|Alun Davies AM|
|David Rees AM||Cadeirydd y Pwyllgor|
|Delyth Jewell AM|
|Huw Irranca-Davies AM|
|Mark Reckless AM|
|Suzy Davies AM||Yn dirprwyo ar ran David Melding|
|Substitute for David Melding|
|Jeremy Miles AM||Y Cwnsler Cyffredinol a'r Gweinidog Brexit|
|Counsel General and Brexit Minister|
|Mike Usher||Swyddfa Archwilio Cymru|
|Wales Audit Office|
|Piers Bisson||Llywodraeth Cymru|
|Simon Brindle||Llywodraeth Cymru|
|Claire Fiddes||Dirprwy Glerc|
|Gareth David Thomas||Ymchwilydd|
|Rhys Morgan||Ail Glerc|
|2. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau||2. Introductions, apologies, substitutions and declarations of interest|
|3. Paratoi ar gyfer Brexit—sesiwn graffu gyda'r Cwnsler Cyffredinol a’r Gweinidog Brexit||3. Preparing for Brexit—scrutiny session with the Counsel General and Brexit Minister|
|4. Papur i’w nodi||4. Paper to note|
|5. Cynnig o dan Reol Sefydlog 17.42 (vi) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod||5. Motion under Standing Order 17.42(vi) to resolve to exclude the public from the remainder of the meeting|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Dechreuodd rhan gyhoeddus y cyfarfod am 13:33.
The public part of the meeting began at 13:33.
Good afternoon. Can I welcome Members and the public to this afternoon's meeting of the External Affairs and Additional Legislation Committee? Can I remind Members that the meeting is bilingual and, if you require simultaneous translation from Welsh to English, that's available on the headphones via channel 1? If you require amplification, that's also available on the headphones via channel 0. Can I remind everyone to turn their mobile phones either off or to put them on silent, please, to ensure that they do not interfere with broadcasting equipment? There's no fire alarm scheduled this afternoon so, if one does take place, please follow the directions of the ushers to a safe location.
We have received apologies from Joyce Watson and David Melding, and we've been notified of a substitution for Joyce Watson of Hefin David, and can I welcome Suzy Davies, who is attending as a substitute for David Melding?
Can I ask if any Members wish to declare an interest at this point in time?
[Inaudible.] [Laughter.] I declare my interest, on the register of interests, as chair of the European advisory group. Thank you, Chair.
We move on to the next item on the agenda then, which is the scrutiny session with the Counsel General and Brexit Minister, particularly in relation to the preparedness of Wales for the 'no deal' scenario. Could I welcome Jeremy Miles? And would you like to introduce your officials for me for the record, please?
Yes, I've got Piers Bisson, who's the director of European transition, and Simon Brindle, who's director of European transition policy.
Thank you for that. I'll open the questions, then. It's a very simple one, Minister: you've obviously seen the Wales Audit Office report on preparedness, which follows on from reports this committee has produced on preparedness. Perhaps you'd like to give a response to that report.
Yes, certainly. Well, I welcome the report. I think it recognises the scale of the challenge that we face in Wales as a consequence of Brexit. I was pleased to see recognition of the leadership role of the Welsh Government and, in particular, assets such as Paratoi Cymru/Preparing Wales. I thought that the observations around the response of Government and public services to try and work together outside silos in tackling some of the challenges that we face together in relation to Brexit were very interesting and I welcome that acknowledgement. And I think the broad picture that comes from the report is welcome as far as Welsh Government is concerned. Clearly, there were points in the report about variability in public services that I'm sure we can come on to talk about. I would just say, though, that, alongside looking at that report, you also see the report from the UK Government last week or the week before last about 'no deal' preparations in general. So, I suppose my take out is that the report indicates that we are doing what we can, but the broader context is the one that is set out in the UK Government's analysis, which just shows the circumstances, the challenging circumstances, within which all public services—indeed, all sectors in Wales—are trying to address some of these very significant challenges of preparation.
This committee, obviously, has highlighted its concerns on preparations for all scenarios for quite a while now, well before this report was commissioned. Do you think it's actually late in the day that you made the decision on preparing for no deal? Because we did ask the Government to prepare many months ago for all scenarios, including no deal and then all of a sudden, now, clearly 'no deal' is very much more on the table than it was. Did you come to the table late?
No, I don't think that's the case, Chair. I think, as the prospect of leaving the European Union without a deal has increased in its likelihood, so has the work of the Welsh Government and, I think, public services in Wales generally, to address some of that. As I've mentioned, I think, in the past, some aspects have been planned from the very start on a 'no deal' basis—the legislative programme, the legislative work in particular around that. And there's been planning for Brexit scenarios, as your question implies, for some time. What we are now seeing, I think, is greater communication of the work of preparing for that, because it's obviously important to not just be doing the work, but to be sharing that information both with other public bodies but also stakeholders at large and the general public.
I should probably have said that I was a Minister responsible for this area of policy until the reshuffle and put it on the record for a start. But one of the issues we faced then was the relationship with the United Kingdom Government. Now, I think it's probably fair to say that there's been a real lack of political leadership within the UK Government and political chaos in the management of the process. I think anybody who reads the Sunday papers will see that. But one of the things that were always very difficult through the autumn was the unwillingness of UK departments to share planning, and certainly officials, through the early part of the autumn particularly, were finding it increasingly difficult to actually work effectively with colleagues in London. I was wondering if you could outline what the situation is today and the willingness of the United Kingdom Government to share information and to work alongside us at the moment.
Well, I think the various configurations of the Joint Ministerial Committee provide the opportunity for us as a Government to attend and make the case for better collaboration. We have made that case consistently throughout. I think it's fair to say that the picture began to improve over the summer, going into the autumn, when there became—as a consequence, I think, of pressure from Welsh Government and Scottish Government and the administration as well in Northern Ireland. As a result of that continued pushing for more openness and more sharing of information, I think that picture started to improve around that time, and that remains the case. So, I think it has improved.
Am I in a position where I can say to you I feel that we're getting 100 per cent information sharing across all areas in a timely way? I'm not in that position, but the picture, to give an objective view of it, I think is significantly improved. Most recently, of course, since the turn of the year, there's been an invitation for Welsh Government and the other two devolved administrations to attend the UK Cabinet sub-committee on 'no deal' preparedness. Again, it's not my role to share what the agendas of those meetings are but, obviously, they provide that continuing opportunity to describe the sort of post-Brexit relationship we feel is the best in Wales's interests, and also to press for continuing engagement.
There have been other developments that I think it is important to identify in relation to the increasing use of ministerial fora, whether they're new fora or existing fora that are meeting more often. And I think those will become more important if we get to a stage where we're in negotiations with the EU about the next stage of the relationship, but I think that will require different ways of working—much more nimble, much more responsive ways of working—and I think those ministerial fora provide an opportunity to begin to do that.
So, there's significant improvement from a very low base. I'm interested in your reliance on the political structures because, normally, inter-governmental relationships on a day-to-day basis, of course, are handled at official level, and it's officials that will have those week-to-week, day-to-day contacts rather than Ministers. And it appears to me—certainly, it's my experience—that very heavy ministerial pressure is required to make those weekly, daily structures work effectively. So, you seem to be relying very heavily on the political structures. Can you tell us a little about how the officials' structures are working without that political intervention?
I'll ask Piers to perhaps give you some more detail around that in a second. I did make the point recently to the ministerial forum that meetings where Ministers were engaging with each other about the process for resolution of these issues, and the process going forward, were not a good use of ministerial time. But I also know that having those forums in place has driven much more engagement with officials. I'll ask Piers to give you a bit more colour, if I may.
Yes, absolutely. So, you're right—where there are those ministerial structures in place, they tend to act as an enabler and a driver then to support the official-level engagement. So, there are a whole range of different fora and ways in which that engagement happens. We try and make sure that, wherever possible, that's done on a multilateral basis, so, including all the devolved administrations. We would have engagement through Cabinet Office and the Department for Exiting the European Union directly to look at the overall picture, and then meetings in support of the Minister's attendance at the UK Government Cabinet committee meetings. So, there's a range of meetings that sit beneath that and support it, which the central team is involved in. There are then specific meetings that happen in respect of legislation as well. Individual policy departments will have their own official-level forum that supports some of the ministerial interfaces there. So, what we have seen is that that has really grown, I think, going through the autumn, and continues to grow, and that has been really welcome because it has helped us to be able to escalate issues where we have found blockages, helped to be able to provide resolution to issues, and helped then to be able to put the right issues perhaps on ministerial radars, where there's an opportunity to progress something at the ministerial level.
And all documents that you believe you need are being shared with you in a timely manner.
We've certainly seen a huge improvement, I would say. On some areas, we would feel we're completely embedded. In other areas, then, we see information we might not see quite as soon as we would like, but I would say that has still moved on very positively compared to the picture that was happening back in the summer and before the summer.
Okay, so in which areas do you feel embedded and which areas do you not feel so connected?
I think we've always felt most comfortable in relation to areas where the relationship has been stronger over time. So, environment and agriculture have had longer standing structures and official-level contact. What we are seeing through Brexit is, where you have got the interface between reserved issues and devolved issues, and you wouldn't necessarily have had the depth of contact or breadth of contact previously, some of those areas are the ones where we are having to forge the new relationships and bring out. So, it's particularly, probably, the interface between reserved and devolved that has been the area we've been seeing the movement on more recently.
Just to give you a bit more context on that, for example, in the area of health and in business, energy and industrial strategy, there have been—I think the health ministerial forum was meeting today—ministerial fora for those, which will, I think, drive better collaboration going forward. But that is, itself, I think an opportunity for us to grasp.
Who's attending the health ministerial forum on behalf of the Welsh Government?
I think it's Vaughan Gething.
It is the Minister, is it? Okay. Just before I bring Delyth in, a couple of points, Minister. You said you don't have the necessary permissions, I would think—I'll put it politely—to share the agendas of the forums. Have you actually raised this with the relevant UK Ministers to ask as to whether, why not, or can you publish the agendas? It is for scrutiny, to ask questions.
Well, it's a UK Cabinet committee, so it'll follow the UK Cabinet committee conventions.
Perhaps it would be helpful if you could raise those points, because it's important for us to scrutinise what you're doing. Understanding what you're discussing would be helpful for us.
And the other question: many times in this committee, we've had comments that things changed as a consequence of David Lidington taking up post. My concern is: are things changing because of personnel rather than structures being formalised and put into place to ensure that, no matter who the personnel is, those relationships will continue in that vein? So, is it a personnel issue or is it actually now seeing a structural change, which cannot be affected by whoever takes on the Secretary of State's role or the lead role in those committees?
I think one of the developments that we have seen is these additional fora being established—ministerial fora—and that provides a whole different set of relationships and frameworks for taking these forward. There's no doubt that David Lidington's involvement has been extremely helpful in areas at times, when we've been wanting more engagement with particular portfolios than perhaps we've hitherto had with them. But the point of what we're trying to establish is a framework and a set of relationships within the context of revised memoranda of understanding and so on, which obviously survive particular relationships.
The auditor general's report draws attention to the fact that 198 new posts have been created in Welsh Government to prepare for 'no deal', and the report says that most of these posts have been filled by existing staff. So, their existing roles have been filled by new recruits, for the most part. Have you made any calculation about what the effect will have been on, say, the opportunity cost of that on areas outside Brexit policy—because of a loss of efficiency, people having to get upskilled and things like that?
Well, the latest figures I've seen show there are 127 additional staffing posts and a further 53 that are in the process. I expect there'll be further in addition to that, which will probably take us beyond the 200 posts that we've been talking about. The issue isn't in my view so much about whether individual roles are being filled from within or externally; the key measure there obviously is getting the right person to do the role that is being advertised. Sometimes that'll be an internal recruitment, sometimes it'll be an external recruitment.
If your question is: is the process meaning that there are people moved from—is the process of moving people from non-Brexit-specific work to Brexit-specific work in some way causing a loss of, some kind of—what's the best word for this; that you have to manage the change in job spec and experience and so on? Clearly, the very process of Brexit is involved in that to some extent. There is a diversion of resources and of focus, isn't there? Whether it is possible scientifically then to say what is the remaining aspects of those roles that are—. I think that's probably a bit more of a challenge. But the key point is to make sure we have the right people in the right roles that are required for this time-limited exercise.
Okay, thank you. The other thing I wanted to ask about was a report that the chief economic adviser to the Scottish Government has released last month on the economic implications for Scotland of a 'no deal' Brexit. The first thing I'd like to ask is: has a similar piece of work been done by Welsh Government?
Well, the original piece of work, which we published some time ago now, about the impact of Brexit on Wales was underlaid by significant evidence of the impact on the Welsh economy and, obviously, there's been additional work since then on trade policy specifically. Cardiff Business School did a significant piece of work for Welsh Government modelling the impact on the Welsh economy of Brexit. So, that work has been done; it's been published. There's a question, I think, isn't there, about, if you look at it in a kind of scientific way, the different impact of different kinds of deal—clearly, the level of granularity that you can bring to bear to that is, I think, limited. But there's absolutely clear consensus, in broad terms, about the different impacts of 'no deal' Brexit, the Prime Minister's deal, the sort of deal that we've been advocating together with Plaid Cymru here in Wales. So, the broad picture, I think, is clear from those reports, which have been in the public domain for some time now.
And in—. Thank you. In terms of a specific piece of work looking at the economic impact of no deal, there isn't an equivalent piece of work that's been done by Welsh Government, then.
Just to say, when the UK Government produced its economic analysis last year, then there was a review of that done by our chief economist, and then that was published, I think, under a written statement to the Assembly around the end of November or early December last year, I seem to recall. So, yes, we've been looking at it, drawing, in particular, on different sources. The Welsh economy is integrated in a different way to the rest of the UK compared to the Scottish economy, so it makes sense to look at some things in aggregate, but there was that piece of work, which, as I say, came out under a written statement, I think, around the end of November or early December.
Okay, thank you. Looking at some of the specifics—just in case you have the figures for them—in this report it says that Scottish exports could fall by 10 to 20 per cent. Do you have equivalent figures for Wales for that, please?
Well, we have the—. In terms of our exports, we have the largest exposure to the EU in terms of the percentage of our exports that go, but I think the picture is clear in terms of the overall impact on the Welsh economy, and it's set out in those reports. I think, from a 'no deal' perspective, we're looking at an economy that is between 8 and 10 per cent less than it would otherwise have been— so, very significant.
Can I ask the question, therefore: based upon your report, which was produced, as Piers Bisson has indicated, for a November or a December statement, have you updated any of the data in that analysis to look at, 'Actually, we're now in a position where we're three months down the line, we know a bit more—there's greater uncertainty but we have a different picture, we know how the fluctuations are moving'? Have you had a chance to update the figures you would have had included in that analysis at the end of November, early December?
We haven't done a specific review following up on that. What tends to happen also is that we look at the different bits of economic data that come out, and our chief economist usually looks at the time of spring statements and budgets. So, we've got the spring statement later this week, and I'd expect we'd be using some of the information within that to see if there's any material update to it. But the broad figures I wouldn't expect to change overall significantly compared to what was being said in some of that UK Government analysis late last year in orders of magnitude.
So, would we have a view, prior to Brexit day, following the spring statement this week, so we'd have an idea of what that implication means for Wales, basically, before we leave on 29 March?
I'm very happy to talk to colleagues and then see what could be developed. As I say, I think there is normally an update that we give. It would depend on the sort of information that's there when it's published by the Chancellor in a couple of days' time as to how much new information we have to be able to update our view. But I'm happy to talk to colleagues on that.
Can I ask the Welsh Government—? Even if it means no change, because there's nothing new in it, it would be very helpful for us as Members to understand what your thinking is on the spring statement and the implications for Brexit.
That's okay. Just to go back to the specifics, please. So, again, in the Scottish report, it says that Brexit could reduce business investment in Scotland by £1 billion in this year. Do you have equivalent figures for Wales, please?
Okay, thank you. And one other piece of information I'd like is that it says that the number of people unemployed would rise by around 100,000 people in Scotland and unemployment would increase by between 5.5 per cent and 8 per cent from the current rate of 4 per cent. Do you have equivalent figures for Wales?
Okay, and the final thing, please. There's a potential for GDP to contract by between 2.5 per cent and 7 per cent by the end of this year. Do you have equivalent figures for Wales, please?
We've clearly described the overall impact on GDP for the Welsh economy, but I can provide what information we have to you separately.
Thank you. Just before we lose sight of the question about job numbers, you mentioned that this 198 figure might actually go over 200. I think the Commission might be watching with some envy, with that kind of talk. Are they likely to be on fixed-term contracts as well?
As I've said, all of these recruitment exercises are on the basis of a fixed-term contract, yes.
Okay, so as internal employees move on to those fixed-term contracts, I presume their position is protected so that they can go back to their previous work once those contracts have come to an end, but what will happen to the people who backfilled their jobs in the meantime? They've presumably come in on fixed-term contracts as well.
Okay, that's just to give me a bit of clarity. That's lovely, thank you.
And, just for clarification, those fixed-term contracts are for a period of time for which you have certainty of funding from the UK Government, because, obviously there's a consequential from what the UK Government is spending, so is this part of that consequential or is this part of the £50 million that the Welsh Government has put aside for the transition fund?
Yes. Shall I ask mine all together? Okay, thank you. Right, my question is about comms as much as anything. So, first of all, I'd like to get a sense of what might have changed quite recently within Welsh Government about how you communicate between departments on the latest developments, just to make sure that everyone has the most up-to-date information about what a 'no deal' scenario might look like.
Can you give us a brief idea of what that looks like, without getting into the weeds?
Yes. There's a comms presence in each department, and they liaise with the central European transition comms team on the communications of the messages within the Government, but also there's a very significant increase in the level of communication to our stakeholder groups. So, in each of the key portfolios, there's a different stakeholder group. We have in addition to that the European advisory group, which is not portfolio specific—it sits outside Government. And they're all part of a network of partners, if you like, that we can disseminate messages through. One of the key challenges here is making sure that the messages that the Government wishes to send out gets to stakeholders, certainly, but gets beyond that to the client base, if you like—
So, for example, the National Farmers' Union were in last week, and that's an issue I was discussing with them: how to make sure the information that we're able to provide to them actually ends up with their members, if you like. But there's also the task—. The other challenge here is to make sure that the comms that the Welsh Government puts out is seen in the context of the comms that the UK Government is putting out and that other bodies are putting out. So, seeing that in a co-ordinated way is very important. And there are, weekly, I think, comms calls between DExEU and the Welsh Government's communications team, to make sure as best we can that that is aligned, but obviously events mean that that sometimes is vulnerable to changes.
Okay. That's what I wanted to explore, really. My next question is about communications with the public bodies and then with the public at large, if I could put it like that. So, in terms of public bodies, how are you making sure that your Paratoi Cymru website, for example, is always up to date and we're not in a position where public bodies in particular might be making decisions on slightly out-of-date information?
Well, I think the Wales Audit Office described it as a good starting point—
Yes, absolutely. They've also said that, if it isn't up to date, that leaves people very vulnerable.
Absolutely—no, of course. There is a system, an internal system, where departments provide that information whenever there's a new update on a particular policy area to the central comms team, then that gets updated on the website. That was one of the challenges that we, if you like, set ourselves at the start of the process of building Paratoi Cymru. It's fine to have a website that is correct on day one, but it's obviously important for it to continue to be correct. There have been some significant updates, which have been cross-cutting, so one of them's around data, for example, and we've included a new section, which links to material that the Information Commissioner’s Office has published, which includes guidance to businesses on how they can protect themselves in terms of a new data landscape post Brexit.
I mean, you can't be everybody's mother in this, but how do you monitor how well public sector bodies engage with that website in particular, shall we say? Because it's great having information there, but if public bodies aren't engaging with it, then there's still a problem, and bearing in mind that the audit office report mentions that some parts of the public sector are better than others at taking leadership roles and preparation, there are going to be some that are worse at this than others. So, how can you encourage those who aren't quite so willing to grab every opportunity to be informed to do it? You mentioned in your opening remarks that there are assets such as Paratoi Cymru. So, there must be other assets that you have that you're taking advantage of to communicate with public bodies.
Well, with a range of bodies, not just public bodies. We've got a Brexit portal for businesses, for example, which—
Okay, fine. Well, the task is to make sure that our stakeholder groups are getting that message out. I think I'm right in saying that most local authorities are linking to Paratoi Cymru. Obviously, it's important insofar as we can as well just to make sure that there's no duplication. So, having, insofar as it's practical, a single source for these things is important—so, encouraging other parts of the public sector to link to that rather than necessarily developing stand-alone assets that might be duplicative.
But it must worry you—sorry, I'll let you answer now—to hear from the audit office that some civic leaders aren't on top of this in the same way that, perhaps, the Welsh Government itself is, and that certain activities are being led by officers rather than elected leaders or members of the NHS boards and things.
Well, there are two aspects to that, I think. One is that, in January, I think it was, the partnership forum that engaged local authority leaders—. I think the picture there was very much one of leaders absolutely getting hands-on about it.
Absolutely, because I think it's absolutely essential to have the kind of political drive as well as the officer official drive. And there's also the dimension, which I think you're alluding to, which the Wales Audit Office also spoke about in its report, about ensuring that the scrutiny process of what's happening is enhanced, and we've taken that very much on board. This week sees the start of a series of roadshows that the Wales Audit Office and Academi Cymru are running jointly to build capacity amongst councillors and board members so they can scrutinise using those assets that are in the public domain from UK Government, Welsh Government, and other bodies, using those assets then to scrutinise what's going on in their organisations. That's an essential part of that communications process.
Well, I'm pleased to hear that, because, down the line, it's probably entirely foreseeable—six months, 12 months down the line—opposition parties will be asking Welsh Government, 'What have you done to make sure that you're scrutinising what local authorities and public bodies are doing to make sure they've taken up this information and are using it wisely?' So, that's a nice big flag-up for you there.
You mentioned the NFU earlier on—and I'll just finish with these two questions, if I may—. Perhaps I should declare an interest with this one, as we are a farming family.
Okay. How are you dealing with those who might be more difficult to get to because they don't have a direct relationship with Government? That will include bodies like the NFU and some bigger private sector organisations, who could be benefiting from all your information.
Well, this is a significant challenge, to be blunt. Last week, I had a meeting with the NFU. I also met with the Confederation of British Industry, and the consistent messages are, 'How do you make sure that individual farmers, individual businesses, are getting the information that they need?', and, bluntly, the initial part of the challenge is raising the awareness of this as a real issue in terms of—. In particular with a 'no deal' Brexit, there's a perception that it just isn't going to happen, and so people don't necessarily want to engage with it, and I just think there's a task for us as Government, but also for all our stakeholders, to raise people's awareness of that. I think making sure that members have access in a way that is authoritative and current is obviously vital. I think if people feel they have a particular question, they know where they can go to get the answer. The challenge is making sure that people are aware of what the questions are they should be asking themselves. So, as you say, we can't as a Government ensure that every single business, every single farm, in that particular context gets that information. It just isn't within our capacity to do that, but we have, in providing, I think, quite extensive information in both those areas on the assets that we do control at least provided the base on which that can be disseminated. We do what we can through direct channels, through conventional media channels. You'll have seen there's a billboard campaign that Business Wales is running at the moment. So, there are other channels that we are exploring, but, ultimately, we look to our stakeholders to join us in the exercise of raising awareness generally about the questions that businesses of all sorts in all sectors and organisations should be asking themselves.
Okay. Thank you. Then, just finally from me, Chair, the questions the public should be asking themselves—. I mean, you've given that sort of advice in the past—the 'Don't panic, Mr Mainwaring' type of approach, which was very welcome. Are you planning a different approach to the way you conduct public campaigns from now on? We've seen some recent television campaigns, as you mentioned. Have you thought about what public information campaigns are likely to cost? Will you be targeting—should there be no deal, obviously?
The answer is 'yes'. We are looking at all the various channels. In terms of what they might cost, I think you come back here to the judgment that others are making at the same time—so, the UK Government will be making judgments about what communications it will be putting in the public domain, so the question of how we relate to that is quite important to the design of any communications campaign, but also to the question of cost. So, the answer's 'yes' in principle, but I can't be more granular than that in terms of the—
No, no, I understand that. In terms of how—. Do you think it's likely you'll be giving different advice to individuals, the public at large, about what they should do in a 'no deal' scenario in their own day-to-day lives? Sorry, I'm not explaining this very well—in the daily life of an ordinary person on the street, what kind of things they would have to think about.
I think the best way of putting it is that we keep it constantly under review. As the likely options move and change, we keep—. And there's also the question of what difference those decisions can make, if you like. So, we've been very clear about our advice around food, around medicines, and so on, and we don't see any reason at this point in time to change that advice.
Sorry. If I may, I was just going to add an element to the question around the engagement with public bodies. You talked about here in Wales, but I'd also draw attention to the engagement fora that we have, which enable discussions to happen at the right point in time, and then, underneath those, there can be regular contact at official level. So, particularly I'm aware, I think in health, there are regular meetings involving comms professionals from across Welsh Government and the NHS and the NHS Confederation and others with an interest in that agenda to try and make sure that the right messages then can be cascaded, and then, obviously, health bodies and so on will have the ways in which they have their internal comms to cascade that through to relevant staff. So, there's kind of a whole patchwork quilt of ways in which we would look to get the messages out beyond just what is said on the Preparing Wales website.
Well that'll be very useful, particularly for our scrutiny in, say, six or 12 months' time. Thank you.
Will those messages also be about not just information, but prompting actions from bodies and organisations?
Yes, I imagine so. I haven't seen the detail of all the individual discussions, but it would be around making sure that different parts are prepared and ready to act on a kind of multi-agency basis, because you need to make sure that all the different public bodies are singing from the same hymn sheet and have got the same messages. So, I'm sure there will be actions and so on, but I'm not sighted on the granularity of them.
And are you prepared for a variety of scenarios? Because we're still in the position where we could actually exit with a deal on the twenty-ninth. We could exit without a deal. And we could be in a position where we are seeking an extension. So, are you prepared for all three possible scenarios?
Well, your question strikes at the heart of it, doesn't it? You want to give advice that is dependable and authoritative, and you can only do that, ultimately, in a context that is clear and certain, and I'm afraid we aren't in that position at this point, but we respond to the different configurations as we can and give the best advice at any particular time, looking at what look to be the potential likely outcomes.
But, from that answer, I take it you are preparing for three different scenarios to give information out, because, let's be honest, we've been so embroiled in 'no deal' discussions, if there is a deal, people have to be aware, perhaps, what that means for them.
You said earlier, when we asked about the economic impact that had been forecasted for no deal, that you didn't anticipate any significant changes in those estimates, if I recall correctly, and that they'd been based around, I think, the OBR/Treasury's estimates about three months or so ago. I was a little surprised by that, because the Bank of England released its scenarios for no deal within a day of those OBR/Treasury numbers. Are you not aware of the changes the Bank of England made to its estimates in the past week?
The Welsh Government chief economist's report around the economic impact on Wales is based on the long-run effects, and his analysis is broadly in line with the average of the economic forecasts, including the OBR response—so, about 8 to 10 per cent long-run effect. The Bank of England's recent scenario work was thinking about short-run effects—what might happen in the first months and the first year of an exit. That is a very volatile and different kind of time frame to be thinking about the impacts. So, that's why there was a difference in those different reports.
Are you aware of the changes the Bank of England have made to those scenarios?
Yes, we know that that position around the scenarios and the short-run effects is very difficult to project and also one where the analysis changes over time.
But are you aware that the Bank of England said last week that the scenarios that are released, at the same time that you've got these other economic estimates, that it had halved its forecast of the reduction in economic output for a 'no deal' Brexit? Isn't that a matter of some significance?
The short-run effect is incredibly difficult to project because of the uncertainties in the behavioural responses on both sides of the border. But I think the analysis of the long-run effects is relatively consistent over time.
But the Bank of England, contrary to what is said three months ago, as we now know, says that the banks in the UK, at least, are prepared for no deal, that the EU recognised that London clearing houses will continue to transact EU business, that aviation will continue between the EU and the UK, So, hence the worst-case scenarios based on some of those scenarios—haven't those clearly eased?
Some of these scenarios are short-term fixes to try and ameliorate the worst potential downsides of leaving without a deal, but I don't think there's any doubt about the long-term damage that Wales and the UK would suffer from leaving without a deal.
The evidence earlier, I just didn't understand this and I'm just re-asking for clarification. I think, Piers, you mentioned we were talking about the areas where the information flow from UK Government to Welsh Government was perhaps less good, and I think, Piers, you said it was where there was the interface between the devolved and the reserved. I just wondered what you meant by that or if you could give me an example of that. I know we've moved from a devolved to a reserved-powers model, but I don't quite understand what you mean by this interface between devolved and reserved for areas where there's more difficulty.
So, an example would be we would like to get upstream in the engagement with UK Government on aspects such as migration where, obviously, at a UK level there is a UK policy on migration, but then the implications of that for public services in Wales, you know, have that interface. So, that's an area where we haven't been as upstream in the engagement with the UK Government as we have perhaps in some other areas, and that makes it then more difficult for us to be able to consider what's coming forward and to be able to contribute and help make sure that all the different aspects related to Wales are picked up at the right point in time.
Thank you. That's a good example. Can I ask specifically about the NHS and how you would assess the overall level of preparedness within the Wales NHS, both in absolute terms and relative to other public service areas?
I think there is a significant amount of work going on within the NHS to prepare for the challenges that may be faced. We've talked about a number of these areas in the past, like the workforce challenges in particular. But also, as you will I think know, there have been UK Government-led discussions with medical supply companies, and so on, around making sure that we have assurances from them in relation to availability of medicines on a rolling window, a rolling buffer. We've been doing our own work here in Wales in addition to what's going on at the UK level—some of the supply chain issues around medical devices, for example, to ensure that we have a clear picture of where it makes sense for us to work closely with UK Government and where we need to take specific action here in Wales. So, there are number of examples of those sorts of projects, which have been in train for some time. Also, there are examples of—your question talked about other public bodies—health organisations and social care organisations obviously working together on preparedness work, because that connection's obviously vital.
Yes. And you gave the Department for Environment, Food and Rural Affairs, or DEFRA areas, as an example of where there'd been good co-operation between Wales and the UK Government historically. Can I ask where the NHS sits on that? Have we tended to push on with our own thing in Wales without those close links, and have we needed to make those links because of this Brexit planning, or has that been good co-operation generally?
Yes, I mean, I think I mentioned that today's the first of those ministerial fora for the health Minister, so I think that is an area where there's been less experience of working in that way. Simon, you could perhaps give some more colour on that.
I think, at an operational level, the NHS has co-ordinated very closely across borders. I think Swansea is a tertiary centre for plastic surgery and people are helicoptered in across borders for surgery there, and a lot of health provision in mid Wales is in England. At an operational level, there's been a lot of close co-operation. What Brexit and the issues for the health service in that have meant is a lot more policy interaction and so a growing maturity of those political and senior policy-making fora to try and deal with those levels of increased workload.
And why has it taken so long for our health Minister to be in a forum meeting with the health Minister at a UK level?
I think the department for health here has been pressing for that level of dialogue for well over a year.
Well, I'm glad to hear that's now been agreed. Can I ask, finally, around the medical consumables, what's being done in Wales in terms of extra storage or refrigeration capacity as opposed to relying on arrangements that are being made elsewhere in the UK?
Well, there have been discussions about acquiring additional capacity to enable there to be storage capacity—
We are—yes, we are in the process of doing that at the moment. The facility is being made available to us so we can make sure that we have stock in south Wales, for example. And that will, I think, provide opportunities beyond Brexit, actually, to make sure that we can perhaps use our procurement capacity and bring it to bear on that so that we can develop the supply chains in the future, which may work even better for us.
The auditor general was saying earlier that he didn't want to be too critical of public sector bodies with, as he said, the benefit of hindsight, potentially, but, nonetheless, do you not think that 18 days before the Brexit date is a little late to be acquiring this storage capacity for the NHS in Wales?
Well, as I said, preparations have been going on in this area for some time. I welcome the auditor's comments on not being critical of public bodies who spend money in anticipation of Brexit and a 'no deal' Brexit. That said, I think there is a significant amount of resource being deployed on this, which is a great pity, because if we had clarity from the UK Government in a timely fashion about the kind of orderly Brexit they've been advocating apparently for some time we would not be having to be in a position where we're spending sums of money, which could be spent more productively on other public services and on the needs of our population—it's being spent instead on managing against a contingency that certainly Welsh Government thinks would be very, very bad news in Wales.
Thank you. When we're talking about storage, we're talking literally about warehouses and so forth.
The auditor general's report makes very clear that no public body is going to be criticised for how much money is being spent on 'no deal' preparations even if there is a deal, because, so long as it's reasonable, then the preparations have to be made. But if figures are available for how much of that money will have been wasted—how much money will have been on warehouses that wouldn't otherwise have been necessary to procure—if the figures are available now, where would we find them? And if they're not available, would the Welsh Government have any desire to see those figures being made public in the future? Or would they be collated?
Well, I suppose some of it is about, as I mentioned now in relation to warehouse capacity, whether it is possible for that to be used in future for purposes that could also be genuinely constructive, as it were. Then there'll be expenditure in that area. The question is whether you would choose, at this point, to make that expenditure, and there'll be judgments around that. It is certainly the case that we'll prefer to be in a position where we're not having to make these judgments about how resources are deployed. But if you look at things, for example, like the EU transition fund, some of that money is being spent on a 'no deal' Brexit preparation; some of it's being spent on preparation that will be helpful, we hope, in any kind of Brexit scenario. So, there are judgments on the boundary in some cases as well.
Thank you. In terms of the figures of how much of it we can quantify would have been wasted, would there be any plans at any point to make those calculations?
I should declare I'm not an accountant, but I think in the year-end accounting process, there are ways in which—I think they might be called fruitless payments, or aspects like that that might be picked up. I mean, I think wherever we have been trying to incur expenditure, we've been trying to look at it on the basis of, 'Would this also form part of the sensible deployment of funds that, whether or not we are in "no deal" or a different scenario, would be of benefit?' So, that's a general approach, wherever we can, to try and make sure that it would be valuable. But I think there will be processes within year-end accounts to pick up if there was, initially, any expenditure that was wasted as such, but that's, obviously, what we're trying to avoid wherever we can.
No, no, I understand. If those figures can be made available to us, when they are calculated, that would be welcome. Thank you.
Minister, good morning. Before I come to a couple of Treasury-related questions, I wonder if I can ask you your current views, the Welsh Government's current views, on the issue of migration post Brexit, and particularly in terms of the shortage occupation list? Professor Manning of the migration advisory committee was in Cardiff last week as part of a series of round-tables he's doing across the UK to go back to the UK Government. One of the things that came up was the aspect of whether devolved Governments, including Northern Ireland, but certainly Scotland, which already have some capacity, some influence, should have any ability to adjust what's on the shortage occupation list to reflect geographic, regional, devolved features. Welsh Government—no, he did highlight, I have to say, some concerns around that as well. Are you of an open mind at the moment on this as a Welsh Government?
I met with Professor Manning last week, and I've written to him, and I'd be happy to share the letter, which sets out in more detail some of the considerations around this. We've also, as a Government, commissioned a piece of work from the Wales public policy forum that deals in more granularity around some of the issues here. The broad message, I think, is that, whilst there definitely are some advantages in having a version of that list that is specific to Wales, generally speaking, much more significant in terms of the health of the Welsh economy and the impact of migration on that would be for the UK Government to look again at the salary threshold in the White Paper, which it sets far too high for the Welsh Government. Now, where those two issues come together—there is a kind of relationship between the two, but we would have particular concerns to make sure that social care, for example, and vets in the food production sector, find their way onto that list. And, obviously, if that doesn't appear on the England and Wales list, there will be advantages in having that on a Wales list. But much more important than that is getting the right salary thresholds.
That's interesting. I didn't want to over-dwell on this, but it's interesting that your approach is: can we get the UK approach right that will fit all the nations? But you're not completely slamming the door shut.
No. I think the issues about what works for Wales, really, are my main priority here, and the sectoral range of issues is not greatly different in Wales and England. It may be different in Scotland, it may be different in Northern Ireland, but, broadly speaking, the picture isn't so different between England and Wales. There are particular areas where we have concerns—social care and vets being two of them.
And you're clearly articulating that directly to Professor Manning, but also directly into Government as well?
Okay, thank you. Could I turn to the two Treasury questions that I have? Why is it that both Welsh Government and the Scottish Government have articulated the need for an emergency budget at least to be considered in the event of a 'no deal', and, I assume, to be planned for in the event of a 'no deal'?
Yes, indeed. Put it in terms that we can understand, a member of the gallery can understand and the Welsh public. Why do we need an emergency budget? Why do Welsh Government—?
Well, if the impact on the UK economy is as we think it will be, there will be additional calls on the public purse to stimulate the economy in different ways, and there'll be calls from particular sectors for particular levels of support. We have been clear that it would not be manageable within the Welsh budget for us to be able to address that adequately, and it would not be adequate to do that through any kind of Barnett consequential; we would need to have more ambitious spending commitments than that.
I think one of the things that might of reassurance to this committee—. Whilst I understand the UK Government's current political position, which is, 'We are planning but we're not planning for a "no deal", but we're looking for the Prime Minister's deal or something like it to be passed, so, in that case, we're not countenancing public discussion of an emergency budget', can you—? I don't know if you can. Can you reassure the committee that at least in the back channels there are discussions that Treasury is having with devolved Ministers that are saying, 'That's our public position, but don't worry, we are seriously planning, just in case, for a range of scenarios'? Mark said that these are constantly revised, and they are, they're revised from day to day, from week to week, and I suspect that they'll be revised again. But I would hope that the Treasury were wrestling with this and were thinking, 'Right, there's a range of possible scenarios here.'
Okay. I understand. Could I then—? Sorry, I'm also pushing you into the Rumsfeld unknown unknowns here as well, because one of the things, beyond—. The Welsh Government, indeed, is looking at its stakeholder groups and its forums and the work that it's doing internally on what we can manage, both in terms of a managed transition, but also a 'no deal' scenario and every possibility. But, of course, there is the impact within what impacts in Wales in terms of market fluctuations, currency fluctuations and so on. I know you can't give any detail on it, but are we in a position where we can say that the Welsh Government is engaging with UK Government on those concerns and what happens in that situation? Because these are retained competencies of the UK Government, but the implications are UK-wide, and all of the best planning around health and transport and ports and everything else, if we hit a bad scenario, could be undermined by those things such as currency fluctuations, market fluctuations.
We don't have the level of reassurance that we'd need in relation to those. There are discussions, obviously, on a ministerial level and on an official level, about a number of issues around funding and so on, but nothing of a level of maturity that I could give you the reassurance that you're looking for.
Would you expect, if there was a 'no deal' scenario, that the Scottish Parliament, Northern Ireland officials and Welsh Government Ministers would be at the top table in those discussions about response to a critical situation in the markets?
Yes, and we press consistently for there to be. There is an existing—the finance Minister has a quadrilateral, as you know, and it is the Government's position in Wales that that should become a body that deals with exactly that kind of UK-wide situation.
It's the Government's position. Have you had reassurance that that, indeed, will be what happens yet?
Can I just ask one question? In terms of civil contingencies, clearly there'll be civil contingency planning taking place as well, and I accept that some of the scenario planning can be quite difficult on this, and there will be extremes on either side, and the Government will, I presume, take a more reasoned approach to managing what it believes is the more likely situation facing us in potentially two and a half weeks. I presume, therefore, that civil contingency structures are in place. I'd be grateful if you could confirm that, and that you are planning to use all the civil contingency facilities and assets that are available to Welsh Government in planning, potentially, over not just the next month, but I understand that some of this planning is in place to potentially be in place for up to a year.
Certainly it's much longer than the next month. So, the time frame, the horizon, is much longer than that, because obviously issues may emerge over a longer time frame than that. The short answer to your question is 'yes'; the range of civil contingencies, processes and arrangements are in place and will be deployed, and they have been subject to testing as well, both on a UK-wide basis and also for the specific dimensions of the Welsh-wide response, if you like. You may have seen that, today, the Government announced additional funding for our local resilience fora, specifically so that they can better resource themselves in terms of staffing to enable them to be plugged into the UK-wide Yellowhammer arrangements and so on, so that the communication flow is built upon, essentially.
We can have a really short answer on it, if you like. I'm just curious: the Welsh Local Government Association's had some transition money. Can you give me your view on who you think's used that well, on what, when it comes to 'no deal' scenario planning?
Well, that money's being used to build capacity across the sector generally.
Yes. So it's developed a toolkit that councils are using, or have been using, to test their Brexit readiness, and there's also been a series of one-to-one assessments with councils around their progress, and also sharing of best practice. I think the sharing of best practice is a very important dimension in this. I think it's Torfaen council that recently did their own impact self-assessment, and based that on learnings from other councils in terms of what they had discovered in doing theirs. So, there's an element of that happening, which I think is to be encouraged, frankly, across councils generally.
You've just identified how that funding is being used by the WLGA. The indicators are that you're getting funding from a consequential to help support your staff, but the report also identifies that many local authorities and public bodies are actually identifying roles for staff to take on this responsibility within them. Are they going to get any aspects of that consequential? Are they going to get funding for those roles?
The WLGA have raised that with us, and we have been in discussion with them, and we have agreed to make additional funding available, which will be announced later on this week.
Thank you for that; that's very helpful. Minister, I can't let you go without asking you a simple question on where we are in negotiations. Clearly, this week is a week when we expect some action in Westminster, whichever way it goes. Have you at this moment in time got any scheduled meetings with UK Ministers at the end of this week or beginning of next week to discuss the outcomes of what happens in Westminster?
There are meetings scheduled for, hopefully, the next week, during next week, which will be an opportunity to raise some of these points with them. This week is an absolutely vital week for us, isn't it? I'm pleased to see, just before coming down to committee, the Prime Minister reconfirming what she had said to Parliament, that she will bring a meaningful vote forward. I have no confidence that she will be in a different position tomorrow than she was when she last put that vote to Parliament, but there's an opportunity for Parliament to be clear that a 'no deal' Brexit is not acceptable and also to instruct the Prime Minister to seek an extension to article 50. The Welsh Government is also today putting in the public domain some potential drafting for the withdrawal agreement Bill, which would give a reformed version of the political declaration, reflecting the principles in 'Securing Wales' Future'—a reformed version of that, some kind of statutory footing. One of the questions has been: if you amend the declaration, does that give you any more comfort, because it could be changed? Whilst that is the case, we have been developing some suggestions as to how the version of Brexit that we've been advocating here could be given some kind of statutory footing, if you like, so we'll be putting that in the public domain today.
You mentioned the withdrawal agreement Bill. Clearly, if that is to go ahead and a deal is agreed this week, there's very little time to undertake the proper scrutiny, and this Assembly should be undertaking proper scrutiny, because it has a legislative consent motion attached to it. Will you be pressing for some form of mechanism to allow us the adequate time to do that scrutiny?
Absolutely, Chair. I've been consistent in pressing for that point. I made the point directly to the Minister, Kwasi Kwarteng, that it's absolutely essential in what is obviously becoming a constrained time frame, that the Welsh Assembly and the Scottish Parliament have the time they need to consider the legislation and that the constitutional conventions apply fully.
Okay, thank you. Our time has come to an end. Can I thank you very much for your time this afternoon, and for the evidence from your officials? As you know, you'll receive a copy of the transcript for any factual inaccuracies. Please let us know if there are any as soon as possible so we can have them corrected. Thank you very much for your time and I wish you luck in your meetings in the weeks ahead.
We now move on to item 4 on the agenda, papers to note. There is one paper to note, and that is correspondence from the Counsel General and Brexit Minister in relation to common frameworks. Are Members happy to note that response at this point in time? Thank you, then; we note that.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).
that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).
Cynigiwyd y cynnig.
The next item on the agenda is Standing Order 17.42(vi), to resolve to exclude the public from the remainder of this meeting. Are Members content to do so? They are. Therefore, we now move into private session.
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 14:36.
The public part of the meeting ended at 14:36.