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Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol

External Affairs and Additional Legislation Committee

25/03/2019

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Alun Davies AM
David Rees AM Cadeirydd y Pwyllgor
Committee Chair
Delyth Jewell AM
Huw Irranca-Davies AM
Mark Reckless AM
Suzy Davies AM Yn dirprwyo ar ran David Melding
Substitute for David Melding
Vikki Howells AM Yn dirprwyo ar ran Joyce Watson
Substitute for Joyce Watson

Y rhai eraill a oedd yn bresennol

Others in Attendance

Des Clifford Llywodraeth Cymru
Welsh Government
Mark Drakeford AM Prif Weinidog Cymru
First Minister of Wales
Piers Bisson Llywodraeth Cymru
Welsh Government
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
Claire Fiddes Dirprwy Glerc
Deputy Clerk
Peter Hill 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 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? Can I remind Members this afternoon, first of all, to make sure their mobile phones are on silent or switched off, please, so that they don't interfere with the broadcasting equipment? The meeting this afternoon is bilingual. If you require simultaneous translation from Welsh to English, that's available on the headphones via channel 1. If you would benefit from additional amplification, please, that's available via the headphones on channel 0. There is no scheduled fire alarm this afternoon. So, if one does take place, please follow the directions of the ushers to a safe location. Do any Members wish to declare an interest?

I would, please. I'm chairing the committees on the programme monitoring committee, but also the regional investment post Brexit and also the European advisory group. So, I will keep away from any subject questions on preparedness or on financial matters.

Okay. We've also received apologies from Joyce Watson, David Melding and Michelle Brown, and we welcome Vikki Howells as a substitute for Joyce Watson and Suzy Davies as a substitute for David Melding. 

2. Sesiwn graffu gyda Phrif Weinidog Cymru
2. Scrutiny session with the First Minister of Wales

We move on to the next item on the agenda, and that is this afternoon's main evidence session with the First Minister. Can I welcome the First Minister, Mark Drakeford, this afternoon? First Minister, if you'd like to introduce your officials for the record, please. 

Diolch yn fawr. So, gyda fi prynhawn yma mae Des Clifford, sy'n gweithio yn fy adran i, Piers Bisson, pennaeth y tîm sy'n gweithio ar Brexit, a Simon Brindle, sy'n canolbwyntio ar bethau tu mewn i'r agenda yna, a frameworks yn enwedig.

Thank you very much. So, this afternoon, I have Des Clifford, who works in my department, Piers Bisson, head of the team that's working on Brexit, and Simon Brindle, who concentrates on issues within that agenda, and the frameworks in particular. 

Thank you for that, First Minister. We'll move straight into questioning, if that's okay with you. Clearly, the weekend has been a busy weekend in this area and we've seen things happen. Our briefing has changed as a consequence of what happened over the weekend. I'm sure you can appreciate that. Perhaps we'll have your assessment as to what events have gone on over the weekend, particularly the outcome of the council meeting on 22 and 21 March and how that is now feeding into the process within Parliament. 

Well, Chair, I imagine—. My starting point is simply to say that it is astonishing that we find ourselves in the position that we are in—that we have a Government that triggered article 50 and then turned out to have no plan for how to proceed, that has assured us at many, many points in the process that they were about to come to a conclusion that would command a majority in the House of Commons, that in the process we have lost the goodwill of so many people who wanted to be on our side and, in my experience of being in Brussels and talking to people, who were prepared to work hard to try and find a way of leaving the European Union that would have protected their interests—of course—but would have been to our advantage as well. When I was in Brussels for St David's Day, I had a further series of meetings with people who have always, I think, been prepared particularly to take a positive attitude towards Wales and our future, and the message I got consistently was that the Prime Minister's decision to back the Brady amendment had crossed a rubicon in their view of the United Kingdom. In their view, the Prime Minister had struck a deal with them, that they had struck it in good faith with her, and then she was prepared to support an amendment in the House of Commons that overturned part of the deal that she herself had negotiated. And at this distance, we don't see always quite the impact that what was described to me straightforwardly as a breach of good faith on the part of the United Kingdom—we don't see the impact that has on our reputation and on our ability to then go on having those sorts of negotiations. So, it's not a surprise that last week's events were ones in which the European Union felt it had to take charge of the agenda from their perspective, where the Prime Minister's reluctant decision to seek an extension could not be delivered at that summit on the terms that she had set out for the other members of the European Union.

And we're here again this week, and it is just going round and round the same circuit time after time. Our advice is unchanged. I sat in a room with the Prime Minister, with the First Minister of Scotland, in a very small meeting well before Christmas—before Christmas certainly—and said to her then, 'There is a deal to be struck in the House of Commons if you are prepared to move away from the position that you have set out, and that's what you now need to do. You will never get a deal of your sort through the House of Commons if you think that your key constituents are those people on your far right, the people who are determined to leave the European Union on the bluntest of terms.' And she's never succeeded in getting a majority by appealing to them, and if she had pivoted, as they say, and sought a different type of deal—reaching out, trying to create a consensus—that could have been done. It should have been done from the very outset.

Sorry, I don't want to go over the long history, Chair. I'll finish with this point that I have long come to believe that the Prime Minister's basic error was from the start of the referendum to regard it as a winner takes all referendum in which 52 per cent of the population were to have everything and 48 per cent of the people were to be given nothing. If she had tried a different approach to Brexit in which she had recognised the closeness of the referendum result, that it was a decision to leave the European Union but it wasn't a decision to leave the European Union on terms that damage all of our futures, she would have set down a different path and negotiated a different way through, and I think we would have been far further down the road had she gone about it in that way. She chose the opposite. She was still at it on television last week, talking to the British public as though there was only one opinion out there that she had to respect, and I'm afraid that's where so many of our difficulties find their origin.

14:05

Well, thank you for that reminder of some of the events, but clearly what's important to us is what the Welsh Government will be looking to do in the next weeks and months as a consequence. In your answer, you started off saying, 'The Prime Minister has assured us'. Can I confirm as to whether she's assured us generally, or has she assured the Welsh Government about those deals, because it's important to understand where the Welsh Government is in the discussion process. I want to try and work out whether you've been involved in discussions on her position and her intention to come back with the motions, whether you're aware—has she discussed with you her idea and letter to write to the Commission asking for an extension. Were you involved in any of those areas?

Well, I spoke to the Prime Minister directly by telephone before the second vote on her deal in Parliament. Last week, Jeremy Miles had conversations with David Lidington, the de facto Deputy Prime Minister. He was involved in a further via-telephone-conference meeting of the JMC (Europe) last week. He attended, I have attended, successive meetings of the UK Cabinet sub-committee on preparing to leave the European Union without a deal. So, it is not that we don't have opportunities to hear from the Prime Minister and to put our point of view to her. If you wanted me to sum up the nature of those discussions, then I heard Hilary Benn use this phrase on the radio last week. He said the Prime Minister's door has been open, but her mind has been closed, and that's been my experience as well.

But, you know, there are successive opportunities to put our point of view, and sometimes—not always; we weren't, for example, provided with some of the specific advance notices that you referred to, Chair—. But we have these successive opportunities to hear from, and to talk to, the UK Government. That is completely fair for me to put those on the record. But the evidence is that, no matter how hard we make our case—how hard the Scottish Minister and the First of Scotland make a case—it's very hard to see where the Prime Minister then acts on any of the advice that we've provided.

14:10

It's very concerning. Just to confirm again—you said you had some of those confirmations—were you informed before the letter went to Donald Tusk regarding seeking and extension?

First, I'd like to apologise in advance. I'm going to have to leave before the end of this session because I have to attend a funeral. So, I won't be walking out in horror at something that you've said.

First Minister, I'd first like to ask you about where you think we should be heading from here. Personally and politically, I agree that I'm not happy with where we are. But if meaningful vote 3 fails this week, we expect that there will be indicative votes that MPs are asked to vote on again. I appreciate that this is a Westminster issue, but in terms of what the Welsh Government's stance is on this, I'd be interested to know what your order of preference would be. So, the Brexit select committee have said that they think the options will be: to leave without a deal; to seek renegotiation based on a Canada-style deal; to seek renegotiation based on common market 2.0, so staying in the European Economic Area and a customs union; or holding another referendum. So, what would your order of preference be of those options please?

Well, of those four options, Chair, from a Welsh Government point of view, we would not be supportive of the first or the second. I think it is very important that Parliament has the third and the fourth of those options in front of it. I don't think it is helpful for me to try and then prioritise within them, but I do think that both of those options must be available to the House of Commons.

But if I—sorry to interrupt you, First Minister—if I could push you on that, though, because, obviously, whether it's the third—so common market 2.0—or a second referendum, they will have very different impacts, potentially, on the Welsh economy. So, if you were to have to advise anyone on which you think would be better for Wales, which one would it be?

Well, Chair, I think—. I'm not trying to dodge Delyth's question at all, but I think the premise of that question is that a second referendum would lead us to remain in the European Union. 

Well, I mean, I'm sure that you're aware of what my opinion is on this. I'm just keen to know what yours is. 

Yes, and I share your opinion there. We have said from the beginning—. Our advice to the people in Wales in the first referendum was that Wales's future was best secured through continued membership of the European Union. If there were a second referendum and 'remain' was on the ballot paper, then that is what our advice still would be. But I don't think that Parliament, necessarily, will have a simple choice between a common market-type solution, which is close to that set out in the joint paper  we published with Plaid Cymru in January 2017, and a referendum. You've heard, I'm sure, many variations on this over the weekend, in which those two things are linked—in which if a withdrawal agreement could be got through the House of Commons, it would be on the basis that that withdrawal agreement would then be subject to a second people's vote. So, I don't think choosing between the two and ordering them is a sensible thing for me to say this afternoon. The answer to Delyth's question: if there was an option of staying in the European Union, the Welsh Government would go on explaining to people in Wales why we think that is the right answer.

Thank you, First Minister. The reason that I'm asking is because it's very likely that MPs will be asked to vote on all of these options separately. So, at the moment, then, the Government doesn't have a particular view of which of these would be—even if not voted for, but what would be better for Wales.

It's about the House of Commons identifying where the centre of gravity there lies. And so long as MPs have both of those options in front of them, then I think what we will learn—. I think our impact on where those votes will go is not central. We should wait to see where, between those options, the House of Commons comes down. Two of the four options would be acceptable to us as a Welsh Government; two of them would not.

Okay. Just finally on this point please, Chair: if you were to have to face this option yourself today—and I appreciate that things are changing all the time—but today: how do you think that you would vote?

Politicians are forever telling journalists that we're not going to answer hypothetical questions. Hypothetical questions—I just don't think they get us very far. The situation moves so fast. I could give you an answer now and, in an hour's time, the range of options would have altered. Just to be clear: the Welsh Government's position has always been that there is a form of Brexit, which we jointly elaborated on in our document, which is very close to the Scottish document as well, where if we are to leave the European Union, there is a way of doing it that protects our economy and jobs. That will never be as good as the protections we have while we are in the European Union. 

14:15

I'm interested in understanding the conversations that you have with the United Kingdom Government on these matters, and Delyth has outlined a range of different options potentially available, as we move through this chaotic time. I think it's fair to say that the only options that would enable the United Kingdom to leave on the dates agreed by the European Council last week, would be were the deal agreed by Mrs May to receive the endorsement of the House of Commons, or if the House of Commons was to vote to leave without any deal at all. Any other arrangement, whether it's a customs union, whether it's the policy pursued by the Welsh Government over the last few years, would inevitably mean a longer period of time within the European Union and would mean that we couldn't leave on either 12 April or 22 May. If you agree with that analysis, could you potentially outline to us the conversations that you've been having with UK Government about revoking article 50 to provide a lot more time to start these negotiations again, or whether to extend article 50 in order to have a more fundamental negotiation with the European Union?

Thank you, Chair. Let me just say something on your first proposition first, which is that I don't think we—. I have not given up, and I don't think the advice that I have seen leads me to give up on the proposition that if the House of Commons, this week, were to move in favour of the sort of prospectus that we have set out, and if the amendments that we have proposed to any withdrawal Bill were to put those new aspects of a political declaration into the Bill—I think you could do that by 30 June. Now, I know then you would rightly say to me, 'But 30 June is not on offer, because the European Commission and the 27 states say you've only got until 23 May.' My own view, for what it is worth, and we're all just exchanging speculations here—. My own view is, if the European Union saw that the House of Commons was moving purposefully and directly to a different sort of deal that they regard as better for the European Union and for ourselves, and they could see that that deal could be delivered by 30 June, but not by 23 May, that they would find a way of allowing us those extra weeks. So, I have not given up on the idea that we could strike a deal of that sort and that it could be delivered without us having to enter into the huge complications of the European elections. 

The nature of our discussions with the UK Government have been like this, really: the Prime Minister has only ever been prepared to advocate for the deal that she herself has struck. So, you can go into the room and you can offer her different possibilities, and she listens very politely—always say that—and she engages in the conversation with you, but when the conversation is over she reverts—in what has always seemed to me,to be a rigid way—to the one deal that she says she is prepared to support. Even when, and, as I say, this was before Christmas, Scotland and ourselves were saying to her, 'But you need more time, you can't get even your own deal through the House of Commons by 29 March, because you have to pass a whole Bill to put that withdrawal agreement into law', she was never willing to accept that argument. So, it's only in the very last week or so, isn't it, that the Prime Minister—and she says it, as you know, as though it's the bitterest pill for her to swallow—has to recognise that more time is needed, and in her mind, quite certainly, the shorter that time, she feels, the better. 

We have always argued from the very, very beginning that this approach to negotiations in which you just keep setting deadline after deadline in front of you has never worked for the United Kingdom. In fact, it works against us every time, because every day that you get closer to the deadline weakens your position and strengthens the hands on the other side of the table.

14:20

So, just for me to understand what you're saying, First Minister—I'm sorry, I don't share your optimism on 30 June. The assumptions that you make, I think, are extremely generous in terms of not only the 27 EU member states and the UK Government being able to change fundamentally a position that's already been agreed—to do that and do all the work needed, both in legal terms and statutory terms by that time, I think it is an extraordinarily optimistic outlook. But I don't necessarily disagree with your wish to avoid some of the consequences of that. I recognise that.

But the answer to the second part of the question sort of mitigates against your optimism in the first part, doesn't it? Because if the UK Government and the negotiating teams have been given very clear and rigid instructions as to where the parameters of negotiation lie, then it is impossible to conceive of the circumstances in which they can be changed, even with a vote in the House of Commons, which, arguably, the political importance is more than the legal importance of that, and then to be able to go back to the negotiating mandate to Brussels for Brussels to adopt a negotiating mandate and for an agreement to be made. Even if that agreement would be the sort of agreement that the EU would probably prefer to make than the one they actually have made. So, even where the EU would want to make that, 30 June is, I think, too optimistic for me. But, in terms of where you are—your correspondence and your meetings—are you arguing for a longer extension, a longer period of negotiation to enable the sorts of conversations that we would all want to see take place?

What we've been arguing for is having the right amount of time and not having rigid dates in the diary that prevent you from having the right amount of time. Now, let me just go back to the substance, because, where I agree with you that I'm having to be optimistic is in the ability of the UK Parliament to set a different agenda and a Government willing to carry it out. If you'd had a UK Parliament that was able to grasp the sort of agenda we have suggested, then, actually, it's the political declaration that has to be changed, not the withdrawal agreement. So, it isn't a matter of having to have a wholesale renegotiation of a legally binding document; it is having a different political prospectus in the political declaration. And my view is that if the UK were to grasp that and make it clear to the European Union that that's what they were trying to achieve, I don't think the difficulties would be on the European Union end.

I completely understand why the European Union is anxious about the impact of the UK remaining in the European Union without taking part in the European elections, but there are different views even in Europe about what date those difficulties crystalise around. So, the Commission believes that they have to be 23 May because there are citizens in this country of other countries who wouldn't be able to take part in the elections and UK citizens abroad who'd be denied an opportunity to do it, but the Parliament's own legal advice is that provided no decisions are taken by an incoming Parliament, then those difficulties would not be real, wouldn't have a real-world impact. That's why I think they could, if they wanted to, take it to 30 June and I think if they thought that we were genuinely determined to craft a different future set out in the political declaration, anchored in the withdrawal Bill using the sort of amendments we have passed, it could still be done. If it can't be done then and it has to take longer, then that is a less worse prospect, absolutely, from the Welsh Government's point of view than crashing out of the European Union without a deal. We would all be right to pause and think about the real complications that taking part in another round of European elections would involve. So, I certainly don't say that lightly, but given the choice, I know which one I prefer.

Yes, and I think all of us recognise that the real-world impact on the people we represent is more important than the difficulties that face us in actually fighting the elections. I agree with you on that. But can I press you further, please, on the nature of your conversations with the United Kingdom Government? On 30 June, the Welsh Government, along with Plaid Cymru, asked the National Assembly to agree a policy that included a belief that, I quote,

'work should begin immediately on preparing for a public vote.'

Now, you will have witnessed the groundswell of support for that over the past few weeks, especially over the past few days. I think 10,000 people in your own constituency have signed the petition asking for article 50 to be revoked, and that's common across large parts of the UK. What have you been saying to the United Kingdom Government on a public vote? Because you say in this motion, which most of us around this table voted for, that you believe that work should begin immediately on preparing for a public vote. So, what steps has the Welsh Government taken to pursue that belief and to deliver on that motion?

14:25

Let me say to begin with to the Member that if article 50 were revoked, there would be no second referendum. So, let's be clear about that. If people had revocation, then the European Court of Justice ruling is clear. Revocation is not a tactic. You cannot revoke in order to hold a referendum, or in order to go on thinking about it. If you revoke, then that's the end of the sports.

But in terms of the preparation for a second referendum, Alun is quite right to point out the fact that the decisions for that, the preparations for that, have to be at the UK level. There are things that we can do here to make sure that returning officers are checking where their ballot boxes have been stored and are ready to conduct an election. We're responsible in some ways for the conduct, but we're not responsible for the setting of a second referendum. I've certainly made this point with UK Ministers that it would be democratically beyond difficult if people were denied an opportunity of a second vote because the practicalities had been timed out, not because of the merits of the issue, or a vote in favour in Parliament, but because the UK Government had just talked the clock down to a point where that was no longer a possibility. We've made that point on that planning ahead and on making sure that doesn't happen directly to UK Ministers, certainly.

So, you've spoken directly to UK Ministers on the matter of a public vote, and you've pressed them on those issues.

It came up in the meeting that I described to you when the Scottish Minister and I were there, because we were exploring all the different ways in which this issue could be resolved, and advocating for our position, and the Scottish Minister was rehearsing the second referendum issue. You can have a conversation with the Prime Minister. It's not that she sat back and didn't take part in it. She did. But at the end of it, she simply returned to her basic proposition that whatever else was being rehearsed, there was a deal, it was her deal, and she wasn't going to be willing to be drawn into any other solution.

Two things, First Minister, from me before we move on. You've talked about the Scottish First Minister and you've worked together. Originally, we had a vote both in this Assembly and in the Scottish Parliament, which were in sync with one another. Have there been discussions with the Scottish First Minister in more recent times, particularly since the weekend, to discuss perhaps how the Welsh Government and Scottish Government could move forward in synchronisation to ensure that that motion we put forward continues?

I haven't spoken to the Scottish First Minister directly this week. There are further meetings later this week where Welsh Ministers and Scottish Ministers will be together, and there'll be further opportunities to work as closely as we can with them, and those continue all the time. They were continuing last week in advance of us putting down those proposed amendments to any withdrawal Bill, where we shared those ideas with the Scottish Government in advance of publication, for example. So, although I haven't spoken directly with Nicola Sturgeon today, there are opportunities all the time for us to continue to work together, and we do, as closely as we can on this particular matter.

Obviously, as things move on this week, we expect them to move quite quickly. Will you therefore be looking at opportunities to actually have those discussions with the Scottish First Minister this week?

As I say, Chair, there are dates in the diary already this week. We're not yet completely decided who will go from the Welsh Government's point of view. It could be me. I may yet end up going to meetings in London on Wednesday, but we're just watching, like everybody else, the unfolding events and we'll decide as close to the point as we need to whether I'll go, whether Jeremy Miles will attend. We'll know who is coming from Scotland; we'll be talking to them in advance. If a point comes when a conversation between the Scottish First Minister and myself is useful this week, of course we will make sure that that happens, but it's not the only opportunity, because we know that we're going to be in the same room with the Scottish Government on things that are already—. In fact, this morning, Lesley—Lesley Griffiths—is in London in a meeting involving UK Ministers and Scottish Ministers on the agriculture side of Brexit. So, these things don't need inventing every day, because they are there as part of the way current business is being conducted. 

14:30

Okay. Before I move on to preparedness, we've talked an awful lot this afternoon about 12 April or 22 May, but of course we are still, at this moment in time, under law, scheduled to leave on 29 March. Have you yet been informed by the UK Government as to whether she, the Prime Minister, intends to lay a statutory instrument to change that date?

I think that is a very good question, Chair. I've seen no moves this morning by the UK Government to lay the necessary instrument to change the date of 29 March. 

So, there's still a possibility that we leave on Friday.

Well, I make the assumption that the Prime Minister quite likes to be in that position. [Interruption.] Delyth has seen it already, perhaps. 

No, I haven't. No, I haven't. I had heard last week, from a constitutional law expert, that the UK Government would have to table something today in order for that to—. Is that correct?

I'm not an expert, Chair, in the arcane procedures of the House of Commons. There are others here, on both sides of the table, better placed than me to know how that would be. I think what we're learning is is that there are no rules—that, in these circumstances, the rulebook is rewritten every day. I am entirely speculating here, Chair; I would not be surprised to find the House of Commons voting on Friday on such a proposition. 

Yes. First Minister, at the beginning of the session, your critique of the Prime Minister was that she needed to recognise that a 52:48 result implied a need to compromise. I think, to broadly summarise your position: not in the EU, but remaining in close alignment with it, some sort of variant of a Norway-type relationship to reflect that 52:48 result. Would you have been saying the same if the 52:48 had been the other way round?

Well, I hope that, had it been the other way round, we would have continued to be respectful of the views of those people who had voted in such large numbers to leave and that we would have taken into account the strength of that feeling in the way that we looked to reform the way that things happen at the EU level. 

But not by arguing for being in an EEA-type Norway relationship. 

I doubt it. I'm trying to think myself into the position you're suggesting, which is an even more 'what if?' version of history than the others we've been—. But I think what I would have wanted to have been would have been to have been respectful of the fact that there would have been such a large number of people who took a different view. 

And I think leavers are respectful of remainers, but when the Prime Minister said leaving the aegis European Court of Justice and leaving the single market and leaving the customs union, that's leaving the European Union, but you would prefer not to do that because you don't agree with the decision the electorate made, do you?

I think Wales's best interests and the future of people who live in Wales are best secured through membership of the European Union, if that choice is available. That was my opinion in 2016; it remains it now. But the Welsh Government has always recognised the result of the referendum. We have always been focused on the form of Brexit, not the fact of Brexit. However much we might regret that that was the vote, that was the vote. 

Well, I hope that will remain the case, First Minister. 

When the Bank of England made its estimates previously suggesting that a 'no deal' Brexit could lead to the loss of between 4.75 and 7.75 per cent of GDP over a three-year period, the Welsh Government chief economist then came out with an estimate for Wales of job losses of between 40,000 and 50,000. Since then, the Bank of England has reduced its estimate of 4.75 to 7.75 per cent to a much more sensible 2.75 per cent. What change has the Welsh Government made to its estimate to reflect such matters as the agreements on transport and finance, which encouraged the Bank of England to revise down its estimate so markedly? 

14:35

As I recall it, Chair, the central assumption of the Bank of England is still a reduction in UK gross domestic product of between 5 and 6.5 per cent. That will be within a broader range, and the bottom end of it may well be down as low as 2.5 per cent. I still don't remember members of the leave campaign telling people that if they voted to leave that the economy would be shrinking, even at 2.5 per cent, let alone at 5. Personally, I don't find that comforting—the fact that the Bank of England now thinks that the economy might shrink a little bit less than it did otherwise.

Our chief economist published an update on his original analysis a week ago; I'm sure committee members have seen it. He continues to believe that the impact of leaving the European Union without a deal will be equivalent to the impact of the global recession of 2008—that's how he derives his figure of 40,000 to 50,000 job losses—and I still think that that is a working hypothesis that we are using inside the Welsh Government in thinking about the things that we might be able to do to help people to respond, if that would be the position that we would be in.    

So, during the campaign, I think recognising the EU's position on no cherry-picking and how close the relationship is, and certain things follow from that, but I think people did expect that it would be possible to negotiate a Canada-style free trade agreement for the UK as a whole, and it's only since the referendum that the EU has taken the position that that would be subject to Northern Ireland remaining in their regulatory purview, and potentially having a customs border down the Irish sea. So, they insist that we have to have that backstop; we couldn't possibly leave the customs union and customs market without having a backstop, because that would imply a hard border or potentially put the peace process at risk.

Today, the Irish Taoiseach has said that special arrangements can be found to keep the Northern Ireland border invisible in a 'no deal' scenario, and the EU Commissioner says,

'We're working very closely with the Irish authorities to try and perform controls away from the border'.

So, why then was this backstop necessary? 

Well, I'm not at all surprised to find that the backstop is necessary, nor do I think that it is a fair reflection of the EU's position to say that they only became aware of it in a Canada plus style agreement. I think it is UK Ministers who from the outset underestimated the impact that having a land border with the European Union would have. In fact, Chair, I remember attending a meeting in July, immediately after the referendum, here in the Assembly building. David Davis, the then Secretary of State for Exiting the European Union, attended. The First Minister took the meeting—I sat in on it—and the First Minister began the meeting by asking David Davis how he thought the land border would be negotiated within a deal to leave the European Union. And he did not get a sensible answer of any sort. I think that has always been—that has been at the heart of the dilemma for the UK Government, that there are members of it who simply are not willing to recognise the significance of that border and the risks to the peace process that come with any form of re-instatement of border-type arrangements.

Now, I'm quite sure that when the Taoiseach says that they will do everything they can, if a 'no deal' Brexit happens, to mitigate that, and I'm quite sure the UK Government would do the same— nobody wants to see a recrudescence of the difficulties that have happened there—but the reason the backstop is there is to guarantee that those things don't happen and that we don't need hand-to-mouth mitigation measures, but that there is a proper guarantee that those things that were there in the past and caused such harm will not be there in the future. Our deal, of course, avoids that altogether.  

Why is that guarantee required if both the Irish and the EU are saying today that even in a 'no deal' scenario, there is no requirement for any infrastructure or checks on the border? 

What they are saying, as I understand it, is they will do their best to take whatever actions they can to mitigate the impact that would be there. Nobody is claiming that they will be able to just eliminate all of those things. All the promises we heard at the very beginning—that there were technological solutions available elsewhere in the world, that we would just lift them up and drop them down, that there'd be no difficulties at all at the border—all of that has been exposed and exploded in the time that has passed since. I think it is one of the most disconcerting parts of the hardline Brexiteer narrative that they are willing to treat the Northern Ireland/Republic of Ireland border as something that is fundamentally not serious. What did Boris Johnson say? That it was no different than the border between two boroughs of London. That is such a misrepresentation, and such a willingness to waive to one side the risks that exist. And I think that's what we've been up against during this debate.

14:40

So, First Minister, what do you say to those who've said that a failure to come to agreement, a failure to agree the backstop, would lead to a hard border and infrastructure at that border, when both the Irish Taoiseach and the European Commission today have admitted that is not true?

Well, I don't necessarily accept that what they are saying today is—

I think the Irish border is being used by people on your side of the argument.

Can I remind Members we are not here to actually discuss the argument? We are here to look at the implications for Wales.

Can I move on to implications for Welsh ports, then, of what's being said today by the Taoiseach and the Commission? If these checks can happen away from the border in Ireland, what are the implications, if any, for what checks would be necessary at Welsh ports in a 'no deal' scenario?

Well, there are impacts for Welsh ports, undoubtedly, Chair, if goods that come from the Republic into the United Kingdom directly are subject to tariff and other new barriers to trade, whereas goods that come from the Republic of Ireland into the North of Ireland do not face any checks at the border. What happens to those goods when they are now moved on from the north of Ireland and into a UK port? Do they become subject to tariffs at that point? Will there be border checks at the Britain end of this? I don't think we know the answer to that. The UK Government has said that it will not impose controls on goods coming into the UK through those borders. What is, then, the position, legally, of those goods that have come from another part of the European Union into the Republic of Ireland and then moved from the Republic of Ireland into north Ireland—we know there'll be no border check there—but then moved from the north of Ireland into the UK? Surely, tariffs have to be charged on those goods, because they are coming from the—

Surely, the tariff would be charged in the same way as the differential VAT or customs and excise rates are currently.

Well, these are very important questions to know, not in a speculative way, but in a definitive way, as far as Welsh ports are concerned. Because you can mount an argument—and the Member will have heard it many times—that, if goods that come from the Republic directly to Wales are subject to new barriers to trade, but goods that come from the north of Ireland into a port in Scotland or England, for example, are not, then that will provide an incentive, a clear incentive, for goods to travel that way, and that will be to the detriment of Welsh ports. I don't myself believe that you will see that immediately, because I think supply chains and logistical arrangements, you don't just switch them on and off—these are big plans that people have to have for many months ahead. But I do think in the longer run—and maybe not that long—that, if there are different barriers to trade coming in through Wales to the barriers that will be there elsewhere, that will start to have an impact on the Welsh economy and on the Welsh ports.

On that point, First Minister, before we move off preparedness, tariffs were announced last week. I'm sure you would have had an opportunity to have your staff look at those tariffs—the implications of them. Have you seen anything that you think requires additional preparations within Wales as a consequence of those tariffs, which may come to force if a 'no deal' is the outcome of the negotiations?

Well, Chair, yes, of course we are doing work to see what the impact of the tariff policy in a 'no deal' scenario would be on Wales. And you'll know that I wrote to the Chancellor of the Exchequer on 31 January setting out those issues that were particularly important to Wales, in relation to red meat, automotive steel and so on. What we've seen from the UK Government confirms what we know—and indeed what the Chancellor of Exchequer himself says—that, if we leave the European Union without a deal and we're forced into tariffs of the sort that have been announced, the impact on the UK economy and the Welsh economy can only be adverse. That is what the Chancellor says time and again. I heard him say it again yesterday. These will be new barriers; they will be new pressures on our sectors in the economy. We are taking advice and doing further work on things that we might be able to do to help to mitigate them. But that is all that we would be doing: we would be trying to make a very bad job a little bit less awful than it otherwise would be.

14:45

Okay. We'll move on to other areas in our questions, but I want to move on to questions regarding inter-governmental relationships. I'll pass to Delyth.

I wanted to ask the First Minister about a few points that you've made in a letter to the Chair of the Constitutional and Legislative Affairs Committee relating to Brexit statutory instruments. You said that the concerns that had been raised by that committee about the impact that some of Welsh Government's decisions in terms of simply nodding through what Westminster had begun in terms of statutory instruments, that that would have an adverse impact on the legislative remit of the Assembly, and the fact that you had said in that letter that their reading simply does not match your experience of legislation for Brexit. And you said that the SIs to which the Government had consented don't make new policies, but rather they put existing approaches onto a devolved footing. I wanted to ask you whether you think that that balance is right, because I'm concerned that if we are just accepting that we are putting matters that emanate from Westminster onto a devolved footing, it almost seems that this legislature would be nodding through policies that start in Westminster rather than us legislating in the first place. That seems to me that it could set quite a worrying precedent. Do you share any of those concerns?

Well, Chair, let me begin by recognising the issue that the Constitutional and Legislative Affairs Committee points to, because what we are doing here is having to make a judgment between those SIs that we bring through the full Assembly process and those that we are prepared to allow the UK Parliament to legislate for on our behalf. The judgment that we make is always on the significance of the change that is being proposed, and where the change in our view is simply technical in nature, where it has no impact on the policy, but it is just making the statute book fit for leaving the European Union, then we think it is sensible, where those simply technical matters are being dealt with, to associate ourselves with the changes that are being made at Westminster.

Where there is a policy issue in place, then we bring an SI to the Assembly itself so that it can be scrutinised by the body here. If we were not in the extraordinary times we are in, would we have drawn that line in a slightly different place on that spectrum? Well, I suppose we would have done because we would not be under the enormous pressure of events that says that we have to have a functioning statute book ready to protect Welsh businesses, Welsh citizens and Welsh public services in place by 29 March. That's why I take a different view to the committee because the committee did not appear to me to recognise the extraordinary pressures that this creates, and it slightly looked to me as though we had the luxury of time on our side, when clearly we do not. 

Now interestingly, and this is not by discussion or by design, if you look at the proportion of SIs that we have asked the UK Parliament to pass and the proportion that we have brought here, it is, the last time I looked, more or less identical with the proportion that the Scottish Government is asking to be carried out. The numbers are bigger because they have a different devolution settlement, but the proportion is almost identical to the one here in Wales. So, we brought 41 SIs in front of the National Assembly for Wales and we have another one that we will bring forward. There are about 120 or so SIs that have been passed through the UK Parliament. As a result, we are now confident that, had we left the European Union on Friday of next week, we would have had a functioning statute book in place for Wales. And, actually, we think that that is the higher obligation.

We have done our very best to protect the Assembly’s rights to scrutiny and recognised them powerfully, but in these extraordinary circumstances we think we have made the best judgment we can, making sure the Assembly has a genuine opportunity to scrutinise things where there’s an issue that is worth scrutinising, and where there is not, where it is simply, for example, substituting a UK body for an EU body while the policy remains identical, we haven't thought it was right to delay the process. The risk would be to delay the process by loading more work into our hands as a Welsh Government, and to the Assembly as well.

14:50

On this question, before I ask Delyth to continue, I've got several people who have indicated they want to come in. Alun, Suzy and then Mark, and then go back to Delyth.

I'm very content with the policy that the First Minister has outlined, but it would be useful, I think, if you were able to confirm that this policy approach is to deal with the impact of leaving the European Union, it isn't an ongoing policy approach, and when this process has been exhausted, if you like, then we will return to a situation where Welsh Government will be putting forward SIs and all secondary instruments needed through the National Assembly, or the Welsh parliament as it probably will be by then.

I'm very happy to confirm that, Chair. We have a memorandum of understanding with the Constitutional and Legislative Affairs Committee and have already, I think, agreed, and have certainly said to them, that when these extraordinary circumstances are over, we will need to revisit that and put different arrangements in place when we are not acting under the immense pressure of events.

Yes, it's not just the UK Parliament that's now experiencing some tension with its Government. I have to say how disappointed I was in the response to the letter to the CLAC committee report, and in particular the comment that was in your letter, saying that you thought that

'the Committee Members are more concerned with scrutinising the Welsh Ministers' rationale for giving consent and in scrutinising the Statements, rather than the SIs themselves.'

I don't think that was a very helpful observation. It's the role of this place to scrutinise Welsh Ministers and why they make decisions, and while we were completely au fait with the enormous pressure that Welsh Government was under, the whole point that committee was making was that if only things like the explanatory memoranda on the triaged SIs had just been clearer, it would have been much easier for that committee to have had confidence in the decisions. That's why I brought my statutory instrument consent motion forward, because that was the point we were trying to make.

Having said that now, the number of statutory instruments is slowing down, if I understand correctly. Am I right in that?

I think that 41 of them have been laid already. We don't expect many more.

Are you expecting many that would kick in after 29 March? Because I'm wondering how important a date that is now.

Simon can confirm for me, but if I'm summarising very bluntly, I'd say that we think that everything we need for 29 March, had it been 29 March, is now there. There will be some that will come beyond that, but they are not essential for day one preparedness.

Okay. Is there likely to be any delay on some of those? This is a genuine question, if there’s more space now.

There is one statutory instrument related to healthcare charging where we are waiting on the UK Government's policy position before we can form a Welsh one, and that will be introduced. Still, I'd expect that to be ready for 29 March. There are eight statutory instruments that are not intended to be introduced by 29 March; they're not required by that point, so they will be introduced at a later stage.

Okay, so there's a little bit of a—. We can have a breather for those, yes? Okay, thank you. Shall I—?

Yes. In answer to Delyth's question, you gave the example of where there is a sort of EU body and then the SI just sets up a sort of UK body to take over its powers for the UK. If we're talking here about devolved areas, given the need for us to give consent, what consideration would you give to establishing a sort of Welsh body to do that for Wales, rather than a UK body? You were saying here that you were just waving it through being a UK body.

I don't think we are waving through a UK body, Chair. I think that, had the proposal for that UK body been one that we would not have thought was reasonable or that wouldn't have been capable of being able to represent Welsh interests, then the first thing we would have done would have been to have tried to negotiate something better with the UK Government. Had we failed in that, then there is always the possibility that we could have, in a devolved area, established something for ourselves.

Can I say, Chair, I've been critical of the UK Government a lot this afternoon, but let me say that on this business of just trying to get the statute book into a working shape, our experience is that the relationships have been good at that practical working level? If we've been able to point to the UK Government that the solution they propose is not one that would work in practice, they have been willing to talk to us about that and to adjust some of their thinking. So—

14:55

Are there any areas where you've set up a Welsh body rather than relying on the UK Government to set up a new UK body?

I can't immediately think of one myself, but I'm perfectly happy that we will go and look at the question properly and, if there is an example, I'm very happy that we will let you know.

Thank you, Chair. Just to move on to the shared prosperity fund—is it all right if I move on?

Yes, go on. I know you have to go so I'll let you do a little bit of that.

Thank you very much. Are you concerned, First Minister, that the proposals for the shared prosperity fund say that it's going to be administered by an England-only department?

On that basis, Chair, the shared prosperity fund proposals will be absolutely unacceptable to us in Wales. Here is another matter that we have discussed repeatedly with UK Ministers. My line to them always is, Chair, that their hands are full dealing with the very many problems that they have as a result of Brexit. Here is an area where they don't need to have a problem, and they don't need to have an extra quarrel on their hands either, because there is a very sensible solution. It's one that was set out in the all-party parliamentary group that Stephen Kinnock chairs, and it's been endorsed by the Scottish Government and it's endorsed by us too, in which the funding that we get through the European Union today because of the needs that Wales has—and those needs will not have gone away whatever date we leave the European Union—the funding we get to meet those needs today should continue to flow to Wales the other side of Brexit and the key decisions about how that money is deployed should be made by those people closest to where those issues are faced.

We have further questions on shared prosperity, which we'll come back to a little bit later, after you've gone, because I want to move on because Suzy's got a question on the Brexit legislation, which we'll continue to talk about.

Thank you, Chair. Thank you. I'm sorry I have to leave.

If we can just come back to Brexit legislation—. Actually, if at this stage perhaps we could have a bit of an update on any additional Brexit-related legislation that may be needed, perhaps under different exit scenarios. Have you got a sort of drawerful of draft LCMs that might apply in different situations?

Well, what we certainly do have, Chair, is a sort of moving, day-by-day analysis of how different outcomes would lead to different sorts of legislative needs and therefore would call LCMs into play. One of our colleagues who we were meeting with this morning is responsible for that and was describing her whiteboard to me as she rubs different possibilities out and inks new ones in and so on. So, we are preparing in that way. The problem is, as I know Suzy Davies will understand, that we have, in some cases, spent quite a bit of time thinking through how we would respond only to find that that possibility now is no longer part of the potential repertoire. So, we are, against the many different scenarios—the seven different scenarios; however many you think—doing that work. It's not settled because the options aren't settled.

And has there been space to develop the sort of Wales-only legislation that we have been talking about—agriculture and fisheries Bills, for example—or are they sort of on hold on the basis that the potential LCMs may do the job for you?

Well, on the Agriculture Bill, if the Agriculture Bill reaches the statute book, proceeds further towards the statute book, it will need LCMs, and we are now confident and we've had further concessions, if that is the right word, from the UK Government on a number—a diminishing number—of further concerns we had about the Bill. We are now confident that we would be able to propose an LCM positively to the Assembly in relation to the Agriculture Bill and that it would provide Welsh Ministers with all the powers they need in the short run to continue to design and deliver a system of agricultural support here in Wales while we then develop a bespoke Bill, which we definitely want to see, beyond that.

On the Fisheries Bill, things are less certain, because the state of the UK's fishery legislation is less certain and, I couldn't, I think, say to you today with as much confidence that the UK Fisheries Bill is in a position where we could be certain we could recommend a positive legislative consent motion to the Assembly, or that it will design a system that gives Welsh Ministers the powers that we will need to be able to operate the responsibilities that fall to the National Assembly the other side of Brexit.

So, the Agriculture Bill experience is encouraging—let me say that—and the ability to have those conversations and to get officials at the UK level and then the Ministers to recognise some of the concerns we've raised and to find resolutions to them, let's put that in the positive box. We are yet to have the opportunity that we need to apply the same level of engagement as far as fisheries are concerned. 

15:00

Does that mean the pressure's off you then on a made-in-Wales agriculture Bill?

It's not that the pressure's off us, Chair; it's that the anxieties that people in the sector would have if the powers weren't available to go on providing them with the incomes they need and the protections that they have—. If we hadn't secured that—. We haven't secured these powers just for our own convenience; we have secured them because they're such an important sector in Wales that needs to be protected. They can have the confidence now of knowing that we have a sufficient level of agreement with the UK Government that their Bill will provide the National Assembly with what is needed in the short run. It's not where we need to be, but it is enough to give them the very important guarantees that they need.

Can I reframe the question then? Does that mean that you will be taking longer to bring forward a Wales-only Bill?

No, I'm relying on the conversations that I've had with Lesley Griffiths on this, and I know that she's very keen to develop a Wales-only Bill. But she would at least be able to do that now without it being driven by the emergency set of circumstances that we would have if we hadn't secured the agreements that we have secured in the UK Bill.

Okay. Thank you very much. With the LCM that we'll need for the withdrawal agreement Bill, whenever we have the opportunity to do that, are you confident that you're in a position to respond to that swiftly in bringing forward your LCM? And do you foresee, in that range of potential scenarios that we're looking at, that each LCM might be treated by the UK Government with a different level of seriousness?

Well, I certainly hope the answer will be 'no' to the second question, because the decision of the UK Government to, as they would certainly put it, ride roughshod over the refusal of the Scottish Parliament to provide an LCM to the previous withdrawal Bill has created a level of rancour in those relationships that nobody sensible would want to see repeated, because one of the things—. We don't talk about it that much here, but it's almost impossible to get a proper conversation at a UK level on the way that the United Kingdom will operate the other side of leaving the European Union. And every time the UK Government decides to take no notice of the decisions of devolved legislatures on an LCM basis, it cuts into our ability to have those sensible conversations.

Lots of this, Chair, goes back to the points that Alun was raising with me earlier about timescales and the amount of weeks that there are to conclude all of this. When I was a member of the JMC(EN) before Christmas, during the autumn, there was a brief period when there was a Minister in the Department for Exiting the European Union who was responsible for preparing this Bill. Her name was Suella Braverman. She is a pretty hardline Brexiteer, and she left the Government because she couldn't agree with the path that the Prime Minister was pursuing, but she was, I thought, one of the relatively rare number of UK Ministers who had a proper grasp of devolution and the need for her to be thinking about where the opportunities for us to place an LCM in front of the Assembly were to be found, if that legislation was having to be taken very quickly through the parliamentary procedure. She would come regularly to those meetings, and I thought, and I think the Scottish Minister said the same, that she gave you a degree of confidence that they were thinking about this as well. She's left that Government. There is yet another Minister—as far as I know, he's still there today—in DExEU, who has inherited that. We did have advance sight of the White Paper that led to that Bill. We have had a draft copy of the Bill in advance as well, so we can look at the clauses that will be of direct interest to us in Wales.

So, there has been some decent engagement over it. I can't say to you today that I am confident that we can say confidently that we would have the right moment to put an LCM in front of the Assembly when we don't know the answers to the basic questions that Alun was asking about: how many weeks will there be? How quickly will that legislation have to be taken through the House of Commons? Where would the moment be identified where we would be sufficiently certain of the proposals to come to the floor of the Assembly, but still, at a point in the process if the Assembly were to decide not to give its consent, that that could be taken into account in the remaining stages of that Bill? It's a really tricky point to find in the process, and when everything is happening in a turmoil and where the normal rules of engagement are harder to sustain, I couldn't honestly say to you today that we are yet certain that we would be able to find that moment.

15:05

Thank you for that answer. I don't disagree that the turmoil we're in is making things more obscure as regards timing. Just finally, if you find yourself in the course of this, or—let me put it this way—if the Assembly, during the course of this, says, 'Well, actually, we would like more scrutiny powers, some additional LCMs,' where perhaps the UK Government doesn't agree, would the Welsh Government be fighting that corner for us, because obviously we can't do it directly?

Well, I think, first of all, Chair, the Assembly can, to an extent, do it directly, and it will be very important that the Assembly itself makes those points, because it is the Assembly's scrutiny powers that are at stake here, but yes—

I'm very happy to say this afternoon that if the Assembly identified places where the Assembly felt that a UK approach was preventing the Assembly from discharging its proper responsibilities and the Assembly was making that point, then our aim would be to support the Assembly position, of course.

Okay, and the same would apply if the Assembly, at statutory instrument level, thought there was something we needed to scrutinise that perhaps Welsh Government had thought wasn't an appropriate piece of legislation for scrutiny.

Well, that would lead us back to—

—again, the point that Alun was making about when we move beyond the extraordinary circumstances and we revisit the memorandum of understanding we have about how all of this is navigated through the Assembly. Of course, we will want to take the views of committees who've had the practical experience of doing that and see if we can align things so that we are all able to discharge the different responsibilities we have in the best way.

I think the last few answers, First Minister, have been very, very useful to us in our scrutiny of this matter. Can I ask you to write to the committee? I don't want to spend too much of the committee's time on these matters, but can I say I'm exceedingly uncomfortable with the current Agriculture Bill in front of the House of Commons? We were promised a framework Bill that would simply provide powers that would enable things to happen during a period of transition. It feels a bit more—. There's a bit more substance in it than what we were first promised, and I do feel exceedingly uncomfortable, for the same reason that Suzy has outlined, that that matter is being scrutinised by the House of Commons and not by the National Assembly. I think there are fundamental issues of principle there. So, you know, to hear you say that you've reached agreement on some of those matters—. I did see, I think it was, a written statement from Lesley Griffiths last week on that matter, and I'm hoping to be convinced on those issues.

I don't have a principled problem with these transitional issues, but I was thinking that—. You know, you launched a very ambitious climate change policy last week. Well, many of those ambitions that you outlined can't be achieved within the current legislative framework. So, it would be, I think, useful—and this is where I'd like to ask you to write to the committee—were the committee able to understand the work that is going on to develop the legislation that will be required in the last two years of this Assembly's mandate, where you will be seeking to put forward legislation to the National Assembly to fill in some of these areas where we are moving through transition at the moment. Agriculture is one that you've outlined; fisheries may be another. If you wish to see the ambitions in the climate change agenda being met, then I would imagine that that would be another Bill that would be required in order to flesh out some of those sorts of issues. I'm not sure all the powers currently exist in the way that you would require. And what the other areas are that we haven't discussed this afternoon where the Government is seeking to develop legislation, because that will have a fundamental impact on the shape of the next two years of this Assembly—what we do in terms of scrutiny and what we do in terms of policy. I think it would be very useful for us to understand what the Government's current thinking is on all of those matters.

15:10

Chair, I will make a legislative statement on the floor of the Assembly in July in the normal way, which will set out the Bills that we hope to bring to the floor of the Assembly in the remaining period of this Assembly term. I'm not able to anticipate in the full detail what that statement will say at this point. I'm certainly happy to try and provide information to the committee on the specific points that Alun has raised about the Agriculture Bill, the current state of play in relation to that, where we see remaining issues that we would need to bring forward legislation of our own to deal with—that certainly we can organise. I'll think about the other points that Alun made, of course, and see if there's anything more that I could put in that letter that would be helpful.

Before we move off the legislation, can I ask two questions? You've talked about the timescales and, very clearly, if an agreement is reached by 11 April, we may well need to be looking at this during the weeks after that. Are you intending to recall the Assembly, because that's recess and we won't be back until the twenty-ninth? Clearly, you have a very deep concern. There could be so much going on in those weeks. Will you recall the Assembly to ensure that we have an opportunity to scrutinise the withdrawal agreement if one is in place?

Well, Chair, that's been in my mind, certainly, once the date of 12 April was identified. That's not quite in the middle, but it's well into our recess. I can tell you that I've had a number of conversations with the Llywydd over recent months—over the Christmas period, over the half-term period. Brexit is such a gift that keeps on giving that there is almost never a period when we are not here when something essential couldn't be going on. And so I've had those conversations with the Llywydd about recall arrangements, and I'm quite certain I will need to have them with her about 12 April. You don't do it lightly. We know that all Assembly Members have got other things that they will have planned to do, often important commitments they've given in constituencies and so on. But, if there were to be an event where the Assembly ought to be recalled for Members to be able to ask questions and scrutinise it, then, of course, that is what we would want to do.

On the withdrawal agreement Bill, you said you've submitted draft clauses. Have you had any response to those draft clauses? And, if those draft clauses are not included, will you therefore perhaps review your position on accepting the withdrawal agreement Bill?

I've seen no direct response. As I said, we discussed them with the Scottish Government in advance of them going public. They're available now for all Members of the House of Commons. That's why we published them in the way that we did—not simply for the Government but for other parties too to be able to consider them. We did it because, Chair—. You'll understand that if we are moving to make changes to the political declaration, the key focus of our attention, and if Members of the House of Commons were to be prepared to vote in a particular way because they could see those changes, then you have to find a way of answering the people's anxieties that while the current Prime Minister might be willing to make those commitments, she may not be there when those commitments come to be delivered, and a different leader of the Conservative Party of a different point of view might be in power at that time. So, in order to give people confidence that the things that are being proposed have a reasonable chance of being delivered, anchoring them in the Bill, through the amendments that we've proposed, is a way of trying to meet that anxiety.

15:15

But if those things were properly to have a reasonable chance of being implemented, and they're the things that the Labour Party want, shouldn't that depend on there being a Labour Prime Minister? Why should you get that otherwise?

Well, because it is self-evident, Mark, isn't it, that relying on her own party does not provide a basis for the Prime Minister to get her legislation—her agreement or the legislation that would follow from it through the House of Commons. That is the simple fact of the matter, isn't it—that her own party is fractured into many pieces behind her. If she is to find a way through, if she's to find a majority that she can rely on, not simply for the agreement, but for the legislation that will follow, she will have to rely on a broader base of support. And that broad base of support will be secured if the political declaration could be developed in a way that commanded that support. People who might be willing to go down that route are anxious that, because the political declaration is what it says—a declaration, not an agreement that will be put into statute—that agreement might not be delivered if the Prime Minister who signed up to it is no longer there when it comes to be delivered. And our amendments were designed to try to offer some security to people that, if you amended the Bill, in a way that anchored those political declaration possibilities in that Bill, it would give you a different sort of platform for their—

But doesn't the political declaration already leave open the prospect of a customs union, and, surely, if there's to be a customs union, continually, surely that should only happen if there's a parliamentary majority and a Government, going forward, that wants that?

We're going back again into an area that we don't have that responsibility for, and you've identified why you've put those clauses in—that's what the question I asked was. I want to move on, because time is moving against us, and I haven't yet gone into more detail on the shared prosperity fund. I want to call Vikki on that.

Thank you, Chair. So, to go back to the UK shared prosperity fund, the Secretary of State for Wales wrote to this committee on 12 March. And in his letter, he said

'I am particularly keen to consider how organisations at the local level, including local authorities, can have the greatest influence over spending decisions under the UK Shared Prosperity Fund.'

Now, the all-party parliamentary group on industrial communities has published its report, and it's very firmly of the opinion, as you stated before, that the best place for those funds to sit is exactly the same place as the EU structural funds sit now, and that is with the devolved administrations, so that projects can be cohesive and overarching. So I wondered what your views were on Alun Cairns's statement there.

Well, I'm afraid, Chair, that I think it's deeply unhelpful. And I think it's as clear as day that the Secretary of State would wish to bypass the National Assembly for Wales. And he thinks that the way to do it is to dangle small amounts of cash in front of hard-pressed, cash-strapped local authorities and others, and say to them, in a way that I do not think bears examination, that the way that he would like the shared prosperity fund to work would mean that money would go straight to them and bypass the National Assembly. I think that is a forlorn effort to try to curry some favour amongst those organisations—I don't think it'll work, but I think it's very unhelpful that he goes about it in that way.

Thank you, First Minister. The current round of European structural funds we know we'll still be able to draw down from. But if there is a 'no deal' exit for us, will that affect the way that those funds operate, or will they be protected?

Well, Chair, we're currently around 91 per cent—we have 91 per cent of structural funds committed here in Wales. We're about halfway through the delivery of the programmes. I'm reluctant to say all of this in front of Huw, who will probably have a grasp of the detail better than mine. But we are confident, through the programme monitoring committee and others, that we have done very well in terms of committing early, so that we can spend in a way that is confident that we can draw down the Chancellor's guarantee, and that guarantee is on offer however we leave the European Union.

But, nonetheless, in this area, as in every other area, if we were doing that in a way that was orderly, where we had a transition period, where we had time to put other arrangements in place, where we could conclude the discussions properly on a shared prosperity fund, that would give you a way of continuing to make the very best use of the European funding that we have. If we're trying to do all of that in the midst of the very adverse effect that a 'no deal' Brexit would have on Wales, then nobody, I think, could pretend that one bit of what we do can carry on unaffected and there would be real pressures on our ability to make best use of the funds that we are guaranteed to have as a result of the current round of structural funding.

15:20

Thank you, First Minister, and one final question from me: thinking about the financial implications of Brexit more generally, I know the Welsh Government has said that the UK Government cannot allow spending plans to be paralysed by Brexit, so what level of additional spending are you looking for from the UK Government and are there any particular Welsh projects that you feel should be prioritised?

Well, Chair, I have considerable anxiety about this myself. I'm afraid that if you look at the record of the UK Government in the way that it responded to the global difficulties of 2008—can we have confidence that they would respond to the impact of a 'no deal' Brexit in a genuinely counter-cyclical way? If the UK economy is heading south at the rate at which it could, then surely, it is the job of a UK Government to act in a way that will help the economy to stay afloat, and that means acting in that sensibly Keynesian way and particularly coming forward with capital investment programmes that will provide employment and help create the future that we all look for.

I don't think their track record gives us much confidence that that would happen. But the Chancellor has said that he has a sum of money there and we are preparing across the Welsh Government to make sure that, if we were in that position, and it's not the position we would want to be in, absolutely, but if we were in a position where the UK Government was acting to put spending power into the economy to help keep it afloat—that we will have plans and projects ready to be able to invest that money sensibly.

Just one example: we know that in the climate change field that was being referred to a moment ago, retrofitting of our existing housing stock is essential for us to meet our carbon ambitions and so on. We would make sure that, if money became available that allowed us to accelerate our current plans for that and to do more, then we would be ready to do it. Do I feel confident that that's how the UK Government would respond? Well, not on their track record.

Thank you for that, First Minister. Can we move on to international trade and that aspect of the economic agenda? Huw.

Thank you, Chair. I just wonder, what salience should we give to the speculation that the Democratic Unionist Party is going to be given some sort of priority—special position—in negotiating future trade deals, and what would the Welsh Government's response to that be—that there was a majority party and a nation, in the absence of the actual Executive being up and standing—?Perhaps if it's offered to the DUP, then it should be offered to the majority party in each administration.

Well, it would be astonishing. It's a sign of just where we have got to in all of this—that the UK Government had allowed, even to be speculated, the idea that a single party from one part of the United Kingdom would have privileged access to the sort of trade negotiations that affect us all.  And it would be completely unacceptable, of course, to us, and it ought to be completely unacceptable to anybody who has any care for the proper constitutional ways in which these arrangements have to be drawn up.

We have been pleased that we have been able to agree with the UK Government that there is to be a ministerial forum set up in which there is meant to be a proper opportunity for us to be involved before, during and at the end of trade negotiations, and a bit more understanding in the Department for International Trade that they cannot strike deals with anybody else that depend upon devolved administrations to deliver the deals that they are striking, because if we're not there to make sure that they are at least properly informed about the way that things operate on the ground, those deals won't have any prospect of success. But we have been arguing, as we do all the time, that if there is to be this ministerial forum, then it has to be rules based; it has to have an agreed way of conducting business; there should be parity of participation; it can meet in any part of the United Kingdom; it can be chaired by Ministers other than the UK Government's; and any participating Government can put items on the agenda, for example. That's not the way that current systems work, where they always meet in London, it's only a UK Minister who can chair it and it's only the UK Government that can shape agendas. The United Kingdom cannot operate on that basis the other side of Brexit, and a new forum is sometimes a good place to try and establish a different way of doing things.

15:25

I wonder if I could ask you, First Minister, what is your level of confidence, your level of optimism that we can get to a good place on that? Bearing in mind that many informed commentators have made the point that this warm-up that we have had up until this point has been no way, frankly, to run negotiations or to run a Government in a period of what is now approaching some real crisis moments. So, going forward, the ability to have a rational approach to this where there is genuine, meaningful engagement, where the devolved administrations are properly listened to, do you have confidence, based on what's currently going on behind the scenes, that this will be far better, as a main course, than what we've had as the aperitif? 

Well, Chair, my predecessor, Carwyn Jones, agreed at a Joint Ministerial Committee plenary meeting in March of last year that there would be a review of these arrangements. There was an interim report on progress at the JMC plenary in December; I thought it was thin and disappointing, although I was told by our officials at the time that a lot more work was going on and that it was better behind the scenes than it appeared then. There are five different work streams in all of that. Different administrations are taking the lead in each one and we are in charge of a principles paper. Actually, in the work on frameworks, the fact that we started with a principles paper has turned out to be a lot more important and had more strength in the development of the frameworks than maybe I would have anticipated in the beginning. We now need those things to come back to a plenary meeting of the JMC, but in current circumstances, there isn't one in the diary and it's hard to see where the space will be quickly found for one.

It just takes me back, Chair, very briefly, to the point I made earlier in the session that the UK Government and UK Ministers have seemed to me, for some time, to be overwhelmed by Brexit. Every time they pick up an issue and look under the stone, it turns out to be more difficult and more complicated and harder to resolve than they had anticipated, and try as we do at regular meetings, to say, 'We've got to find some time in these meetings to think beyond now and to think about when the EU rulebook is no longer there; how we find a way of operating successfully between ourselves', nobody demurs from that, nobody says, 'We don't agree with that', but nobody is willing to find the time, the energy and the political capital that you would have to have in order to do that seriously. 

But that itself doesn't bode well. I mean, I pick up that there's an immense amount of activity behind the scenes at official level and that Ministers are pushing on this agenda, but if, once again, we're catapulted, through just the sheer pace of this and the fact that people are distracted into other areas, that doesn't bode well for having a good process here of future trade negotiations, nor does it for the establishment of the inter-ministerial forum, because all of that would benefit from cool, calm thinking and putting the plans in place.

And if we get to a position where there is an orderly exit and a transition period and time for some of these things to be done, we will have a better opportunity to do that. Since September, we, as a Government, and the UK Government, certainly, have moved more and more into preparing for a 'no deal' Brexit, and the urgency of that, and the seriousness of the issues that are faced were that to happen, has crowded out the ability at the UK level, quite certainly, not simply to do other, longer term thinking around Brexit, but to do many other parts of ordinary, day in, day out Government business.

15:30

But my reading of that is that it's genuinely quite tragic in the efficient operation of Government and inter-government relations, because what you're saying is quite clearly that, if that 'no deal' had been taken off the table at some point, you and officials would have been able to focus with the UK Government on putting in place better arrangements.

I think that's a very important point to make, Chair: that had the UK Government been prepared months ago to be clear that leaving the European Union without a deal was not an option that they were prepared to sign up to, then the last few months would have been very, very different.

Okay. All of that, First Minister, is for future trade agreements. If we can just turn to continuity trade agreements for the moment, of course the understanding was that many of the continuity trade agreements would pretty much be business as usual, but the committee has already picked up that some we've seen have had not insignificant changes—so, a number of changes to the agreement with Switzerland; Norwegian media are reporting that there are going to be significant changes to the continuity agreement with Iceland and Norway and so on. Now, if that is the case for continuity agreements, should we be having a greater role? What are you saying to the UK Government on negotiations on continuity agreements?

Well, the UK's position on continuity agreements, as Huw will know, was that these were going to be the easiest negotiations in the world. This is the one that Liam Fox referred to as the Tipp-Ex thing—'EU' would be Tipp-Exed out and 'UK' would be written in instead. It's clearly been nothing like that, and is it six or seven of the 40 agreements that they've managed to get over the line by the time we would leave the European Union? Our view of the ones so far is that they haven't had big departures, and even the Swiss one—remember, the Swiss one doesn't have a single agreement, it has many agreements—the ones that have been rolled forward have been rolled forward more or less intact, and the difficulties are sins of omission, not commission. They haven't changed those ones. What they haven't been able to do is roll them all forward, because some of them depend upon the Swiss relationship with the EU, and that is a different relationship to ours. So, so far, we haven't had the anxieties. We are more anxious about some of the ones that will follow, because there are signs that some of those other countries see this as an opportunity to change some of the substance of those agreements, so at that point we will be clear with the UK Government that we will have to have a different sort of involvement if the agreement that is being rolled forward is not the one that was struck while we were members of the European Union.

Chair, I wonder—could I just really quickly return to the initial question?

Sorry. I'm trying not to be unfair on this question, but should we—if we end up in a place where things do proceed fairly rationally, and you have a good, sound basis for an inter-ministerial forum for future grade agreements and so on, and that is working well, but you find that, during this week, because of the Government's will to actually get an agreement through, to our surprise, a deal is done with the DUP to give them a back channel, top-table seat in terms of—? That surely is something that the Scottish First Minister and you will have to simply reject.

Yes, we would have to, Chair. Things are bad enough, aren't they? Our relations with the UK Government have been soured already by the financial deal that has been struck with the DUP, where money is going into education and health and housing in Northern Ireland that is being denied to citizens in England, Scotland and in Wales. That's bad enough, when side deals of that sort are struck outside the rulebook altogether. But if that sort of way of doing things was to be transposed into another area as well now, with really profound constitutional implications, it would be completely unacceptable to us. 

15:35

We've come to the end of our allotted session. Can I thank the First Minister for his time and his answers? As you know, you will get a copy of the transcript. If there are any inaccuracies, please let us know as soon as possible so that we can have them corrected. I thank the First Minister for his time this afternoon, and his officials. 

Thank you all very much indeed. 

3. Papurau i’w nodi
3. Papers to note

Members, we'll move on to the next item on the agenda, which are papers to note. The first one, as has been highlighted already this afternoon, is correspondence from the Secretary of State for Wales regarding regional funding after Brexit. At this point—I think we've made comments during the session with the First Minister—we'll just note the paper at this point.

Can I ask what we intend—? It's a wholly inadequate response. It's a wholly inadequate response. It's poor. It's very, very poor. And whilst I'm happy to note it this afternoon, I wouldn't want to leave it rest, because this is a Secretary of State that has failed every test that's been set for him. He's failed to represent Wales well in Westminster and he's failed to ensure that the Welsh voice is heard around the UK Cabinet table. 

I'm not discussing the Severn tolls, I'm discussing the letter. I'm discussing the letter—[Interruption.] Wait, please. I am discussing the letter from the Secretary of State. If a Member wishes us to discuss a response to that, we're happy to do it next week.

Okay. Paper 2 to note is correspondence from the Constitutional and Legislative Affairs Committee Chair to all Chairs within the Assembly regarding the inter-institutional relations agreement between the Assembly and Government, which I think was debated in the Chamber. Are Members content to note that?

Paper 3: correspondence from the Brexit Minister to the Chair regarding the 11 March meeting, which he attended, and the follow-up from that. He's got several items within the appendices. Are Members content to note that at this point?

Paper 4: correspondence from the Parliamentary Under-Secretary of State for the Department for Exiting the European Union, Robin Walker MP, accepting an invitation to appear before the committee. Whilst we note that, I'll also put it on record that, since we received that, unfortunately, because of events over the weekend we've also had notification that he can't come now. But he is willing to come at a later date.

And we'll obviously try and work out a date once we know there's a bit more stability in the process.

Paper 5: correspondence from the First Minister to the Chair regarding the letter that we wrote in support of the CLAC report. And you'll note the letter simply points us in the direction of the response he gave to CLAC. Are Members content to note that at this point? I'm sure CLAC will be responding. 

I'd rather see what CLAC's response is, in the first instance. 

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.

The next item on the agenda is a motion under Standing Order 17.42(vi) to resolve to exclude the public from the remainder of today's meeting. Are Members content to move into private session? Then we will move into private session. 

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 15:38.

Motion agreed.

The public part of the meeting ended at 15:38.

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