National Assembly for Wales

Y Pwyllgor Craffu ar Waith y Prif Weinidog

Committee for the Scrutiny of the First Minister

16/02/2018

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Ann Jones AM Y Dirprwy Lywydd a Chadeirydd y Pwyllgor
The Deputy Presiding Officer and Committee Chair
Dai Lloyd AM
David J Rowlands AM
Jayne Bryant AM
John Griffiths AM
Mick Antoniw AM
Mike Hedges AM
Russell George AM
Simon Thomas AM

Y rhai eraill a oedd yn bresennol

Others in Attendance

Carwyn Jones AM Prif Weinidog Cymru
First Minister of Wales
David Morris Dirprwy Bennaeth yr Is-adran Fwyd, Llywodraeth Cymru
Deputy Head of Food Division, Welsh Government
Tim Render Cyfarwyddwr Tir, Natur a Bwyd, Llywodraeth Cymru
Director of Land, Nature and Food, Welsh Government

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Graeme Francis Clerc
Clerk
Kath Thomas Ail Glerc
Second Clerk
Katy Orford Ymchwilydd
Researcher

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Dechreuodd y cyfarfod am 11:33.

The meeting began at 11:33.

1. Cyflwyniad, Ymddiheuriadau, Dirprwyon a Datgan Buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Good morning, everybody. Bore da. Welcome to the Committee for the Scrutiny of the First Minister. Can I start by welcoming Mick Antoniw to his first committee as Chair of what we fondly call 'CLAC', the Constitutional and Legislative Affairs Committee—welcome—and to put on record our thanks to the previous Chair, Huw Irranca-Davies, for his help in this? We've had a number of apologies, from Bethan Jenkins, Lynne Neagle, Nick Ramsay and David Rees, and so we will record those. 

In the opening remarks, can I say that we're delighted to have the audience with us today? It's great that you've taken some interest to come along and hear, and hope that you will be able to follow our proceedings. And just to say—this is the point where I have to do the housekeeping rules—I was never very good at it. I didn't want to be an air stewardess, so I'll keep my hands by my sides, but just to say that, should we have to evacuate the building, the ushers and the staff here will escort us to the safest place, so we'll take our instructions from them and follow them. We operate bilingually, so there are headsets available and translation from Welsh to English is available.

I just wanted to say 'thank you' to Hafren theatre and to the Newtown College for the way in which they've hosted us here and also for the hospitality. As a committee, we don't travel light, as you will all see, and so it's to say 'thank you very much' for that and then to welcome the First Minister and his officials and to thank him for coming because, without you, we couldn't have a scrutiny of the First Minister committee.  

The other thing on housekeeping is that, if we've got mobile phones, can we either put them off or into the flight safe mode, not that we're going to be flying anywhere, but apparently that stops interference with the broadcasting? So, I'll put mine away.

11:35
2. Sesiwn i Graffu ar Waith y Gweinidog: Y Diwydiant Bwyd a Diod yng Nghymru
2. Ministerial Scrutiny Session: The Food and Drink Industry in Wales

We're going to move into the main item on the agenda, which is scrutiny of the First Minister on the food and drink industry in Wales. So, as I've already welcomed the First Minister and his officials, perhaps, just for the Record, First Minister, you could introduce yourself and your officials?

Yes. Carwyn Jones, First Minister. If I could ask Tim and David to introduce themselves and their titles—.

Tim Render, I'm the director of environment and rural affairs in the Welsh Government. I joined the Welsh Government at the beginning of this year, having moved from the Department for Environment, Food and Rural Affairs in London where I was responsible for the food and drink industry—both all the work on Brexit and on exports, so I'm bringing quite a lot of experience to this particular subject.

Good morning. I'm David Morris. I'm the deputy head of the food division in the Welsh Government. I've held that role for four and a half years now.

Thank you very much. So, as I say, the main purpose of the meeting is the evidence session on the food and drink industry. We've broken it down into five areas, and those five areas are the current Welsh Government food and drink policy, Brexit and international trade, food industry standards, the promotion of Welsh produce, and then other Welsh Government investment in the food sector. So, those are the five areas that we're going to try and scrutinise you on, but as always happens we tend to drift with how the debate goes and how the scrutiny goes, but we will try.

So, if I can ask—Mike, you're going to start off on the first section, which is current Welsh Government food and drink policy.

Yes. How are the Welsh Government assessing the success of the food and drink strategy and action plan, with specific reference to microbreweries and, perhaps more importantly, what used to be microbreweries, which have grown into quite large breweries? I think of two—Tiny Rebel in Newport and Tomos Watkin in Swansea, which have grown fairly substantially over recent years and now export.

Well, first of all, in terms of what our plan is and how we measure the success of that plan, we produced an action plan in 2014, and that set a headline target to grow the turnover value of food and farming to £7 billion by the end of this decade, and that represents a 30 per cent increase from where we were in 2014. Actually, we suspect that target will have been reached this year. We were at £6.9 billion last year, so projections are that we will have gone past that target, so we're three years ahead of schedule. We do also commission an external economic appraisal of the food and drink industry, and that looks at the performance of many of the industry subsectors.

In terms of microbreweries, there's been considerable growth over the past few years. I've had two breweries set up in my constituency over the past year. We know that there's a huge amount of demand for craft beers particularly. We've seen some very small breweries—Tiny Rebel is an example—that have started off very small and are now expanding at a rate of knots. We know that microbreweries form an important part of our drink offering. At the Royal Welsh, I always notice how many more breweries have started every year since the last time that I was there. I don't have a figure on how much they actually contribute—microbreweries—to the Welsh food and drink sector, but they're obviously growing in importance.

Like you say, in your own constituency, you've had two; in my constituency, I've had two in the last couple of years, but you've also got those that have gone on to the next stage. Is the Welsh Government providing enough support for those to move on to the stage after that? Because both Tomos Watkin and Tiny Rebel are reasonably large breweries now, but there's a next stage. As you know very well, one of the great weaknesses of the Welsh economy is turning small and medium-sized businesses into larger ones.

11:40

That's absolutely true. The tendency has been there for many, many years for businesses to reach a certain size and then to sell to a larger business, take the money and go. That's been a cultural problem we've had since the start of the last decade where, at one point, we were even considering whether the resurrection of the Cardiff stock exchange would make a difference, where businesses might want to be listed there rather than in the London stock exchange. We are past that stage now with the digitalisation of the markets.

Well, what I'd say is, as far as microbreweries are concerned, they are surviving and expanding. Some of them are very, very small, but those who want to grow—and Tiny Rebel is a fine example of that—are moving to new premises. They are looking to expand into new areas. As far as the specific support that we give to microbreweries, Tim, any—?

I think what I would say is yes, that scale-up stage for any business is the most difficult, and there's a range of measures that we have: the business clusters—there's one of those around the drinks industry that lets businesses learn from each other—and some of the support for the export to people to go to trade shows and so on to meet buyers. That's available to those. I think it is those people who are in that scale-up stage who benefit most from that, and brewers are among some of those that we have taken to some of the international trade shows.

Earlier on this morning, First Minister, we went to Hilltop Honey here in Newtown, where we met with the company and Monty's Brewery, and a local food and drink co-operative retail initiative. So, we were discussing some of their ambitions to have more quality local food and drink produced here and in mid Wales more generally. Obviously, if some of those local producers have the ambition and the ability to grow, they can become national and, indeed, international brands. Is there enough help at that early stage, do you think, in helping those local producers through support for food festivals, through general support, to have that critical mass that can then go on and produce the national and international brands?

Well, I believe there is. If we look at Hilltop Honey as an example, we know that it's recently secured a new contract to supply its products into the middle east. It's recently expanded. Having been there this morning, of course, you will have seen that. It was successful in the first round of the food business investment scheme, so it was one of the first projects to be approved under the scheme with a grant award of £240,000. So, there is money available through that scheme. So, there's financial support available, but also, importantly, export support as well. It's not just about the money; it's providing support for businesses to look for new markets, and I understand that Hilltop will be at the Gulfood exhibition soon, actually; it's around about now. That stand has been subsidised by the Welsh Government. So, not only is there grant funding available to help businesses to grow, but also help to provide a presence at the major food shows.

Yes. I guess they've reached that stage, which you've described earlier, with your officials, First Minister, where perhaps they're an obvious target for assistance to grow because they're fairly well-established now. But for the generality of local, very small-scale producers of food and drink at the moment, what is there in place to try and encourage that flourishing that can produce, hopefully, the local critical mass that can go on, then, to provide examples of growth and, as I say, national and international brands of the future?

Well, there are a number of programmes. First of all, the food business investment scheme; that's been a great success. Thirty-four projects, totalling over £87.3 million of capital investment, have been supported to date. We are looking in the spring of this year to open a further window for larger scale investment. We have the rural business investment scheme as well. The window for that has closed for the current scheme, but that aims to support up to 40 micro and small food and drink producers, giving them support with capital and investment for projects that offer what we would see as a clear benefit to the food and drink industry in Wales. There will be further windows that'll be announced over the course of this year.

We have the food cluster programme—410 active business members. What does it do? Well, it's a powerful engine for driving more growth, for opening up new opportunities and adding value. So, those are just three examples of what's there. It's not all about helping the already well-established businesses. But, obviously, through schemes such as the rural business investment scheme, it's a way of helping those businesses that are small or micro and helping them to grow.

11:45

If I may, Chair, I'm just wondering about—. I know that there are local food festivals that provide opportunities for local producers, but funding for that is becoming difficult, as funding for so many things is becoming difficult. Is support for food festivals part of the Welsh Government's general assistance and support?

Yes, we've continued to support food festivals. We've supported food festivals for 15 years now and the model of support has changed over time. So, it's a competitive process, but the majority of food festivals that apply for support do secure support, and we've also encouraged those festivals to think of the wider food agenda as well—so, to be maybe innovative to see how they can engage young people to see how they can perhaps engage in the healthy-eating agenda. So, it's a very popular support, and our food festivals are a great advert for the food industry in Wales.

I've got a number of Members now, so Dai Lloyd first and then Russell and then Jayne Bryant.

Diolch yn fawr, Cadeirydd. Eto, yn deillio o'r drafodaeth y bore yma pan aethom ni i weld rhai o'r busnesau lleol yma yn y Drenewydd, roedden nhw'n holi pan fo Llywodraeth Cymru yn arwain teithiau masnachol—trade missions—i wahanol rannau o'r byd, yn enwedig cwmnïau sydd yn weddol newydd a ddim gyda'r mwyaf, un o'r pethau roedden nhw yn ei holi—achos mae yna gost sylweddol iddyn nhw fel cwmni i fynd ar y teithiau masnachol yma—oedd beth am y posibilrwydd o allu mynd ar y teithiau masnachol yma am y tro cyntaf am ddim. Roeddwn i'n credu bod hynny'n syniad eithaf gwych i'w hyrwyddo. Roeddwn i'n meddwl beth fuasai ymateb Llywodraeth Cymru i'r fath osodiad.

Thank you very much, Chair. Stemming from the discussion this morning when we went to see some of the local businesses here in Newtown, they were asking, where the Welsh Government is leading trade missions to different parts of the world, particularly companies that are relatively new and not the biggest, one of the things that they were asking about—because there is a significant cost for them as a company to go on these trade missions—was the possibility of being able to go on these trade missions for the first time for free. I thought that was an excellent idea to promote themselves. I was wondering what the response of the Welsh Government would be to that proposal.

Un peth byddai'n rhaid gwneud yn siŵr, wrth gwrs, yw bod y cwmni o ddifrif. Lan i nawr, wrth gwrs, beth y byddem ni'n tueddu i'w ddweud yw, wel, os ydyn nhw'n rhoi cyfraniad eu hunain, felly, byddem ni'n rhoi cyfraniad hefyd i ddangos, yn gyntaf, partneriaeth, ond yn ail eu bod nhw o ddifrif ynglŷn ag edrych ar y farchnad eu hunain. Gallem ni ei ystyried ef, ond byddai'n rhaid sicrhau bod busnesau yn wir o ddifrif, os ydyn nhw am ddod ar daith, ynglŷn ag edrych ar y farchnad honno.

One thing we'd have to ensure is that those companies were serious. Up to now, what we've tended to do is say that, if they make a contribution themselves, we would match that to show, first, partnership, but, secondly, that they are serious about looking at the market themselves. We could certainly consider that as an option, but we would have to ensure that businesses were truly serious, if they were to come on a trade mission, about looking at that market.

Sut felly y byddech chi eisiau cael arwyddion o'r sicrwydd yna yn absenoldeb yr arian, achos mae'n gallu bod yn arian mawr weithiau sydd yn atal y cwmnïau yma rhag dod ar eich teithiau masnachol chi? Wedyn, pa fath arall o sicrwydd y byddech chi'n chwilio amdano fe, buasech chi'n feddwl?

How therefore would you be able to have signs of that assurance in the absence of that money, because they can be significant funds sometimes that can prevent these companies from coming on these trade missions. So, what other kind of assurance would you be looking for?

Byddai'n rhaid cael rhyw fath o ymrwymiad ynglŷn â pha fath o waith maen nhw yn wedi ei wneud o flaen llaw efallai, pa fath o waith y maen nhw wedi'i wneud er mwyn gwneud ymchwil i'r farchnad, pa fath o gwsmeriaid maen nhw'n credu y bydd yna iddyn nhw, a mynd o fanna. Nid wyf i'n credu bod unrhyw fath o rwystr Ewropeaidd a fyddai'n eu stopio nhw rhag gwneud hyn. Nid wyf i'n credu bod unrhyw fath o rwystr ynglŷn â'r gyfraith ynglŷn â gwneud hynny.

There would have to be some sort of commitment in terms of what sort of preparatory work that they'd done, what sort of work that they'd done in terms of research into the market and what kind of customers they believe would exist for them in those markets. I don't think there's any sort of European barrier that would prevent them from doing this. I don't think there is any barrier in terms of law or a regulation.

Roedd yn syniad cryf a ddaeth trwy'r cwmnïau yma bore yma am efallai hyrwyddo'r ffordd ymlaen iddyn nhw jest i ddechrau cael cam mewn ar y stepen yna i fynd yn fwy rhyngwladol felly.

It was a strong idea that emanated from these companies this morning on facilitating the way forward, to get one step on the ladder to be more international.

Okay. I think that might be something we'll explore, perhaps, in our written report, if that's okay.

Could I just add very briefly, Chair, there was also a suggestion, wasn't there, that there's an initial meeting that they also have to pay for before they go on a trade mission, and that's something that they might be looking for initial financial assistance for, even if it didn't extend to the actual trade mission itself?

Okay. As I say, I think that's something that we can look at when we do our report. We'll have a look at it and we'll wait and see how we can progress that one. Russell.

Dai's covered the point I was going to ask, but what I would add though is that apart from the cost of attending an original trade mission, it was the cost in time because, very often, as a young business, they're just by themselves and perhaps they don't employ any staff, and that's the reason why it was a great risk for them, although they're heavily subsidised, to put in that original investment in the first place.

11:50

We'll include that quote in our report to the First Minister, I'm sure. Sorry, did you want to answer, First Minister?

In terms of a businessperson offering their time to come on a trade mission, only they can do it. That's the difficulty, isn't it? They will inevitably be the best ambassador for their own product. So, yes, there is a sacrifice in terms of time, but it's difficult to see how that can be avoided.

I think what they're saying to us is that, as a larger business, they've got more capacity to be able to employ other people to run the business whilst they're away, but it's the initial cost in time, as well as the financial cost, and if they have that support to go on an original, first trade mission, then they're happy to fund future trade missions after that themselves. I think that was the point they were making this morning.

Let me take that into consideration and perhaps if I write back to the committee with further details on that. But what seems to be clear is there's no rule that prevents a 100 per cent subsidy, but there would need to be satisfaction that a particular business was serious about the market.

Thank you, Chair. What opportunities are there for businesses such as food and drink producers to partner up on projects? Because I know, for example, in Newport, Tiny Rebel work with their local chocolatier producer and we've seen some examples in west Wales where local food producers came together to sell their produce together; that was off their own backs, and that networking seems to be so important. I wonder if there's any support that can be given from Welsh Government on that.

We have the food cluster network, which represents, as I said earlier on, more than 400 businesses but, to my mind, these are incentives that businesses themselves are in the best position to take forward—that they will spot another business that can complement what they already produce, and they seem to be making those links anyway. What I'd say to any business that was looking to partner is up is: go to the Royal Welsh, for example, to the food hall there, where there is support available from officials from Welsh Government and also other businesses, who may well be looking to do the same thing. I think that incentive lies with businesses. I don't think it's easy for Government to say, 'Well, why don't you two work together?' It's up to businesses to make that partnership themselves. 

Is there any sort of help that you can give if they want to come together? Is there any—? Do you think there's any support we can give them on that?

Presumably, they could apply under the existing schemes, as they would if they were individual businesses.

Can we move on to one of the substantial items: Brexit and international trade? Mick, you've got a few—start with a few questions.

Well, First Minister, a few questions around the issue of the single market and the customs union, particularly focused on the food and drink industry. If I could perhaps just start with a bit of an issue that arose this morning, and that is the discussions that may have taken place with regard to replacement of EU grants. It's very clear that a number of EU grants have been very significant in allowing businesses to develop, some local businesses here, but across Wales. There was a concern about what is the position with regard to the replacement of that sort of funding, which has made quite a significant contribution to the Welsh economy.

We know that the UK Government has given a guarantee that commitments made before the UK leaves the EU will continue to be funded to the end of the programme. Beyond that, we have no certainty. What I have to say is that we could not provide the funds ourselves in the absence of any replacement funding for the European funds that would be lost. That's true as well of agricultural subsidy. We're more than happy to commit to ensure that payments continue, but, unless there's a pot of money from which those payments can come, we cannot cover that amount of money. Now, we were promised at the time of the Brexit referendum that we would not lose a penny, and I expect that promise to be kept.

What is the state of discussions on that, because it's clearly something that has been raised? It's an issue, and there's quite a simple response to it—either UK Government is going to make up that differential; I mean, there have been promises, but is there any reason why guarantees can't be given at this stage? 

They won't give those guarantees. They've given guarantees for a particular period of time. Beyond that, nothing is certain.

Okay. Can I take you on then to the Welsh Government's position in respect of the issue of the single market and the customs union? Of course, you'll be aware, in the background, there's a trade as well as a withdrawal Bill—there's a Trade Bill that's going through at the moment. What are the key issues, or the key challenges in respect of access, because there are varying, mixed messages coming out, particularly from Westminster—on the one hand, ‘It won’t make any difference, we don’t need to worry about it’. But what are the specific issues that concern you in respect of the Welsh economy? 

11:55

There are three major issues that are yet unresolved. The first is, if a hard Brexit leads to tariff barriers, what effect that will have on not just the food and drink industry, but the food and drink industry particularly—90 per cent of our exports go to the single market. Meat, for example, can carry, in extreme circumstances, a subsidy of 104 per cent. It certainly starts at 48 per cent and goes up to 104 per cent. Now, it's obvious what the effect would be on our sheep meat exports if that were to happen, and there are a number of tariffs in other areas as well. So, tariff barriers are the ones that are most obviously talked about, because they would make our goods more expensive in our most important market.

But another, of course, is non-tariff barriers—things such as extra paperwork, extra customs arrangements, extra bureaucracy. They have a very strong effect, particularly on the sectors of the food and drink industry where the goods are highly perishable. The shellfish industry, particularly, is the most vulnerable of all; 90 per cent of our exports of shellfish go to the European single market, the product itself is perishable and, in fact, the shellfish are live. Any kind of delay at the channel ports could lead to a situation where the goods are spoiled, and if they can't export in the same way as they do now, then they will not survive. It's that easy.

When I was in Ireland on Monday, I was given the example by a representative of the road haulage association of fish that was crossing the Irish sea through GB and then, of course, over to the channel ports. As a result of a delay in the Irish sea, they missed their crossing in Dover, and the products were all spoiled. Their concern is that that will become the norm in future. So, the more perishable the goods, the more difficult the situation is when it comes to non-tariff barriers.

And the third is alignment: alignment of regulations, alignment of food standards, and alignment of recognition of the protection of particular foods—protected food name status, as it's called now. There's no point in us having a protected status framework for our food if it isn't recognised anywhere else. So, that alignment is absolutely crucial to us to be able firstly to access the market, and secondly to protect the products that we have already registered under the European scheme.

To me, those are the three main challenges that we face, which can be resolved, but, nevertheless, they are where we are now, and they will be there if there's a Brexit that leads to WTO rules.

Well, one of the issues that flows on from that is the whole issue of common frameworks—I'm interested in that—and, of course, alignment is an issue. If we don't have direct access to the single market, whether it be with a customs union or whatever, what might be the mechanism for achieving that alignment? Because, the reality is, if the majority of, for example, our shellfish and a lot of our agricultural perishable produce is going to Europe, leaving aside the issues of the potential delays and the tariff access, there is the question of the regulatory side and the changes that will take place from time to time. How do you see alignment actually working if we don't have access to the single market or we're not in the customs union?

Well, in reality, there'd have to be either an overall agreement that there would be alignment in all sectors or a sector-by-sector agreement system. Now, that's particularly clunky. Switzerland does it. When I met with the Swiss, they said, 'Well, we wouldn't recommend it, because it is much more complicated and much more time-consuming than having an overall agreement'. But, the reality is the last thing we want to see is Welsh produce to be held up in the channel ports because they are seen as not meeting the requirements of the European single market. The reality is, even if we leave the EU and the customs union, most of the food and drinks sector will have to meet European standards anyway, because they'll have to export into that market. So, it makes perfect business sense for us to ensure that the European and UK standards are aligned.

What is the status, then, of common frameworks, particularly, for example, around the issues of the Trade Bill? Because there are potentially competing interests. For example, the UK Government could design trade agreements et cetera that do not serve the benefit of the specific Welsh economy. There might be conflicts that exist, and the Trade Bill at the moment, as it's drafted, basically gives an overwhelming position to the UK Government, despite the fact that most of these areas of agriculture and food and so on are very much devolved. What's the state of those discussions, and what are the particular challenges that we've got to actually deal with?

12:00

Well, at the moment, the Bill talks about consultation with the devolved administrations. Now, I've said many, many times that I think these issues and all issues to do with trade and with our relationship with Europe should be done via a council of Ministers. It's what happens in the European Union—why not within the union of the UK? 

Now, trade is a reserved matter; that much is true. But, there's an awful lot of negative effect on the Welsh economy if trade deals are done with certain markets. I am wholly unconvinced that a free trade deal with Australia or New Zealand is actually good for Wales. Their markets are much smaller, for a start, than the European single market, and, of course, we know New Zealand, particularly, is a major producer of lamb, and there is a threat to the Welsh sheep meat industry if there were to be unrestricted imports of New Zealand lamb into Wales. The markets are slightly different. They don't serve exactly the same market; that much is true. But, the concern that I would have is that they would be able to wipe out the section of the market in the UK that Welsh lamb enjoys at the moment, and that makes a difference to the sheep meat industry overall.

I've always said that a free trade agreement only works if it is concluded with an economy or a country that has a similar income level to yours, similar wage rates—otherwise there's an invitation for jobs to disappear into that other country—and where there is an advantage in terms of the market size; not exactly the same size market. But, none of this is relevant unless we can get a suitable agreement with our closest, most important market, which is the European single market. New Zealand has 4.5 million people and it's 12,000 miles away. Europe has 440 million people and it's on our doorstep.  

If we fall out—. If there isn't a deal—and there's no clarity at the moment as to whether there is going to be any form of arrangement; in fact, all the indicators seem to be going the exact opposite way—we fall back on World Trade Organization rules. Of course, up to now, that's been very much presented as just another set of tariffs, but they also include the issue of quotas. What analysis has been done by the Welsh Government to look at the impact that the World Trade Organization tariffs and, in particular, quotas would actually have on the Welsh economy per se?

Well, the Cabinet Secretary has met several times with the Secretary of State on this issue. The tariff-rate quota for lamb is being discussed as part of a wider exercise to re-establish the UK as an independent member of the WTO, but there is a difference of opinion as to how that will work in terms of tariff-rate quotas. The UK is in a position where it wants to replicate the current commitments on the EU's schedule. It's a fairly complicated process and it could involve the entire WTO membership of 163 countries. Both the EU and the UK have taken the view that the approach to this should be to split the tariff-rate quotas between the EU and the UK, based on existing usage. But, that's being challenged by existing WTO members; it's being challenged by the United States of America, and it's being challenged by New Zealand. So, we're in a position now where nobody can know what will happen in the WTO, whether it will be simply a question of, 'UK, you take that part, then, of what was a bigger European share and the EU will keep the rest of it', or whether the whole thing will have to be reopened. That will take time.  

What would be the Welsh Government's status in any of those particular negotiations? Some of these areas are completely devolved. Obviously, trade is not devolved, but there's clearly a potential conflict. Do we have direct engagement with the WTO on this? Do we have the capacity for direct engagement? 

No, we don't have direct engagement with the WTO. All the discussions have been through the UK Government. I think it's hugely important that the UK as a whole comes to a position when it comes to looking at the trade arrangements for the future. I know trade is reserved, but I do not think that a new trading arrangement will stand the test of time if there's resentment in one of the UK countries because of the implications and the results of such an agreement. For example, what does that mean for us in Wales? Well, a free trade agreement with New Zealand, in the wrong circumstances, would be hugely harmful to Welsh farming. A free trade agreement with a country that's a major steel producer, potentially, could wipe out the Welsh steel industry. So, these things have to be looked at very carefully. To my mind, it's hugely important the UK Government looks to get the approval or agreement of the devolved administrations. It doesn't have to do it legally, but, sensibly, I think that should be done.

But, consent is going to be required—legislative consent on both the withdrawal Bill and on the Trade Bill. What are the criteria? What are the red lines in respect of, particularly, the Trade Bill, because of our concern about the food and drink industry in particular?

12:05

We need to be more than simply a sounding board. There needs to be a structure in place that enables the devolved countries to play a full part not directly in terms of the trade negotiations, but in influencing the trade negotiations. How would that work? Well, it worked pretty well when I was rural affairs Minister back at the start of the last decade. Every month, the Ministers from each administration in the UK would meet in London. We would work out what the UK's line should be at the coming Council of Ministers, and it worked very well. Where there were important issues on the agenda, it would be the UK Secretary of State who would lead in the council itself, but that Secretary of State would then consult with Ministers who were already in Brussels and take their view on what the UK should do, and that worked pretty well in those days. I can't see why that can't be replicated more widely to create a Council of Ministers structure that the UK now badly needs with Brexit coming. 

I've got quite a few Members who are patiently waiting to ask questions on that particular subject. Simon, and then I'll move to Dai. 

Diolch yn fawr. Hoffwn i jest yn gyntaf oll ofyn ynglŷn â beth fedrwch chi ei wneud fel Prif Weinidog yn y cyd-destun yma. Mae'n amlwg o'r hyn rydych chi wedi ei ddisgrifio wrth ymateb i Mick Antoniw y byddai fe'n haws o lawer pe bai'r sefyllfa yn parhau fel rŷch chi yn dymuno fel Llywodraeth Cymru—ein bod ni'n aros yn y farchnad sengl, neu o leiaf yn aros gyda mynediad llawn i'r farchnad sengl, ac yn aros yn yr undeb tollau. Pryd ydych chi'n meddwl y byddwch chi'n perswadio eich arweinydd eich hunan, Jeremy Corbyn, o'r sefyllfa yna?  

Thank you very much. First of all, I'd like to ask about what you as First Minister can do in this context. It's clear from what you've described in responding to Mick Antoniw's questions that it would be far easier if the current situation remained as you desire as a Welsh Government—that we remain in the single market, or at least have full and unfettered access to the single market, and also remain within the customs union. When do you think you'll persuade your own leader, Jeremy Corbyn, of the merits of that? 

Wel, mae yna drafod, wrth gwrs, yn y Blaid Lafur, ond fy jobyn i yw perswadio Llywodraeth y Deyrnas Unedig. Nid yw'r Blaid Lafur ar hyn o bryd yn gallu gwneud dim byd am hwn, achos nid y Blaid Lafur sydd mewn Llywodraeth yn Llundain. Ond beth sy'n hollbwysig yw bod Llywodraeth y Deyrnas Unedig yn deall bod yna ffordd synhwyrol i symud ymlaen ynglŷn â hyn, ac mae yna ffordd sydd yn wael iawn i economi Cymru ac i economi'r Deyrnas Unedig. So, felly, pwyso ar Lywodraeth y Deyrnas Unedig rydym ni'n ei wneud er mwyn eu bod nhw'n gallu gweld y synnwyr yn beth rŷm ni a'r Alban yn ei ddweud.  

Well, there is discussion, of course, in the Labour Party, but my job is to persuade the UK Government. The Labour Party, at present, can't do anything about this because the Labour Party is not in Government in London. But what's vital is that the UK Government understands that there is a sensible way to move ahead on this, and there is a way that is very bad for the Welsh economy and the UK economy. So, I want to press the UK Government to do this so that they can see the sense in what we and Scotland are saying. 

A gawn ni jest edrych ar ddau o bethau rydych chi newydd eu crybwyll lle mae Cymru yn agored iawn i niwed yn y cyd-destun yma? Yn gyntaf, pysgod cregyn. Rydym ni newydd weld adroddiad yr wythnos yma gan y Sefydliad Polisi Cyhoeddus i Gymru, ond mae unrhyw un sydd wedi ymweld ag Aberdaugleddau a thrafod fanna yn gallu gweld mai cychod llai na 10m sydd gyda ni yn bennaf oll yn pysgota am bysgod cregyn. Fel rydych chi'n ddweud, os ewch chi draw i Lidl, sydd ddim yn bell o fan hyn, digon posibl y byddwch chi'n prynu cranc o Iwerddon wedi'i rewi, ond byddai fe wedi dod drwy Aberdaugleddau. Ac, wrth gwrs, mae llawer yn mynd drwy Aberdaugleddau ymlaen i Wlad Belg mewn lorris. Rydych chi newydd amlinellu pa mor time-sensitive ydy hynny. 

Ond, wrth gwrs, nid yw hynny ar hyn o bryd yn cael ei gefnogi gan bolisi pysgodfeydd yr Undeb Ewropeaidd. Mae pysgod cregyn tu hwnt i unrhyw gwotâu neu unrhyw beth tebyg. So, pa gefnogaeth fel Llywodraeth fedrwch chi ei rhoi i sicrhau parhad y diwydiant hwnnw? Ydym, rydym ni angen mynediad di-dariff, ond mae hefyd yn mynd i fod yn wynebu heriadau sylweddol iawn achos fe fydd yna grandfather rights, ac fe fydd yna lot o berchnogion o Wlad Belg a Sbaen yn gallu pysgota yn ein moroedd ni. Sut ydych chi'n mynd i sicrhau bod parhad i'r diwydiant pysgota yng Nghymru? 

And if we could just look at two of the issues you've just mentioned where Wales is very vulnerable in this context, first of all, shellfish. We've just seen a report this week by the Public Policy Institute for Wales, but anyone who's visited Milford Haven has seen that we have mainly smaller boats of less than 10m fishing for shellfish. If you go to Lidl not far from here, it's likely that you'll buy a frozen crab from Ireland, but it will have come through Milford Haven. And, of course, there's a great deal moving through Milford Haven onto Belgium loaded on lorries. You've just outlined how time-sensitive all of that is. 

But, at the moment, that's not supported by the European fisheries policy. Much of the shellfish is outwith any quota system. So, what support can you as a Government give to ensure the survival of that industry? Yes, we need tariff-free access, but it's also going to be facing significant challenges because there'll be grandfather rights, and there'll be many owners from Spain and Belgium who will be able to fish in our seas. How are you going to ensure that our fisheries in Wales can survive? 

Wrth gadw'r farchnad. Nid oes modd sicrhau dyfodol y diwydiant pysgod cregyn heb eu bod nhw'n gallu cael mynediad i'r farchnad yn yr un ffordd maen nhw nawr, achos nid yw marchnad y Deyrnas Unedig o bell yn ddigon mawr i gynnal y diwydiant ei hunan. So, y peth cyntaf yw sicrhau eu bod nhw'n gallu gwerthu yn yr un ffordd ag y maen nhw nawr. Heb hynny, nid oes modd, i fod yn onest, i'w helpu nhw i ffeindio marchnadoedd eraill o achos beth maen nhw'n ei gynhyrchu a bod marchnad y Deyrnas Unedig yn rhy fach. 

By keeping the market. You can't secure the future of the shellfish industry unless they can have access to the market in the way that they have now, because the UK market is nowhere near big enough to sustain the industry itself. So, the first thing is to ensure that they can sell in the same way that they can now. Without that, it's impossible, to be honest, to help them to find other markets because of what they produce and because the UK market is too small.  

Mae hynny'n golygu bod rhaid i ni gael cytundeb penodol ar hynny. Nid yw mor syml â jest—. Hyd yn oed pe byddem ni'n aros yn y farchnad sengl, oherwydd y cyd-destun pysgodfeydd, mae angen trafodaeth mwy manwl gyda, yn benodol, gwledydd fel Gwlad Belg a'r Iseldiroedd ynglŷn â hyn. 

That means that we need a specific agreement on that. It's not as simple as just—. Even if we were to remain within the single market, because of the context of fisheries, there needs to be a more detailed discussion, specifically with Belgium and the Netherlands on these issues.  

Oes, ac mae'n rhywbeth cymhleth. Ond hefyd, wrth gwrs, mae yna drafodaeth i'w chael ynglŷn â chwotâu a pha fath o gwota fydd gan Gymru a Lloegr a'r Alban, ac yn y blaen. Nawr, wrth gwrs, mae ardal forol yr Alban yn anferth—yn fwy, rwy'n credu, na Lloegr. Mae ardal forol Cymru yn weddol o fach. Nawr, pwy sy'n mynd i benderfynu pwy sy'n cael y quotas? All DEFRA ddim gwneud hynny, achos nhw yw adran pysgodfeydd Lloegr. Pa fath o ffydd fydd gyda ni eu bod nhw'n mynd i fod yn deg i bob rhan o'r Deyrnas Unedig? So, mae yna drafodaeth nawr sydd i fod i gymryd lle nid dim ond ynglŷn â beth sy'n mynd i ddigwydd gyda hawliau hanesyddol, cychod gwlad Belg, ac rwy'n credu'r Iseldiroedd hefyd mewn rhai rhannau o'r ardal forol, ond hefyd pwy sy'n cael beth ynglŷn â'r Deyrnas Unedig.

Yes, and it's very complex. But also, of course, there's a discussion to be had on quotas and what kind of quota Wales and England will have, and Scotland and so forth. Now, of course, the marine area of Scotland is huge—bigger than England, I think. The Wales marine area is quite small. Now, who's going to decide who gets the quotas? DEFRA can't do that, because they are the fisheries department of England. How much confidence will we have that they're going to be fair to every part of the UK? So, there is a discussion that should take place there not only in terms of historic rights, boats from Belgium, and also the Netherlands, I think, in some parts of the marine area, but also who gets what in terms of UK.

12:10

Rydych chi'n sôn—rydym ni'n mynd nôl ac nid ydw i eisiau ailadrodd y drafodaeth ynglŷn â fframweithiau, ond mae gyda ni 14 mis neu rywbeth, ar y lefel Brydeinig, i ddatrys hwn. Rydw i'n gwybod efallai fod yna gyfnod trosiannol mewn perthynas â'r Undeb Ewropeaidd, ond onid oes bosib ein bod ni angen i hynny gael ei benderfynu ar lefel Brydeinig erbyn gadael yr Undeb Ewropeaidd, nac oes?

I don't want to rehearse the discussion on frameworks, but we have around 14 months, at a UK level, to resolve this. I know that there may be a transition period in terms of the relationship with the European Union, but surely that needs to be decided at a UK level by the time we've left the European Union.

Wel, oes, mae fe, a'r ffordd i'w wneud e, yn fy marn i, yw sicrhau bod y quotas yn aros fel maen nhw ar hyn o bryd ac, wrth gwrs, defnyddio cyngor y Gweinidogion i benderfynu gyda'n gilydd pa fath o siâp ddylai fod ar y quotas yn y pen draw. Rwyf i wedi dweud hynny ynglŷn ag amaeth, rwy'n ei ddweud e ynglŷn â physgodfeydd, rwy'n ei ddweud e ynglŷn â rheoliadau cymorth gwladol—state aid. Y ffordd rwyddaf o wneud hyn yw i bob Llywodraeth ddweud, 'Gwnawn ni gadw pethau fel maen nhw am nawr ac wedyn, gyda'n gilydd, gweithio mas system newydd yn y pen draw.' Nid yw e'n ddigonol i un rhan o'r Deyrnas Unedig, sef Lloegr, ddweud, 'Ni fydd yn penderfynu popeth; y cwota byddwn ni'n ei roi ichi, ac fe gewch chi reoliadau ynglŷn â ffermio'—er enghraifft—'yr ŷm ni'n mynd i'w rhoi ichi.' Wel, nid fel yna mae'r Deyrnas Unedig rhagor. Nid dyna'r fath o wlad yw hi. So, mae hwn yn dod unwaith eto at greu strwythur lle mae pob Llywodraeth yn gallu cytuno gyda'i gilydd ar y ffordd ymlaen, ac nid yw e yna ar hyn o bryd.

Well, yes, and the way to do that is to ensure that the quotas stay as they are at present and to use the council of Ministers to decide together what kind of quotas we'll have in the end. I've said that about agriculture and fisheries, and about regulations on state aid. The easiest way to do this is for every Government to say, 'We'll keep things as they are for now, and then, together, work out a new system for the future.' It's not sufficient for one part of the UK, namely England, to say, 'We will be deciding everything; this'll be the quota that we will give you, and you will have regulations on farming'—for example—'that we give you.' Well, that's not the way the UK operates now. That's not the kind of country it is now. This comes back to creating a structure where every Government can agree together the way ahead, and it's not there at present.

Y cwestiwn olaf yw: ynglŷn â'r diwydiant cig oen yr ŷch chi wedi ei grybwyll, pa mor ofidus ydych chi, mewn gwirionedd, ynglŷn â'r effaith ar y diwydiant cig oen? Mae eich papur masnach chi eich hunain, y Llywodraeth, yn sôn am gwymp posib ym mhris cig oen o 38 y cant o dan senario'r WTO, a masnach rydd, a dweud y gwir, am y rhesymau yr ydych chi wedi eu gosod allan. Felly, pa mor hyderus ydych chi ein bod ni'n gallu cadw'r diwydiant cig oen yn y sefyllfa bresennol, fel rydych chi wedi ei awgrymu?

Just a final question: on the sheep meat industry, which you have mentioned, how concerned are you, in reality, about the impact on the sheep meat industry? Your own trade paper, your Government's trade paper, talks about a possible fall in the price of lamb by 38 per cent under the WTO scenario, and under the free trade scenario, because of the reasons that you've outlined. So, how confident are you that we can maintain the sheep meat industry in its current condition, as you have suggested?

Wel, os oes yna rwystrau mewn lle, bydd y diwydiant yn lleihau. Nid oes modd osgoi hynny, achos bydd y farchnad yn llai, achos y ffaith bod yna tariffs mewn lle neu rwystrau eraill, ac mae hynny'n meddwl y bydd y cynnyrch ei hun yn ddrutach, ac felly rŷm ni'n gwybod bod rheoliadau economaidd yn dweud felly y bydd yna lai o ofyn am y cynnyrch hwnnw. 

Rydym ni'n gwybod bydd y Deyrnas Unedig yn ffaelu cymryd lan y slac. Mae yna farchnadoedd eraill ar gael i'n cig oen—er enghraifft, rydym ni'n gwerthu cig oen i Dubai—ond nid yw hynny'n mynd i wneud lan am y golled yn y farchnad dros y blynyddoedd nesaf dros y tymor byr. So, mae pobl wastad yn gofyn i fi, 'Wel, beth am y Deyrnas Unedig?' Y broblem yw bod pobl y Deyrnas Unedig, cwsmeriaid y Deyrnas Unedig, yn tueddu hoffi cig oen Seland Newydd achos y ffaith eu bod nhw'n hoffi cael cig o anifeiliaid sydd yn fwy na'r anifeiliaid rydym ni'n eu cynhyrchu yng Nghymru. O achos hynny, mae yna limit wedi bod i faint o alw sydd am gig oen o Gymru yn y farchnad Brydeinig, ond rydym ni'n gwybod bod pobl Ffrainc, pobl de Ewrop, yn hoff iawn o'r corff yn gyfan gwbl—

Well, if there are barriers in place, the industry will contract. We can't avoid that, because the market will be smaller, because there are tariffs in place or other barriers, and that'll mean that the produce will be more expensive, and we know that economic rules dictate that there will be less demand for the produce.

We know that the UK won't be able to pick up that slack. There are other markets available for lamb—for example, we sell lamb to Dubai—but that's not going to make up for the loss of markets over the short term, the next few years. People always ask me, 'Well, what about the UK?' The problem is that people in the UK, customers in the UK, tend to like New Zealand lamb because they like having meat from animals larger than the ones we produce in Wales. Because of that, there has been a limit in terms of the demand that exists for Welsh lamb in the UK market, but we do know that the people of France and southern Europe are very fond of the entire carcass—

Achos mae e'n blasu'n well.

Because it tastes better.

Wrth gwrs ei fod e. Nid ydw i'n mynd i anghytuno â hynny.

Maen nhw'n moyn yr ŵyn ysgafn, maen nhw'n moyn yr holl gorff, ac, o achos hynny, dyna'r farchnad. Nid yw pobl Prydain yn moyn hynny. So, nid oes yna fodd i ddweud, 'Ocê, rydym ni'n mynd i golli, efallai, tipyn bach o'r farchnad yn ne Ewrop ac felly rŷm ni'n gallu ei wneud e lan yn y Deyrnas Unedig.' Nid fel hynny mae hyn yn gweithio. I fod yn blwmp ac yn blaen, os oes yna unrhyw rwystr ar allforio i mewn i'r farchnad Ewropeaidd, bydd yna lai o ffermwyr ŵyn. Nid oes modd osgoi hynny. Heb farchnad, wrth gwrs, mae hynny'n mynd i ddigwydd. Mae sefyllfa yn mynd i godi lle bydd cwymp yn y galw am gig oen ac wedyn cwymp yn incwm eithaf llawer o ffermwyr yng Nghymru.

Yes, of course it does. I'm not going to disagree with that.

They want the light lamb, they want the entire carcass, the entire body, and, because of that, there's a market there. But British consumers don't want that. So, it's not possible to say, 'Okay, we're going to lose some of the market in southern Europe but we can make it up in the UK.' It won't work like that. To speak plainly about this, if there are any barriers on export into the European market, there will be fewer lamb farmers. We can't avoid that. Without a market, of course, that's what's going to happen. A situation is going to arise where there will be a decrease in the demand for lamb and a decrease in the income of many farmers in Wales.

Ie. Diolch yn fawr, Cadeirydd. Mae nifer o'r cwestiynau roeddwn i'n mynd i'w gofyn eisoes wedi cael eu gofyn, ond mae yna un pwynt ar ôl. Jest i bwyso ar y Prif Weinidog ychydig, rydych chi'n dweud bod y Deyrnas Unedig yn newid. Nid ydw i'n gweld llawer o dystiolaeth o hynny, mae gen i ofn. Eto, yng nghyd-destun sefyllfa lle yr ydym ni’n trafod cytundebau masnachol yn y dyfodol a’r sefyllfa os nad oes yna gytundeb, no deal, o gofio’r cefndir yna, a hefyd o gofio, fel yr oedd Mick Antoniw yn ei ddweud, yr ydym ni’n colli pwerau ar hyn o bryd o dan y Bil ymadael ag Ewrop, a hefyd y cyd-destun rydym ni’n sôn amdani heddiw, yn bwysicach, o dan y Bil Masnach, yr ydym ni’n colli pwerau—hynny yw, nid yw Cymru yn rhan o’r drafodaeth—rwyf eto i gael fy narbwyllo bod y Deyrnas Unedig yn newid os ydym ni’n colli pwerau o dan y dau Fil yna. Yn y cyd-destun yna, lle nad oes cytundeb yn y dyfydol, beth ydych chi’n gallu ei wneud? Achos roeddem ni’n clywed y bore yma oddi wrth y busnesau eu bod nhw wedi derbyn cymorth ariannol eithaf sylweddol ar hyn o bryd oddi wrth Ewrop. Yn y dyfodol, nid yw hynny’n mynd i fod yna. Felly, yn y cyd-destun yna, lle nad oes cytundeb ac rydym ni i gyd yn cwympo yn ôl o dan orfod masnachu o dan reolau Sefydliad Masnach y Byd, yn y cyd-destun yna, pa fath o gefnogaeth y gall Llywodraeth Cymru ei rhoi i ffermwyr a chynhyrchwyr bwyd yng Nghymru i’w cefnogi nhw yn absenoldeb yr Undeb Ewropeaidd a’r arian maen nhw’n ei gael ar hyn o bryd, a hefyd yn absenoldeb unrhyw gytundeb â’r Undeb Ewropeaidd ar y ffordd ymlaen?

Yes. Thank you, Chair. A number of the questions I was going to ask have already been asked, but there is one point left. Just to press the First Minister a little, you say that the UK is changing. I don't see much evidence of that, unfortunately. But, in the context of the situation where we are discussing future trade agreements and a no-deal scenario, given that background, and also, as Mick Antoniw said, that we're losing powers under the EU withdrawal Bill, and also the context that we're talking about today, the Trade Bill, that we are losing powers there as well—that is, Wales isn't part of that negotiation—again, I've yet to be convinced that the UK is changing if we are losing powers under those two Bills. In that context, where there is no deal in the future, what can you do? Because we heard this morning from these businesses that they've received significant financial support from Europe. But, in the future, that's not going to be there. So, in that context, where there isn't a deal and we'll all be falling back to trading under WTO rules in that context, what kind of support can the Welsh Government give to farmers and food producers in Wales to support them in the absence of the EU and the money they receive now, and in the absence of any deal with the EU on the way ahead?

12:15

Wel, yn gyntaf, nid wyf i'n dweud bod y Deyrnas Unedig yn newid; beth rwy’n ei ddweud yw y dylai’r Deyrnas Unedig newid. Mae’n wir dweud nad oes yna ddigon o dystiolaeth eto bod hynny wedi digwydd, ac mae’n rhaid i hynny ddigwydd.

Y broblem yw, os bydd yna leihad yn y galw am gynnyrch o Gymru yn y farchnad, mae’n mynd i ddigwydd lle bydd llai o ffermwyr o achos y ffaith y bydd eisiau llai o gynnyrch gennym ni. Ac mae gan y diwydiant pysgod cregyn yn enwedig broblem fawr ynglŷn â hynny. Os ydyn nhw’n colli marchnadoedd, wel, nid oes dim byd y gallwn ni ei wneud i’w talu nhw i gynhyrchu cynnyrch nad oes neb yn moyn ei brynu. So, mae hynny yn broblem, ac rŷm ni’n dod yn ôl eto i’r mater o sicrhau bod y farchnad yn agored yn yr un ffordd ag y mae hi nawr.

Nawr, ynglŷn â thaliadau i ffermwyr, rwyf i wedi ymrwymo yn barod yn gyhoeddus y byddem ni’n cadw’r taliadau i fynd, ond mae’n rhaid sicrhau bod yr arian yna ar gael. Nid oes dim modd inni dalu’r taliadau os nad oes yna ddim arian yn dod o rywle. Nawr, y ffordd yr ŷm ni wedi dweud y dylai hynny cael ei ddatrys yw y dylai’r Deyrnas Unedig gymryd y swm sydd yno ar hyn o bryd sy’n cael ei dalu yn gyfan gwbl i’r Deyrnas Unedig a sicrhau bod yr arian hwnnw yn dod i bob gwlad yn y Deyrnas Unedig yn yr un ffordd ag y mae nawr—felly, byddai’r arian yna—rwy’n ddigon hapus wedi hynny i ymrwymo i sicrhau bod yr arian yn cael ei dalu i mewn i amaeth, mewn taliadau i ffermwyr. Ond, ar hyn o bryd, nid oes yna ddim ymrwymiad nag addewid wrth y Deyrnas Unedig y bydd yr un geiniog yno o gwbl yn y pen draw. Ac mae'n rhaid imi fod yn onest a dweud, ‘Wel, allwn ni ddim ei dalu fe’. Rŷm ni’n gwybod hynny; byddai fe’n ormodol.

Yr un peth arall rŷm ni wedi ymladd yn ei erbyn yw unrhyw gynllun lle byddai arian amaeth yn cael ei dalu drwy fformiwla Barnett. Os yw hynny’n digwydd byddem ni’n colli mas yn sylweddol—rhwng 75 y cant ac 80 y cant o’r arian sydd gyda ni ar hyn o bryd.

Hefyd, rwy'n credu ei bod yn synhwyrol cadw arian taliadau ffermwyr ar wahân i’r bloc yr ŷm ni’n ei gael, achos nid ydw i'n credu bod ffermwyr yn moyn bod yn rhan o’r ddadl ynghylch a ddylai’r arian fynd at ffermwyr neu ddoctoriaid, neu ysgolion. So, rwy’n credu mae o ddiddordeb iddyn nhw sicrhau nad yw hynny’n digwydd hefyd.

So, beth sydd ei eisiau arnom ni yw ymrwymiad gan Lywodraeth y Deyrnas Unedig y byddai’n arian yno, bydd yr arian yn cael ei ddosbarthu yn yr un ffordd ag y mae nawr—efallai bydd yna amser yn y pen draw lle bydd yna gytundeb rhwng y Llywodraethau fod y system yn newid, ond byddai hynny’n rhoi sicrwydd i ffermwyr.

Well, first of all, I'm not saying that the UK has changed; what I am saying is that it should change. It's true to say that there isn't sufficient evidence as of yet that that has happened, but it must happen.

The problem is, if there is a reduction in demand for produce from Wales in the market, then it will be the case that we will have fewer farmers, because there will be less demand for produce. And the shellfish industry particularly faces a major problem in that regard. If they lose their markets, well, there's nothing really that we can do to pay them to produce food that nobody wants to buy. And that comes back to the issue that we need to ensure that the market is open, as it is now.

Now, in terms of farm payments, I have publicly committed to maintaining those payments, but we have to ensure that the funding is available. We can't maintain those payments unless the money comes from somewhere. Now, the way that we've said that this should be resolved is that the UK should take the total amount currently paid to the UK and ensure that that funding is provided to all nations within the UK on an equal basis now, as it is being done now, and I would be happy to ensure that all of that funding would be paid to farmers. But, at the moment, there is no commitment, no pledge, from the UK that there'll be any money at all ultimately. And I have to be honest and say, 'Well, we can't pay it.' We know that; it would be excessive.

And the other thing that we've fought against is any proposal whereby agricultural funding would be allocated via the Barnett formula. If that were to happen, we would lose out significantly—around 75 per cent to 80 per cent of the funding that we currently receive.

Also, I think it would be sensible to keep farm payments separate from the block, because I don't think that farmers want to be part of a debate as to whether we should fund farmers or doctors, or schools. So, it's in their interests to ensure that that doesn't happen either.

So, what we want is a commitment from the UK Government that the funding will be available, that the funding will be distributed as it is now—there may be a time, ultimately, when there will be an intergovernmental agreement where the system changes, but that will provide assurances for farmers.

Ocê. Jest un cwestiwn i ddilyn hynny. Ond yn y sefyllfa—os ydym ni’n cynllunio ymlaen i sefyllfa lle nad oes cytundeb, a ydych chi’n cael y trafodaethau hyn nawr â’r Deyrnas Unedig i sicrhau rhyw fath o lwybr ymlaen?

Okay. Just one follow-up question. In this situation—if we are planning ahead to a situation in which there is no deal, are you having these discussions now with the UK to ensure some kind of path ahead?

Wel, beth sy’n anodd yw nid yw’n glir beth yn gymwys yw cynllun y Deyrnas Unedig. Mae’r Gweinidogion yn dweud gwahanol bethau drwy’r amser. So, ocê, maen nhw wedi dweud eu bod nhw am adael y farchnad sengl a’r undeb tollau—mae hynny’n glir; nid ydw i'n cytuno â hynny, ond mae’n glir, o leiaf. Ond beth nad oes neb yn ei wybod ar hyn o bryd yw beth, felly, yw’r cynllun. Beth fydd natur y berthynas rhwng y Deyrnas Unedig a’r Undeb Ewropeaidd? Nid ydw i'n deall, er enghraifft, pam mae eisiau tynnu mas o Euratom neu’r Asiantaeth Meddyginiaethau Ewropeaidd—pam? Nid yw hynny’n gwneud synnwyr o gwbl. So, nid ydw i'n gwybod pa mor bell mae'r Deyrnas Unedig eisiau mynd ynglŷn â thynnu mas nid dim ond o'r Undeb Ewropeaidd, ond sefydliadau Ewropeaidd eraill. Nid yw hynny'n glir. Beth yr ŷm ni yn gwybod yw, os ydym ni'n symud i system lle bydd yna tariffs, os ydyn nhw'n tariffs ariannol neu beidio, nid yw hynny o les i Gymru, nag, yn fy marn i, i wledydd eraill y Deyrnas Unedig chwaith.

Well, what's difficult is that it's not clear exactly what the UK's plans are. Different Ministers are saying different things all the time. They've said that they want to leave the single market and the customs union—that's clear; I don't agree with it, but at least it's clear. But what nobody knows at the moment is what the plan is. What will the nature of the relationship between the UK and the EU be? I don't understand, for example, why we need to withdraw from Euratom or the European Medicnes Agency—why? It makes no sense whatsoever. So, I don't know how far the UK wants to go in withdrawing not just from the European Union, but also from other European organisations and institutions. That's not clear, and what we do know is, if we move to a system where there are tariffs, be they financial tariffs or otherwise, then that's of no benefit to Wales, or to other nations within the UK, I would argue.

12:20

Okay, thank you. I'm just looking at the time, and so I'm going to move—. This is a subject no doubt we will return to, I'm sure, but can we move on to the food industry standards? John, do you want to do some—?

Diolch yn fawr, Cadeirydd.

Thank you very much, Chair.

In terms of trade deal negotiations, First Minister, and how they will affect food standards in the UK and Wales, what would you say are the main implications?

It's essential that our standards are not seen as being inferior to those of Europe, which would cause a problem for us exporting into the European single market. I think that is absolutely—. Why would we want them to be, anyway? Food standards have increased hugely over the past 30 or 40 years. We can say, I think genuinely, that we have some of the highest standards in the world. We would not want to reduce those standards, but alignment with the standards that will be required in the market that's most important to us is essential.

If those standards were to change at a UK level in a way that Welsh Government thought concerning, would you consider having a Welsh system of enforcing appropriately high food level standards, perhaps similar to the way that it operates in Scotland?

It's already devolved. There's no difference between ourselves and Scotland except for one thing: they have their own agency—

—which they set up. Now, we took the decision not to do that, because it carries with it a significant cost for no apparent benefit that we can see. So, the Food Standards Agency advises us on food safety and standards but we actually make the regulations and the laws. So, we have as free a hand as Scotland in that regard.

Okay. So, you wouldn't see any advantage in having an agency Wales-based as Scotland has, even if things changed in terms of the UK standards and approach post Brexit.

Part of the reason why the Scots set up their own agency was because of a dispute over the appointment of the chair of that agency. They decided to set up their own. That issue was resolved. I can't see what advantage our own agency would give us, especially given the cost of setting it up. We're talking here about an advisory body, and that body—we have the devolved powers we need in order to create the food standards that we would want.

Can we turn to the promotion of Welsh produce and start with the Welsh branding? Then we've got a few more others to come under this topic. So, Simon.

Diolch, Cadeirydd. Wrth gwrs, ynghlwm wrth safon bwyd o Gymru yw ansawdd y bwyd a lles anifeiliaid, er enghraifft, yn berthynas â chynhyrchion cig. Mae gan fwyd Cymru enw da, ac wrth i ni adael yr Undeb Ewropeaidd mae yna gwestiwn yn codi ynglŷn â sut mae bwyd o Gymru tu fewn i'r amlen Brydeinig, os liciwch chi, yn mynd i gael ei allforio. Felly, cwestiwn mewn ddwy ran: yn gyntaf oll, sut ydych chi'n mynd i ddiogelu bod bwyd o Gymru sy'n cael ei werthu tu fewn i'r Deyrnas Gyfunol ar hyn o bryd yn dal â'r brand cryf Cymreig? Achos mae'r ymweliad a gawsom ni'r bore yma i gynhyrchwyr bwyd lleol yn fan hyn wedi—yn sicr maen nhw o'r farn bod y brand Cymreig yn bwerus. Ond, yn ail, sut ydych chi'n mynd i sicrhau hefyd bod allforion tu hwnt i'r Deyrnas Gyfunol, sydd hefyd, am wn i, yn mynd i gario 'Yn dod o Gymru', hefyd yn dwyn y brand yna? A ydym ni'n mynd i gael ein boddi gan ryw frandio arall gan Lywodraeth San Steffan, neu ydych chi'n hyderus ein bod ni'n gallu cadw'r brand Cymreig?

Thank you, Chair. Related to the quality of Welsh food is the issue of animal welfare in terms of meat products. Wales has a very good reputation for its food, and as we exit the European Union there are questions about how Welsh foods within the UK envelope are going to be exported, if you like. So, I have a question in two parts: first, how are you going to ensure that food from Wales sold within the UK at the moment is still strongly branded as being Welsh? Because the visit this morning to local food producers in this area—certainly they are of the view that the Welsh brand is a powerful one. But, secondly, how are you also going to ensure that exports outwith the UK, which I suppose will also carry 'from Wales', also carry that Welsh brand? Are we going to be consumed by some other branding imposed from Westminster, or are you confident that we can retain the Welsh brand?

Hollol hyderus. Fyddwn i byth yn moyn gweld cig oen o Gymru yn cael ei labeli fel 'cig oen Prydeinig'. Byddai'n tynnu'r pris lawr, achos y ffaith bod gennym ni gynnyrch sydd ag enw da dros ben.

Mae fe'n bosibl i ni gadw'r system fel y mae e, ond beth fydd yn hollbwysig yw bod Ewrop yn gwarchod unrhyw system y byddai ar gael yn y Deyrnas Unedig, a bod y Deyrnas Unedig yn cydnabod, wrth gwrs, y system Ewropeaidd. Heb hynny, nid oes pwynt, o achos y ffaith na fyddai modd sicrhau ein bod ni'n gallu gwarchod y cynnyrch yn yr un ffordd ag yr ŷm ni nawr.

Un o'r pethau sydd yn codi, wrth gwrs, yw, pe byddai safonau gwahanol ynglŷn â bwyd mewn lle yng ngwahanol wledydd y Deyrnas Unedig a bod un o'r gwledydd hynny'n cael ei hystyried fel gwlad sydd â safonau sydd yn llai na beth fyddai'r farchnad Ewropeaidd eisiau eu gweld, byddai'n rhaid sicrhau bod yna ffordd i wahaniaethu rhwng cynnyrch o'r wlad honno a'r gwledydd eraill. Nawr, mae'n bosibl gwneud hynny. Fe welais hyn yn ymarferol fy hun.

Aethom mas i Dubai i edrych ar botensial cael cig oen o Gymru i mewn i Dubai. Ar y pryd pan es i mas yno, roedd yna waharddiad ar gig oen o Ewrop o achos clwy'r traed a'r genau. Beth oeddwn i'n moyn sicrhau, wrth gwrs, oedd bod cig oen o Gymru yn gallu dod i mewn. Gall bawb arall edrych ar ôl eu hunain, ond cig oen o Gymru roeddwn i'n moyn ei sicrhau. Iddyn nhw, beth oedd yn hollbwysig oedd ein bod ni'n gallu dangos iddyn nhw bod y cig oen yr oeddem yn moyn ei allforio yn wir yn dod o Gymru. Dyna lle'r oedd statws PGI yn hollbwysig. Roeddwn yn gallu gwneud hynny. Roeddwn yn gallu dweud, 'Mae'r cig hwn yn dod o Gymru, wedi ei eni a'i fagu yng Nghymru.' Felly, dyna lle mae'r traceability. Dyna sut rydym yn gallu dangos bod y system yn system gadarn, a bod dim byd yn mynd i ddod mewn nad yw'n dod o Gymru. O achos hynny, aethom i mewn i Dubai.

Nawr, beth sy'n codi o hynny, wrth gwrs, yw y byddai'n rhaid sicrhau bod unrhyw system sy'n dod i mewn yn lle PFN, fel y mae yn awr, yn cael ei hystyried yn yr un ffordd ac yr un mor gadarn â'r system bresennol Ewropeaidd.    

I'm very confident. I wouldn't want to see Welsh lamb labelled as 'British lamb'. It would pull the price down, because we have produce that has a great reputation.

It is possible for us to retain the current system, but what's vital is that Europe protects any system that would be used by the UK, and that the UK does recognise the European system. Without that, there's no point, because it wouldn't be possible to ensure that we could protect produce in the same way that we do now.

One of the things that does arise is, if there were different standards in terms of food in place in different parts of the UK, and that one of those countries was considered as having lower standards than what the European market wanted to see, then we would have to ensure that it was possible to differentiate between products from that country and the other countries. Now, it is possible to do that. I saw this in practice myself.

We went out to Dubai to look at the potential of having Welsh lamb go into Dubai. At the time when I went there, there was a ban on lamb from Europe because of foot and mouth disease. What I wanted to ensure was that Welsh lamb could enter there. Everyone else can look after themselves; I wanted to protect Welsh lamb. What was important to them was that we could show to them that the lamb that we wanted to export genuinely came from Wales. That's where PGI status was vital. I could do that. I could say, 'This lamb comes from Wales. It was born and bred in Wales.' Therefore, that's where the traceability is. That's how we can show that the system is robust, and that nothing is going to come in that doesn't come from Wales. Because of that, we gained entry to Dubai.

Now, what arises from that is that we'd have to ensure that any system that comes in instead of PFN, as it is now, would be considered in the same way and in the same robust way as the current European system.

12:25

Rwy'n cytuno â hynny. Mae hefyd yn broblem, rwy'n meddwl, fod cymaint o gig o Gymru yn cael ei ladd a'i brosesu dros y ffin yn Lloegr. Mae hynny'n rhywbeth rwy'n awgrymu y bydd yn rhaid i Lywodraeth Cymru edrych arno wrth ddelio â hyn. Ond, efallai, dim i fynd ar y trywydd hwnnw yn awr, a jest i ganolbwyntio ar rai o'r prif bethau rydych chi'n gallu eu gwneud. Un o'r pethau sydd wedi bod yn cyniwair dros y flwyddyn ddiwethaf, wrth inni wynebu her Brexit, yw, ie, mae yna enw da gan fwyd o Gymru, ond a ydym ni yn dathlu ac yn marchnata hwn ddigon? Fe gollwyd y gwobrau Gwir Flas pedair neu bum mlynedd yn ôl. Mae llawer o gynhyrchwyr bwyd bellach yn teimlo bod angen atgyfodi rhyw fath o system o wobrwyo cynnyrch gorau, fel rhan o ddweud y stori am ba mor dda a pha mor uchel ei safon y mae bwyd o Gymru. A oes gennych chi ddiddordeb mewn gweld a ydym yn gallu atgyfodi rhywbeth unigryw Cymreig yn fanna? Rydych chi newydd ddweud ei bod yn bwysig cadw'r brand Cymreig, ond wrth gwrs, ar hyn o bryd, mae'n cael ei golli braidd yn y gwobrau Prydeinig.    

I agree with that. It's also a problem, I think, that so much meat from Wales is slaughtered and processed across the border in England. I think that is something that I would suggest the Welsh Government needs to look at. But, I don't particularly want to pursue that now. I want to focus on the main things that you can do. One of the things that has been developing over the past year, in facing the challenges of Brexit, is that, yes, Welsh food has a good reputation, but are we celebrating this and marketing it sufficiently? We lost the True Taste, Gwir Flas, awards four or five years ago. Many food producers now feel that we need some sort of awards system as part of the job of telling the story of how good Welsh food is and how high the standards are. Would you be interested to see whether we could actually have something uniquely Welsh there? You've just said that it's important to retain the Welsh brand, but it is being slightly lost in the UK-wide awards for food.

Mae rhai yn gofyn am gael system wobrau, ond byddwn i'n dadlau na fyddai'r rhan fwyaf o gynhyrchwyr eisiau gweld hynny. Fe newidiodd y system, wrth gwrs, i'r system sydd gennym ni yn awr, sef Blas Gwych, neu Great Taste fel y mae yn y Saesneg. Mae hynny'n cael ei gydnabod drwy'r diwydiant bwyd a diod, ac mae'n rhywbeth y mae pawb yn y diwydiant yn ei ddeall. So, ni fyddwn yn moyn gweld y system yn newid o achos y ffaith, i fi, mae system dda gyda ni ar hyn o bryd, lle mae modd o adnabod cynnyrch o Gymru yn gryf. Mae yna ddealltwriaeth gref o'r system honno drwy'r sector i gyd a thrwy'r diwydiant i gyd. Nid wyf yn gweld bod yr achos wedi cael ei wneud i'w newid yn awr.  

Well, some are asking for an awards system, but I would argue that the majority of producers don't want to see that. The system changed, of course, to the system that we have now, namely the Great Taste awards, which is recognised throughout the food and drink industry, and it's something that everyone in the industry does understand. So, I wouldn't want to see that system changing because, to me, we've got a good system at present, where it's possible to recognise Welsh produce strongly, and there is a strong understanding of that system throughout the sector and throughout the industry. I don't see that the case has been made to change it now.

Yes. This is almost following on from what I asked earlier. Aarhus in Denmark is roughly the same size as the Swansea bay city region. The big difference is that its GVA is 50 per cent higher. One of the strengths it has got is that, if you go into almost any supermarket, you will find brands like Arla, Castello and Lurpak, which are based in that region. We don't have the same in Wales. What can we do to ensure that we start getting that value and getting that name recognition, whether it's an overarching Welsh cheese/Caerphilly or something different, but some idea of actually promoting the Welsh bit, so that people buying milk, butter and cheese actually know that they are getting something from Wales?

Well, Rachel's is an example in the dairy industry of where a brand has endured. Perhaps it is not always seen as a Welsh brand; nevertheless, it is one of our market leaders.The situation, to my mind, has improved enormously in the past 15 years in terms of labelling. The PGI labelling at one time was fairly lax. There was, for example, a difference between Scotch beef and Scottish beef. Basically—I exaggerate somewhat but not too much—to get your animals labelled and being sold as Scotch beef, they basically had to be in Scotland for a certain number of weeks and qualify on residence. That's why the Scottish beef label was invented, to make sure that 'born, reared and raised' were the criteria on which the status was actually based. So, that was the issue then.

I've certainly noticed over the past few years that many more products are labelled in Welsh—if you go into any supermarket in Wales, they're clearly labelled and successfully so. Is that the case in supermarkets elsewhere? I believe that it is. I was in Dubai in July and there sat, clearly labelled, Welsh lamb, which I was delighted to see. So, I think we are seeing more and more products that are being labelled as Welsh. What we don't yet have is a number of larger food producers. Many of them are small.

The cheese industry was always an example some years ago—people did it almost as a hobby. Most of the people moved into Wales—not all—and they did it as a hobby and they created the Welsh cheese industry. There were a few people locally who did the same thing. There are now cheese producers who are looking to expand beyond being a craft producer. They tend to be younger people—a lot of them. They're ambitious in terms of their product and that's what we're now seeing. A lot of those microbusinesses that were content to remain microbusinesses more or less are now looking to expand. They're not major businesses yet, but I detect more of a desire now amongst the newer businesses to do that.

12:30

That was the point—it's almost going back to what I asked at the very beginning. There's a lot of these—we talked about breweries first, but I'm talking about the dairy industry—that really need that push into becoming medium and large businesses. What support can Welsh Government give to give them that push to become those medium and then large industries?

Two things that I mentioned earlier: first of all, there is financial support for capital investment, but market support as well—looking at new markets around the world, particularly helping them to understand what's required in that market, and helping them to understand what kind of licence that's needed and what kind of certification, and then helping them to export.

I don't know whether I'd want to call it an 'export' or not, but our biggest market is England and there have been difficulties that they've got a supermarket deal to provide good 'x' throughout the whole of Wales, but actually getting it—. And it could be manufactured in Flintshire, as one example was, but actually getting it over into Cheshire was very difficult. England is by far the biggest market outside of Wales for our goods and actually getting these in there. What more can be done to get the supermarkets to have—? In Wales, you have these blocks of Welsh produce, but they don't necessarily have them in Bristol and Cheshire.

No. Some of it's to do with the way that supermarkets operate. If we look at Tesco, for example, not that long ago—1999 and 2000—Tesco had a philosophy that everything in every shop was the same. They didn’t do regional products. Now they've gone very much the other way, and you can see a picture of the farm that produced your potatoes in Tesco if you go there. But there is a danger, of course, that we end up simply trying to service the Welsh market on that basis and that's what we don't want.

How do you resolve that? Well, there's constant dialogue with the supermarkets. Some of it, I have to say, is helping producers to be able to supply those big markets as well, because for a lot of suppliers, a very big market is difficult to supply. Working with those supermarkets, and I know that Sainsbury's did this at one time, they would work with local producers and say, 'Look, this is what we require. Can you meet that challenge, and we'll help you to meet that challenge?' It's not simply a matter of saying to a producer, 'Right, can you supply all these supermarkets across London?', if they say, 'We can't do it.' So, helping them to be able to fulfil their obligations in terms of supply is important as well.

But, it has worked in the drinks market, with breweries, and I'm thinking of things like Penderyn, where you can get that across England; it's the food market that hasn't really succeeded. I'm not going to push you any further, but I'll just ask you and your officials to look at it.

We will, and we'll write to the committee on that. Penderyn is an interesting example. The market for whisky is very vibrant around the world. Penderyn's challenge is producing enough. There's more of a market for Penderyn. I know that there are plans now for Penderyn in terms of moving—

—and it's great to see that and, of course, we have another distillery that's near Bangor, which, if I remember rightly, will be able to sell whisky from the end of the decade, once it's mature. So, the market's very, very good, and the challenge in that market is actually fulfilling the supply and demand that already exists there. It's good to see Penderyn, which started off, so myth has it, as a conversation in a pub in Hirwaun, almost as a hobby, into now what's becoming one of our fastest-growing exports.

Following on very much from the comments of Simon and Mike, and, quite rightly, we talked about the importance of the European market—450 million people for Welsh products—but the truth of the matter is that right on our doorstep we have a ready-made market of 50 million people. If we could create the demand in that market—I'm talking about England now, of course—then they could pretty well absorb all the products that the Welsh food and drinks industry can produce. A part of that would obviously be creating the fact that Welsh produce is a quality brand. You've just mentioned Penderyn. Penderyn is very, very popular because it started off and it's made itself a premium brand. We've got in Wales a marketing man's dream logo with the Welsh flag, there's no doubt about that—that on every product that we produce and the provenance of where that product comes from—but it's a matter of building that quality brand to make sure that products coming from Wales—any products coming from Wales—are of top quality. Where are the Welsh Government with regard to that, and promoting it purely and even only being willing to support the producers who are producing quality products, rather than just a bland helping of others? Where do you stand on that? 

12:35

We are nothing if we are not quality producers; we can't be anything else. We can't be commodity producers. We couldn't possibly compete with New Zealand on price or in terms of the sheer production capacity that they have. Land in New Zealand is much cheaper. The climate is much better. Everything grows bigger there. There's no way of trying to compete with the New Zealanders when it comes to lamb, so we have to say that what we produce is better. We argue that it's of higher quality. It's a different type of lamb: hill lamb is different to the lowland lambs that the New Zealanders tend to focus on, so we've always focused on quality. The reason why we do that is because if we can sell our produce then at a higher price, it puts more money back into farmers' pockets. That's what it's about at the end of the day—making sure that the industry is sustainable. 

But it's not quite as easy—. For some products, there's an untapped market in England—that much is true—but for others, it just isn't there. And I come back to the point I made about Welsh light lambs earlier on. Many of our hill lambs come in at 8 to 12 kg deadweight. There's very little market for them in the UK. Why? Because they're sold as carcasses, and you don't see sheep carcasses hanging in the supermarket, but in southern Europe people will pay for them. The demand for lamb in the UK is for, if I can put it this way, the wrong kind of lamb as far as Welsh hill lamb is concerned, and you can't easily substitute it. So, the export market will always be essential to the health of the Welsh food and drink industry.  

But we've got 54 million people. It's a matter of marketing it in the right way. You can't tell me that we can't change that whole thought of those 50 million people towards Welsh lamb. I mean, I'm absolutely—

We do, but in the UK it's a small market. The market for lamb is small, much smaller than it is in other countries, and the market for Welsh lamb as part of that is also small. Of course there's always scope to increase the market share that we have, but the idea we could do that over a very short space of time and that it would replace the European market is impossible. It's an entirely different type of lamb that we sell into the European market, and there is no demand for whole lamb carcasses in the UK in the same way as there is in France, in Spain, in Greece and in Italy. 

Just following on very quickly from something Simon raised, and that is slaughterhouses. We export most of our carcasses of cattle and sheep into England, but surely if we want to be able to prove the provenance of our products, particularly lamb and beef, wouldn't it be a very good idea to set up a co-operative slaughterhouse where they took all the animals produced in Wales and slaughtered them in one particular place, so that we'd know the provenance of it? 

The nationalisation of the meat industry. That's what that would mean. 

The problem is, David, you'd be effectively saying to farmers, 'You can only sell legally into this one abattoir at the prices that you're given.' That's the problem. 

12:40

Yes, but it's only one. There'd be no competition. It's basically the nationalisation of post-farm-gate meat production. I don't think we should be hung up on this. It's inevitable that we will see meat processed outside Wales. That's particularly true of beef. It is a nuisance in the sense that it creates a problem with creating the levy—the red meat levy—but what's hugely important is that we're able to show that the animals are born, reared and raised in Wales. In doing that, that's enough for us to be able to honestly label lamb as Welsh and then protect the status that that lamb has. I keep coming back to lamb as a market leader for us. What then is important is that there is recognition of what will be the UK's protected name status structure in the European market and vice versa. That's absolutely crucial. If we don't get that mutual recognition, then PFN status within the UK would only work within the UK, and we need to make sure that we've got that status in as many markets around the world as we can get.

Okay. Shall we move on to local and community-produced food? Russell you've got one, then Jayne, and then—

Yes, thank you. One of the barriers to food and drink producers growing their businesses is the lack of industrial units and start-up units to move into. We heard this morning about the cheese industry, the cottage industry—how they started as a hobby. But we've got the Hilltop Honey example of starting in a garage. They went to a unit, a start-up unit, then they expanded into the premises they've got today. They talked about the difficulties in that journey, but they are one of the luckier businesses, I'd say. A business today that starts as a hobby simply cannot find a unit to go into. Can I ask you: do you recognise that as an issue, and how can the Welsh Government support that? I say that, knowing that there are signs across the road that say, 'units for rent here', but the units that are for rent tend to be not fit for purpose, as the ceilings are too low. Do you recognise this as an issue, and how can the Welsh Government support in this area?

Yes, I have heard it from others in other sectors of manufacturing as well. Building factory units got a bad name in the early 1990s, when a lot of them were built and they were left empty. That doesn't mean that it is necessarily a bad idea, and I think that it is something that we can consider in the future, but the difficulty is creating units that are appropriate for the particular business. To me, the way that you try to resolve that is that you look potentially in the future to creating a food park—a group of units that are suitable for as many food producers as possible. We have our food parks in Horeb in Ceredigion, and in Menai Bridge—I'm not sure that the one in Cardiff is still there. They tend to be hubs to help businesses to promote new products and to test new products.

One of things that I think it is worth us considering in the future is how we can create sector parks where it's possible for a particular type of business to look there and get the kind of premises that they need. There's always a difficulty creating lots of buildings where it's one size fits all. We know that that can create problems—you've mentioned one there already in terms of low ceilings, and of course there will be issues if you're in the tech industry; there are issues with the electricity supply particularly and things like air conditioning. In the food industry, obviously there are the hygiene requirements of that industry. 

I have heard it before. It is something that we are thinking about further, but that would mean clustering as well. You would have to say, 'Well, that particular cluster there is for a particular type of industry and then another one will be over there' because then, of course, you could create those external economies of scale that you would need in order to make the industry more efficient.

And it's not a problem unique to the Severn valley. I thought it was, but it's not. We heard in the economy committee in the last few weeks from enterprise zones board chairs that these are businesses that are in the food and drink and other sectors that are struggling to simply find units to grow their businesses.

Of course, the other issue is the cost of building as well. Once that building has developed, it immediately loses its value, up to about 15 per cent. As a result, it's difficult for businesses to be able to finance those in the first place. So, is there anything in terms of business regulation that can be reduced in order to narrow that gap?

Yes, well, I assume that they can write that loss off. Obviously, that's something that businesses can do. We have a generous small business rate relief scheme, which I think matches anywhere in the rest of the UK in terms of its reach, and of course the support that is available for Welsh businesses generally. One of the things I have heard from those in the Welsh food and drink industry is they value the support that they get in Wales and compare it favourably to support that's available elsewhere.

12:45

Just on that, actually, I spoke to a business in my own constituency where they were offered many incentives to go just across the border into Bristol—and I think similar issues could happen here—but they stayed in Newport because it was their home and they didn't want to leave. I'm just concerned that, if people didn't feel that tug and pull to home, we could lose some of these businesses, particularly when they are looking to expand to go into England.

There's been no evidence of that that I've seen, and I would argue it's because of the packages that we've put in place. Of course, it's a competitive environment, and inducements will be offered. These are the things that we do ourselves. Packages are put together to attract businesses into Wales. Everybody does it. It's a competitive environment. But what we offer that, for example, is not available for a business in Bristol is, if you're an SME in Wales, you get noticed. People know you're there. You're drawn to the attention of Government, you'll be known to Government Ministers, and it's just not possible in England because of its size. We hear this from businesses time and time again: 'Well, we're in Wales because we are so much closer to decision makers', in a way that just isn't possible in bigger countries. I think we need to use that—and we do use that—to our advantage.

Finally, one of the issues that was raised with me, actually at Tiny Rebel brewery was around the issue of skills. They've got people who work for them, but they're quite keen to upskill their workforce and develop them in the future. What more can Welsh Government do to ensure that we've got the right skills in the food and drink industry that are fit for now and the future?

Well, of course we already fund apprenticeships. We made a commitment to that two years ago in our manifesto: 100,000 all-age apprenticeships. What we always look to do is to work with businesses to identify what types of apprenticeships they need, and then see what we can do to help them to provide those apprenticeships. We do that in a number of ways, in order for us to understand that apprenticeships are being created in those sectors.

Okay, thank you. Shall we move to tourism and hospitality? John, you wanted to start that one.

I think, First Minister, many of us will be familiar with the attractions of quality local food and drink produce when deciding where to holiday and where to visit. Many European countries are very good at providing that local food and drink experience, and Scotland I think have got considerable strengths as well. So, I think it would be very beneficial to the Welsh tourism offer if there was more high-quality local food and drink produce associated with different parts of Wales, and coming to Wales. So, what Welsh Government support is there to try and ensure that the tourism offer in Wales and tourism operators are able to provide that quality local food and drink?

Well, we launched our food tourism action plan in April 2015. That plan is used by Visit Wales to help to develop the food tourism action plan, which runs, as I mentioned earlier on, till 2020. There was a fair bit of consultation with food and drink tourism industry representatives to agree the plan. What does it do? Well, it identifies the priorities and informs the development of future food tourism projects and proposals. It raises awareness of the quality of Wales's food and drink offer, and it makes information available about Welsh food and drink to Welsh businesses and visitors to Wales.

Obviously, the first objective is to improve visitor knowledge of Wales's food and drink, to encourage our own hospitality industry to use more local produce and to increase the prevalence of Welsh food and drink on menus, and that's grown substantially over the last few years—you see a lot more of that now than was the case say 20 years ago—and also, of course, to identify the skills gaps: where do we need to provide the skills training that the hospitality industry and the food and drink industry actually both need?

Do you think there might be any major advantage in perhaps having quality local Welsh food and drink as one of the themes for tourism for a particular year in Wales? So, you know, we've had various themes. Might that be one of them? Would that give a focus on that quality of food and drink that might enable a significant step forward?

12:50

That is an interesting idea, and I think we can genuinely say now that we can do it. We have such a breadth of food producers, such a breadth of products, and, importantly, consistency. One of the things that was lacking in some sectors 15 years ago was consistency. If you had something very good, then it wouldn't be so good the second time around. We do get that now, and that is something I think we need to consider: a year of food.

I think we are all guilty of a year of food when we look around the table, but there you go, we might have to call it something else. Mike.

Of course, there is sub-regional food. I come from a cockles and laverbread area. I think that if we are going to market it, perhaps it's not just Welsh lamb, but we actually need to market the sub-regional food available.

Yes. I think as far as Swansea is concerned, the availability of cockles and laverbread is fairly good, in Swansea market particularly, and there's a fair spread of availability around south Wales. You can buy cockles and laverbread in Bridgend, but only, as far as I'm aware in one place—no, two places—in Bridgend market. So, it's available. Are cockles and laverbread two products that we could spread around Wales? That's possible. It's traditionally associated, of course, with Swansea and the Gower coast of Swansea bay. One of the things I know that Swansea has been keen to do—. I was looking last week, actually, at Swansea's website—the Swansea shopping website—at how Swansea has been categorised into different quarters, and the way the market is being promoted. There are opportunities to promote two products there as part of the promotion of Swansea as well, which is being done.

I was thinking specifically of the 'taste of Wales' and if we are going to have that sort of thing in tourism. So, if you come to Swansea, you can go to these places and you can eat cockles and laverbread, which—if you are coming from England or America or Switzerland—you have probably never heard of, never mind eaten.

Yes. Cockles are an easier sell, I have found, but people's palates can be educated. But, it's different. Actually, laverbread is not that wildly different to some seaweeds that are eaten elsewhere in the world. It's eaten in Ireland, but in a dry form, called dulse, which is quite different. But, I know that in Japan, for example, there is a market as well for a similar type of product. So, it's unusual, but it's not so unusual that people might think that it's too strange to eat, and I do think that we have products there that can be market leaders for Wales.

I'm always frightened when I say this, but we've exhausted most of the areas that we wanted to cover. Does anybody feel that there was a question that they wanted to ask that we didn't get to, without going back and opening a huge debate? We have about five minutes on this section now, but I'm happy to move on if people feel that we have got sufficient—to be able to write our report. Okay, fine. Thank you. 

3. Sesiwn i Graffu ar Waith y Gweinidog: Materion Amserol
3. Ministerial Scrutiny Session: Topical Matters

We'll move on, then, to the next item on the agenda, which is questions on topical issues. I have only had one topical question submitted, and that is from Dai. 

Diolch yn fawr, Gadeirydd. Yr hyn yr oeddwn i eisiau codi efo chi, Brif Weinidog, oedd cyflwr yr M4 o gwmpas Abertawe. Rwy'n gwybod bod cryn dipyn o sôn am yr M4 wedi bod dros y misoedd diwethaf, ond roeddwn i'n moyn canolbwyntio ar y rhan honno sy'n amgylchynu Abertawe. Roedd yna bum damwain wythnos diwethaf—rhai sylweddol. Wrth gwrs, bob tro mae yna ddamwain, mae tagfeydd traffig yn dilyn, ac wrth gwrs, mae hynny'n achosi oedi am rai oriau. Mae yna hefyd broblemau wrth y ffyrdd ymadael, yn enwedig wrth gylchfan Ynysforgan—problemau efo wyneb y ffordd. Er ei bod wedi cael wyneb newydd dim ond ychydig flynyddoedd yn ôl, mae'n wastad yn dadfeilio, ac mae'r dŵr yn tueddu i gasglu, yn enwedig pan mae'n bwrw glaw yn drwm, sy'n digwydd yn weddol aml yn ddiweddar. Felly, mae'r holl bethau yna yn dod at ei gilydd ac yn achosi ambell i wrthdrawiad fel hyn. Mi wnaeth yr Ysgrifennydd Cabinet addo adolygiad o'r M4—yr ardal yma ohoni—yn ôl yn 2016. Rydw i wedi gofyn gwpwl o weithiau, o dan ddatganiad busnes yn y Cynulliad, ond eto, nid ydym wedi cael cadarnhad, a fyddai hi'n bosib cael rhyw amser i'r adolygiad yma i ddigwydd. Achos mae'r damweiniau fel petaen nhw'n digwydd yn gynyddol, felly, ac mae yna gryn bryder yn lleol, ac rydw i'n derbyn nifer o e-byst. Rwy'n gwybod bod Aelodau eraill hefyd yn derbyn yr un galwadau—beth yn union ydym ni'n ei wneud ynglŷn â chyflwr ffordd yr M4 o gwmpas Abertawe?

Thank you very much, Chair. What I wanted to raise with you, First Minister, is the state of the M4 around Swansea. I know there's been a great deal of talk about the M4 in the past few months, but I want to focus on that section surrounding Swansea. There were five significant accidents last week, and every time there's an accident, there are traffic jams that follow, and that causes delays, often for some hours. There are also problems in terms of the junctions, especially the Ynysforgan roundabout, with the surface of the road. Although it was resurfaced just a few years ago, it seems to be damaged again, and water seems to be pooling there when there is heavy rain, and that's happened often recently. All of these things come together and cause these accidents. The Cabinet Secretary did promise a review of this section of the M4 back in 2016. I've asked, on a few occasions, under the business statement in the Assembly, but we've had no confirmation as to whether we could have a timetable for this review. Because these accidents seem to be happening more often, and there are many concerns locally. I receive a number of e-mails and calls, and I know that other Members are receiving enquiries about what exactly we're doing on the state of the M4 around Swansea.

12:55

Bydd yn rhaid i fi ysgrifennu at yr Aelod ynglŷn â hynny, os yw rhywbeth wedi cael ei addo. Felly, fe wnaf i sicrhau bod hynny'n cael ei ystyried, ac efallai ysgrifennu yn ôl at y pwyllgor gyda mwy o fanylion.

I'll have to write to the Member about that, if something has been pledged. So, I'll ensure that that is considered, and I'll write back to the committee with more details on that.

Okay, thank you. Mike on this point.

Ynysforgan roundabout is the roundabout where I join the M4 fairly regularly. Obviously, I use it to go in every direction I travel. I think that, on the M4, there's a drainage problem, or there appears to those of us who drive on it to be a drainage problem. I don't expect you to know much about the drainage problem there today, but could you ask your officials to have a look at the drainage on that section? There's been some resurfacing work, and I'm not sure that the drainage has followed the resurfacing.

The other question—and you could put it on any part of the M4, but I'll just ask for it around Swansea—is to actually do some electronic number plate-taking to actually work out where people are going to and from. Because I have a horrible feeling—and I include myself in this—a lot of people are using it as a one-junction or two-junction jump. That itself is actually adding to the number of cars on the M4.

Well, we could, but the question is: what would we do about it? There are some junctions where it's far easier to travel on the motorway than it is elsewhere. One exception might be Llangyfelach to Fforestfach, where there's an equally good road that runs parallel almost to the motorway. For the rest of it, coming through Morriston or going down the M4 from Llangyfelach, the M4 is always going to be quicker. So, a traffic survey of that kind we could do, but what it leads to is difficult. One of the problems that exists at the Ynysforgan roundabout is the fact that the Swansea Valley road was built as a single carriageway road, for reasons that escape me. It was a long time ago now—Brecon got a dual carriageway and Swansea got a single carriageway. We know that that road is very heavily congested, given the number of people who live in the valley.

The drainage issue I can look into for the Member, but as I say, I'm not sure what a traffic survey like that could be used for. It would tell us perhaps where traffic is going, but I'm not sure we could do anything about the traffic itself.

You might be right, and you probably are right, about Llangyfelach to Morriston, but from Morriston to Birchgrove—you have actually got the distributor road, which is one of the best-kept secrets in the area, which has very limited amount of traffic on it, for example. If you saw that a lot of people were going from Birchgrove to Morriston and then coming off there, you may well start pushing people onto the distributor road.

We are, I think, having a dialogue about shortcuts through the lower Swansea Valley—[Inaudible.]

—for which you will have better knowledge than me, incidentally, living in Morriston. Clearly, there are some examples where there is an alternative, but how you actually—. You could use signage, but how you—. Obviously, people make their choices as to which route to take.

I think that if you saw that there was a problem, you could use signage. If there isn't a problem, then you don't need to use the signage. But that would identify it—that's the point I was trying to get across. If there is an alternative route that people could be using, rather than clogging up the M4, then it may well be advantageous to direct them, especially when you've got distributor roads. Port Talbot is a classic example. You've got the Port Talbot distributor road. When you drive along that, most of the time you'd think the world has come to an end. There is no other traffic on there at all.

I wouldn't say that to David Rees, actually. [Laughter.] But we do find, of course, that there's a gap between a road being built and the use of it. On the distributor road in the old copper works area of the Member's constituency, I wonder whether actually the capacity exists to take more traffic anywhere, particularly at certain times of the day, and whether congestion on the M4 would simply be transferred to congestion on the distributor road. Yes, I think there is a case for saying, when there's an accident, or when there's a bottleneck on the M4—on that part of the M4—is there a way of signposting people around it? But I suspect there would need to be some kind of survey of the traffic capacity of the distributor road.

Okay. I think we're opening up now. Mick.

First Minister, this debate really brings us back to the crux of transport policy, and that is that we've got to get cars off the road, we've got to get more people onto public transport, and we've got to invest in public transport. And you will have seen recently the concerns that have been expressed about the underfunding in Wales of the rail infrastructure, almost to the tune of £1 billion. I wonder if that's an area where representations are being made?

13:00

Very much so. We have said that we believe that we should be able to direct Network Rail. We can't. It's one of the reasons why the metro is being set up with the structure that it has under Transport for Wales, because we need to make sure that we don't have it so that Network Rail just don't do as we ask; that would bring the metro into disrepute.

I think the key with transport policy is—well, there are several things. First of all, I, as Members will know, have a fairly encyclopaedic knowledge of the rail industry and trains in Wales—he's smiling at that. So, I'm a great supporter of the rail network, and a great supporter of the metro, but there are areas of Wales where you do need to have road improvements, and here we are in Newtown. If we said to the people of Newtown, 'Well, actually, we've got a railway line anyway; use that rather than the road', I don't think it would go down too well in this part of Wales.

It's a question of getting the balance right and planning for the future. But it's more than simply providing more transport; it's about the way people work. Two things: ensuring that more people are able to work at home, so they don't have to travel in the first place, and, secondly, more flexible working, so that people are not all travelling at the same time, which we know—. I see the effect on the road where I live: when the schools come out it's suddenly jam-packed for half an hour and then it disappears. So, I think, yes, we do need to provide, to my mind, road improvements, but not just that. Public transport improvements as well are hugely important: creating a system where people can feel they can move seamlessly between light rail, heavy rail and buses in the urban parts of Wales; improving the service on the Cambrian line here, so that it's more predictable and more frequent in the future; but also thinking as a society as to how we create a scenario where people have to travel less, where you don't have to physically travel to a meeting. It's very easy to do it now, of course, through video-conferencing.

Okay. John, on this point, and then I know that David's got one on another form of transport, and I know that, then, Russell's got one.

On this point, Chair, I think it's relevant right across Wales, including in Newtown, that there are those peak points in terms of congestion on the roads, as you say, around school times, around travel-to-work times, and we now have the Active Travel (Wales) Act 2013, of course, in force in Wales, First Minister, and I think it's an opportunity, for example, to get schoolchildren cycling and walking to school much more often, rather than being dropped off in mum and dad's car. And I know it's a question of distance, but, very often, fairly short distances are involved, and, you know, it's one way of reducing that congestion at peak times, because, as you say, at many times of the day, that congestion isn't an issue, but it certainly is at peak times. We have the active travel Act now, and we have to implement it to help deal with these problems and reap the other benefits from it.

I agree, and I think it's hugely important to focus on the school run and creating safe routes to schools that involve, for example, in time, building physically separate cycle lanes. You know, we live in an era when people are very uncomfortable about the thought of children being on the road with lorries. He and I belong to a generation where we were thrown out on to the road without helmets, and that was the way things were then. But now, there's so much traffic. I mean, this road—the traffic on this road has increased incredibly since the supermarkets were built at the other end of town. I wouldn't want a child of mine to be cycling on a road with an artic going past. How do you resolve that? Physically separate cycle paths and cycle lanes. That's why the active travel Act was so important, to make sure that the local authorities understood that it's not simply about road improvements, but that when you're looking at transport improvements, you consider bikes to be a mode of transport, not a form of leisure, which was the case before. He knows this as well as I do, that it was simply seen as a form of leisure, not as a mode of transport. But, of course, I suspect that most of the traffic going through Newtown is long-distance and people heading off down towards Welshpool, down towards Shrewsbury and beyond, and you can't transfer that traffic and a lot of the freight onto the rails. As a result of that, we need to have in some parts of Wales a bypass around a town like Newtown to ease the traffic, as there is no other alternative that presents itself.

I could take the pressure off you just a little bit, First Minister, because I want to talk about—

—one of the Welsh Government's success stories, which is Cardiff Airport. It's been a great success story. But is there anything you can do to encourage tour operators to include further destinations from Cardiff? It's quite depressing, really—you open a brochure or you go online and there are so many more flights going from Bristol. Now, Bristol is really at capacity. Anybody flying out of Bristol now would find it not a nice experience compared to Cardiff. Is there something the Welsh Government can do to encourage tour—?

13:05

The devolution of APD would make an enormous difference—

The devolution of air passenger duty. Not just to Cardiff. We have an airport not very far away here—an airfield in Welshpool, which I've flown into. It's not going to become a massive airport, clearly, but it's got potential for perhaps getting more light aircraft in. The same is true of Valley. APD could help Valley as well to become a hub for Anglesey. So, APD would make an enormous difference to our ability to attract more routes.

I think we have to accept that for many years Bristol has done well. Bristol has been a successful airport: it was well-run, it invested at a time when that didn't happen in Cardiff Airport, and Bristol did march ahead of Cardiff, there's no question about it. We didn't start off from the basis of looking to buy the airport but rather to persuade the then owners, Abertis, to actually invest in the airport. It got to the point where we were offered the airport. We bought it at market value; we've not had it valued recently, but I suspect it's worth an awful lot more now than it was when we bought it. The investment is there for everybody to see. It's much, much better now. I believe that, before we bought the airport, it was fully believed in the airline industry and the travel industry that the airport would close, so what was the point of looking to Cardiff for new routes, because it was going to close down anyway? That was widely believed. It's not believed now. Getting Qatar Airways in has been a huge, huge boost for the airport—a daily flight, and for that I have to give credit to Roger Lewis because this is his doing as somebody who worked very hard on getting that route into Cardiff. And now other airlines are sitting up and taking notice.

With the airport tax, I've heard that the reason that they will not devolve it to the Welsh Government is because of the proximity of Bristol Airport. Is that right or—?

The reason why they won't devolve it is that they regret having devolved it to the Scots, and as a result they won't devolve it to us—

That's what I mean. Obviously, you've got Newcastle and Edinburgh. The same argument could be used for that.

Exactly. The reality is, to my mind, that Cardiff's strength lies in long haul. Bristol has great strength in short haul. For me, we even said, 'Look, devolve long haul APD to us; that's less of a threat to Bristol.' Of course Bristol Airport are going to be nervous about it and oppose it, for obvious reasons. I don't criticise them for that; they have to look after their own interests. But I believe that long haul APD would make an enormous difference to the ability of Cardiff Airport to grow, without it being a threat to Bristol.

I just wanted to follow on from that. One part of Cardiff Airport that hasn't been openly discussed to a massive extent is the extra development of freight, a fundamental part of the Welsh economy. Other publicly owned airports—Newcastle and so on—have built an entire freight distribution network around the airport itself. I think that, at the time that Welsh Government took over the airport, freight had virtually disappeared from Cardiff. Is that part of the economic strategy?

It is—well, the freight had disappeared before that. It is something that Roger Lewis, the airport chair, has discussed with me many times. He is very keen on getting more freight into the airport. I don't think the previous owners were that keen. At one time, it was a distribution centre for one of the—I forget which one it is—postal companies that brought a flight in from Liège every morning. That disappeared, and I don't think that really at that point much was done to increase freight.

Now, what the airport has done is focused on increasing footfall first. Why? Well, the more footfall you've got, the more sustainable the shops are for a start, the more sustainable the facilities are. Just by getting people through the airport that helps, of course, the sustainability of the airport, but the airport is now very heavily focused on freight and developing freight opportunities. We have—[Inaudible.]—for example, which does fly freight into the UK, and that's where the airport has got a lot of potential.

Looking at the passenger side, it's growing well. Freight now is the next challenge.

Okay. I'll carry on now then. Because we are in Russell George's constituency and also for those—no, there are no regional Members here for Mid and West Wales—but because we're in Russell George's constituency, he can have the last topical question, even though he didn't give me notice beforehand of it. But you can now ask your question. 

13:10

Thank you, Chair. Can I ask, First Minister, about your plans for health provision in mid Wales in particular, because we know that this is an issue that really exercises people that live in this area? We know that there are the Future Fit plans across the border in Shropshire, and we know that Powys has no district general hospital of its own, so there is a fear that people will have to travel further for their health provision following changes across the border in Shropshire. Certainly, in terms of this area, if you have to be transferred to a district general hospital, it's an hour away, and could be further away after Future Fit's consultation comes to a conclusion.

Perhaps you could also talk about Welsh Government's provision of healthcare in rural areas. Newtown Hospital predates the NHS itself. It was built before the NHS was formed. What plans might the Welsh Government have for a new facility in Newtown? I accept that wouldn't be accident and emergency facilities, but an integrated service and a new hospital in Newtown as well.

Well, it's a matter, of course, for the health board to come forward with proposals. It will always be the case that people living in Powys and other border counties will rely on some services being provided from England, and we're certainly not looking to prevent that happening in the future. Powys doesn't have a DGH. Geography's a problem: where would it go? If it went to Llandrindod or Builth then it is still a journey over the mountain in the winter to get to it. People in Brecon will still go to Merthyr and people living in Crickhowell will still go to Nevill Hall. The geographical question is all-important when it comes to where a DGH would go. That said, what is the underlying philosophy of Welsh Government? It's (a) to provide services as close to home as possible, and (b) to make sure they're safe and sustainable. That will always guide the decisions that we have to take, and we expect the health boards to be guided by those principles as well.

But in terms of—and I'm not suggesting that there should be a district general hospital in mid Wales. I accept your answer in terms of geography and population, but there certainly has to be a solution if it takes an hour and a quarter for somebody to be transferred to their nearest district general hospital, and there has to be greater provision in towns like Newtown, which doesn't even have a 24/7 minor injuries unit. Surely some of these services can be supported. Powys health board alone would need support from the Welsh Government in terms of building some of these services up, albeit not being a district general hospital.

It would, but as I say, it's for the health board to determine how services are provided. It's not just about money, it's about getting the people. A&E is a particularly difficult area. A&E consultants are few and far between, relatively, and you need at least seven of them to run a 24/7 rota. So, it's for the health board to determine in which way it can provide those safe and sustainable services, and to ensure that where people need immediate transfer, there's a way of doing that, even using the air ambulance, which is there to provide exactly that kind of service.

Would the Welsh Government look favourably on proposals from Powys health board for a new-build hospital in Newtown?

Well, as the Member full well knows—

—it's a matter that would have to be determined by Ministers at the appropriate time. But there is no reason why such plans can't be developed in order for the health board to make a bid.

Okay, thank you very much. First Minister, can I thank you and your officials for attending this morning, especially after your heavy night last night at the Oxford Union debating society where you won—

When you say 'heavy night', Chair, I just want to make sure that—[Laughter.]

Debating—a heavy night debating. [Laughter.] If you listened, I did say 'your heavy night debating'—where you won, so well done for that. I thought I'd just put that on the record. No, seriously, back to the business: we'll send you a draft transcript to check for accuracy and then there are a number of points that we'll write to you with, and also with a copy of our findings for you, as is standard practice. So, just to say 'thank you very much' for your attendance this morning—or this afternoon now.

4. Papurau i'w Nodi
4. Papers to Note

Committee, we have item 4 on the agenda, which is the paper to note. It's the report and the answers from the First Minister at the last committee, which we held in Cwmbran. So, are Members happy to note that? Okay, thank you very much. 

13:15
5. Cynnig o dan Reol Sefydlog 17.42 i Benderfynu Gwahardd y Cyhoedd o'r Cyfarfod
5. Motion under Standing Order 17.42 to Resolve to Exclude the Public from the Meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

If we can now move a motion under Standing Order 17.42 to resolve to exclude the public from the remainder of the meeting. But, before, I ask you to formally do that, I wanted to once again say 'thank you very much' to all of you for coming. I hope you have had a flavour of what does go on. I don't think the First Minister was under pressure at all, because I hadn't got my little spotlight. That's when he knows he's under pressure: when I start to shine lights. But I'd like to say 'thank you very much' to you all for coming, and once again thank Hafren theatre for their hospitality here, and for the fact that we've probably disrupted all of their proceedings today. So, it's to say 'thank you'.

Now, I formally move the motion under Standing Order 17.42 to resolve to exclude the press and public. Okay, thank you very much.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 13:15.

Motion agreed.

The public part of the meeting ended at 13:15.

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