Calum Kerr's speech on the Impact of Leaving the EU on the Rural Economy

I beg to move, that this House is concerned at the impact on the rural economy of the United Kingdom leaving the European Union.

We want to use this debate today to consider the significant and tangible benefits that EU membership has afforded the Scottish rural economy – through funding, trade and freedom of movement. 

These benefits must be acknowledged and the government must also offer a clear statement, prior to the triggering of Article 50, on how they intend to mitigate the impact of leaving the EU on rural areas.

They must do so now, because the combined threats of the loss of direct funding, an end to tariff-free trading and the abolition of free movement of people, could have devastating consequences for rural communities across Scotland and the rest of the UK. 

Yet the Prime Minister’s idea of what Brexit means remains abstract. We’re told that Brexit is about a more “global” Britain, and that this process will represent a “clean break.” 

Well, let me be absolutely clear in stating how far removed from reality that rhetoric is. 

Under the government’s current direction of travel Brexit will not be a “clean break” for the sheep farmers in my constituency, whose produce could face prohibitive tariffs and whose direct support payments could be wiped-out. 

It will not be a “clean break” for the fish processor in Shetland – where more fish was landed than in the entirety of England and Wales in 2015 – but whose access to the largest seafood market in the world is now under question. 

Nor will it be a “clean break” for the soft fruit farmer in Angus when the plug is pulled on the seasonal labour his business needs to function. 

And it will not be a “clean break” for the most remote Highland communities that are now contemplating the loss of hundreds of millions of pounds in European Regional Development Funding. 

We find ourselves, once again, facing a combination of Tory indifference to the needs of the Scottish economy and a democratic deficit. 

And as the many complex challenges of Brexit pile up, we need to remember that real political leadership is about finding solutions, not soundbites. 

Our debate today is necessary to ensure that the government does not overlook or downplay all of the possible outcomes of Brexit. They must not walk away from the policy vacuum that is opening up before our eyes. 

Nowhere is this policy vacuum more apparent than on the issue of farm payments. Whatever its flaws, the monies invested in Scotland through the Common Agricultural Policy are absolutely vital in underpinning the rural economy.

Farm payments currently account for two-thirds of total net farm income in Scotland. 

With only 8.4 per cent of the UK’s population, but 32.5 per cent of its landmass, our distinct topography means that Scotland receives 16.5% of the UK’s CAP funds.  

Agriculture is already a devolved area. So as powers are repatriated from Brussels it is essential that they go directly to the Scottish Government – any power grab from a Westminster government would be totally unacceptable. 

We need a commitment from this government that the existing allocation of funding will not be tampered with, once the convergence uplift is finally delivered as we move forward.

Throughout last year’s referendum campaign, both the Secretary of State and the Farming Minister argued for Brexit. It is now incumbent upon them to take responsibility for the commitments they made during that campaign. 

In March last year the Farming Minister said, and I quote: "The UK government will continue to give farmers and the environment as much support - or perhaps even more - as they get now." 
Yet this commitment has already been abandoned. Earlier this month at the Oxford Farming Conference both the Secretary of State and the Minister refused to confirm that funding would match current levels beyond 2020. 

So I hope the Secretary of State will take this opportunity to make a clear commitment that Brexit will not result in a reduction in the level of funding available to farmers. 

We acknowledge that CAP is far from perfect and recognise that there is now an opportunity to design a new and better system. We also accept that there must be a route to a sustainable farming sector without direct income support. 

It’s also important to note that CAP is about more than farming. 

In Scotland EU funding has helped to support the roll-out of superfast broadband, business development, housing investment and measures to address fuel poverty, in addition to improvements in infrastructure and transport through Pillar 2 Regional Development Funds and the European Social Fund. 

We need the government to explain how this critical funding will be continued after Brexit.

Another area where the rural economy has benefited massively from EU membership is freedom of movement. 

For significant portions of the Scottish rural economy, access to a seasonal workforce is a vital factor in keeping their operations sustainable. 

At any one time between five and fifteen thousand non-UK EU workers are employed in Scottish agriculture. 

So we support continuing free movement of people because it is a system that works, not just for farming and food production, but for a range of sectors in rural Scotland, especially in areas with ageing populations.  

Given the consensus in Scotland against the Hard Brexit – we must have powers over immigration devolved to the Scottish Parliament – in order to pursue our own distinct policy. 

But in the meantime, we want to hear what steps DEFRA is taking now to ensure the rural economy doesn’t grind to a halt as seasonal workers already begin look elsewhere

One area where Brexit clearly does present clear opportunities, is fishing. 

We welcome the chance to move beyond the Common Fisheries Policy, but we won’t forget the circumstances in which it was first imposed on Scotland – when Ted Heath sacrificed the “expendable” Scottish fishing industry to gain entry to Europe. 

The legacy of that deal means that today over half of the fish in our waters are caught by foreign vessels.

Brexit will mean the re-establishment of our Exclusive Economic Zone. 

But the process here is key – like Norway, the Faroes and Iceland, access to our Exclusive Economic Zone should be negotiated on an annual basis and led by Scottish ministers. 

These negotiations must not form part of Brexit talks. 

Scottish fishermen want to hear a clear and unequivocal commitment from the Secretary of State to the Scottish fishing industry that it won’t be just another pawn in a Brexit negotiation. 

Finally, Mr Speaker, I’d like to turn to the issue of trade and in particular the important question of access to the single market. I think the numbers speak for themselves on this. 

Overall, 69% of Scotland’s overseas food exports go to the EU, worth £724 million in 2015.  

In terms of Scottish fishing – 68% of Scottish seafood exports that leave the UK go to EU countries. 

And 80% of beef and lamb exports from Scotland are destined for the EU. 

Out with the EU all of these crucial exports will be subject to tariffs. 

To take just one example, red meat, Quality Meat Scotland has conducted analysis which shows that if we were subject to the current tariffs that apply to non EU countries there would be on average a 50% increase in cost for importers to buy our products.

At the Oxford Farming Conference the Secretary of State admitted UK exports to the EU would decline if new tariffs were erected. 

This is the prospect exporters are facing across rural Scotland. We call upon the Secretary of State to outline what products her department thinks should be prioritised in the coming negotiations. 

At the end of the day, there is no easy way to withdraw from the world’s largest trading bloc and the search for alternative markets will involve a host of costs and compromises too.

Canada’s standard tariff on beef stands at 26.5% per cent. South Africa’s is currently 40%. Does the government really think that alternative markets – many with lower production costs than our own – can compensate for restricted access to Europe?  

The recent success of the Scotland’s 14 billion pound food and drink sector shows that we should always be building our export markets. 

But new trade links cannot mitigate the economic vandalism of cutting off access to a market of 500 million people. 

Again, real political leadership is about seeking solutions to combat the impact of leaving the EU on the rural economy, not just in Scotland, but all over the UK. 

But if all of the tangible benefits of Single Market membership end up being frittered away in pursuit of a “red white and blue” Brexit, or a “global Brexit” the Scottish people – who have shown that they want to build, not sever, their links with Europe, will recognise a familiar pattern. 

They will recall that the Heath government sacrificed Scottish fisheries when we joined the EU, that the Thatcher government decimated Scottish industry in the 1980s – and they will conclude that this Tory government, with no mandate for the damage it may cause, will wreck Scotland’s rural economy and ignore our overwhelming wish to retain our links with Europe.   

If this government has already made a calculation that rural Scotland is expendable in order to engineer a “clean break” with Europe, they can never again turn to the people of Scotland and claim that this union is a “partnership of equals”.

Will the government take this opportunity to recognise the potentially devastating impact that a Hard Brexit could have on the Scottish rural economy, or will they be content to make a desert of rural Scotland in the name of Brexit?