National Assembly for Wales

Can I welcome Members to this virtual meeting of the Legislation, Justice and Constitution Committee? In accordance with Standing Order 34.19, I determine that the public are excluded from the committee's meeting in order to protect public health. In accordance with Standing Order 34.21, notice of this decision was included in the agenda for this meeting, published last Thursday. This meeting is being broadcast live on Senedd.tv and the Record of Proceedings will be published as usual. Aside from the procedural adaptation relating to conducting proceedings remotely, all other Standing Order requirements for committees remain in place. We have a full committee; there are no necessary apologies. Are there any declarations of interest? I don't see any declarations of interest, so I'll just move on very quickly to the housekeeping arrangements. Can all attendees ensure mobile devices are switched to 'Senedd'? The interpretation system is in operation and the sound operator is controlling the microphones. Just one announcement before I move on to item 2, and that is just to say that our next meeting, next Monday, will include a session with the Counsel General on the United Kingdom Internal Market Bill, and, of course, we have a further session on constitutional issues on 12 October with both the First Minister and the Counsel General.

We now move on to item 2, which is the Greenhouse Gas Emissions Trading Scheme Order 2020: evidence session with the Minister for Environment, Energy and Rural Affairs, Lesley Griffiths, who has with her Christine Wheeler, deputy director, decarbonisation and energy in the Welsh Government; Rhiannon Phillips, policy officer, carbon markets, Welsh Government; and Catriona Hawthorne is a lawyer with the Welsh Government.

Before we go straight into the evidence session, can I just say that this is an Order, a very technical Order, which establishes a new emissions trading scheme covering greenhouse gas emissions from power and heat generation, energy-intensive industries and aviation. The scheme is to be known as the UK emissions trading scheme, or UK ETS, and it is the successor in the UK to the EU emissions trading scheme. The establishment of a successor scheme to the EU ETS is one of the jointly agreed common frameworks. The Order makes provision about the scope of participants, the environmental ambition, as indicated by the cap and trajectory of allowances, requirements for monitoring, reporting and verification, charging, compliance and enforcement, penalties and appeals and scheme reviews. The Order is made in exercise of powers conferred by the Climate Change Act 2008 and contains 77 articles, divided into nine Parts and 11 Schedules.

So, with that introduction on some of the technical aspects, Minister, if you don't mind, can I just first of all start off by asking a few opening questions? Why is it that a UK-wide approach has been adopted as opposed to a specific Welsh approach?

Thank you very much, Chair. We need to ensure that there is a continued financial incentive to reduce emissions from sectors such as industry and power once we leave the European Union. So, there were three broad options: we could remain in the EU ETS; we establish a UK-wide scheme; or, of course, we have a scheme of our own in Wales. Remaining in the EU ETS was a feasible option. I think it was certainly attractive to scheme participants when we consulted people like that, because of continuity and competitiveness, for instance, and it also obviously provided and established a large and active carbon market. However, the UK Government wouldn't agree to that on sovereignty grounds, and Wales obviously couldn't remain in the EU ETS on its own because we're part of the UK. Establishing a UK-wide trading scheme that could then be linked to the EU system offered a good-size market, it maintained a level playing field between Welsh operators and those elsewhere in the UK, and it provided a role for Welsh Government and, of course, the Senedd in governing and influencing the scheme. In particular, with the preference for linking, this option was supported by respondents to our consultation.

When we looked at having a Wales-only scheme—on first impression, it does look attractive from the perspective of, obviously, having full control of our own climate policy. But there is a very significant risk in it having such a small size of the market. It means it probably wouldn't operate effectively.

So, given all those considerations and the fact all four Governments of the UK are bound by ambitious statutory emissions-reduction targets, a UK-wide ETS was the preferred option.

Okay, thank you for that. So, how does the UK-wide emissions trading scheme differ from the EU-wide emissions trading scheme? What are the main differences, if any?

Well, there are some differences. It mainly and deliberately mirrors the EU scheme as it will operate in phase 4 from 2021, and there were a variety of reasons for doing that, which I've alluded to in my opening remarks. I suppose the main differences are, from day one, the cap on total emissions will be 5 per cent less than they would have been if we'd have remained in the EU ETS. That reflects our ambitious statutory targets for emissions reductions and signals our intent to align the cap with our net zero commitments, once we receive advice from the UK Committee on Climate Change, which we haven't had yet. That will probably be in December; it's a bit later than we anticipated.

It will be a new carbon market, and we've introduced some mechanisms to manage extremes of high and low prices in the early years of the scheme. That was set out in the Government response document and it will be introduced by secondary legislation under the Finance Act 2020 and an option reserve price of £15 will stop extremely low prices, and a more reactive cost-containment mechanism will be triggered in the event of extremely high prices. There'll also be some improvements to the permitting, the monitoring, reporting and verification system as well.

Thank you for that, Minister. Now, the Order sets out how various applications have to be made and how various notices have to be given. So, when deciding applications giving notice, in some cases, regulators have to give people information about the right to appeal, and then in other cases, the regulators do not have to give people information about the right to appeal. So, for example, under article 30 of the Order, it does not have to include information about the right to appeal the notice, but a notice under article 47 of the Order does have to include information about the right to appeal the notice. Should people not always be expressly told when they have a right to appeal? What is the reason for the variation in the requirement to give the notice of appeal within the different sections of the Order?

Regulators are required to expressly inform a person of their right to appeal in articles 45 and 47, but these are the most draconian measures. These are enforcement notices or civil penalty notices, so it is, therefore, important to ensure, as you say, participants are informed of their rights by the regulator, and that will include a requirement to do so within the Order. That doesn't mean a person doesn't have a right to appeal against other decisions, and that's set out in a different article.

In practice, scheme participants regularly deal with Natural Resources Wales officers on regulatory issues, so they would know, or NRW, as the regulator, could appropriately guide them as to their appeals rights in most cases.

Do you think this is an area that might need to be slightly reviewed and so on so that at least there is consistency, or is there actually a logic as to why it's not included in some sections?

I think there is a logic, but, obviously, we've made it very clear there will be review dates in place, so we will be able to do that as the scheme beds in, if we do need to review that. So, the mechanism is there.

Thank you, Minister. Article 17 provides for the emissions trading standards authority to review and publish a report about the operation of the UK ETS before 31 December 2023 and 31 December 2028. I just wonder if you could explain why these particular dates have been chosen.

So, I just mentioned we need to have time for the new system to bed in before we review it, so a review needs to look back at what's gone on with the scheme, but also look at if there are going to be any potential changes going forward. So, I think there needs to be a reasonable length of time before we can draw robust conclusions from any evaluation. If the review does result in proposals for scheme changes, I think the most appropriate time would be to introduce them at the start of the second allocation period. So, developing any proposals by December 2023 provides sufficient foresight of changes to the market, I think, to allow time to consult. Then we could finalise the detailed proposals, draft legislation, undergo scrutiny and then prepare and implement changes that would then be 1 January 2026. And the same principle, really, for the second one as well. But I think, importantly, that the review dates are exactly in line with the EU ETS phase 4 reviews, and the Paris agreement global stock take efforts as well. So, I think it's beneficial to align it with those dates as well.

Thank you, Minister. That answer's helpful. Article 75 of the Order gives the UK ETS authority and regulators the power to give an information notice requiring a person to provide specific information. I'm just wondering, what are the consequences for failing to comply with an information notice, and how will those information notices be enforced?

So, failure to comply, or comply on time, will make a person liable to a civil penalty, and the level of the civil penalty is £5,000. Then there's a daily penalty of £500 a day, and that goes up to a maximum of £45,000. In terms of enforcement, NRW have procedures in place to manage enforcement and prosecution, and that includes the issuing of civil penalties as well. NRW will publish their policy on enforcement and prosecution on their website.

Thank you for that, Minister. We now move on to the issue of installations and aviation, and to Carwyn Jones. You need to de-mute.

Thank you. Minister, which installations and aircraft operators in Wales will be captured by the Order?

The criteria for participating in a UK ETS will initially match that of the EU system. There were 72 stationary installations participating in the EU system last year, out of around 1,000 UK ones—sorry, 72 in Wales out of 1,000 across the UK. So, if we discount installations likely to opt out of the main scheme, we think there are probably 62 Welsh installations out of the estimated 655 UK-wide; so, about 9 per cent of the total number will be located in Wales out of the full scheme. The installations that can opt out of the main scheme are on two grounds—either they're small emitters or they emit less than 25,000 tonnes of carbon dioxide equivalent per year, and they have a net-rated thermal input below 35MW, or they're a hospital.

Is there a list available that can be provided to the committee?

I would imagine there must be a list because, as I say, it mirrors the EU. So, yes, we'll be able to provide a list to committee. If that's okay, Chair, we'll send a note with that. There are no aircraft operators on that as well. There are no aircraft operators required to participate in the scheme who have registered offices or a place of residence in Wales.

Okay. How will the Welsh Government engage with the operators of these installations to ensure they can comply with the new scheme?

All the installations and aviation operators who will be in the UK scheme, bar any new entrants, are already obligated to manage their emissions under the EU system, so we'll just be able to engage with them through NRW during the consultation phase. We were able to engage with them when we had the consultation phase back in the summer of 2019. We engaged with them through NRW, and then we'll continue to do that as we prepare for implementation.

We will be developing guidance for operators, and NRW already has a helpline for the participants in the EU ETS, and that will just transition to provide advice on the UK ETS, and NRW will continue to work with operators to enable them to transfer to the new scheme. We want it to be as smooth as possible, so we're already working with NRW and other regulators to ensure that that process is as smooth and streamlined as possible.

So, I gather from what you're saying, then, that NRW will bear the responsibility of continuing with engagement.

Yes, they will. 

Okay. Could I take you to article 4(3)(b) of the Order? That sets out the meaning of an installation that has ceased operation. It says that an installation has ceased operation if 

'it is technically impossible to resume operation.'

Is there a definition of that?

No. We didn't think it would be appropriate to define that term within the Order. That's for the regulator to assess, in conjunction with the operator concerned. So, there could be a range of reasons why an installation may or may not be capable of resuming operations, so we didn't want it to be overly prescriptive to define that within the Order.

So the definition would be for NRW?

Yes, that would be—

Where they're the regulator, yes?

Yes, as the regulator it would be for them to define it. 

Right. I'm just—. But will there be a definition somewhere? The reason why I ask the question is that, if there are no guidelines at least, there may be a legal challenge to any definition that the regulator might apply. Will any thought be given to at least providing some kind of guidance to the regulators, in terms of what principles they should apply as they seek to create the definition of an installation that is technically impossible to resume operation?

I'm going to hand over to Rhiannon who is indeed writing the guidance, to answer that question, if that's okay, Carwyn.

Good morning. This particular provision is about surrendering permits. So you can surrender permits on two grounds, really: either you're an installation that is completely closing down and therefore all of your operations cease, including the activities under the permit; alternatively, you might be in a situation where you continue operating, but the particular activity that requires a permit you're ceasing to do, but it would be technically possible for you to recommence that activity. So it's really by discussion between the operator and the regulator to determine that, although you're ceasing, it's not technically impossible for you to recommence, it's an option that you've taken and you're surrendering on that basis. And so it's quite difficult to define, but we could provide, for instance, examples of where that might be the case, in guidance.

Okay, that's helpful. Okay, thank you for that. 

Minister, if I could move on, then. I notice that UHW, the University Hospital of Wales, appears to be the only installation in Wales that's listed as a hospital on the EU ETS list. Do you know whether other installations in Wales might fall within the meaning of

'an installation that primarily provides services to a hospital', 

or do you anticipate that UHW will be the only one?

Yes, there are no others. The University Hospital of Wales site is the only hospital in Wales currently captured within the scope of the ETS, and that's because its combustion activity and capacity brings it within the scope. So, it's obviously permitted in the hospital opt-out.

Okay. The final question from me at this stage, then, is quite a technical one. The maximum amount of emissions installations are permitted doesn't apply to hospital installations. Is there any limit placed on hospital qualifying installations other than their own emissions target, in accordance with paragraph 19 of Schedule 7? Now, if you want to hand that over to somebody, I entirely understand. [Laughter.]

Well, I'll have a go first. There's no upper limit placed on eligibility for hospital opt-outs, unlike those in the small emitters category, whose annual emissions must remain below the 25,000 tonnes carbon dioxide equivalent I referred to earlier. So hospitals are encouraged to reduce their emissions, they're required to report, however, the absence of an upper limit ensures that they are able to scale up their healthcare services as required, without having to comply with the requirements of the main scheme. And, as you're aware, there are lots of other policies in place across Welsh Government to decarbonise hospitals in Wales. So, if that answers your question, I won't pass over to Rhiannon, but if you'd like any further—

That's fine. Thank you.

Okay.

We'll now move on to Dai Lloyd.

Emissions targets set obligations on operators who've opted out of the main scheme, so the purpose of the emissions reductions factors is to reduce emissions in line with the overall UK emissions trading system cap, and they're calculated to maintain this trajectory. Firstly, we have a baseline of the operators' emissions that is set, and then for installations that began operating before 2016, a three-year average of 2016, 2017 and 2018 is used. For operations that started later, the baselines are determined using reportable data or estimates as defined in the Order. So, for each of the scheme years, a reduction factor is then applied to the baseline. 

I think it's 3 November, but I might be wrong. The first of November is just a cut-off point for small emitters to have started operating in order to have small emitters status at the start of the scheme. So, for the first allocation period of the UK ETS, if an installation applied to regulators to opt out or for an exemption under the EU ETS in preparation for phase 4, then that installation will be in the UK equivalent. So, that will then provide that smooth transition and continuity I referred to earlier for UK operators. Some operators will have already applied for the EU ETS article 27 small emitters list from January 2021, without having started operating. So, the November date just provides a cut-off point, really, by which they must have started operating to be on the list.

There's no technical reason for 42 days. The four Governments and our regulators view six weeks as a reasonable amount of time, and that's also consistent with current arrangements under the current EU ETS. So, I don't think there's any really good reason to deviate from that. 

NRW must first bring the proposed charges to the attention of those who will be affected by them, to provide opportunity for representation or objections to the proposals. The charging scheme then has to be approved by Welsh Ministers prior to publication. That's got to take into account any representations, any objections, and then if, for instance, Welsh Ministers want to introduce modifications also, they have to be considered. So, any material changes to the charging scheme must follow that process.

I think we'll now move on to the area of the Order dealing with monitoring compliance and enforcement, so over to David Melding.

Thank you, Chair, and good morning, Minister.

Morning, David. 

Hello. Can I start with article 38, which allows regulators—let's just take Natural Resources Wales as a model—to authorise a person to exercise their compliance monitoring powers on their behalf? What sort of person would that be? Would it be a local authority person, or just who they would delegate to? And how extensively do you think that power might be used?

I wouldn't expect those powers to be widely used under normal conditions, given that there are dedicated officials within NRW whose role it is to regulate those installations, and they've already built up a rapport with the operators because of the current system. But what the article does do is allow people other than NRW to exercise those powers. So, there's no specific criteria at the moment applied to an authorised person, but that is something that will obviously be looked at in the guidance that is currently being drafted.

For instance, it could be an environmental consultant who is self-employed but would qualify as a reasonable person to do that in terms of their expertise.

Yes, it could be, that could be somebody who would be one of the other ones. But, as I said, I wouldn't expect them to be—. I would expect it predominantly to be NRW. 

No, I quite understand. It's just how wide the power is in terms of those that might be commissioned to do such work, and I think that's quite—[Inaudible.] 

If it would be helpful, Chair, I could ask NRW to provide a fuller response to that point, to how they're going to use authorised persons.

That would be helpful. It is an important point that David Melding raises. 

Well, thank you for that, Minister. If we look at article 39, which is regulators having access to premises to monitor compliance, and it says that

'Reasonable prior notice must be given' 

before visiting. I just wonder what is 'reasonable'. And I suppose the usual 24 hours is a very vigorous measure—three days less so, a week, or you've already talked about six weeks in another part of the Order. So, what will be reasonable for these compliance visits?

Well, we haven't defined, as you say, a specific time period, but we've simply required regulators to give prior notice. Arguably requiring a defined period of notice might have frustrated the purposes of an inspection and, in some instances, inspections may be required at short notice, as you say. I think it's good practice for reasonable prior notice to be given where powers of entry are being exercised and, realistically, I think that's at the discretion of the regulator themselves. But—

So, would you expect—? I didn't want to cut you off, Minister, if you want to add anything. 

All I was going to say was that the notice does give operators the opportunity to grant or refuse entry, after which, obviously, if entry is refused regulators can apply for a warrant to enter premises. 

So, just so that we get a sense of the magnitude, is it likely to be nearer one day or six weeks in terms of the notice period? Where do you think it's likely to fall to be reasonable?  

Personally, I think it's like any sort of inspection, isn't it? School inspections, et cetera, et cetera. I think if you want to have a meaningful inspection the least time the better. I suppose I'm quite hard in that way, but, as I said, I think it's at the discretion of the regulators and again we've got the EU ETS. NRW are very well placed to—. I think, when I ask for the previous note that I referred to, I could ask them perhaps for an average of time that they've had to use previously.

I think that would be helpful, because obviously this is a successor scheme to something that's already operating in essence.

Article 49 then requires the regulator to publish names of the people who've received an excess emissions penalty, and that's published as soon as is reasonably possible after either an appeal is not lodged or an appeal is withdrawn or determined. So, again, when do you think the names are likely to be published?

So, we're looking at doing this with guidance, which, as I mentioned, Rhiannon is currently drafting. So, the Order doesn't define where the regulator must publish these names. We're looking at maybe having a single consolidated list for the entire UK-wide scheme and then each regulator from the four countries would be able to update that list. We may ask the regulator to hold that list. That's something that we're looking at at the current time. But the most important thing is that we ensure transparency and that everyone knows where that list is going to be held. So, as I say, we're looking at that in guidance now.

So, it's possible, if your appeal was held or you decided to withdraw your appeal just after the date of the last update of the list, that it could be several months before your infraction is made transparent. Is that the case?

No, I wouldn't necessarily agree with that. I'll ask Rhiannon to come in on that point.

So, it'll partly depend on how many of these come through. We don’t expect there to be that many; compliance rates are pretty good. So, it's perfectly possible that an ad hoc update to the list would be possible within a week or two. I don't envisage having to wait months and months for that to become transparent.

Thank you. That's a very helpful answer. And then, finally for now, do you think the range of civil penalties are sufficiently to ensure a high level of compliance? As we've just heard, there is a high level of compliance at the moment, and will these penalties, in your view, ensure such compliance in the future?

So, I've seen no evidence to suggest the current range of penalties is insufficient. Again, it's the same range as is being used for compliance in the current EU ETS, and it appears to be effective.

Thank you, Minister.

Thank you. A couple of extra questions from me, really, to do with the framework outline agreement and the concordat. You'll be aware that, in other Orders and legislation, we've raised, I suppose, a criticism in terms of having access to those and seeing those before the Orders are actually made. So, I'm just wondering whether the framework outline agreement and the concordat will be made available to us for scrutiny prior to the Senedd vote on the Order on 4 November or 3 November—whichever date is accurate.

I think it's the third. We certainly hope to. Officials are working with the UK Government and, obviously, the other devolved administrations to finalise the framework outline agreement and prepare the associated concordat. So, priority is absolutely being given to finalising the legislation to ensure the scheme can come into place from 1 January 2021. Timescales are really tight, but our aim is to provide that to the Senedd for the opportunity to have scrutiny ahead of the debate on the Order. If timescales do slip—and we certainly hope that's not the case—scrutiny of the frameworks can still continue beyond the debate.

I have to say that—because I've got a lot of common frameworks in my portfolio, as you can imagine, as we go towards leaving the EU—this Order does contain much of the detail on governance and regulatory duties for Welsh Ministers and NRW. That's not the case in a lot of frameworks, but it is in this. So, the concordat is a large part, really, of operationalising the governance requirements, and I'm sure Members are aware that both the Scottish Parliament and the House of Commons have both approved the Order ahead of receiving the FOA and the concordat, but I certainly hope to bring those forward before the vote on the Order. 

I know, Minister, that we've always felt it important that the concordats are an important part of understanding the Order and how it will operate. We have to report by 29 September, so there's not a great deal of time, and I'm just wondering, if it is at all possible, it would be very desirable to at least have sight of it before we complete our report on the twenty-ninth.

If I can move on, Minister, then, just with regard to the debate in the Senedd on, I'll say, 3 November—I take your knowledge on this is superior—if there are any proposed changes and so on to the Order, or if there are specific comments, will there still be some scope for amendment to the Order? Or is it a fait accompli in that sense?

I'm afraid the Order can't be amended at this stage. The option available to all four legislatures is to approve or not. I am confident the Order establishes in law a robust scheme for emissions reduction, and, together with the proposed review points that I've spoken about, it does provide a mechanism to help us achieve our climate targets and our ambitions, so that's why I'm asking you to support it on that basis.

However, I'm sure you will have recommendations, and I'm very interested in recommendations from this committee and obviously the CCERA committee also on how we do strengthen the Order by future amendment, if you agree to its introduction. So, whilst your recommendations can't be introduced into this Order for 1 January 2021, I will take any suggestions that you have into any discussions I have with the UK Government, and all four nations would have to agree to any changes to the legislation.

We understand that point, I think, and that's very helpfully made, Minister, and I suppose just to re-emphasise the importance I think this committee, I'm sure, feels about the framework agreement and concordat at some stage ideally being available to us, ideally before 29 September, but at least before 3 November. For further questions, then, over to Carwyn Jones.

Thank you, Chair. I did have two questions. The second has been answered in answer to your last question there. So, one question from me, Minister: what are the implications of the ETS framework as a whole for executive and legislative competence in Wales—so, the competence of Welsh Ministers and the competence of the Senedd?

So, there's no change to legislative competence as such, but we're increasing the use of existing legislative competence. So, unlike the regulations on the EU ETS, which, as you're obviously aware, were made by the Secretary of State, these Orders are made collectively by Welsh Ministers and other devolved Ministers and the Secretary of State. So, we're all accountable, obviously, to our respective legislatures, unlike with the regulations for the EU system. So, I suppose, in reality, we had very little opportunity to fundamentally shape the EU ETS scheme design; we just provided comment to the UK Government they could either accept it or ignore it when they then did the negotiations with other member states. So, I would argue we've now got greater ability to exercise our legislative and executive competence.

And just to clarify, then, parliamentary rebellions are very popular in London at the moment. I hope that's something that doesn't spread to Wales, but I think you've made it very clear that the choice the Senedd would have would be either to accept or reject. There's no scope for any amendment, is there?

No. So, you're absolutely right: it's either approve or don't approve.

We'll move over now to Dai Lloyd for some further questions.

So, we had a formal consultation in the summer of 2019. We had two events in Wales for our stakeholders. Then, when we had the joint Government response in June, I think, of this year, we had a further round of engagements and we had, again, a Wales-specific meeting, which was obviously virtual this year.

So, stakeholders were generally supportive of the proposals we put forward in the consultation. In particular, I think they were very keen not to deviate from the EU ETS scheme. They strongly favour linking to the EU system. The Government response document set out all our proposals, the views of the stakeholders and, obviously, our final positions.

One of the main concerns, I think it's fair to say, of participants was the risk of very high prices. Having said that, there were some respondents who were concerned the ambition was too low. So, that's why we set the initial cap 5 per cent lower than would have been the case had we stayed in the EU ETS. I think it shows our ambitions in that area. We also introduced the auction reserve price of £15 and a cost containment mechanism so that we'll be able to manage price fluctuations. It gives us a bit of headroom in the early years, I think. That's the reason we did that.

There was also a bit of concern that the three review points would not allow the market to stabilise. That's why we've now got two review points. I think that was probably the biggest change that came out of the consultation. And we're also introducing streamlined reporting requirements to reduce the administrative burden whilst, of course, we're retaining the environmental integrity of the scheme.

I'm sure you won't be surprised to hear that I am deeply concerned, and I'm very frustrated that the UK Government are refusing to state a clear preference for a linked ETS, and to rule out introducing a carbon emissions tax except as a last resort. Instead, it's chosen to consult on the tax. At the current time, all four legislatures have laid that UK ETS legislation. I think it's really unhelpful that they're consulting at the current time. I've made my views very clear to BEIS when I've had discussions at a ministerial level, and when there's been a Treasury Minister or even a Treasury official present, I've made my views even more clear, if you get my drift.

If we introduced a reserved carbon tax to replace a devolved trading scheme, it would be completely unacceptable for a variety of reasons, which I'm sure I don't have to spell out to you. Welsh Ministers would absolutely have no role in ensuring that any tax designed worked to reduce emissions in line with our climate ambitions, and, of course, it wouldn't even be accountable to the Senedd. It would completely undermine the UK ETS legislation that's already been laid by the four of us, and, of course, it goes against the principles for common frameworks that was agreed by the JMC(EN) back in 2017.

I can't prevent the UK Government legislating for reserved tax. I've mentioned that I've made my views very, very clear at a variety of meetings that I've been attending over the past three years—four years now. We've sought discussions to press for a tax to be ruled out. Certainly, the BEIS Ministers are under no illusion as to our views on that, and when Treasury officials have been there, I know officials have also made it clear to Cabinet Office, to No. 10, when they've been able to do that also.

The fact that the UK Government have laid this legislation and it's been approved by the House of Commons I think shows that the scheme that we're debating today is absolutely desirable, and it's deliverable. We've got four UK Governments of different colours, and we've worked really constructively together on this scheme, certainly at an official level and, I would say, at a ministerial level with BEIS. So, I think it's an opportunity to really highlight what can be achieved with co-operation and goodwill. I've done this in good faith, and I will keep repeating the desires that I've just mentioned around the UK ETS.

Thank you, Minister. David Melding.

I wonder if you could just outline the dispute resolution mechanism for the framework.

So, we're currently finalising the dispute resolution proceedings, and they'll be set out in the concordat. So, the governance structure consists of several levels: you've got official level working groups, you've got the senior officials level board, and then you've got the ministerial quadrilaterals, and, of course, the final step, should ministers fail to agree, would be escalation to the JMC(EN). However, we are also required to seek advice from UK CCC ahead of legislation for trading schemes, so all four countries will receive the same independent evidence to support our decision. So, based on this, and the fact that statutory emissions reduction targets are what we need to work to, I'd anticipate us all being closely aligned in our thinking and unlikely to resort to dispute resolution, but those are the levels that we have available. 

So, we have this multilevel approach, which, you know, I'm sure is a necessity, given the complexities of this, but will there be a great distinction between disputes in areas that are devolved and those that are reserved? Because obviously the dispute mechanism for the—as I understand, anyway—reserved element will actually be with the JMC.

So, I mentioned in my earlier answer that we're currently finalising that. We're making good progress through various iterations of the FOA. That now recognises disputes over elements that the UK Government consider to be reserved and which we consider as potentially devolved. So, again, we are working very closely. You know, you've got to do it in good faith and we've been open to discussion around these issues. So, whilst we're still finalising it, I think that's probably as far as I can comment today, Chair. 

So, if I were to say that anything of real leverage and impact upon the scheme is probably going to be dealt with by the JMC, is that a fair assumption I'm making?

Well, as I say, that is the top one if we can't agree as Ministers. 

Okay. 

We've touched a bit on this in terms of the current Order, but, for future Orders, how will the revisions that, I presume, from time to time will be necessary—how will they be agreed?

Sorry, you just broke off a bit then, David. Would you mind repeating the question?

Yes. I was just saying, we've talked—. The current Order, as it's now proposed, has to be accepted or rejected, but there will be revisions to the scheme in the future and revisions to the Order, and what process will there be for that?

So, a negative Order in Council has been finalised. That's undergoing the last sort of few checks on that and that will introduce additional technical provisions regarding free allocation and the allowances registry. Future revisions will mainly be undertaken as a result of the planned review periods—the points that I mentioned before—that will be implemented in 2026 and 2031. We'll also need to legislate for a revised common agricultural policy, and that's subject to considering advice from the UK Committee on Climate Change, when we receive that.

So, if we distinguish between any small adjustments that are needed through the Order in Council process, presumably, the actual periodic review of the Order, how will those, which presumably will contain some major revisions—how is that going to be conducted?

So, if we have additional revisions, they would be managed under a sort of rolling issues log and prioritised. So, again, if this committee has any suggestions, I'd be happy to consider them as we bring that forward. Any substantive policy decision, we would have to have public consultation and then an affirmative Order brought before the Senedd for agreement.

And that process, presumably, will interact with some post-implementation review of the framework in general. Is that correct?

Yes, that's correct.

And then just to restate, really, how, in the future, the Senedd will be involved in these processes—both about the Order and framework. 

So, I mentioned how we would—. The negative Order in Council has been finalised. If we needed—as I say, if there was a substantive policy decision, we would have to go back out to consultation and then we'd have to have the affirmative Order, so that would go before the Senedd. There are limitations on amendments to the Order, so I'd be happy to discuss proposals with the Senedd at the consultation stage. I think that would be helpful, because there is so little headroom around amendments to Orders of this nature.

And, presumably, future review and revision will be, when the Senedd is involved, a more complete process than this one has been, because—and I'm not saying this is your fault, because this is a framework of the four Governments— 

It's not. [Laughter.]

—but, you know, we don't know the dispute mechanism and we're having these deliberations. Presumably, we would be avoiding that sort of inelegance—let me put it no stronger than that.

I think you're absolutely right to make that point, and, you know, I spoke about the—. We've had discussions about the review period, and that's why—. Perhaps you think they are a bit far in the future, but I think it is important that, you know, it is far more robust than the current procedures that we're going through at the moment. That's why it is important that, if we can, we get the concordat to you and the FOA so that you can scrutinise those, because so much of it is in there, and I absolutely understand that.

Thank you, Minister.

Well, Minister, that brings us to the end of the questions, ahead of time. Can I thank you and your officials for attending, and also for the very clear answers to what is a complex and technical Order? There will be, obviously, a transcript that will go to you for checking for factual accuracy. Thank you very much for your attendance.

Thank you very much.

I think, if we just now arrange for the Minister and her officials to leave the meeting, we'll shortly move on to item 3 of the agenda.

Okay, so we move on to item 3, instruments that raise issues to be reported to the Senedd under Standing Order 21.2 or 21.3. We have the Health Protection (Coronavirus, International Travel) (Wales) (Amendment) (No. 6) Regulations 2020. Again, we have before us a report, the regulations and the explanatory memorandum, and indeed a letter from the Trefnydd of 21 August 2020, and again a written statement of 20 August 2020. These regulations amend the Health Protection (Coronavirus, International Travel) (Wales) Regulations, which impose requirements on persons entering Wales after having been abroad. If I can just refer over now to the Senedd lawyers in respect of technical and merits points. Gareth.

Diolch. There's one technical point and two merits points, starting on pack page 124. The technical point notes an inconsistency between the English text and the Welsh text. The Welsh Government response received on Friday agrees with the point and, although there is no real ambiguity, the Welsh Government will correct the inconsistency at the first available opportunity.

The merits point notes a breach of the 21-day rule and the reasons given by the Welsh Government for the breach, as set out in the Welsh Government's letter to the Llywydd on pack page 139.

And the second merits point notes that the Welsh Government website contained a Welsh language version of the international regulations as amended, but the version on the Welsh Government website was not up to date and had not been updated since 15 June. The Welsh Government response says that the Welsh language consolidated version has now been removed from the Welsh Government website, and this means that if you want an up-to-date consolidated version of these regulations you have to go to legislation.gov.uk, but legislation.gov.uk provides consolidated versions only in English.

And it's also worth saying that these are the No. 6 amendments. The No. 7 amendments are the next item on today's agenda, but things are moving so quickly there are now also the No. 8, No. 9 and No. 10 amendments. And it's difficult for anyone to keep up with all the changes. For example, these No. 6 amendments add Portugal to the list of exempt countries, but the No. 8 amendments remove Portugal from that list, but with the exception of the Azores and Madeira—all very difficult to keep up with, but at least you can find a consolidated version of the law in English; you cannot in Welsh.

Okay. Comments, then. Dai Lloyd.

Just a general point, really. We've been doing this for some time now, considering coronavirus regulations, and we always—we consider them after they've come into force, and we also then debate them in Plenary after they've come into force. Well, it's very difficult really, actually, to be having a proper cross-examination of why certain things were done at what time and all the rest of it when we're not doing it proactively, we're doing it after the event. That's just a general point, and I realise that it's an emergency and it's a pandemic and things are changing quickly, but can't we somehow be looking at regulations before they actually kick in? I know that that might sound radical, but it's just a thought I have.

Okay. Carwyn.

I've no particular comment, Chair. I take Dai's point, of course, but it is hugely difficult to bring in regulations after a debate in the Senedd in the current circumstances. In normal circumstances, I think it would be a very fair point to make, but how we deal with that—. I suppose it's a matter for the Trefnydd rather than for us as a committee, or, indeed, for the Government. But no other comments.

Okay. David Melding, any comments? De-mute, David.

Yes, thanks, Chair. These comments stand for all the Orders, regulations and amendments that we're considering this afternoon. I completely accept the justification for breaking the 21-day rule during a public health emergency, and also we're in the position that action is taken for England by the UK Government and, obviously, Scotland and Northern Ireland take action as well. But the fact is that, you know, we've had 17 amendments at least and the total is increasing daily, as Gareth has just indicated, and I think this does cause great difficulty for the public and for enforcement, especially over those matters that are central to life in terms of if you're going on holiday, but then, you know, your households—where they can meet and how many can meet and how many extended households you can be linked to.

So, I don't know if there's any way, at some point, to have a debate in Plenary about the general principles that have been applied. Because having Portugal on and then off and then bits of it back on again I think is something that has to be questioned and surely the Government should be making these Orders, even if they are in response to a public health emergency, with some sense of a reasonable duration so that the public can adjust to them. And then, if you've been too cautious, perhaps you just leave it in place until a reasonable period has elapsed, because of the confusion caused by chopping and changing all the time. Obviously, if you need to tighten and there is a real emergency, then I think then the justification for pretty immediate action has to be accepted.

So, those are the general remarks I want to make about all that's before us today; I don't intend to remark on any particulars as we go through them one by one, but I did want to state that on the record.

We do, in fact—. Because of the concern we have over the 21-day breach and the risk of normalisation, I think we fully understand the circumstances in which those breaches occur. We do, of course, respond, so we could add those comments in terms of the response in respect of these particular breaches.

As much as anything, it's important that they are on the record, that we are identifying them, and, of course, there are those anomalies that emerge. We recognise the importance of people having clarity as to what the law is and I think the points that have been identified are valid points to make.

Can I just check with the clerk—these regulations will be coming up before Senedd, reported on, when? We can't hear you, Gareth; you're muted.

The international travel regs, of course, are negative resolution. So, as a consequence, there is no debate in Plenary on these; the only way that a debate could be held is if a Member were to table a motion to annul those particular regulations.

I think the point that Dai Lloyd made a while back—at some stage, this will need to come up within a debate that is a review of this process and so on—perhaps that's something we can give some consideration to and can look at.

If there are no other comments—. Oh, sorry, David Melding.

I forgot I did have one more and it really looks at—

Please.

—what Gareth, our legal adviser, said. The public dissemination of this, particularly the Welsh Government's website—and I'm concerned if the Welsh version is not as effective as the English one—is just crucial, because that's where people will go, or at least that's where they should go, and there's a whole issue about public awareness and that that site is there. I have to say, I think it is quite a good site, but there's a question, really, that the information is as clear as possible and it really does take people through the most practical examples of how they've got to be aware of what the law is. Because I don't know if other Members have found this, but I've had Members of the public ring to ask very straightforward questions about what the law is—and it's not an unreasonable thing for them to turn to Members of the Senedd to ask for that—but it is interesting that this is quite a challenging area for the public. I know there have been some stories in the press about, you know, walking down the high street and interviewing people in a vox pop, and quite a lot of people are confused. So, public information is ever so important at the moment.

And I think the point you make about the updating is absolutely crucial. I think what I'm suggesting, in the letter that we send, just with regard to noting, effectively, the 21-day breach—it may be that a point there can be made as well. Unless there are any further comments on this—. Of course, we have a number of these regulations to go through.

So, we move on to item 3.2, which are the Health Protection (Coronavirus, International Travel) (Wales) (Amendment) (No. 7) Regulations 2020. We have, again, all the relevant papers and statements in that respect. Again, these regulations make further amendments. Any further comments from you, Gareth?

There are two merits points, starting on pack page 142: again, one noting the breach of the 21-day rule, and the second merits point ties in with the earlier discussion, and it's about the transitional provisions in the regulations. Transitional provisions are often overlooked and they can be difficult to understand because they deal with that grey area where you transit from one regime to another. The merits point suggests that the Welsh Government include a bit more detail about these transitional provisions in its guidance. For example, what if the status of your departing country changes mid-air while you're on a flight to Wales? Well, the answer is that if your departing country was not exempt when your flight set off, then it'll not be exempt when you land in Wales, even if the status of the departing country changed after your flight set off. Now, self-isolation is clearly an important part of the law that deals with the pandemic. So, the draft report suggests that the guidance should include a bit more detail about how these transitional provisions work, and the Welsh Government has not yet responded to that merits point.

Okay. We note that important point that's been made. Any other comments?

If not, we move on to item 3.3, the Education (Student Support) (Postgraduate Master's Degrees) (Wales) (Amendment) (Coronavirus) Regulations 2020, which amend the Education (Student Support) (Postgraduate Master's Degrees) (Wales) Regulations 2019 to enable new students to receive support for their distanced-learning course if coronavirus prevents them from being in Wales on the first day of the academic year. I know there are some merits points that have been identified, Gareth.

Yes. Just a merits point again, noting a breach of the 21-day rule.

Okay. Any other comments on that?

If not, we move on to the next item—two sets of regulations under items 3.4 and 3.5, which are going to be debated in Plenary on 22 September. That is the Health Protection (Coronavirus Restrictions) (No. 2) (Wales) (Amendment) (No. 6) Regulations 2020, and again I just refer you to some merits points that have been identified—Gareth.

Yes, there's one merits point, on pack page 170, noting there's been no formal consultation or regulatory impact assessment, but that the Welsh Government has continued to update individuals and businesses of these changes. But, again, it has to be noted these regulations were made at a time when restrictions were continuing a general trend of being lifted. Since these regulations, some restrictions have again been reintroduced or increased, for example the Caerphilly restrictions, the restrictions on gatherings of more than six people indoors and the requirement to wear a face covering in shops, on buses and in bus and railway stations.

Okay. Thank you, Gareth. Any comments or observations?

If not, we move on to item 3.5, which is the regulations that were made on 27 August to make further amendments to the Health Protection (Coronavirus Restrictions) (No. 2) (Wales) Regulations 2020. These are the No. 7 regulations. Gareth, there's another merits point.

Yes, one merits point on pack page 187, again noting there's been no formal consultation, but the Welsh Government says there's been wide-scale public information broadcasting. The merits point also notes there was discussion between the Welsh Government and the police and the police and crime commissioners in Wales about addressing unlicensed music events taking place in Wales.

Okay. Any comments or observations?

If not, we move on to item 3.6, which is the Curriculum Requirements (Amendment of paragraph 7(6) of Schedule 17 to the Coronavirus Act 2020) (Wales) Regulations 2020. Again, I think some technical and merits points have been identified on this. Gareth.

There are two technical points and one merits point, starting on pack page 206. The first technical point is about listing legislation in chronological order. The relevant bit of the Coronavirus Act 2020 contains a long list of legislation, all of which is in chronological order, apart from one reference that is being inserted by these regulations, which is not included in chronological order. The Welsh Government accepts the list is no longer in chronological order, but that it makes no substantive difference.

The second technical point notes an incorrect cross-reference in a footnote to the regulations, and it appears this is down to a formatting issue when the legislation was published on legislation.gov.uk and that the error has now been corrected. Therefore, while the Welsh Government said it does not agree with the technical point, the technical point was correct, given the version of the regulations laid by the Welsh Government.

The merits point notes there's been no formal consultation, but that the Welsh Government has been in regular engagement with key stakeholders.

Thank you. Any comments or observations? If not, we move on to item 4.

The Health Protection (Coronavirus Restrictions) (No. 2) (Wales) (Amendment) (No. 4) Regulations 2020. We considered these regulations at our meeting on 24 August and a report was laid the same day. We're just now invited to note the Welsh Government's response to the points raised in the committee's report, and, in addition, the letter from the First Minister. Gareth, any comments?

Can I say, firstly, that it's a very helpful response from the Welsh Government? Members may be particularly interested in the Welsh Government's understanding that the unintended inclusion of a custodial sentence in the No. 4 regulations had no practical effect during the time it was in force. There is also very a helpful commentary on how the coronavirus restrictions are being enforced.

Okay. Thank you for that. Any comments or observations?

In which case, we move on to item 4.2, the Education (School Day and School Year) (Wales) (Amendment) (Coronavirus) Regulations 2020. You have before you the report. The committee considered these regulations, again, on 24 August and laid its report. We have now a letter from the Minister, from the Trefnydd, with regard to the explanatory memorandum being republished. Any comments, Gareth?

The committee asked the Welsh Government for more information about the consultation behind these regulations, and the Welsh Government response, starting on pack page 231, seems to provide a thorough explanation. And, as mentioned, the Welsh Government laid a new explanatory memorandum on Friday 11 September, which includes information contained in the Welsh Government's response.

Okay. Any comments or observations? If not, we move on to item 5. 

Written statements under Standing Order 30C: we have the Prohibition on Quantitative Restrictions (EU Exit) Regulations 2020. The Welsh Government statement gives notification that it has consented to the making of the Prohibition on Quantitative Restrictions (EU Exit) Regulations 2020. The statement confirms that the Welsh Government gave its consent because there was no divergence between Welsh Government and UK Government on the policy for correction. Any comments there, Gareth? No?

There's one thing worth mentioning with regard to the Welsh Government's written statement. The statement says that these regulations form part of a single legislative framework across the United Kingdom. However, there is not really a UK-wide framework, because as far as Northern Ireland is concerned, it is the Northern Ireland protocol that applies, not these regulations. 

Okay. Well, we've noted that for the record. Any other comments or observations? If not, we move on to item 6, papers to note. 

We have a letter from the Counsel General with regard to the Joint Ministerial Committee (EU Negotiations). That's to be noted. It's sent to us in accordance with the inter-institutional relations agreement. Any comments or observations? Is that noted? Good.

I'll move on to item 6.2, a letter from the First Minister on making justice work in Wales, a letter of 28 August really just confirming the point I made right at the beginning of the meeting, that both he and the Counsel General will be attending the committee's evidence session on 12 October, which I think will be very timely. Also, the letter confirms that the Welsh Government is seeking to schedule a debate on the second annual report of the president of Welsh Tribunals. Any comments or observations? Just to note that. It's an important letter and acknowledgement, I think. 

Item 6.3, then, a letter from the president of Welsh Tribunals on making justice work in Wales. We put a number of additional questions to what I thought was a very important and historic, I think, first session with the president of Welsh Tribunals at the last meeting. He makes a number, I think, of important points there within that letter, which obviously we will include within, or consider within, our further reports. Any comments on that? Dai Lloyd. Dai, you need to demute.

Just to emphasise the point that the chair of the Welsh Tribunals service does say that, yes, this committee's well aware of the Welsh Tribunals system now, and the fact that it's devolved, but some other committees of this Senedd appear not to be, and they want to be more involved with various other reviews that are going on involving other committees that also impact on their work. So, I think he seems to intimate that, late in the day, the Senedd is aware of the tribunal system now, but that at the moment is with this committee, and it needs to be with them all.

Yes, I think we could usefully, actually, circulate the content of that letter to the other committees. I think he made another additional point, if my reading of it is right, which is that of course there are also reports from the chairs or the heads of each of the specific tribunals themselves, and I think that is an area that we should also be looking at. I know that we had the head of the Welsh Tribunals unit present, but I think when considering the president of Welsh Tribunals report, it's also worth being aware of the fact that there are these other reports, which I think provide some of the information relating to questions that we did ask the president at the last session. So, I think we're gaining a more detailed understanding of the way in which our part of the justice system is working, and obviously a bit of a learning curve is contained in those reports, but it might be worth it if those could be obtained and made available to us. Is that possible, Gareth? Yes, it is. Okay.

So, we move on, then, to, I think, item 6.4, which is a letter from the Minister for Environment, Energy and Rural Affairs. This is a response to our report on the legislative consent memorandum on the Environment Bill. So, it's a letter to be noted, and if there are any issues on that, can we raise those in private session? 

In which case, we move on to item 6.5, which is a letter from the Counsel General on the inter-institutional agreement and intergovernmental relations review ministerial meetings. It's just a letter for us to note, which is really an update on the inter-governmental relations review, and I think that might be something to consider later on in private session. 

If that's agreed, then item 6.6 is a letter from the First Minister on the legislation handbook on subordinate legislation. I think it's something to note. For anyone suffering from insomnia, it will make very, very good reading at some stage, but again, it's an important guide. It's important for us to be aware of the guidance that Government has, particularly in respect of subordinate legislation. I'm just wondering if we could have a link to that. I didn't see a link in the papers. I might have missed it, but if that's possible. Any comments or observations on that? If not, we've a letter from the Minister for Finance and Trefnydd on competence for a vacant land tax in Wales. I think there's an important letter there, and concerns that we may want to raise. Can we discuss that in private session?

Item 6.8: a letter from the Minister for Housing and Local Government—a letter dated 10 September. It provides an update on the proposed amendments to the Local Government and Elections (Wales) Bill. Note that? Noted.

Item 6.9: a letter from the Counsel General with regard to the section 109 Order, which provides an update on the proposed section 109 Order. If there's any issue on this, we can discuss that in private session. Is that agreed?

Okay, then, I move on to item 7. I'd like to ask the committee to resolve to exclude the public from the remainder of the meeting. So, in accordance with Standing Order 17.42(vi), I invite the committee to resolve to exclude the public from the remainder of the meeting. Do the Members agree? I can see agreement and we now move into private session.