National Assembly for Wales

Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol

External Affairs and Additional Legislation Committee

26/11/2018

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

David Melding AM
David Rees AM Cadeirydd y Pwyllgor
Committee Chair
Jane Hutt AM
Mark Reckless AM
Michelle Brown AM
Mike Hedges AM Yn dirprwyo ar ran Joyce Watson
Substitute for Joyce Watson
Vikki Howells AM

Y rhai eraill a oedd yn bresennol

Others in Attendance

Ed Sherriff Llywodraeth Cymru
Welsh Government
Mark Drakeford AM Ysgrifennydd y Cabinet dros Gyllid
Cabinet Secretary for Finance
Simon Brindle Llywodraeth Cymru
Welsh Government

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Alun Davidson Clerc
Clerk
Gareth David Thomas Ymchwilydd
Researcher
Manon George Ymchwilydd
Researcher
Yan Thomas Dirprwy Glerc
Deputy Clerk

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 14:00.

The meeting began at 14:00.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Good afternoon. Can I welcome Members and the public to this afternoon's session of the External Affairs and Additional Legislation Committee? This afternoon, we'll be taking evidence from the Cabinet Secretary for Finance in relation to the issues around Brexit and how they affect Wales.

Before we do that, can I remind Members of some of the housekeeping? Please turn your mobile phones off or on silent and any other equipment that may interfere with the broadcasting equipment. We have not received notification of any fire alarms this afternoon, so, if one does take place, please follow the directions of the ushers to a safe place. We do operate a bilingual system, so, if you require simultaneous translation from Welsh to English, that's via the headphones set on channel 1. If you require amplification, that's also via the headphones set on channel 0. We've received apologies this afternoon from Joyce Watson and can I welcome Mike Hedges, who is substituting for Joyce? We've also received apologies from Steffan Lewis.

2. Sesiwn graffu gydag Ysgrifennydd y Cabinet dros Gyllid
2. Scrutiny session with the Cabinet Secretary for Finance

Can I go on to the next item on the agenda and then go straight into questions relating to our scrutiny session with the Cabinet Secretary? Cabinet Secretary, can I ask you to introduce your officials for the record, please?

Thank you, Chair. So, this afternoon, I am joined by Simon Brindle and Ed Sherriff, both of whom work as part of our Brexit team.

Thank you very much. Perhaps if I start the first question, clearly, this session should have been held last week, but events moved very quickly in the last fortnight, to the point where we now have a withdrawal agreement and a political declaration associated with that, which was confirmed by the European Council yesterday. Have the Welsh Government done any analysis of the withdrawal agreement and the implications for Wales in that agreement? I'm not commenting upon the number of times Wales is mentioned, because we know that it's none, but there are implications that it would have for the Welsh economy and Welsh businesses.

Well, yes, Chair. We've carried out an analysis of the withdrawal agreement and the political declaration—they're separate documents, but they go alongside one another. The First Minister has set out some of the conclusions that we have drawn so far from those documents, and I think has indicated that they both, but particularly the political declaration, fall short of the sort of document that we would have been looking for and are unlikely to secure the support of the Welsh Government.

Well, I do think that they fall short in different ways. The withdrawal agreement falls short in that many of the things that we might be prepared to regard as positives in the withdrawal agreement are disguised. This is a Government, even when it is doing the right thing, that finds it difficult to talk about that out loud. So, there is undoubtedly a customs union in the withdrawal agreement, but it doesn't use that term. It tries to obfuscate by calling it 'a customs arrangement' and failing, I think, to get some of the support it could have got for some of those measures had it been more explicit about the nature of the agreement that it has struck. It very specifically falls short of the Welsh Government's ambitions in relation to the way that it treats rights that Welsh citizens enjoy through our membership of the European Union—consumer rights, environmental rights, workers' rights and so on. A non-regression clause, which is what the withdrawal agreement has, is not satisfactory. We have always argued that Welsh citizens ought to be able to enjoy the benefits of future advances in those rights, many of which we will have been part of shaping while we have still been members of the European Union, so the withdrawal agreement falls short very specifically on that.

The political declaration is even less satisfactory. There were times when the UK Government told us that the political declaration would be 'detailed, precise and substantive'. Well, as you know, it's 26 pages long and it falls short of what we have been saying for many months is required in a long-term arrangement with the European Union. We believe that we need to be in a long-term, permanent customs union in which there is a say for the United Kingdom in that customs union. It continues to perpetuate the unsatisfactory nature of the withdrawal agreement in its attempt to separate goods and services as far as participation in the single market is concerned. It provides no guarantees that, in the longer term, workers' rights and citizenship rights could not be rolled back by a future Government. It provides no guarantee that the UK will continue equivalent arrangements with key EU programmes and agencies, many of which are very important to Wales. It offers no guarantees that the current arrangements that support our security, in relation, for example, to the European arrest warrant—that those will be secured as part of that long-term arrangement. So, on a whole series of ways, the political declaration, both in the way that it consistently kicks forward all the major decisions that need to be arrived at—language continuously in the political declaration of considering conditions, exploring possibilities, working together to identify issues—this is not a document that resolves those issues. It simply identifies them and wish-lists them into the future. And, where it is more precise, then it's not precise in the way that we would be prepared to support.

14:05

Thank you for that clarification from the Welsh Government's perspective. Is terminology crucial to you? Because if you say it's a customs union in everything but name—they call it 'a customs arrangement', but, surely, if the outcome is what you wanted, then the outcome is still something you would accept.

Well, of course the outcome is crucial. But there is a political failure at the heart of all of this. Had the Prime Minister, back in 2016, approached the result of the referendum in a way that said, 'Here was a narrowly fought referendum with strong views on both sides, with just under half the population wanting to stay in the European Union', if she'd approached it in that way and said, 'My ambition will be to negotiate an exit from the political arrangements of the European Union'—because that's what the referendum required—'but to continue to have the strongest possible economic set of relationships with the European Union, the closest possible form of engagement in cultural matters, to make sure that we are part of a full security union', in other words, if she'd had a balanced approach to the referendum, given the very finely balanced result—. But, instead, she took a 'winner takes all' view of the referendum. She headed straight for the hardest form of Brexit: her speech to the Conservative Party conference in the autumn, her Lancaster House speech of January 2017, a flawed and, in the end, deeply unhelpful set of red lines—'no' to a customs union, 'no' to the single market, 'no' to paying our bills, 'no' to the European Court of Justice, 'no' to freedom of movement, 'no' to participation in programmes such as Erasmus+ and Horizon. The Lancaster House speech is a set of things that we were to be against, rather than the description of a future relationship that we wanted. Now, ever since then, it's been a retreat from those red lines as the realities have had to sink in at the UK Government end. But language matters. Had the Prime Minister set about all of this in that different way, then I think she could have described what she has achieved in the withdrawal agreement in a very different way. She could have described it as consistent with an agreement with the European Union that respected the result of the referendum—Britain will no longer be part of the European Union—but would have secured outside the European Union a set of really important relationships that protect our jobs and the economy and give us a set of ongoing possibilities with the European Union. Instead, the withdrawal agreement tries to disguise lots of what has had to be agreed in a vain attempt—a completely impossible attempt—to satisfy the irreconcilables in her own party. And, in that way, she loses the advantages of what she's agreed and secures nothing in return.

14:10

Clearly, you've expressed very strongly your position on this and you were at the Joint Ministerial Committee on European Union negotiations last week, which was called, I'm assuming, to discuss the withdrawal agreement. Did you have a chance to put the Welsh Government's position at that meeting?

Yes, it was an opportunity to do that. It was an extraordinary meeting in the sense that it was outside the normal schedule of meetings. We focused primarily on the political declaration. In addition to the points I've just made, there were two other key things that I was able to say at that meeting. First of all, I said that it was imperative that the political declaration recognised the fact that, in the negotiations that will be carried out about our future relationship with the European Union, what will be at stake in those discussions, very often, will be matters that have been devolved to Wales and Scotland since 1999. In other words, for those purposes, UK Ministers are English Ministers only, and, therefore, when they are, to give a small example—. To give a small example, when they are resolving the issue of professional qualifications and how those are to be recognised between the United Kingdom and the European Union in future, responsibility for those qualifications rests here in this Assembly. We have a different pattern of professional qualifications; we have different awarding bodies. When the discussions with the European Union are being conducted on those matters, UK Ministers are not able to speak for Wales or Scotland, and therefore the political declaration ought to have explicitly recognised that, unlike the withdrawal agreement—. You say Wales isn't mentioned in it—neither is Scotland—and the explanation is that it will lead to a treaty between the United Kingdom as the member state and the European Union. But in the future relationship the discussion will be about responsibilities that UK Ministers do not hold and therefore we have to be at the table for those elements of the discussion that have devolved responsibilities at stake. 

The second issue that came up in that discussion, which I haven't mentioned so far, is a major one, and that is the future of mobility and migration. The JMC took place on the day when the Prime Minister had spoken at the Confederation of British Industry on this matter, and I just had to register our complete disagreement with the Prime Minister on this matter, our deep disappointment at the offensive language that she used in her CBI speech—how people who live in Wales from the European Union doing absolutely essential jobs here in Wales already feel, because of our withdrawal from the European Union, that their future here is under a shadow, and then to hear from the Prime Minister that they had somehow 'jumped the queue' in order to be here, it's deeply offensive to those people who we've been lucky enough to attract to come and do vital jobs here in Wales. And it undermines our ability to go on persuading those people, who can work wherever they like, whose skills are in short supply in many other parts of Europe and who have choices that they can make that they could make tomorrow to go elsewhere—our ability to hang on to those people and to persuade them that they are welcome to be here in Wales, as we believe, was badly affected by what the Prime Minister said, and there was quite an extended and straight-talking discussion between Wales and Scotland on that matter at the JMC.

Based on the past evidence you've given to this committee of your original concerns over the fact that the JMC wasn't acting effectively, you then indicated that perhaps they went more into listening mode and now, since your meeting last week, we've now seen the fuller version of the political declaration—are you of the view that they are listening to us, or are they continuing, in your view, or going back to the days where they were ignoring the nations?

Well, Chair, I want to try to be even handed, if I can, and to say that I still think, for all the limitations and the frustrations, the JMC is a better place in November 2018 than it was when it started straight after the referendum. And lots of what we do in the JMC is actually transacting ongoing business. So, in the JMC on 13 November the week before, we focused on the withdrawal agreement implementation Bill, the WAIB, as it's called, where we've had better engagement with the UK Government than on previous legislation—early sight of the White Paper, sharing of draft clauses, a genuine discussion, I felt, at the JMC, led by a Minister, Suella Braverman, who has since resigned, but who, in those discussions, I felt was one of the better UK Ministers I've come across in her understanding of devolved responsibilities and the way in which they had to be taken into account in the work that she was doing. And we spent a lot of time at that meeting talking about the detail of framework discussions, how the JMC will receive the next set of reports from the framework discussions, and how they will be translated through the JMC into final agreements between the four UK nations. 

So, in some ways, the JMC is a more—. It's a better working forum than it was at the beginning. So, I want to be even-handed in that way; I don't want to say to you, 'Look, it's all just a waste of a time, and we're never listened to or treated properly.' I think it's improved. It's got a very long way to go, as many reports, including the reports of this committee, have said, if it's to become a forum that can bear the weight of Brexit.  

14:15

And, in that sense, do you feel that you were adequately involved in the political declaration discussions? 

Well, you couldn't say that, Chair, no. There was a discussion of the political declaration at the meeting a week ago today, because I had met with David Lidington, the chair of the JMC, on the previous Friday here in Cardiff, and he had met the First Minister and the First Minister of Scotland over that [correction: over a previous] weekend at the British-Irish Council. His message on Friday and over the [correction: over that] weekend was that the UK remained in discussions with the European Union to develop the document. So, it was a six-page document to begin with, and it's a 26-page document at the end, and he said that that document is still in development. Therefore, it was sensible to use the JMC a week ago today to make sure that if a document was being developed in discussion with other European Union nations, it needed to be developed in discussions with the UK nations as well.

So, in that sense, we had an opportunity to discuss it and to make the points we did. David Lidington said at the end that a note would be taken of the concerns and the issues that Scotland had raised and we had raised, that that note would be shared with Olly Robbins and the negotiating team in Brussels, and that it would be shared directly with the Prime Minister's office as well. I have no doubt that we will return at the next JMC to ask for evidence of where our views and that note made a difference to the document that was finally published.       

We'll come back to ask questions later in that case. Michelle. 

Thank you, Chair. What engagement have you had, since the withdrawal agreement was agreed on 13 November, with the UK Government, and what have those conversations been—well, as much as you can disclose, anyway? 

Surely, yes. Thank you. Well, there have been a series of opportunities to engage with the UK Government since 13 November. On the Friday of that week, as I said, David Lidington came to Cardiff, and I had a proper opportunity to discuss things with him there. He went to the Isle of Man from here, where the British-Irish Council was taking place, and there was a trilateral meeting, as it's called there, between the Scottish First Minister, the Welsh First Minister and David Lidington as the de facto deputy Prime Minister at the United Kingdom level. Then there was the JMC that followed on the Monday. The First Minister—the Welsh First Minister—has met the Prime Minister since then on Wednesday of last week, and I know that he took a further telephone call from David Lidington on Thursday of last week. So, compared to normal times when you certainly wouldn't expect that regularity of conversation between senior figures in the UK Government and Ministers here, that's probably one of the more intense periods of engagement that we have had.

14:20

Thank you. How much influence do you think the Welsh Government has had on the negotiations and the eventual withdrawal agreement and political declaration?

My belief, Chair, is that if you compare, as I said, what the Prime Minister said in January 2017 in her Lancaster House speech and what we said in the same month in 'Securing Wales' Future', and compare those two documents with the withdrawal agreement, the withdrawal agreement looks an awful lot more like our documents than it looks like her speech. I'm not going to claim for a moment that those changes are in a causal way linked between our document and what the UK ended up doing, because so much of what we have said has been said by so many other organisations.

Our position has always been much more closely aligned with the CBI and business in the United Kingdom and with trade unions in the United Kingdom than the United Kingdom Government's position has been aligned. So, when you see—. As I said, Mrs May said 'no' to a customs union—there is a customs union in the withdrawal agreement. She said 'no' to the single market, but there's regulatory alignment for goods and for agricultural products in the withdrawal agreement. She said 'no' to paying all bills—we're committed to paying all bills, as we should be. She said no role for the ECJ—there's clearly a role for the ECJ right there in the middle of the withdrawal agreement.

Right up to the JMC of 13 November, I was having to argue for a flexible approach to the end of the transition period, where, in that meeting, UK Ministers were still saying to me, 'No, transition is going to end on 31 December 2020, and that's it.' I was arguing again, as I and Scotland have always argued, for flexibility around that. Why would you put another cliff edge into legislation if, in the run-up to that date, everybody agreed that, with a few more weeks or a few more months, a better deal could be done for everybody? The withdrawal agreement actually has a mechanism in it to extend the transition period if we find ourselves in that position. 

Thank you, Cabinet Secretary. Do you feel that you've done sufficient analysis of the withdrawal agreement, or are you going to be doing any further analysis?

It's a hefty document, as you will know, so I'm sure there is more work to be done in making sure we've understood the finer detail of it. Chair, our intention will be to publish a Welsh Government set of responses to it in advance of any debate that we will have here in the Assembly. So, the Assembly will have the Welsh Government's response to the withdrawal agreement to inform any discussions that we have on the floor of the Assembly.

Thank you. Can you give us an indication of when the Assembly will be given an opportunity to debate and vote on the withdrawal agreement?

As I understand it, the Business Committee is still discussing the final arrangements for timing of that debate and for the motion that will be put in front of the Assembly for debate. From a Government point of view, what we remain committed to doing is to make sure, as best we can, that the debate on the floor of our Assembly takes place in advance of any meaningful vote in the House of Commons, so that the views of this Assembly are known to Members of Parliament when they come to cast their votes. That's quite a narrow bit of time to try and land that debate, and the Business Committee, I think, is trying to finalise the actual arrangements. 

Do you have a position right now? If a vote goes to the Assembly, do you have a position right now on how you would recommend the Assembly to vote on the withdrawal agreement?

Subject to what Michelle Brown asked me a moment ago about further analysis of it and so on, if we were having the vote today, on what we know today, then I think our recommendation to the Assembly would be not to support the withdrawal agreement, and quite definitely that we could not support the political declaration.

What steps would you take if the Assembly were to vote against it?

In those circumstances, Chair, as I understand it, our main responsibility would be to make sure that the views of the National Assembly were fully conveyed to the UK Government and to Members of Parliament. Because at that point, the actual decision making, which has never been in our hands—. We are here to make sure that the Welsh point of view is fully articulated. After doing that, our job is to make sure that that is fully communicated to the people who will be casting votes on the withdrawal agreement in meaningful votes in the House of Commons. 

14:25

Mark, did you want to come in on this point? Because you wanted to raise your concern about the vote in the Assembly.

As the Cabinet Secretary was saying before, with the withdrawal agreement, you appear to have been content for the UK Government to have been negotiating that, but you drew a distinction with the future relationship and the issues there where you would expect the Welsh Government to be in the room. Why, in that case, is the Assembly voting on the withdrawal agreement itself? What's the purpose of our vote?

I think the purpose of our vote is to make sure that Members of the National Assembly are able to consider these documents that—although they are separate, there's a very close relationship between the two. I don't think you can simply say, 'We're interested in one, but not the other.' I think there's a legitimate interest for Members of the Assembly in both documents. It's different, but I think it's legitimate in both cases, and it's right that the Assembly should be offered an opportunity to express its view on both and then to make sure that those views are known to Members of Parliament. 

And on the political relationship, do you feel that the Prime Minister has advanced beyond—I think the phrase is 'square one' in these negotiations to get to the resolution, such as it is, within the future relationship document?

Well, if I did think that, I'm afraid I would have to say it's a marginal advance. I can't help, Chair, but remember, when I'm asked this sort of question, that I sat with the then Secretary of State for Exiting the European Union here in this building in July of 2016, and then again in the first meetings of the JMC, when Wales was advocating the need for a transition period in order to be able to negotiate the future relationship, and was absolutely assured that this was a complete distraction. He was completely confident that, within the article 50 period, he would conclude both the withdrawal agreement and the whole of the future relationship, and that people like us in Wales who talked about the need for longer and to make sure they were—we simply were throwing sand in people's eyes and making it harder for him to get on and conclude that job.

Well, we've seen where it got to—560-odd pages needed to withdraw from the European Union, six and a half pages to describe our future relationship. So, maybe it has moved beyond square one, but it certainly didn't get to where we were promised it would get to in the months immediately after the referendum.

Isn't she right that the transition period is, to an extent, a distraction, in that, since it was negotiated in principle, perhaps six or nine months ago now, many in business have had that assumption that there will be this transitional period from 29 March. Whereas, the reality is there is no majority in the House of Commons to agree this withdrawal agreement and, therefore, the default is we will leave without a transition period on 29 March.

I don't agree that the choice in front of the House of Commons will be between Mrs May's agreement and no deal at all. If there's not a majority in the House of Commons for Mrs May's deal, then I'd be pretty confident that there's an even bigger majority in the House of Commons against leaving the European Union on a 'no deal' basis. So, it's not a prospectus that I'd be prepared to sign up to, and I don't think that it's a position that's likely to be supported in the House of Commons either.

How do you expect that majority to express itself? Through what mechanism?

Personally, I believe it will be through an amendment to the meaningful vote motion. It is clear that it is an amendable motion, we know that. It's likely, I imagine, that the meaningful vote debate will be conducted on conventional lines—in other words, that votes on amendments will be taken first. And if there is an amendment to that motion ruling out, from the House of Commons' point of view, leaving the European Union with no deal, then that vote will be taken first.

14:30

Well, I think it's a curious question, Chair. It's a curious question to ask about what difference a vote held and concluded in that democratic forum has. The question of what difference it makes in law is surely not the central question. The House of Commons will have made its views known. A Government that continues as though the House of Commons meant nothing, because it has some legal ability to do so, is on the flimsiest of democratic grounds, and I don't imagine that a democratic Government would be content to do that.

Last week, the Welsh Government lost a motion in the Assembly on further education. I just wonder what the Welsh Government is doing to respond to that decision.

Well, you can be sure—

That, to be fair, is not for this committee to decide upon. This committee is looking at the issues—

Can I ask, then, a general question, Chair? Does the Welsh Government implement every motion passed by the Assembly, even when that is not law?

Well, in my experience, Chair, the Welsh Government takes very seriously all votes that are held on the floor of the National Assembly.

Very finally from me, Chair, if I may. Earlier, Cabinet Secretary, you said that the referendum required us to leave the political aspects of the European Union, but not the economic aspects. How do you define that?

Well, it is an interpretation, Chair. I'm clear about that, and we'll have many different interpretations, because neither of those matters was explicitly on the ballot paper in front of the people who voted, who were asked to vote on whether they wished to continue membership of the European Union. I have never believed that in casting votes people voted to cause themselves economic harm.

So, when they voted to leave the European Union, you interpret that as having voted to remain in the economic aspects of the European Union, do you?

Well, I believe that it was a vote to leave political membership of the European Union, not to be members of the European Union. Like everybody around this table, Chair, you will have had conversations during the referendum with people who drew a distinction between the European Economic Community, which they were comfortable to be members of, but not a European Union seeking ever closer political union. So, I think it's perfectly within the normal bounds of interpretation to say that while people were sending a strong signal of their wish to leave the European Union as a political entity, there was no sense that I ever came across that people thought that they were willing to do themselves economic harm as part of the same proposition.

Thank you, Chair. Just one final question. How are you going to ensure that the information that Welsh Government gives to citizens and businesses about the withdrawal agreement and the political declaration is balanced?

I thank the member for that question. We have a range of different ways in which we are able to communicate, particularly with those organisations and individuals who are closest to the debate. So, we use all the things we have in terms of online communications. We have all the things we have done in terms of publishing the papers. We have the series of papers that we have on Brexit, and we have all those forums in which we engage directly with either individuals who have particular expertise to offer, which is how the European advisory group is made up—people don't represent anybody else; they come in their own right—or through the places where we meet organisationally through the council for economic renewal, the workforce partnership council and so on. In all of those places, now, there is always a Brexit item on the agenda, where we are able to update people on the latest state of play in the negotiations and able to hear from people in return as to the things they think we should be saying on their behalf to the UK Government.

It is harder, it seems to me, other than in the things we are able to do politically—you know, interviews, appearances in media columns and so on—to communicate to people beyond that circle of people who have got the most direct interest in it. And, on the whole, my own experience is that the declining interest in people at large to follow the twists and turns of Brexit is real and it is hard to get conversations with the public at large about all of this as it moves from stage to stage. Simon is more involved in some of the—.

14:35

I think the Welsh Government's business portal is a good example of giving practical information on those matters, and as they become more specific and detailed on what the actual changes are, to get that information out on the front line and make sure that businesses can actually pick up that information. So, the UK Government's technical notices are signposting people to those things on the practical issues that a 'no deal' would bring, but also setting out some of the real things that would be sensible to do in terms of planning and resilience to support a change as they move forward. And as more details come through, we'll use those kinds of channels to get information to people so that they can prepare as best they can.

So, can you confirm you are actually updating the portal to reflect the withdrawal agreement, and, therefore, businesses will have an understanding of their position based upon the withdrawal agreement?

As things become more detailed in terms of the actual nature of the changes coming ahead, then those, clearly, we'll make [correction: we'll make those public] through the portal. So, the portal has some links [correction: has links] to some of the fast-moving political-level debates on the new sites and so on. The portal is focused on the practical changes and tools for businesses to help them prepare. So, when there is certainty around the actual time period or when the transition agreement gets agreed and secured, then, actually, that information will increasingly come to the fore and there'll be less information about a kind of rapid exit in April. So, the tool is very much focused on what we know now and those things that will be good to be done regardless of which scenario that we're heading into. 

Yes, I just want to follow up, Cabinet Secretary, the visit by Rebecca Evans, the Minister for Housing and Regeneration, to Strasbourg, to the plenary session of the European Parliament. We've had a written statement from her, which was very helpful, alongside many, I think, on that day, but I think it would be very helpful to have some more information about the discussion about the potential extension of the article 50 process and what the Welsh Government's position is on this issue, if it was needed.

Thank you. Well, I think the flavour that Rebecca picked up, from my discussions with her, is that opportunities to extend article 50 are closing down around us, really. I mean, they're not completely closed, but the practical ability to secure an extension gets smaller every day. So, I think she was really clearly told by leaders of political groups at the European Parliament that, simply, the current Prime Minister asking for an extension to do some minor adjustments to her deal did not appear very likely to succeed.

Of course, a different sort of prospectus, say there were to be a general election and a different Government and a different approach, then that might be different, but you run into the European Parliamentary elections three months beyond the article 50 date.

Michel Barnier told our First Minister some months ago—and I know he reported it to the Assembly and otherwise—that an extension was possible provided the UK Government asked for it, but it was for the UK Government to ask for it. But the UK Government hasn't asked for it. And the opportunity—. I don't think it's closed; I'm not saying it couldn't happen. There are circumstances in which I think it could, but it requires unanimity on the part of the EU-27. Every one of them has to agree to it, and every day that goes by makes that harder to achieve.

14:40

We move on to some questions on inter-governmental structures. David.

Yes, thank you, Chair. I wonder if I could just go back to a couple of the general points that were made in that opening session, because I've found your answers really important and fascinating. I think they do indicate just the weight of the decisions that are in front of us, because I don't think you're approaching this in any sort of gung-ho way, because you have the responsibility of office and that sets you apart, perhaps, even from your colleagues in Westminster, where they're in opposition.

But it seemed to me that you were saying on the withdrawal agreement that you agree with an awful lot of it, but you think the language should be clearer on the benefits, the achievements, then, of the withdrawal agreement in crafting a via media that, insofar as anything can reflect the referendum situation—the result was to come out, but the situation of the referendum was a highly divided nation, or nations, in the UK. And then you talk about the political declaration, which of course is just the parameters, really, for a future negotiation on the permanent relationship that we're seeking. So, is your real fear that you could live with the withdrawal agreement if that more or less were made permanent in the months after, during the transition period, and you just don't feel it's firm enough to draw us in that direction? Is that really your position?

It's close to it, but not exactly. I was trying to draw a distinction between the political declaration, which we think is very unsatisfactory, and the withdrawal agreement, where it's still not good enough for us to sign up to it, but it has more features that we think reflect our position than the political declaration does.

I think that the problem in David's proposition that the set of arrangements set out in the withdrawal agreement becomes permanent is that the European Union have been so clear that that is not satisfactory to them; that transition has to be transition to somewhere, and it can't just become a permanent purgatory where we are camped outside the door of the European Union but not in it. So, even if we were to agree, which I'm not agreeing, that the withdrawal agreement creates a state of affairs that we could live with permanently, the trouble is that our European Union partners won't agree to that.

I don't want to get into a general discussion like we could have in a saloon bar, but it's interesting that, if you look at some of the reactions of EU Governments, several have made these points that they think the withdrawal agreement is far too generous to the UK, in basically leading on to a position where we get a pretty good deal in a common market, then, if it's not a single market with lots of obligations.

But it seems to me it's a great achievement of British statecraft, even under these stressed circumstances, to at least achieve a sort of via media that might be workable. If you look at the political declaration, it is written with a certain ambiguity, clearly, for both sides to then be able to work through it, but it does give one a lot of encouragement, I would argue, that these things will be worked through by both sides to get the best sort of relationship for both sides that can be reconciled with Britain leaving the EU. So, given that, why are you toying with the chaos that would result from this being rejected in Westminster?

If it is rejected in Westminster, Chair, it will be because the Prime Minister has failed to secure the agreement of her own party to it. So, that's where the responsibility will lie.

I agree with David in this way: I think the withdrawal agreement does reflect a considerable level of generosity amongst the EU-27, and a generosity that a number of member states have had hesitations about at the last moment—generosities in relation to what it has given up in relation to fisheries, because it does not deliver the mandate. Barnier did not deliver his mandate on fisheries. He has compromised on that to a significant extent, and there's anxiety that the backstop arrangements become a permanent way in which the United Kingdom is able to access the single market without paying or observing the other freedoms that go with that. So, I think it does show that there has been significant compromise to reach it.

I think the political declaration disguises the fact that the next set of negotiations will be even more demanding and difficult, because some of those tensions within the European Union will become more apparent in those negotiations and it will be difficult to secure the sort of agreement that masks some of those things in order to deliver a bigger picture. So, I'm afraid I think the political declaration simply washes over those things and doesn't provide a robust enough framework to see how that very difficult set of discussions on the detail of the future relationship will be concluded. 

14:45

I'm not sure if colleagues are going to ask about the rights of EU nationals—

—so could I just go back to that? Because I've had several representations, and quite serious ones, from concerned current citizens—because they're EU citizens, so they're citizens here. My reading of the withdrawal agreement and then, presumably, what then follows is quite clear: that those who are already here or come before 2020 will have their rights, short of being able to vote in elections, preserved. Is that your understanding? And is it because they won't be able to vote or be in that sense—? They'll have status that's short of citizenship, I suppose. Or do you have further concerns about their right to work and to move about, or whatever, and enjoy a settled status in the United Kingdom in a full way, economically and socially?

I'll ask my colleagues to help with this for a moment. 

I think there's one area in the withdrawal agreement that isn't nailed down in terms of onward movement of residents currently in EU member states. So, if you move from the UK or into another member state, then what happens next? I think it was agreed that that was going to be part of the future relationship rather than something in the withdrawal agreement. So, there's still some uncertainty regarding onward movement within member states, which hasn't been agreed in the withdrawal agreement. So that's one area, yes. 

And that is true of UK citizens, therefore, in the European Union as well. There are no onward rights. So, if you're living in Spain now and your job moves you to France, there's no guarantee that your rights will be portable.

I've dealt, like David Melding, with a number of constituents, coming from places like France, for example, who would not be considered to be economic migrants by any stretch of the imagination, who are just concerned. And don't you think the language being used at Westminster has a lot to do with this and that, instead of saying they are people who are living here, they're married, they've got children here, therefore they are part of Britain, describe them as people who are queue-jumping?

Well, I absolutely do share that anxiety, and a lot of what I think I pick up when I am meeting groups of people who live in Wales now and from other parts of the European Union—they do have very significant, proper questions to ask about the detail of things, but they are more concerned about the tone and the atmosphere and what it makes them feel as people who are making decisions about where to lay their long-term futures and their family's futures: do they really think that the United Kingdom is somewhere that now values people who've come from elsewhere, or do we regard them as a regrettable necessity and that the sooner we can do without them, the better? I'm afraid they feel it's the second. 

I won't quite take as long, I think, on some of the other points on inter-governmental structures, because they emerged in the previous session. Would it be fair to say that the JMC has worked tolerably well as a mechanism? And, indeed, in the fourth Assembly, the Constitutional and Legislative Affairs Committee, which I then chaired, did look at the JMC(E) and thought that it was actually a good way of working. It was pragmatic. Perhaps there weren't enough firm rules in it so that you weren't sure of the future arrangements, necessarily, but the way it was working at that time was quite robust. Is that your experience generally?

14:50

I said earlier that the JMC(EN) has improved, although I don't think it is where it needs to be for the long term. The JMC(Europe) has some features that the JMC(EN) has struggled to emulate, although it's closer to it than it was in the beginning, in that the JME(E) has a calendar of meetings so that you know well in advance when the meetings are going to happen, it has papers that arrive in good time generally, and it meets in other parts of the United Kingdom than London. As I say, the JMC(EN) has struggled to emulate some of that. It's never met anywhere other than in London. Everybody else always has to travel to the UK Government, rather than it ever being able to travel elsewhere. Papers are better than they were, but they don't always arrive properly for other members to be able to understand them. And in the end, it is not a parity of esteem forum. Only UK Government Ministers can ever chair it. Why, if the JMC met in Edinburgh, could not the Scottish Government chair it there? Only UK Ministers are able to put items on the agenda. Only the UK Government provides the secretariat and writes the minutes. Only the UK Government is able to set the agendas. In the long run, that isn't going to work.

Which is why, I think under the initial suggestion of the Welsh Government, the process is being reviewed. Has that got anywhere yet? Have you been able to see some evidence of the emerging findings of that review?

I do know that there have been a series of meetings at official level. They have been described to me as purposeful, and that there is a product that's going to emerge from those meetings. The JMC plenary set that work in hand back in March. I think it was expected to take 12 months. The Scottish and the Welsh First Ministers both wrote to the Prime Minister saying that a JMC plenary needed to be brought forward, and there is some prospect of one this side of Christmas, which will mostly focus on the things we've already talked about, but I would expect there to be an update on that work there. I doubt it'll all be concluded by March, but there may be some things that have been agreed that we can take off the table and then identify the next set of issues that need to be worked through.

But it appears to be a sincere, purposeful procedure at the moment—the review.

I think we have to go into it in that spirit. My own experience, Chair, is that it is very difficult to claw time in the minds of UK Ministers to think about how the United Kingdom will operate the other side of the European Union. It's not that they ever suggest that that isn't an important topic or that it needs to be considered, it is that they are so busy firefighting—there are so many fires on their desk at any one time, which are right here and now—that being able to find a moment to think ahead and consider how the future might operate is very challenging for them. 

Finally from me, the political declaration does talk about future institutional arrangements between the British state and the EU and it talks about parliamentary links and also how regional issues may get discussed. So, have you any involvement or do you plan to have any involvement in terms of how these things may be shaped?

Well, I think it's absolutely essential that devolved administrations have a direct role in the shaping of those arrangements. Let us assume, simply, for a moment that there is a dispute resolution mechanism set up between the United Kingdom and the European Union over some aspects of the future arrangement, if it is a devolved responsibility that becomes part of the dispute, then we would have to be the body that was responsible for helping to resolve it. So, it's inescapable, it seems to me, and that's why I said it's a constitutional necessity that we are involved in those discussions, rather than just simply a polite invitation to us to take part.

If I could ask a couple of questions, therefore, on Brexit legislation. I suppose the biggest question we have is: now there is a withdrawal agreement in place to be decided upon in Parliament, do you have the capacity to ensure all those Bills are progressed in time for the end of March?

14:55

Well, it is a very, very demanding period, Chair, for the Welsh Government, but it will be for the National Assembly for Wales as well, as those pieces of legislation, correcting and so on, begin to flow through the system and onto the floor of the Assembly. It is why—in exactly the same way as the Scottish Government has concluded—we came to the decision that where the changes are technical in nature, have no political sensitivity about them and do not amend law that has been made in Wales, we would co-operate with the UK Government so that correcting SIs can go through the House of Commons and apply to Wales as well as to England. So, we expect there to be about 200 of these SIs between now and the end of March, of which around 150 will go through the House of Commons and around 50 will come to the floor of the National Assembly, and that's the same proportions, almost identically, as they are expecting in Scotland, on a larger number of correcting SIs as well.

So, we remain confident that we can do it, although it is a significant ask, and some of our timings are dependent upon timings of correcting SIs in the House of Commons. If, for example, we are substituting a new UK body for a European body, that UK body has to be established in House of Commons legislation for us to refer to it in our correcting SIs. But the work goes on every day. I see advice going to Ministers across the Welsh Government every day, and even in these really uncertain times, we remain confident that we're on track to get that business through.

And you're confident that the SIs that you're allowing to be delivered via the House of Commons—nothing is going to slip through that could inadvertently, perhaps, require a UK body, when it could be a Welsh body?

Well, we are inevitably having to take a pragmatic approach to all of this. Remember that these are all SIs designed to prevent, remedy or mitigate any failures of retained EU law to operate effectively. So, that's their purpose—they're not there to break new policy ground; they're there to make sure the law is in a fit state the other side of 29 March next year.

We have, therefore, taken the view that, where it is possible and practical to do so, we will align law that will apply in Wales to law that is going through the House of Commons, but, as I said, it's got to be—. We don't do that where either we have a distinctive approach already here in Wales, or where the issue is politically sensitive, or where the SI would amend law that has been made here by the National Assembly. Those three criteria: if an SI offends any one of those criteria, then it's not made at Westminster, it will be made here. Where it's technical in nature, has no political sensitivity and doesn't, in any way, create us any policy problems, then in a practical and pragmatic way, it simply makes sense to allow it to be done elsewhere.

And as you say, there's some primary legislation that we'll have to do as well. Mike. 

Thank you. Directly on from that: when can we expect the Welsh Government to bring forward its own agriculture and fisheries Bills?

It is still the intention of Welsh Ministers to bring forward an agriculture Wales Bill to the Assembly during this Assembly term. I think consideration continues to be given to fisheries legislation and further advice will be needed by Ministers to Ministers to decide how legislation in that field should be brought forward.

Can I push you a little further—? You said 'this Assembly term'. Do you mean this Assembly term by 2021, or do you mean this Assembly term by Christmas?

No, I mean before this Assembly is dissolved and elections take place.

15:00

So, that's quite a while down the line, and we could be actually out of transition by then.

Well, that is why we have worked hard with the UK Government, and, again, in an even handed way, to say with some considerable co-operation from the UK Government, on the agriculture Bill that has been published for the House of Commons, because we believe that we have secured through that Bill all the powers that we will need in Wales for that interim period. We will not be without a legislative framework that will allow us to design a system of support for agriculture in Wales immediately after the European Union or at the point when those powers become operable in the United Kingdom. So, we've secured the immediate future through the UK Agriculture Bill, and the inter-governmental agreement has been very important in shaping those discussions. Nevertheless, for the longer term, we recognise that an agriculture Bill brought forward by Welsh Ministers and shaped and debated on the floor of the National Assembly will be needed, but there will be no lacuna.

Okay. Well, Cabinet Secretary, with regard to the UK Agriculture Bill, which, obviously, there is a legislative consent motion on, the Cabinet Secretary for Energy, Planning and Rural Affairs has said that one of the contentious issues in the Bill relating to the operation of World Trade Organization rules might be dealt with by an agreement between the UK and Welsh Governments, which I'm assuming is a separate agreement to the one we've already got. Are any details of such an agreement going to be published and discussed?

Well, the negotiations over the Agriculture Bill are not entirely concluded, so the WTO issue is the one outstanding issue where we remain in discussions with them. There are a number of ways in which that could be resolved. It might yet be resolved within the Bill itself at an amending stage, so we haven't given up that possibility. If it isn't resolved in that way, which obviously the Assembly would oversee through the LCM process—. If it is resolved through, for example, a memorandum of understanding, then that would also be published and there would also be opportunities for that to be scrutinised by the National Assembly.

Is that going to happen on more than one occasion—with fisheries, as an example?

I think the discussions on frameworks are more and more concluding that legislative routes to resolve these matters will not be needed on the scale originally anticipated and that more of the ways in which powers can be deployed across the United Kingdom in future are capable of being resolved by non-legislative means. That was what the Secretary of State David Lidington concluded when he published the first three-month report on the withdrawal Act operation. So, I think you're right to say there will be more of that in the future and, as those ways of doing things are agreed between not just ourselves and the UK Government but, very likely, between the Scottish Government as well, I hope, then those things will be published and available for scrutiny.

And you are committing to publishing those as soon as possible, so we can scrutinise them.

Of course. As they become available then we are very keen for them to be published because it is a demonstration of the success of the discussions that we will have had.

Thank you. I want to move on to common frameworks. We've just been talking about agriculture and frameworks. Jane.

Yes. I welcomed, as you know, Cabinet Secretary, your statement on 13 November, following the report that was laid by the UK Government under the withdrawal Act. So, can you give us an update on the work being undertaken to develop common UK policy frameworks, including those policy areas where it's agreed that there'll be no need for frameworks and the areas where it's recognised that there might be a need for frameworks?

Yes. Thanks to Jane Hutt for that and for what she said on the floor of the Assembly when that three-month report was laid, because it does, as you know, demonstrate to the satisfaction of the Welsh, Scottish and UK Governments that sufficient progress has been made in discussing frameworks that it is now unlikely that freezing powers, as they were called, will be needed. So, the way I see the process working—and Simon will help, because he leads the team that is involved in the detailed discussions on frameworks—is that the next JMC(EN) is likely to receive the first full drafts of framework arrangements in four areas: fisheries management and support, animal health and welfare, hazardous substance planning, and nutrition. There may be others that will be ready by then, but we anticipate those four will. If they're signed off at the JMC in December, then they will go out in this draft form for discussion amongst stakeholders because there are, obviously, very significant industrial and other interests in these matters, and we want to make sure that we have received their views on the frameworks as well. There'll then be a further, hopefully, final iteration of them and they will go back to the JMC(EN) to be signed off there.

Now, that is not to say that those four areas require legislative solutions; there are a range of different ways, from memorandums of understanding, which are more formal documents, to just letters of intent exchanged between Ministers. So, in identifying those four areas, I'm not wanting to imply to you that they've been singled out because they are thought to need legislative solutions. We are still discussing with both the Scottish and the UK Government ways in which the framework agreements can be made available to legislatures for scrutiny. Inevitably, that has to be a process that all three Governments have to agree because if one legislature moved ahead of the others then the documents would all be in the public domain for everybody else. So, it's got to be a process that we're all signed up to. But Simon could probably tell you a bit more about where the other—.

15:05

So, we are hosting the UK common frameworks programme board Thursday this week—that's officials working from all the administrations on taking frameworks forward. Our task there is to prepare for the next ministerial meeting of JMC(EN), but to take that overview of all the framework areas—non-legislative, and there's a minority where legislation may be required—to try and identify which legislative vehicle will be used, if that's being taken forward, and to draw out some common themes and approaches for those non-legislative mechanisms.

We're considering the frameworks at portfolio level in the round, so, actually, where there's—. These are the material sets of decisions that will need to be taken at a UK level with co-operation and co-ordination between administrations outside of the EU. Those are creating the demand and the need for the JMC structures to bear the weight of that decision-making structure, so there's a bottom-up analysis of the substantive business between Governments going forward. 

Some of the things where significant progress is being made, beyond the ones that the Cabinet Secretary's already outlined, are the agriculture support framework, the legislative vehicle—the extent to which there is any legislation in that space—is on the face of the agriculture Bill. The other aspects of that agriculture framework will be non-legislative, and that needs to go hand in hand with that. So, these things need to iterate.

The last point I would make is that many of the framework areas are going to be interacting with the emerging future economic partnership. The nature of the relationship negotiated with the EU will shape the type and nature and the depth of framework as it operates within the UK. So, we may be in a position where we continue in a very similar way to what we do now on some of these topic areas, and little is required additionally within the UK to make those things functional. If those things aren't nailed down tightly in the future economic partnership, then more structures in the UK need to be put in place to make those things functional. So, they will work [correction: will develop] over time at the same kind of timescale as the negotiations progress [correction: as the negotiations].

You indicated there that structures are being established. If you could give us a note as to what those structures are, it'd be interesting.

When Robin Walker came, he said nothing had been imposed in terms of the discussions around common frameworks. Has there been a point where devolved Governments have had to compromise in terms of those discussions? It's very interesting that, actually, Cabinet Secretary, you talked about the JMC signing off. I don't know whether that actually meant having an overview. I think Simon said 'an overview', but 'signing off' sounds as though you've got a proper role to play.

15:10

Well, I think the JMC will be the place where they will be signed off. I'm sure they will involve compromises, and I don't regard 'compromise' as a bad word in politics, in the sense that, if you're trying to get an agreement in which we can all feel comfortable with things going ahead, you're bound to give way, give some ground, on some things in order to gain ground on others. It is why independent dispute resolution mechanisms will be a really important part of the framework process as well, because if, afterwards, any party to a framework believes that another party is not operating in the way in which it was intended, for everybody to have confidence in these frameworks there's got to be somewhere you can go to have such matters resolved.

And, from what you were saying, there are no restrictions imposed on the Assembly's legislative competence in terms of what's emerged at this—.

No, absolutely none, Chair. I don't have to defend the agreement from Steffan this afternoon, but you know that, if I did, I would just be reminding everybody that not a single power has left the National Assembly. The three-month report tells us that there's no danger of that happening, either, in the foreseeable future.

Thank you. I think it would be helpful just to clarify for the committee discussions about how the devolved Governments will input into the common rulebook—how it would function in future.

Well, there's been a discussion of this at the ministerial forum that Rebecca Evans attends. It was also attended by Lesley Griffiths because the way the ministerial forum is operating now is that it is more into the detail of some of these things, and Rebecca is generally accompanied by the portfolio Minister responsible for the matter being discussed—so, Kirsty Williams attended the last meeting; Ken Skates will attend the next one. There was a commitment secured there from the UK Government to share some of the analysis that they are conducting that lies behind the common rulebook, and then for that to lead to engagement between us so that we can have an influence on that common rulebook in that way.

I might be able to update on that. In terms of the information that's been shared, there's been a high-level paper that's been shared at official level in terms of classification of those regulations into either deemed essential for frictionless trade for those goods, those that are deemed not essential for trade at all, and those in the middle where there is some discussion about whether they are essential for those trading relationships that are envisioned as part of that common rulebook. And there's a series of technical discussions that will happen now between officials, which have been put in diaries between now and Christmas, to try and work through that scoping exercise to identify which regulations need to be in that common rulebook.

We move on now to the shared prosperity fund. Vikki, do you want to start on this?

Yes, thank you, Chair. Cabinet Secretary, clearly you're right in saying that not a single devolved power has been lost to us, which is very reassuring at this stage—we can take some reassurance from where we're at at the moment with regard to Brexit. But I've got real concerns around the shared prosperity fund, especially representing an area that has benefited so much from European regional funding. Also, as chair of the industrial communities cross-party group, you'll be familiar with the work of Professor Steve Fothergill and the work that the Industrial Communities Alliance has done on this, and, indeed, looking at the Welsh Government's paper, 'Regional Investment in Wales after Brexit', it addresses many of those concerns. If there was a way that we could get that model up and running, I'm sure it would be very beneficial for Wales. But, where we're at at the moment with the UK shared prosperity fund—the Welsh Government has described it themselves as a direct attack on devolution, with a centralised fund. Do you see any hope that powers there could be devolved to Cardiff so we could implement some of the very clear proposals that we do have in this area?

I thank Vikki Howells for the question. Chair, in lots of what we've discussed this afternoon, I've tried to show where progress has been made, and where we're working positively together, albeit sometimes with very significant limitations. But the shared prosperity fund is emerging for me as one of the most worrying policy matters in the whole of the Brexit arrangements. I spend my time saying to UK Ministers that here is a quarrel they do not need to have, but that the way that things are shaping up, there's going to be a quarrel about it.

So, our position is straightforward, as Vikki has said: people who voted to leave the European Union in Wales were offered an absolute guarantee that the money that comes to Wales from the European Union would continue to flow to Wales in the future, and that's one of only two principles—that's the first one, that the shared prosperity fund, or whatever it's called, it must make sure that the money we get from the European Union continues, the quantum continues to flow to Wales the other side of the European Union, and the second one is about where decisions about that money are made. They've been devolved to Wales since 1999, these responsibilities. They're not something we've acquired along the way in the devolution journey. They were part of the founding legislation that set up the National Assembly.

Now, if those two things are delivered, and it's called Wales's part of a shared prosperity fund, I'm not going to fall out with people about a label on a tin. But if we don't get the money and the responsibility that we've had up until now, then I'm afraid there will be a fight about this one.

15:15

Thank you. I know the First Minister highlighted his concerns that the Wales Office appears to have cut across devolved responsibilities in arranging a stakeholder event last week about the UK shared prosperity fund. Has the Welsh Government raised these concerns with the UK Government, and if so, what response has been received?

It is an example of the unfortunate way that this is being done that stakeholder events on the shared prosperity fund were arranged in Wales without any reference to the Welsh Government, who, after all, have these responsibilities; that we were at less than 24 hours' notice—well, at the most, 24 hours' notice—informed of them and invited to send somebody along. It was simply impractical to do it by then. I understand that exactly the same pattern was carried out in Scotland, where the Scottish Government wasn't at those meetings either because they weren't told about them. It erodes good faith in the process when things are done in that way, so, yes, the First Minister wrote and I wrote, and we have received a reply from the Secretary of State for Wales. He tells us, he says,

we will continue to engage with the Welsh Government.

'Continue' is an interesting word to use when, as far as I can see, 'we will begin' would have been a more accurate description.

He says that there's an intention on the UK Government's part to launch a consultation before the end of this year and that the consultation would be an early step in the development of the UK shared prosperity fund. I think what that tells you is that the state of preparation inside the UK Government for this matter is rudimentary. But, with everything else they've got going on, there simply is no appetite in many parts of the UK Government to spend much time on this matter, and I've been in meetings with other UK Ministers who have never heard of the shared prosperity fund, and that's within the last month, and neither did any of the officials that they had with them, either.

So, that says to me that, at the very best, this is an idea being driven along by a small number of people within the UK Government, and if they don't go about it in a more satisfactory way, they are simply storing up trouble, and unnecessary trouble. There's no need to fall out about this because the things that the Welsh Government and the Scottish Government are asking for are simply, in a way, a continuation of the status quo. We are not people looking to change things in a big way. We want to do things differently in the future, we published our paper on regional economic development as a result, but on the big parameters in terms of money and responsibility, our message to the UK Government is, 'Your hands are full enough with everything else you're having to deal with, why not leave this one alone?'

15:20

Thank you. My next question was going to be whether you'd had any indication from the UK Government about when they would publish more detailed proposals, but, clearly, given what you've said, it seems as though that's a long way off. And so I'm just thinking in addition to that: what would happen to this pot of money during the time that consultations and discussions are ongoing? Are we going to be losing out on that money, or will it be ring-fenced and put to one side to come to us when the proposals are finalised?

Well, Chair, again, to try to be positive, the Welsh Government has always welcomed the steps that the Chancellor of the Exchequer has taken in relation to the current round of European funding. So, he offered two guarantees: an original guarantee, which was that projects that had been agreed up until 29 March next year would be funded, and he has since extended that guarantee so we now know that, as far as structural funds are concerned, we are in the current round right up until the time it finishes. So, that does mean that the shared prosperity fund is not going to happen immediately, come what may, because the current arrangements will continue up to 2021, and Wales will be able to use the full amount of money that we have been allocated through the European Union and, operating within the shared rulebook, we will be able to make the decisions about how we use that money. So we've always welcomed the fact that the Chancellor's relatively early action has sustained confidence in the current round of funding and has allowed our partners to go on making plans and coming forward with good ideas for using the money. The shared prosperity fund is for what happens afterwards and, there, there are no guarantees of the sort that we've had so far. 

People always talk about European Union inflexibility, of course, west Wales and the Valleys fails the nomenclature of territorial units for statistics 2 criteria. It's not contiguous. We've got the Powys bit, the Borth corridor coming across there, which stops it being contiguous, so it didn't actually meet their criteria, but they were willing to be flexible and treat it as, effectively, one area, which I think was very beneficial for both west Wales and the Valleys. 

The point I would like to ask you is: surely the key is that they can call it a shared prosperity fund, they can call it what they like, but Wales gets exactly the same amount of money when the current scheme comes to an end—it's the same amount. So, there's no having to go bidding into it, we have our own money top-sliced off any shared prosperity scheme and then we can bid against that. Now, the criteria are probably areas that some of us from some areas might be arguing with people from other areas about what they should be, but the quantum should be, surely, set and it should be the same as we're getting now. 

Well, Chair, that's exactly our argument. The amount of money that Wales qualifies for from the European Union is determined by a set of rules. It is our needs against the programme that the European Union has. It's one of the rare bits of money in our budget that come to us on the basis of need and with a rulebook that you can apply to, and if you don't think the rules have been properly applied, you can go and argue your case. So, it just seems a sensible, pragmatic way to say, 'That's the sum of money that's been identified in the current round, let's take if forward.' The needs won't have gone away. On 30 March next year, the needs that Wales has will still be here and the funding that we need to match those needs needs to be here as well. 

I agree with the end, but I'm not sure I'm convinced by the means because we've no idea if we would have qualified in future programmes and at what level. But it seems to me this is a really legitimate negotiation position, given that the Barnett formula does not serve us particularly well; in fact, the worst of any of the home nations. So, I do support your political objective here, I have to say, though I'll give you a bit of advice: perhaps spread the reasons out a bit in terms of the grounds for pursuing this point. But it would be quite a rupture, potentially, from existing patterns, and I think that is a genuine worry for us all. 

I completely agree with David Melding, Barnett would be a disastrous way of distributing this money from a Welsh point of view, as would a bidding system as well. I'm not prepared to sign up to a bidding system. I probably wouldn't disagree with David—I think we do know that we would qualify for the next round; the data is already published. And even if we hadn't, we would have been guaranteed a 70 per cent transition period for another seven years. So, there would have been more security. And if we were not leaving the European Union, which we are, we would have been already—the UK Government and ourselves would have been involved in the detailed discussions about the next round of structural funding. We'd be far further forward in those discussions than we are in relation to the shared prosperity fund.

15:25

Jane, do you have any further questions on the shared prosperity fund?

Cabinet Secretary, we've talked about everything, in the sense of when we mentioned the meaningful vote that's going to be in Parliament, in roughly two weeks' time, and that vote will decide as to whether the House of Commons agrees to the withdrawal agreement and the implementation period. Now, if that does get passed, and we do have a transition period, we will be abiding by EU law during that period, but we will not be having a say in that law. Has the Welsh Government made any arrangements to look at how we can influence or assess and scrutinise the European law on devolved responsibilities?

From memory, Chair, I believe that the withdrawal agreement does set up some mechanisms already there for being able to have a dialogue with the European Union on new EU law that will emerge during the transition period. Because we will be—as you say, in the transition period, not only will we continue to abide by the set of rules that have already been developed, but we will be bound by any new European-level legislation that is passed during the transition period. And the withdrawal agreement sets out a mechanism for the UK to be at least in dialogue with the European Union about—

That's the joint agreement, so, the question is: has the Welsh Government come to an agreement that it will be involved in that joint committee?

No, I don't think we have reached that point of detail in the discussion. And, to be frank, the minds of UK Ministers, when you meet them, are focused on the next two weeks, and selling the deal that they have reached, and seeing where that gets in the House of Commons, rather than dwelling on some of the more detailed points of how the transition period would operate in practice.

Well, their minds might be, but I assume our minds will be focused upon—

We will be, but you couldn't get attention for that sort of—. If I asked that sort of question in the JMC, I wouldn't get an answer. But of course we will be interested in it, and of course we will look to make sure that Welsh interests are applied, should we ever get to that point.

It's the thirteenth.

The thirteenth. Sorry, when I said eighteenth, I realise now—13 December.

And the same day as the council. Interesting times ahead of us. And just a final question, your view of the loss of the principle of subsidiarity—what's your view on that?

Well, we will no longer be part of the formal subsidiarity arrangements of the European Union, clearly, because there is again, as you know, a formula there, in which, if a third of member states believe that the principle of subsidiarity has not been observed in a piece of decision making by the European Union, then they can require that decision to be revisited. We won't be part of that the other side of the European Union. But the basic principle of susbidiarity, that decisions should be made at the right level of government—whether that is local authorities, or regional governments, or national governments—will very clearly continue to be played out in lots of the discussions that we will have with the UK Government. And, as a principle, it is one that I'm sure that we will want to continue to advance in an intra-UK set of negotiations.

Well, we've come to the end of our time. So, can I thank you, Cabinet Secretary, for your time this afternoon? I'm sure we will have some interesting discussions in the months and year ahead of us. You will receive a copy of the transcript for any factual inaccuracies, so, if you find any, please let the clerking team know as soon as possible. So, thank you again for your time this afternoon.

15:30
3. Papur i'w nodi
3. Paper to note

Members, we'll move on to item 3 on the agenda, which is papers to note. We have one paper to note, which is correspondence from the Wales Environment Link to the Cabinet Secretary for Energy, Planning and Rural Affairs regarding the UK Fisheries Bill. Are Members content to note that at this point? They are. Thank you.

4. Cynnig o dan Reol Sefydlog 17.42(vi) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
4. Motion under Standing Order 17.42(vi) to resolve to exclude the public from the remainder of 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.

Then, item 4. I therefore move that we go into private session for the remainder of this meeting, under Standing Order 17.42(vi). Are Members content to do so? They are content, therefore, we now move into private session for the remainder of this meeting.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 15:30.

Motion agreed.

The public part of the meeting ended at 15:30.

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