Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol - Y Bumed Senedd

External Affairs and Additional Legislation Committee - Fifth Senedd

23/09/2019

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Alun Davies
David Melding
David Rees Cadeirydd y Pwyllgor
Committee Chair
Huw Irranca-Davies
Mandy Jones

Y rhai eraill a oedd yn bresennol

Others in Attendance

Alastair Paton Yr Adran ar gyfer Ymadael â'r Undeb Ewropeaidd
Department for Exiting the European Union
Andrew Gwatkin - Anghywir Llywodraeth Cymru
Welsh Government
Eluned Morgan Gweinidog y Gymraeg a Chysylltiadau Rhyngwladol
Minister for International Relations and the Welsh Language
Emma Edworthy Llywodraeth Cymru
Welsh Government
James Duddridge Is-Ysgrifennydd Seneddol (yr Adran ar gyfer Ymadael â'r Undeb Ewropeaidd)
Parliamentary Under-Secretary (Department for Exiting the European Union)

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Aled Evans Cynghorydd Cyfreithiol
Legal Adviser
Claire Fiddes Dirprwy Glerc
Deputy Clerk
Nia Moss Ymchwilydd
Researcher
Rhys Morgan Ail Glerc
Second Clerk

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Dechreuodd y cyfarfod am 13:31.

The meeting began at 13:31.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Good afternoon. Can I welcome members of the public and Members to this afternoon’s session of the External Affairs and Additional Legislation Committee? Before we go into our business for the afternoon, can I remind Members of some of the housekeeping? If you have mobile phones on, please make sure they’re on silent, and any other equipment that may be interfering with the broadcasting equipment today. The meeting is bilingual, so if you require simultaneous translation from Welsh to English, then please use the headphones on channel 1. If you require amplification, then please use the headphones on channel 0. We’re not scheduled for a fire alarm this afternoon, so if one does take place, please follow the directions of the ushers to a safe location. Do any Members wish to declare an interest at this point in time? I see none. Can I also pass on the apologies from Delyth Jewell? There have been no substitutes identified, so we will not have a Plaid Cymru Member this afternoon.

2. Sesiwn graffu gyda Gweinidog y Gymraeg a Chysylltiadau Rhyngwladol
2. Scrutiny session with the Minister for International Relations and the Welsh Language

Moving on to the business today, the next item on the agenda is item 2, and that is our scrutiny session with the Minister for International Relations and the Welsh Language. Minister, I'd like you to introduce your officials for the record, please.
 

Member
Eluned Morgan 13:32:51
Minister for International Relations and the Welsh Language

This is Andrew Gwatkin, who's the director for the international relations department, and this is Emma Edworthy, who heads up our trade team.

Thank you very much for that. We'll move straight into questions, if that's okay with yourself. I just want to make a note—. In that case, Minister, when you came to us on 10 June, you indicated that you would hope to have a final strategy in place. In July, when you published your strategy, it was a draft strategy, indicating various reasons, including the flexibility and the uncertainty that still existed. Where are we with your final strategy? What type of date are we talking about for a final document, and can we have confidence that, even though there's still uncertainty going on, that will be the final document?

Well, it is difficult to lock down what the final strategy will look like because so much of this is wrapped up in our response to Brexit and where we end up in relation to Brexit. So, of course, I don't think we can wait forever, which is why I thought it was important for us to make sure that we published a draft document, so that we can just get some kind of response in terms of whether we're heading in the right kind of direction, but I’m hopeful that—we’ll see if we get some kind of outcome before 31 October. If not, we may be looking at January. My guess is that we probably need to do something, irrespective of what happens with Brexit, by February. We’d have to go with something. But it’s not to say that we’re not working on some of the issues that we’ve been promoting in here already. So, we’re not waiting for the strategy to change some of the things that I was hoping to change anyway.

Could I ask—? When I look at a strategy, I think to myself, ‘This is the direction of travel you want to go in, and these are your ambitions’, and I don’t see why that should be delayed because of the uncertainty, because all the uncertainty does is perhaps challenges the way in which you achieve that goal. Because it might make it harder, it might make it easier, but the goal you want will still be the same goal. So, I just wondered why we won't have a final strategy in November irrespective of what happens with Brexit, because that would still tell us where the Welsh Government wants to be; the difference maybe is how you get there.

13:35

I think it's about emphasis and where we place the emphasis. So, if we leave the European Union then we'd have to reinforce those relationships with the continent, I think. If we don't leave the European Union, then we would be in a different situation in terms of being able to assume that some of those relationships that we built up over the years would not need the kind of care and attention that we need to reinforce, given that some of the messages that they will have been having is that we as a UK nation want to cut off from the continent. That is certainly not the impression we want to give as the Welsh Government. 

Which to me, again, reflects—. Yes, if we leave, reinforcement of relationships is part and parcel of how you get your ambition. Your ambition is still that you want those relationships. So, I'm still concerned as to why we're not having a final document in November, because that would set out where the Welsh Government wants to be and what it wants to achieve. The strengthening of relationships if we have bad break with the EU is simply an additional requirement you will be placing to get to that point. So I just wondered, will we—? Are you in a situation to give us a final strategy and say, 'This is where we want to be, this is what we want to be able to achieve' in November? Because to me, Brexit simply says—it makes it difficult or easy, but still you know where you want to go. 

Look, I think this document gives you an idea of where we want to go anyway. I think it gives you a sense of direction in terms of priority areas and priority regions that we want to promote. Some of this is about focusing. What is clear, I hope, is that if we have a relationship where 60 per cent of our goods go to the European Union, and specifically to two major countries within the European Union, then reinforcing that link will be critical. But that's not to say that we're not interested in pursuing our relationships with other countries around the globe. The fact that we've opened 21 offices around the globe I hope demonstrates our commitment to a broader approach to international relationships.

Okay. Let's get back to this document and the draft. Can you tell us, perhaps, how the consultation that the Government undertook prior to that influenced the document?

So, we've consulted with groups around Wales; we've had a task and finish group that was set up, and that had people from the third sector, from the business community, and honorary consuls for example. We've also had responses from about 400 people, or 400 organisations, to the pre-drafting of the document. So, the whole exercise was about really making sure that people felt engaged and that this would be part of what they wanted to see as a strategy. The key thing to remember here is that it's got be a partnership approach and that we can't do this alone. So, we're going to add a lot more value if we can bring people with us on this journey, and that's what has helped to shape the document.

But I think it's worth also saying that we're not starting with a blank page. We already have 21 offices around the world. We have to make a judgment: is now the time to be reorganising, closing some offices, opening new offices? I think now is the time for us to make sure that those offices that we have are working well, that we're driving the performances of those offices. Because you can spend two or three years reorganising and reprioritising, and I didn't think that that was a good use of time, because I think that there is an immediacy here that we have to really focus on. That message has gone out around the world that we are not necessarily the open country that we in Wales certainly are, and that's why I think that we need to reinforce that message now.

I'm grateful to you for the explanation you've given, Minister. When I read the document, I felt it was a good document but it was a narrative. It didn't contain the analysis I was anticipating. It would have benefited, I think, from a chapter outlining the future rather than two or three chapters describing the present. I think it was—. It left me—you know, it's like a first course and you're sitting there waiting for your second course and then it doesn't come and you think, 'Oh, I'm leaving this restaurant a bit hungry'. It felt to me that the Government has an ability to put together and to shape and to describe the present, but the Government doesn't have a clear idea of the path it wants to follow for the future and where its destination is. So, it is always easy to get out of this by saying, 'This is a draft and we're going to consult' and all the rest of it, but I would have anticipated a bit more meat on these bones, if I am completely honest with you. I would have anticipated not necessarily all the different key performance indicators and the rest of it—I accept that; I don't want to go into all that much detail—but I would have accepted, rather than simply saying there are three objectives, to have actually tried to flesh that out a bit. You know, there are some fantastic opportunities in some of the areas you have described. You talk about the creative industries, but there's very little there on soft power, for example. There is very little in there about using the diaspora; there is very little in there about the purpose of it all. I was left thinking it feels like it's been a bit rushed, it feels like it doesn't know where it wants to be. I don't know if that's unfair, but it's a feeling I had when I first read it, back in the summer.

13:40

Well, I don't think you can underestimate the importance of a narrative, because I think that's one of the things that, actually, I think we really needed to build in terms of the Welsh Government. When people around us, offices round the world—. We need to be clear to them about what it is we're asking them to do. When the UK Government ask us, 'What do you want us to say?', we have to be clear, which is why we were really focused in saying, 'Look, these are our three priorities. This is what we're looking at'. Within those, there is analysis and we've been trying to make sure that we're attracting attention. And that narrative is important—you know, changing the perception of Wales. Even in the newspaper today, people in Japan were saying, 'We thought you were a coal mining area'. We have to change that narrative. So, I think it's really important we don't underestimate the importance of changing the narrative. Right; onto the detail—

Sorry, I was using 'narrative' as a verb and not a noun. I think it's important to understand what I was actually trying to say there.

Okay. In relation to—. This is a strategic document. There will be further work, obviously, that needs to be done; for example, on exports. This is an example where we've—. You know, the response to Brexit matters here. Obviously, inward investment is a tough sell at the moment, so it makes sense for us to focus a bit more on exports and developing. So, we may need to shift that emphasis a bit more, depending on what happens in relation to Brexit. On soft power, you're right: it does need to be built up, and that's why we're going to be helping to sponsor an event by the Learned Society of Wales who are going to help us to frame that. But we have had extensive discussions with organisations. Some of this is about practically pulling people together to amplify the work that they're doing. And on the diaspora, we will have a very clear strategy in relation to diaspora that pulls all this together and gets that messaging out to where it needs to be. I think the key thing is that, actually, we have engaged people. This is not just about a government policy; this is about people throughout Wales and 400 organisations actually saying, 'This is the kind of thing we'd like you to be promoting'.

I think the point I was trying to make, Minister, was—. In your response to that question, you said 'This is a strategic document'. The point I'm making is I don't think it actually is. I think it's a descriptive document. I don't think it is a strategic document, because the first thing you do when you write a strategic document is say where you want to be and the purpose of wanting to be there and how you're going to get to that destination. That is not contained in this document. So, I think the criticism—you did it quite well for me, actually—is that it isn't a strategic document and it needs to be a strategic document. Putting the word 'strategy' on the front page doesn't make it strategic. I think, in terms of the structure of the document—I don't want to get bogged down in the detail of some of this, but I think there's a lack of a clear understanding, and, as a reader, I felt I didn't understand where the Welsh Government wants to be in five years, having read this document. I think there's a need to spend some time revisiting some of those issues.

I accept that the Learned Society make a fantastic contribution to policy making and to thinking within this country. I wouldn't want, in any way, to play down that role, but I'd also like you to talk to the Football Association of Wales, for example. We're seeing the rugby team doing some—well, certainly, the first half was great this morning in Japan. I know that the First Minister is going to Japan later this week, and I think that's fantastic. I think it's really good that we do that, and we need to make the argument for Ministers being out there, travelling the world, arguing the Welsh case—I don't think we do that often enough. But I think we just need, in this strategy, to have a far clearer grip on where we want to be and how we're going to get there.

13:45

I don't think you need to answer that, because I think it was just a position. Mandy.

I think the Minister has answered two of my questions already, but can you explain how the priority relationships relate to these three core objectives and also how they relate to the three specific industries identified in your strategy?

So, the relationships with nations and regions or—

Nations and regions, you know—. I've seen that you've done your task and finish group with the 21 countries and that. Have you gone further afield than that as well?

Yes, we've had extensive consultation with people like the well-being of future generations commissioner, the higher education institutions, the British Council and the ambassadors—we've done massive consultation on this. In terms of where we want to focus, we have looked at—we've tried to make it evidence based. So, for example, we want to focus on Germany, because that is our biggest export market and it's our second biggest inward investment market. There's actually a really strong German diaspora in Wales. So, those are really solid reasons why we would pick on that country.

The same thing in France—that's our second biggest export market. Ireland is our closest neighbour. All of that has been worked out with a very strong evidence base behind it. And the same thing with the United States—that's our biggest investor into Wales. Also, in some of the core areas we're looking at developing—cyber security, compound semiconductors and film and tv—there's a real strength in terms of industry in North America, so that's why we've done that.

Those specific three sectors—. Again, we've done quite a bit of analysis on that. First of all, we've got so many sectors that we could have looked at and we could have picked on. Part of the problem you have with this international strategy is that everybody thinks that their sector is the most important. So, you know, people are saying, 'Right, why aren't you promoting more food and drink? Why aren't you promoting higher education more?' So, we've had to look at how we get the balance correct here. I think the first thing to say is that this is not just about three sectors; some of it's about changing the perception. We've chosen those sectors partly because we want to change the perception and challenge the perception of Wales.

Brexit, again, features. So, for example, we are brilliant in manufacturing in relation to aerospace. At the moment, when we don't know what our relationship with our nearest neighbours is and whether there'll be any problems in terms of transportation into the European Union, it's a difficult time to be choosing manufacturing.

We also wanted to link up with the priorities of the city regions and of the economic action plan, and we also looked at growth potential. So, those are the reasons why we picked on some of those areas. Again, this is a useful opportunity for us now to test that out to see if people think that we've picked on the right areas.

Compound semiconductors—there's a recognition that we are global leaders in this. The Massachusetts Institute of Technology have actually said, 'You are global leaders.' Isn't it amazing to go to a different country and to say, 'Look at us—we are absolutely leading the world here'? Cyber security—massive potential for growth, and we have centres of excellence. I tested all of this out on the National Cyber Security Centre to ask them, 'Look, are we genuinely good at this?', and they said, 'Yes, you genuinely are, in particular if you link it up with the kind of Malvern, south-west cluster.' And, I think with film and tv, that gives us a double bite of the cherry, because not only are we very good, not only are there now 58,000 people employed in that sector, but also it gives us an opportunity to showcase Wales internationally. So, those are some of the reasons why we picked on those areas. But they're not exclusive—they're absolutely not exclusive. Also, you must read that alongside the promotion of some of the magnet projects that we're talking about—things like homes as power stations, the fact that we've got amazing facilities here to test tidal energy, that kind of—. So, you've got to see them alongside each other.

13:50

I just want to press you on—do you think it's good political judgment not to put a strategy in place, really, as an immediate priority when you were appointed? One interpretation—as you just said, we still may not have one next February. And isn't it at a time of political uncertainty that you'd need to have strategic leadership? I am at a loss to think of what of your draft strategy key goals—or, as we've just been talking about, some of the key sectors—would be different, whether we had Brexit or not. And you can easily, in a strategy, have two lines of development: should Brexit get reversed, which is fairly unlikely, I would say, or in the new relationships, because there could be a variety of Brexits? We're only about to, if we get a deal, go into the transition period when we negotiate with the EU our long-term relationship. The deal is not really a permanent deal; it's just giving us the right to have a couple of years to talk to them to really put something in for the next 10 or 20 years. So, it's a real missed opportunity, really, isn't it?

No, I don't think it is. What we're setting out here is the fact that we need to increase Wales's profile internationally, and that's something we need to do, in particular in the context of Brexit, and the messaging we're giving around that is crucial. We do need to say, 'Listen, actually, central to what we're trying to do here is to improve the economy of Wales, and that's about exports and inward investment', and that we want to raise our profile as a nation that is serious about global responsibility. So, those are very clear goals, I think, that we're setting out in the strategy.

So, why haven't you moved to concrete ways of achieving those? Why is it going to take so long and why are we not clear what you're going to do, depending on if we do Brexit or not?

Because some of it is wrapped up in terms of what we do with Brexit. So, we will probably shift more towards exports, and we've given that instruction now—that we need to probably move towards exports rather than doing quite so much on inward investment, because it's a difficult time. We'll go back to that, I've no doubt, and it's not that we're going to stop doing it, but I do think that, until we have that settled, it's going to be difficult for us to be clear about, 'This is actually where we are going to place our emphasis.'

Thank you, Chair. Can I just go back to the three distinct industries that you focused on as centres of excellence? They're quite interesting, in that my reading would be that those are three areas that are largely—largely, not extensively—immune from the vagaries of Brexit. If you look at semiconductors, if you look at the creative industries and, I suspect, cyber security as well, we are looking at industries that, by and large, are within World Trade Organization spheres. Or, actually, things like film and creative industries have more important things—they have other things that are of more importance than Brexit in terms of incentivising a film production company from Netflix to come to Pencoed, to come to Llanharan. Am I right, and has that factored into why you've picked those three?

Absolutely. That was one of the main points that we—which is why we didn't go for manufacturing, for example. We are a centre of excellence for aerospace; we didn't follow that for that very reason. So, Brexit immunity was absolutely a key feature and obviously we've talked to—I've met with the cyber clusters, I've met with the compound semiconductor clusters and asked them, 'Look, how is this going to impact on you?', and that's the message they give—'Actually we do feel that the Brexit impact will not be as great on our industries.'

13:55

That's interesting clarity, because I've certainly had companies in my constituency who are going to be massively impacted by whatever shape Brexit is. I've got others who have always been clear to me, 'Actually, Huw, we're going to be one of the ones who are pretty much immune from this, because we're in a WTO sphere', and it struck me that those were, so that clarity is helpful.

Could I just ask, though—I said 'largely immune from the effects of Brexit'? If you look at the semiconductors, and you're rightly saying the Welsh Government has put its money where its mouth is, it has worked with the industry around Newport and so on, now, to really drive this; there is a growing international reputation around it. However, of course the European Union is now moving on this. They're putting something like £2 billion into it. France and Germany are looking to put something like hundreds of millions of pounds into it. What we've done here is immense on our own, but to what extent do you think that that sector that you've identified, I think quite rightly—are we going to be able to maintain that competitive edge when the European Union, which we are shortly to exit in one shape or another, presumably—? Are we're going to be exempting ourselves from the ability to bid into that £2 billion of funding for semiconductor development?

That's not a great place for us to be, but I do think we need to recognise that, actually, compound semiconductors are a part of the UK Government industrial strategy, and, where possible, it's really essential that we speak with one voice with the United Kingdom. So, I met with the Secretary of State for Wales last week and we are going to make sure now that, as far as possible, we are singing from the same hymn sheet, we do look at high-potential opportunities, and let's not forget that we have the compound semiconductor Catapult based here in south Wales, and that, again, gives us credibility on a global stage. So, of course it'll be difficult. I'm hopeful that we will find a way to continue to benefit from access to Horizon. It won't be the same relationship we'd have if we were still a part of the European Union, but there are people who are really, really keen to continue working with us.

Would you look at considering putting the argument to the UK Government? Because you're right—we're investing something just short, I think, of £50 million, but we're looking now at—rapidly there are going to be hundreds of millions pounds in France and Germany and elsewhere across Europe, partly through the projects of common European interest, which are looking at semiconductors. They don't do funding per se, but they bring together those various industry sectors and state actors to really get a bang for the buck. Would you put that argument, then, to UK Ministers to say that we are going to risk being outstripped in the real advance that we've made in the semiconductor area unless the UK Government—and you're absolutely right—steps up to the mark and says, 'We're going to find another way to continue this level of investment so we maintain that competitive edge'?

Yes, absolutely, and, again, the compound semiconductor cluster have asked us to really make sure that that message is delivered. I think the fact is that they have already put a lot of money into the Catapult initiative, but this is a really expensive sector, we've got to remember, but it is central to their industrial strategy, and so I think it makes absolute sense for us to be on the same page as them.

Moving on from that direct area, in reading the document again I—. The final section, which talks about Wales and Africa, and Wales's wider sense of being a responsible international citizen, for lack of a better term, I thought was quite lacking in ambition. We seem to be saying that we want this policy to be delivered through almost charitable philanthropic contributions to what's going on in Uganda and elsewhere rather than taking a policy approach. In the past, as a Minister myself, I've had several very good interactions with different parts, different administrations, such as the state of California, the state of Quebec. We've had signed undertakings with different organisations and we've worked together to develop an approach, and a policy-based approach, on issues such as climate change. We've participated in some of the UN processes, we've participated in UN conferences and the rest of it. There doesn't seem to be any of this there—well, there isn't any of this there at all in the strategy.

The committee visited Brussels in the spring and we spoke to the New Zealand ambassador there, and he spoke about how, through international agreements, New Zealand wishes to export a policy approach and not just a trade approach. Now, I recognise the limitations, clearly, and the differences between the Government of Wales and the Government of New Zealand. I'm not arguing for a moment that you can simply replicate that approach, but there doesn't seem to be any approach in here at all on policy issues and on global leadership of any issues. I think there's a passing reference to the Well-being of Future Generations (Wales) Act 2015, but there doesn't seem to be any thinking done about the place of Wales and the role of Wales and the Welsh Government as an international participant in the international community, and the role that Wales could potentially play in both learning from other states and sub-national Governments, wherever it happens to be, or actually being a leading participant in changing the way that things happen. Certainly, I remember Wales was an active participant in, and helped shape, some of the Paris agreements, for example, on sub-national states in terms of climate change. So, is there something missing there that we're actually doing at the moment that has neither been captured, nor described, nor actually built upon?

14:00

What we'd like to do in terms of projecting Wales as a globally responsible nation, I think there are areas where we can demonstrate global leadership. One is on things like the Welsh language, where we've got, I think, a good story to tell. Another is on future generations; climate change—we're just about to plant our 10 millionth tree in Uganda; and women's empowerment, in particular, in Africa. So those are clear themes that are there. What we're doing now: if you have a look at the back of the document, there is a list of international networks and agreements that we have. Those are now being assessed in an order of priority, depending and taking into account what the priorities are within the strategy. So, for example, is the network—? There's a whole list of them at the back of the document. Does it align with the Welsh Government's strategy? Is there an opportunity for us to lead? So we're setting out some clear criteria in terms of which organisations and networks we want to be engaged with and which ones we're going to prioritise. And so those things that I've just set out, for example, will be cross-referenced and that work has been largely undertaken already and we're just waiting for the end of this process, to make a call in line with what those are. 

But it's not in the strategy. You talk about a shop in Monmouth selling beeswax, or whatever, but you don't talk about any of that. And—

—we've said that we will prioritise which networks we want to be engaged with post Brexit. That is in the strategy, absolutely. It's written in there. 

I can't see it. I can see the list of networks in annex 1, but I can't see any of the ambitions that you've just outlined to us in the strategy. There are two pages, as far as I can see, one on beekeeping and one on Wales for Africa. 

In terms of where we want to be, do you not think that this strategy could have outlined a level of leadership for Wales? You talk about language policy, and I think you're absolutely right. The GWLAD conference here on Saturday is discussing exactly that and I think there have been times when Wales has been a leader in terms of minority language policy, and I think there are things that we can learn from other places as well. But, again, that's not in here, is it?

Well, just to give you an example on the Welsh language, on page 13, we'll

'Demonstrate global responsibility by increasing global awareness of Wales as a bilingual nation and use the...Year of Indigenous Languages to showcase how we are planning to increase the numbers and use of Welsh speakers and ensure a legacy develops as a result. And we will share our success with other countries.'

So, it's absolutely in there.

14:05

Do you not think that that's not quite ambitious enough in terms of the policy area that I've tried to describe to you? 

No, I think that that's demonstrating global leadership. 

I think the Member's put his case quite strongly that he still sees, in his view, that something's lacking. Perhaps as part of your final document, you can reflect upon what has been raised in that sense, to ensure that it reflects the comments made. I've got two questions—I want to go back—and then I'll move on. I'm conscious of the time, and I want to get definitely a couple of sections in to the questions to you. In earlier questions this afternoon, you talked about it might be February because of uncertainty. At the moment, we are assuming that we will be leaving on 31 October. It's a possibility that that will be extended to 31 January. But are you saying that we won't have a strategy until we've actually left?  

If we know where we stand by 31 October, I think we'll definitely get something ready by the end of the year, without question. 

Which year? [Laughter.] This year. So, I do think it depends on where we stand with that. I think if it goes beyond January, then we absolutely have to say that we're making a call on this, irrespective of where we stand on Brexit. We'll have to explain within the document that it's about emphasis then, and that we'll change the emphasis depending on the outcomes of Brexit. So, we can explain that in the document. 

The First Minister has indicated in the last week, actually, that we will get the final version in November. So, he believes November is your deadline. 

Well, I'm hoping that we'll know where we stand in November by 31 October. 

It's an observation more than a question. I think there's a real advantage, Minister, in just bolting this down, just picking a date and saying, 'We'll do it by—'. I absolutely see all the vagaries, but there's so much uncertainty at the moment, anyway, to give certainty to Wales and the Welsh industrial sector that this is what we're doing, this is what we're going for; come hell or high water, we're going to go for it. Sorry, Chair, just more of an observation than a question. Pick a date and say, 'That's going to be it.' 

Can I just ask one final point on this in this session at the moment, which is on the co-ordination? Clearly, some of the strategy, you've talked about in the draft, you've mentioned this afternoon, there has to be strong co-ordination across Welsh Government to deliver this. Have you managed to establish that co-ordination in the Welsh Government at this point in time, so that when a strategy is finalised, when you have the final version, you will be able to up and go straight away without having to establish the links within Welsh Government to ensure it can be delivered?

We've had a very comprehensive debate on this in a discursive Cabinet, where we went into quite a lot of depth on the international strategy, but that's been complemented by bilateral meetings with each of the Ministers. So, they've all fed into it, and part of what we're doing now is to make sure that everybody is aware of what activity is going on where, and we're mapping that. 

So, you're in the process, you know—. You've had discussions, you've had meetings, and you're in the process of setting up a formal strategy, a formal model of communications. 

So, the Cabinet will be the place where we discuss international relations as we go along in the long term. 

Okay. All right. Can we move on? I want to move on to trade first, if that's okay. David, do you want to lead on that? 

Thank you, Chair. Have you had an opportunity yet to meet Liz Truss, the Secretary of State for International Trade? 

I have asked for a meeting with Liz Truss, but I'm afraid she hasn't responded yet. But I am glad to say that over the summer, I met with Conor Burns, and it was one of his first visits as a Minister. I think we had a really good relationship with George Hollingbery, who was the previous trade Minister. I think he made it clear to his successor that this was an important relationship. So, that was a visit. He came to Port Talbot, actually, to the steelworks, where I was able to emphasise some of the key issues that concern us in relation to trade, in particular some of the issues surrounding steel, some of the issues around Valero, but also the fact that, actually, we're uncomfortable with some of the priorities that they are pursuing.

14:10

So, we know that the UK Government is making a priority of a US trade deal; they've also said that Australia and New Zealand are in the first tranche, I suppose, of what they'll want to achieve. So, have you had an opportunity to feed in your considered thoughts then? You've referred to steel, but there are other big ones, aren't there? 

We're waiting for this infrastructure to be set up, and we've been waiting for a very, very long time now for this concordat to be settled. Again, this is something that we pushed very vigorously with Conor Burns. The concordat is more or less ready. I haven't actually seen it yet, but what we haven't got is sign-off from that department. So, if we crash out on 31 October, we're going to have to move very, very quickly, and, at the moment, we still don't have the infrastructure for those discussions to happen.

What is comforting now is that he has committed that we can have a ministerial meeting, perhaps just to look at the terms of reference, so that we can be up and running when and if that concordat is signed. And they did give us an assurance that they wouldn't start negotiating externally until that concordat was in place. So, we are hoping that they will stick to that. But, I must say that the relationship with this Boris Johnson regime is perhaps not as forthcoming. 

I realise these events are not in your control, so please take the questions in that spirit. In June, you were more or less in the same position, that your officials, I think you said, have had some sight of the concordat; you haven't. There's been a change of Government, in effect, or administration—whatever language we should use—and that dislocation has meant that there's been no real progress from the situation in June. Is that a fair description?

That is a fair description. I think you've got the Brexit Minister coming in later, and it will be quite useful, and might be worth bearing in mind the fact that, actually, we don't have that trade infrastructure in place at the moment. 

So, if we take the UK Government's biggest priority, which is a deeper trading relationship with the US and possibly the rest of North America, in that they're in that zone of US trade pattern and after the EU it's by far the biggest area for our trade, there have already been some discussions, haven't there, at heads of government level? I don't know if the Prime Minister is meeting the President this week in New York, but I presume that things have been happening. So, is there a danger that by the time this concordat does come, and you eventually have your meeting—and, again, I do emphasise that I don't blame you for that—some of the big heads of terms would have already been written in?

Well, that's certainly something that we're fearful of, but we can only do what we are able to do. We have been trying to take advantage of the fact that, actually, we've been able to meet with some of the ambassadors. So, for example, we met the US ambassador. It was useful to be able to say, 'Look, these are our areas of priority, these are our concerns, and we don't want you to downgrade rules in relation to social, environmental, things that matter to us as a Government that are set out in our trade strategy.' And the same thing with the New Zealand high commissioner. So, we have had an opportunity to give that message directly to the ambassadors concerned. 

Have you tried to use the leverage of the Secretary of State for Wales, for instance, by emphasising how important it is that we move along with these structures, and have these high-level meetings, where you do have access to the decision makers in the UK Government?

It was certainly something I raised with him the day before yesterday. So, he is aware that we need that to move on. We're using other mechanisms to try and make sure that they get that message loud and clear. 

So, the ministerial forum on international trade, I understand that has now been established. Do you have any way of feeding into that, for instance?

Well, that's the one that we're hoping will be meeting in October. So, that's the one that we've been told is going to happen, perhaps prior to the concordat being signed off, so that we can get everything up and running, so we're ready to run. And, as I say, we can set out those terms of reference so that we can get into the meat of the discussions in those first meetings.

14:15

And then, if you look at what the UK Government have said on the free ports—and I think what you've said in the past as well—that there may be some advantages there, and obviously we have some big ports in Wales that, on the face of it, might be prime candidates to get that status. So, has there been any interaction there? And there is, I think, an advisory committee—they're meeting at the moment—in terms of developing the free port concept. I don't think there's a Welsh person on it, but what are we doing?

So, we're very concerned about that. I know that Ken Skates has written to Liz Truss to express his concern that we weren't involved in the advisory group, that actually they need to recognise that, if they're serious about this particularly and they want to involve all the nations, then they need to understand that there are devolved implications to this. If you want to develop these ports, you'll need planning, you'll need to reorganise those ports, so we have to work hand in hand. And we're very upset that they haven't engaged with us in the way that they—

Are you sending them anything, or are you waiting for their invitation?

We've written to Liz Truss, and obviously we've written in the past, to make it clear that we'd be interested in discussing this. We obviously have some reservations about whether—. You know, we don't want to see them reducing social laws in those areas, or environmental laws, or anything. So, I think they've had that message loud and clear; they just haven't involved us recently.

Before I bring in Mandy in, I want just clarification perhaps. The ministerial forum for trade hasn't yet met.

So, the first one that may occur could be October before we leave, where a concordat may be agreed.

We haven't had any indication that the concordat will be agreed at that meeting.

So, we could be entering a period where negotiation could start and there's no concordat signed.

They told us that wouldn't happen, but at the moment, that's a possibility.

And, with the concordat, have you had sight of the current draft, and does it therefore reflect your own strategy, and your own ambitions, within that concordat?

I haven't had sight of that strategy. We've made it clear that this is all about infrastructure, rather than content. I think it's really important that people understand this is about the mechanics of how we come to positions, rather than the positions themselves.

But the mechanics are important because they say how strong your voice is.

Yes, which is why getting this right and getting it landed as soon as possible is urgent.

And particularly concerning, because, obviously, the Secretary of State for International Trade has actually been to New Zealand, Australia and Japan recently, and has made it very clear that she thinks there's a deal to be done very quickly. New Zealand would be a very concerning one for Welsh farmers in particular. So, it's important that we get that concordat agreed, where the voice of Wales is heard, so that, in a deal that she hopes to get done quickly, it has a major impact upon Wales. I suppose what I'm asking is what pressures you are putting on that department to ensure that that concordat is done ASAP and not left to linger while some of the negotiations actually start happening, because, otherwise, we come to the table late.

Well, we have been putting pressure on them for months to finalise this concordat. Obviously, there's been a change in terms of the personnel involved in that department. But what is clear is, even if they don't see the urgency, countries like New Zealand understand the importance of Wales being a part of that negotiating strategy. So, even if the UK Government doesn't appreciate it, the partners with whom they will be negotiating understand the importance of us being a part of that dialogue.

Because we've met with the New Zealand high commissioner.

Right, okay. What discussions have you had with the free ports advisory panel?

14:20

So, the free ports advisory panel is the panel that we have not been invited to, and that's why a letter has been sent to Liz Truss to ask for us to be much more engaged and why haven't they included us in that advisory panel.

Would it be possible for us to have a copy of that letter?

Sure. It's actually not my letter; it's from Ken Skates.

I suppose, in relation to international trade, the biggest concern we've had as a committee is the importance of having that Welsh voice, setting up the negotiating position of any trade discussions that will take place. New Zealand highlights an example of it, and now you've mentioned that New Zealand may understand it. But, if I'm a businessman on one side and I see an opportunity for me, I'm not necessarily going to worry about the other sides not getting their balance right, because the opportunity is for my country and not for somebody else's country. So, I just want to ensure that that happens. And have you had discussions with the Scottish Government to ensure that both you and the Scottish Government are sending the same message regarding this concordat?

So, we work very closely with the Scottish Government. They're in a slightly different situation to us because they are still clear that they want to have a veto on trade negotiations, but we are trying to work with them. There has been a quadrilateral meeting back in April, or something, with the Scottish, us and the UK Government, but that wasn't a formal structure in the sense that we'd like to see a formal structure being established. But there is a process for free trade agreements, and you're absolutely right that you need to be a part of that; you need to be a part of the pre-negotiation, where you're setting out the parameters. So, you're absolutely right, David, in what you were saying earlier, that it's an important time to get engaged now in those pre-negotiations. So, we're pushing hard, but we haven't had the response that we'd like yet.

Thank you, Minister. We'll move on to talk about the overseas offices, which obviously feed into the international trade agenda as well. Huw.

Thanks, Chair. Minister, we're going to move from something where there's a slightly shifting grey date in the future to something where you've been very specific, because you've written to the committee and you have said that we will have the high-level performance data first quarterly report on 1 October. So, we're looking forward to that. What will be the high-level performance data? What are we measuring?

Well, certainly, it will have references to inward investment, to the direct export support that's been provided, the engagement and account management for existing investors, events and opportunities to deliver key messages, and opportunities to promote the wider Welsh Government priorities. So, that might be higher education or some of the other issues that we want to promote across Government.

Will it be tied at all at the moment to the evolving draft strategy?

Absolutely. That's the plan—to make sure that one reflects the other. 

Okay, that is useful and that's good to know. One of the recommendations you accepted in principle from the committee's previous report was actually to have a baseline against which you can measure performance, because, starting from now, we want to see the improvement. So, how have you taken that accept-in-principle recommendation forward?

So, what we'll be doing is measuring against past performance, but also benchmarking against the rest of the UK. So, if you look at something like inward investment, for example, in 2018, the department brought in about 51 projects and secured about 3,700 jobs. There has been a slight reduction, because obviously Brexit's going to influence that, but the reduction wasn't nearly as big as the reduction that they've seen in England. So, I think it is important, but also it's worth noting that 75 per cent of those inward investments came as a result of Welsh Government intervention rather than the UK.

14:25

Will we be able to see, aligned against individual offices, where your expectation level is of increasing performance, albeit with Brexit or other international issues occasionally knocking our stride? But you will have individual expectations of different offices based on their market, their access to market, et cetera. Will we see that as well, or will this just be a reporting back after the fact, of, 'We've done well', 'We haven't done so well'? Or will it be, 'Here's what Welsh Government was expecting’?

I think that we have to adapt to the market we're in and we have to reflect what the expectations are. So, if you're in Dubai or Doha, for example, inward investment is less likely, but there may be great opportunities for export. So, you have to reflect that. It may be in India now, in particular, that the UK Government have said that students will be able to stay for an extra two years. So, we might say, ‘Well, actually, we’d like to see a growth in the number of students’, or whatever. 

So, I think we’d have to adapt to those markets. That's what I'd like to see.

So, I think you're saying to me that we will be able to see not simply performance, but performance against targets on individual offices.

I think the UK Government has gone through a big exercise with this, and I do want to empower the offices as well.

Yes, but when you're appointing someone, I think you also need to give them a degree of flexibility, to make sure that they are responding to opportunities that may arise and are being proactive. So, for example, the Ineos investment came as a result of somebody from our department cold calling. So, you need to make sure that there are opportunities for people to use their initiative as well.

Entirely. I won’t pursue this any further, Chair, but it just strikes me that the idea of driving the performance within an individual office has to be, somehow, as you rightly said, on the individual circumstances of each country that they’re in, of who they’re dealing with, but then it needs to be driven by saying to them, ‘Here’s what we’re expecting of you’ above and beyond what another office might be doing. But I’ll just leave that thought with you.

Can I ask you about the west coast of America operations? You’ve indicated that you intend to reinforce that. Does that mean the existing offices? Does it mean new offices? How are you going to take that forward on the west coast operations?

So, we've got an office in San Francisco at the moment. The west coast is an area that has a degree of expertise in the three sectors in particular that we’ve highlighted. So, I’m hoping to go over to a cyber conference there at the end of February, and I would hope that, by then, we’ll have absolute clarity in terms of how we will expand that office.

Okay, that's great. If I can turn to work with the UK Government. The UK Government has changed its approach now in terms of meetings that it intends to attend in the EU. It’s made clear it won’t routinely attend EU meetings, only the ones that have a particular interest for the UK Government. Can I ask what in involvement you've had with that decision of, if you like, the ‘first among equals’, of the UK Government to go down that line, before they made the announcement, not after the event? And, secondly, what impact can you have now by saying, ‘Well, actually, we do need to be at that one, because Wales’s interests are served by being at that particular one’?

So, obviously, this is not something that we welcome—the fact that they’ve withdrawn from engagement in European negotiations. On what’s happening currently, we are still a member of the EU. Obviously, this is an area for Jeremy Miles as Brexit Minister. So, we have made it clear that we’re uncomfortable with that. We think that there is still scope to influence, and we’re very disappointed that we are not engaging and able to shape future EU policy. Because whatever happens, we will need a relationship with the EU in future. They are writing laws now that will impact on us, because if we want to trade with them, we will need to probably conform with some aspects. So, of course, why wouldn’t we take advantage of the fact that, legally, we still have a right to be sitting there?

14:30

You've just said that this is Jeremy Miles's area, but I'm assuming that this actually is more of the role of the Brussels office and the work that the Brussels office has, as it normally does, in the EU. I'm not talking about negotiations but simply working within the EU to see how we can influence the EU for the benefit of Wales in the future. I would've thought that that's not Jeremy Miles's office. I would've thought that that's either your office or Ken Skates's department—one of the two, but not Jeremy Miles.

Well, it comes under Brexit at the moment, because we are withdrawing as a result of Brexit. At some point, that will probably switch and we'll need to look at future relationships. So, that's where we're at at the moment.

It's a reasonable question: how does it affect the functioning of the Brussels office and their work within the institutions of the EU in Brussels?

I have asked that question, to ask, 'Look, how are we adapting? How are we changing as a result of those relationships?' What we mustn't do is lose those contacts that we've made over the years. This is why it's the time to reinforce that Brussels office, rather than to walk away from it.

I think the concern we have is that this is a situation where Welsh Government staff in the Brussels office could still be involved in day-to-day normal operations if we're still a member of the EU, and they're going to be attending meetings that are going to have, possibly, policy decisions of the EU that could influence some of the regulations we may have to put in place if we want to trade with the EU. So, in a sense, it is still an important role.

It's not negotiations about exiting; it's about the future operation of the EU and, perhaps, some of the laws and rules we may have to abide by to get into the trade area. So, I'm just wondering how we are looking at this and ensuring that any interests that there may be to Wales—. If they're going to put a regulation on animal welfare, for example, how are we going to be there at that table to ensure that we have a say in those changes to animal welfare rules? I think that's what we're trying to get at.

Well, the problem is that they've now locked us—. We've voluntarily locked ourselves out of those meetings, as a UK Government, and that's a problem for us. But we need to still monitor what is happening in those meetings, because they will impact on us.

You'll be aware of what meetings are coming down the pipeline. You'll be aware of, by scanning them, where the Welsh interests lie. Are you making clear to the UK Government that you need to be in those meetings or we need to be in those meetings—we have Welsh interests in them—or are you now just stepping back and saying, 'Well, the UK Government has made a decision and we have to live with what they've done'? Have you drawn up a list? Are you drawing up a live list and saying, 'We need to be in that meeting, UK Minister'? 

We've certainly let them know that we would like to continue to engage—

We're certainly scanning, but if they won't let us in—. It's not us. We can go as observers, still, and we are taking advantage of that.

Steve Barclay, the Secretary of State for Exiting the EU, has actually told the EU select committee of the Lords that the Government will continue to work with devolved administrations on ongoing EU business to determine the priority of meetings for the UK to attend. So, is the UK Government having those discussions with the Welsh Government to identify which meetings you would think they should attend as a priority?

We are doing that. The other thing is that we are able to attend, still, as observers.

So, the Welsh Government officials—your officials—are attending meetings in the institutions in Brussels still.

The office in Brussels has two commercial staff, who are part of Minister Morgan's area. The rest of the office in Brussels is operationally managed by us, because it's one of our overseas offices, but there are staff there dedicated to transition work. So, that's for another area of Government, in terms of the way that they're being directed and what they're doing. We work very closely together; we're all part of the same team. It is not separate in that sense, but Minister Morgan's staff are not attending those meetings. Our staff in the Brussels office have various different objectives.

Absolutely, and—

—and my question was: are they attending meetings of the institutions?

I think we'll have to ask Jeremy Miles's office that question.

I can account for the commercial staff who work in our area, but I'm sorry that I'm not able to answer that question. We can absolutely find that out.

But, they all work in an open-plan environment. They should know. I know from working there myself that people do discuss the meetings they're going to and where they're going at different times. So, there's a common knowledge across the whole office of the functions of the office.

14:35

I'm going to stop the discussion there because we've reached the end of our session. Interesting final point on the co-ordination across departments in Welsh Government. Perhaps you'll be able to come back to us or write to us with some answers in relation to that or ask the relevant Minister to write to us to inform us as to what is happening in relation to Welsh officials and their role in any discussions and meetings that we may wish to attend because there's an interest to Wales in those meetings. 

We can ask Jeremy Miles to write to you on that, if you'd like.

Yes, please. We didn't cover everything. So, we might well wish to write to you, Minister, with some of the final questions we want to raise. Can I thank you for your time this afternoon, and your officials? You will receive a copy of the transcript, as per usual. If you find any inaccuracies, please let the clerking team know as soon as possible so we can have them corrected. Thank you very much for your time.

I intend to have a five minute recess so that we have time for a swap-over to ensure that we do it smoothly. We'll come back at 14:40.

14:40

Gohiriwyd y cyfarfod rhwng 14:36 ac 14:41.

The meeting adjourned between 14:36 and 14:41

3. Sesiwn graffu gyda James Duddridge AS, Is-Ysgrifennydd Seneddol (yr Adran ar gyfer Ymadael â'r Undeb Ewropeaidd)
3. Scrutiny session with James Duddridge MP, Parliamentary Under-Secretary (Department for Exiting the European Union)

Can I welcome everyone back to this afternoon's session of the External Affairs and Additional Legislation Committee? We'll move on to the next item of business. Can I welcome the Parliamentary Under-Secretary for the Department for Exiting the European Union, James Duddridge MP? You have your official, Alastair Paton, who is also from the Department for Exiting the European Union. Welcome this afternoon to our scrutiny session, and we'll go straight into questions if that's okay with you. David.

Diolch yn fawr, Cadeirydd. Prynhawn da. Good afternoon, Minister, and thank you for taking the trouble to come and give evidence to us today. I think, in the last week or so, we've all got used to this concept of a non-paper and that negotiations, or pre-negotiations, preparations or whatever, have been going on via this process of some detail or a landing zone or whatever being sketched out in these non-papers. I just wonder whether any indication of the direction of travel has been given to the Welsh Government here in Cardiff.

Specifically in relation to the papers—well, I stood in at the Joint Ministerial Committee (European Union negotiations), negotiating with Jeremy, and I'm meeting him again later today. But the non-papers are pre-negotiation, technical documents, so they haven't been widely shared. That is just to inform the discussions on the ground, as it were, rather than anything else.

So, when they—let's be positive—will move on to a negotiating stage fairly quickly, obviously, as time is very short, and my understanding is that a lot of this work's got to be done before the European Council meets, will they be shared, certainly in terms of the heads of terms, the real guts of it, with the Welsh Government before or as those negotiations begin?

Those documents are just for internal work. Clearly, there's a high level of dialogue with the Welsh Government, and, as things progress, more information will be shared, but not explicitly those documents, which aren't designed for that purpose; they're designed as discussion documents through the negotiations, whether those are higher level with David Frost, the Prime Minister's sherpa, or slightly more technical. On a revolving basis, he's taking various technical groups to look at some of the detail.

So, what we know, or what the press was briefed, is that it seems that what the UK Government wants to discuss is some form of single economic zone, and quite how embracing of economic activity that would be has obviously been something the Government wants to discuss. But it's said a couple of areas like agriculture would be key to that. Now, obviously, in the history of Ireland, it's often been seen as a single economy, and those issues have had to be grappled with, so there's a precedent to look at that unit. But if that's retained as deeply as it is now through our membership of the EU, or at least key parts of it are, that would have quite a big impact on Irish-Welsh trade, and also trade travelling through Welsh ports and these critical issues. So, that big idea of the single economic zone—is that what's being advanced, or are the press just misinformed?

14:45

We're looking at Northern Ireland remaining part of the union rather than having any special arrangements. On sanitary and phytosanitary in particular, there's a good hard look at the whole of Ireland in terms of all of those issues in relation to animals and animal products, and that seems sensible to do on an all-Ireland basis, which is one of the things that is being reviewed and is one of the things that's being reported.

So, those that have perhaps inferred that we're going back to some sort of Northern Ireland opt-out are not accurate, then. So we will not see—. I mean, there have already been hints that I've read, anyway, in the press, that manufactured goods are going to be part of this arrangement, and quite how that's done, through alternative arrangements and using them in a very creative way—but, in effect, achieving that. Is that fair speculation or is that way beyond what's being—?

[Inaudible.]—I was in Belfast and went down to the border and I co-chaired the alternative advisory group on business engagement. So, there's a high-level technical body of expert panels, which is chaired by the Secretary of State, and below that, major businesses looking at all the options. But the option that has been ruled out is putting any hard border. And really, it's now up for negotiation how we get ourselves around this big issue of the backstop. But what one has to remember is that whilst the backstop was pernicious in that it would leave us in perpetuity if it hadn't been solved, the expectation of everyone was that it would be solved and this was only if it wasn't going to be solved. So, even going in on Theresa May's agreement, there was an expectation that this could be solved through technology, and we're seeing that in examples of what could be done. But it's at the technical level, looking at the detail, that that will come out.

Obviously, my history was backing Mrs May's deal extensively, it always seemed to me that those who believed that alternative arrangements were coherent should have been very calm about the backstop because it would never come into force and if you really believed those arrangements were going to be fit for purpose, then you wouldn't have had a problem with the backstop, but in the end, that's not where we got, for whatever reason.

It's quite possible that some would've delayed, despite the ability to move forwards with alternative arrangements.

Yes, well, we could go into this, because obviously, the various technologies exist to some extent, but how fully and how advanced—and certainly not in a comprehensive solution anywhere in the world yet. But where there's a will, there may be a way, especially when there's such a pressing need, obviously, given the history of Northern Ireland. So, it's not envisaged, then, that in a transition phase, there would be any border down the Irish sea by the sound of what you're saying; it's just not what's part of the deal, even if it's only for two years whilst we set in place the alternatives.

Northern Ireland will remain part of the United Kingdom in the same way as the rest of the United Kingdom.

In terms of trade, then, that will be the case; it will not have any checks imposed on anything that is coming from Northern Ireland into the British—

No physical checks.

No physical checks. I mean, there are lots of checks that happen with goods going across the border, and as you've alluded to, there are many ways to do that technologically, and that's right that that happens, whether that's on a sanitary, phytosanitary, customs or whatever form of clearance. But no checks, physically, on the border, is an absolute.

Okay. So, basically, the UK Government's line is that the alternative arrangements can be accelerated, they come into play, there may be one or two tweaks and things that we need to do as we go along, but that, basically, is what's going to happen. So, any thought of a different form of backstop with just Northern Ireland in it, but not the UK in terms of customs arrangements while that's going on—that is not what's happening.

Okay. Thank you for that. I think that's very helpful. There's been some talk that the UK Government has been seeking bilateral deals with individual member states over areas where you think they've retained some competence. I'm now talking more about health concerns and citizenship rights, which Welsh residents abroad in the EU at the moment may be concerned about. And that was hit back quite severely by the EU. Can you throw any light onto that?

14:50

Well, citizens' rights is unique in the negotiations. So, we as a UK Government asked for a side deal to be made on citizens' rights so people would feel protected, and it would be separate from a broader negotiation in the EU, so they weren't used as bargaining chips, for want of a better word. The Commission did not want us to do that, which led to some confusion, and distress in many cases, and that precipitated the current Prime Minister, Boris Johnson, making a much bolder offer around citizens' rights, which was a unilateral offer to people that they could stay here, we would have the EU settlement scheme, and fleshing out what would be available going forward. Having made that big, bold offer, we then asked member nations to reciprocate, and that has been a slightly longer and more painful and more nuanced process. So, some nation states have been more progressive than others. Some have made similar offers but have put barriers in the way, whether that's certification or costs, but the decision was made that it was the right thing to do for EU citizens here to make that big, bold offer, and I think that's been quite popular, particularly in areas that rely on migrant labour or there are particularly large European communities.

So this would be more about rights to remain, and those issues. What about access to healthcare? Has that been part of that strand as well?

It's quite complicated. So, you've got healthcare strands, you've got education strands, social security strands. As a Minister at the Department for Exiting the European Union, I'm playing a balancing act between not interfering where a Whitehall department has competence, but equally trying to bring together the full picture, and at last count there were over eight departments that were involved in the citizens' rights issues. Sometimes DExEU's not the lead party. We've seen Matt Hancock, the Secretary of State for health, making some announcements on that today.

Health and education are devolved, so has there been any liaison with the devolved administrations? I don't think they'd have great problems with the direction of travel if it was to try to cement these rights for EU citizens that live here and then our citizens abroad. What sort of liaison has there been?

There are a number of levels of engagement. So, the Joint Ministerial Committee on European negotiations, which I attended—that was the nineteenth such meeting. So, that's at a very high level. There was a Ministers' forum beneath that level, and there are discussions on how that goes forward in the new world. And then, of course, on 'no deal' preparations, which is more the purview of the Cabinet Office and the Chancellor of the Duchy of Lancaster, Michael Gove, there's the XO committee—the exiting the European Union operations committee—which meets daily. It was the intention that the devolved assemblies would be invited to some of those. Some of the earlier meetings were more broad-brush than specific, so we're now going through a process of the devolved administrations being invited to more than they were early on. These meetings have only been going for just over a month. For illustration, last week, I think, the devolved administrations were involved with one of the XO meetings. This week I think they're invited to two of those meetings. But beneath that lies a lot of official-to-official activity where—

So at official level there's much more interaction, is there?

On citizens' rights, I understand that in a response to a letter from Paul Blomfield from yourself you indicated that 29 per cent of EU citizens living in Wales have actually applied for the EU settlement scheme, whereas the comparative across the UK is about 40 per cent. I suppose what we're trying to work out is what you're going to be doing as a UK Government to actually increase that response rate, because 29 per cent is quite low, and if we are in a situation where we leave the EU on 31 October without a deal, then this is going to be critical. We're talking about 70 per cent of EU citizens not actually being registered at that point. 

14:55

Just to freshen those numbers, overall there are about 3.2 million EU citizens in the United Kingdom as a whole and just over 1.5 million of those have applied for and got either settled or pre-settled status. But, of course, they have until the end of the period to apply. What we are doing proactively—. There's a particular concern around vulnerable groups. There's a large number of people who are holding back because they have got that time. It's not something urgent for them. They are actually settled and they know they have the commitment to have settled status. They see that people are going through the process, but they're just holding back until nearer the time. Where there has been some concern is around things like minors, people in care, people who are vulnerable, people who perhaps don't have the language skills or the money to engage in the process. The Government has set up a fund, funnelled through 53 different organisations, that will help those vulnerable people.

So, an example of that: last week, I was in Birmingham and there's a group there that particularly deals with asylum seekers as part of their core business, but are also reaching out to EU nationals in the area in innovative ways. So, that's taking through whole family units themselves—so they don't have to interact with the computer—or showing them what's needed. So that is a way of raising that figure. But it's increasing rapidly. And, ironically, with more talk of the possibility of 'no deal', that's actually driving more people to register now who would have done so subsequently. I've not got the figures for this weekend, but on the Saturday before last, 26,000 people applied to the scheme. So, it really has been ramped up. And you can do it via an Android phone and we're bringing on board the iPhones as well so that the biometrics can be scanned easily. And actually that ends up with an automated process quite quickly, with electronic certification, rather than having to rely on sending in bits of paper, which can have to happen if there are checks needed, but the presumption from the Home Office system and the best practice for immigration, migration and these types of systems is to go fully electronic where possible. 

I was going to raise the question of the iPhone, because I understood there was only an Android app and therefore that ruled out a lot of people who might have smartphones as a consequence. But also, you've got a scanning centre. I understand there's one in Caerphilly, but that's the only one in Wales. You have two in the borders, one in Herefordshire and one in Liverpool, but there are many people who live in rural communities, where broadband isn't wonderful, as we're often told in the Chamber, who therefore might have difficulty in getting anywhere to have their documents scanned. So how are you going to help those individuals to ensure that they don't fall through a gap in the process?

Through the 53 organisations, that's part of the outreach—to rural as well as homeless communities and the other communities that I've mentioned. I explored the issue of the Apple phone. I have an Apple phone myself, and I thought, 'Well, why on earth would you set up a business and only have it being sold through one device?' It's actually to do with the hardware in the iPhone and the licence for the biometrics. So, it wasn't simply just transferring over; there had to be a purchase of capability by Apple to take that forward, which is why it took a little longer. 

So, do you believe those 53 organisations are able to reach all parts of Wales?

I can provide the committee with a breakdown of Wales. From what I've seen, they're doing excellent work, although even just on that one visit, there were a few ideas on how one could improve. And there are different cuts; so, one could consider all the EU citizens in Wales, or you could take a different cut and, say, look at all Polish people. So, the Polish ambassador has sent out communication—I'm meeting with the Polish ambassador after their elections—about having some type of diaspora, then—. In fact, there was a Pole that was working in the Birmingham/Wolverhampton office who expressed an interest. So it's capturing people in their communities in the broadest sense of the word, and that's not just always a geographic and physical community. And as we get nearer the end of the process, there no doubt will need to be an analysis of whether there are some groups that we're not connecting with, and focusing resource on that.

15:00

Thank you for the commitment to send us some data; that will be very helpful for us. Alun. 

Can you take us back to the structure of relationships between Governments in these islands? You confirmed in answer to David Melding that you have not shared the non-papers with the Welsh Government, and you seemed to be saying that you weren't going to either. 

Correct. 

Yes. And that concerns me, because, in answer to other questions, you ruled out some of the more obvious ways of dealing with the position the UK Government seems to have found itself in. So, you're not going to create a special economic area in Northern Ireland, which has been trailed by some of your spokespeople. So, there's going to be no border of any sort or checks down the Irish Sea. The whole of the UK isn't going to be in any relationship with the customs union either. So, it appears to me that these technical magic tricks that you seem to be relying upon are more important and not less important, because normally in these matters the Government would have a policy. It would be a matter of public debate and public scrutiny, and then the technical issues—certainly, as a Minister myself, I've dealt with non-papers in the EU institutions, and they have been exactly the way you describe: reasonably technical, dull documents that people who don't see them want to see, and are then disappointed by seeing them. But it appears to me in this case that these are actually the policy of the UK Government, because the major areas you've just ruled out again this afternoon. So, the technical fixes are more important and not less important. 

And it appears to me that you don't have any structured engagement in place between the UK Government and the other Governments in these islands. I appreciate what you say about the JMC and the rest of it, but we all know that that's a set piece meeting where you all stand up and read out your lines to take, and we read out our lines to take back at you, and then we all disappear again. That's not the way in which engagement takes place, and my concern, Minister, is this: that the UK Government has made a hash of its relationship with the EU over the last few years, and now it's making a hash of its relationship with Governments in these islands, and there are real dangers there for the future of the union—fundamental dangers to the future of the union. 

I'm concerned, therefore, that you haven't been able to reassure me that there are structures in place that enable the free exchange of information between Governments—I accept it's on a confidential basis—and, certainly, the evidence we've received from the First Minister last week, from our Brexit Minister on previous occasions, is that the relationships are not as good as perhaps you would believe. 

I should have said maybe at the outset, if I'd had time, that I hoped to have a good and constructive working relationship. I think Robin Walker had been three years in this chair, and certainly given evidence three, maybe four times. So, that is our intention. By design, we are not aiming to achieve what you are describing as a reality, which I would prefer to see as a perception, although there are elements of truth in any perception.

I think we need to distinguish on the non-papers between the content and the actual papers themselves. In terms of the content and thematics of discussion, there's no separate agenda in the non-papers. There are the things that are discussed at JMC, which is quite high level. It was my first one, the nineteenth one; I certainly wasn't reading from a script, and I don't think other participants were, although they were laying on the record, as is tradition, positions early on. Prior to that meeting, there was a dialogue with the Chancellor of the Duchy of Lancaster more informally. I mentioned that I'm meeting informally with Jeremy Miles later today, so that perhaps gives a bit more nuance of information. But it is essential that negotiators can table papers and discuss them on some type of confidential basis, and this is of no disrespect to the Welsh Assembly; these are confidential to the UK Parliament as well, so it's not something we're sharing with one Parliament but not the other.    

The other thing that I would say gently is that Theresa May, as Prime Minister, was a little bit more sharing of documents, where, as a result of being shared more widely—not to you, but just generally—little bits were picked out before proposals were fully formed and tested in negotiations, and then dismissed—proposals that could have been worked on by taskforce 50 and the negotiators on either side, and developed. I think there is a value in having structures, which we are committed to, and to have the structures that perhaps are more nuanced in the detail—so, the ministerial forums. I've been having discussions around having those thematically, but also having another type that might crop up slightly more short term as negotiations change, because things are going to move quite fast as we come nearer and nearer to 31 October. So, actually having those relationships and being able to pick up the phone or have quick meetings, I think, will be more important going forward. 

15:05

My intention wasn't to describe your approach, or the UK Government's approach as being deliberately antagonistic towards the Governments of the United Kingdom. That wasn't my intention at all, but 'careless' is the word I would use. I've sat on JMCs over a number of years. Certainly, the Cameron Governments was far more open than the Theresa May Government, quite frankly, and what ministerial colleagues tell us today is that the Johnson Government is less forthcoming than the Theresa May Government. And that concerns me at a number of different levels. It was indicated by one of your ministerial colleagues some time ago that they're more concerned about their colleagues in London having access to some of these papers than us here in Cardiff. But, I think that speaks about the problems you were facing at the time as a party.

But they don't appear to me to have structures in place that enable the easy exchange of information between the capitals, between Ministers and officials. There don't appear to be the negotiating teams in place that I was used to. Huw and I have both been agriculture Ministers—Huw in the UK, me here in Cardiff—and when we've been negotiating with the EU before, we've had teams of negotiators, which included representatives of Welsh Government, along with the UK Government, the Scottish Government, the Northern Irish Executive. So, we have a familiarity of working together in negotiations in the EU. Now, it appears to me, in this set of negotiations, the UK Government is saying, 'Do you know what? We're going to do it ourselves, and we're not going to let you know what's going on.' And that appears to me to be the wrong way to address these issues, because the consequence of some of the agreements that you could reach would be to put immense strain on the union and what creates the unity of the United Kingdom. And it would appear to me that, if the UK Government isn't a participant in a more structured approach to the negotiations, one of the consequences of Brexit could be the fall of the United Kingdom as a state. 

Well, I'm keen to do a lot more with the ministerial forums, and perhaps that's something that you can flow through to your Government, to get your ideas on how that lower level of technical forum works. On the 'no deal' side, I understand that the Cabinet Office and Michael Gove will invite the Welsh Government, be that politicians or civil service, to the table. Perhaps that's something that the Welsh Government might like to do on your 'no deal' preparations. So, it's a kind of joining of the two, but relatively early on in my role, the Secretary of State wanted me to come here and give evidence. I think you would have understood if I said, 'No, I'd like to be in Estonia actually doing the deal rather than talking about the deal.' I've chosen not to do that today, which, hopefully, is an indication of the position of the Government. I think we agree, if you were right, that it would be wrong. I think where we disagree is the kind of Government intention and direction, and the fact that we're wanting to do more via the forum should give you a degree of reassurance.

But, underlying some of these more technical and process discussions, there is a reality that a number of people have different views on this issue. So, some people are genuinely engaged, as this committee I'm sure is, in the actuality of process, and others are trying to move the dial, whether that's a few degrees to the right or to the left, and get a completely different outcome. And this is kind of an international competence of the Government, but with big implications for the devolved assemblies, and also a number of other parts of the broader family, whether that's the Crown dependencies, which I've started to visit, the overseas territories, who I've met in London, or the regions and councils. So, I'm not lumping you in with all of those, but what I am saying is there are a number of relationship issues and implications well outside the Whitehall village that we need to balance with the external negotiations, which are more complicated, given, officially, negotiations haven't restarted—Barnier has not got a mandate, as mandated by the last European Council, to negotiate yet, in reality. There are these discussions happening, and things are progressing quite quickly behind the scenes. And perhaps there may be an opportunity to touch more on that, but I don't want to abuse—. I want to answer questions, rather than present what I think you should be asking.

15:10

We'll be moving on. Don't worry, we'll be moving on. Mandy, do you have any questions on this section?

Yes, a couple of questions, please. Our Prime Minister, Boris Johnson, actually said he'd rather die in a ditch than extend. Are you confident in our new Prime Minister, and can you guarantee that the UK will be out, deal or no deal, on 31 October?

'Yes' to both is the short answer. So, I'm confident in the Prime Minister, and I'm confident we will exit on 31 October. I think that's right for the United Kingdom. This needs to be brought to a conclusion. I think it was unhelpful to extend it. The whole process has taken far, far too long, and the process itself has created a kind of self-perpetuating uncertainty around the outcome. Whilst I don't want to sound facile, but what we are doing is leaving a union we've been members of for some 50 years; it shouldn't have been this hard. And I think we'll look back on the process being more of a problem than the actuality of leaving the union. But the Prime Minister is committed to leaving on 31 October, in 38 days. I think that gets Whitehall and everyone behind. Many people—negotiating experts—say things always happen in the last day, last hours of a negotiation, and this being a bigger negotiation, I think we can know that things aren't literally going to be done in the last hour. But actually having an absolute deadline, where our EU partners can make tough choices, we can make tough choices, and we can balance up the interests of the whole of the United Kingdom, and deliver a deal—the best deal we can, and one that works—has got to be the right way forward.

And in my time—I joined the department at the end of July—the focus has shifted massively towards deal preparation, rather than 'no deal' preparation, at Cabinet Office. That is still going on, and that's quite right and proper. But, just in terms of the activity, in my first couple of weeks, there was very little European travel, explaining the deal, selling the deal, explaining the problems we had with the deal, and explaining how the whole of the United Kingdom felt about the deal. As soon as the Prime Minister went to visit Angela Merkel and Macron, things started to change. And then there was the Tusk letter that really defined where we wanted the changes in the withdrawal agreement and the political declaration. And then things have started moving on at quite some pace—actually, to be frank, faster than my expectations. I thought more would be done nearer the back end of the negotiations than the front end. So, in the last few weeks I think things have progressed faster than my expectations. Perhaps the Prime Minister was more bullish.

Does that mean that you're actually bringing that withdrawal agreement through again?

We want a withdrawal agreement, and there are—

Right. So, deal or no deal, we'll come out. Let's just see—. 

That deal or no deal is only on the withdrawal agreement.

Yes. So, if we get the withdrawal agreement through, we've said that the main problem with the withdrawal agreement is the backstop and the position in Northern Ireland. That's not to say the whole document's perfect, but there are some parts of that document that are quite important. I'll take one example. I visited the National Crime Agency, looking at data exchange and how we share things like air passenger numbers, criminal offences. Now, there is a workaround in 'no deal' that you can have through use of INTERPOL rather than Europol, different systems one can use if you're losing the Schengen information system, too. However, it would be better to operate with our European partners, as we would do if we were an independent nation state. Independent nation states share security and intelligence material. So, that would be a good example, in my mind, of something that certainly should remain within the withdrawal agreement.

15:15

And just one last question on this: I've read this morning that the 1972 European Communities Act has been rolled into the 2018 European Union (Withdrawal) Act, when that's supposed to be a completely separate document, which is repealed on 31 October. Have I read this right, or have they got it wrong online?

I'm slightly confused by your question, to be honest, however, I think there's some technical interplay between the two Acts. Can I come back to you on that?

Thank you.

Minister, welcome. Could I, for people outside of this committee session today, who are looking to see what the implications are for Wales of whatever the concept, ideas and the non-papers are that are going to come to some hardened fruition, hopefully, and lead to a deal that will not have a hard border between Northern Ireland and Ireland—can you give us at least a flavour of what the implications will be for Milford Haven, or for Liverpool, for that matter, and what it will mean for trade across the Irish sea? Because you've been very reassuring, and it seems to be pretty much nothing.

So, I'm not going to get into the detail of the non-papers specifically, but I will get into the substance of some of the issues, if that's okay. So, there's a prioritisation on trade that we will have free-flowing borders and that will be given priority over revenue protection or revenue acquisition. And sitting over that in relation to the ports is the issue of security, which is clearly pre-eminent; the reason we don't put 'security' as a headline precursor is because of the optics of that word on the Irish border.

But, in relation to trade implications, one of the reasons for Brexit was a shift, a very clear shift, away from a European-centric view of the world and to a more global-centric view of the world—so, taking international norms rather than EU norms, looking to trade more with the rest of the world, going forward, than the European Union. And that is where growth is—

—but that doesn't mean that we don't want to carry on trading, clearly.

But there's a real practical issue here. I'm just wondering what the committee—what we should, in Wales, make of Juncker's statement over the weekend, very much recognising, the one time the Prime Minister has appeared in front of Parliament, he made it clear that there would be no circumstances in which this Prime Minister will accept a hard border between Northern Ireland and Ireland. Juncker has said that, in the case of a 'no deal' in particular, there will be border controls and customs in crossings—there will be, in order to protect European citizens. So, I get the wider international thing; we all do absolutely get that. But the practicalities: if there isn't a border there, Juncker wants to make sure to protect—and Barnier will be the same—European citizens from those flows. The border will have to be somewhere, surely. What am I missing? And I've been a UK Minister and I've been a Welsh Minister—what am I missing?

I think, as a snapshot, it sounds insightful. But, if you take it over a wider period of time, where there's been a negotiation, everyone said, 'This can't possibly work without a border on either side', and some people have accepted that. The UK Government haven't. The UK Government have then said, 'We will not put a border' definitively: 'There will be no hard border. We don't think there needs to be a hard border. Over to you.'—

The EU are now coming back briefly and saying, 'Well, we're not going to do one, thus you will have to', and we are gradually getting towards the point of reality, where there will be no border. No-one wants to put up a border, and there are perfectly adequate methods of getting across that. I think someone said earlier—forgive me, I forget who it was—that these are not tried-and-tested solutions comprehensively, I think the word—

They've never been brought together in a single package to manage a significant border.

Absolutely right. However, they have been brought together in individual situations. So, we're bringing together solutions that have worked, but haven't worked collectively. And, remember, this isn't something that we're doing overnight. The idea of the implementation period at the end of December next year is to get this right, and when we talk of negotiations and timescale—when you set Whitehall a task, when you set a project to task, you work towards achieving that. If you start saying, 'Well, we could have another rollover, or we could extend the implementation a bit', it gets further and further away. I think that's the issue, going back to your question.

15:20

This is critical, because—. It's critical for Wales whether or not there is some sort of border and some sort of customs transaction points and so on—wherever they are, in the middle of the Irish sea, in Milford Haven or whatever—but it's also critical in terms of the Northern Ireland peace process. I know you're as concerned about this as I am as well, and I'm sure the Prime Minister is, but are you saying that Juncker in effect is playing chicken with this—he's calling the bluff? Because he's made it crystal clear that, on the case of leaving with a 'no deal' on 31 October, to protect EU citizens, there will be a hard border, there will be border customs, there will be points where you'll have to check things going across it. Is he just playing chicken?

I wouldn't use the term 'chicken' or 'playing'; it plays down the importance of it. But I think we are in a state of evolution and we're seeing the public view of what might play out. I don't think it's in anybody's interests to have hard borders, separately to the Belfast Good Friday agreement, just from a pure economic— forget political and security—perspective, and that argument is the same north-south as it is east-west. It is in every nation state's interest to have that free flowing free market flow of goods.

What I would imagine we'll see more of, or there will be more of, is pressures within member states saying to their countries, 'No, we want a deal because we want Polish poultry to be sold in the United Kingdom, we want the fish coming through to the Parisian markets, we want to have free movement of parts on no tariffs or low tariffs at the car end to end.' Our economies are so intermeshed it is hard to see a situation playing out that doesn't involve a maintenance of that kind of liberal trade. Hopefully, that's proactively via a deal, rather than the shock of no deal and then looking forward from a 'no deal' perspective.