National Assembly for Wales

Good afternoon, and can I welcome Members to this afternoon's session of the External Affairs and Additional Legislation Committee? Before we begin our business, can I remind Members that you need to turn your telephones off, please, or put them on silent, or any other equipment that may interfere with the broadcasting equipment? If you require simultaneous translation from Welsh to English, that's available on the headphones via channel 1. If you require amplification—. [Interruption.] Obviously, the noise is the boat in the dock. If you require amplification, that's available on the headphones via channel 0. There are no scheduled fire alarms today, so if one does take place please follow the ushers to ensure we leave safely. 

This afternoon, we've received apologies from Joyce Watson. Can I welcome Hefin David as the substitute for Joyce Watson? And we've received apologies from Steffan Lewis.  

We move on to the next item of business on the agenda, which is the first evidence session we have this afternoon. This afternoon, we are reviewing the preparedness agenda, particularly in relation to some of the sectors that we feel are key. And the first session, can I welcome representatives of the Welsh ports, Cardiff Airport and the Freight Transport Association? For the record, would you like to introduce yourselves and the organisation you represent? 

Okay. I'm Sally Gilson. I'm head of policy for Wales for the Freight Transport Association. 

Good afternoon. Richard Ballantyne, chief executive of the British Ports Association and secretary of the Welsh Ports Group. 

I'm Debra Barber, the chief executive office of Cardiff Airport. 

Thank you very much, and can I thank you for your written evidence that we've received? Clearly, the transport sector is an important area, particularly the links to Europe and what happens following our exit from the EU, and how transport then deals with the issues is critical. So, we need to, therefore, assess how both the sector and the Government are preparing for 30 March. So, if we go straight into questions—Mark. 

Good afternoon. Thank you all for coming. Could I ask you to set out your assessment of the current state of the Brexit negotiations, and the implications of the various options for you? 

If we do it for each sector; in this case, if we go left to right. 

Okay. So, as we understand it, obviously, we know what is currently on the table, and that's some form of a facilitated customs arrangement. From speaking to our members, certainly from the haulage point of view, this would actually work very well. However, once you go further up the line, it could cause issues further along, but certainly when it comes to a solution for around the ports, we are told by our members that it would work quite effectively. 

However, from what we read within the media, that position might change and, certainly, we're very concerned that there seems to be a growing move towards this 'no deal' scenario. Therefore, our members are now starting to put quite a few procedures in place to make sure that they can cover that issue. I dare say we will move on to how that will affect industry, so I will end it there. 

Mr Ballantyne. 

Thank you. It's very similar, really—ditto, I think, a lot of it—but I would say, just starting with a broad summary, that if you look at all ports in the UK, cargo-handling ports, it's fair to say that there are a few different views, actually. If you look at general bulk-handling ports or container terminals, a lot of their operations are less time critical than the ferry ports that we have in Wales, and they have time, systems and existing procedures in place to deal with the country traffic. So, for them, the prospect of leaving the EU customs union, the institutions, is not as daunting as it is for some others. There will be certain changes required and some implications for them, so I wouldn't say that they're kind of sitting there laughing. But, in comparison with the roll-on, roll-off sector, which I've mentioned, which, in Wales, is Pembroke port, Fishguard and Holyhead, where lorries come through effectively with only undergoing a security check presently—. Because we're in the customs union and also the common travel area, there are no immigration checks and there are no customs checks. So, the prospect of building those new checks in is quite daunting. What does that mean? Under conventional arrangements, in a 'no deal' scenario, that would mean stopping each freight unit at the border for a customs approval process, which may only take a few seconds, but as soon as you start to stop lorries at ports you get queues that back load onto ferries, that back out of ports themselves. So, that's been our prime—

Couldn't you check them on the ferry?

That's one of the options that could be considered, but usually, under customs law, it's when the goods land, so that's when they get into the country. But it's fair to say that all options are being considered in the event of a 'no deal' Brexit. And then coming back to the options on the table, the customs arrangement, aka the Chequers agreement, as Sally mentioned before, it largely rules out the needs for any of those checks, and it also goes wider than customs—it covers things like port health checks. So, those are things like sanitary and phytosanitary checks on animal and plant products at the border.

So, your initial remarks—I think you looked at some of the bulk and container ports, looking specifically at the Welsh ports. The facilitated custom arrangement under Chequers—wouldn't that give some challenges for the bulk and the container ports to the extent that importers would have to categorise whether things were for the UK market or whether they'd be going on to elsewhere in the EU and potentially apply a different tariff?

That's probably not an issue for the ports themselves, but it might be an issue for some of the port customers. So, broadly speaking, the paperwork, the bureaucratic stuff, takes place away from the ports, and it's usually agents who undertake that. So, whether or not they are ready for a dual tariff collection scheme is a matter for them. But, generally, tariffs are—. When the whole process started, when we had the referendum, I thought tariffs would be a really big issue for the ports. But it's actually—. Notwithstanding one or two exceptions in animal and agri-bulk-type things, where tariffs are quite high—and cars as well—broadly speaking, tariffs are relatively low, and, with tariffs, they are built into the logistics costs and they're not conditional on entry into the UK. So, they're a fiscal transaction; it's collected away from the border. So, it's not as concerning for the ports directly, as I had suspected. That said, anything that adds additional cost to freight, we would not welcome.

So, is the implication of that that it would be the regulatory border that would be more of a challenge than a customs border down the Irish sea?

Can you just broaden that out? What do you mean, sorry?

I think you were saying that the tariffs weren't especially difficult, but I think you were talking before that checks that had regulatory differences might be more—

You have regulatory checks on customs, and you have them also for standards as well. And, yes, you're absolutely right. So, basically, non-tariff barriers are probably our prime concern.

And the speculation is that this week, potentially, the UK Government may put forward a proposal of keeping the UK within the EU customs union for at least a further period, but at the same time potentially having a regulatory divergence between Northern Ireland and Wales. What I'm trying to understand is how much of a challenge would that regulatory divergence—i.e. one being in the single market and one not—be compared to the customs, where the proposal would, it seems, be to keep a customs union, say?

Well, anything that introduces new checks at frontiers is going to be a challenge to actually manage, and, without a proper implementation period and time to build those in, it's very difficult to see how you would build in those processes immediately. We don't have the facilities. This is intra-EU movement, so it's been outside customs controls and port health controls for 25 years at least, which means we don't have the facilities and processes at the border already. So, anything that introduces those new checks is going to be quite a dramatic change and it's going to take time for both the port operators to build in new systems, the Government to build in their new arrangements, and also the members of Sally and others who need to undertake all the customs formalities for the movers of freight.

I'll come on to you in a moment, Debra, if I may, but I think just one more question, perhaps for Sally as well as Richard: in a 'no deal' scenario, do you really assess it as likely that the UK Government would then start putting on checks and immediately applying tariffs? Given the logistical challenges you identify, isn't it more likely that, at least in the near term, they would waive imports?

Well, I can't really speculate on what Government would do, but the realistic—

Don't you need to?

Well, it's not my job to speculate on behalf of Government. That's their decision. Our activity is to respond to what Government are saying and look at how we would manage that. There may be advice to Government saying whatever they are proposing to do may not be realistic, but that will be ultimately a decision for Government to weigh up the costs and benefits. But there will be laws that it won't be able to avoid. I would say the one thing, just to pick up on your point, is the UK Government at least will have the opportunity to decide, whereas at the other end of the port routes, i.e. in Dublin or Rosslare, the Irish Government is bound by EU rules on things like port health inspections. So, that is a frontier—that will be a new frontier and they won't be able to bypass those rules unless the EU decides that they're allowed to.

Debra, could I move on to Cardiff Airport and the extent to which you are engaged with these issues and how you assess the situation?

The critical issue for us is that post 31 March next year air travel is able to operate uninterrupted into and out of Europe. There are two key issues there. One is access to airspace and to airports and the UK's continuation to benefit from the open skies agreement that operates across the whole of Europe. The other is very much to do with safety regulation and certification. We're all certified by air operator's certificates and now the European Aviation Safety Agency, and the key issue is that post 31 March there continues to be mutual recognition of certification both within the UK and Europe. So, those are the two key issues in respect of our interaction with airlines, because clearly we need the airlines to operate to keep the airport running.

There are another two key issues associated with Brexit. One is currency and the uncertainty around currency fluctuation. That is having an impact for airports and airlines at the moment, particularly if you look at transatlantic activity. The other issue is immigration and freight coming across the border—so, working with Border Force at the airport to understand how passengers will continue to cross the UK border at the airport. 

You mentioned a particular concern on transatlantic travel. Is that a concern for Cardiff?

I think one of the key issues is the relationship of the dollar against sterling. It has resulted in a cutback of capacity with US airlines operating into the UK. It's one of our stated ambitions for the airport that we would look at a north American link. The US carriers are very cautious about expanding into the UK at the moment. There's a huge amount of competition on the Atlantic anyway, and the current drop in the strength of sterling has obviously impacted on what are already really tight margins. Obviously, the other issue with currency is travellers' propensity to travel and the impact that has, although there are obviously opportunities for people coming inbound to the UK, with the strength of the euro.

I just want to ask: to what extent have you been able to promote those inbound opportunities for people coming into Wales, potentially to spend money here, compared to going out to spend money elsewhere at a more expensive exchange rate?

That is a huge part of our operation at Cardiff. This year, 30 per cent of passengers were inbound; last year it was 24 per cent, so that has increased. Obviously, one of the reasons for that is the new Qatar service and the inbound opportunities that that gives us, but also the Flybe network, which is European city pairs, and we're seeing a lot of inbound traffic, particularly on the Spanish and Italian routes. So, for a number of reasons, we are seeing an increasing amount of inbound traffic, which is obviously one of our key objectives, working with Visit Wales in particular. 

Just very briefly, can I ask, for comparison purposes, what, say, the UK average would be—

Sorry?

For comparison purposes, would you be able to tell me what the UK average was for the proportion that was incoming traffic?

I don't have that figure. I can get it for you, but I don't have it today. 

Thank you.

Vikki. 

Thank you, Chair. Over the past few weeks, concerns about the likelihood of a 'no deal' Brexit have grown and, looking at that through the context of the UK Government's 'no deal' notices, how far would you say wider international and also pre-EU international agreements provide a satisfactory fallback position for your sectors in the event of a 'no deal' Brexit? 

Do you want me to just kick off with the ports? As I said before, a lot of the ports are used to dealing with third country traffic already, but not the ro-ro ports. So, they are not. As we mentioned—not to repeat myself—to the earlier questions, essentially that means full customs controls at the border and those checks on every bit of freight moving in and out of the country for various purposes. So, while the notices are very helpful, to have those out there, they're perhaps, you could say, slightly late; we could have done with these earlier. And also they don't really go particularly far enough for port operators; they're for a broader, wider audience. So, a lot of the detailed discussions are taking place between the UK Government and my sector and others behind closed doors on ironing out issues that need to be discussed. But I guess there's no easy way to do this for certain operators. There is going to be—. Under a 'no deal' arrangement, certainly, there would be dramatic changes for certain sectors and new things that people have to think about doing. And, ultimately, for us, that leads to costs. 

So, what would the key gaps be then for your sector? 

Well, at the moment, if you imagine hauliers bringing freight in and freight forwarders and agents—at the moment, they don't have to think about these kinds of things: the customs arrangements, the port health checks that I talked about earlier, some of the certificates on board. All that sort of paperwork and how you get that to the UK authorities, and presumably the Irish authorities, needs to be built into arrangements. There isn't a phone line you pick up and say, 'HMRC, I'm here and this is what it is.' So, it's about building systems, IT systems, building the culture as well where the hauliers and the freight forwarders and the movers of freight understand what their role is, how they interface with the carriers, i.e. the ships and the ferries, and then how the port might have a role in facilitating the actual information as it's passed on and allowing the freight to move freely between, in this case, Wales and Ireland. 

And, in terms of those IT systems that you referred to there, is it feasible for them to be up and running by March of next year?

No. You'd have to speak to the specialist software developers, but we're told no, not at all. 

Do you have any timeline that's been passed on to you? 

They're mentioning years, so that could be two years minimum. 

And are there interim arrangements then that are being discussed to fill that gap?

Well, I mean, UK Government is in discussion with my sector and others about interim arrangements and they've been broadly positive. A lot of them are covered by non-disclosure agreements so I can't go into too many details there, unfortunately. But Welsh ports are plugged in as well as other ports around the country and they're looking at particular options. We don't know what the situation is with European ports, so I presume the Irish have similar discussions going on there. I can't overemphasise the criticality of both ends of the ferry route, because if one end gets clogged up it affects the other.

Okay. Sally, it'd probably be useful to hear from you now.  

We're not saying that it can't be rectified and sorted in the case of a 'no deal', but there are quite a number of issues that will need to be overcome. There'll be a permit system that will have to come into place by the ECMT—don't ask me what it stands for. So, you have the ECMT permits. Now, if you're going back, obviously, to before, when we weren't within the EU, I think freight, it's safe to say, was very different. Now that we are really working to a just-in-time situation and things, we would need a multitude of warehouses to be able to deal with the 'no deal' scenario. But one of the biggest issues is around the fact that, at the moment, there's about 10,000 truck movements that take place, and we're talking—I'm desperately trying to remember the figure now—roughly about 600 permits, I think, that would be allowed on the UK side.

It would be a massive problem, because then you've got to decide what freight would be most important to get those permits. Is it medical freight? Is it food freight? Then you've got all these vehicles that, actually, deliver quite a number of different freight. So, it's how those ECMT permits will be handed out. We've already heard that it will probably be, first and foremost, to trucks that are of Euro 6, so, obviously, trying to tick the box with regard to up-to-date vehicles. But you've got quite a number of specialist hauliers, especially our hauliers that go out and do the tours. So, they'll be out for anywhere from six weeks to several months—very specialist forms of trucks that cost a lot of money and, obviously, don't get updated quite as frequently as your standard truck. So, that would severely affect them, the fact that a permit would be prioritised for a newer vehicle. 

Sorry, can I just stop you there for a second to clarify? Are you saying that, out of 10,000 vehicles, only 600 would receive this permit?

I will come back to you on the exact figure, but it is as crazy as that. So, the scenario that could happen here is that the UK could effectively say, 'We will forget the permit system and EU vehicles can come in without the permits.' That obviously means that you've still got the flow of trucks coming in. But they will only be able to grant x amount to UK hauliers. So, that could, eventually, have the effect that if you want to guarantee that your goods are going to be delivered in the EU post a 'no deal' Brexit, you're not going to be using a UK haulier, because you can't guarantee whether they'll be able to make the movement. So, that's a problem, obviously, for the UK Government to decide—are you going to prevent, potentially, the movement of UK hauliers that go and do the international journeys, or are you going to make sure that you've still got a free-flowing amount of vehicles coming in to the UK?

But, that's one side that, at the moment, our members are being guided on and, obviously, are very, very concerned about, because those that do frequent journeys across the EU will be desperate for those permits to make sure that they can continue those.

Could I ask just a supplementary on this? I think, when people talk about a 'no deal' Brexit, it's as if there will be no agreements at all. Now, what it means is that there isn't a comprehensive agreement with which to leave the EU. But, lots of bilateral arrangements will surely be made, and when there is a huge practical necessity to do so, which is pretty reciprocal, aren't you picking anything up behind the scenes that this sort of problem will get resolved? It's enormously beneficial for both parties—not just Britain and the EU, but also the Republic of Ireland.

And I did caveat it by saying, 'I'm not saying that everything can't be sorted', but we could be in a scenario where it's going to take a few weeks, potentially, to sort these. And the ECMT is a very real issue for our members, which will need to be sorted. And, yes, we would like to think that, if we say, 'We won't prevent a certain number of permits coming into the UK', that would be reciprocated.

Mark.

Could I just ask, given that these permits are currently required, where is your source for this proposition that there will be a quota of 600 that can be issued the UK?

The UK Government and HMRC.

So, HMRC have told you that—

It's in the technical notices.

—there will only be 600 lorry movements allowed by the EU.

I will confirm, after, the actual number, because it might not even be that many.

On what basis can they derive that number? If, currently, there's zero, because none is required, how do we know that in future there will be 600? I'm not sure whether we're taking these as—[Inaudible.]

Presumably, we will go back to WTO rules. That's where the limited number of permits would come in, until it is negotiated.

So, under WTO rules, only 600 lorries are allowed to come from the EU into the UK if there is—

The permit system will be limited. So, you could have any number of EU trucks if we allow them to come in, but there will be a certain number of permits that will be given out to hauliers to make those journeys.

If, in the Republic of Ireland, the ports are clogged and shortages of food and medicine develop, do you expect them to obey this 600 WTO cap, or—?

That's not for me to say; that's for the UK Government to sort out. If they decide that they have to—

We have the Minister for transport in next week and I'm sure we'll take the opportunity to ask him those questions.

But your members aren't planning on the basis of these assumptions, surely, are they?

They are working very hard to try to find workarounds, and whether that's to come up with ways and means of, perhaps, having partnerships with people on the other side of the water—.

If the Republic of Ireland were to, for a period, breach EU law in some of these areas, should they decide that was necessary for their own domestic reasons, enforcement proceedings would take how long? This is years down the road before the Commission would—

We're not here to discuss what the Republic of Ireland Government will decide upon.

But surely we are here to discuss what the trade associations are saying to their members in terms of what their planning assumptions should be post 29 March next year. I question how realistic these—

We have advised them of what the technical notices say and have then explained—not me personally, as you can tell, as I'm standing in for a colleague today—. We are advising on what should happen in the case of ECMT permits. So, we're advising that, obviously, if it's possible to have a Euro 6 truck, then that's the way they've got to go, and HMRC have actually come and given a talk to our members as well to advise them how they will be able to apply for these permits.

Vikki.

Thank you, Sally. So, moving on, then, Debra, from an aviation perspective, in the context of the UK Government's 'no deal' notices, how far would you say that wider international law and pre-EU international agreements provide a satisfactory fallback position?

I think the UK Government laid out in the technical notices last week the potential implications of a 'no deal' Brexit. Ultimately, the doomsday scenario is that, on 1 April, aircraft stop flying around Europe. I think none of us in the aviation industry or airports industry absolutely expect that to happen. Unfortunately, there are no international agreements that apply in this respect, in terms of WTO agreements. We fly around European airspace at the moment in line with the European open skies agreement and the International Civil Aviation Organization convention, which is based on the 1944 Chicago convention.

But, as I say, if we no longer have access to the open skies agreement, effectively what we then have to have is either a replacement overarching bilateral agreement with Europe, or we're into the scenario of the UK, or even airlines, having to negotiate individual bilateral agreements with countries or airports. 

Everything we get from the Department for Transport and, indeed, from the Civil Aviation Authority—we had the chief executive officer of the CAA, Richard Moriarty, at the airport on Friday—. There is a huge amount of work going on in the background. Aviation is as important to Europe as it is to us, if you look at the economic impact of aviation coming to a grinding halt on 1 April. So, we know there is a huge amount of work going on behind the main overarching negotiation, looking at contingency planning around bilateral agreements and things like that.

The other issue is, as I said earlier on, safety certification. We currently are part of the European Aviation Safety Agency. Now, actually, the UK was instrumental in the majority of European aviation safety regulation. In the UK, we apply—we're probably stricter than Europe. So, all of the current European safety regulation would be enshrined within UK law through the withdrawal Act. So, the UK has already said that we would apply mutual recognition to European airlines. Although Europe is currently saying they wouldn't, again, there is expectation that that will happen as the negotiation continues.

Are there any key gaps for your sector within the UK Government's 'no deal' notices?

Well, we don't see in detail what's going on behind the scenes, but the main thing is we have to have either continued access to open skies or alternative agreements in place on 1 April, or an agreed transition period that will allow things to continue as are for a defined period whilst those agreements are thrashed out and finalised.

Thank you.

Hefin.

Whatever happens in reality, the expectations of your customers will also affect their behaviour, so even if we—. As Mark Reckless said, these things may not be likely in his view, but it doesn't really matter what politicians or policy makers or anyone thinks; it depends what the market thinks. Are you noticing anything in your customers' behaviour that is anticipating a—?

Well, do you know, surprisingly not. The airlines are still selling; tickets for summer 2019 are on sale, and every expectation is that summer 2019 will continue to sell. We don't know yet—I mean, it's still too early to assess whether it's going to have an impact, but the most important thing—. I mean, if you go back a year or so when the airlines were exceptionally nervous about the timescales, they were talking about not putting summer 2019 on sale, because how could they if they didn't know for sure that they were going to be able to fly them? But they have done that, so—

And there's been no visible impact.

Not at the moment, not at the moment, but, like I say, we do continue to watch it closely.

Just one more. If there was an impact, at what point would you expect that to hit? Are there last-minute bookings, whether that be business or—?

It depends on the routes. Business routes, for instance, are very much last-minute bookings. Holiday bookings, we would pick up much earlier, because people do tend to book, especially long-haul holidays, earlier. So, we watch. Whilst it's something that we don't have any control over as an airport, as far as we've got information—. And again, we don't have the information; it's information that the airlines hold. So, it is difficult for us as an airport to have a really clear understanding, but it's something that we talk continuously to our airline partners about and that we monitor very closely with them.

I think there is a risk from disruption—I well appreciate that. But the use of British airspace by much of north-western Europe is hugely significant for Atlantic trade. So, you know, the imperatives on both sides to get to an agreement, even if it's not in a comprehensive deal, will still be there, won't they?

I know, and what illustrates that point is that, as I say, Richard Moriarty and the CAA put up—. When the technical notices were released last week, the CAA put a kind of mini brief on their website for aviation stakeholders to review it, and they expected maybe a couple of hundred hits on the website. They had 15,000 within 72 hours, and a significant number of those were outside of the UK. They had people in the US, they had people all over Europe. So, it's absolutely right, and if you look at the geographical position of UK airspace—

It's key.

Well, we saw when we had the volcanic ash crisis the implications of airspace closing. It just brings down the whole global system, really.

Can I clarify that there's a difference between airspace and then permission to land, because I understand we can actually fly over European airspace? The question of whether we're able to land in Europe is one of the big questions, rather than flying over Europe.

There are different rules that apply to overflight rules and also, then, rules for taking off and landing within European airports. They are tied up, though, in international agreements. The key thing for us is the continued ability of UK airlines to operate in and out of European airports and vice versa. But also, we've got airlines like Ryanair that had a European air operator certificate. Within the EU, they can operate domestic flights within the UK that don't originate from Ireland. If we lose the airspace agreements that we've currently got, as a European-registered airline, they wouldn't be able to do that. Now, a lot of the airlines are, as contingencies, are changing their—. They're getting additional AOCs—air operator certificates. So, for instance, Ryanair have now got a UK AOC, EasyJet have got a European AOC. So, they are looking at ways around how they can continue to operate in a 'no deal' scenario where the previous rules where they could operate with impunity are no longer there. 

And the flights into Cardiff from Qatar wouldn't be affected by—.

No, because, as I say, they originate from outside the EU, so they would continue to operate under the same rules as they do now. Although, saying that, you know, at the moment, a lot of our international agreements, for instance the agreement that the UK has to fly in and out of the US is an umbrella EU agreement. So, we operate into the US as part of the EU. So, clearly, post 1 April, we would have to have specific UK agreements with the US. So, that's all going on as well. 

Okay, thank you. Jane. 

Well, you've all, obviously, and your associations, been very heavily in preparations for Brexit, and, obviously, continuing uncertainty about the outcome of the negotiations—. Is uncertainty a barrier to your preparations? 

Do you want me to get that? Well, it is, really. There's been a bit of criticism of ports: why are they not preparing? Why not investing? But ports are private sector businesses, and they're not going to invest until they know what they need to invest in. So, the uncertainty just fuels the problems they have in waiting to know exactly what to do, and in terms of a hard Brexit—if you want to call it that—that would require extra facilities at the border, not only resourced by UK Government but also resourced by the ports. And to build those facilities, to redesign port terminals, takes time. So, yes, the uncertainty has not helped.

I would say, since the Chequers agreement has been proposed—there was more uncertainty previously because we had the previous two Government options, and one was very similar to the facilitated customs agreement. The other was the 'max fac' option. But since we had that—I think it was the beginning of July—that has helped focus the minds, but I'm not saying that ports are now getting the cheque books out and investing immediately. But at least they're now starting to be able to consider exactly what—. It's either hard Brexit or the facilitated customs arrangement, which is, basically, for my sector, broadly the same as we have it now. 

But very much on the Chequers agreement sort of direction— 

The Chequers agreement doesn't really represent—there's hardly any investments required from the ports sector, really. I mean, as we mentioned before, there could be one or two things for other parts of the logistic chain to invest in, such as the mechanism for collecting a dual tariff and declaring those formalities. But in terms of the actual border processes, the FCA is broadly the same as customs union membership from the point of view of frontier controls. 

Sally? 

It was mentioned earlier on that, obviously, if you were to want to really break this down to if we did land up where we didn't have an agreement in place, then you would need a huge amount of warehouse capacity, but also—you might want to correct me on this—at present, I don't think the Irish sea-facing ports actually have the available space to be able to hold waiting traffic as well. So, again, that could be a potential issue for our hauliers: where do they sit and wait? A side issue: we have problems anyway of where trucks can sit and take their breaks in their overnight stops, especially in Wales, so I don't know where they're all going to be held. But our members would actually much rather be able to be putting money into growing business rather than having to come up with contingency plans for a 'no deal' scenario.

But one area that we've not touched on yet is in terms of future immigration policy. In the logistics sector specifically, we have a lot of European Economic Area workers, so if you look within the warehouses, you're looking at 25 per cent of staff who are EU citizens, and then your fork-lift truck drivers are 26 per cent, but then for heavy goods vehicle drivers, you're looking at 14 per cent of those drivers, and we can't afford to lose those people. At the moment, we don't have a technical notice when it comes to immigration yet, and I believe there probably won't be; it'll be in the form of some other kind of document. We can start telling these workers, 'You will be able to stay; we've got a verbal promise', but we're already getting a lot of our members getting very jittery as to what will happen in the case of a 'no deal'. Also, it's all those discussions that are now having to take place—they're very delicate discussions, because you can't just ask someone are they going to stay or are they going to go, so it's all about making sure that we retain those people. But a lot are seasonal workers, so from September to December, obviously, our hauliers are flat out for the seasonal period and we take on a substantial amount of extra staff during that period. A lot of those agency workers will come from the EEA for a short period, and then return to either home or another EU country. And we are currently fighting with—sorry, that's the wrong word—we're in competition with Germany and France with regard to HGV drivers, because we have a shortage of about 50,000 HGV drivers, and Germany's in a similar kind of predicament. So, we're already desperately trying to lure other drivers across, because, unfortunately, our training system just is not there to be able to support our own training needs.

So, there are many uncertainties affecting, also, your workforce as well as your planning and management, and what they see as their prospects for their future and security.

Yes. I think it's quite clear that not everybody is going to apply for settled status, so at this point we don't know how many of those will, and until that system is properly in place, which I believe is going to be the beginning of next year—I know that there is a beta system happening at the moment and students are being allowed to apply via the settled status—but until that's fully functioning, we won't really get a feel for how many people will be staying.

So, aviation—the same sort of uncertainty must be shared with all your trade—.

Yes, I think so, although, I must say, I think airlines have kind of rallied around in the last year or so. I remember going to the first industry round-table that the Secretary of State for Transport did just after the vote and it was a very, very difficult and hostile meeting, and the airlines were talking about—. Uncertainty was the biggest issue and it putting the brakes on any future investment, looking forward to growth in sales and all that kind of stuff. I think there's a much more sanguine approach to it now. They are putting contingency plans in place, and I mentioned Ryanair and EasyJet changing AOCs, for instance. So, they are looking at contingency planning.

The other big thing for us, obviously, is immigration procedures—say, passengers coming across the UK border. And, obviously, if there is a 'no deal', then we would expect there to be changes. We might look at more passengers coming in on visas, for instance, or other clearance mechanisms, so we have been working with Border Force. As part of the Welsh Ports Group, they've come to the airport and they've gone to each individual port and done a specific study looking at the specific operation at that site. So, we've increased the number of desks that we've got. We've also worked with the Welsh Government now to put e-gates back into the immigration hall, which we expect to happen now in March next year, so it will speed up processes for UK passenger holders if we do have more people coming in on what is currently non-EU. 

So, I think the main thing, as I say, is that there is an awful lot of contingency planning going on and I think people are still very concerned about uncertainty, but I think the industry is just kind of getting on with it at the moment, to be honest.

You mentioned the meeting with the Secretary of State early on after the vote, so how much engagement are you and your associations having with UK Government at ministerial and official level? I think one of you—I think it was Richard—said that there was a lot going on behind closed doors. I mean, how much support, how much engagement are you getting because of this level of uncertainty and different scenario planning?

Shall I carry on? As I say, the Secretary of State for Transport has set up an industry round-table, and that includes the chief executive officers of major airlines and airports, and I was very fortunate to be invited to join that. So, that has met, I think, three or four times since the vote, so not regularly but fairly often. We've also done a lot of work with Her Majesty's Revenue and Customs and the borders. We sit on the Welsh ports steering group, which is work done under a non-disclosure agreement, but that gives us a lot of detail into the work that they're looking at and the contingency scenarios that they are getting their heads around. So, a reasonable amount, I think. You know, we don't have absolute clarity, obviously, on what's happening, but I think there is an attempt to keep industry engaged, certainly.

I could be wrong, but I think the maritime sector has a lot more, actually. I think there's a lot going on, and that's probably the implications of a whole load of lorries and vehicles at ports that has led to Government officials, I wouldn't say overdoing it, but making sure—they're being very thorough in the amount of groups and meetings we have. Debra mentioned the border planning group in Wales. All the main Welsh ports are on that, and I'm also separately on several UK groups under the same working programme, under which we're signed up to NDAs. And exactly as Debra says, you go through looking at the various options and implications of those, and I'd say the feedback is actually positive—we welcome this—because I think if we didn't have the opportunity to talk about these things and thrash things out, then we might go down the unexpected route, but at least there is planning going on. Whether or not that leads to physical investments at the border yet, that hasn't happened in my sector, certainly—even extra desks you mentioned for immigration officials. 

Debra also mentioned the UK Border Force ports and airports audit, so, essentially, that's happened across the UK. They've been out to see all, in my sector, 140 cargo-handling ports around the UK, looking at exactly what they do already and what they may require in a 'no deal' scenario with new customs controls, and other border processes required. So, that is, a sort of a —. Although it's complete in terms of their visit, the reporting of that—a lot of it will be internal UK Government stuff. I think that's under way now, and we look forward to finding out exactly what their findings are there. 

There are seven of us at the moment who seem to be spending an inordinate amount of time on the subject. As you could probably tell earlier, my speciality is more in immigration. But we have two colleagues in the Brussels office, so they're having the conversations, actually, the other side, going round and talking to the other 27 countries but also with—. They will be obviously be best placed for those conversations, to actually see the other side of the argument, so to speak. 

We've been in several times to see the Department for Transport, Department for Business, Energy and Industrial Strategy and HMRC. I was actually there last week with BEIS and DfT talking about the mobility of HGV drivers going forward. So, we are having quite a number of, and several top-level conversations, but, as you said, not all for the public domain.  

Last month, Ken Skates, our Cabinet Secretary, told the Economy, Infrastructure and Skills Committee that UK Government is entering into NDAs with each port on support offered to them. I don't know whether there's a similar approach with Cardiff Airport, as far as you—

Sorry, can you say—?

Non-disclosure agreements that the UK Government is entering into with each port on support available to them—Richard, you commented on that, but anything like that for Cardiff Airport? 

Yes. Through the Welsh ports group, we have had that audit. We've done the questionnaire. We haven't yet got the outcome of it, but we've taken part in the audit of the airport, yes.  

Just to say, this is a different Welsh ports group to mine. I think it's the Welsh border planning ports and airports group.  

Yes, sorry. 

So, I'm not doling out NDAs. 

No, you're not, no. This is the Welsh border planning group, yes, sorry. 

Thank you. 

Do we know why they're having non-disclosure agreements? Why is it so secretive about the support that ports are being offered? Have we any awareness of that?

Well, I think there's a combination of—they want to work out exactly what may be required, there's also the negotiation going on at this time, so they wouldn't want things to get into the public domain that might undermine the negotiations, either by attempting to shock the EU, or by showing their hand early. So, I think, really, that's a question for the Government, actually. From a membership organisation's point of view, on one level, it's quite handy that we are invited to these discussions, of course, but getting the messages out to our members is a bit of a challenge, because—

It creates more uncertainty, I would have thought. Okay. Mark.

But, surely, when it's a question of Government doling out money to private companies, it's very often the private company who wants the NDA in place, for reasons, of course, of commercial confidentiality. Are you saying your members would be happy for this material to be published?

Well, they're not doling out money. I don't know where you—

You're not getting any—there's no issue of any financial support from Government for—

No, not at all. We've asked for Government to resource new border inspection posts and immigration points, many of which are required of the port operator under UK law. But, given the short timescales, we've asked that the Brexit planning and implementation budget, which was announced in last year's budget—which I think is £3 billion—we've asked that some of that be allocated to port terminals, not from a competitive point of view, so not building new terminals and deepening berths for boats, but actually for the Government facilities, which don't exist. But we've been told 'no' by the Government—

Well, we'll see whether there are any announcements in the budget later this month. But you were saying, as private sector organisations, you wouldn't expect your members to invest without greater certainty as to what's required. Do you see any evidence of investment by European ports that are in public rather than private hands in contingency planning?

Well, we've seen—. I think it's fair to say that the port of Dublin has had some land adjacent to the port that it owned that is now developing into potential lorry vehicle stop points, for immigration purposes—sorry, for customs purposes. And, in terms of the Governments in the EU, we know they've been recruiting more immigration and customs officials, particularly in Netherlands and Belgium, but we haven't seen a huge deal of actual terminal investment, if you want to call it that—I mean that regarding the terminal infrastructure, not the more morbid description. But, no, we haven't seen that yet.

It's fair to say, going back to Mr David's question earlier, which was directed at Debra, but in terms of maritime routes, many of you will be familiar with the land-bridging that goes on between—so, that's traffic that comes or goes to Ireland, which is travelling across Great Britain, and then going out of the southern and eastern English ports to places like France and Belgium and the Netherlands. And there have been new routes opened since the Brexit vote, which are direct routes from Dublin and from southern Ireland, direct into France and Zeebrugge, Belgium and the Netherlands. But, I wouldn't get people too excited yet, because they will be long-term investments, and those investments probably would have been commissioned and authorised before the actual referendum. I'm not saying that more of that traffic may not occur after a hard Brexit, where hauliers want to avoid the potential checks. But, broadly speaking, for the just-in-time logistics industry, if you're going to sit on a boat for 12 hours to a day—24 hours, sorry—then that's one thing, whereas if you're a more swift-moving lorry that wants to just get across and take the next available ferry, you don't really want to wait around for these twice-weekly sailings that go direct.

But if trade from the Republic of Ireland to the rest of the EU were diverted, at least in part, onto some of these new suggested routes, would that offer benefits, do you think, Sally, in terms of reduced congestion on the M4 and the A55 for us?

Possibly, but it doesn't sound very good for the Welsh ports. Congestion is another issue, isn't it? I don't think—yes, I don't think—

We have as a committee, in the past, looked exactly at the question you just raised, and there was concern that there's a possibility of the Ireland-to-the-continent direct routes—though they felt that the numbers were probably not enough to make that totally viable, but there was a possibility that it could happen. I think that's the concern we have, as to what preparedness there is for this.

Sally, can I ask you a question? You've talked about the Welsh ports and the parking issues being a problem. We were made aware of this almost two years ago now. What preparations have your organisation made with Welsh Government, basically, to say, 'Look, we knew of the shortages in Wales, what plans have you got in place to put something into position so that ports are not blocked up or the A55 is not blocked up?'

Firstly, I don't think it's for our members to be able to go and buy a piece of land and put a lorry on it. 

No, but the discussions with the Welsh Government, saying, 'These are the issues, what are you doing about it?'

We are forever bringing up the issue of the lack of lorry parking, and it's not just in Wales, it's a UK-wide issue. It's very, very difficult to get lorry parks built. Normally, people don't want them in their own back yard. But, also, to actually have one built, they're not exactly profit-making organisations, really. They don't make huge amounts of money. Therefore, it's reliant on perhaps cheaper pockets of land. Actually, if this is a case of waiting around a port because of potential issues because of a 'no deal' Brexit or an unfavourable Brexit, then it shouldn't really be down to our members to try and rectify that. But it's something that we have brought up, not just in the past two years, we've been bringing it up for the past 10 years with UK Government—the lack of lorry parks, and that's only going to get worse.

I'll just supplement that by saying if there are going to be checks required at ports, or for the freight-moving group of ports, we'd prefer to see those checks done elsewhere. So, if there was land available, we'd welcome this committee encouraging the Welsh Government to look at that as a viable solution.

One of the questions earlier was about ports and the availability of land. There isn't that much available land out there, it's fair to say, at most Welsh ports, particularly the ro-ro ports. But there will be some bits of land, and Welsh ports, as canny businesses, will be looking at opportunities to rent out that land for temporary storage, and some have said—. Sally's members— probably not the accompanied freight, because that would be quite expensive to have hauliers sitting around, but it may be the wagons are there if they're left for a short period of time. There may be business opportunities there. Whether or not that is attractive to Sally's members or attractive to the wider logistics industry costs remains to be seen, but the ports will try and adapt to whatever situation arises. 

Thank you. David.

I wonder, this is for all of you or any of you, how effective do you think the co-operation has been between the Welsh Government and the UK Government in terms of sketching out scenarios and then making those preparations that it's viable to make at the moment. I think the point you made earlier about how it's difficult to invest in anything until you know you absolutely will require it— 

Do you want me to—?

Yes, you start.

I think I would say it's positive. There's been a lot of discussion. I'm not party to, obviously, the private discussions between the Welsh Government and the UK Government, but it appears as though there have been a lot of communications, and I think they sit on the Welsh board or planning group, so they're right in there. A lot of the issues, though, are UK competencies. So, they are immigration and borders and customs arrangements and certain other standards. They stem from UK Government, and UK Government is responsible for the policy. Obviously, you're right, there are things that the Welsh Government is responsible for—the transport side, so it's right that they're there, but I would say broadly it's been positive. Also, it's not just the customs side, there have been interesting studies I've seen by the Welsh Government looking at implications, for example, on the meat trade of a hard Brexit and what border checks and requirements' impacts will be on Welsh lamb producers, et cetera. Do you want to, Debra—?

Yes. I think, obviously, for us, aviation is not devolved, so it is UK policy that we're working with. But, for the Welsh—

The Government does own the airport. [Laughter.]

The Welsh Government does own the airport, but, in terms of the policy, it comes from Whitehall. I think the aerospace industry in Wales has a turnover of over £5 billion, we've got 23,000 people employed, so it's a hugely important subject. Again, we don't have sight of the detailed stuff that's going backwards and forwards, but the Welsh Government has lobbied really hard in terms of aviation and the need for certainty and the need to understand, for the industry, what's going to happen.

I think the other area that the Welsh Government has been very active on is the question of air passenger duty, which, in a post-Brexit environment, has even bigger implications, and there are considerable issues around the devolution of APD to Wales. For us at the airport, I think the debate has been around long haul. We obviously have the Qatar service now, and if you look in a post-Brexit environment and you know opportunities to enhance wider market—you know, tap into wider markets and things like that—APD is a really big issue, so there has been, I know, a huge amount of support across all parties for that to happen. It is one of the big debates that have gained momentum, I think, as Brexit has gone forward.  

I've attended a few Welsh Government meetings regarding EU exit. There does seem to be communication, certainly from the transport side with Ken Skates, so I feel confident that those conversations are happening. 

And have any of you asked the Welsh Government to take any practical measures? I realise, in terms of policy, most of this is non-devolved, but, as the owner of the airport, it could give investment to the ports to create facilities, like at least identifying possible land outside a port area that you might have the checks made, on or, indeed, some of the hard infrastructure, which I think Mr Ballantyne said you'd hoped the UK Government would start to fund, but, so far, there's been a big zilch coming from them in terms of money. 

The big area for us has been electronic gates. We had first generation e-gates at Cardiff Airport that became obsolete with passport technology and they were removed by Border Force a year or so ago now. We had no intention to replace them at Cardiff Airport because we were too small; we didn't meet the metric of 2 million inbound passengers. Now, as we say, post Brexit, with potential issues with the border, having that facility in Cardiff as a national airport is really, really important, and the Welsh Government has provided the investment under a safety and security initiative to replace that equipment. So, that's been one area where they've worked really closely with us. 

Are there any other examples? Because that sounds a really good, practical bit of assistance. 

I'm not going to answer your question, sorry, but a slightly different angle is—well, we haven't really directly asked but I will draft a letter now asking for some money for the customs-processing-type things. [Laughter.] What I was going to say is we have been talking to the Welsh Government about possible future planning and environmental arrangements post Brexit, so a lot of the planning and environmental regulations that can be quite preventative of port development and infrastructure building and things that slow things down stem from Brussels. So, after we leave the European Union, there is an opportunity, not to rip that up, not to get rid of it because a lot of it is good and it's well meaning, but to look at where it has caused problems and delays and hasn't allowed ports to invest and develop. So, we're looking at that with them and any additional funding for transport in Wales that helps logistics operators, that helps ports. So, anything particularly with a Welsh port connectivity taint, we would fully support. 

I think the highways point has been covered, Chair. 

Thank you. We've reached the end of our allocated session, so I'd like to thank you very much for your evidence this afternoon. You will receive a copy of the transcript. If you find any factual inaccuracies, please let the clerking team know as soon as possible so we can get them corrected. Once again, thank you for your time this afternoon. We'll now have a break until 3.10 p.m.—3.15 p.m., we're running five minutes late. 

Good afternoon, and can I welcome everyone back to this afternoon's session of the External Affairs and Additional Legislation Committee? And we'll continue our look into preparedness in relation to Brexit, and our second evidence session this afternoon is related to the healthcare and medicines sectors in Wales. Can I welcome our panel and, for the record, would you like to introduce yourselves and who you're representing? So, if we go from left to right. My left to right.

Rick Greville from the ABPI—the Association of the British Pharmaceutical Industry.

Lisa Turnbull from the Royal College of Nursing in Wales.

Dr Stephen Monaghan from the British Medical Association.

Vanessa Young, director of the Welsh NHS Confederation.

Thank you. And again, can I thank, also, those who have submitted written evidence for us to consider this afternoon? Because it is important that we continue our look into how Wales is preparing for post-Brexit scenarios and, clearly, we are still in a position where we do not know what the outcomes of the negotiations are, so, we need to reflect upon a various set of scenarios.

Perhaps I may start off by asking each of you in turn—and in particular how it relates to the area you have, because some have medicines and pharmaceutical issues, some have staff or workforce issues, others have healthcare issues and just the wider healthcare sector—perhaps how you see the negotiations progressing and the concerns you would have about those negotiations at this point in time. And I will reflect, we do not know the final outcome—we are still in a process of negotiations. But to date, the issues you feel that are arising in your sector.  

So, again, if I go left to right.

Okay, I'm happy to start off and, I suppose, highlight the four areas of priorities that the ABPI has had over recent times since the article 50 declaration or announcement. One of them is the secure ability to trade and move medicines and, I suppose, being from the ABPI—the Association of the British Pharmaceutical Industry—that doesn't surprise you too much. And very much tied in with that is the need and desire for regulatory co-operation across Europe. I'm sure you'll be aware that medicines move quite rapidly and abundantly throughout Europe currently. For example, 45 million packs of medicines leave the UK into the EU on a monthly basis, and another 37 million packs travel the other way. So, it's really important that those packs are regulated in a harmonious fashion and certainly for the movement of medicines to be supported in that way.

But also, being an industry, we have a very strong interest in making sure that our industry can attract and retain the best talent. So, in terms of interest in staff retention and recruitment, that's a critical area for us because one of our main areas of interest is that of developing highly technical medicines. Without the talent, that development is challenged.

The fourth area is that of predictable funding and collaboration with the science expertise across Europe. Certainly, access to European funding has been critical in the development of certain medicines over recent times, and we see a great challenge to that perhaps into the future.

And to date, on those four points you highlighted, are you seeing progress through the negotiations to reach a point where you think you'll be in a position where you understand where we are going and where you'll be able to work post Brexit?

Well, I think that you highlighted that we're still in the time of uncertainty, that various scenarios still exist. So, until those scenarios are narrowed down to one scenario, we'll always find it challenging in all of those four areas to ensure that the pharmaceutical industry is satisfied.

Lisa.

Thank you. The Royal College of Nursing, our members, have a number of concerns about the potential impact of the negotiations on health and social care delivery. One is, as has just been outlined, issues of public protection and supply around medicines and medical devices. Other areas are around access to clinical trials and collaboration in research. 

One aspect of that is the impact on a sustainable workforce, and there are a number of other issues with a sustainable workforce that we are concerned about—what any future immigration system might look like and its impact, particularly around not just registered professionals, such as nurses, but also around healthcare support workers, particularly in the independent sector, so not just within the NHS. There are other issues affecting that, such as the recognition of professional qualifications, which need to be very clear. 

And then there are other issues as well, such as public health—threats to public health, cross-border arrangements, including access to data.

So, there are a number of quite serious themes that we've identified, and we've worked with other royal colleges and organisations in Wales. We recently held a symposium on the issue and produced a paper, which I know has been circulated to the committee, outlining areas of common concern. And I know that other organisations have held similar events too outlining those. So, those really are the key issues.

Our members have also—I think recently at the last UK congress of the Royal College of Nursing—been very clear in passing a resolution that we feel that there should be a referendum on the final deal, whatever that might look like. So, there are very clear concerns from our members.

Dr Monaghan.

A little bit similar to what Lisa's said, we have concerns regarding the negotiations and the lack of clarity quite late in the day. We think that transition is particularly critical. Therefore, we do need to have a deal. The BMA's position has been firmed up a lot over the summer in terms of formal BMA policy at our annual representative meeting, and we are, like the Royal College of Nursing, asking for a public vote on the final deal.

We believe overall, also, that Brexit is bad for the health of the people, and we've got some very specific policy positions on the single market and assurance of supplies and supply chains to the NHS, and also on items such as Euratom specifically, and radioisotopes, clinical trials; and, of course, you'd expect me to bring up workforce—EU nationals working in the NHS who are a considerable mainstay and are critical in general, but especially to some particular parts of the NHS that are almost wholly dependent on EU nationals. And, also, mutual recognition of qualifications, as Lisa has mentioned.

Thank you. Vanessa.

That doesn't really leave much to add. As you can imagine, my members have concerns about all of those areas that colleagues have mentioned. In particular, in preparing for a 'no deal' Brexit, now, our immediate concern is around the continuation of supply for medicines and medical devices and consumables, and also the potential impact on the workforce in terms of retention and recruitment. The other issues that colleagues have mentioned are also concerns, but as I say, our priority at the moment is focusing on planning for a 'no deal' scenario.

Thank you. Could I just put on record, remember that the people's vote is not an issue that we're looking at here, because we're looking at the preparedness agenda? In that sense, perhaps I can ask Dr Greville and Vanessa the question as to what your organisations, at the moment, are doing to prepare for Brexit. Because, clearly, the workforce issues depend very much upon the rules and regulations that are going to come from the UK Government, and we haven't yet seen the detail. But we've heard very much about concerns relating to medicines and pieces of equipment—isotopes has often been one that's been used and discussed—so, can you just give us a briefing as to what you're doing at this point in time to prepare for a possible situation where you need to have access to those quickly?

Do you want to go first?

Yes, sure. So, we're working really closely with Welsh Government, and our partnership working on this has really stepped up in the last month to six weeks since the publication of the technical notices by UK Government. And we have had a couple of pieces of very helpful correspondence from Welsh Government to the service in August, and then, most recently, last week, setting out what individual organisations should be doing in terms of planning and preparing for a 'no deal' scenario. So, the correspondence basically outlines that, in terms of supply of medicines, the UK Government is taking the lead for the pharmaceutical industry in preparing to have sufficient stockpile of medicines. And Rick will be able to talk a bit more about that, I'm sure.

In terms of consumables, the work is being done at a Welsh Government level, working with NHS Wales Shared Services Partnership procurement leads, to establish what the requirements are and what the needs would be to stockpile consumables in Wales—what levels we would require and where we would warehouse those and how—and that work is ongoing. And the Welsh Government, with shared services, are in the process of commissioning some further work to help with that planning.

And so, for individual organisations, what the Welsh Government is asking individual organisations to do is to review and rehearse promptly existing business continuity and resilience arrangements within organisations and to do that with their local and regional partnerships and through local resilience forums. And then, they have provided a checklist to give us areas of particular things to focus on in terms of those actions, starting with resilience and continuity. So, confirming that existing arrangements are up to date, they're working with partners to pay particular consideration to Brexit and that plans are in place for a rehearsal for January next year.

The second area is in terms of continuation of supply and the focus there is on the extent to which organisations are confident of their inventory management arrangements. So, how confident are we that we have up-to-date, accurate, real-time inventory data for our medicines and consumables? Then, the final point is around critical machinery and equipment. So, we know that there can be difficulties sometimes in accessing parts for key machines, MRI scanners, et cetera, so a piece of work to say, 'Are there the services complete? Are there key bits of equipment that you need to make sure that we have got stock of in the event of a "no deal"?'

Can I just clarify, because I understand what you're saying, but in your written evidence you indicate that,

'The NHS in Wales has been advised that they do not need to take any steps to stockpile additional medicines beyond their current stock levels'?

Yes.

So, I accept we're talking about equipment and machinery as one aspect, but this was August, so has the Welsh Government now changed its position and therefore is it now asking you to work with it to look at stockpiling medicines?

No, no—consumables.

Just consumables.

So, medicines is being dealt with at a UK level, and, as I say, Rick can talk more about the fact that this is specifically looking at consumables.

So where you say the NHS has been advised not

'to take any steps to stockpile additional medicines',

that's related to a Welsh Government position, but there's a UK Government position that says you do.

It's a UK Government position that has been made clear through technical notices and fed through to Welsh Government, who've then fed it through subsequently to individual NHS organisations, and that's contained in correspondence between Welsh Government and the NHS in August.

Okay, thank you for that.

I think there's a subtlety in terms of the definition of stockpiling, so perhaps I'll be able to clarify that—I hope so—a bit later. But certainly, from day one the ABPI have been supporting our members' preparedness for Brexit, for all the different scenarios, but let's not forget that the main aim here is continuity of supply, and that's been at the forefront of everybody's mind in this area.

What have we expected our members to do in preparation? That's an evaluation of both the supply lines that they currently have, the supply lines that they may need in the future, but also, as I touched on earlier, the regulatory requirements that may differ depending on where we are and what relationship we have with Europe on an ongoing basis. But our No. 1 ask is for a deal with regulatory co-operation and frictionless trade and movement across borders. Having said that, we've always got to prepare for a 'no deal' scenario as well, and our members are currently working with the UK Government on what is termed the medicine supply contingency planning programme. That's a programme that was introduced over the summer and announced alongside the technical notices on 23 August. And basically that's a request from the UK Government for manufacturers to increase their stock within pre-wholesaler of up to and including six weeks' additional stock of medicines. So, 'pre-wholesaler' means that the stockpiling is done at the cost of the manufacturer within warehousing that the manufacturer maintains and pays for. So, that, I think, is the difference between the stockpiling. I think Nessa was talking about stockpiling within the NHS, and the ask on manufacturers is for us to stockpile an additional six weeks within pre-wholesaler facilities within the UK.

If that can't be done, the programme then goes on to ask for manufacturers to arrange air freighting facilities if that was needed. Now, neither of those are entirely possible, and neither of those on their own will provide a solution. But it is a good place to start bearing in mind that difficult scenario that we may well be heading to.

So, in terms of how the Government evaluates our members' preparedness, alongside the requests, they issued what was termed a response template, which queried and surveyed each manufacturer as to their ability to supply that additional six weeks for each of the medicines that they bring to the market in the UK, and that analysis is being done currently, and we would certainly encourage the Welsh Government to engage closely with the UK Government to understand the scenario or the analysis of these surveys on an ongoing basis.

I mentioned that the stockpiling was at a pre-wholesaler level. There are certain issues with regard to the costs of bringing additional stock to the UK. There are also issues about the costs of the additional warehousing needed and, obviously, if the warehousing isn't an option that's possible for whatever reason, the costs of air freight are also a consideration. And for all of the above, you also need to consider the capacity availability in the UK. Medicines are slightly different from a lot of other goods in that they are very heavily regulated. So, it isn't a case of creating a warehouse without any appropriate regulatory sign-off and certification. So, all of that will inevitably take time, but close collaboration and engagement between the Welsh Government and the UK Government on this topic might be very useful. 

Hefin. 

A lot of the questions I was going to ask have largely been anticipated, but I suppose a broad question is: to what extent is the healthcare sector anticipating a 'no deal' Brexit? Is it likely? 

It's not one that we can ignore. Our preferred option, obviously, is a deal. I think probably everybody at the table has suggested that their preferred outcome is a deal, but a very real scenario is that of 'no deal', and bearing in mind our overall aim of continuity of supply of medicines to patients in the UK and, in fact, to Europe as well—but that's by the by, I suppose—we have to bear in mind the contingency planning arrangements as needed for a 'no deal' Brexit.   

Which I think, Vanessa, you indicated, and you made reference to the technical notes from the UK Government. The UK Government's priority is stability, according to the UK Government. Would you say that's a fair approach, considering the technical note? 

I think that it would be irresponsible for us not to be taking all the measures we can to ensure that we're prepared in the event of a 'no deal' and that there is stability in the event of a 'no deal'. And so, what we have always said—we're part of the Brexit Health Alliance and the Cavendish Coalition—and what we want to ensure is that whatever the outcome of Brexit, patients and services aren't negatively impacted. So, it is our obligation to do everything that we can to make sure that we are adequately prepared so that patients can still access medicines, can still have the treatments that they need, and therefore it's a prudent approach that we're taking. 

Do you feel, members of the panel, that that's happening right now? 

In terms of preparations? 

Yes, for a 'no deal'. Are you confident that the market is going to be prepared for 'no deal'? 

I think what would make our members more confident would be communication. I think communication from Welsh Government, as well as UK Government, and I would say communication not just to senior leaders, although that is extremely important, obviously, to get these plans in motion, but communication to the general public and also to the workforce at large. For example, if you are a front-line practitioner, you may have concerns from simply reading what's happening in the media, you may have concerns about the supply of medicines and medical devices in your area, you may have concerns about how immigration system changes might affect your colleagues or your own life. So, those kinds of concerns need to be addressed at two levels: at the operational level as well as the actual planning level. So, what I would say is that some of the preparatory work that Vanessa has alluded to, for example the research that has been commissioned by the Welsh Government, may be known—that's known to us; it's known to the Royal College of Nursing because we've had meetings with the Welsh Government—but is it known widely?

So, what we would say is that we would welcome much stronger communication. For example, we know that there is a portal for businesses to look at and provide them with guidance and support. There is a useful discussion hub on Public Health Wales, but that seems to relate specifically, as you'd expect, to public health questions and policy questions, whereas what we would be looking for, perhaps, is a more central depository, whether that's on HOWIS or on the Welsh Government site, actually providing that clear planning guidance. So, 'This research has been commissioned; we're expecting the results by this time. This is the terms of reference for that research', so that everybody can actually share the position, because sometimes the work is not going on and needs to go on, and sometimes it is going on but people are not aware that it's going on.

Okay. So, you think there's a disconnect between strategic planning and what's happening locally.

I think strategic planning has begun, which we welcome very much, but I think that needs to be communicated further and faster, and people need to communicate, as I say, at all levels, including, now, they need to think about communicating to the wider workforce and, indeed, to the general public that this work is ongoing.

Can I come in? I completely agree. We had a round-table meeting that the confed organised in September, and that was one of the key points that came out of it—that we needed to have greater clarity about what was happening, what planning was taking place, what was expected at a national level, what was expected at a local level. And there was a recognition—and there was a range of health and social care leaders in the room—that we need to take account of all of those involved in health and social care, which includes, for example, independent providers in social care, and how we are making sure that we are able to communicate and engage effectively to make sure the planning is working in—

So, there's a possibility of inconsistent preparation.

Without that central co-ordination, there is a danger of duplication and omission. So, on the back of that event, which was attended by the Cabinet Secretary and the Minister for Children, Older People and Social Care, there was an agreement to establish a ministerial stakeholder advisory forum, and that's due to meet for the first time at the end of October. So, we think that's really helpful.

Pretty late in the day.

But it's helpful that it's now being established. There's now an EU transition leadership group, chaired by Welsh Government, with various colleagues from health and social care. And there are also now meetings of the NHS emergency planners to deal with that sort of civil contingency aspect. And we are absolutely, I think, across the sector, recognising we need to have an effective communication strategy also with the public, and so that is now starting to be developed.

Okay. I'd like to move on to something that, Richard Greville, you mentioned—the connection between Welsh Government and UK Government. It's not just about connecting between strategic Welsh and local levels, but also between those two Governments. Is that effective?

Yes, it is, absolutely. And just to reiterate the points that Lisa and Vanessa were making earlier, the communication is absolutely classic—a real requirement in this scenario, which is so complex. And that's where we're heading; we are heading into a complex area.

But, given that complexity, is the advice that the Welsh Government is giving, and the research that the Welsh Government is doing, in line with that which the UK Government is doing? Is there a clear path between the two?

I wouldn't like to comment as to whether those paths overlap. But certainly, in terms of the need for communication, before those paths do overlap, I would suggest that there needs to be a high level of communication, there needs to be collaboration. I suppose the supply of medicines gives a good example of this. You would expect that the supply of medicines would be easily in the gift of manufacturers—just bring more into the UK. Well, of course, when you look at it and peel back the onion, it isn't as easy as that. The supply-and-demand side needs to be considered and the issue of stockpiling at a central point, pre-wholesaler position, by the manufacturers. What happens if some local stockpiling happens? That would very easily and quickly remove any benefit from having a six-week additional stock at the overall UK level. So, it's really important that the behaviours of stakeholders in this space don't inadvertently compromise one another's activities. I think we have to work collectively—

But you're not suggesting that's happening.

I'm suggesting that it may be possible because there was a bit of uncertainty as to what was meant by the stockpiling approach. So, I think it's really important to understand what the ask is and then that all the stakeholders within, and have an impact on, that scenario understand their role.

Sorry, just to say really quickly that I think what we'd be concerned about is the risk of that happening if that information isn't made public and transparent in a clear place. So, for example, just to give you one example about research: we've been highlighting that we are concerned about the potential impact on recruitment and retention in the independent sector. Now, we have become aware that Welsh Government has commissioned research from Social Care Wales, which is actually going to be doing that commissioning, to examine the scale of that problem. That's good news. What we are not aware of is the actual terms of reference of that or the timescale of that. So, we're not clear if that piece of work will answer our concerns or not. That's not because that information has been in any way—. There's no suggestion at all that that information in any way has been deliberately withheld; it's merely a case that lots of people are trying to do a lot of things, and, at the moment, we need to put them all on the table to make sure that everybody is aware of what's going on.

I think that is reflective of the uncertainty across the UK about the negotiation: where we are, what is being done, what needs to be done. So, I think we are trying to respond in a very uncertain environment, and there will always be times when we haven't necessarily got all the information. But, sometimes, even just saying that we haven't got that information yet, but we're working on it and we'll bring that out shortly, reassures people sufficiently, because otherwise what happens is, if you leave a void, then people will fill it with suspicion or concern. So, it's just really important, I think, that we have really regular and consistent communication across the whole sector. One of the things the Welsh NHS Confederation has agreed to do with all of the people who were present at our round table, who were representing all parts of the sector, is to pull together a frequently asked questions briefing and we've gone out to everybody and said, 'What are the things that are concerning you? What are the questions that you want answering?', and then we're going to work with Welsh Government colleagues to try and answer those questions consistently and in one place. But, necessarily, over the next few months, we'll continue to see uncertainty around Brexit. We'll have to keep updating that and recognise that it's a dynamic process and the way in which we communicate will continue to need to be dynamic.

Can I follow on, partly in answer to your previous question, which it links back to—

If you can remind me what it was.

Yes. Well, I think it was about how the negotiations were going. Because it was—. I think that, on the risk side, it's pretty clear that the severity side of no deal is very severe for the NHS and for health. But the difficulty is trying to gauge the likelihood of no deal, and that shifts day by day in terms of—you know, anyone watching the environment would see that it seemed to be getting more likely that there'd be no deal; suddenly, there's some fairly positive mood music that there'll be a deal. So, for the service, knowing that there's planning for something of very high severity were there to be no deal at the same time, it kind of lurches from complacency to panic and it's not ideal for planning. There may well be a deal before too long, I hope, in the next month or so, but, even then, that won't be the end of the story because of the meaningful vote back in the UK Parliament and then because of all of the deliberations on the UK withdrawal agreement Bill. So, this is quite a difficult scenario for the NHS to plan—or environment, sorry, for the NHS to plan within—and yet the severity of not having a plan that works and really falling out with no deal is so severe. It wouldn't be so bad if it was just marginal.

Okay.

We've talked about communication and move on to questions on that with Jane.

Yes, you touched on that quite considerably, I remember, when I chaired the session that you attended, I think it was earlier on this year, and you were concerned then about engagement. It's good to hear—albeit at this perhaps late stage—that you've got this ministerial group and the EU transition leadership group. But I think the issue about communication is—. Is it an issue about communicating the impact on the healthcare and medicines sector? Are the workforce are aware in terms of those impacts? Because you need to be aware of them, clearly, in terms of the way you're preparing for Brexit, including for a 'no deal'. Or is it that you feel that you know it and you're spending a lot of time on it but it's not being shared more widely and publicly in terms of patient awareness?

I think it's that we have to have sufficient clarity ourselves before we go out to the public with messages. So, for example, in August, when Welsh Government wrote to the NHS, it very clearly stated there that hospitals, GPs and community pharmacies in Wales do not need to take any steps to stockpile additional medicines beyond their business-as-usual stock levels. Local stockpiling of medicines is not necessary. And then they also said there was no need for clinicians to write longer prescriptions and patients will not need to store additional NHS medicines at home. So, that's very clear guidance that we need to make sure that we are communicating both through to our workforce but also to patients too so patients don't start stockpiling medicines at home. So, where we have absolute clarity of what action we need to take, I think then we can start communicating with the public in that way. But, until we're clear on some of that, it is probably going to become confusing if we start doing too much of a public campaign.

In terms of that clarity, it's really important. We mentioned technical notices a bit earlier, and certainly the technical notices that were issued at the end of August and subsequently have provided that very useful clarity. Some of them have introduced a good level of pragmatism as well from the regulatory aspect of the UK. One of the important ones from our perspective was the confirmation that medicines that are quality tested and batch released in Europe would still satisfy the requirements of the UK regulator post Brexit. So, what does that mean, that technical jargon? It means really that all the medicines that are available in Europe will fundamentally be available to the UK to utilise. So, it means that maximum use is made of the stock of medicines that is available across Europe. Now, we would also have liked and expected the EU to do a similar recognition or a mutual recognition of such quality testing and batch releases that are naturally done in the UK. Now, we still await that and we're still encouraging that approach, but at least for the UK to take a unilateral approach has been very, very useful. Otherwise, we would have had to concentrate resources and time to make sure that we were duplicating the quality testing in the UK after it had already been done at a European level to the current standards. So, these technical notices not only introduce some pragmatism into the argument, they introduce certainty, and by doing so they make sure that as much resource as possible is not spent unwisely or unnecessarily.

I think it's fair to say that we might take a certainly stronger position with regard to what communication is necessary from the Welsh Government. I think we have reached the point—. Our members are very concerned about a number of areas, as I outlined at the beginning, and I think there does need to be a clear reassurance sent to them that action is being taken in these areas. Now, that might be signposting to action taken by the UK Government where the UK Government has the lead. It may be about being clear about the research that has been commissioned or is under way or the planning that is currently being undertaken. It may be about notices or correspondence that have already been issued from the Welsh Government to leaders in the NHS, but that may not have been disseminated more widely than, say, the executive team of a health board. So, being clearer about all of these steps that are being undertaken is, I think, very important to provide that reassurance in this time of uncertainty and change, and I think there are some issues, particularly around, say, professional recognition of qualifications, which we touched on, around revalidation, around the potential for future immigration systems, around data sharing. There are areas where the answer is going to be, 'We are still planning for the scenario; we are still discussing', but, even so, that statement of intent that we have recognised that this is an area of concern and that people are examining it will go a long way, I think, to providing our members with the reassurance that they need in this uncertain time.  

On supplies, specifically, and communication about them, it would only be fair to say that certainly one area where the communications are not adequate, because the position has not been clarified enough, including in the technical notices, is on radioisotopes. So, because we are, as things stand, leaving Euratom—which the BMA regrets—we will not be able to legally obtain radioisotopes from EU member states. They won't be able to export them to us—any European company. So, what we haven't seen is clarity as to where the radioisotopes are, therefore, going to come from should there be no deal. So, we've seen some detail, obviously, about consumables, about medicines and medical devices, but radioisotopes is a specific area and very heavily regulated—even more heavily regulated than pharmaceuticals, arguably. So, that remains a point of concern. 

And the technical notices, they weren't particularly clear, and they refer to aviation to bring them in from somewhere else, but that was before the aviation technical notice came out, and some of the—. And, actually, aviation is one of the high-risk arenas in its own right. But there's still—. 'Where are we going to import the radioisotopes from if it's beyond Europe?' is the question; the secondary is how we get them to the UK.

In terms of contingency planning—and my colleague, Hefin David, has raised a question on this already, but—. So, when you say, 'Where are we going to—?', that's the whole of the UK. So, how are you liaising with colleagues—well, obviously, through the Welsh Government, but—through your associations with Scotland and Northern Ireland and all organisations affected?

Well, we are raising this point about radioisotopes on all the levels.

You're all raising it as an obviously major concern.

Yes, and we've raised it with Welsh Government and they have certainly advised us that they are working with UK Government and the other devolved administrations on this as an UK issue, so they recognise it as an issue.

The point to make on the technical notices, actually, is that there are a number of areas where they're still silent. We haven't had technical notices on issues like reciprocal healthcare, on much of the public health protection issues and on mutual recognition of qualifications, for example. So, there are a number of areas where we're still waiting to understand that UK position. But they are issues on which we're aware the UK is leading, but in discussion with devolved administrations.

Do you feel that Welsh Government is being a channel to the UK Government, as well, sufficiently on these issues to raise these issues as well on your behalf?

We are alerting and highlighting the issues to the Welsh Government—so, using that channel—but we're also using our membership of the Brexit Health Alliance and the Cavendish Coalition, which are UK-wide forums, and ensuring that the Welsh voice is being heard through those too.

Thank you.

Okay. David.

I wonder—how reliant are we on isotopes from Euratom members?

My understanding is that the majority are imported from EU countries, and, because they're heavily regulated, they can't legally be exported to us by those companies, as I've said. So, we are heavily reliant on them. 

And how—? I can understand, if there isn't an agreement over this, which seems unlikely, given how both sides would appear if they failed to agree on something quite so essential to health. There would be an initial disruption, but then a solution would be found. It would be more expensive, obviously, than the current situation, but that is where we're at, isn't it, ultimately? There's little direct impact on public health, probably.

I guess it's whether or not the continuation of supply can be guaranteed in the event that a deal hasn't been struck on how that would work post Brexit. But, yes, you're right, there are other options of getting radioisotopes from countries outside of the EU. There is an issue about the half-life of radioisotopes, which can make that problematic, depending on how far away we might get them from, and obviously there would be an additional cost associated with that. So, all those issues need to be considered.

And, obviously, because of the half-life problem, we can't stockpile in advance, particularly.

There's also an issue about communication here too, as I say, to front-line practitioners and also to patients as well, because even—. The risk needs to be explained so that people are not overly alarmed or overly concerned. If the risk has been examined and it's low, or if there is continuity in place, then all of that needs to be explained at that operational level, because otherwise what will happen is you'll see the fears of front-line staff and the anxieties of patients translating into issues that may impact on the operation, then, of the system. So, that's another important point to bear in mind.

Okay. Then looking at medicines, are we particularly vulnerable in any particular area? Because, again, it seems to me very likely that we actually send more medicines to the EU than the other way around. Again, I don't think either side is going to look very liberal and constructive if they deliberately cause disruption. We have complete regulatory alignment, and even if we wanted to impose a fair degree of difference in terms of our regulatory framework, that would take quite some time, so how disruptive could the worst-case scenario be? It seems to me it's very limited, really, in terms of what could happen in that one or two-month window, then, when we are all trying to come to terms with the fact that not only is there a 'no deal', but there's austerity and real ill feeling between the two sides, which is only what, presumably, can cause these dramatic health impacts.

It may also be important to consider it's not just the physical supply, it has to be the professionals' understanding of the regulatory framework they're operating in. So, 'Can I dispense these drugs? How am I professionally accountable? How do I transfer them?' So, it's also about making sure that people understand the framework that they're operating in, which could cause potential disruption as well. So, that's something that needs to be addressed separately from the physical supply.

I suppose what I'm trying—. I have very little, or, well, no sympathy, with Brexit. It's not where I wanted this country to go. But I think we have a public duty to identify what are the real risks, i.e. people on regular heart drugs, high blood pressure—whatever—diabetics, who may not get their medicines in that period in April when we're all coming to terms with the new system and it's gone badly wrong in terms of how we divorce. I think things could be awkward, expensive, and there are lots of economic downsides to this, but I'm still not quite sure where the high risk in terms of a patient outcome is. That's not to say they're not there, but please explain it to me.

If we end up in a 'no deal' scenario and we haven't done the planning that we've just been talking about, then the very real risk would be that we would have shortages of medicines because we haven't got enough in this country, because there were lorries not able to cross borders et cetera, or we weren't able to get whatever medicines, particularly those with a short lifespan, through our supply chains quickly enough. With the plans—

So, which are particularly vulnerable, then, to the frictional problems you get, with lorries taking longer to come over borders? Where are the pinch points?

One item that I think you probably noticed is insulin, which is entirely imported, and it's cold chain-dependent as well so it's not just any old transport. So, that's one. Overall, normally, the just-in-time delivery nature of the supply chain means that, without planning, disruption would have pretty immediate effects. And we've seen that—I work in the day job part of the time in infectious disease control, and we know from the severe acute respiratory syndrome outbreak in Canada, when the Americans closed the border to stop SARS spreading to them, that Canadian hospitals ran out of supplies within two days. So, that's how fragile some of these—or how efficient, but the flip side being fragility—supply chains are.

And the medicine supply chain in itself is fundamentally fragile at the best of times. I'm sure that there will be examples where the NHS finds shortages of certain medicines on a day-by-day basis. That's the reality of the situation. Over and above that, you put any unplanned compromised positions due to Brexit and you just exacerbate those issues. Certainly, medicines with a short half-life—they can't hang around our ports for days, let alone weeks. I'm not sure what the plans are. I believe you had a presentation from the ports earlier, so perhaps you're in a better position than us to comment, but certainly those delays are a challenge for medicines with a short half-life, and those medicines that require cold chain facilities—they're a challenge. Those medicines that require warehousing either in controlled or bonded warehouses or cold chain warehouses in the UK are themselves a challenge. So, the challenges certainly without planning are certainly there; it is very useful that the UK Government has issued a clear request of pharmaceutical companies, and all our members are doing their very, very best to be able to satisfy that request. And in instances where they can't satisfy that request, they are looking for ongoing engagement and discussions with the Government as to how alternative plans can be put into place. 

And then—. This is very helpful, I think, that we drill down to the practicalities and the shelf life of medicines in that initial phase when we may have disruption in terms of the new system and then working through that and managing more robust supply chains as a result of that—that's really important that we get that right. But I just wonder: is there any indication that, even in a 'no deal'—and no deal means there isn't a comprehensive agreement to leave the EU as is envisaged under the Lisbon procedure when you negotiate under article 50, you know, an amicable divorce—it doesn't mean that there can't be agreements. In fact, there'll probably be lots of bilateral agreements. Many of them are underwritten by other aspects of international law, for instance. Now, this is an area probably where we don't have that fallback, but are you picking up any close collaboration between the European Commission and the UK Government to work their way through these sorts of scenarios? If we're short of insulin, that's going to be an awful story in Germany and France when people see the consequences of being obdurate—

One of our asks is for that communication and for that mutual recognition to happen. At the moment—I gave an example earlier that one of the technical notices allowed the UK to accept medicines batch released and quality tested in the EU. Well, the reciprocal arrangement hasn't been agreed and hasn't been written down. So, we are left in a period of uncertainty as to what happens with the medicines that are batch released and quality tested currently in the UK, and the fallback option is for the pharmaceutical industry to make significant investments to make sure that those regulatory requirements are actually satisfied. But that in itself takes resources, that takes time, that takes resources away from other thinking that could happen in this space. 

The two issues that I just wanted to put in there—as well as the immediate physical supply—. In the longer term, two of the issues I wanted to talk about are—. For example, we are not entirely clear what the position is regarding new directives that are about to come in on medicines, and I think that's creating some uncertainty as well. The new regulations that would be coming in under the current EU system—what will happen to them in terms of ensuring that we're actually compliant, such as to the falsified medicines directive? And the other issue is around participation in clinical trials, and opportunity for clinical collaboration, because that provides patients with access very often to new drugs in a way that's very beneficial for the patient, but also it's beneficial in terms of driving up research standards and recruitment here for the workforce. So, I just wanted to put those in, because I think with the whole medicines supply issue, obviously it's important to focus on the immediate physical supply, but there are a number of other issues medium to long term. 

I would say it's not that we think—. These agreements in the first place were negotiated, so, clearly, agreements can be negotiated again, so the issue is not insurmountable. But I think what we're looking for at this stage is a recognition by the Welsh Government and by the UK Government that this issue has been recognised—and, in fairness, I think we have arrived at that place—but now we need to have communication that it is being negotiated, or it is being planned for, and that's where we haven't quite got to. So, it's not that we're flagging up these issues and saying, 'These are insurmountable'— 

You'd like to see clearer evidence, at that level at least, that those reciprocal agreements are in place, so even if we're not in a great situation—we've no deal, or whatever—there are still issues of profound public interest, acting in an appropriate manner. 

Yes, that people are aware of the detail and there are plans to negotiate an arrangement to replace the current ones. 

I guess the issues is that while we're trying to negotiate a deal, the Government won't be seeking to negotiate reciprocal arrangements on specific elements outside of a deal. And, actually, I think I'm right in saying that in law they can't start to negotiate on some of these mutual recognition points outside of the overall negotiation until the UK becomes a third country. So, that requires us to either get a deal on all of it, or be out and then strike reciprocal arrangements on individual issues. 

But I suppose the clarity, as you mentioned, and the 'no deal' papers and technical notices—and you've indicated that the UK Government has taken a position where it would acknowledge the standards in Europe, and you haven't had a reciprocal agreements—but what we don't know is whether those are under discussion at this point in time, during those negotiations, and how far down the line that might be, because your concern is whether they are not doing it because we're not a third country at this point in time.

I think, Chair, reciprocal agreements could be negotiated; it would be transitional until there's a new situation is established. But, you know, I think that it's likely, if we have a 'no deal', that there would be lots of agreements that both sides just see as humane to keep going in both of their interests. 

But my point is they wouldn't agree to them before we have clarity on whether we have a deal or not.  

But a statement of intent would be helpful—a statement of principled intent that we recognise this could be an issue, and that we would seek to address it. 

And in the same way that the UK unilaterally state the technical notices, the EU itself could similarly take an unilateral position. It hasn't to date. 

I realise time is running out. The sharing of data and scientific best practice, and our researchers going there and them coming here, and collaborating on joint projects is very important. But perhaps you could just move—are there any more immediate concerns around the management of public health emergencies, for instance, that in the months after a 'no deal' situation we need to be aware of that we might be vulnerable to? 

Yes, there are, and some of this relates to the rather boring topic of data protection, I guess, because our ability to control infectious disease outbreaks these days is based on data, epidemiological surveillance, and sharing data. So, that's what replaced quarantine and isolation as the mainstay of infectious disease control. And, in Europe, that is underpinned by the agreements for sharing data, which happens at all levels, between all parts of the European system, but I guess they're anchored by the agency in Stockholm. So, that is a concern, and it's the similar data protection concerns that underlie a lot of the issues about the risk to research collaborations as well. So, yes, there is a concern on that.

I would just add to that—issues around data sharing, when they touch on safeguarding issues, would be critical. And, also, related to that, again, the issue about mutual recognition of professional qualifications. That's very critical indeed in terms of being able to assure public safety.

I'd like to go on, but I think we're out of time.

We've got a couple of minutes. I need to ask the question on the workforce. In one sense, we know the health boards have often gone across to Europe to see whether they can recruit staff, and elsewhere in the world. We understand the challenges that might come now, based upon—we still don't know the total immigration picture, even though there are now some rumours about the immigration proposals coming forward. Is the Welsh Government taking actions with your bodies to look at how it can work with you, to see how it can expand the workforce? Because, at this point in time, we're still going to be relying upon immigration as one of the parts of building our sustainable workforce.

Yes, and that's why I mentioned earlier the piece of research we know the Welsh Government has, through Social Care Wales, commissioned, and we'd welcome more details of that. Our concern, which we've identified, is that, although there are a number of EU-registered nurses working in NHS Wales—our concern is what we don't know. So, our concern is how many are working in the independent sector, and also, specifically, around the unregistered workforce, so people such as care workers—what proportion are EU? The care home sector is fragile; it is very dependent on them for keeping that provision open. And of course, it has a huge impact then on what the NHS's operation is, in terms of the whole-systems approach. So, we are concerned specifically around that area, and we would welcome more—certainly the outcome of this research, and more information about this research that is currently under way, because it is an area of concern for us. Vanessa has highlighted the Cavendish Coalition, which the Royal College of Nursing is also part of, and we've been through that at a UK level, making available a number of pieces of evidence to the UK Government, in terms of what any future immigration system could look like, in terms of a consistent approach, in terms of assuring sustainability. As I said, one of the areas is not just your highly skilled, highly specialised roles, but also, equally important, is the very important skills that the care workforce has, and the work that they do in the independent sector in care homes.

A couple of things on that. I think, at a strategic level, Social Care Wales has, I believe, commissioned that research, to understand better—we talked about that last time I came to committee—about the NHS. We have, perhaps, greater intelligence about our workforce than social care, because of its make-up, really, with more independent providers. And so, that work will be really useful. But, at a strategic level, the creation of HEIW—Health Education and Improvement Wales, just established this month, is now working on a joint workforce strategy with Social Care Wales, which I think is an opportunity for us to really look at what the skills needs are across the whole sector, taking account of issues such as Brexit, and looking at what that means in terms of international recruitment, hopefully, EU recruitment in the future, and also what we need to do to grow our own domestic supply. So, that's the longer term picture, and being able to really demonstrate the vision of health and social care in Wales, to help attract people to come and work here.

On a more operational level, and thinking about the 'no deal' scenario and what would happen immediately, in the next few years, with or without a deal, it's about making sure that we understand really clearly where the EU nationals, who we currently employ, are located and understanding and working with them to ensure that they continue to feel supported and welcomed and very much valued within our system. And so, making sure we're doing everything we can to do that. But, also, if we are seeing—we're not at the moment—a reduction in the number of EU nationals, we need to be aware where that has particular consequences. So, we know, for example, in some specialties that we have a higher proportion of EU nationals than others. So, I think optometry—ophthalmology is one of those examples. So, we need to be very closely monitoring what's happening so that we can put in place appropriate strategies, first of all, to try and retain staff, but then also to recruit them, should those numbers reduce.

Based on the fact—. I don't think we've seen reducing numbers because people are leaving, but are you seeing a reduction in applications from EU nations?

The NMC has warned of a significant reduction, yes. 

Has warned or observed?

Observed—sorry.

The NHS in Wales is piloting, or is fostering within the arena of a pilot, the fast-tracking of settled status for EU nationals who are employed by the NHS. Our understanding is that that will be for staff who are EU nationals, but it won't be for their families, and that's the problem. So, for doctors who are EU nationals, they're not really all that interested. You also have to pay to enter that pilot, but you then can't secure it for your family—you're not going to stay if your family can't stay, but there is work going on.

In terms of some specialties that are vulnerable, one to make a note of—there are quite a few that are vulnerable—is transplant surgeons. The vast majority of transplant surgeons in the UK and in Wales are EU nationals. We have a shortage of transplant surgeons, as it is. In fact, that, it would appear, is the rate-limiting step now in spite of presumed consent; it's actually the number of transplant surgeons that is the rate-limiting step on capacity for transplanting more organs. There's a particular fragility in relation to them as it so happens that they are predominantly EU nationals. There are a number of other specialties where that also is the case.

Just on the settled-status scheme—just to clarify that there's a pilot going on at the moment in the north-west of England around the NHS, and we understand the Home Office is, at the moment, considering whether or not that might be extended to other groups, but there's no clarity on that. But, obviously, the settled status scheme is due to be fully operational by March next year. So, we're waiting to see if there's further news there for us.

Thank you. Time has caught up with us. There are obviously areas we'd still wish to explore in this area, but perhaps we may cover them in the future. Thank you very much for your evidence this afternoon. You will receive a copy of the transcript. If there are any factual inaccuracies, could you please let the clerking team know as soon as possible so that we can have them corrected? Once again, thank you for your time.

The next session will be with representatives from the food and drink sector. We'll wait for them to swap over. 

Good afternoon. In case you haven't been before, don't worry about the microphones, they will automatically appear. If you require translation, though we haven't used it this afternoon, but if you do require translation from Welsh to English, that's available via the headphones. We move on to the next item on the agenda, which is the evidence from witnesses from the food and drinks sector. For the record, would you like to introduce yourselves and the organisations you represent?

My name is Andy Richardson, I chair the Food and Drink Wales Industry Board.

My name is Gwyn Howells, I'm chief executive of Meat Promotion Wales/Hybu Cig Cymru.

Thank you for that. We'll move straight into questions. Clearly, there's a new drinks and food strategy and action plan, and I suppose the question I want to ask is: how has Brexit influenced the new strategy and action plan?

Would you like me to take that one? Essentially, it's very much a consideration of part of the plan. It would be inconceivable for it not to be. The challenge, obviously, we have is we don't know what outcome we're planning for. So, it is being considered. It's also being taken account of because we've done a lot of scenario work. The Welsh Government have done a lot of scenario work. So, as much as can be, we're taking it into account. 

Very much so, yes. Obviously, Hybu Cig Cymru's remit is red meat. Therefore, it's lamb, beef and pork, in that order, in Wales. Therefore, what we did last May was launch a new vision and strategy to 2025, which takes into account the opportunities and threats, indeed, that Brexit poses to our sector. It's largely a road map of our work on behalf of the industry both now and in the future up to 2025 to actually position red meat from Wales as premium both in the home market, which is a GB market, and that's the most important market for us, but also in the European market, which is extremely, extremely important to us, and further afield as well. Part of the strategy is to develop those markets, we would call them third country markets, beyond Europe, if you like, at an accelerated pace over the next few years in order to de-risk our portfolio of exports, which is largely in the European basket at the moment.

Clearly, as you highlighted, the uncertainty has been, in a sense, a challenge, very much so, but as we approach the point at which we will either decide upon a deal or no deal, we're getting closer, are you now in a position, do you think, where, irrespective of the outcome, you're able to move forward?

If I can take that for our sector, and if you drill down into our sector, sheep would be particularly hard hit if there were a hard Brexit, because of the predominance of two things. First is the seasonality of production, which means that we need export market valves opening at certain times of the year, for example, from September on until January, and without that ability to have free trade with the European consumer base, we would find that very, very difficult. The sector would be in some serious short-term problems, given that 35 per cent of all our production—one in three lambs born in Wales—finds itself in European countries as a destination at the end and, therefore, that is a big risk for the sector. 

So, from my perspective, about 90 per cent of the exports from Wales, in terms of food and drink, go to the EU. So, it's clear that the importance of the EU market is crucial. And the only thing you really can do at the moment is plan for a hard Brexit. Things, obviously, change on a daily basis, but it's quite prudent to do that.

In terms of the rest of the market, 12 per cent is to the rest of the world, and what we want to do as a board is, actually, to look at export markets and see which of those export markets you can take long-term defendable positions in. Where can Wales's food add value and not be a commodity? And that's important, because, as I say, they're long-term positions that we can take where we can add value. And that's what we want to spend time on. We have to bear in mind the context—it's only 12 per cent of our exports at the moment—but it's a growing sector, so it may be a bigger part going forward.

Thank you. You've mentioned markets; I've got some questions on the single market. Michelle.

Thank you, Chair. Can you just remind us what the balance of imports/exports is between the UK and the EU in terms of food and drink? Do we export more to them, or do they export more to us?

I haven't got the import figures [correction: I haven't got the import figures with me today]; I've got the export figures. As I say, we export about 88 per cent of our food and drink from Wales. But there is product that comes in, so, there are products coming in from Ireland as well—cheese, for example—so they're not insignificant.

I wasn't speaking specifically about Wales, I was talking about the UK as a whole, because, obviously, it's the UK as a whole that's negotiating with the EU. I just was interested to know whether you could remind us what that balance was—whether we were exporting more to them or vice versa. I suspect, actually, they're exporting more to us, aren't they, in terms of food and drink?

In terms of the UK, yes.

So, have you had any discussions with your counterparts in the EU to find out what they're actually going to be pushing for from their side? Because, obviously, if any difficulties with exporting to the UK are thrown up, it's going to be damaging to their interests as much as any obstacles are going to be damaging to ours. So, have you had those conversations and what's their objective in this?

Can I just mention in terms of, obviously, the sector I represent? We are net exporters of sheep meat and therefore we export a great deal, which is probably about £100 million per annum of sheep meat. So, net exporters. But we're net importers of beef, and therefore, in the UK, we produce probably about 65 per cent of what we consume. Therefore, the net import comes largely from countries like Ireland. Therefore, with each sector the balance of payments, if you like, differs. So, milk, similarly, we would be net importers. So, sheep stands out as the problem, if you like, in all of this.

The Chairman mentioned at the start in terms of confidence and uncertainty, and that is characterised in terms of our discussions with the European countries at the moment. Where we have had very, very good relationships over 30 years in terms of exporting lamb and beef from Wales, there is some doubt, obviously, and they need to secure supply chains going forward. And what people normally do when they have some doubt whether they will be able to buy freely lamb from Wales and beef from Wales after March is that they seek alternative product, and we're seeing a bit of that at the moment and that's quite unsettling. But, hopefully, common sense will prevail and we will have a free-trade agreement and we can move forward on that basis.

Thank you for the mini analysis of the beef and lamb, but I was talking in general terms—food and drink in general. I know it's a convenient issue to pick on, Welsh lamb. But it is quite a—. It's a big issue for Wales, but in the grand scheme of things, it's quite a small part of the actual food and drink sector. I just wondered whether you'd actually had any conversations with your counterparts in the EU. What are their concerns? Are they worried about being able to export to us? Because if they're not able to export to us as freely as they are now, they're going to lose a lot of money.

Yes, in some cases and I'll give an example. So, with the TasteWales event that was run last year, we had a lot of discussions with international buyers. These, to be fair, are people buying from the UK and they are very, very worried about not being able to access our product, because it's known for—

I'm sorry, can I just interrupt you? I was actually talking about them exporting to us.

Yes, I was going to come onto that. In terms of exporting, there is no doubt that they actually see our market as key. So, if you take French wine, for example, it's an important market. So, they value our market. So, the answer to your question is: they value our market.

Have you had any more in-depth conversations than that—that they just value our market? Do you know whether they're actually putting any pressure on the EU themselves in relation to tariffs and free trade and things?

Well I believe so, but it's very difficult for me to know what discussions they will be having with their respective Governments, but the same we ask of the trade associations in Europe, an example being the European Whey Processors Association, which we're [correction: which Volac, the company I work for, is] part of. They're based in Brussels, and we did joint work, which was lobbying our respective Governments. So, they sent a letter to Brussels and all the European Governments to say, 'It's very important to get a trade deal so that we can access their markets and they can access our markets.' So, as I say, that's one example of what's been happening.

Okay, thank you. Can I just come back to you, Mr Howells, about the lamb issue? Are there any ways that you can think of that we could use Brexit to actually benefit Welsh lamb farmers?

Obviously, there are opportunities in all issues, and we're actively seeking those, but if I can rewind to your comment that the lamb sector is quite a small part of the economy, I would take issue with you on that.

Of the UK economy.

Well, for Wales and the rural economy, it's a cornerstone of the rural economy. It's worth about £0.75 billion per annum, as farm-gate product, and the macro effect of that economy in rural Wales is significant. It's a multiplier effect on top of that. And therefore, I would take issue that it's not a significant economic problem that we have; it is.

In terms of lamb—and I make no apologies that I can only speak for the lamb, beef and pork sectors, because that's my job—there is next to nothing of European lamb that comes into the UK market. The lamb that comes in is from Australasia. It's New Zealand and Australia in the main. In terms of beef, the Irish are very, very dependent on selling beef into the UK market. Around 50 or 60 per cent of their beef production ends up in the UK market, and therefore they have a real interest in trade going forward. For the beef from Wales, of what we produce, we would sell about 15 per cent into the European market.

But I think, to answer your question specifically, if there is a hard Brexit for the sheep sector, and for political reasons—shall we say—the market disappears overnight, 30 per cent of production can't find a home and therefore that would be placed on the home market. That, in the short term, presents some serious problems from, potentially, spring next year onwards. Therefore, there would be a significant period where there would need to be adjustment, and to find supply chains that could take the excess lamb at certain months of the year onto either the retail market in the UK, or the food service market in the UK, or to public procurement supply chains. Some of that work is ongoing at the moment, but let's not kid ourselves: if you lose 95 per cent of your export market, if you like, finding other markets overnight is just not possible in third countries, and therefore we need to be realistic about the prospects.

Can I ask a question on that? Is it realistic to say that there's a challenge—if that happened, there's a challenge to actually find the market within the UK as well, because, as you say, the UK market doesn't import much lamb as such?

No, it doesn't, and what it does import, as I said, comes from the antipodean countries. The retailers, whilst they're very important customers of the red meat industry, don't consume or sell all parts of the lamb carcass. Predominantly, in the UK, the consumer preference is for lamb legs and loins, which is the middle part of the lamb, but for the other parts of the lamb, we need to find preferences in terms of customers and consumers abroad, and therefore to change consumer eating habits in the UK overnight would be a massive challenge and we would need consumer education and also probably alternative supply chains. Obviously, the one very, very big issue is that we have a seasonal product. Lambs are born in spring predominantly, grazed on grass, sold in the autumn months, and therefore all the peak comes at once, and therefore we need to shift a lot of product in a short space of time.

It's not just that it's seasonal; I understand also that it's the planning for the longer term, because you have to start planning a couple of years in advance for your market down the line.

That's a very, very good point. All the products in the red meat sector—beef is a longer production cycle; that can be up to three years. Lamb is probably a year and a half by the time you plan your production, and therefore any change needs to be introduced way ahead of the changes. Obviously, at the moment, people are very—to make significant changes on the basis of no particular information is very, very difficult for the industry at the moment.

David.

I think it's important that we spend bit of time on lamb, because as I understand it we are also vulnerable from a revival in the French, Italian and Spanish lamb industries, which basically can't compete very effectively with us at the moment. Is there a danger that those Governments will be actually quite keen to see quite high tariffs on Welsh lamb? Are you picking any signals up like that, that they see an opportunity for their farmers to start rearing lambs again? 

Well, I think that is a possibility, given that, whilst we are part of the EU, there is seamless trade between those countries, and France indeed, by volume, is our single biggest market followed by Germany and Italy, and Spain is also an important customer for Welsh lamb. Patriotism can raise its head very, very quickly, and they will see an opportunity to probably either have WTO tariffs introduced or non-tariff barriers, which would probably ease back trading opportunities terrifically. So, if, for example, there's a hard Brexit, shall we say, and no deal at all and we'd be on most-favoured-nation WTO tariffs, that would be, at a very minimum on carcasses of lambs traded, a tariff of 50 per cent, David, and on cuts it would be up to 80 per cent. Therefore—

Well, you couldn't survive that. It would go.

There would be no exports to those countries in that scenario.

Michelle.

Thank you. The EU has got an agreement with the World Trade Organization in relation to quotas for New Zealand lamb coming into the EU. Do you have any thoughts on whether that could be—? If we leave without a deal, we'll obviously be having to renegotiate those with the WTO, so do you have any thoughts there?

Yes. Both Australia and New Zealand have what they call TRQs, tariff rate quotas, which are quotas free of any tariffs coming in at the moment. So, in the case of lamb, it's 228,000 tonnes coming into the EU, and the UK Government have been very strong, along with the European Commission, in saying that we have to split that 228,000 tonnes between us, based on customs and excise duties and import tonnages coming in. And therefore that would be a very sensible approach, and hopefully that is something that is done in the future, and that we stick to that tonnage imported and then that's the quota that they have, tariff-free, coming in in the future.

How do you think it should be split between the EU and the UK, because we're talking about splitting current quota—?

Yes. So, the split is around 90,000 tonnes coming into the UK based on landings of sheep meat in the past three years. I think that would be a fair way to move forward. I suspect that those countries—Australia and New Zealand—would have a different view on that allocation of splitting the quota.

I want to move on. Jane.

I just want to look at the role of Welsh and UK Governments in terms of engaging and supporting the industries in preparing for future trade scenarios and whether this is sufficient to minimise disruption. 

I think there are quite a few technical notes that are out now, which are obviously the worst-case scenarios in terms of no trade deals. So, there is a lot of work that is gathering pace at the moment. If you're a pessimist, you probably read a lot of those and the detail of those, and if you're an eternal optimist, you hope that there's a free trade agreement around the corner, but it's important work that has to be done and I suspect that there is collegiate work between Welsh Government and the UK Government on those issues, which is good to see.

One thing that does concern us in terms of legislative changes, possibly, ahead is the protected food names scheme. It's only in the last few days—in fact, last Thursday—that the UK Government has consulted, or started a consultation, on what would be a new scheme for UK geographical indicators. That's something that we're very, very keen to understand—how that might work and what the outcomes of that particular scheme would be.

We have a question on that.

Sorry.

We will go on to that in a minute. That's fine.

I don't know whether you want to say anything from the food and drink sector in terms of support and engagement with the Welsh and UK Governments in terms of Brexit preparedness.

I would say that the work we do with the Welsh Government has been incredibly supportive, firstly because we've done the scenario work, and I'm very pleased that the Welsh Government has done that. That was done months ago, and what we are doing collectively between the board—the food and drinks board that I chair—and also with Welsh Government colleagues is running some engaging activities with business. It's that that I'm worried about; I'm worried about businesses being prepared for Brexit. It's been very difficult because, of course, they don't know whether it's going to be soft, hard or in between. Certainly, the feeling, of course, most recently is that it's more likely to be a hard Brexit. So, what we're doing is running events. So, there are events in early November, which are run jointly between the food and drink board and the Welsh Government to engage businesses and really understand where they are and where they need support.

There are also issues in terms of possible impacts of variation in regulatory systems between the UK and the EU and, indeed, within the UK as well. There are issues there in terms of maintaining standards and possibly opportunities for reducing bureaucracy. Have you been addressing that point as well?

I think it's really important to actually have common standards within the UK under what are deemed to be national frameworks, and I know that work is ongoing in that particular case. But also, given that we have common standards between the European Union and us now, that should be fairly straightforward in the first instance as part of the withdrawal process. One of the concerns, I think, that we need to have is that we keep standards as high as possible in order to access European markets and have some equivalence with our European customers, but also in terms of seeking new markets further afield in third countries in that we have standards that we can be proud of and that can help sell product once access is agreed. 

On a negative point, I think it's crucially important that, in any trade deal going forward, both with the EU and, indeed, perhaps more significantly, with third countries that wish to export into the UK, the standards and equivalence of food coming into the UK is of the same standard as the food that we produce and eat here. I think that's really important going forward not only to secure industry, but more importantly to ensure that consumer standards are adhered to.

Thank you. We'll move on to the geographical indication scheme. David.

I'm just wondering, on the final point that Gwyn made there, would that make penetration into some markets difficult? We've identified the USA as a possible larger market for lamb, but if we don't take their chlorinated chicken, we may find it difficult. So, is there a balance to be struck there?

In terms of equivalence with the USA, I think we are there. We've done a lot of work over the past 10 years in achieving some traction in terms of agreeing (a) access and (b) equivalence. I don't think that would be an issue. I think the issue with the US market would probably be one of political will and agreement. But having said that, obviously, we probably wouldn't wish to import chlorinated chicken and hormone beef, because that's a differing standard and not equivalent to what we produce.

Therefore, I think that is really, really important and the same applies to other countries across the world as well—China and the middle east where, potentially, we have a great deal of opportunities for sheep meat in particular, and we need to demonstrate the highest possible standards of production, processing and health certification in order to gain confidence in those markets. At the end of the day, those trade deals with third countries do take a lot of time and have a heavy emphasis on political will.

Can I just make a comment on that? I understand now that the British Government have just started a consultation on GIs, and, effectively, it is getting quite late for that now, and what I'm worried about is that, if we don't retain the EU system, then we'll have to set up our new GI system and that will take months to do. So, effectively, the concern I have is what happens when we leave at the end of March. And then, when these new GIs—. If they come in, what's going to happen in the interim, because that, actually, could signal—. You know, how do we protect our products abroad? So, there's an issue of timing there.

I was going to ask directly whether we should establish our own UK GI system, or whether we should try to keep an analogous system to Europe going on, with, presumably, those that currently have the status by some form of agreement with the EU retaining it, and then we would observe a system that the EU would be confident was up to the standard of the designation, and then however that would apply in the UK, and we would continue, obviously, to respect and recognise their GIs. So, would that be a better way forward, in your view, than what the UK Government is now proposing?

I've not heard anyone say that there's a problem with the current EU GI system. So, I'm thinking what the benefit would be of doing that.

Yes, and it's not impossible to have a system that continues along that basis.

I would guess so. As I previously mentioned, firstly, I haven't seen any reasons why it would be better to break away from that, and secondly, if we do break away, it's going to take time to set up. And the third point is just to reinforce what's been said: we have to protect the quality and image of our produce, particularly in Wales, because if we let it slip, it will take months and years to get back.

And, Gwyn, what's been the practical use of the GI status for Welsh lamb? Has it led to larger exports and also the value added that we get for it?

If we look at the journey, Welsh lamb and Welsh beef have had protected geographical indication status since 2002 and 2003, and, on that 15-year journey, it has been hugely impacting in terms of our ability to find new customers and to add value to the products, mostly in Europe, but it's also helped in third countries as well.

For example, to give you some metrics, back in 2003, Welsh farm exports were around £50 million per annum. By last year, 2017, it was £150-odd million, so it's three times as much over the 15 years. It's not specifically down to the PGIs, but, obviously, it's down to the provenance story, and we have a very, very strong brand and awareness in Wales, which has helped—and it's no coincidence—in those markets where we have traded very, very heavily, such as France, Germany, Italy, the Low Countries and Spain. The protected food name schemes are recognised as marks of quality identified by consumers across the continent, and it's no coincidence that we've grown on the back of that.

So, my plea in the consultation, which is a four-week consultation, would be, 'Can we not have a similar system going forward, one that recognises our products in the European setting and gives them a legal framework to avoid imitation? And, let's reciprocate that in terms of what we see here'. I think it would be a case of if it's not broken, we don't need to fix it, really, and I think we could carry on like that. It has been a very, very helpful tool to us, and certainly, as well, in third markets when we've sought to go to Canada and the middle east, it also has recognition there and therefore, I would say, 'Let's build on that' as opposed to, 'Let's take it down'.

And how are you approaching the consultation? Are you disappointed that they're consulting on a UK scheme, or do you think that they're testing the situation out to see if the various food and drink industries would actually prefer an EU-type system to continue?

I think it's good. Consultation is a great idea. I think it's an issue of timing, which I raised earlier on, but we are where we are, so—

When you say 'timing', do you think four weeks is enough, or do you feel that it's a bit late in the day to be doing this?

I think it's a bit late in the day, but, at the end of the day, bearing in mind the scale of the challenge, I'm pleased that we're actually having that discussion now, and again, my comments earlier on that it's going to take a long time to set up if we decide to decide to go it alone.

I think that covers it.

Thank you. Hefin.

The UK Government's 'no deal' notices—are you aware of them and how helpful are they?

Sorry, what was that?

The UK Government's 'no deal' notices. Are they helpful?

From my perspective, they are helpful. It's a start, it gives reassurance to business and I think it serves to highlight to business that, actually, things need to happen. If you take the example of the labelling one, I think there is more detail that needs to come out of it. So, it just says things such as, 'You need to make sure that you have a UK label on, and, a foreign entity, you won't'. I think it's a bit more complicated than that, so I think they're a great start. There's probably more detail needed, so I think there needs to be a dialogue about what's missing in terms of practical aspects.

Gwyn Howells.

I think it's a massive dose of realism to what we've got to do between now and March, and that can be frightening, but they do set out in quite stark terms what the issues are and what we've got to get to grips with between now and 29 March, which is pretty significant, really. I think there are some real challenges ahead in terms of getting all of those planks in place before the spring.

It's quite late in the day to receive these, though, isn't it?

I guess, with hindsight, it would always have been good to have them a little bit earlier, but I think the most important thing is that we've got them and it's the question of what we do with them now that's important.

Couldn't we have done with them when the Prime Minister was already talking about 'no deal' way back when?

Well, I would like to see them moving to more practical things. A lot of businesses now are working out how they maintain their raw material supply into the UK in preparation for 1 April and, vice versa, how they continue to supply their export markets. So, I'd like to see things more aligned with those practical things that businesses have to solve.

The free movement of labour is a big thing that the Prime Minister is setting down as a restriction. What impact is it going to have—is the restriction of labour going to have—on the food industry and particular parts of the food industry?

Well, pretty significant on two fronts—for the sectors I represent probably not so much on farm, but, in the processing sector, a massively significant problem given that, in the large processing plants, red meat processing plants, in Wales you will have, basically, two major needs: one in terms of skilled staff for actually processing the meat, and non-skilled staff. Largely, those jobs now are filled by eastern European migrant workers, and, in the number, you would talk about over 50 per cent of the workforce in plants would be migrant workers.

These are short-term migrants, though. They come over to—

No. In fact, they'd be longer term. So, they're not seasonal workers; they've been here for a number of years, and their number has increased over the years because there is a demand issue, because indigenous workers do not wish to do that work, and therefore skilled workers and non-skilled workers from places like Romania and Poland have filled that void particularly well.