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Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol

External Affairs and Additional Legislation Committee

29/04/2019

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
Mike Hedges AM Yn dirprwyo ar ran Joyce Watson
Substitute for Joyce Watson
Suzy Davies AM Yn dirprwyo ar ran David Melding
Substitute for David Melding

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
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
Elisabeth Jones Cynghorydd Cyfreithiol
Legal Adviser
Gareth David Thomas 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 13:31.

The meeting began at 13:31.

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 meeting of the External Affairs and Additional Legislation Committee? Can I remind Members before we start our business of some housekeeping? The meeting is bilingual, and therefore if you require simultaneous translation from Welsh to English, that's available on the headphones via channel 1. If you require amplification, that's also available on the headphones via channel 0. Can I remind Members to please turn your mobile phones off or on silent, and other equipment that may interfere with the broadcasting equipment? There's no scheduled fire alarm this afternoon, so if one does take place, please follow the directions of the ushers to a safe location. Are any Members declaring an interest in this afternoon's sessions?

Chair, only in my role in chairing the Brexit advisory group and the regional investment steering group as well. 

Thank you very much. We've received apologies from Joyce Watson and David Melding and welcome Mike Hedges and Suzy Davies, attending as substitutes respectively. 

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, which is our scrutiny session this afternoon, and can I welcome the First Minister to this afternoon's session? First Minister, would you like to introduce your officials for the record, please?

Thank you, Chair. So, I'm accompanied today by Des Clifford, who is director general of the office of the First Minister, and by Simon Brindle, who is director of Brexit strategy in the Welsh Government.

Thank you for that, First Minister. Clearly, we're going to be looking carefully at Brexit negotiations—where we are, where the various issues related to Wales are again. We've had a three-week recess during which we are still seeing in the same position as we were before the recess. But can I just ask very simply: you've put on the record, perhaps, the Welsh Government's position at this point in time, and what you understand is the current position regarding negotiations, and where you think we will be moving towards? Perhaps you could add in whether you've had a chance to meet the Prime Minister and the discussions with her regarding where her red lines are, and will she be moving them or not.

Thank you, Chair. So, I suppose my starting point would be that, in fact, we're not in the identical position that we were in prior to the recess, because prior to the recess we faced the very realistic possibility of leaving the European Union without a deal on 12 April. A great deal of my time and the time of senior officials and other Ministers in the lead-up to 12 April was devoted to preparing for that eventuality. So, since then, we know that that didn't take place and that, in agreement with the European Union, we now have continued membership until the end of October of this year. So, I suppose the question is: what do we think can be made of the time that we now have? If I think pessimistically, then I sometimes think that the date of 31 October is potentially the worst of both worlds—that it has removed a sense of immediate urgency and yet it may not be long enough to do the sort of deeper realignment of forces behind a different sort of deal. So, I think we should not set to one side at all the risk that 31 October just becomes another of these dates along this progress in which we will be repeating in October all the risks that we ran in the run-up to 12 April. 

If you take a more optimistic view, though, what you have to say is that this place is a real obligation on all our players at Westminster to use this period to try to find a way through the Brexit dilemma that does not run the risk of leaving the European Union without a deal, and that people should be focused relentlessly on finding common ground that would allow for a deal that would command a majority in the House of Commons. There are many ways in which that could be derailed. If we were to use up the six months in a Tory leadership contest, for example, that would be to eliminate any possibility of those sorts of cross-party negotiations and discussions happening in the fruitful way that they need to. If they are to happen, then fundamental to it will be a willingness on the part of the UK Government to move away from its red line strategy, because if they are to have a genuine negotiation with others, and if they are to find a different sort of deal, that can only be done by moving away from a deal that has now been put three times to the House of Commons and failed. And simply repeating the perceived merits of that deal by the Prime Minister and others is never going to find the space for that common ground to emerge.

So, from the Welsh Government's point of view, we continue to say that a 'no deal' Brexit is the worst possible outcome for Wales, that everything that can be done must be done to avoid that, that the time that has become available must be used purposefully, and that, if it is to be used purposefully, then that means that there has to be a genuine spirit of negotiation, not simply meetings in which pre-prepared and well-known positions that have already been rejected are simply served up again. 

13:35

On that point, then, clearly the Welsh Government, either through you or through Jeremy Miles, has been attending meetings in Whitehall. With regard to those negotiations, have you seen a shift in that position? And does the Welsh Government therefore believe that it will be—does it see a move towards a solution that is a compromise, effectively?

Well, I met the Prime Minister on 3 April. I've met her a whole series of times now. I'm sure I've said in front of this committee before that the meetings with her are unfailingly courteous and that the Prime Minister always listens carefully to what others say—and this was simply a one-to-one meeting. Prior to that meeting, I would describe a typical encounter with the Prime Minister on this matter as one in which she listens carefully to what people say, she engages to an extent in the debate and always, at the end, returns to the position that she started from and simply repeats again her arguments that you'll have heard many times as to why her deal is the only deal and why everybody should support it.

The meeting on 3 April did not end that way. So, if that is a sign of a greater willingness to have broader discussions, it was an opportunity for me to set out again the position of the Welsh Government, both in relation to the catastrophic impact of a 'no deal' Brexit and then to set out the sort of Brexit arrangement that we set out in 'Securing Wales' Future' and to update some of the evidence that lies behind that document and again to urge the Prime Minister that, if she's to find a compromise position that others can support, then she has to move, we believe, in that direction still further. 

13:40

I appreciate that, First Minister, but the question was—. You've had meetings, I assume. I've heard you've had meetings since that date—not you, necessarily, but a representative of the Welsh Government. The question was: has there been evidence to show that there has been a move away from that harsher stance?

Well, the evidence is equivocal. There is evidence, because those discussions go on, and we have to assume that they are conducted in good faith, and we certainly take part in them on that basis. But, on the other hand, there is still a tendency on the part of UK Ministers to want to retreat to the position that they have long held, in which, instead of trying to listen to what others are saying and look for places where compromise could be found, they offer you again a rehearsal of the arguments that we have heard for months now and that have not succeeded in persuading a majority on the floor of the House of Commons—and, as far as we can see, have no realistic prospect of doing so. So, I don't want to say that there is no evidence that the UK Government is listening and that it isn't genuine in its intention to try and seek consensus, because there are some signs that they are, but the signs don't all point in one direction. 

Okay. I've got some people who now want to come in on this. I've got Alun, Huw, Delyth and Mark. 

Thank you, First Minister. Did you use the opportunity of your conversation with the Prime Minister to raise the position of the Welsh Government and the National Assembly, as agreed on 30 January, that preparations should begin immediately for a public vote?

We did discuss, relatively briefly, the public vote issue. The Prime Minister repeated her own view that a public vote was not something that she has supported, or felt inclined to support that day. But, I have always—as I've said many times, I've always felt that my position in those discussions is strengthened when I can speak not simply on behalf of the Welsh Government, but where there are resolutions that have been endorsed across the floor of the Assembly and I'm able to put that to the Prime Minister as the view of the Assembly itself. 

And, of course, the view of the Assembly is that a public vote should be held. That was the purpose of that resolution on 30 January. It's important for those of us who voted for that to know that the Welsh Government is doing its best to deliver on that resolution, so it would be useful for us to understand how the Welsh Government is taking forward that resolution and how it forms a part of the Welsh Government's negotiating position with the UK Government. 

Well, locally, Chair, we will have been in touch with our electoral returning officers in Wales, making sure that they were aware of the Assembly's resolution and making sure that they have the necessary mechanical steps in place were they to be called upon to conduct such a poll. They are having to reactivate the electoral machinery in relation to the European election, and I think we've had assurances from them that, were they to be called upon to conduct a test of public opinion, they would be in a position to do that. Of course, that decision doesn't rest with the Welsh Government or the National Assembly for Wales; it is a decision that would have to be agreed at Westminster. And at the time that I met the Prime Minister, the negotiations with the Labour Party had already begun and one of the six items that the Labour Party placed on the agenda for those negotiations was the issue of a confirmatory vote. And that was raised in my discussions with the Prime Minister as well. 

Okay. So, the Welsh Government has taken the necessary steps within Wales to ensure that a public vote can take place and that the mechanisms to enable a referendum to take place are there and able to be activated, if I understand you correctly. I think that's a good thing, and I very much welcome your commitment on that and your reassurance that the Welsh Government has taken that forward and has taken those steps with local returning officers. However, what is also important, as you say, is that the decision to activate that will be taken in Westminster and not here. So, it's important for us to understand the way in which you are taking forward that resolution and that position, in terms of your overall negotiating position.

We understand that there are negotiations taking place between the opposition and the Government in Westminster, and we recognise the politics around that. However, my interest here is your role as First Minister rather than your role as leader of Welsh Labour. The important issue here for us, I think, is to understand that the Welsh Government is taking seriously the view of the National Assembly that a referendum should be held, and that that is a part of your negotiating position and one of the areas that you are continuing to pursue at your meetings—I mean you, the Welsh Government as a whole—with the UK Government.

13:45

Well, the position of the Welsh Government is the one rehearsed many times here, Chair. We believe that there are two possible courses of action that are still in play. One is that the negotiations that are going on could come to a successful conclusion and that a deal could be struck that could be supported on the floor of the House of Commons. And those discussions continue and that possibility remains alive. If the House of Commons cannot find a way through the Brexit dilemma, then we have said for many months now that the decision should return to the people. And I faithfully reflect that position every time I have an opportunity to do that with UK Ministers. And so do my ministerial colleagues.

Thank you, Chair. Just a very short follow-up to the Chair's question, First Minister. One of the interesting things is, after the Ministers and the First Minister have left the room, what then happens in the intervening days and weeks. It would be fascinating, I think, for us to know whether, when you left that meeting—when Jeremy Miles, the Brexit Minister, leaves his meetings and so on—your officials are tasked then—. Are your officials given licence by UK Ministers' officials, by the Prime Minister's officials, to engage on some of those red lines? Is that scenario plotting going on, where the Prime Minister says, 'Well, it's really difficult for us to move on this particular issue because here's the politics of it, but, actually, there are technical issues as well'? Is that sort of level of engagement going on? Has the Prime Minister said to you, 'By all means, let's sit down with the teams and work through the difficulties on both sides, with both scenarios, both sets of red lines'? Or is it simply that, from meeting to meeting, it hops along?

Discussions do go on between meetings, certainly, Chair, and at official level they do tend to be more on the technical issues that Huw has identified. So, for example, in my meeting with the Prime Minister, I was able to draw her attention to the draft amendments that we had prepared to any withdrawal Bill, and to explain to her why we though amendments of the sort that we had prepared would be confidence building—that it would allow people who are anxious that the Prime Minister might make some commitment to changes to the political declaration but that she might not be Prime Minister by the time those commitments came to be delivered—. People will be very familiar with that anxiety that people have. Now, we've drafted amendments that would sort of root that agreement more firmly in the Bill and then the Act. The Prime Minister was interested in that and, certainly, at official level, she's always, I think, receptive to having a follow-up to those discussions.

That's really encouraging. I just wonder whether there's also that sort of engagement on some of the more significant contentious areas yet. Or is too soon? Or maybe you can't even tell us.

Well, my impression, certainly—my colleagues will add to it if they have more direct experience themselves—is that when it is on technical matters, there is a willingness at the top of the UK Government to have those discussions. I don't think that there is a great deal of the more substantive issues sub-contracted to official level to thrash through.

So, we're not there yet, and your point about the time—. Sorry, Des.

I'd just add that the First Minister is correct; the political arguments are carried out at a political level. Officials focus more on technical positions. But I guess I would characterise that the approach that we've taken at official level is to operate within the policy parameters laid out in 'Securing Wales' Future' and the subsequent series of policy documents that have been drawn up by the Welsh Government. And we have continued to make the case for access to the single market, for example, based on the evidence that was provided in the original White Paper, and we've continued to make the case for the customs union, and we have always been very receptive. Indeed, we have requested evidence from the UK Government, making the case for alternative courses of action, but they've been really not very forthcoming in coming forward with evidence to lay alongside the evidence that we mounted in our own papers. I think that's probably the way I would best characterise the discussions.

13:50

I think that's quite telling. So, we haven't yet got to the position where they've said, 'Well, okay, there's the political arguments around this, but actually we want to plot this out, how it would work; let's sit down and talk through this, what are the implications'. That isn't happening, not on those fundamental issues—yet. I'm being optimistic. 

No. I think that would be a fair summary.

First Minister, I think we'll all be aware that, tomorrow, your party's national executive committee is meeting to discuss the contents of the European election manifesto. It says on your website—on the Labour Party's website—that Mick Antoniw will be representing the Welsh frontbench at that meeting. Could I ask how the Welsh Government will be instructing him to vote on holding a people's vote, come what may? Will that be in favour, abstaining, or against?

I don't think you are entitled to ask me that question.

In the interests of transparency, First Minister, I think that, because he is going to be representing the Welsh frontbench, we are entitled to ask that question.

If the Member would like to join the Labour Party, Chair, I'm very happy to provide her with an application form.

It says on your website that he is a representative of the Welsh frontbench at that meeting. Could I ask, First Minister—? The reason I'm asking this question is that, at the moment, your position as a Government—and I'm asking you this as the First Minister, not as the leader of Welsh Labour—seems to remind me of Schrödinger's cat, in that you are simultaneously in favour of having a referendum and also against, just as the cat is both alive and dead. Tomorrow, we will have to see whether the cat is alive or dead. I think, in the interests of transparency, we have a right to ask what Mick Antoniw will be instructed to do in that vote.

Can I ask the question, First Minister, first of all—? Clearly, what needs clarification is—. Mick Antoniw is obviously representing Welsh Labour at the NEC, because it's a Labour Party organisation. Can you clarify as to what role he plays in regard to the Welsh Labour group in this Assembly, or the Welsh Government?

Well, it's entirely a Labour Party matter. Nobody represents the Welsh frontbench in a Government sense. Our party has a seat for Welsh Labour at the NEC, Mick Antoniw is the representative of Welsh Labour—

First Minister, can I ask why it doesn't say that on your website, then? On the Labour Party website, it says that he's a representative of the Welsh frontbench.

Whatever it says on the website, let me be clear so the Member—. I want to make sure the Member is properly informed. It is absolutely nothing to do with the Welsh Government. It is a Labour Party forum. Mick Antoniw represents the Welsh Labour Party at the NEC, and he does not sit there, in any sense, representing the Welsh Government.

Okay. Thank you for that clarification, First Minister. Could I ask, in that case, again in the interests of transparency, how you would want him to vote on that matter?

I will expect him to exercise his judgment as he—

So, as the First Minister, you don't have a position on that.

I expect the Welsh representative on the Labour Party NEC to conduct himself in a way that I would expect, and that is to exercise his judgment within the Labour Party context.

I think the First Minister's answered the question now in relation to that. Because it is not necessarily in the interests of this committee to keep on the political direction, but to focus upon the Welsh Government's direction. And the First Minister has actually indicated that it's no longer—he's stated it's not a Welsh Government representation on that committee. I think it's fair to make that point. Okay?

So, First Minister, will you be correcting your website, and this statement that Mick Antoniw represents the frontbench?

Well, I would need to see what the website—. I have a report of what the website says. I'm perfectly happy to visit the website myself.

Fair enough. First Minister, the referendum has been held. Wales and the UK voted to leave. You said you would respect that result. Today, all the Labour candidates for the European Parliament have issued a statement saying that any deal to exit the EU should be subject to a second referendum. Do you support them?

13:55

The committee's interest in the internal workings of the Labour Party is touching. Those people are making their views known as part of the process that will lead to my party's declaring a manifesto for the European elections during this week. They're absolutely entitled to do that, of course. They are members of the party and they are trying to influence the party's position. I'm completely relaxed about the fact that they want to exercise their rights as members of the Labour Party to influence the policy of the party.

It's not for me to agree or disagree. They are doing it in that—. I've set out the Welsh Government's position here, Chair. I'm happy to continue to repeat that for the benefit of Members. How people, as individual members of the Labour Party, choose to behave is not, I think, something that I'm accountable for in front of this committee.

May the Welsh Government position change following the decision of Labour's NEC tomorrow?

It's an entirely hypothetical question, Chair.

So, focusing on the Labour Welsh Government's position today, am I correct in understanding that it is to say there should be a second referendum if there is a bad Tory deal but not if there is a good Labour deal?

Our position is the one I articulated earlier, Chair, which is that we hope that the House of Commons can still strike a deal, a deal that will be in line with 'Securing Wales' Future' and a deal that would therefore have a majority to support it on the floor of the House of Commons. If there is no deal that the House of Commons can support, then the decision should go back to the people.

I've read this document, you've referred to it many times, and, like the Prime Minister's position, the Welsh Government's position doesn't seem to have changed for quite a long time. You say the negotiations are in good faith, you say you want compromise, but then just reassert this long-time position. What are the changes that you need to see to support a Brexit deal without a referendum?

Well, they are indeed the things set out in that document. In other words, we have always argued that membership of a customs union is essential to the health of the Welsh economy, that full and unfettered participation in the single market is essential to support Welsh jobs and the Welsh economy, that we need a sensible approach to migration, as elaborated in fair movement of people—an approach to migration that will allow Welsh businesses, Welsh public services and Welsh research institutions to continue to recruit the people who are essential to supporting the jobs of other people who live in Wales already.

We expect dynamic alignment in relation to workers' rights, environmental rights, citizens' rights, consumer rights, the rights that have been won for people in Wales as a result of our membership of the European Union. We expect that the Conservative Government will honour in full the commitments given to people during the referendum, that all the money that flows to Wales today as a result of our membership of the European Union should continue to flow to us the other side of the European Union, and that decision making on that money should remain where it always has been since 1999, that is to say here in Wales in front of the National Assembly, and that there should be a transition period of sufficient length to allow Welsh businesses to come to an accommodation with the implementation of any deal of that sort that was then struck.

First Minister, you used to argue for full and unfettered access to the single market, then in this document you argued for participation in the single market. People know what membership or not membership of the single market is, but no-one really knows what these phrases are. You've now a third formulation today, which is 'full and unfettered participation in'. Does that mean membership of or not? You then have this 'sensible' migration policy. What on earth is that? It is frankly unclear what your position is. You say nothing's changed except 'no deal' has gone on 12 April, but isn't the other change that's happened is, over the recess, the apparent fracturing of Conservative support? And is your concern as a Labour Party not to try and take over the UK Government and make Jeremy Corbyn Prime Minister? And isn't the reality that these negotiations are just not going to continue and not lead anywhere, because it's not in the Labour Party's partisan interest for them to do so? 

14:00

Can I remind Members that we are focusing on the Welsh Labour Government and not the Labour Party UK, as such? But, First Minister, do you wish to answer?  

Well, if the Member is adding his voice to calls for a general election I'm very pleased to welcome him to that campaign, because we have long argued here that if the House of Commons is unable to discharge its responsibilities what we need is a new House of Commons. And that is the constitutionally correct response to the stasis that we have seen in the House of Commons since October of last year.

In relation to what does 'fair movement of people' mean, I commend the document produced by the Welsh Government to Mr Reckless. He will find it an admirably evidence-based document in which we set out a series of practical and specific proposals that would respond to some of the anxieties that people have had about the current operation of free movement, that would provide new rights for people at entry level jobs, but would not solve the problem of people's anxieties by preventing the ability of Welsh businesses and Welsh public services to recruit people to come and work in Wales who provide absolutely vital and necessary services.

And as to the difference between unfettered access and full participation in the single market, we have always been careful—and it's a barren debate, which we've had in front of this committee many times, but there is a difference between the single market, which you can only be in if you are members of the European Union, and participation in a single market, which is possible for—[Inaudible.]—countries under the right conditions to have that access, and that access is essential for Welsh businesses. Time and time again members of this committee will have heard directly from manufacturing businesses in Wales—the automotive sector, the aeronautics sector—that without that unfettered access to that single market their ability to go on trading and providing jobs and livelihoods here in Wales will be compromised, and that is what we are trying to avoid. 

And finally from me, Chair, your evidence there is wrong, First Minister. Norway and Iceland are members of the single market without being members of the European Union. But may I infer, from your invitation to me to support a general election, that by way of public vote you would be content for these matters to be resolved through a general election, rather than a referendum? 

Well, we've always said that a general election and a referendum are both ways in which the public could express their view on these matters. I've been told many times on the floor of the Assembly and here that a general election is impossible, that the House of Commons under the Fixed-term Parliaments Act 2011 will never agree to that. So, I've had to recognise some of that. I continue to believe that constitutionally the proper answer to a deadlocked House of Commons is a new House of Commons, and that a referendum, which, as Alun Davies has pointed out, we've supported in votes on the floor of the Assembly, would be to resolve one aspect of a House of Commons—and would still be a House of Commons—without a majority, would still be a House of Commons riven by splits and inability to make progress on many other issues. So, for me, both of those possibilities remain, and one of them I think has greater constitutional legitimacy. 

Before we move on, First Minister, just to confirm Delyth Jewell's question, it is—we've checked—on the Labour Party's website saying Welsh Labour frontbench representative—[Interruption.]—Welsh Government frontbench actually, even Welsh Labour frontbench, okay. 

Thank you for pointing that out. 

So, that is a genuine point raised. Before we move on, can I just ask, since we've been talking about politics and parties—? You are a Welsh Government. Clearly, in the discussions going on between the Labour Party and the Conservative party on attempting to reach an agreement—. Can you confirm that you've had discussions within the Labour Party to put the Welsh Government's position in those discussions to ensure that they are fully aware of the Welsh Government's position?  

Yes, Chair. I can confirm that the same day that I met the Prime Minister and the Scottish First Minister and attended a sub-committee of the UK Cabinet, I also attended a meeting of the shadow cabinet of the Labour Party and had an opportunity to speak there and once again to put the position of the Welsh Labour Government. 

14:05

Yes. I should say, whatever the website says, as a person who was representing Welsh Labour at the national executive meeting, I was appointed to represent the First Minister the Labour leader—not the First Minister of Wales, the Labour leader—and there's a very clear distinction there. I have to say that, in representing the leader of Welsh Labour, I spoke to the leader of Welsh Labour at the time on a number of occasions and the Labour group. I was never held to account by a committee of the National Assembly, and neither should I be, for my decisions as a party politician. So— 

And I think it was also right to point out what was on the website.

—I think it was a very clear distinction that the committee should recognise. Otherwise, we'll have all sorts of conversations about our own parties that none of us really want to have.

I'd like to move the conversation onwards, about the relationship between the Governments of the United Kingdom. I think it's fair to say that the relationship between the United Kingdom Government and the Scottish and Welsh Governments has been quite difficult at times, quite strained, shall we say. I think it's important that in doing so we have a very clear negotiating position, which we've already discussed this afternoon. I'm interested, First Minister, in the relationship we have with the Scottish Government as well and the way in which we work alongside our colleagues in Government in Scotland, and that we're able therefore to have an understanding of each other's position and, wherever possible—you've said so before—a more powerful response to the United Kingdom Government is where Welsh and Scottish Governments are able to work more closely together in shared positions. So, I'd be grateful if you could outline to us the work that's taking place between the Welsh Government and the Scottish Government and the way in which you seek to work together in order to ensure that you are able to present a robust position to the United Kingdom Government. 

Thank you, Alun, and to agree that I've always thought that, where the Welsh Government and Scottish Government are able to agree on things, then we are better able to support one another in forums when we are discussing these matters with the UK Government. So, we continue to do that across a range of different contacts that we have. I said to you that I met Nicola Sturgeon, the Scottish First Minister, when she and I were both in London. I've had an exchange of correspondence with her recently and since then, looking at ways in which we can work together to strengthen the way that the UK operates as a voluntary association of four nations.

Now, parallel links then take place between Cabinet colleagues with Scottish Ministers. So, Jeremy Miles has attended a number of meetings in April where the Scottish Government is a participant. Lesley Griffiths is meeting today with Scottish and other Ministers in the environment and energy field. We continue to participate in the ministerial forum, the Joint Ministerial Committee on Europe and the Joint Ministerial Committee on European Negotiations. It is not a formal part of the constitution but it is increasingly the case that Welsh and Scottish Ministers will share views in advance of those meetings where we are able to craft common positions that we can then represent in those forums. 

I'm interested—. I'm grateful to you for that, First Minister. I'm interested therefore in the evolving position that you would take alongside Scottish colleagues, if possible, to the changing nature of the debate and discussions about the future of the UK. We've had these conversations on a number of occasions and it appears to me, now we understand the Scottish Government's perspective is to seek a referendum on independence—and that is their right and it's proper for them to pursue that, but our position is different; we don't seek that. Therefore, there are fundamental differences about the destination, if you like, on this particular route, but there are, I would expect and anticipate, a number of commonalities and similarities about where we would seek to see the UK develop in the future. There are, I guess, a number of lessons to learn from the last two years, shall we say, in all sorts of different ways, but one of them has to be the structure of governance within the United Kingdom. It would be useful, I think, if we could understand whether you've begun to have those conversations with the Scottish Government and the position the Welsh Government would be seeking to adopt in those discussions.

14:10

Thank you, Chair. So, of course, Alun is right—we have a fundamental difference with the Scottish Government over the final destination of these things. The Scottish Government has a political mandate to pursue its ambition of taking Scotland out of the United Kingdom. It's absolutely entitled to pursue that. But my discussions with Scottish Ministers, I think, have always led me to believe that they understand as well that, up until the point where that might happen, it is in the interest of Scotland as well as everybody else to have a successfully functioning United Kingdom, and that they will play their part in that, because that is in the interest of Scottish people. So, while they pursue their ambition, I don't think that means that they don't have an interest in the way that the UK operates in the meantime. And I think they've been good citizens in their willingness to participate in those discussions.

And I think we have a series of things that we share as a result of the experience that we've had. First of all, the principle of parity of participation. So, the four component parts of the United Kingdom are very different in scale and size, and you can't just pretend that that isn't a factor. But that does not mean that, in terms of participation, there should not be parity. So, the questions we always ask are: why do JMCs almost always happen in London? It's as rare as hens' teeth to find a meeting outside London; why is it that it is only UK Ministers that chair those meetings?; why is it only UK officials who produce agendas and papers for those meetings? Those meetings should happen anywhere in the United Kingdom. If it happened to happen in Scotland, a Scottish Minister is equally capable of chairing a meeting of a JMC as any other Minister, and the chair could move around in that way. If a meeting were to happen in Wales, then I would expect Welsh officials to take responsibility for making sure that papers were produced and that agendas were—. That's what we mean by parity of participation, and we certainly haven't had that. And the future good operation of the United Kingdom requires it, I believe.

We need an independent disputes resolution mechanism, because, even when we agree on things, the way that things are implemented may sometimes lead one of the four parties to believe that something isn't being done in accordance with the agreement that has been reached. And if there is a dispute, then you need a way of the dispute being resolved that doesn't leave one of the four parties as the judge and the jury. And, at the moment, that is what we have—the UK Government is in that position. So, dispute resolution is really important.

So, Members will know that, at the JMC plenary in March of last year, it was agreed that there would be a formal review of these things, that different parts of the United Kingdom have taken responsibility for developing the work streams. Wales is leading on the principles document, which I've come to believe is a more important part of the work than I might once have believed, having seen the way in which the principles document has been so important in the successful work we have done on frameworks between the four nations. And other administrations have responsibility for other strands. Now, Brexit means, Chair, that there's been no further meeting of JMC plenary in which that was a substantive item. It was a minor item in the JMC plenary that was held before Christmas. We need a JMC plenary where that work can be properly reported and can be the main focus of discussions, but Brexit has had the effect of crowding that off the agenda, as it has had the effect of crowding other things off the agenda too. 

It would be useful if, perhaps, any documents that could be shared with the committee could be shared at a time that would be appropriate for those conversations to take place, in terms of taking forward a wider debate on these matters. Mr Clifford will have heard me say on a number of occasions that the UK is a social, economic and political union, and a number of aspects of that define what we are and what we will be as a state, taking things forward. I fully agree with the points that you've made about dispute resolution and about structures of meetings and the rest of it, but also it would be useful to have a more positive approach in terms of how we work together as democratic institutions and as Governments, and the shared prosperity fund should be an opportunity, of course, for that to happen. It would be, perhaps, useful if you could give us an update on where you believe we are with that at the moment.

14:15

Well, I thank Mr Davies for that and for his identification of the shared prosperity fund as an opportunity to strengthen the union. Truthfully, I don't think we're any further forward than the last time I answered questions on the fund here because, despite many promises, we are still to see any specific proposals. There is no consultation that has any dates attached to it, or outcomes attached to it. What we have is a line in the Conservative Party manifesto in an election that the Conservative Party did not win, but which certain members of the UK Government appear to be particularly attached to. I simply say, Chair, what we've said all along: that the shared prosperity fund cannot possibly be used as an excuse to take money away from Wales and to share it out with other parts of the United Kingdom. Wales benefits from funding from the European Union because we qualify for it on the basis of our needs. Those needs will still be there the day after we leave the European Union, and the funds that have come to Wales through the European Union need to flow to us from the UK Government as we were promised they would thereafter. I am not going to fall out with anybody about the name on the tin. If the money comes to us as our share of the shared prosperity fund, and provided the quantum comes and that the responsibility for spending that money continues to be in Wales, then I don't mind if it's called the shared prosperity fund, as I don't mind that it's been called cohesion funding and various other things at the European Union. But the fundamental things are not negotiable from a Welsh Government point of view, and I know that Mr Davies will know that this has been a widely supported position. The all-party parliamentary group at Westminster supported it strongly in their document. The FSB have recently published a paper again arguing for the money to continue to come to Wales and for the decisions about it to be made in Wales. Universities UK's position on the shared prosperity fund echoes our position entirely. We are not the outliers in this. Ours is the mainstream response to this issue, and we continue to urge the UK Government to be part of that mainstream position as well.

Since we are on the shared prosperity fund, can I ask Delyth to come in with questions, and then Suzy?

Thank you, Chair. Before I ask, I was going to ask a supplementary to what was just being discussed on dispute resolution. Would you like me to do that first?

Okay. First Minister, it was interesting what you were saying about there should possibly be an independent dispute resolution mechanism set up. In a recent letter that we received from the international relations Minister—. When the international relations Minister had given evidence to us, we discussed recently the fact that the UK Government had sometimes shared the text of international agreements before they had been signed and that the process isn't always satisfactory, and that she had received verbal assurances that that wouldn't happen again. Do you think that there could be a mechanism set up so that more than verbal assurances could be received for something like that, to make sure that the Welsh Government and this Assembly—that it wouldn't just be something where we would be saying, 'Oh, we've made absolutely clear that there shouldn't be a bad precedent set,' but that actually there would be a formal mechanism to make sure that our competence wouldn't be called into question in that way?

mighYes, thank you. Chair, I think there are two separate sorts of agreements that we might be talking about. One, and I think this is what was being referred to specifically in Eluned's letter— . Obviously, we are party, through our membership of the European Union, to 40 different existing agreements with 70 different other countries, and the UK Government is in the process of trying to roll those agreements forward so that they continue to apply the other side of our membership of the European Union. A small number have been agreed, and they were some examples of where we were not sighted on those agreements until they were signed. Now, UK Government would probably say in answer that it's because, simply, there was no change; it was just rolling forward an existing agreement. But since raising those concerns, since 15 March, we have now had sight before those agreements are being signed so that we have an opportunity to make sure that they're satisfactory from a Welsh point of view. So, there has been some progress there, which is important to acknowledge, and it's partly as a result of this committee's interest in the matter.

There then is the separate question of future trade agreements. If we leave the European Union and are in a position to strike different trade agreements, how will Wales's interests be protected under those new agreements? And we do now have an agreement that there will be a new ministerial forum around the ministry in London for international trade. So, that is a step forward, because that will be a new forum and it will involve the devolved administrations from the very formative stages, not just at the point where agreements are about to be signed but from the very beginning when agreements are being thought about we will be part of developing the prospectus for that. We continue to say that, when those negotiations are talking about devolved responsibilities, we need to be in the room and at the table because those will be things that we will have to be responsible for delivering. So, we continue to be in discussions with the UK Government about that.

The general point that Delyth was making, though, is one I completely agree with—that independent dispute resolution mechanisms need to apply across the board. All of the different forums that we have with the UK Government, between the UK Government and devolved administrations—where there are disputes or difficulties, then one party by themselves cannot be responsible for the resolution of those disputes. And so the principle of an independent element in dispute resolution is true whether it is the Treasury quadrilateral, whether it's a new body around trade, whether it's the JMC(EN). The principle is true for them all.

14:20

Thank you, First Minister. I welcome that. So—. No, I won't press you further on that; I welcome that.

On the shared prosperity fund, I would also welcome what you were saying earlier. Again, my party have been saying equally in—. I'm not sure if you've had a chance; I'm happy to give you a copy of this, if not—

We've been saying that we shouldn't receive a penny less and that any decisions affecting spending in Wales should be made in Wales. Would those be points that the Welsh Government would agree with?

I'd be very happy to discuss that further, but I'll pass this on to you.

Just two questions, before we run away from them completely. The first one is: bearing in mind what you've just said, First Minister, presumably then the report that came out from the Institute for Government just a couple of weeks ago, suggesting how future relationships should look—. The new arrangement that you've got with the forum that you just mentioned seems to mirror what they are suggesting. So, has one been influential on the other? It was 16 April, if that's any help.

Yes. Thank you, Chair. I've seen the Institute for Government's report, and I think the new forum does demonstrate that the UK Government has made some moves in a positive direction. At the heart of the Institute for Government report, what they say has been exactly my experience, which is that the whole thing has been bedevilled by the difficulties that the UK Government has experienced in securing internal agreement to its own propositions so that, whenever it is in the room with other bodies, it struggles to speak with a single voice on these propositions. And that's what the Institute for Government says, doesn't it? It says,

'bedevilled by the difficulty of getting Cabinet agreement'

to its own propositions, and that has always meant that these discussions have been difficult, because the people put up to have the discussions aren't always confident that they are able to speak.

14:25

I think it was good to have it out in the open, actually, because bearing in mind the committee meetings we've had with this committee in the past, it's always sounded a little bit as if the UK Government, speaking for England, doesn't want to speak to us and it's actually just been impossible coming to speak to you. I think it's out there now, thank goodness.

The other thing I just wanted to check very quickly with you: you mentioned right at the beginning of this session conversations that you've had with the Prime Minister. I just wondered, in terms of candour, whether it's been—we talk an awful lot about the Welsh Government's position, and even the UK position such as it is, but we don't talk an awful lot about the European Commission's position. Again, just this month, Michel Barnier said that if the UK still wants to leave in an orderly fashion, this agreement, meaning the withdrawal agreement, is the best and the only one possible other than a crash-out. So, in terms of the influence you're able to bring to bear on what I think sounds more like the political declaration end of things, how confined have you found those conversations with the Prime Minister, and has she actually been able to say to you, 'Look, there's only so much I can say, because the people with whom I've already negotiated have constrained what I can offer'?

Well, the Prime Minister makes the point that the withdrawal agreement is an agreement, and she echoes what Barnier and others say about the EU's view, that that is a closed, concluded set of agreements. I remember explaining in front of this committee quite a long time ago the reservations that we had about the withdrawal agreement. But, you know, the world moves on and today I suppose what I'd have to say is that our reservations about the withdrawal agreement could be resolved, to a significant extent, by a changed political declaration, and therefore our focus is now on the political declaration.

So, it's narrowed down to that now; that's useful to know.

Yes. It is hard to see, given what has been said so emphatically, that the withdrawal agreement, other than in entirely technical aspects, could easily be reopened. But the EU have said, Barnier has said very clearly, that the political declaration is a different matter; that it is there for further discussion, that it could be elaborated. Some of the things that we were concerned about, for example, that the withdrawal agreement did not have dynamic alignment for workers' rights, if that could be guaranteed through the political declaration, or the political declaration made a document that people could have confidence in, then it could be possible to resolve some of the anxieties we had about the withdrawal agreement in that way.

Which goes back to what you started with, so I don't want to revisit it. I just wanted to clarify that.

But the political declaration then becomes—in exactly the way that Suzy Davies has said—it becomes the key thing to be trying to improve.

We move on now to Brexit legislation. Obviously, there are a lot of discussions there. Mike Hedges.

Yes. Thank you, Chair. The UK Agriculture Bill and Fisheries Bill are both awaiting Report Stage in the House of Commons. Have there been any updates on where they are?

I don't think we do, Chair; we don't have any dates from the UK Government as to when they will be brought back for report, and once they've completed the House of Commons Report Stage, I hope I am right in saying that they then have to go to the House of Lords beyond that, so they are not—. There's a fair amount of legislative road still to go in relation to them both, and as far as I am aware, we do not yet have a date for report.

And do we expect to have a date in the near future or are we just hopeful?

Well, the UK Government, I know, is acutely aware of the need to bring both of those pieces of legislation onto the statute book, so I think our anticipation is that they have a shared interest with us in moving ahead with them.

In your evidence to this committee on 25 March, the First Minister said he was not confident the Welsh Government would be able to recommend legislative consent in relation to the Fisheries Bill. Is that still your view?

Well, we have moved forward since I was last here with further discussions, and the discussions with the UK Government have been continuous and, I must say, there's been some positive progress on resolving some of the issues that were outstanding the last time I was in front of this committee. There still are some outstanding concerns—there's clause 18 of the Bill. I'm pleased to tell you that there are colleagues here who are closer to some of the detail than I am, so if Members want to know it in more detail, but my understanding of it is that clause 18, in our view, does impinge on devolved competencies and we continue to discuss with the UK Government how that clause would operate in practice.

We've had assurances through a letter from Michael Gove about the way that those powers are intended to be used. We have the offer of a jointly produced memorandum of understanding to codify the way in which clause 18 powers would be deployed, and, in the way that Huw asked me earlier, officials of both Governments are working away at the detail of what that memorandum of understanding would say. But it's not concluded as yet, so whereas I feel less anxious than I did last time, we have to wait to make sure that the assurances we've had from Mr Gove and the memorandum that went with it genuinely do address some of the outstanding concerns we have about the way clause 18, in particular, is drafted.

14:30

Well, as we know, the people involved in commercial fishing were amongst the most enthusiastic Brexiteers. They believed that because they thought that if we had control then we could stop fishing boats from other parts of Europe coming into British and Welsh waters. Is there anything in there to ensure that a boat that is currently registered in Spain can't register in Milford Haven and carry on doing what it's doing now?

Now, I'm definitely going to look for some help on that.

I think we might need to write back to you on that one, if we may. [Laughter.]

Perhaps you'll want to carbon copy the climate change committee as well.

I'm trying not to give into temptation to talk about fisheries. In terms of taking this forward, assuming that the two UK Bills become law by Christmas—I don't think it's reasonable—then what is the role of the Welsh Government subsequent to that? Because I think it's fair to say that both these Bills contain clauses and frameworks that the Welsh Government have asked to be included within them to provide Welsh Government with particular powers and opportunities to take forward policy. I think it's also true that the Welsh Government has stated very clearly that it sees a requirement for Welsh legislation in both these areas to actually create a very different regime for the future. Does the Welsh Government have any proposals to make on that yet and does the Welsh Government have a timetable when it anticipates such legislation would be available?

Thank you, Chair. Just caveating what I say with the deep uncertainties that surround everything that we're talking about, the Agriculture Bill would provide Welsh Ministers with all the powers that we think we need in the short to medium term to redesign a regime of farm support and other important agricultural matters the other side of the common agricultural policy. Nevertheless, Lesley Griffiths, I know, remains firmly persuaded that in order to be able to do everything she wants to do, legislation in front of the National Assembly would be needed, and her ambition is to bring that legislation forward during this Assembly term. She has recently reported on the consultation on 'Brexit and our land', and you will know that she intends to bring forward a second consultation in advance of the Royal Welsh Show to provide some further detail and to reflect on the 12,000 responses that came to the first consultation, working with the sector and shaping those ideas. That would then be reflected in a Bill that would be scrutinised through the National Assembly. So, I think on the agriculture front, subject to all the uncertainties and not knowing even when the Bill is coming back for Report Stage, if things work the way we would like them to work, that is broadly the direction we see.

On the Fisheries Bill, the Fisheries Bill, because of the changes that have been agreed to it, will represent some significant constitutional steps forward for devolution, because it would allow a Bill to be put in front of the National Assembly in relation to Wales and the Welsh zone, and Welsh fishing boats beyond that zone. Those are powers we don't have at present. So I'm slightly relying on a recollection of a conversation I had just before Easter with Lesley. I think her view is that it would make sense to bring forward fisheries legislation to the floor of the Assembly when the National Assembly has all those new powers available to it as well, so that there would be a single fisheries Bill for the Assembly to consider that reflects the broader set of responsibilities the Assembly will then have. Whether that is doable during this Assembly term does depend a bit more on how fast the UK Fisheries Bill reaches the statute book, and then all the normal consultations with the sector that we would need to carry out.

14:35

With two former fisheries Ministers here there's a temptation—

I know. Both of whom know a lot more than me, I think.

—to pursue a much longer discussion on these matters, which I don't think anybody would want. So, we would see an agriculture/environment Bill.

No, I think the environmental principles Bill would be a separate Bill. The consultation on environmental principles is current, due to finish in the middle of June, and the way the Minister has talked to me about it, certainly, is that she would see that, which is essentially a governance Bill, making sure that the governance arrangements we currently have for the environment through the EU are not lost, and are replicated and strengthened if necessary here in Wales. That would come forward separately to the agriculture Bill.

And just on legislation, obviously we've discussed the Trade Bill in the past and we've had an LCM that we've approved on the Trade Bill, but following that there were amendments made in the House of Lords and we've received a response from the Minister for international affairs highlighting the fact that she believed there would be insufficient time for the LCM procedures to be complied with, and therefore she did not intend to lay a supplementary LCM. Surely, do you agree that it should be the Assembly's decision as to whether there's sufficient time rather than the Welsh Government's position?

Well, it is the Welsh Government that brings forward an LCM, so the decision in the end to move an LCM has to be the Government's decision. When the Minister wrote, it was on the basis that we could not see a moment in the timetable where an LCM could be meaningfully put in front of the Assembly, but we continue to be in discussions with the UK Government about the timetable of the Trade Bill, and we are continuing to review the decision, and if there is an opportunity to bring forward an LCM, of course we want to. Let me be clear, Chair: the Welsh Government's position is that we would want to bring forward a second LCM, even though the changes in the House of Lords have been such that they have removed some constraints on the Assembly's competence, not added to them, so they are positive changes that have been made. Nevertheless, we would wish to put a supplementary LCM forward. The Minister was pointing to the fact that sometimes the timetable, which is not in our hands, might defeat our ability to do that, and it may yet defeat our ability to do it, but it will not be for want of trying by the Welsh Government, and we continue to be closely in touch with the UK Government on the timetable, so that if an opportunity does arise to review the position, then we definitely will.

So you may review the position and therefore bring forward a supplementary LCM.

If we're in a position to do it, of course that's what we would want to do, but a timetable isn't our timetable, and if we can't do it at a time that is meaningful as far as the UK Bill is concerned, then we may be defeated by their timetable. But we do remain in close contact with the UK Government about the timetable to see if there is any opportunity that we can bring about.

A very short supplementary on that. Do you think, First Minister, that that could be considered in the realms of the remit of any possible mechanism that we were discussing earlier about dispute resolution, just to get the UK Government to appreciate—not just to appreciate, but to be compelled to keep in mind the knock-on effect on the timetable of devolved administrations when they are setting out a timetable? I appreciate that everything to do with Brexit, almost, is far from satisfactory, but for there to be a necessity of the UK Government, for us not to be an afterthought always, so that we're always pushed into having to make a series of unfortunate decisions.

I think making these points to the UK Government and having that as part of the review, the mechanics of legislation—the Sewel convention will be very much part of the same set of discussions, where you know that the Scottish Government has recently put forward some ideas. We've contributed some ideas. These mechanical ways in which the cogs of our system and the cogs of another system need to be able to move in harmony together, rather than finding themselves clashing with one another, I think definitely ought to be part of the overview of the way that the UK operates.

14:40

Thank you. If we move on to some issues on preparedness, Suzy.

Yes, thank you. I've got some general questions, but I want to start with the European transition fund, if I can, just to get a little bit of clarity on this one. The fund is £50 million this year, yes, of which about £30 million of it comes through the Barnett formula, if I'm right. Do I understand that correctly?

The fund is drawn together from a series of different funding streams that come to the Welsh Government. It's a mixture of revenue funding, capital funding, financial transaction capital funding. It's £50 million in total.

Okay. Obviously, a considerable bit of progress has been made on it since we last discussed it in this committee, I think, but there's about £10 million of it that's as of yet unallocated that's come from the UK Government, and overall, I think, there's still about £16 million that needs spending. What's the timetable for that, and are there any particular sectors, now, that have suddenly woken up to the fact that they could do with this money?

There are two different pieces of money here, Chair, so I'll try and clarify them. There is the £50 million EU transition fund, which has not relied on money that has come directly from the UK—

That is separate. So, the £30 million—

So, there's £80 million in total there, for preparedness.

Well, you could sort of—. But the £30 million is not really for the purposes of the EU transition fund. So, the EU transition fund has been used almost entirely for the needs of organisations and companies outside the Welsh Government. We've not spent that money on our own preparation. We got £20 million last year and we gained £30 million this year, as a consequence of the additional staff that have been taken on in Whitehall to prepare the UK Government for its own internal Brexit needs.

That's where the £31 million comes from, and it's not part of the European transition fund.

That is the £50 million separate, which we have created from different sources that we have available to us.

That's great. Are you going to be able to spend the £10 million usefully?

Well, that is a good question, Chair, if I can say it, because when I was finance Minister, I felt I had to take a very careful approach to the way in which one-year funding for staffing purposes was being deployed. Last year, we were told we had the money for one year, and we were promised it for this year, but for a long time we didn't know how much we were getting this year. So, we have taken on extra staff in the Welsh Government, but as finance Minister, I felt I had to be fairly hard line with the Permanent Secretary about those being time-limited posts, because if we don't get money for the year after, then I've got no money to pay for extra staff. So, the people we've been taking on have been for time-limited posts, and we have used existing staff to be redeployed onto Brexit work. So, can we make use of the £10 million? Well, of course we will make use of it, but it's not in Suzy's question, 'Is it money that it is easy to make good use of?' Ten million pounds to employ staff in this year when you don't know if you've got £10 million to keep them in a job next year is not the easiest money to make the best use of. So, we continue to think carefully about how to use it.

What happens to it—genuinely now—if you can't spend it? Does it get drawn down from the UK or does it come here and it can be used for something that's similar but not the same?

It can be used for anything. As you know, in the rules of UK devolution, one of the stranger things about it is that whereas most other devolved nations have constraints on how devolved administrations spend money, the money comes to the Welsh Government and it is for the Welsh Government to decide how to use it. So, we could use it for nothing to do with Brexit at all.

So, do you have a plan B on how you might spend that?

Well, at the moment, the plan is still to have it set aside primarily for Brexit-related purposes, and we work on trying to make sure we have a plan to make best use of it. On the EU transition fund, £35 million—£35 million to £36 million—of that has now been deployed, and Rebecca Evans wrote to Assembly Members on 16 April, setting out all the deployments so far. I said, Chair, that the fund was a mixture of revenue, conventional capital, and financial transaction capital. The drawdown has mostly been on the revenue side—more organisations have wanted revenue assistance than other forms of assistance. So, what's left in the fund is more at the capital and financial transaction capital end. We continue to have bids, we continue to work with others to deploy that money, and we will continue to do that over the next six months.

14:45

Oh, right, okay. Within Government, of course, I think we had an announcement just before recess, that you'd acquired a warehouse for stockpiling things that we might need. I'm not quite sure what the terms of that were. Was that an outright capital spend? Out of interest.

The funding for that didn't come from the European transition fund—

It came internally from the health department itself. Chair, I think in our circumstances, it is a relatively rare example of where we ended up spending money against a 'no deal' exit that we probably wouldn't have spent on a planned exit from the European Union. One of the things Simon particularly has been involved in, that we have worked hard at, is trying to make sure that the allocations we make from the European transition fund are useful whether we leave the European Union with a deal or without a deal, and that we haven't spent large sums of money on 'no deal' preparations that then are purposeless if there is a deal. But the warehouse is probably the one outstanding example of something that we would not have done if we weren't fearful that we were about to leave on 12 April without a deal, and that we needed to make sure that we had a way of going on providing medical devices and other equipment that the health service needed, and we couldn't be confident if we didn't develop an eight-week supply line of our own.

Oh, no, I understand that; I'm just curious about whether it was acquired on terms that would make it easy to get rid of, should you not need it. It maybe not one for this particular committee, but if you have a three-word answer, that would be great.

The First Minister is completely correct that the circumstances of buying that were that it was an essential thing in a 'no deal' scenario. Having the warehouse allows the health department to consolidate the supply chains of medical devices, and try and secure efficiencies across the system. So it's not wasted spending, but we've been very careful through the programme to avoid spending things that would be completely unnecessary in—

Okay. I think I might have to just write in and get what I want, which is the terms of the acquisition, but there we go.

Similarly with Holyhead, obviously a lot of work has gone into that, and we've had the statement, as you say. Obviously, we're all hoping there's not going to be a 'no deal' situation. Bearing in mind that the Scottish Government has started to scale back a little bit on its 'no deal' preparation spending now, is the Anglesey spend probably the last big project that you envisage having to spend money on?

I think it's certainly one of the main ones that we've had to spend money on against a 'no deal' Brexit, because we've had to find alternative places where trucks could park up if there was a queue waiting to go across the Irish sea into Dublin. We still are in discussion with Welsh ports about infrastructure spending, what they may want to bring forward, which will be capital spending, and the discussion is exactly in this area. We would like to fund infrastructure spend in ports that would be useful to ports whether there is a deal or not a deal. And we're anxious not to spend money on things that wouldn't be useful if we struck a deal. But we are still in those conversations with the ports about what the specifics of that might be.

All right. So you're not tied into long-term contracts at the moment, as far as you can tell us.

No. But nor do I want to rule out completely the fact that we may still end up having to spend some money this year against the risk of a 'no deal'—

—if that risk strengthens again over the summer.

Is there anything else in the pipeline that you're thinking you might need—worst case scenario—that we don't know about?

14:50

We're monitoring the circumstances for exiting very closely. Most of the plans that we've had have been accelerated spend for things that we'd need to do anyway. Some of the plans need to be revisited. So, if there was a 'no deal' exit happening in October time, that's quite different, particularly, say, on the water treatment side of things, in terms of the things that we've prepared for for an exit at the end of March. It's a different set of circumstances, it's a different kind of intervention we'd need to make if that's happening in the autumn. So, we'd have to do new things if that's what we're doing.

Can you talk about those assumptions in general terms that we might understand?

I could add on the reservoir issue. If we had left on 29 March—I think I've got this the right way around—the reservoirs are full and require one set of chemicals, and if we exit at the end of October, the reservoirs are relatively empty and require a different set of chemicals. Apologies, it may be the other way around, I can't remember, but rationally—

That's a useful example for us. Finally, you hinted in the earlier questions—are there any sectors that are coming to this a bit late to the game now, that have woken up to the challenges that they could face in the case of a 'no deal'?

I don't think that has been our experience, Chair. I think the sectors that we know that are most at risk—seafood, for example, automotive—I think they are sectors that we have been in conversations with now over many months. We continue to be in conversations with them, of course, and we'll use the next few months to continue to work with them on mitigation measures and so on. I asked this question exactly myself very recently, as to whether or not in this final straight something had suddenly popped out at us that we hadn't heard from, and the answer was 'no'. The companies and the sectors in Wales that are vulnerable, particularly to a 'no deal' Brexit, are the ones we've been in conversations with now for many months. 

That's good to know. It just then raises the question of what the balance of the European transition fund is likely to be spent on.

It's a demand-led funding in the sense that we advertise it and we invite organisations to put bids to us and we continue to have bids coming in and—

Yes, the £7.5 million for business resilience has been supplemented by the Minister for Economy and Transport quite recently, I think, with another £1.7 million, because of the small and medium-sized enterprises valuing that resilience work. That's helping them prepare for Brexit, regardless of which nature of exit.

Okay, so it'll be the same sectors, just looking for a bit more. Okay, thank you. Thank you, Chair.

Thank you. Just for clarification, we've talked an awful lot about JMCs, JMC reviews and a possible forum on trade. The Brexit Minister actually did write to the Chancellor of the Duchy of Lancaster requesting a formal role for the devolved administrations in the future EU negotiations. Have you had a response to that?

I don't think there's been a written response, but I know that there was a conversation between Jeremy Miles and David Lidington just before Easter that followed up on that letter. I don't think as yet we have had a formal written response from the Chancellor of the Duchy of Lancaster. 

Because your positive messages about the JMC review I don't think I felt were reflected everywhere. As such, do you have confidence that the JMC review actually will lead to something productive, rather than simply a sham to keep us happy and nothing actually being achieved to ensure that the devolved administrations have a voice in the future?

Chair, I always think it is my job as the First Minister to be critical of the UK Government where I think that that is warranted, and I've been critical of many aspects of the UK Government's conduct on Brexit, but where there are positive developments it is better to acknowledge them. And where you think there is the prospect that things could get better, then I think it is our job to try and get behind those prospects and to try to make them happen, rather than just to sit back just to be critical of them. So, I could be critical and say it's been over a year since that review started, that the report we had of it before Christmas didn't strike me as work that had been conducted at an accelerated pace, but I am assured by officials who have been involved in them that they have been constructive, that they have involved all four nations and that there are a set of proposals that can come to the next JMC plenary. Will they go as far as we might want or the Scottish Government might want? I doubt it. But you're in a negotiation, and that means if you want to bring a negotiation to an agreed conclusion you have to be aware of the constraints that other parties to a negotiation are also operating within. So, will it do everything that we want? Almost certainly not. Does that mean that we should regard it as not worth doing? Well, I don't agree with that either. 

14:55

So, are you confident that you will be in a position of seeing a newly structured JMC before we leave the EU?  

Well, if we have a transition period of the sort that the Welsh Government has long advocated, then I think there is time then to make sure that when we are beyond the European rulebook that we will have a way of conducting business across the United Kingdom that will stand up to the considerable weight of work that those structures will have to conduct. I think it's in the interests of all parts of the United Kingdom that that should be brought about. Brexit has had the chilling impact at the UK Government end of the M4 of draining away time, draining away attention, draining away energy from doing anything other than the absolute immediate crisis management that they're engaging in. But, as we say all the time, at some point, time and energy and commitment have to be found to that longer-term agenda, because that's how a successful United Kingdom can be crafted of the sort that we are committed to seeing. 

But surely some of those—. You mentioned the transition period, but on trade, for example, if we're outside the EU will we start negotiating those trade agreements straight away. Therefore, the JMC on international trade—you want it to be effective and operational under the new arrangements before then. So, actually, I would suggest it's sooner than the end of the transition period. 

You won't get everything, I don't believe, concluded within an immediate time period. Everything we want of the sort we've been describing this afternoon, in terms of dispute resolution mechanisms and other things—they are going to take time to bring about. That doesn't mean to say that the trade JMC that we have agreed will not be up and running and doing a useful job. The United Kingdom will not be able to strike trade deals while we are in a transition period. It can start the negotiations, but it will not be able to conclude those negotiations while we are part of a transition period. So, there will be some things that can be done,  and it'll be useful and important to have a forum where we can be involved in shaping those negotiations and so on. I'm confident that that will be there. But the transition period will give us the time we need to conclude that wider set of items that are part of that review agenda, and some additional matters that we touched on this afternoon as well. 

I'm conscious that the time is almost up, First Minister. Huw has the last question. 

Yes. We've touched on a lot to do with international trade agreements, but would you accept that if, in this period ahead of us—six months, but even a couple of years ahead of us—you were to move ahead with the restructuring of JMCs to make it more meaningful—you've talked about an agenda that could be jointly set or moved around the country—and you had more of an in to trade agreements, it starts to look something like federal government?

Well, you would certainly frighten the UK horses if you—. That word is a word that UK Ministers are strangely allergic to, I think. Because, yes, you could describe what I've just been describing in the way that David Melding has written extensively about in terms of a federal system for the United Kingdom, but, in a way, I think it's a shame that the label is sometimes used as a way of not becoming engaged in the substance, because the substance is more important. 

Yes. There are many things you could call it. 

Many things, many things. Can I simply turn to the continuity trade agreements in the short time available? We've had sight of the letter from the Minister for international affairs and her concerns over continuity trade agreements. Have we had a response? Have you had a formal response to that yet, those concerns? 

15:00

We've had a practical response, Chair, in the sense, as I've said, that since 15 March, any new continuity trade agreements have been shared with us prior to their final conclusion. So, the concerns that Eluned Morgan raised and that were prompted partly here have resulted in a change in the conduct of the UK Government.  

And my final short question is this: it's fascinating that we sit here at a time where climate change is massively up on the agenda, thanks to agitation outside of the normal democratic sphere, and of course when you turn to those wider international agreements, there is nothing where there is more potential to do it in a collaborative way than climate change. So, are you content, whether it's within the climate change and decarbonisation agenda or other areas of international agreement, that we are in a decent position to move forward on those as well? We talk a lot about trade, we talk a lot about protection of workers' rights and, here within the UK, making sure that we protect the environment, but those international agreements that we are currently part of are key. What progress can we report, if at all, on those? 

Well, Chair, we're going to end, I suppose, on a note on which—. I think what the question does is to remind me of why the Welsh Government campaigned in the original referendum for Wales to remain part of the European Union, and why I've said several times on the floor of the Assembly that, were there to be a second referendum, our advice to people in Wales would not have changed. Part of the reason why our advice would not have changed is that our conclusion would be that Wales and the United Kingdom is better off, in terms of those international agreements on issues that transcend all national boundaries, being part a larger entity where you can mobilise the action that is needed across boundaries in order to bring about the change that is required. So, the question reminds me of why we gave that advice in the first place. 

But if, as we Brexit, would we seek still to have those international collaborations to work with European partners in a different context, to be part of international agreements on things like climate change?

Well, of course, we would want to see that, Chair—of course we would—but in some ways we are having to work very hard then to repair a position that, at the moment, we don't need to repair, because we're in a better position than we would be having to work to do it differently. 

Our time is up. Can I thank the First Minister for his attendance this afternoon? As you know, First Minister, you will receive a copy of the transcript for correction if there are any faults. Please let the clerking team know if you find any factual inaccuracies. Once again, thank you for your time this afternoon. 

Thank you very much. Thank you. 

3. Papurau i’w nodi
3. Papers to note

We move on to item 3 on the agenda, papers to note. There is the first paper from the Brexit Minister regarding UK common frameworks analysis. He has offered us a technical briefing from his officials. Are Members content to accept that offer? Then we will write back accepting that offer.

Paper 2 to note is correspondence from the First Minister, who's just left, regarding attendance of Ministers at committee. Clearly, he has asked us to be as flexible as possible. I will put on record that the First Minister in his current role and his previous role has always been very willing to come to committee, and I'm sure we are willing to be as flexible as possible with him and we will continue to be flexible whenever possible. But I think it is important to put on the record that we are accountable to the Assembly and not to the Welsh Government, and therefore we will be as flexible as possible, but there may be occasions where that just doesn't happen because we can't do anything about it. 

I think we need to be very clear that accountability to the National Assembly should be a priority for Ministers and the organisation of Government business should recognise that they hold office at the confidence of the Assembly. 

We can ensure that that is included in the response as well.

Paper 3—correspondence with the Minister for international relations regarding international agreements. We've had some reflection upon that in today's discussion. Are Members content to note that? 

Paper 4 is from the Brexit Minister regarding the Wales Audit Office report on preparations for Brexit. Are Members content to note that? 

Paper 5 is correspondence from the Minister for International Relations and the Welsh Language regarding the UK Trade Bill, which again we've discussed this afternoon. Are Members content, therefore, to note—? Actually, I don't want just to note it. I think we should respond, expressing our disappointment, but that we've taken note of the response from the First Minister this afternoon that this is still under review, and that at each point in time, we hope that the Welsh Government would look at every avenue to ensure the Assembly has an opportunity to debate supplementary LCMs. 

15:05

Can I just add—? I'd be very surprised if the Constitutional and Legislative Affairs Committee doesn't say something similar when it sees this letter, bearing in mind the work that it's done on precisely this. 

Are Members content that we put that response together?

Chair, I'm sorry, but I just don't understand why it is that time precludes having an LCM on this Bill. Why can't it be done?

We've had the LCM; this is a supplementary LCM. I think, from what I gather from the First Minister's response, because we had a three-week recess and they were trying to push this trade Bill through, probably before we got back, we may not have had time to do a supplementary LCM. That's what my impression is. But I still think we should respond and say that our view is that every effort should be made to ensure that any LCM, whether it's supplementary or a first one, is actually laid before the Assembly.

But if the Bill has not yet had Royal Assent, are we able to have a supplementary LCM? I don't see why we can't do that now. 

We can always be recalled during recess if needs be. I know we wouldn't look forward to it, but it can be done.

But my understanding is that this Bill hasn't had Royal Assent. Why can't we have an LCM this week? 

Exactly. It needs to go back for ping-pong in the House of Commons. So, I share your lack of understanding.

So, in this letter are we going to urge them to move the supplementary LCM even now?

Because otherwise, what we've agreed to isn't what will be enacted.

The response of the First Minister gave me the impression that they might well listen to that.

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.

Okay. We move on to item 4, therefore. Item 4 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 do so? Therefore, we now move into private session.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 15:07.

Motion agreed.

The public part of the meeting ended at 15:07.

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