My speech to Scottish Fabians Brexit Conference:

See full transcript below:

“Can I start by thanking the Fabians for bringing this conference to Edinburgh. •This is the dominating topic of UK politics at the moment and, whilst we would all like to be hear debating the eradication of poverty, we have to deal with the constitutional crisis in front of us.

We have learnt a lot this week.

We were waiting with eager anticipation on the PM defining what she meant when she said “Brexit means Brexit”.• Most of us are still wondering what Brexit means Brexit means.• However, we did get a snippet from the Tory Welsh Leader, Andrew Davies who said “Brexit means breakfast”. •I think he may have missed the word dog out of that statement.

And that is why these discussions today are so important.

Can I also pay tribute to John Denham.• John was an inspiration to me when I first went into parliament.• He was a very wise counsel and always put the country and party at the foremost of his thoughts.

John is a real loss to parliament but has so much still to offer our politics in this country.• I remember, John, me coming to Southampton Itchen in 2012 to support your superb successor, Rowena Davis.• We did a•round table•with public sector workers about workers rights, job insecurity and pay. The seat was lost at the election and politics has lost, in my view, one of the best young politicians we could have had.

How was it lost?• Because the Labour movement was unable to persuade the people of places like Southampton that we had a pathway to power.• A Labour pathway to power.• If this party can’t give the public a credible pathway to government then we can’t give people hope.• If we can’t give people the hope of the Labour government then how can we persuade them to vote for us?•

If you then layer on the top of this the disgusting tactic of the Tories playing English nationalism off against Scottish nationalism then you have cocktail that defeats us.

Remember the billboards and direct mailings across key marginal seats that said “vote Labour get SNP”.• It worked and this is why our response as a party and a movement to the EU question is critical.

It’s critical for the country and critical for the future of our party.

And in the context of the political landscape we have an almost xenophobic nationalist, flag waving Tory PM in a war of words with a nationalist flag waving First Minister.• Who can stoke up enough division to win their own arguments?•

Well, they are both wrong.

We cannot meet division with division.

It is now clearer than ever that the First Minister intends to use the result of the Brexit referendum to continue to argue for a second independence referendum that most of Scotland doesn’t want and Scotland certainly does not need.•

The conditions in the Scottish economy are more challenging now than they were during the last independence referendum. The price of oil has fallen, and job losses in the North Sea continue. Business confidence is fragile. And because of the TORIES’ reckless gamble, consumers are facing a winter of rising prices as the effect of the falling pound begins to be felt.•

The gap in Scottish public finances now stands at £15bn according to the Scottish Governments own accounts – far greater than even Nicola Sturgeon predicted the cost of Brexit would be to Scotland. Yet the argument from the SNP – which I’m sure they will continue to make at their conference this week – is that Scotland still stands to benefit from independence. This is simply false. And for as long as the SNP continue to make this argument, they are playing from the same post-fact playbook that won the Brexit referendum and is seeing Donald Trump continue to pose a threat in the election in the United States.•

We’ve all heard the cry – “We’ve had enough of experts” could as much be the mantra of those in the SNP arguing for a second referendum as it was Michael Gove in the Brexit referendum.

But the economic risk is only half the problem. Do we really want to divide ourselves again? As a nation, we are already deeply divided as a consequence of the independence referendum, and across the UK, the bonds that joined Scotland and England, Wales to England, and the north of England to the south of England are at risk of fracturing. •Our country has never been so divided. And we cannot meet division with division.

We can only meet these challenges together, just as we have always done. But we have to recognise where something needs to be fixed. The Labour Party is not, and never will be, the party of the status quo. We are the reformers. We have always been the reformers.• We are the only political force in Britain that reforms.

And in this next period we must be the ones who present not just the old ideas for how Scotland can continue as part of the UK, but also how we do that with a new relationship with Europe.

Brexit means that a new constitutional debate – not just one about independence, but about where power should lie – will soon be upon us. Let’s seize that moment and come up with a solution that meets what people across Scotland are asking for – strong devolution as part of the United Kingdom and maintaining a strong relationship with Europe.•

We have a political polarisation in Scotland at the moment.• And before I talk about this polarization lets just remember that Ruth Davidson told Scotland at the election in May that the only way to protect the union was to vote Tory.• People believed them and bought it.• Now we are closer to another independence referendum than ever before.• Stoked by English Votes for English Laws and a reckless and unnecessary EU referendum.•

I think she should apologise.

And where has that left Scotland?

We are caught between two polar opposites that are both wrong

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A status quo Tory Govt that wants us in the UK but not in the EU.

And an ideologically driven SNP Government that wants Scotland in the EU but not in the UK.

That is not the answer to the Brexit question.

The answer must be that Scots have voted to stay in the UK and want the benefits of the EU (and not some of the downsides like fishing etc).

And that should be the starting point for our Governments.

And that starting point shouldn’t be influenced by a legalistic or ideological argument but how we answer the big questions that we all came into politics to achieve.

In short, we have to answer the questions that Gordon Brown first posed in his lecture in Edinburgh in August:

How so we create full employment in a post Brexit world?

How do we fund public services now and into the future?

How do we eradicate poverty?

How do we protect our social and economic rights?

How do we create a more equal society?

These are the questions we need to answer.

We also must use this moment that Brexit has presented to ask how we can reform the UK, and in doing that no stone can be left unturned. We need to look again at the case for voting reform, and stop gerrymandering boundaries. And we must again restate our belief that the House of Lords should be replaced with an institution that meets the needs of a major democracy in the 21st century.

Theresa May has recognised the argument that Labour made before 2015 – that this country does not work for the vast majority of ordinary working people. On that, she’s right. (I hope Ed Miliband sues her for copyright infringement). But her solution is all wrong. It’s narrow and xenophobic, and it’s no surprise it finds support from the European Far Right.

And members of her own Government who told the truth that Brexit would make people worse off, like Phillip Hammond, are now trying to say that the risks have disappeared. This is simply untrue.• Although he did say something that I found quite profound and links to the questions Gordon Brown posed.• Hammond said “no-one voted to be poorer”.

Theresa May’s vision for the UK isn’t one that I think the majority of people will agree with. Our challenge now – at this turning point in our history – is to show that Labour – and the progressive left across Europe – can come up with solutions that speak to people’s lives.”

The SNP have been making the argument that we should be working together with our neighbours in Europe.• Creating alliances and trade as close partners. Pooling and sharing our resources across the channel for the benefit of our Scottish economy.• All correct. But these are also the arguments for staying in the UK with our largest and most important customer -; the rest of the UK.

Scotland exports £12bn a year to the EU.• It exports nearly £50bn to the rest of the UK.

There are 300,000 jobs reliant on the EU in Scotland but there are 1.25m jobs reliant on our relationship with the rest of the UK.

So the conclusion must be that the priority should be to stay in the UK and then work with how to get the best deal from the EU.

And that is emphasised by what we already know.

There is no better option for currency than the pound.• Every single other option has huge risk and unsurmountable challenges. No-one in Scotland wants the Euro and no-one seriously thinks it is credible to talk of having a separate currency? (The SNP MP for East Lothian, George Kerevan floated this idea and said it would require a massive reduction in public spending, significant tax increased and the selling of many public assets to create the money required to support a separate currency).

Then what of borders?• Any differential immigration system and trading system would require a hard border.• NI is just about to see what that may look like in the context of a UK Brexit with Ireland remaining in.• NI will have to negotiate that with both the EU and the UK.

So the case for independence is difficult to make and my view is that we should not have even more uncertainty on top of the already uncertain times we have at the moment.

So here is a way forward for Scotland-

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1. I think it is unlikely that Scotland and NI (who voted to stay) will be able to continue membership.• The PM and the EU have said the it is the UK that is the Member so the UK will leave as the Member.• This is disappointing but not unexpected.
2. Does this provide an opportunity for Scotland that is not independence?• Well yes, it does and it must.
   1. As I said Tory and SNP polarised positions are not where we should be.
   2. And if we

•••••••••••••••••••••••••••••••••••••••• i.••• Concede that we need a currency union to keep the pound

•••••••••••••••••••••••••••••••••••••• ii.••• Concede that we need a fiscal union due to the higher public spending per head n Scotland, the need to maintain the Barnett formula for funding in order to make sure the Scottish finances can sustain the current £15bn deficit between what it raises and what it spends.• How can we answer any of the questions about the future of public services, the eradication or poverty and the reduction in inequality if we don’t conceded that we need the money.

•••••••••••••••••••••••••••••••••••• iii.••• We concede that defence and foreign affairs should be maintained at UK level

•••••••••••••••••••••••••••••••••••• iv.••• We concede that the pooling and sharing of resources that maintains the welfare state and, especially, pensions should be maintained.

•••••••••••••••••••••••••••••••••••••• v.••• There will be a host of other things.

1. The question then arises about what happens to the social and economic rights we get from the EU
2. What happens to the powers that are repatriated to the UK from the EU.• These are substantial in terms of agriculture, fisheries, regional development, the environment.• Should they be devolved?• If so, how and where does the money come from (upwards of £700m per year to Scotland).• If they are devolved we need a much better and more defined relationship between parliaments and Governments to make them work.• Is this a role a reformed House of Lords could play?
3. What about Scotland’s relationship with other international organisations?• Should Scotland have a seat at the table where the area of responsibility is devolved?• I don’t know the answer to that but is it worth answering when looking at Erasmus or Horizon 2020 etc.
4. What about the criminal justice elements like the European arrest warrant and Europol?• Do we still participate?• I think we should and justice and policing are devolved? Does that mean Scotland could opt in to these if the UK opts out?
5. The PM talked of a Great Repeal Act to take the European Communities Act of 1972 into UK law and then give parliament the responsibility to repeal certain aspects if it so wishes.• How do we protect the hard won parts of the European social chapter like holiday pay and maternity pay if the UK government wants to repeal?• Is there now an overwhelming case to devolve?
6. How do we control immigration?• Will we need to go to a type of “in country” control that would allow places who require immigration to have a slightly different set of circumstances? A sort of “control at point” type system like operated when jack McConnell introduced the Scottish post study work visa system.

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The bottom line is that we need a settlement that keeps the UK together but allows Scotland flexibility to maintain the important parts of a relationship with the EU and protect Scotland from the repealing of aspects of EU law that benefit Scottish jobs and workers.

And lets just clearly say and keep saying EU nationals should be able to stay and UK nationals abroad should be a priority to protect where they live.

Let me conclude with this.

The answer to what “Brexit means Brexit’ means is not independence and we, as a Labour movement, should resist that at all costs.• It is not in the interest of Scotland and doesn’t allow the answer to the big questions of our time.• There should be an immediate ruling out of a second independence referendum to allow all efforts to be directed to the best options for Scotland.

We can’t allow the preconceived ideological positions of the Tories and the nationalists to cloud this issue.

We must ask ourselves as a Labour movement.

Firstly, what is the right answer for the country?

Secondly, what is the right answer for the party?

More questions posed than answered but I think that is where we are.

Thank you.”