Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol - Y Bumed Senedd
External Affairs and Additional Legislation Committee - Fifth Senedd27/11/2017
Aelodau'r Pwyllgor a oedd yn bresennol
Committee Members in Attendance
|Dai Lloyd AM|
|David Melding AM|
|David Rees AM||Cadeirydd y Pwyllgor|
|Dawn Bowden AM|
|Jane Hutt AM|
|Jenny Rathbone AM|
|Mark Isherwood AM|
|Michelle Brown AM|
|Mick Antoniw AM|
|Nathan Gill AM|
|Steffan Lewis AM|
Y rhai eraill a oedd yn bresennol
Others in Attendance
|Carwyn Jones AM||Prif Weinidog Cymru|
|First Minister of Wales|
|Des Clifford||Cyfarwyddwr Swyddfa Prif Weinidog Cymru, Llywodraeth Cymru|
|Director of the Office of the First Minister, Welsh Government|
|Dr Hugh Rawlings CB||Cyfarwyddwr Materion Cyfansoddiadol a Chysylltiadau Rhynglywodraethol, Llywodraeth Cymru|
|Director of Constitutional Affairs and Inter-governmental Relations, Welsh Government|
Swyddogion y Senedd a oedd yn bresennol
Senedd Officials in Attendance
|P Gareth Williams||Clerc|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle y mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Cynhaliwyd y cyfarfod ar y cyd gyda'r Pwyllgor Materion Cyfansoddiadol a Deddfwriaethol.
Dechreuodd y cyfarfod am 13:59.
The meeting was held jointly with the Constitutional and Legislative Affairs Committee.
The meeting began at 13:59.
Good afternoon. And can I welcome members of the public to this afternoon's session of the External Affairs and Additional Legislation Committee? And this afternoon we are doing our first evidence session jointly with the Constitutional and Legislative Affairs Committee of the National Assembly. Before we start, can I remind Members that, if you require simultaneous translation from Welsh to English, the headphones are available, and translation is available on channel 1? If you require amplification, please use the headphones on channel 0. Can I also remind Members to turn their mobile phones off, or on silent, or any other equipment that may interfere with the broadcasting equipment? There's no scheduled fire alarm this afternoon, so if one goes off, please follow the directions of the ushers.
Can I welcome Jane Hutt and Jenny Rathbone to the committee, as members? And can I put on record my thanks to Jeremy Miles and Eluned Morgan for their work on the committee, whilst they were with us? We've received apologies from Suzy Davies, and we've got no substitute for her. And can I also welcome Mick Antoniw, as Chair of the Constitutional and Legislative Affairs Committee?
We'll go to the next item on the agenda, which is the first evidence session with the First Minister. First Minister, would you like to introduce yourself for the record, and your officials?
Yes. Carwyn Jones, First Minister. I'll ask my companions to introduce themselves. Hugh.
Hugh Rawlings, director of constitutional affairs and inter-governmental relations.
I'm Des Clifford. I'm director of the office of the First Minister, and I'm in charge of co-ordinating Brexit across Welsh Government.
Thank you. Obviously, the first session will be focusing upon the EU withdrawal Bill, which is currently going through the Committee Stage in the House of Commons; it's undergone three days of Committee Stage so far. And to this point, we have not seen any Government amendments, or opposition amendments, approved. We had the Secretary of State for Wales and the Parliamentary Under-Secretary for exiting the EU with us, about three weeks ago now, and, clearly, what we had from that information was that the Secretary of State would want to work and achieve a legislative consent motion as much as possible—that's what he was focusing on, so that the Assembly would approve an LCM. At this point in time, clearly, the Welsh Government and this committee have actually represented their views that the Bill as it stands would not be acceptable. What changes, in your mind, will need to be required to make it acceptable?
Well, we would need to see our amendments all accepted. If they were accepted, then the Bill, of course, would then be in a position where I believe it would be possible for me to recommend an LCM, and a positive vote on that LCM, to the Assembly.
And on that, clearly, Dominic Grieve has withdrawn an amendment because he has a promise that Government would bring amendments forward at the Report Stage. Would that be acceptable to you?
No. We want to make sure that our amendments are dealt with, and dealt with in a positive way. We have to make sure that the position of the Assembly, and the people of Wales, is respected. We have to see concrete promises. It's been said by some in the UK Government that, for example, clause 11 is a temporary clause—it wouldn't be there forever and a day. But that's not what it says, of course, on the face of the Bill. So, our position is that we've tabled our amendments, and those amendments would make the Bill acceptable.
Okay. So, in that sense, did the Prime Minister give you any indication in the meetings you've had with her that they would be looking to accept the Welsh Government's amendments on the Bill?
Not specifically, though she did say that she understood that there would need to be an examination of amendments, and they would consider those amendments. But, no, there was no commitment to supporting the amendments that we've put down jointly with the Scottish Government.
Diolch, Cadeirydd. A allaf i jest gofyn yn fyr: pam wnaeth Aelodau Seneddol y Blaid Lafur—y rheini o Gymru, ac o lefydd eraill—ddim pleidleisio o blaid cael llais i Gymru yn y trafodaethau yma?
Thank you, Chair. May I briefly ask: why did the Labour Party MPs—those from Wales, and other parts of the UK—not vote in favour of having a voice for Wales in these discussions?
Achos mae yna welliannau ein hunain gyda ni—gwelliannau sydd wedi cael eu dodi lawr gyda Llywodraeth yr Alban—a dyna'r gwelliannau rydym ni'n credu yw'r gwelliannau gorau i'w cefnogi.
Because we have our own amendments—our own amendments tabled along with the Scottish Government—and those are the amendments that we believe are the best ones to support.
Ond roedd yna gyfle i o leiaf roi'r her lawr fod yna feddwl annibynnol, felly, o ochr Aelodau Seneddol Llafur. Pam na wnaethon nhw gymryd y cyfle?
But it was an opportunity at least to put a challenge out there that there was independent thinking from the side of Labour MPs. Why didn't they take that opportunity?
Wel, rydym ni'n gwneud hynny'n barod. Byddai wedi bod yn well pe baem ni wedi gallu gweithio gyda phleidiau eraill er mwyn sicrhau bod y gwelliannau i gyd yn cael eu cefnogi gan bob plaid yng Nghymru, a hefyd yn yr Alban. Ond rydym ni wedi gweithio gyda Llywodraeth yr Alban i ddodi lawr gwelliannau sydd yn welliannau a all wneud y Ddeddf ei hunan yn rhywbeth y byddem ni'n gallu ei dderbyn.
Well, we're doing that already. It would have been better if we could have worked with other parties to ensure that all amendments are supported by all parties in Wales and in Scotland. We're working with the Scottish Government to table amendments, which are amendments that could make the Bill itself acceptable to us.
Rwy'n ymwybodol o'r amser, felly wnaf i ddim dilyn hynny.
I'm aware of the time, so I won't talk any further on this.
Can I just ask a couple of questions on that? In terms of red lines, are the red lines all the amendments that we've put down, together with the Scottish Government, or is there an issue that some amendments are more important than the other? How will that be managed?
No, they're all red lines. We decided to get together with the Scottish Government to put down amendments in a helpful fashion, in order to make sure that the Bill was acceptable.
In view of the Welsh Government's amendments, obviously, the committee has also made recommendations for amendments. Have you had a chance to look at those? If so, would you look at supporting those amendments as well?
Well, we'll give them consideration, of course, but we've put down amendments in the name of the Welsh Government, and they would be the amendments that we would look to support. If there were any others, of course, that would be helpful in terms of adding to the amendments we've put down, we will of course give consideration to supporting them.
Particularly because I think one of the concerns has been that amendments have been focused upon powers of Ministers, and not necessarily the powers of the Assembly, and if the Ministers were given powers by the UK Government, but the freeze on the Assembly competences was still there, how would the Welsh Government viewed that?
I'm very much aware of this. The issue is: is it right for Henry VIII powers to be transferred to Welsh Ministers and yet, of course, those powers not be available to the Assembly? So, I'm aware that that would be a difficult situation for the Assembly to support. I would rather see those powers—. I would rather see the Assembly be able to exercise powers together with Ministers. What I wouldn't want to see is a situation where Henry VIII powers are exercised by Welsh Ministers in such a way that the Assembly is cut out of the decision-making process.
And have you put in place any plans, in that case, if the UK Government accepts the position of giving powers to your Welsh Ministers, but not necessarily to the Assembly? Have you put any plans in place to actually allow that to happen?
That would not be our preference. We would want to be in a position where the powers that would come to the Assembly automatically upon us leaving the EU should come to the Assembly, rather than be diverted towards Whitehall. We are not prepared to accept the scenario where, somehow, those powers should be curtailed in any way. Those, of course, are devolved powers that would come to the Assembly, rather than to Ministers.
So, again, it might not be your preference, but have you done any preparation for the situation that might happen?
Well, that's not been offered, nor is it something we want. So, from our position, we want to make sure that the Assembly gets the powers that it should do once we leave the EU. Should it be the position, if something was offered along those lines, then I would not want to accept those powers without full consultation with the Assembly itself. I'm very much aware that one of the arguments that is used in a non-devolved context about the Bill itself is that it concentrates too much power in the hands of Ministers, and I wouldn't want that to happen here in Wales.
Okay. Clearly, in there, there has always been talk about a continuity Bill as a possibility of an alternative way forward, and Dai Lloyd's got a question that.
Diolch, Cadeirydd. Mae yna gryn dipyn o sôn, wrth gwrs, am Fil parhad. Pryd yn union y bydd Llywodraeth Cymru yn penderfynu a yw am gyflwyno Bil parhad ai peidio? Beth sydd rhaid iddo ddigwydd, neu beth sydd rhaid iddo beidio â digwydd cyn ichi benderfynu bod yna Fil parhad yn mynd i gael ei gyflwyno?
Thank you, Chair. Yes, there has been quite some discussion about a continuity Bill. So, when precisely will the Welsh Government decide whether it wants to introduce a continuity Bill or not? What has to be done, or what has to not happen, to make you decide that a continuity Bill will be introduced?
Mae yna Fil yn barod. Mae'r gwaith wedi cael ei wneud. Ar hyn o bryd, gwell gyda ni fyddai sefyllfa lle mae'r gwelliannau i gyd wedi cael eu derbyn, ac wedi hynny fyddai ddim eisiau cael Bil parhad. Pe na fyddai hynny'n digwydd, felly dyna fydd yr amser i ystyried Bil parhad.
A Bill has been prepared. That work has been undertaken. But our preference at the moment is that we get to a point where all amendments have been accepted and we won't need a continuity Bill. If that doesn’t happen, then that would be the time to consider introducing a continuity Bill.
Felly, jest i gadarnhau, mae'r Bil parhad yno yn barod i redeg yn syth pan fydd penderfyniad un ffordd neu'r llall.
Therefore, just to confirm, that continuity Bill is ready to be brought out when a decision is made, one way or another.
Ydy. Ocê, diolch.
Yes. Okay, thank you.
And you've indicated that you would—. It's the last resort, effectively, if you didn't get it. But at what point, do you think, in the process will you need to take action so that the continuity Bill can be completed and done before the UK Government has actually done its work?
It's not an exact science, but, clearly, the continuity Bill would need to have gone through the Assembly and have received Royal Assent before the withdrawal Bill had gone through both Houses of Parliament. As I say, our preferred option is to see the amendments supported in the House of Commons. If that's not the case, then, of course, that'll be the time to consider when and if a continuity Bill should be introduced.
I'm just trying to work out roughly at what stage. Would it be after it's gone through the House of Lords?
No. To my mind, we have to be careful. We have to allow enough time for a Bill to go through the Assembly, if that's what's required, and that would have to be done before the Bill had finished its progress through Parliament.
Okay, thank you. Dawn.
Just on that point, the Secretary of State for Wales has said that he wasn't working towards a situation where an LCM would not be agreed. So, that's his position. That sounds positive, but I was just wondering whether you've had any indication from the Prime Minister in particular as to the intentions of the UK Government if we don't get an LCM that's agreeable.
No, there have been no indications as to what they might do. We've been very clear with them that it's not our intention to prevent the progress of the Bill at all. It's simply a question of ensuring that the rights of the Assembly are preserved as the Bill goes forward. We understand the destination they're trying to get to, but what we've said to them is—they have asked for the Assembly's consent, therefore that has to be taken at face value. The Assembly must be allowed to give its consent, or not, freely. There is a way, I believe, for the Assembly to give its consent, as long as the Bill is amended along the lines that we've suggested.
So, it's not fair to say that we're at the point of a kind of Mexican stand-off just yet, then. There's still quite a way to go, from your point of view.
Yes, there are still discussions ongoing. The view of the UK Government has softened over the past few months. They're more engaged now than they were perhaps at the end of the summer. We welcome that. We all want to get to a scenario where, when Brexit happens, there is enough certainty for businesses and for others. We understand that. So, we share the same destination but we've always said it's the nature of the journey that concerns us. It should be a journey that's undertaken through partnership and not through imposition.
Okay, thank you. Thank you, Chair.
Can I just ask a very quick question on the legislative consent motion issue? The Trade Bill has of course been tabled as well and that also, as I understand, will require a legislative consent memorandum. It's the inter-relationship between the two, because the Trade Bill also relates to a number of powers, and Henry VIII powers as well, being exercised in specific areas, and also the issue of our consent is going to arise then. Presumably, this is also going to occur with a number of other Bills. It's really the relationship between them and what the consistency might be in terms of, for example, getting concessions on the withdrawal Bill, but, equally so, then having to fight the same battle on further pieces of legislation further down the line, and whether featured in there should be the establishment of certain principles, as with other bits of legislation, otherwise we're going to be arguing the same point backwards and forwards in Parliament and in the House of Lords as all the other Bills come through.
Well, I would have hoped that the principle of freely given consent is accepted in the withdrawal Bill and then becomes the established principle for every other Bill. That would be the logical approach. I see no reason why, if the Bill is amended along the lines that we've suggested, we cannot then proceed with an LCM. But the principle has to be accepted by the UK Government that, regardless of agreement on what the destination should be, there has to be an understanding that this is a process that should be done through consent, not by imposition. That's what underlies all this.
Okay, thank you.
Based upon that view, are you disappointed in seeing the Trade Bill, because the Welsh Government and the Scottish Government's amendments were made quite clear to the UK Government before that Bill was published? The objections were made quite clear at the point of publication of the EU withdrawal Bill, and yet, in the Trade Bill, we see very similar views and positions in relation to the powers within devolved competencies.
Well, with the withdrawal Bill and the Trade Bill, we were not given sufficient time for there to be proper engagement on what would and what wouldn't be acceptable as part of those Bills. It would have saved an awful lot of time if there had been proper engagement at the beginning where we could have understood the different positions that we had and looked to resolve them, perhaps before the Bill was published. But that's not the position that we found ourselves in, so now, of course, we have a situation where Bills are published, we get very little notice of those Bills, and then at that point there have to be discussions publicly about what is and what isn't acceptable. It would have been far better to have done all this beforehand.
I've got another question I'll come back to. Steffan.
On that point, Chair, in terms of the time between the publication of the Trade Bill White Paper and the Trade Bill, how much correspondence was there between Welsh Government and Dr Fox's department?
I'm not aware, Chair, that there was extensive discussion between the publication of the White Paper and the Bill. A couple of days before publication of the Trade Bill, there was a letter received saying that it was about to be published and describing it in further detail.
Reverting back to the point that Mr Antoniw raised, the provisions in Schedule 1 to the Trade Bill about ministerial powers effectively replicate in this different context what are rather more honestly called restraints, or constraints, on the devolved administrations' powers replicate what is in Schedule 2 of the withdrawal Bill. The reality, I think, is that it would be rather surprising if the Trade Bill had taken a different approach to the scope of devolved administrations' powers in the Trade Bill from those that had been taken in the withdrawal Bill, because the UK Government has not yet accepted our arguments in relation to the withdrawal Bill. It was therefore restating the position in the Trade Bill that it had already established in the withdrawal Bill. If we are successful in persuading them to amend the withdrawal Bill, that will follow through into the provisions of the Trade Bill.
I appreciate, on that point, that there are parallels between the two and the approach of the UK Government. However, in terms of assuming—and maybe there is time to stop this from happening; I hope so—we leave the customs union, there will be new trade agreements and new trade arrangements, in which case the mood music in the original White Paper for the Trade Bill sounded encouraging. That is maybe too strong, and I'm trying to be generous; we are almost in the Christmas period. However, by the time we got to the Trade Bill then, all of that had been dashed because that wasn't replicated in terms of selling a vision of even a neo-federalist model for trade and the role of devolved administrations and Parliaments in future trade deals. So, that's why I'm asking specifically what representations were made from Welsh Government to Dr Fox's department after the publication of that White Paper, when it looked like perhaps there was an opening, and the publication of the Bill itself.
Well, I met with Liam Fox a few weeks ago. I made it quite clear to him what our position was as a Government: that we expected to be treated as partners. We also made clear that, even though trade is a non-devolved area, clearly there are interests there for Wales in areas where we might be asked to implement, in a devolved context, the agreements that might be made by the UK. There was, when I spoke particularly to Damian Green the last time I met him, an understanding that we had a legitimate interest in trade and, indeed, in looking to agree agreements if they were made, to make sure that Wales's interests were protected. So, these representations have been made by me, in person, to both Liam Fox and Damian Green.
Finally, Chair, if it pleases you, assuming we leave the customs union, what is it, precisely, that you would see as Wales's role? Is it as a consultee to trade agreements and trade negotiations that are carried out by the UK Government almost exclusively, and to have some kind of a feed role there? Or, is your vision for future trade arrangements that Wales is a full participant, à la Belgian regions or Canadian provinces—that it is almost a shared arrangement between the administrations, rather than a reserved one where we are consultees and feed into the process? I suppose I'm asking you whether you are a trade federalist or not.
Before you answer, First Minister, I'm aware that this is perhaps in our second session as well. It's gone off the EU withdrawal Bill a little bit, but I will leave you an opportunity to answer that.
Well, we have to be more than consultees. That's true. In terms of what the architecture might look like, thinking needs to be developed on that for the future. But, certainly, what we cannot be is in a situation where we are asked our view on a trade deal and then told it is going to happen anyway. I do think there will be occasions when we should give our explicit consent, one example being, for example, if a trade deal was done—and the example is always used with New Zealand—in a way that was detrimental to the market for Welsh lamb, I would expect us to be offered the chance to consent or not to that element of the Bill. This is new ground. It's a non-devolved area. Nevertheless, it has to be the case that, where there is a specific effect on a particular nation of the UK, that nation's Government should have a greater role, rather than just being a consultee. How that works is work that will have to be developed for the future.
First Minister, you said that you accept the need for UK frameworks, and the Scottish Government does as well. I wonder, does clause 11 become more palatable if it's just shrunk to those areas that clearly would be needed to run the frameworks instead of the 64 that would get frozen at the moment in Wales, and it's a lot more in Scotland, I think? It's 50 or 55 that are immediately released to Wales, and then just a dozen or so are retained. Does that make it easier?
No. There's a fundamental difference of principle. As far as we are concerned, we would want to see a joint approach to the way EU powers and frameworks are developed in the future. So, for example, common frameworks should be done by agreement and not by imposition. The fundamental problem is we agree with the UK Government that certainty is important, but the fundamental problem is this, under the current Bill: that there will be restrictions placed on Scotland and Wales, and in the future Northern Ireland, but no restrictions placed on England. It's the fundamental contradiction of the UK Government acting as the Government of the UK and the Government of England at the same time. It's got to be one rule for everybody in order for it to be fair. What we have suggested is, 'Let the powers come to rest where they should. Let's all agree that we won't change anything, to create that certainty, until such time as we are agreed that things should change.' Then, of course, we can also negotiate or talk to each other about what a common framework for agriculture might look like, what a common framework for fisheries might look like. I think that's a responsible and mature way of dealing with it, rather than not trusting us with these powers in case we do something that interferes with the UK single market, which is not where we're coming from.
So, it would be fair to say the position is that you acknowledge that some significant areas that you believe would come to Wales would be needed to run UK frameworks, but you feel that consent to those powers resting at a UK level can only be given when you're happy, actually, with the content of the framework? Because it's a policy issue, it's leverage, isn't it, rather than constitutional principle?
If I can put it this way: we could agree, as a Government, to a voluntary freeze on retained EU law, rather than it being imposed. I see no reason—in fact, I can see very good reasons for that to be done. And then, by agreement, if there need to be changes in the future, either in terms of retained EU law or in terms of developing common frameworks, then that can be done, and that, of course, means we get greater buy-in.
So, I do understand the need to create certainty. I do understand the need to create certainty particularly around retained EU law. But that certainty can be created far more effectively through agreement rather than through imposition.
We've moved into frameworks, but I want to go to Mick, who wants to raise one question.
I just wanted to ask two very short questions, as much for the record as anything. On the Trade Bill, on amendments and red lines, in the same way as is being done with the withdrawal Bill, are those in preparation or going to be prepared to ensure consistency of approach?
The second point on the Trade Bill: the intention is that the power to make trade agreements and treaties and so on will be dealt with by use of the common law, effectively the royal prerogative. So, the only scrutiny under that would be the Constitutional Reform and Governance Act 2010, and that seems to me to set a very, very dangerous precedent in terms of the interests of Wales. Is that an area that is going to emerge very, very quickly because of the interrelationship between these Bills and the withdrawal Bill?
Yes, it is. The Member is right. The way in which these agreements are done is very different to the normal legislative process. There will be a need to make sure that we are not cut out of that process as we leave the EU.
And to answer the first point, we are looking, indeed, at the terms in particular of clauses 1 and 2 and Schedule 1 to the Trade Bill to see what would be the appropriate amendments in relation to ministerial powers of the devolved administrations.
On the attempt to find a common framework on the 64 areas where powers are due to come back from the EU, which obviously intersect with the powers that the National Assembly and all Welsh Ministers are already exercising, I understand from the meeting with the Cabinet Secretary for Finance last week that there are three areas that have been identified for initial deep dives and that the one on agriculture has already been completed. So, as far as you're aware, is this deep dive an appropriate way of developing the common understanding, and has it been successful as far as—? How successful has it been as far as agriculture goes?
So far, so good, but, of course, we have to wait and see what the outcome is in terms of what is agreed. What the deep dive cannot be is an exercise where areas that are devolved are identified but the final decision on the framework is taken by the UK Government. So, it's a useful exercise in terms of identifying what needs to be done, but hugely important that what is then done is done by agreement.
Absolutely. Now, the Secretary of State seems to be of the view that we'll be able to get extended powers of the Assembly beyond the powers we currently hold in order to make laws on these new areas of responsibility. Is that something that you're getting indications of from the UK Government, that that is actually going to happen?
I think it's a fundamental difference of interpretation. The interpretation of the UK Government is that EU functions that return to the UK once we leave the EU are matters entirely for the UK Government, and they take the view that those powers should go to Whitehall and then those powers should come to us as and when is appropriate, in some undefined way. That's not, clearly, our approach. We take the view those powers should come to us straight away without there being any kind of interference from the UK Government. So, their interpretation is, 'Well, look, these powers will come to us and then we'll give you those powers when and if we decide', and that's what they mean by extended powers. They simply mean taking the powers that would come to us otherwise and then giving them to us as and when they see fit. It's a bit like ordering a package through the mail, finding the package has been intercepted by somebody, and that somebody saying to you, 'Well, I'll open the package and give you bits of it when I see fit', even though it's yours in the first place. So, they're not extended powers. Basically, these are powers that would automatically come to Wales. Yes they would extend the power of the National Assembly, that's true, but they're not powers that the UK Government has a role in; they're powers that should come to us anyway.
So, in this context, where Robin Walker, the Parliamentary Under-Secretary of State for Exiting the European Union, is hoping that the process of deciding on these common frameworks would have to be completed within two years of exit day, is that hopelessly optimistic in the context of the complexities of all the issues that are wrapped up in these 64 areas?
I don't think they all have to be completed by exit day because we could simply retain what already exists in the meantime and then those common frameworks could be implemented at some point. So, ideally, yes, they would be in place before we leave but—
Okay, but he's talking about within two years of exit day. Now, Sir Ivan Rogers is saying it's all going to take at least a decade and the whole thing is not going to get resolved until 2030.
Yes, I think Ivan Rogers was talking more about the nature of the relationship the UK would have with the EU. I think it's perfectly possible for common frameworks to be in place within a period of two years beyond Brexit day. There is a fallback position, which is keep what we already have until such time as all Governments decide to change it. But there's no reason why common frameworks can't be agreed by then.
But that fallback position assumes that the UK Government agrees with us that the status quo substands unless there is agreement otherwise.
Yes, that's true.
Can I ask what you define as a 'deep dive', because it seems that two days—?
It's not my phrase, Chair.
Well, it seems that two days is very little time to actually go and explore some of the real intricacies and complexities of the 64 areas of law that have been mentioned.
So, my understanding of the process, Chair, of the deep dive, is to really scope out what the detail of the framework agreement would look like. This is new territory for all of the administrations involved, clearly, and there's a whole range of possibilities. It could be something as simple and as straightforward as, effectively, an exchange of letters between administrations just agreeing some basic principles, or else, for a particular area of policy, it might require some very detailed joint drafting with quite complicated annexes delineating the territory to be agreed. So, as to the two days, it isn't a two-day process; that's simply a first run around the track. I mean, this is a process that will go on for some period of time and really it's about scoping what a framework might look like. That's the first step in the process.
Okay. It's been mentioned, the exit day, but, of course, the current EU withdrawal Bill is proposing for the UK Government put a date on the exit day. Is that a positive or a negative?
It's a negative. I don't understand why the UK Government would want to confine itself in that way. The difficulty we have, of course, with the Brexit result last year is that what is clear is that people voted to leave the EU—there's no dispute about that—but it's open to so many different forms of interpretation, from a very hard Brexit on the one hand to the softest of Brexits on the other. I would have thought that the UK Government would have wanted to give itself as much flexibility as possible, but the impression is given, from what they've said about the single market, what they've said about the customs union, and what they've said about putting a date on the face of the Bill, that they're going in the opposite direction and trying to narrow down the options that they have.
Is it fair to say, First Minister, that, if the deep dive on agriculture, which is possibly the most contentious and probably the most important area for Wales, has gone quite well so far, that this process of working to frameworks is an encouraging one? It seems to me that those remarks you've made are in sharp contrast to your very binary position—and, in fairness, you could argue that it's binary from the UK Government's point of view as well—over the whole business of clause 11.
Well, I have to say that the discussions about common frameworks have been fairly new. Some months ago, there was no suggestion that there were discussions on common frameworks. I welcome the fact that those discussions are taking place. The true test, of course, of the process will be whether the UK Government accept that the frameworks should be agreed or whether we are in effect helping to shape the framework that the UK Government will put in place. Clearly, our position is quite clear, and that is that this should be a joint exercise leading to a joint outcome.
So, there are two stages then. In terms of the policy content in the initial framework—for instance, whether direct subsidies would be paid to farmers—you'd expect agreement on that from all the administrations involved so that then becomes the common position. And then any governance of the framework beyond that is done as shared governance. Would that be a fair description of what you're after? So, there are two stages that both need to be agreed, really. Otherwise, you don't think the powers that otherwise would come to Wales should be given up.
The balance has to be struck between creating commonality, to ensure that we don't get market distortion within the UK, and flexibility, as we have now, where each Government is able to operate autonomously but within a common agreed framework, in effect creating state aid rules for farming, for agriculture, which I think is a good thing. We do need to have rules that everybody plays by. We can't be in a situation where there are no rules at all within the single market of the UK. That's one thing.
The difficult issue is the pot of money. At the moment, that money comes from the EU. How will farming be funded when we leave? Funding us through the Barnett formula would result in, I think, off the top of my head, a cut of about 70 per cent to the Welsh farming budget. Now, that clearly wouldn't be acceptable. So, a method has to be found of creating a discrete pot of money that's there for farming—what's being paid under the common agricultural policy now—and that money allocated in the same way as it has been in the past. That money would have to be ring-fenced for agriculture; it couldn't be used for anything else because it would be there for a particular purpose. That's something that certainly I'd be prepared to sign up to.
But the great danger is that we end up with a situation where we've agreed a framework, but then we get into a dispute about how much money and how that money is then distributed around the UK. There is a way around that along the lines that I've just suggested, but distributing it through Barnett wouldn't work.
Okay. There's a lot of policy detail there that I realise is very important. From a constitutional point of view, do you think—and perhaps your officials have a view as well—? Is Whitehall creeping towards an understanding of what shared governance requires? Because it's not exactly a revolutionary principle in decentralised and federal states around the world. You know, you will often see columns: one of them will be shared governance. I don't get the impression this is fully grasped in Whitehall, but I don't want to lead too much; I'd like your view.
I think the situation has improved from our perspective over the last few months. I'm not convinced that that is a situation that has improved because it is the UK Government's free desire to do it, if I can put it that way. I think the arithmetic in the House of Commons and the House of Lords has something to do with it, because certainly at the end of the summer there was no question of there being any kind of partnership working with us in terms of common frameworks. That has changed. We welcome that. Let's get on with that.
There is a fear that's been expressed to me by UK Government Ministers that they don't want to see federalism. The big problem with federalism is the question of England and what you do with England and its size. That's a different argument, and I've made the point to them that this is not—. What we are proposing is to look at areas like agriculture and fisheries where there need to be common frameworks. There are other areas as well. Yes, there is a need to change the governance of the UK, particularly the way in which devolved administrations and the UK Government work with each other. The suggestion that I've made is that, instead of having the JMC as it exists at the moment, we have a proper council of Ministers where these things can be decided. It's not uncommon for it to happen in other countries that are equally as stable, but it's an enormous leap in mindset for many in Whitehall to see themselves as being in devolved areas on a par with us. That is a major leap in mindset for them.
Going to back to clause 11, you refer to your willingness to voluntarily, perhaps, lend to the centre rather than have this obligatory removal under this Bill. You say there wasn't a discussion of frameworks a few months ago. In fact, there was, but the concern being expressed from the Westminster end was that, without clause 11, the devolved administrations might not agree to agree frameworks. Now you've made it very clear to them that you would, as we'd heard here many times previously, and your willingness to volunteer under the basis you've already described to us. Has there been a willingness to understand that in your discussions?
Not on clause 11. They see it as fundamental. I have no difficulty in giving an undertaking—it's not enforceable, I suppose, but an undertaking on behalf of the Welsh Government—that we would not look to change EU retained law with clause 11 not being there. I'd happily give that undertaking. I understand what they're trying to do, but the point is it's voluntary. It's not being imposed upon us.
It's been said to me by UK Government Ministers, 'Well, of course, clause 11 is not meant to operate forever and a day'. Well, it is, on the face of the Bill. I take what they say to me, but unless it's there, in black and white, then—. You know, there's no sunset clause, for example, then how are we to know that that is the case?
I think the fundamental difference of thinking is that the UK Government sees itself as the replacement EU, as it were, for EU-retained law, and so it should take the decision as to what happens with EU-retained law across the whole of the UK. Our position is different. We take the view that, when it comes to EU-retained law, it should come to rest in the devolved administrations and devolved areas, and then we come together and agree the way forward. It's not in our interest to agree the way forward together in terms of common frameworks; it's in our interest to agree on a common decision-making process within the UK, and that's the approach that we've taken.
Regarding the headline—those 64 areas, which have been referred to before—Mark Drakeford, Cabinet Secretary for Finance told this committee three weeks ago, alongside his officials, that they expected the process of analysing the 64 areas to reveal no common framework required in some and a merely non-legislative framework in others, pretty much in line with what the Secretary of State said, although he also said they may need protocols or concordats agreed between the different administrations. Is it your shared expectation, therefore, that once the deep diving has occurred, or is occurring, in those 64 areas, that that separation between non-legislative, no common framework required in some, and non-legislative framework in others, and agreement in the remainder, is likely to be the outcome?
Yes, I think that's sensible. I think there will be a lot of areas where there will be agreement and where there will be common ground, but what we can't accept is a scenario where, if we don't agree, the powers stay with the UK Government. It has to be an agreement that's entered into voluntarily. From our perspective there are many good reasons why we should have frameworks, agreements, concordats, memoranda of understanding with other administrations in the UK to ensure, for example, that our farmers are able to access the UK market and sell within the UK market. So, there are plenty of incentives for people to work together. But, from our perspective, if the UK Government retains those powers under clause 11, it could, if it wanted to, do whatever it wanted to do with English farming and we couldn't replicate it in Wales or Scotland because we would be specifically prevented from doing so. Now, it could create a scenario where farming in England is at an advantage because of that, so it has to be one rule for everybody.
And finally, if I may, in terms of the corrections to the law transferred from the EU to the UK, what is your current understanding of the position with regard to the Welsh Government and the Assembly having the opportunity to, at the very least, check amendments made in Westminster relating to both reserved matters that impact on Wales or, specifically, to non-reserved matters?
As far as the Assembly is concerned, that would be a matter for the Presiding Officer rather than for me, but I'm sure that mechanisms can be found to ensure that that happens.
Can I go back to moving towards a possible shared governance in terms of the JMC, and whether it's fit for purpose in terms of the vehicle? Particularly, I was looking back to the communiqué from your JMC, where, I think, it was said it would be the aim to agree—in terms of all the parties to agree. That's quite a long way from actually getting an agreement that isn't going to result in anything being imposed. How do you feel that—? This is going to be a real test, isn't it, in terms of JMC structures, to get any agreement on common frameworks.
It is, but the JMC needs to prove its worth. The JMC has different committees—JMC European negotiations, JMC Europe, JMC domestic, JMC plenary. JMC plenary meets once a year with the heads of Government, not usefully, if I'm honest. I've been going for the past eight years, and to be honest with you, it's often an opportunity for us to raise issues, sometimes grievances, with the UK Government, to which they respond. It's not a particularly useful process. But it could be a very, very useful forum where we agree things and agree frameworks for the future. And that's where it would really prove its mettle.
The other issue we have to deal with is the dispute resolution process in the JMC. It's way short of what it should be. For example, Members will know about the £1.67 billion given to Northern Ireland. We have raised that as a dispute, together with the Scottish Government, with the UK Government on the basis that at least some of that funding should be Barnettised but isn't. The UK Government's response is, 'We don't accept there's a dispute at all.' So, we can't go through the dispute resolution process because one party says there is no dispute—'Tough.' Now, that clearly doesn't work. There has to be a process that's more open and more objective than that.
So, yes, the JMC needs to become a proper council of Ministers and also, of course, it should have an adjudication process, or at least an arbitration process, that's independent of the UK Government. At the end of the day, the UK Government decides whether there's a dispute or not, and, ultimately, if the dispute goes to its final stage, it's the UK Government that decides the dispute as well. Clearly that can't be fair for the future.
No. I'm in charge. I'll decide who I'm going to call, and I make the decisions as to who asks the questions. Jane, have you finished?
Yes. I mean, I just—
Nathan, you're next.
Thank you very much. With regard to that, First Minister, do you see a role, then, for the Supreme Court to be the arbitrator of disputes and problems that may be arising through the JMC?
Possibly. The problem is, of course, that you need to have an independent body that adjudicates, that decides what the outcome should be. In the discussions we had some years ago now, when the dispute resolution process was put in place, a suggestion was made by myself—and, if I remember rightly, by Alex Salmond, who was the Scottish First Minister at the time—that a panel would be convened of politicians, and possibly those in the Lords, but not those who were active in terms of party politics, who would then decide. That wasn't acceptable at the time for the UK Government, but to us, that was a way of doing it. And that might be one way of doing it in the future.
But that was before there was a Supreme Court as well, though, wasn't it?
No, it wasn't.
Wasn't it? Okay.
The Supreme Court came into being when I was Counsel General back in 2009. So, when I was First Minister, the Supreme Court was there.
Okay. And just finally, Chair, if I may, we were at a meeting with the constitutional committee of the House of Lords last week and they pretty much didn't have any ideas about your idea for a common framework for a single market within the UK. So, the question I have is: how are you pushing this idea? Because, to me, it seems like a fairly good practical solution. Who are you pushing it with and what are you doing to sell it?
Well, we have White Papers that we've produced, together with Plaid Cymru, of course, that have outlined our views on various issues to do with Brexit. I've said many, many times publicly that if the UK's not in a position where EU state aid rules will apply in the future, there'll have to be UK state aid rules and they'd have to be drawn up jointly, and then, of course, they'd have to be policed and adjudicated on by an independent body. Every single market has rules and every single market has an adjudicator of those rules. The UK Government has moved a little towards that thinking by saying that there would have to be an independent body that would adjudicate. I'm not sure that that's sufficient, because I think the process has to be more formal than that and there has to be a legal process for adjudicating, rather than it be done through an independent body that might itself then be reviewed in the Supreme Court. We've made those suggestions to the UK Government and I've certainly said them many times publicly.
One of the issues that has arisen, of course, is EU funding. And, of course, we could have a situation where amendments are conceded and the power balance is conceded, but then finance actually becomes the issue in terms of determining policy, that is, you can do something provided it accords with the policy. Effectively, the financial allocation system that used to be in Brussels is now with Westminster. To what extent is it necessary to have some form of agreement on funding as part and parcel of this entire package?
If I remember rightly, funding has been agreed by the UK Government to n+2, which is 2022, if I remember. Beyond that, we don't know. The issue for us is this: when it comes to structural funds, our ambition, of course, is not to qualify in the future. The argument has been used with me, 'Well, you can't make the case for equivalent structural funding by the UK Government in the future, because you want not to qualify', and that's a fair point. But every other region—west Wales and the Valleys being one—when it no longer qualifies for structural funds, has received transitional funding, and that's what we don't know, whether we will receive, at the very least, transitional funding if we were no longer to qualify for structural funds, and what impact that would have on the Welsh budget.
We're coming to the end. We've gone beyond the time, but I've got two questions, towards the end. You mentioned a sunset clause, and I think the Bill doesn't have one. This committee actually does not agree with a sunset clause, because we think the powers should be returned automatically, straight away. Does the Welsh Government have a view of accepting a sunset clause?
No, we wouldn't accept a sunset clause. Who is to say that it wouldn't be extended ad infinitum in the future? It's a matter of principle here. Either Governments across the UK can trust in themselves and each other to come to sensible agreements across the UK or not, and clause 11 is a clause that, to me, suggests that somehow we can't be trusted.
Okay. Thank you for that. When the Secretary of State attended, he talked about the position on common frameworks and that he would be holding stakeholder sessions jointly with you. Has that happened? Has anything been discussed about that happening?
Not as far as I'm aware.
They haven't taken place yet. I think there may be discussions going on about whether they will happen or when they will happen.
So, we're not yet clear as to whether they will even happen yet.
I think they may happen, but when they will happen, I don't know.
So, as I said, we're not yet clear—'may' means that you're not yet clear. Okay, thank you.
I think we'd like to know that.
Well, I'm sure that, once you're aware that they're happening, we would be grateful if you could provide the Assembly with information as to that event.
Could I just add a word on that, Chair, to help out? The offer that we have made to the Secretary of State's office is that if he is intent on having consultations, we have suggested to him, to the Wales Office, that it makes sense to use existing consultation mechanisms that the Welsh Government has with different groups of stakeholders. So, that's an offer that we have made to them. I don't think that they have yet taken up that offer in a concrete way, but we continue to remain open to dialogue with them.
So, is that what he's interpreting as joint sessions?
I believe so.
Okay, thank you. I'll come to a close in this first session. We have another session starting at 3 o'clock, so we'll take a short break until 3 o'clock. Can I thank you for your time at this point? A short break and we'll reconvene at 3.00 p.m.
Daeth y cyfarfod i ben am 14:49.
The meeting ended at 14:49.