair]
I beg to move,
That this House has considered UK-Israel trade.
It is a pleasure to serve under your chairmanship, Mr Evans.
Before I came here as a Member of Parliament, I worked in the mass spectrometry industry for nearly 20 years. The great pleasure of that was travelling across the world, from Cuba to Taiwan and so many places in between. It was an absolute delight in 2001 and 2002 to do a little bit of work in Israel. A particular highlight for me was working at the Hebrew University of Jerusalem. While there, I had my first opportunity to visit a synagogue. The one I visited had the spectacular stained-glass windows designed, created and made by Marc Chagall, representing the 12 tribes of Israel. It is a spectacular vision in the synagogue, and it is particularly important to recognise the value of not only industry, universities and academia, but art and culture that we can share around the world.
Last week, His Royal Highness the Duke of Cambridge made the first ever official visit by a senior royal to Israel. Speaking in Tel Aviv, the economic heart of Israel, he proclaimed:
“The ties between our two countries have never been stronger, whether in our record levels of trade and investment, our cooperation in science and technology; or the work we do together to keep our people safe.”
The Prince’s visit to Israel last week was a strong symbolic sign that the relationship between our two great nations is better than ever. One can also point to the remarkable record levels of trade to see how tangible this flourishing relationship truly is. In his words and actions, I believe His Royal Highness the Duke of Cambridge captured what today’s debate is about.
Many people, as I did before my visits to Israel nearly 20 years ago, think of the country through the prism of its biblical narrative. They think of deserts, mountains and the Sea of Galilee, but the reality for many Israelis is very different. The Israelis have created a country that is every bit as advanced as Britain and the United States of America, which shows what can be done with talent and an immense amount of hard work. That entrepreneurial culture has resulted in what many now describe as a start-up nation. Every day Israel hosts delegations from across the world, looking to understand the secrets of the country’s success—a country that, we must not forget, is the size of Wales with a population of less than 9 million people.
The UK-Israel friendship runs deep, from our shared democratic values to our extensive co-operation in the fields of intelligence, defence and cyber-security. Prince William was right to point out our record levels of bilateral trade, which reached £6.9 billion last year. In the first five months of 2018 alone, UK-Israel trade reached £3.3 billion—a 22% increase compared with the same time last year. This year-on-year increase in the value of bilateral trade has been happening now for almost a decade.
I should declare to the House my entry in the Register of Members’ Financial Interests, following my recent trip to Israel to discuss trade matters. Does my hon. Friend agree that Israel has become a global powerhouse for research and development, with quite a lot of the big software houses and companies such as Google and Facebook, but that the level of research and development co-operation between the UK and Israel is probably not as high as it could be? Does he think there are further opportunities there for British companies to take advantage of the R&D powerhouse being created in Israel?
I agree entirely. Israel has attracted talent and is creating its own talent within the country. That relationship is improving around the world and it is yet to do so, and we ought to be taking advantage of that as we look to the future.
Trade has been increasing and improving for almost a decade and there are no signs of it stopping or slowing down. Britain is, after all, Israel’s second largest export destination after the United States of America and its principal trading destination in Europe. About 30 Israeli companies are registered on the London stock exchange and about 300 Israeli companies operate in the UK, employing thousands of Britons.
I congratulate my hon. Friend on securing the debate. If necessary, I will certainly declare my interest, having recently visited Israel. Is he aware that Israel has the highest density of start-up companies in the world? There is one start-up company for every 1,600 people within the population. That is the basis of the economic success in the country and internationally.
Those are incredible statistics and they show the innovative and entrepreneurial nature that so many Israelis have and the culture that the wider society embraces. As I mentioned and as has been highlighted, Israel is renowned as the start-up nation—a true high-tech start-up powerhouse. Israel is widely viewed as a desert country with few natural resources, which is perhaps one of the drivers behind that, although there have been discoveries of natural gas off the coast. Despite the geographical challenges and some security threats, an enormous number of innovations and inventions have emerged from the country. Israel has gone from being a desert to the land of milk and honey, and now the land of Apple and Microsoft. Indeed, most of the world’s leading tech companies now have a research and development presence in the country, which is testament to the character and qualities of the people, which my hon. Friend highlighted.
The country’s prowess in the fields of high-tech, energy, medical science and FinTech is in large part due to the need to adapt as challenges arise.
My hon. Friend is making an extremely important point. Does he agree that the extraordinary levels of inward investment into Israel by high-end, high-value companies in the tech space and pharmaceutical space demonstrate that when British companies do business with Israel they are plugging themselves into some of the highest-value sectors of the global economy, which is exactly what we need to do to make Brexit a success?
I agree entirely; my right hon. Friend is absolutely right. That highlights the connectivity and relationships that underpin so much of high tech, culture and the arts.
The necessity of adapting and developing solutions to the challenges Israel faces is a key part of its impressive start-up ecosystem. The culture of entrepreneurship and striving to achieve is reflected in the fact that there have been 12 Israeli Nobel prize winners in the fields of peace, literature, physics, chemistry, medicines and economics; I think that is a 100% record across all the different fields in which they could achieve Nobel recognition. Israelis will be the first to tell you that the Israeli autonomous driving company Mobileye was sold to Intel for a remarkable £12.5 billion and is just one of many success stories, including Waze, the USB storage device and internet firewalls.
As we debate here, dozens of Israeli scale-up founders are in London sharing their experience as part of Innovate Israel 2018. The event, co-ordinated by UK Israel Business, has become a major event in the UK high-tech calendar and is another example of how British and Israeli businesspeople work together every day.
Israel’s cultural exports are no less significant. Netta famously captured the hearts of a continent this year when she won the Eurovision song contest. Hers was an amazing performance that delighted all those who watched it on the evening and on YouTube or other sources afterwards.
As a traditionalist, I will adhere to the convention.
It is no surprise that the first bilateral tech hub was launched by the British embassy in Israel in 2011. The UK-Israel tech hub is one of the first of its kind to promote partnerships in technology and innovation between the two countries. It has generated 175 tech partnerships in deals worth £85 million since it was established, and it has helped to boost the UK economy by an estimated £800 million. I have been to Israel to hear about this excellent initiative, and as we prepare for Brexit it is heartening to hear that this model will be replicated in other countries across the world, ensuring that Britain is well placed in the ongoing tech revolution.
I congratulate the hon. Gentleman on securing the debate. Does he agree that it is gratifying to hear that the UK has prioritised a free trade agreement and trade links with Israel post Brexit? The whole UK—all its countries and regions—should be actively involved in seeking the opportunities that will exist through better UK-Israel trade.
I wholeheartedly agree. As a Greater Manchester and Lancashire MP, I certainly want the north-west of England to participate in this tech revolution, and Northern Ireland certainly should as well. I was born in Ballymena, so I have a personal interest in that.
Other success stories that spring to mind include the landmark £1 billion agreement between Rolls-Royce and El Al in 2016, and I recently heard that the fastest growing Aston Martin dealership in the world is based in Israel.
The UK has signed countless agreements with Israel in science and innovation, and Israeli and British scientists work together every day on cutting-edge research. The Britain Israel Research and Academic Exchange Partnership is a significant part of that, bringing researchers from both countries together to tackle some of the world’s most challenging medical conditions and diseases, including cardiovascular and liver disease, diabetes and Parkinson’s. Each of these research programmes stands to benefit Israeli and British citizens, and no doubt many other people right across the world. That ought to be celebrated.
We should also consider that some 74% of Israeli exports to Britain in 2017 were in the medical equipment and pharma sector. It is undeniable that this relationship keeps Britons healthier, so will the Minister join me in restating the importance of this sector of trade, and will he provide assurances that it will be uninterrupted as we leave the EU?
Israel was one of the first countries that we began discussions with following our vote to leave the European Union. Last year we created the UK-Israel trade working group, which will ensure a smooth post-Brexit transition and is exploring opportunities to maximise further trade.
The hon. Gentleman talks about Britain’s post-Brexit trading relationship with Israel. Does he agree that the definitions in the EU-Israel association agreement, particularly in relation to the settlements, should carry through into any bilateral trading relationship that Britain has with Israel? The trade preferences available under the EU-Israel association agreement do not extend to illegal settlements in the west bank.
I think we ought not to bind ourselves. Any trading relationship or ongoing process evolves over time, and we need to keep an open mind in any ongoing negotiations. Both sides of that divide here should seek an ongoing negotiation because, for example, there might be the possibility of land swaps. We in the United Kingdom ought not to put down lines in the sand. The Minister may develop that further.
For clarity, any new agreement will clearly have to be negotiated on its own terms, for better or for worse. I think the point that my hon. Friend the Member for Birmingham, Northfield (Richard Burden) was making related to issues of illegality, and it is unquestionably the Foreign Office’s view that the settlements are illegal under international law. Article 2 of the EU-Israel association agreement provides that human rights considerations should be instrumental. Surely he would want that to carry through, irrespective of any other terms?
We have to recognise that strengthening businesses, businesspeople and the economies on both sides—in Israel and the occupied territories—is how we will achieve a viable two-state solution. Doing as the Boycott, Divestment, Sanctions movement wants, which is to discriminate against businesses in Israel without distinguishing where they are, will damage the economy and the interests of not only Israelis, but Palestinians seeking to earn a living.
Absolutely. The impoverishment of people, whether in the Palestinian territories or in Israel, is one of the drivers of violence. People who do not believe that they have a future sometimes turn to violence. We ought to ensure that, so far as possible, the whole region becomes increasingly economically successful.
Is my hon. Friend aware that more than 500 Palestinians lost their jobs after the SodaStream factory in the west bank was forced to close after the campaign by the BDS movement? Those people will now not have livelihoods, but they will certainly have families to provide for. Does he agree that that was a disgraceful campaign against people in the west bank?
I will move on from this particular point; hon. Members from both sides of the House have had an opportunity to explore it.
I understand that the existing EU-Israel association agreement will form the basis of a future trade deal, but that there are great opportunities for further collaboration, particularly in the agriculture sector, in which Israel excels.
The House will shortly consider the remaining stages of the Trade Bill, which seeks to convert from EU law into UK law all the EU’s existing third-country trade deals. That will apply to the EU-Israel deal, which, as my hon. Friend says, will give businesses both continuity and the flexibility to enact the changes that he refers to.
I agree. We need in our ongoing relationships a sense of bringing down barriers, enhancing agreements that we already have and creating new and much more comprehensive agreements. Is the Minister able to clarify whether the association agreement will indeed form the basis of a future trade deal with Israel, and is he able to provide an update on discussions regarding agricultural trade?
I had a particular interest in science and industry before my election to Parliament, and I have a particular interest in Israel’s relationship with Horizon 2020. It was the first non-European country to have such a relationship, and in that sense the United Kingdom has something to look up to, to respect and to admire in Israel’s collaboration with European scientists on Horizon 2020. As we look forward to the opportunities presented by our leaving the European Union, we may look forward to framework programme 9—the successor to Horizon 2020—and wish to participate in that. Israel, by already having that kind of relationship, shows us what could happen.
When we look to the United States of America, we get a sense that the world is creating new barriers against trade and people. We ought, especially when looking at the European Union, to have the sense that right across Europe, the United States and the wider world, we are trying to bring down those barriers. In particular, we ought not to be promoting or increasing barriers with the state of Israel. We need to create ever stronger cultural, academic and social ties and, with trade being so important, to have the freedom to trade with countries around the world. We may wish to buy oranges from Spain or other countries, but I look forward to buying my first Jaffa orange post Brexit.
Order. As Members can see, there is considerable interest in taking part in this debate. I will not impose a time limit at this moment, but I ask hon. Members to show restraint and stick to four to five minutes in order that everyone is able to speak.
I draw attention to my entry in the Register of Members’ Financial Interests. I congratulate the hon. Member for Bolton West (Chris Green) on securing this important debate and providing an opportunity to show the strength of the trading ties between Israel and the United Kingdom, and the benefits that those trading links bring.
Israel is a vibrant start-up country with a strong business sector, a strong trade union sector, through the Histadrut, and a strong co-operative sector. It also has a strong welfare state and excellent universal healthcare. The value of bilateral trade between the UK and Israel soared to £6.9 billion in 2017—up 25% on the previous year and still rising. Trading links bring mutual benefit. Thousands of people in this country manufacture products and goods that are sold in Israel, and more than 300 Israeli companies employ thousands of people in the UK, in areas such as high tech, finance and pharmaceuticals. There are very strong educational links between our two countries.
I will focus on one area that benefits people in this country: Israeli medical technology. PillCam is the first pill that can be swallowed to record images of the digestive tract. It was invented and developed in Israel. Babysense is a system that protects babies from sudden infant death syndrome. It was invented in Israel. I could also mention cancer probes, heart catheters, the bedside blood count device developed by PixCell Medical Technologies and the artificial cornea developed by CorNeat Vision. All are positive developments that help people to lead a better life. Reference has already been made to the Boycott, Divestment, Sanctions campaign, which advocates boycotts between the UK and Israel—it is against UK-Israel trade. I wonder whether it has dared to campaign against the use of those lifesaving products. I suspect not.
I will not ask my hon. Friend about the BDS campaign, but could I ask her at least to endorse the statement in the Foreign Office’s own advice to UK businesses? It states:
“Settlements are illegal under international law, constitute an obstacle to peace and threaten to make a two-state solution to the Israeli-Palestinian conflict impossible. We will not recognise any changes to the pre-1967 borders, including with regard to Jerusalem, other than those agreed by the parties.
There are therefore clear risks related to economic and financial activities in the settlements, and we do not encourage or offer support to such activity.”
Will my hon. Friend endorse that statement from the Foreign Office advice?
Settlements are one barrier to peace, but they are not insuperable and not the only barrier to peace. The most fundamental barrier to a peaceful solution of this tragic conflict, and the key factor that prevents the setting up of two states, Israel and Palestine, is the Palestinians’ refusal explicitly to recognise the legitimacy of Israel as a national Jewish home.
The hon. Lady is, as always, making a very well informed speech on this subject. Does she agree that the benefit of the technologies that she is talking about, particularly the medical technologies, is that they benefit both Israelis and Palestinians and people in Britain, and it is wrong to see investment in trading links in the field of medical tech, research and life sciences through the prism of an historical conflict? We should be looking forward and considering the potential benefits of future academic and research links, rather than looking at things through that historical prism, which is to the detriment of both Israelis and Palestinians, and patients generally around the world.
I agree with the hon. Gentleman. Inventions and improvements in the human condition are about all of humanity and should benefit everyone; they are not about conflict. Trade is constructive; boycotts are negative. The BDS movement is fundamentally opposed to the state of Israel, and partial boycott campaigns, however presented, are part of the same movement. BDS has not affected Israel adversely. Israel’s trade is rising, both with the UK and with the rest of the world.
I congratulate my hon. Friend the Member for Bolton West (Chris Green) on securing the debate. The hon. Lady is entirely right to focus on pharma and on our trade links with Israel. I understand that in seven of the past 10 years the UK has had a trade surplus with Israel. Does she agree that we can build on that, and that it shows the strength of our trading relationship both now and for the future?
I agree with the hon. Lady. Trade is beneficial, and it is beneficial to both countries; indeed, it should be international as well. I look forward to the day when the state of Israel and the state of Palestine establish good trading relationships with each other and with the UK, in accordance with the late Shimon Peres’s vision of a new middle east.
It is a great pleasure to serve under your chairmanship, Mr Evans. I should first refer to my entry in the Register of Members’ Financial Interests, which I will spell out a little more fully in the debate.
I was recently on a trip to Israel with a number of Conservative colleagues, and it was specifically focused on trade and investment. I particularly wanted the trip to be focused on trade and investment, for two reasons. One is obviously the context of Brexit and Britain looking outwards to a more global future. My hon. Friend the Member for Bolton West (Chris Green), who very ably opened the debate, focused on the growth in trade between Britain and Israel and the fact that Britain is Israel’s largest trading partner. Also, I wanted to understand the extent to which economic growth and development could at some point, when the political conditions are right, contribute to strengthening and enabling the two-state solution that I think we all want to see.
In the limited time I have—I will try to obey your injunction to be relatively brief, Mr Evans—I will focus on just two areas. First, when we were in Israel we saw a number of examples of its strength in cyber-security. The Prime Minister of Israel spoke at a science gala taking place on the first full day of our visit. He talked specifically about IT and cyber. I come from Gloucestershire, where GCHQ is based, but there are also a number of companies in the cyber sector. The work that Britain and Israel, and their companies, do together does not just develop business relationships; it helps keep both countries safer in a very dangerous world. Those companies work together to keep businesses and consumers safe from the threats from organised crime, but they also help our Governments and security agencies keep us safe from those who would do us harm. That partnership working is therefore very valuable.
Secondly, I want to focus on the specific example of a company that provides a good illustration of how business can help bring communities together. As my hon. Friend the Member for Bolton West said, we visited the SodaStream factory. He mentioned that it had been forced to move from the west bank and that a number of Palestinians were unable to continue working there. When we visited the factory, we saw a company that employs Israeli Jews, Israeli Arabs, Bedouins and Palestinians. We met a Palestinian manager who travels there from the west bank. He manages a team of employees, including Israelis. I thought it was a very powerful symbol. There are people coming together, from a range of different communities, and working together to make their business successful.
One of the things that struck me about how business can be powerful was something that one of the Israeli managers at SodaStream mentioned. They had recently had a day when they could bring their sons or daughters to work, as we do in the UK. When his son came to that business, meeting his father’s colleagues and their children, it was one of the first times he had met Palestinians in an environment that was conducive to sharing ideas and furthering understanding between those two communities.
During the week, we spoke to a number of business people from individual companies, but also from some business organisations, such as those that further business development between Israel and the Palestinian territories. All of those business people were up for, and encouraging of, growing the Israeli economy and the Palestinian economy. I hope that the Minister will take away the message that Britain should encourage economic development in the Palestinian territories as well as growing our trade with Israel, so that when the political conditions are right—I know that they are challenging—we will have a thriving economy to underpin the success of a two-state solution.
I came away from our visit optimistic about the future trade relationship between Britain and Israel, and the prospects for growing our trade in the parts of the economy that will make both countries prosperous. I also came away more hopeful about the prospects for Israeli civil and business society to help create the conditions that will allow politicians on both sides to achieve the two-state solution that the hon. Member for Liverpool, Riverside (Dame Louise Ellman) talked about. That was summed up well by the Duke of Cambridge’s visit, during which he visited both communities and spoke powerfully about the opportunities and hope for the future. I hope that we have more such visits, to help bring Britain and Israel closer together and to heal some of the divisions within Israeli society. I think that business can contribute to that, and I hope that we will see more of that.
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate the hon. Member for Bolton West (Chris Green) on securing the debate. I declare an interest: I, like many other Members here today, am a friend of Israel and have been involved in the all-party parliamentary groups, both here and in Northern Ireland. I am an unashamed friend of Israel, by nature, choice and conviction. Therefore, when debates like this one come up, it is always a pleasure to contribute.
We have forged deep ties with Israel in cyber-security, which is vital not only for our national security, but for the private and public sectors. Israel is at the cutting edge of that industry, with Israeli start-ups receiving around 20% of global investment in the cyber market. I believe that we must continue our staunch partnership in that area. Israel has strong historical links with Northern Ireland and the rest of the United Kingdom. Some people joke that perhaps we in Northern Ireland are the 13th tribe. I am not sure whether that is true, but many people might look at us and say, “Yes, perhaps we are.” The main thing is that we have a very strong relationship with Israel.
During one of our recent visits to Israel we saw how a university there had made links with cyber aspects. Is there not a great opportunity for UK universities to become joint partners on the world-leading technologies that are being brought forward?
My hon. Friend is absolutely right. I was going to mention education and universities, but he has done it, so I can relax on that. We can do something strong. Queen’s University in Belfast and Ulster University can be part of that partnership. Maybe the Government should be looking at how they do that with other universities across the United Kingdom of Great Britain and Northern Ireland.
Israelis see the UK as an ideal country to trade with. They are attracted by our culture, language and institutions, and by our honesty, integrity and business acumen. Those are all qualities that business people like to see, and we have them in abundance in the United Kingdom. I welcome the Duke of Cambridge’s historic visit to Israel last week and share the view that it was fitting for him to meet Israeli high-tech companies ReWalk and AlgoBrix, which have developed innovative medical solutions. They epitomise the start-up nation and we want to be part of that, as other hon. Members have said. I am also glad that he took the opportunity to visit the Palestinian territories, because it is good to reach out to both sides and try to bridge that gap. He did that in such a good way.
In the light of the Duke’s visit to Israel last week, during which he saw a showcase of Israeli technology at the British embassy in Tel Aviv, what steps are the Government taking to increase the sharing of innovation between our two countries? There are many things that we can do, and I believe that this is one of them. I welcome the growing collaboration between our two countries and recent agreements signed to increase co-operation in the field of science. How is the Minister working to strengthen that relationship?
Israel has become renowned for its high-tech capability and innovative technological solutions. The UK and Israel share a close relationship in research and development, yet there is still more that can be done. What are the Government doing to unlock that potential? The UK and Israel have a strong and growing partnership in R&D with British companies such as Barclays and HSBC—the latter launched a cyber-hub in Tel Aviv last September—but we still lie behind Canada, China and the US in utilising Israeli expertise. Does the Minister share my concern, and that of many other Members, that further co-operation on R&D should be a priority? Whether it is pre-Brexit or post-Brexit, let us get ourselves into a position in which we can take advantage of the opportunities to create jobs.
Does my hon. Friend agree that the converse of what he has just eloquently described is the regrettable and reprehensible actions by a small number of people who advocate disincentives and actions against Israeli businesses, which disadvantages not only Israelis but Palestinians?
My hon. Friend succinctly reminds us of the negatives of not supporting Israel-UK trade links, which can achieve much. There are opportunities, jobs, expertise and a chance to move forward.
In conclusion, Israel spends 4.27% of GDP on R&D, which is more than any other developed country. There remains large untapped potential in the form of British investment in R&D in Israel. Does the Minister agree that there is more to do in this area, and how will his Department ensure that happens?
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Bolton West (Chris Green) on securing the debate. I, too, was part of the recent trade delegation to Israel, and I draw attention to my entry in the Register of Members’ Financial Interests.
For many years Israel has had a reputation for developing the technology solutions to many of the world’s challenges. For many years it has had an effective irrigation system to water a very dry part of the world. That technology is exported, particularly to developing countries that face similar challenges—if this heatwave continues, we might want to deploy that technology here. That technology was developed many years ago. Today Israel is addressing some of the new challenges in the world. We visited Gigawatt Global, which is providing solar energy solutions to many developing countries around the world and making their communities energy-sustainable.
As other colleagues have mentioned, research into cyber technology and security is now a key part of the Israeli economy, and we spotted many opportunities for deepening trade links between the United Kingdom and Israel. I will give three brief examples to illustrate the point. We visited a start-up company called CommonSense Robotics, which is innovating with a very efficient packing system for food distribution within a particular factory or unit, but at the moment it uses traditional delivery methods. There are companies in the United Kingdom piloting robotic delivery systems. In my constituency we have the Starship delivery robot, which is a fancy robot that goes around the streets delivering packages to people’s homes. I have put the two companies in contact with each other, as they potentially have a synergy of interests.
We also visited the Israeli aerospace industries. One of the most exciting ideas that they are developing is an autonomous electric taxiing system at airports, so that aircraft can move from the stand to the runway without having to switch on their engines. Cumulatively, that will save a considerable amount of emissions at airports, which is very pertinent to current debates on air quality.
My final point is more general. We discovered a sophisticated ecosystem in the new technology space where academic and commercial bodies and the Israeli Defence Force could combine their knowledge for innovative new solutions. They have developed a powerful ecosystem of co-operation, which is something that this country, and indeed all countries, will have to take notice of. Individual sectors on their own will not deliver the solutions we need. Israel is already having that cross-fertilisation of ideas and solutions. I chair the all-party group on the Oxford-Milton Keynes-Cambridge corridor, and our ambition is to have the United Kingdom’s creative centre. I am already putting different bodies in touch with their Israeli counterparts to see what lessons we can learn from them. Israel has a long tradition of providing solutions and will do so in future. I very much hope that will be part of a deepening of UK-Israel relationships.
It is a pleasure to serve under your chairmanship, Mr Evans. I refer to my declaration in the Register of Members’ Financial Interests. I travelled to the Occupied Palestinian Territories, including the village of Khan al-Ahmar, last November. I appreciate being given a few minutes of the debate, and I apologise to the Minister if I am not here when he comes to reply. For that reason I will be brief and will make just three points that relate to the elephant in the room: relations with the Occupied Palestinian Territories. I wondered until the interventions whether we would hear anything about that from the hon. Member for Bolton West (Chris Green), who secured this important debate.
My hon. Friend the Member for Birmingham, Northfield (Richard Burden) read out the Foreign Office position, which I am sure the Minister will adhere to, even if the Foreign Secretary sometimes does not. The position is straightforward, if somewhat illogical: settlements are illegal under international law, but buying settlement products should be a matter for consumer choice. There seems to be an illogicality in that. I do not know whether the Minister, the shadow Minister or the Scottish National party spokesperson will wish to comment on that. The situation is unique: a 50-year occupation of territory and Israeli settlements.
The principal governing treaty at present is the EU-Israel association agreement, which came into force in 2000. As I referred to earlier in an intervention, article 2 of that agreement makes it clear that all the trade preferences it bestows are conditional upon respect for human rights by both sides. What is meant by that? I can give three quick examples. First, the settlements are a transfer of population to occupied territory and are therefore considered a war crime under the fourth Geneva convention. Secondly, I referred to Khan al-Ahmar, a village that is under imminent threat of demolition. It is a Bedouin village on the west bank, which Israelis visited at the weekend preparatory to its demolition. I know that the Minister made representations, along with many other people, but that demolition would constitute forcible transfer and a war crime under international law, and demolitions are increasing across the west bank.
Thirdly, there are the disgraceful events that we saw on the Gaza border last month in which more than 130 Palestinians, including children and medics, were killed. Such use of lethal force constitutes wilful killing and, again, is a grave breach of the fourth Geneva convention. The EU trade association agreement could be criticised in that article 2 is not being enforced, but it is there at the moment, so my third point is addressed directly to the Minister. If we are in a post-Brexit situation—if we are—and an agreement is being negotiated, will those terms be carried across?
On that point, is not one of the issues with the agreement, as pointed out to us earlier by the European Council on Foreign Relations, the fact that Israel defines the borders? We have the issues of the green line, the blue line, the purple line and the status of Jerusalem. If we are to negotiate ourselves, should there not be international recognition of what the borders are, not Israeli definitions?
Absolutely. We are dealing with matters of law here, and there is a lot of picking and choosing. It is all very well for Members to say, “Well, there was a business in the occupied territories.” How would Members here like it if foreign entities were operating in this country without our consent, which is what happens to the Palestinians? The demands placed on business could equally be placed on the Government in negotiating a new treaty.
I am sorry, I do not have much time.
Companies should not carry on business activities in the settlements or with individuals in the settlements. They should not trade in goods originally from the settlements, nor provide goods or services that are used for the benefit of settlements. They should not engage in any business activity that contributes directly or indirectly to the maintenance, development or expansion of the settlements. Those are the criteria and standards we should set. Once we have done that, we can perhaps go on to talk about trade. This matter is not about BDS. It is about international law and our treaty obligations as a democracy that believes in the rule of law.
I refer to my entry in the Register of Members’ Financial Interests. I am just about to make what is my seventh or eighth visit to Israel in the past four or five years. I hope that I will see some more change; I have seen a lot over the past few years.
Like you, Mr Evans, I am a member of the Parliamentary Assembly of the Council of Europe. That is an important organisation in Europe, because it contains both the Israelis and the Palestinian Authority and is unique in being able to tackle the issues that they both present. I want to organise an exhibition in the foyer of this Chamber that looks at projects that are done jointly between the Israelis and the Palestinians. The problem is that there are so many projects to call on.
We have heard today that Israel is renowned for its high-tech capability. That is still growing. There is still an enormous amount of research and development to do, and we still need to move that on, but that development has not happened by accident. It has happened because there has been a growing self-confidence in Israel and a growing confidence among British businesses that have found a willing partner. From my constituency perspective, I want to concentrate on water management and the excellent approach to water conservation in Israel.
I have been to a desalination plant on the coast of Israel. Sadly, the technology that was envisaged for the plant had been offered to the people who live in Gaza, but had been rejected. I think that is a great shame. Israel recycles some 90% of its domestic waste water, which is mostly used in agricultural production. By way of comparison, in Spain, the next biggest user of recycled water, only 20% is used for agriculture. Israel’s drip irrigation technology is exported throughout the world.
I agree with the hon. Member for Liverpool, Riverside (Dame Louise Ellman) about the boycott, divestment and sanctions regime. It affects the livelihoods of Palestinians as much as those of Israelis and prejudges the outcome of the debate; it is an issue to be tackled in the debate, but it does not define the whole debate. Where are the similar boycott, divestment and sanctions calls in relation to the Turkish occupation of northern Cyprus, or the Moroccan occupation of the controlled Western Sahara? We have a blinkered view of Israel in some sections of this country, and we need to overcome it by encouraging more companies to do business there.
Like just about everyone else in the Chamber I want to draw my attention to my entry in the Register of Members’ Financial Interests. I, too, have been to Israel on many occasions. One of the last couple of times was as an International Trade Minister—it is good to see my successor in his place—and the other was as a member of the trade delegation.
We have heard a great deal about Israel, including a lot of statistics, but we need to note the vibrant atmosphere there, which has led to its becoming one of the greatest countries for technology start-ups in the world. The combination of an extremely energetic population, national service that seeks out elite individuals for elite units, a willingness to support innovative technology and the ability to network results in Israel having the greatest density of technology company start-ups. There is one start-up for every 1,600 people, 4.25% of GDP is invested in research and development, and it has one of the best start-up company success rates. As a result, extraordinary things are done in areas such as telecoms, cyber-security, information technology, biomed, environmental sciences and FinTech. All those are things that this country wants to take advantage of. They are the cutting edge of technology, and where we trade with Israel in those areas we will improve our productivity and intelligence. We welcome those companies coming to invest in the UK, and we need to do as much as we can to help them.
As to comments that have been made about problems in Israel, only someone with a completely tin ear would not understand that there are worries, but, as we heard from the hon. Member for Liverpool, Riverside (Dame Louise Ellman), the best way to get positive outcomes for populations is by trading with the countries in question, doing as much as we can to bring wealth and prosperity to Israel, the occupied territories, the west bank and the Gaza strip. We need to do as much trade as we can.
My hon. Friend the Minister has one of the best jobs in the world and works with some of the best civil servants that the Government have to offer. It is a great pleasure to see some of my former colleagues from my private office here. They work extraordinarily hard. My hon. Friend’s job is to go out and make companies and businesses wealthy. By creating wealth through the Department we can generate more tax revenue and, as a result, we can have more hospitals, police on the streets, schools and all the good things that taxation brings.
I shall not let the Minister off without a task: will he share with us the budgeting decisions that have been made about our Department for International Trade friends in Tel Aviv? As his predecessor I am worried to see that there has been a 9% budget cut for the DIT in Israel. The Government are under a certain amount of pressure, but is it not right to increase the budget for a wealth-creating Department such as DIT, rather than decreasing it, particularly in a country such as Israel?
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Bolton West (Chris Green) on securing the debate. I, too, draw the attention of the House to my entry in the Register of Members’ Financial Interests, which shows that in May I joined other colleagues on a visit to Israel, to meet Jews, Palestinians and Bedouins, strengthen the trade relationship between the UK and Israel, and promote my constituency as a destination for inward investment by Israeli businesses. As the House will know, Havant is a centre of excellence for technology, trade, investment and science, and I am pleased to say that, following my visit, a number of Israeli businesses are in discussions with me about opening offices there. I look forward to continuing those discussions.
The debate is timely, as trade between the UK and Israel is at a record high level. Obviously I welcome the visit to Israel made by His Royal Highness the Duke of Cambridge last month. Israel is the original start-up nation and a global powerhouse for science, technology and innovation. It is a key driver of the fourth industrial revolution. It has the highest density of start-ups in the world, and has earned its title as the start-up nation by, amazingly, having the equivalent of one start-up for every 1,600 people.
As the fourth industrial revolution accelerates, our two economies will increasingly be powered by artificial intelligence, big data, robotics, advanced manufacturing, precision medicine and other advanced sciences. I hope that the Minister will join me in championing Israel as one of the UK’s leading partners and will make sure that both countries benefit from the present exciting period of technological innovation. There has never been a more important time to strengthen our links with Israel, a beacon of democracy in the middle east with which we share strong values, and with which we can partner as the new technological revolution accelerates. It is vital, in particular, as we leave the European Union, that we take the opportunity to secure our prosperity by strengthening links with our most important trading partners.
As I have mentioned, last month I had the opportunity to visit Israel on a trade-focused trip with several other colleagues who have spoken in the debate, to see and maximise opportunities for developing our trading relationship. At SodaStream I saw Palestinians, Jews and Bedouins working together to manufacture products for export—something that will not only drive prosperity and increase trade but is also a good model for the peace process in the future. I also visited cyber-security firms that do vital work helping to safeguard both our countries. Israel is second only to the US in its number of cyber-security firms, and has a 20% share of the global market in that important sector—a truly astonishing figure, on which I hope the UK can capitalise.
I also visited the Gav-Yam Negev advanced technologies park in Be’er Sheva, which gave us an insight into the spill-over effects in the Israeli economy, utilising leverage between the military, universities, civil society and the corporate world. Such collaboration was key to the cyber-park’s success, and I hope we can replicate that in parks in this country as well. On our visit we also had a glimpse of some of the medical innovations that the hon. Member for Liverpool, Riverside (Dame Louise Ellman) mentioned. As precision medicine becomes an increasingly important part of the fourth industrial revolution, that is an area for expansion in both the UK and Israel. I hope that we can deepen our collaboration in that area.
This is an exciting time for our two countries, and as the UK leaves the European Union and the fourth industrial revolution accelerates, I hope that the Government will do all that they can to strengthen the trade relationship between the UK and Israel for the years ahead.
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Bolton West (Chris Green) on securing the debate. I draw Members’ attention to my entry in the Register of Members’ Financial Interests, as I recently made a trip to Israel with colleagues.
As has been mentioned, trade between the UK and Israel is at a record high, and the UK is Israel’s second largest trading partner. It is often said of trade, particularly now that we are leaving the EU, that it should be as free and frictionless as possible. How do we apply that idea? I believe that the answer is through technology, with partner countries that appreciate the same idea. Israel is certainly one of those. It spends about 4.27% of its GDP on research and development—more than any other developed country. I am sure that we in the UK can admire that, and of course we shall be only too keen to emulate it in the coming years, as I expect the Minister will agree.
There are many types of technology that can facilitate trade between our two nations as we lead digital disruption across the world. One of the key examples is distributed ledger technologies. Some Members may have heard of blockchain, which is one type of DLT. For those who have not, DLTs are the building blocks of the internet of value and can record interactions of peer-to-peer value without the need for a centrally co-ordinating entity. In that sense, value can refer to any record of ownership of an asset, be it money, land, commodities, or even music industry ownership rights. Its decentralised nature makes that data safer from hackers who could try to compromise it. As hon. Members can see, DLT could be something big that could enhance every industry, and if we seek to use it we will need partner countries that are as technologically advanced as we are. Israel is pioneering DLT with world-class projects in Tel Aviv.
It is important that we prepare the UK for its future trade beyond Brexit, and we must follow in Israel’s footsteps and put technology and digital innovation at the forefront of our trade strategy. I commend the efforts of one UK organisation, FinTech Central, which is working hard to promote the UK’s financial technology industry and ensure that it benefits trade across borders. UK-Israel trade is strong, and by harnessing the potential of distributed ledger technology, I believe it could be stronger still.
It is a pleasure to sum up this debate on behalf of the Scottish National party, and I commend the hon. Member for Bolton West (Chris Green) for securing it and for the measured and well-informed way in which he introduced his remarks. I cannot say I agree with everything he said, but I compliment him on the eloquence with which he presented his case.
I have always thought that Israel is something of an enigma in the world. As we have heard from a number of Members, there is no doubt that the advances in knowledge and research that Israel helps to promote have the potential, and sometimes the actuality, to benefit humankind well beyond that country’s borders. At the same time, however, Israel is almost an outlaw; it is a criminal, and it is acting against international law every day of the week. There have been a number of serious, lethal attacks on civilians for which nobody in Israel has yet been held to account. Just as it would be wrong to completely demonise Israel and treat it as a pariah state, and wrong to ignore the atrocities committed by some on the Palestinian side, so it is wrong to talk about Israel only as a place from which Britons may get rich, and to ignore some of the human rights issues that perhaps do not affect many people living within Israel’s borders, but that certainly affect many who live within the borders of Palestine.
I visited Israel recently and met the Israeli-Palestinian Chamber of Commerce. Does the hon. Gentleman agree that, irrespective of some of the obviously complex issues in that region, trade between Britain and Israel, and between Israel and Palestine, is a key lever for creating the conditions for a two-state solution?
I will come on to that in a minute. There is no doubt that trade relationships can lead to wider relationships and be used as a way of influencing—for good or sometimes for ill—the actions of other countries and Governments. Today’s debate, presumably not by accident, is not about trade with Palestine; it is about trade with Israel. If someone applied for a debate on UK-Palestine trade, and enhancing and expanding fair trade networks between the United Kingdom and Palestine, I wonder how many of the people who were so desperate to speak in this debate would be as desperate to speak in that one.
No, I am afraid I do not have a great deal of time.
Although trade in general between the UK and Israel is to be welcomed and promoted, we should not get things out of context. Israel accounts for less than 0.5% of UK exports—it will not fix the huge absence of trade that we will have if discussions with the European Union go wrong. We could increase exports to Israel by a factor of 10 and it would still be only a relatively minor trading partner compared with the European Union and a number of others.
We must try to negotiate an equivalent of 40 trade deals in just a couple of years, if we are lucky—possibly not even that long. I must take to task the hon. Member for Milton Keynes South (Iain Stewart), who said that the Trade Bill will replicate all the current trade deals in British legislation. No, it will not. The Trade Bill will convert EU legislation into UK law, but the only way that the UK can replicate its trade deals with the 40 countries in question is if those 40 countries agree to that. This Parliament cannot unilaterally agree to extend a trade deal after we have left the European Union, and the European Union cannot do that on our behalf.
Although we can speak positively about trade with Israel in general, there are two aspects of that trade about which I cannot speak positively. As the hon. Member for Hammersmith (Andy Slaughter) mentioned—I was very disappointed by the response he received—trade with the Occupied Palestinian Territories should not be treated as if it were trade with Israel. Indeed, at the moment, under the EU agreement with Israel that cannot happen, and when Gordon Brown was in office, he said that it would be an offence to take goods from the occupied territories and sell them marked as produce of Israel. I want the Minister to give an absolute assurance that after we leave the European Union, nothing will be done to land a deal with Israel that will make it easier for goods that have been produced illegally in the illegally occupied territories to be exported here. We should regard those goods as the proceeds of crime.
On that specific point, the hon. Gentleman seems to be mushing two things together. The hon. Member for Hammersmith (Andy Slaughter) was talking about settlements, which is one issue, but the hon. Gentleman seems to be saying that we should not trade with any businesses based anywhere in the occupied territories. That sounds like a recipe for putting out of business every Palestinian-owned business, and subjecting them all to economic devastation. Is that really what he is saying?
To clarify, I am talking about trade with areas that are under illegal occupation by Israel, and where Israel has illegally occupied parts of Palestine. I do not think that “settlements” is the correct term; this is an illegal occupation, and we should not be looking to trade with any business carried out under the illegal Israeli settlement or occupation—call it what you will. Plenty of other Palestinian businesses in Gaza and the rest of Palestine would welcome our trade, if only the Israelis would let that trade get through to Gaza.
Another area that has not yet been touched on but must be mentioned is the UK’s massively increasing weapons sales to Israel. UK arms sales licences to Israel have increased by 1,100% in two years, and in 2017 the value of licences awarded was £220 million. Israel is about our 45th biggest export customer, but it is our eighth biggest arms export customer. Consider what the Israel defence forces have been using some of those small arms to do over the past two or three months—it is time for those arms sales to stop.
I do not deny, and I would never argue about, the right of Israel to exist or defend itself against aggressors, and I would never argue about the fact that Israel faces an aggressor in some of the more militant elements within Palestine. However, children being shot with high velocity sniper rifles; medics whose only weapon is a first-aid box being shot from a distance with high-velocity precision rifles by highly trained and skilled snipers—those are not acts of self-defence, those are acts of unlawful killing and should be called out as that. The United Kingdom should not be selling weapons to anybody who is still under investigation for such crimes.
No, I will not give way. As I have said, I am not against trade with Israel—I know that some of my colleagues might be, but I am not. [Interruption.] No, it does not sound like that at all. Perhaps hon. Members should bother to listen, instead of just spouting forth their own prejudices.
As I have said a number of times, I cannot keep giving way. Perhaps Members should listen to what I am saying, then they would not have to intervene and lay bare their misinterpretations of what is being said. The SNP does not support an all-out boycott of Israel.
Thank you, Mr Evans. We do not support an all-out boycott of Israel, and I do not think that would work. I have good friends who believe that that is the right thing to do, but I think they are mistaken. I do not think they are being dishonest or disingenuous, but I think they are simply mistaken about what is the best tactic to use.
I will return to the point that I made before: if we had a debate this afternoon about expanding the opportunity for Palestinian producers with fair trade products to export those products to the United Kingdom, how many hon. Members would be desperate to come here and speak in that debate? Perhaps that is part of the problem. When we talk about our relationship with Israel, the debate is always oversubscribed. When we talk about trade with Palestine, which has the potential to ease significantly the poverty of people there, we do not get the same level of interest from Members of this Parliament. That unfortunate imbalance should be addressed.
It is a pleasure, as always, to serve under your chairmanship, Mr Evans.
I congratulate the hon. Member for Bolton West (Chris Green) on securing the debate and I welcome the hon. Member for Beverley and Holderness (Graham Stuart), who is responding to his first debate as a Minister after his enforced Trappist-monk silence in the Whips Office in preceding years—I will not go into what happened before that. I welcome the Duke of Cambridge’s comments on his timely visit. He was right to speak about the importance of economic and trade ties between the UK and Israel, but it is also right to debate where we agree and where we have reservations about our relationship.
The EU-Israel association agreement has governed trade relations between Israel and the UK since it came into force in June 2000. It grants Israeli exports preferential access to the UK market, along with the markets of other EU member states. It was supplemented by an agreement on agriculture that came into force at the beginning of 2010, and by a mutual recognition agreement on pharmaceutical products that came into effect in January 2013. Labour would welcome a new trade agreement with Israel to maintain the same market access opportunities for goods, and to deepen a potential relationship in the trade of services, where the UK has an obvious comparative advantage.
As we argued in the Trade Bill Committee, however, no Government should have a blank cheque to introduce new terms of trade without first undergoing a process of external consultation with business and other stakeholders, as well as a proper process of parliamentary scrutiny. The Government’s delegated powers memorandum to the Trade Bill makes it explicit that all the UK trade agreements needed to replace the 40 existing EU trade agreements with countries such as Israel will be legally distinct treaties. Moreover, the same memorandum acknowledges that the powers afforded to the Government under the Bill would allow the
“implementation of substantial amendments, including new obligations.”
Business representatives giving evidence to the Trade Bill Committee expressed considerable concern.
This is relevant, because the Israeli trade agreement will roll over, which is covered by the Trade Bill.
However, the Government have so far failed to confirm that they would inform business of any substantive changes to the terms of trade between the UK and its trading partners in the trade deals being negotiated to replace the existing EU ones. Will the Minister take this opportunity to reassure business that the Government will let it know in advance about any proposed changes to the terms of trade under which companies will be required to conduct their operations, so that they can have the required input into those negotiations before it is too late?
The existing EU trading relationship with Israel is predicated on an understanding that export preferences are available to goods produced in Israel only, and not to any goods produced in the occupied territories. Furthermore, Gordon Brown’s Government introduced labelling guidelines to ensure that consumers are properly informed as to the origin of the produce that they see in the shops and as to whether goods are from settlements in the illegally occupied territories. I trust that the Minister will confirm that that crucial distinction will be honoured in any future UK-Israel agreement. I look forward to hearing what further measures the Government are proposing to take to reinforce clarity on that point.
I will not give way; I have told the right hon. Gentleman that already.
Will the Minister confirm that any UK-Israel trade agreement will maintain the existing clarity about the fact that market access preferences offered to Israeli exports into the UK do not extend to goods produced in settlements in the illegally occupied Palestinian territories? It is extremely important that we maintain cross-party recognition of the status of the settlements in the west bank.
The Government have consistently reiterated that the UK considers those settlements illegal under international law, and they have continued to speak out forcefully against Israel’s expansion of settlements. Last October, the Foreign Secretary expressed his concern at Israel’s approval of settlement construction permits in Hebron for the first time in 15 years:
“Settlements are illegal under international law and undermine both the physical viability of the two-state solution and perceptions of Israel’s commitment to it.”
We agree with those concerns about the occupied territories.
From the Trade Bill Committee, we know that Ministers intend to replicate the existing EU-Israel trade agreement exactly. Will the Minister confirm that that will also apply to the human rights clauses and that the Government intend to enforce those clauses once we have left the European Union? Will he confirm that the Government fully support the human rights of all those who will come under the ambit of any future trade agreement between the UK and Israel? The trade preferences granted under the EU-Israel association agreement are conditional on respect for human rights by both sides. Article 2 of the agreement reads:
“Relations between the Parties, as well as all the provisions of the Agreement itself, shall be based on respect for human rights and democratic principles, which guides their internal and international policy and constitutes an essential element of this Agreement.”
I trust that the Minister will confirm that respect for human rights and democratic principles will be an essential element of any new UK-Israel agreement.
Last year, Labour’s manifesto said that trade policy should prioritise human rights through our agreements with other countries. We reiterated the importance of human rights in trade agreements during the Trade Bill Committee proceedings in January. They are particularly important in the light of ongoing human rights concerns in Israel and Palestine, yet in February, in a written answer in the House of Lords, the Government stated that they had as yet made no assessment as to Israel’s compliance with the condition in article 2 of the EU-Israel association agreement that it respect human rights and democracy. Will the Minister assure us that the Government will undertake such an assessment as part of a due diligence process when they move towards a new UK-Israel agreement?
Concerns about human rights can dominate the public debate, and if we had longer, we could go into arms sales as well. Perhaps the Minister will comment on the Government’s commitment to the consolidated criteria on arms export controls and the review of whether UK-produced equipment was involved in the use of lethal force by Israeli forces in the last few months.
It is important, however, to recognise the potential for successful trade with Israel. Together, pharmaceuticals and motor vehicles account for almost 30% of our exports to Israel, so supporting those sectors is important. The jobs that they and their supply chains bring are vital to supporting communities, but if the broader trade picture is botched, both sectors will be at risk from the non-tariff barriers that affect their supply chains, due to the just-in-time nature of vehicle components and the risk of drugs degrading in transit.
Our relationship with Israel does not exist in a vacuum; it is directly affected by our relationships with third countries and the wider world. Trade with Israel currently benefits from the fact that we are part of the EU and from the application of rules of origin and regulatory alignment. This weekend, the Cabinet needs to resolve its differences and produce a third way that delivers the certainty needed by business about border arrangements and non-tariff barriers.
Any trade deal that the UK makes with Israel must include strong guarantees that democratic principles and a fundamental respect for human rights will form a large component of that deal. Our policy on trade with Israel is to support a progressive trading relationship that brings jobs and prosperity at home and that also delivers benefits to the Israeli and Palestinian peoples. Any future UK-Israel trade deal must be judged against those goals—
It is a great pleasure, Mr Evans, to serve under your chairmanship on the first outing for this ingénue Minister.
I congratulate and thank my hon. Friend the Member for Bolton West (Chris Green) for raising this important topic. It is a pleasure to follow the hon. Member for Sefton Central (Bill Esterson), who served with me on the Education Committee for many years.
It is now 70 years since Israel was founded, and the UK-Israeli relationship is firm. In the last month alone, the Prime Minister has met Prime Minister Netanyahu, and Prince William, as has been discussed, has made the first ever official visit to Israel by a senior royal—one that was very well received.
That relationship is also backed by a strong trade and investment relationship, which many Members have discussed this afternoon. As of 2016, our total trade with Israel was worth £3.6 billion per year, with a £570 million surplus for the UK, according to our figures. We are Israel’s largest goods export market in the European Union and its second largest in the whole world. We are also a significant destination for Israeli investment. I will give just a few examples. British brands, from Superdry to Jo Malone London, are continuing to expand in Israel, and Israel’s largest investment house, Psagot, is now owned by a UK private equity firm.
British brands that are already in Israel are going from strength to strength. For instance, easyJet is now Israel’s second most popular airline for international flights after El Al, and 2016 saw the signing of our biggest ever trade deal—Rolls-Royce will provide £1 billion worth of engines for El Al’s new planes. The strength of British exports to Israel is felt across the UK. For example, sales of Scotch whisky have increased by 245% since 2012. UK-Israeli trade is a vital component of the UK’s economic growth and we hope to strengthen it further in the coming years, including as we leave the European Union.
Last December, we signed a new aviation agreement, to make sure that travel between the UK and Israel remains open after Brexit. In March 2017, we launched the UK-Israel trade working group, which is designed both to maximise existing trade opportunities and to ensure a smooth transition of our existing relationship as we leave the EU.
As members will be aware, the draft withdrawal agreement text provides that, during the implementation period, the UK will continue to benefit from the EU’s third-party trade agreements, including those with Israel. We are committed to ensuring continuity for our existing EU trade agreements—that issue came up several times in the debate—and are working to transition the existing EU-Israel association agreement as it stands.
First of all, it is a great pleasure to see the Minister in his place and, frankly, I congratulate him on taking an intervention and on giving us a lesson in how debate is conducted, unlike the hon. Member for Sefton Central (Bill Esterson), who speaks for the Opposition.
As we think about our relationships with Israel, may I just ask the Minister to ensure that we look for opportunities, notwithstanding the complexities around settlement, and that we give every opportunity to the Palestinian economy to grow and to thrive? That matters, because if we do not generate wealth and successful businesses in the occupied territories, we will have no hope of achieving a successful two-state solution, which needs that strong economic partnership between the two future states.
My right hon. Friend is absolutely right. The Department for International Trade was set up precisely to promote trade around the world, not only to enrich this country but in the sure knowledge that trade and an open, liberal, rules-based system enriches everybody, and most of all the poorest. In places such as Palestine, which are on a developmental path, it is absolutely essential that we engage with business, and it was inspiring to hear stories of businesses acting as a facilitator to bring different communities together. I am sure he is right that, through the building of prosperity, security and development go hand in hand.
I thank my hon. Friend for that intervention. Of course, it is always a pleasure to take a job and have one’s predecessor giving instructions on how to carry out that job.
Any decision about the resourcing in Israel is subject to a decision by Her Majesty’s trade commissioner for Europe, and that will come about in due course. However, I will take this intervention as strong lobbying by someone with a clear knowledge of the importance of DIT that it needs to be resourced appropriately in the future.
I will turn, if I may, to the effect of the trade agreements on the Occupied Palestinian Territories. I want to be absolutely clear that we believe that the level of control that Israel has over the west bank, East Jerusalem and the Gaza strip amounts to occupation under international law. As has been said, the existing EU-Israeli agreements do not extend to Israeli settlements in the Palestinian territories, and we intend there to be a technical transfer of those agreements as they stand.
A particularly strong area of co-operation is science and technology, which is another subject that came up in so many speeches, not least that of my hon. Friend the Member for Bolton West who secured the debate and began it. The respective strengths of Israel and the UK complement each other. The UK has one of the world’s strongest science bases, with four of the world’s top 10 universities, and we are ranked third worldwide for academic citations.
Meanwhile, Israel—as has been said—is the start-up nation, and it spends 4.3% of GDP on research and development, which is the highest figure in the OECD. We are seeing UK-Israel business-to-business links grow and grow. For example, Israel’s Orbotech, a micro-electronics company that has had a Welsh-based subsidiary since 2014, last year won the Queen’s award for enterprise in international trade.
I really have very little time, so if my hon. Friend will allow me, I will not take any more interventions.
We are seeing our links grow on an institution-to-institution basis, such as the Royal Society’s co-operation agreement with the Israeli Academy of Sciences and Humanities, which was signed in 2015. We are also seeing growing co-operation between our Governments. In May, we signed a £4 million science agreement to strengthen joint research in artificial intelligence, ageing and other priority areas. In response to the hon. Member for Strangford (Jim Shannon), that is an example of what we are doing, and that comes on top of the existing UK-Israel tech hub—
I am afraid that I will not give way. As I was saying, that comes on top of the existing UK-Israel tech hub at our embassy in Tel Aviv—the first country ever to establish a tech hub at an embassy. That kind of co-operation, as the hon. Member for Strangford and others have said, will not only help our trade; it will have a real effect on our nation’s health.
I have very little time left, Mr Evans, so I will just say something briefly on the subject of arms, which was mentioned, including the specific case of sniper rifles. Only four licences were granted last year for targeting equipment: two were temporary licences for demonstration purposes; one was to return an item to its Israeli manufacturer after tests in the UK; and one was for laser illuminators for end use by the Israeli Prime Minister’s Office. On the subject of sniper rifles, the UK has not licensed the export of sniper rifles to the Israeli defence forces. We have granted only two licences in the last decade for a total of six sniper rifles and magazines, and they were for an Israeli defence company to test ammunition on its own firing range.
With that, I will cease.
I thank the Minister for such a positive speech and for dealing with so many of the issues that came out during the debate.
It has been an incredibly positive debate about the relationship between the United Kingdom and Israel, and about our trade, covering everything from agriculture to medical technology, and on to the fourth industrial revolution.
I will highlight something the hon. Member for Liverpool, Riverside (Dame Louise Ellman) said, which I myself might not have picked up on: the importance of trade for the trade union movement and the co-operative movement. It is so important that we have strong trade, because good trade is good for workers and I am therefore delighted to see the level of UK-Israel solidarity.
Question put and agreed to.
That this House has considered UK-Israel trade.
Uncontrolled Shark Fishing in the Atlantic
[Mr Philip Hollobone in the Chair]
I beg to move,
That this House has considered uncontrolled shark fishing in the Atlantic high seas.
It is a great pleasure to serve under your chairmanship, Mr Hollobone. When I secured this debate, it raised a few eyebrows. Colleagues asked why I had chosen this issue. I might already have a bit of a reputation in this place for campaigning on things that are cute and cuddly, such as domestic pets, so why on earth sharks? Since first seeing the movie “Jaws” at the age of four, I have genuinely been inspired and fascinated by sharks. By the way, that movie celebrates its 43rd anniversary this year.
I am not sure whether this counts as declaring an interest, but I should state that after a birthday present from my office last year, I adopted a shiver of great white sharks through the Shark Trust. The Shark Trust is one of many organisations based in the UK and beyond that do excellent work on shark conservation all over the world. The adoption certificate scheme, which is helping to fund vital research and population monitoring around the Farallon Islands off the coast of California, is just one example of that.
Sharks are not just found in far-flung waters. In fact, 21 species of shark live in British waters, and at least 11 species of deep-water shark can be found here, too. Lest that discourage anyone from spending this glorious summer at the British seaside, I stress that very few species of shark are potentially dangerous to humans, and none of them has ever been reported in British waters. In fact, there has not been a fatal shark attack in British waters in more than 80 years. The truth is that sharks are not the aggressive, man-eating monsters of movies such as “Jaws”, “Open Water” or “Sharknado”. Sharks are essential to the health of our oceanic ecosystems, and they are a valuable part of our marine life. We must not allow the Hollywood stereotype that seeks to stir up misplaced fear to get in the way of necessary conservation efforts securing the long-term future of these remarkable and wonderful animals.
Sharks play a crucial role in the ecosystems of every ocean on Earth. They are key, for example, to maintaining coral reefs. Without sharks keeping the predatory fish population in check, there would be fewer smaller fish eating the algae that would otherwise compete with and kill the coral reef. Studies have shown that declining shark populat