Brexit: the constitutional implications for Scotland
Douglas Alexander spoke last night at the European Studies Centre at Oxford University on a way forward for Scotland that lets us recognise new circumstances without denying the enduring interdependence of the UK.
Thank you for the invitation to be here tonight in Oxford. It is a great pleasure and a privilege to take part in, for what is, I believe, both a timely and important discussion about Scotland, Brexit and the constitutional implications for our United Kingdom.
Let me begin my remarks by offering a context for what follows. Ever since the then Prime Minister David Cameron made his speech back in January 2013, announcing the timetable for an in/out referendum, I have believed that the origins of his fateful and ultimately fatal decision owed more to domestic politics than to foreign policy.
So in my remarks I will purposely range across both politics and policy. I will first endeavour to locate the decision taken in the wider context of Scottish constitutional politics before reflecting on how the character of contemporary politics more broadly is affecting and shaping the reactions and responses to the UK’s decision to vote for Brexit.
Next, I will offer an alternative lens through which to assess the impact and implications of the Brexit vote in Scotland, acknowledging both the economic and emotional consequences of this decision.
And finally I will recommend a way forward: A new settlement between Scotland, the UK and the EU, including new powers for the Scottish Parliament, new international engagement for the Scottish Government across key areas, and an immediate agenda for a Constitutional Convention of the nations and regions of the whole of the UK.
Let me start with both an admission and a declaration of interest. For me, the issues we are discussing today are not merely dry constitutional arrangements or interesting theoretical political constructs.
Even after much thought, and mindful of this august, scholastic setting, I do not claim academic detachment from the subject matter. On the contrary, these issues, for me, run deep and indeed touch on deep senses of affinity and belonging.
Why? It is not simply that these remarks are offered from a Scottish perspective. Scotland is indeed where I was born, and where, one day, I expect to die. It has shaped who I am and crafted the lens through which I see the world. For all our present divisions and challenges, I love Scotland. It’s as simple as that.
But, these remarks also come from my belief that constitutional politics, like politics in general, needs to be understood and addressed in terms of feelings as well as facts. And that is as it should be for that is the essence of the human condition. As the great Scottish enlightenment thinker David Hume put it; reason is and ought only to be a slave to the passions. It is in making sense of how we feel about our experience of the world that we begin to make our choices about what we will do in it.
All of politics begins and ends with relationships; with our neighbour, with our family, with our community, with those who lead us and make decisions for us. It is shaped by our story, our history, our aspirations. So it is an endeavour that demands the weighing of pride and dignity, of values and identity, as well as costs and benefits. Constitutional politics involves much more than a ledger of accounts: It speaks to who we are, how we see ourselves, and how we relate to others. It is about a common journey, a shared story.
So tonight there must be space for emotion as well as economics in our deliberations this evening or we will fail to offer a credible account of what has occurred or offer a compelling prescription for what could emerge in the future.
In that regard, it is important to communicate frankly the sense of disappointment and disorientation many of us in Scotland felt as a consequence of the United Kingdom’s vote to leave the European Union.
On any reckoning it is a decision that affects our sense of self and our sense of the future. It’s naive or disingenuous to somehow pretend that Brexit is not a big deal – it is.
Yet the early responses to the vote suggest that certain politicians are more comfortable with old problems than they are with new circumstances.
These new circumstances demand a new conversation that shows understanding of the feelings experienced post 23rd June. Old dogmas just won’t cut it. New thinking is now required.
Again, for me, the political starts with the personal. Far from being the rootless “citizen of the world” described in the Prime Minister’s Conservative Party Conference rhetoric, I, as with so many Scots, have always seen myself as a rooted internationalist: Comfortable indeed celebrating a layered, diverse personal identity – and so happy to regard myself in different times and in different contexts as Scottish, British, and European and beyond a ‘global citizen” a resident of the Global Village – for each of these represents the different relationships that make me who I am, who we are; connected to my global neighbours yes by economics, but much more importantly by human creativity, by our common humanity.
So it is right to acknowledge openly that as surely as the result of the 2014 referendum in Scotland represented, for me, an affirmation of a politics of cooperation, interdependence, and solidarity, the result of the referendum this June represented a defeat for that same perspective.
And it also worth acknowledging that this defeat for the politics of cooperation came at a point when Labour, the Party I most closely associate with cooperation, interdependence and solidarity, has experienced both defeat and division on both sides of the Border.
Its weakness at a time when the voice of solidarity and common endeavor need to be strong was another factor that continues to shape the political response and policy thinking in Scotland in the immediate aftermath of the Brexit vote.
There is another factor too. It is what Robert Shiller, a Nobel Laureate economist, has termed ‘the post factual world’. And in this post fact, post truth world, politics is no longer about shared facts and divergent opinions. In this world in which, courtesy of social media, everyone has their own facts – real or invented – what matters most, when communicating a plan, putting forward a vision, or in shaping opinion, is the story that people believe.
The advent of this post fact politics was evident in the European referendum campaign. Many commentators were horrified by the assault on reason that they witnessed during the two months prior to the Brexit vote with the attacks on the “mainstream media” in general and the BBC in particular, with the deriding of independent experts, and the priority that many attached to feeling over facts in exactly the opposite way that David Hume intended. The comment that ‘we’ve had enough of experts” was a deliberate attempt to discourage the application of reason to emotional responses.
It helps explain both the tone and tactics of the Brexit campaign – with its emotive appeal to “take back control”. The combined feelings of economic anger, cultural anxiety and political alienation proved a lot more powerful than the combined facts provided by the Bank of England, the Treasury, the CBI, the TUC, the OECD, and the IMF.
This phenomenon helps explain why Donald Trump, despite his many flaws, is now on his way to the White House.
Of course, as the great political commentator Joe Klein has observed, politics has always, in part, involved “the art of competitive storytelling” but today – fuelled by the rise of social media and the collapse of trust in experts and elites – success regularly accrues not to those prioritising answers, but those simply caressing and nurturing the anger many voters feel.
Many in politics, in journalism and indeed within academia, have been shocked by this turn of events.
Indeed many were stunned and dismayed by the division, rancour, and the polarization evident in the campaign for the two months preceding the vote in June.
Maybe it is because I was on the frontline of the two year campaign that preceded the independence referendum in Scotland on 18th September 2014 that while I shared that dismay, I was a lot less surprised. At risk of once again self-identifying as Theresa May’s dreaded “citizen of the world” there was, for me, a palpable sense of deja vu.
The reason, in part, for the strength of feeling and depth of division which so often permeate these type of campaigns was best described by former Canadian Prime Minister Jean Chrétian who himself still bears the scars of two referenda in Quebec. In early 2014 he observed prophetically, referenda are so visceral, because you break the dreams of your neighbours.
With the highest turnout since universal suffrage at 84.6% the officially sanctioned narrative of the SNP-led Scottish Government then and now, is that Scotland experienced a joyful festival of democracy. And at one level many more engaged in the political process and debate. Yet, in truth, the campaign animated such deep and deeply personal feelings of affinity, identity and belonging – on both sides of the argument – that it has left families, workplaces, communities and indeed the nation deeply, deeply divided.
The 2014 referendum both energised and divided Scotland – certainly reconfiguring the political landscape but also entrenching division, distrust, and a palpable sense of “them and us” that remains an open wound scarring the nation to this day.
It should certainly be acknowledged that the SNP have shown themselves to be highly adept at turning these circumstances of a deeply divided electorate, to their partisan advantage. They are, in truth, much better at politics than they are at government.
They have channelled the disappointment of 45% of Scottish voters, galvanising the portion of the electorate who quite literally won’t take ‘No’ for an answer, and turned a referendum defeat into a sweeping victory in the 2015 UK General Election and into their re-election (albeit as a minority government) in the 2016 Scottish Parliament election.
Yet today they find themselves trying to find a difficult middle way between their 100,000 new members (who joined in large measure to secure another independence referendum), and a Scottish public keener to ensure the wound heals and leave behind the rancour, division and uncertainty of 2014’s referendum.
I, and I sense millions of other Scots, today feel squeezed between two Nationalist narratives – one North and one South of the border – and identify with neither. We yearn for a more positive, more attractive and more believable way forward for our nation.
As a remain supporter myself, I can attest to the fact that voting to remain within the EU was not somehow a proxy vote for either a further referendum or even Scottish independence, as Scotland’s First Minister now seems intent on implying.
To be fair, in the hours and days which followed the Brexit vote, she did strike a welcome and pragmatic tone. Yet just last month she discarded any pretence of instrumental nationalism and instead publicly reembraced existential nationalism when she declared that, for her, independence “ultimately transcends the issues of Brexit, of oil, of national wealth and balance sheets and of passing political fads and trends.”
Similarly, many of us in Scotland welcomed Theresa May’s decision to travel to Edinburgh immediately following her appointment as Prime Minister and were encouraged by the pragmatic tone of her remarks that day.
Yet that early pragmatism has now been trampled underfoot in the Government’s headlong rush towards the listing by UK companies of foreign workers, the willingness to use the EU citizens who have chosen to make their home here “bargaining chips” and so much more as she tries to secure her leave-voting base within the Conservative Party.
Whether it is directed against London, as in the case with Scottish nationalism, or directed against Brussels, as is the case with English nationalism, nationalism still involves redrawing the boundaries of empathy and asserting a sense of “us” by constantly differentiating “us” from “them”.
Both Scottish and English nationalists seem more intent right now on myth making than searching for solutions; Too much of the energy, time, and fresh thinking required by the new circumstances created by the Brexit vote, is instead being drained and diverted into entrenching a sense of “other”, whether it’s challenging the ages of unaccompanied Calais children or conflating the people of England with the politics of the Tories. Narrating stories about ‘others’ seems more the order of the day than figuring out solutions together.
I find it an unappealing psychological frame, but it’s also of no help, and indeed can be a real barrier, to developing the new solutions that these new circumstances demand. As Mahatma Gandhi, a man who knew a lot about nationalism, racism, rejection and identity in all its forms put it:
Keep your thoughts positive, because your thoughts become your words.
Keep your words positive, because your words become your behaviour.
Keep your behaviour positive, because your behaviour become your habits.
Keep your habits positive, because your habits become your values.
Keep your values positive, because your values become your destiny.
So the question I ask this evening is what could be a political and policy response in Scotland more in keeping with that perspective and the finest traditions of our nation – a response that reflects on how we feel and uses those refection’s to applies logic and rationality to the search for a solution to our present difficulties: Which recognises the importance of emotion, and so acknowledges both the place for facts and feelings in this debate.
Let us start, as Hume would want us to, with the emotional feelings before turning to the economic facts.
While it is worth acknowledging that 1 million Scots voted to leave the European Union, it is fair to say that the majority of Scottish voters felt dismay and disorientation in the weeks that followed the political chaos after the vote. And frankly, that disorientation for many turned into disgust in the Autumn as the Conservative Party Conference set out the UK Government’s thinking on Brexit and the proposed way ahead for the country.
I am myself the grandson of Scottish medical missionaries who worked for many years in China. My mother was born there and was then evacuated during the Second World War to Canada. My father, a Church of Scotland Minister, completed his studies in the United States where he worked in a parish in Harlem and heard Martin Luther King preach. With family ties that stretch from Glasgow to Sydney my family is very far from unique: Scotland has given the world countless engineers, doctors, scientists and sailors.
As I referred to earlier, Theresa May’s 2016 statement that “if you are a citizen of the world … you are a citizen of nowhere” reveals an ignorance of Scotland’s sense of self matched only by Margaret Thatcher’s infamous declaration that the point of the parable of the Good Samaritan was that he had made enough money to subsequently be able to be charitable.
There is no doubt that for many Scots like for many folks across the UK these post Brexit antics of the present Conservative Government has elicited a combination of revulsion and foreboding. The suggestion that companies would have to keep a register of foreign workers met with similar incredulity. The sense has been left for many of us of a narrow minded, inward looking, economically illiterate approach to Brexit offering a replica of, rather than a remedy for, the divisive politics of nationalism.
So my sense is that for the constitutional arrangements that emerge as a consequence of Brexit to be durable, they will need to be judged as in the service of, rather than in opposition to, Scotland’s sense of self and the values and outlook we hold dear. Frankly, amidst the present rubble, that feels difficult, but remains doable.
It is vital that the proposals that emerge as a result of the vote are interpreted as an affirmation of – rather than a denial of – both the pride and partnership that has shaped most Scots sense of where we are and how we want to be governed.
We should aspire to a solution that allows Scotland both autonomy and cooperation – that let us recognise new circumstances without denying our enduring interdependence.
But alongside the sense of pride and partnership that shapes so many of our responses to constitutional questions there must of course also be a place for evidence and economics.
There is little serious disagreement that one of the reasons the Nationalists lost the 2014 referendum was their failure to provide credible answers to reasonable economic questions; whether on the reliability of the oil price, the currency of a post-independence Scotland, and the significant financial advantage Scotland gains from the operation of the Barnett Formula.
And if the tumultuous weeks and months following have taught us anything it should be to ask the hard economic questions before deciding to disdain experts and simply walk away from our neighbours.
So here are just a few relevant facts:
The Scottish Government’s official blueprint for independence in 2014 asserted that the oil price would not fall below $113 a barrel.
Today oil prices are around $50 a barrel. As a result of the collapse in the global price of oil there has been a 97% fall in North Sea oil incomes in the past year alone. Scotland’s estimated oil revenues fell from £1.8bn to just £60m last year.
The First Minister has stated “There is no rational case for taking the UK out of the single market”. She has confirmed that leaving the EU Single Market will be “disastrous” and “potentially ruinous” for our economy.
And Scotland does indeed export goods and services worth around £2bn to Holland – our largest EU trading partner – and around £1.9bn to Germany, and France £1.8bn. Yet the inconvenient truth for the nationalists is that, as Scots, we sell £48bn of goods and services to the rest of the UK.
Our exports to continental Europe total £12bn, four times smaller than the £48bn of goods and services we sell to the rest of the UK.
It simply doesn’t make sense to leave the UK without fully considering the impact of leaving the UK single market. If it’s bad for Scotland to leave the EU single market – where we send £12 billion of exports – how then can it be good for Scotland to leave the U.K. single market – where we send £48 billion of exports?
If it is useful for Scotland’s companies to be able to trade freely with the European Single Market, geography, history, and economic integration make it even more essential for Scotland’s companies to be able to trade freely within the British Single Market.
As proposed in 2014, Scotland leaving the UK – but being alongside them in the Single Market – involved economic risks. But when our biggest trading partner, to whom we sell two thirds of our exports, is likely to be outside the European Single Market this new arrangement carries even higher risks.
And what of currency?
In circumstances where the UK has left the EU, the choices for an independent Scotland become even more fraught with difficulty; joining the Euro, which is a pre requisite for joining membership of the European Union where interest rate decisions will be made in Frankfurt, seeking to stay with Sterling where interest rate decisions will be made in London, or establishing a new currency when the oil price has fallen with all the impact that has on Scotland’s public finances. The latter two options would require winning the additional argument of membership without the Euro
And let us also recognise the public expenditure backdrop to these decisions. According to Scottish Government figures; Scotland spent £14.3bn more than it raised in taxes in 2015/16 (or 9.1% of GDP) with these figures including a share of North Sea Oil revenue.
Joining the European Union would require Scotland to cut this deficit down to 3% of GDP, with all of the cuts to public services and public expenditure that this obligation would entail. Far from ending austerity, this would extend and deepen austerity.
We have just witnessed one form of nationalism take us out of Europe with little thought for the consequences. We should be wary of another form of nationalism repeating a similar mistake in Scotland.
So is there a better way for Scotland to solve the problems caused by the UK’s decision to leave the European Union? That is the most pressing challenge for Scotland’s politicians today: they need to offer a remedy for Brexit. Not just a replica.
To my mind it is clearly in both Scotland’s and the whole UK’s economic interest UK to retain a close, effective and positive relationship with the European Union in the coming years.
But in demanding Theresa May deliver a “soft Brexit” Scotland’s First Minister consciously or unconsciously is making the same mistake as nationalists south of the border. She seems to be assuming that the outcome of the negotiations can be dictated by a British Prime Minister. That is simply not the case.
There are politics, let us acknowledge, on both sides of the channel, and one of the many ironies of a campaign run under the slogan “Take Back Control” is that it has ensured that the United Kingdom is not in control of the terms of the deal that will at some point be struck with Europe. We don’t get “sovereignty” over the decision making process nor over the outcome and neither, frankly, will have it as the myth suggested once we have returned to post EU isolation
The operation and the timetable of the Section 50 process were specifically designed to put the leaving country on the back foot.
The Brexit negotiations must also be understood in the context of leaders across the continent determined to avoid an outcome that strengthens populism or encourages contagion. In the course of 2017 we will also see crucial elections first in the Netherlands, then in France and finally in Germany. In each contest populist, xenophobic candidates will be challenging the mainstream governing parties.
That is what lay behind Donald Tusk, the President of the European Council’s recent statement that “The only real alternative to hard Brexit is no Brexit.”
So where, within the bounds of the possible can a way forward be found that would command widespread support in Scotland? I believe rather than overestimating the capacity of the British Government to dictate the terms of its new relationship with Europe, it is better to simultaneously look at internal arrangements within the U.K. – where the British Government undoubtedly does have the capacity to deliver a new settlement.
On these matters the former Prime Minister Gordon Brown, in speech in August, started to chart a way forward. Then, in October, Professor Jim Gallagher of Nuffield College at this University produced a timely and influential “Nuffield Paper” that sets a number of these proposals in more detail.
Let’s start with the Brexit negotiations. Certainly one option would be for the UK to remain part of the European Economic Area – something akin to the Norway option – whereby there could be some amendment to arrangements around free movement while still ensuring full access to the single market.
That remains an option that – despite its early disparagement by Tory Ministers – deserves consideration. It would be consistent with both the 2014 referendum and 2016 referendum by securing access to both the British Single Market and the European Single Market.
But even if Conservative Government Ministers continue to reject a Norway style EEA arrangement on the grounds that they cannot, in light of the Brexit vote, or their own more narrow philosophical views or identity, contemplate the continuation of free movement of workers, there are other options that can and will be explored.
There had been much speculation in recent weeks about the merits of the UK agreeing a Canadian style Free Trade Arrangement with the EU. This interest reflects the fact that the Canadian agreement (CETA) is the most recent and the most comprehensive trade agreement negotiated by the EU.
Yet CETA is 1600 pages long, has taken 7 years to negotiate, does not cover services (that make up 79% of UK GDP), and has not yet been implemented. It therefore seems to me highly unlikely that such a comprehensive free trade agreement (necessarily including services) could be negotiated within the two-year timetable anticipated by the Section 50 procedure.
I therefore believe there is merit in the Scottish Government focusing its immediate efforts on the terms of the ‘bridging agreement’ that in all likelihood will emerge as the legal framework governing relations between the UK and the EU while work continues on a final and more comprehensive agreement.
Undoubtedly such a bridging agreement will be demanded by British industry to avoid a cliff edge in Spring 2019 in the rules governing trading relationships with the EU. Indeed despite such an agreement in the language of insurance being what we might call ‘temporary cover’; It is likely to remain in place for a number of years. Such an agreement could potentially provide Scottish firms guaranteed access to both the British and the European single markets for years to come.
In the meantime, however, there are three other specific proposals that could benefit Scotland in the present circumstances that impact on European relations but could be secured within the United Kingdom.
First, as a result of the vote, areas of law previously within the competence of the European Union will be returned to the UK. In key areas within the competence of the Scottish Parliament – agriculture, fisheries, and environmental protection – European law will no longer apply. It is therefore right that in these devolved areas, both power and resources should be repatriated – ensuring important new power over key sections of Scotland’s rural economy pass directly from Brussels to Edinburgh.
Second, the Mayor of London, Sadiq Khan back in September, initiated a dialogue with UK Government Ministers arguing that it makes sense for London to be able to issue work permits based on the needs of the London economy. I would argue that the ability to issue work permits to skilled workers should be examined as one possible route to ensuring the needs of Scotland’s public services, private sector development and demographic needs are appropriately addressed post Brexit.
Under the terms of the Scotland Act 1998 international relations are, of course, predominantly reserved to the UK Government. The Foreign Secretary is responsible for the for the foreign policy of the United Kingdom and as such holds responsibility for concluding treaties and other international agreements on behalf of the UK.
In the case of a number of those neighbours, like Austria, Belgium, Italy and Germany there already exists the capacity for regions to enter treaties within areas that fall within their competence, subject to review, consent or abrogation by the Nation State Government. In Belgium, under the “in foro interno, in foro externo” principle of its constitution, Flanders has reached international agreements, for example with UNESCO, within areas of its competence such as education, infrastructure and the environment.
In the light of the Brexit vote it is clear, that the majority of Scots are keen to maintain links with partners and neighbours across Europe.
Thirdly, therefore, we should now consider new constitutional arrangements here in the UK to better ensure effective engagement with the EU on devolved issues like health care, transportation, agriculture and education.
That new engagement would be of particular interest to Scotland’s world leading universities sector. To take just one example, these institutions today benefit greatly from the attendance of European students and have made clear their appetite to remain within the ERASMUS + scheme which presently benefits Scottish Universities so much. Similarly, access to EU research funding has been a key element of these universities success in recent decades.
As this example of the needs of our universities reminds us, however, responding effectively to the Brexit vote is not a challenge unique to Scotland. There are very real concerns about the impact of Brexit north and south of the border. These new circumstances of today demand of us new thinking, not simply the repetition of old dogmas
That is why I welcome the proposal made last week by Gordon Brown for a UK wide Constitutional Convention that could develop proposals to empower the nations and regions of the whole of the UK.
The proposal has been welcomed by both the First Minister of Wales, and the Mayor of London. Previously, the First Minister of Scotland has expressed her willingness to work with others across the United Kingdom to secure the best possible post Brexit deal.
Of course such a convention could consider the case for a more federal Britain, and the case for reforming the Lords into a senate of the Nations and Regions.
But I believe there is a more urgent task. Just last week the High Court ruled that the Government could not initiate Article 50 proceedings without Parliamentary approval.
Of course the Government has said that it will appeal the decision, but we also know that the serious negotiations on the UK’s withdrawal from the UK will only take place after next Autumn’s German election. In all likelihood, no serious negotiations on departure will take place between the UK and the EU until at least November 2017
That time must not be wasted. So today I would suggest that the immediate remit for a UK wide Constitutional Convention would be to produce a First report within twelve months – by November 2017 – that could inform and shape the subsequent negotiations.
Necessarily, this report would address the case for devolving further powers and resources to the nations and regions of the UK in light of the Brexit vote, rather than see powers on agriculture, fisheries, regional policy and state aid simply repatriated to Westminster.
In closing, let me address one further political point. I am conscious that there are many Nationalists in Scotland who will argue that only the threat of a second independence referendum can deliver these changes within the U.K. For me the answer to grievance and division is not more grievance and division.
Alas, for the First Minister and her Party, the real issue seems not so much the terms of the deal but the level of the polls. Yet even as a negotiating tactic it doesn’t make sense, when you’re shot in the foot, to then threaten to cut off your leg.
My honest worry is that the SNP risks replicating David Cameron’s fatal error – starting off trying to solve a party problem and ending up creating a far, far, bigger country problem. Constantly threatening an independence referendum in the face of the economic evidence and without any credible answers to reasonable questions doesn’t enhance the First Minister’s credibility for the discussions ahead – it diminishes it.
Today we need more new thinking, and less of just the same old threats.
Why would we choose to add greater insecurity and uncertainty to the insecurity and uncertainty already created by Brexit?
Why would we choose an approach that guarantees division and rancour rather than an approach that could build consensus by consent?
We have the opportunity instead to ensure this crisis doesn’t go to waste by forging a constitutional settlement that I believe could command broad support from both sides of the 2014 debate, and indeed on both sides of the Border.
These days are a real and legacy-creating test for both the Prime Minister and the First Minister. Do they lead their parties or simply follow them? Can they reach beyond narrow party interests, take a broader view, and recognise both the jeopardy and the opportunity of the current circumstances?
Scotland, Britain and Europe’s best hope lies in leadership worthy of these tumultuous times.