Lochgreen House Hotel, Troon

Friday 16th December

Ladies & Gentlemen,

I was delighted to stand-in for Ruth and it is always a pleasure to come and speak in my old happy hunting ground of South Ayrshire, although I am sad that the reason for me being here today is because Ruth is attending the funeral in Aberdeenshire of my great friend and Party colleague Alex Johnstone. I knew Alex for more than 20 years. I remember when I stood in the North East Scotland European by-election in 1998, STV wanted little biographical film clips of each of the candidates and Alex suggested that I should invite them to film me feeding cattle on his farm in Aberdeenshire, rather than bringing them all the way down to my own farm in Ballantrae. He told me just to tell STV to pretend that it was my farm in Ayrshire, because he was sure they wouldn’t mind, after all it was saving them a long trip!

So we went ahead and made the short film with STV. Imagine my horror when later that week a scandal erupted over the Labour candidate’s STV video clip. She took the same film crew down a street in Aberdeen and claimed this was where she’d been born, but some smart journalist did a bit of research and discovered she’d actually been born in Sheffield. There was an almighty row and she appeared on all the front pages labelled as a liar!  I was shaking in my shoes!

But Alex was a great stalwart for the party and was in fact the longest serving MSP, having first been elected in 1999 when Holyrood began. He will be sadly missed.

It is a pleasure to be with you today for the Christmas Lunch and wonderful to see such a huge turnout. Great to see your incomparable MSP John Scott here; he is a ferociously hard-working parliamentarian. And I think the huge turnout here today demonstrates the great success of our Party in the past year under Ruth’s leadership. Ruth predicted that she would overtake Labour to make the Scottish Conservatives the official opposition party in Holyrood and the political pundits dismissed her notion as nonsense. But, thanks to Ruth, we won 31 seats, more than doubling our number of MSPs at Holyrood, forcing Labour into third place and silencing our critics.

Labour only has 24 MSPs and with that poor wee lassie Kezia Dugdale in charge, I think they have further ground to lose. Do you know, every time I hear Kezia’s voice I think I’ve switched on BLUE PETER by mistake!

And we’re not only storming ahead in Scotland; look at the situation down south. We’re 16% ahead of Labour in the opinion polls. Jeremy Corbyn is an utter disaster and the Labour Party seems to have embarked on a suicide mission. Who would ever have believed that Labour would be reduced to a single MP from Scotland? Incredible! And with Theresa May in No.10, a cross between Mrs T and Mother Theresa, we have a steady pair of hands at the helm. It feels good to be a Conservative. But we mustn’t be complacent. There are major challenges ahead.

I want to talk to you today about what the New Year – 2017 – has in store, with BREXIT and Donald Trump and all that that conjures up. We know ‘The Donald’ well in South Ayrshire, as of course he is the owner of Trump Turnberry. To be fair, he did spend over $200 million refurbishing the hotel and golf courses, so we cannot afford to be too critical. However, he has hit the golf club with a swingeing increase in their annual membership fees, which hasn’t gone down well at all.

I have to tell you that Mr Trump will be the first US President that I’ve actually spoken to. I wrote an article in the Sunday Post a couple of years ago, saying that Trump was quite right to object to the giant wind turbines next to his hotel and golf complex and to my surprise, on the Monday evening following its publication, I received a phonecall in my office in Brussels. It was from George Sorial, Executive Vice-President of the Trump Organisation and Donald Trump’s senior lawyer. Sorial told me that the big man was well pleased with my article and wanted to speak to me. So next thing I get put through to The Donald himself in his office on the legendary 23rd floor of Trump Tower in New York. I’m not sure if I was more shocked to be speaking to Donald Trump or more shocked to discover that he reads the Sunday Post, however, he said to me: “What the hell are we going to do with this crazy guy Alex Salmond. He’s ruining your beautiful country with his steel monsters and they’re as much use as a lead parachute!” In that one opening sentence he neatly encapsulated my own views on both subjects!

So it’s going to be the start of a rollercoaster year when he takes office in only 3 weeks’ time. Through my own work in the Middle East, I know some of his key friends and advisers really well. People like Rudy Giuliani, Newt Gingrich and John Bolton. They are all highly intelligent people and one thing is for sure, they are all against continuing the policy of appeasement towards the Iranian regime that has been the hallmark of the Obama administration. During his campaign, Trump himself repeatedly called Obama’s nuclear deal with the Iranians as a catastrophe.

He cited the way the lifting of sanctions released over $150 billion of frozen assets, which the Iranians simply pumped into sending revolutionary guards and weapons to Bashar al-Assad in Syria, to the brutal Shi’ia militias in Iraq, to the Houthi rebels in Yemen and to Hezbollah in Lebanon. The theocratic Iranian regime is behind every vicious conflict in the Middle East. They export terror and yet Obama claimed he was dealing with the smiling, moderate President Hassan Rouhani. Well I can tell you that Rouhani is far from moderate. During the three years he has been in office more than 3000 people have been executed, many of them hanged in public and most of them political prisoners who simply expressed their opposition to the mullah’s dictatorship. Iran now, per capita, executes more people than any other country in the world. The country is in the grip of a theocratic dictatorship and I don’t think Trump will stand for this and I don’t think he will allow the Iranian regime to continue blatantly to breach the conditions of the nuclear agreement. I expect him to hold them to account and to show he means business by backing the main Iranian opposition movement. We can expect interesting times ahead.

But 2017 will be a rollercoaster year for Scotland and for the UK too. The President of the European Commission Jean-Claude Juncker, has appointed the former French Foreign Minister and Agriculture Minister Michel Barnier as the key Commission spokesman for dealing with BREXIT. Barnier is not renowned for his friendship towards the UK. Lst week he reminded us that the EU’s single market and its four fundamental freedoms — including free movement of people — were “indivisible. There can be no cherry- picking,” he said. He went on to say that if the UK triggers Article 50 in March, then he expects negotiations to take no longer than 18 months and BREXIT to be concluded by late 2018. He was clearly doing this to put pressure on the UK. Last night he told Theresa May that Britain will have to pay €50 billion in debts to the EU before we leave.

I am not as confident as Michel Barnier that the negotiations can be concluded within the two-year period. I am more in concurrence with our UK Ambassador to the EU Sir Ivan Rogers, who says it may take ten years to negotiate a trade deal with the 27 EU Member States. The complexity of these negotiations is breathtaking. Of course it remains to be seen whether the British Supreme Court, or ironically potentially the European Courts, insist upon the Westminster Parliament being given a say on the terms of any BREXIT deal. The legal arguments seem to hinge on whether or not the Prime Minister has the right to trigger Article 50, or whether she requires the consent of parliament to do so. If parliament is given that right, we could end up with a demand for a second referendum. But whatever the outcome, I think the BREXIT negotiation process is going to take years and any extension of the two-year time limit has to be agreed upon by the other 27 EU Member States and by the European Parliament, a process that itself could take more than one year.

If we look at the only precedent for a country leaving the EU in the case of Greenland, the only issue they had to negotiate was fisheries and yet it took three years for them to complete their departure. Currently the acquis communautaire, the book of rules and regulations, which every Member State has to sign into its own statutes, comprises no less than 146,000 pages. The UK government will painstakingly have to go through every one of these laws deciding what we want to keep and what we want to discard. This will be a mammoth task that alone could take ten years, although Theresa May says that she will include a Great Repeal Bill in the Queen’s Speech in the Spring, which will effectively remove the 1972 European Communities Act from the statute book. Presumably this will then enable the government to decide at its leisure, which EU laws it wishes to retain and which it wishes to reject. But each and every one of these 146,000 pages of legislation will need to be carefully examined, with MPs in Westminster and the devolved legislatures deciding what we keep and what we reject.

One thing is clear the process is not going to an easy one. In the British case, the political goal is to restore parliamentary sovereignty and to regain control of immigration. On the EU side, the goal will be to make sure that BREXIT does not lead to the unraveling of a European project that has been built up over 60 years. That will mean making sure that the UK pays a clear and heavy price for leaving the EU. As a result, both sides will accept some economic damage rather than sacrifice their political goals.

The fact that two constituent parts of the UK, Scotland and Northern Ireland, voted by a substantial majority to remain in the EU, also complicates matters.  Nicola Sturgeon has been charging around Europe seeking help on trying to retain Scotland’s full membership of the single market, looking at options such as a reverse-Greenland scenario. But none of these options will gain acceptance in Brussels. Nor will our First Minister find any sympathy for her threats to hold a second referendum on independence. Too many EU Member States have problems with their own secessionist movements to give any encouragement to an independent Scotland.

In any case, I am certain that Nicola Sturgeon will not call an INDYREF2 before the polls demonstrate at least 60% support, as Salmond and Cameron’s resignations show that she would have to resign as SNP Leader and First Minister if INDYREF2 failed to win majority support. She loves her job too much to take such a risk! Plus the Government Expenditure & Revenue Scotland figures (GERS) published last summer revealed a deficit of £14.8 billion in Scotland, bigger than Greece, which in my estimation seems likely to push independence even further out of reach. The only thing that would resolve an independent Scotland’s debt crisis ironically would be for the SNP government to allow fracking to go ahead, exploiting the sea of shale gas that we are floating on. But to gain a majority of MSPs in favour of independence at Holyrood, Sturgeon needs the support of the Greens and fracking is a red line for them. So our First Minister is caught between a rock and a hard place!

We also have to try to grab the best possible deal for our farmers and fishermen. Under the CAP many British farmers currently receive 60% of their income from EU subsidies via the Single Farm Payment. They would lose most of this at a stroke unless the British government and the SNP government at Holyrood guaranteed compensating support of one kind or another. But agriculture will be particularly sensitive to the eventual shape BREXIT takes. The sector has drawn comfort from a government pledge to guarantee annual EU subsidy payments once the UK leaves the EU, though this extends only to 2020.

Is there anyone in this room that seriously believes that the Holyrood government would subsidise agriculture on the same scale operated under the CAP after 2020? With the current focus on cuts and austerity and prioritizing schools and hospitals, there is no way that the current level of subsidies would be maintained. If subsidies are cut land values will fall. For farmers who have taken out bank loans against the value of their land, a loss of value could be fatal. 18% of farms have current liabilities that exceed current assets. They couldn’t possibly survive.

You may recall the interesting exchange recently between Boris Johnson and Italy’s Economic Development Minister, when Boris suggested that it was “bollocks” to say that freedom of movement of people is a founding principle of the EU and that Italy would be quick to support an end to free movement if Prosecco sales to the UK were threatened. The Italian minister replied that the principle of freedom of movement was sacrosanct and that while Italy might lose Prosecco sales to Britain, Britain would lose the sale of fish and chips to 27 countries! This statement neatly embraces the dilemma we face.

Scotland’s fisheries sector should take a long hard look at the challenges facing the industry after we leave the EU. It is well known that 58% of the fish caught in UK waters – around 650,000 tonnes - is currently caught by foreign fishing vessels. Our fishermen are rubbing their hands together in gleeful expectation of chasing away all the foreigners and landing all of this catch ourselves. But we have to find a market for these fish. We export thousands of tonnes of fresh fish to France, Spain, the Netherlands and other EU nations every week. Are those countries going to be happy to buy our fish after we have expelled their boats from UK waters or will they impose stringent tariffs to protect their own fishing fleets? The prevailing sense of euphoria in the industry needs a reality check.

I was Chairman of the Fisheries Committee in the European Parliament and I know only too well that under the hated CFP the size of the Scottish fleet has been halved and many hundreds of fishermen lost their jobs. But these figures conceal an unpalatable truth that the fishermen themselves are reluctant to reveal. In the 1970s, the Scottish fleet was landing over 300,000 tonnes of cod every year. Modern technology had improved to such an extent that fishermen could indulge in this Olympic fishery with impunity.

But landings on this scale were wholly unsustainable. By the 1990s, cod stocks and indeed stocks of other key demersal species in the North Sea had all but collapsed. This was the reason why the Common Fisheries Policy was forced to introduce endless regulations and controls to try to save the industry. This was the reason why de-commissioning schemes encouraged many struggling skippers to scrap their vessels and why the number of fishermen in Scotland plummeted.

This is also the reason why cod stocks in the North Sea have now doubled, stocks of plaice have trebled and hake stocks have quadrupled. Haddock and nephrops (prawns) have increased too; the Marine Stewardship Council (MSC) could award North Sea cod a sustainability ticket as early as next year. With far fewer vessels and fewer fishermen, a profitable future beckons for the industry. But fishermen who are throwing their hats in the air in celebration of BREXIT should beware. A return to the unsustainable fishing of the 1970s and 80s can never be allowed to happen again. Earlier this week the annual quotas for next year were fixed in Brussels and it was good news all round for Scotland’s fishermen with cod and whiting up by 17% and North Sea prawns by a massive 46%. 

Ladies & Gentlemen, it would be tough enough facing the challenges of 2017 if we had a decent government in power at Holyrood. But the SNP minority government with their obsession with independence is a joke. Every week there is new damning evidence to show how Scotland is losing out under the SNP. Only last week we heard that in our schools, Scotland has fallen behind England in numeracy, literacy and science and in world rankings we are now even below former Soviet states like Poland and Estonia. We’ve suffered a shocking decade of failure under the SNP and it’s our children who are paying the price.

It’s the same story in Transport where we have a totally incompetent minister in Humza Yousaf who has been charged with driving a car without insurance and who is presiding over a shambolic rail service where delays and cancellations have reached almost epidemic proportions, costing the Scottish economy billions. We have a dilapidated infrastructure that has allowed many of our road networks to ground to a virtual standstill at rush hour every day, while potholes are appearing across Scotland from which you expect to see Alice in Wonderland and a white rabbit emerge!

We have a staffing crisis within the NHS with spiraling vacancy rates across nursing, midwifery and consulting. These are the latest statistics that have exposed the SNP’s mismanagement of the NHS. Waiting times targets at accident and emergency departments across Scotland continue to be missed, while referral-to-treatment times are also slipping. The SNP has been in charge for more than a decade and they need to tell us why they are allowing this to happen?

And of course we have the hapless Derek Mackay as our Finance Secretary, the man who stunned MSPs by admitting he hadn’t heard of the Laffer curve, the famous economic theory that shows how tax reductions stimulate growth and in turn lead to higher tax revenues. Derek Mackay and the SNP’s only instincts are to tax and spend like there was no tomorrow. This is why he has decided to make middle-income earners in Scotland pay more tax than our cousins south of the border. Nicola Sturgeon is always bleating about how the wicked Tories at Westminster have cut Scottish funding to the bone, but only this week we discovered that a decade of SNP waste has cost Scotland £1 billion in money frittered away on bungled IT projects and cost overruns. Once again the SNP has been so obsessed with independence they have failed to do their day job and taken their eye off the ball. Instead of squandering taxpayers’ money on this scale they need to cut the waste and pass the savings back to families and firms who need a break.

Ladies & Gentlemen, we can look ahead with confidence to 2017. Yes, there will be many challenges, but with leaders like Ruth Davidson and Theresa May, nothing is impossible. We have the council elections in Scotland in May and I know that we will all work hard to ensure victory for our excellent team of candidates here in South Ayrshire. But before then, relax and enjoy Christmas and New Year. Don’t drink too much.

Chic Murray used to say:  “I’ve heard that alcohol is a slow poison, but who’s in a hurry?” A very Happy Christmas to you all.