National Assembly for Wales

Back to Search

Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol

External Affairs and Additional Legislation Committee

16/09/2019

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

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

Y rhai eraill a oedd yn bresennol

Others in Attendance

Des Clifford Llywodraeth Cymru
Welsh Government
Liz Lalley Llywodraeth Cymru
Welsh Government
Mark Drakeford AM Prif Weinidog Cymru
The First Minister of Wales
Piers Bisson Llywodraeth Cymru
Welsh Government

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 13:30.

The meeting began at 13:30.

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

Good afternoon. Can I welcome Members and the public to this afternoon's session of the External Affairs and Additional Legislation Committee? Before we go into our business, can I first of all remind Members that the meeting is bilingual? If you require the headphones for translation, it is available on channel 1. If you require the headphones for amplification, that's available on channel 0. Please, everyone, switch off your mobile phones if you've left them on, or any other equipment that may interfere with the broadcasting equipment. There's no scheduled fire alarm today, 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?

Chair, only the interest I've declared before about chairing certain groups with a European interest. 

2. Sesiwn graffu gyda Phrif Weinidog Cymru
2. Scrutiny session with the First Minister of Wales

We move on to our business, then. It's a scrutiny session with the First Minister. Can I welcome the First Minister, Mark Drakeford, to this afternoon's session? First Minister, would you introduce your officials for the record, please?

Thank you, Chair. I have with me Des Clifford, who is the director general in charge of the First Minister's department, Piers Bisson who has overall responsibility for Brexit matters, and Liz Lalley, who focuses particularly on Brexit preparation, including 'no deal' preparation.

Thank you. It's been a while since we last met, First Minister, and obviously over the summer we've seen some changes across the nation with a new Prime Minister now installed and positions in Westminster that have been interesting to say the least over the last few weeks. Perhaps you want to give us a brief update as to what the Welsh Government's been doing in this time. 

Well, Chair, you're right, of course, that there have been major changes at the UK level, all of which lead to an impact on the work that the Welsh Government does. We have a new Government and a new Prime Minister and apparently a different sense of direction. When I met the new Prime Minister here in Cardiff, he told me that the risk of leaving the European Union without a deal was 'vanishingly small', but you turn on the radio later the same day to hear that we're leaving the European Union on 31 October come what may. So, dealing with a Government that oscillates between determination to leave with a deal and determination to leave without a deal on the same day creates a different context for our relationships with the UK Government.

Changes of key personnel make a big difference to the Welsh Government as well. It's one of the deeply frustrating things of the post-Brexit period. We spend a lot of time and a lot of investment in building up contacts and understanding with key Ministers at Whitehall, only to find that those people are no longer there, no longer discharging the responsibilities that they had. So, in the Brexit context particularly, we will have spent many, many hours in the company of David Lidington, the then deputy Prime Minister, chair of the JMC, chair of the British-Irish Council and so on, and an individual with whom we felt it was possible to have those conversations and to do reasonable business. All of that—those things build up, don't they? Those relationships develop; they become something you draw on as you go forward in those conversations. All of that is gone. Greg Clark is no longer at the Department for Business, Energy and Industrial Strategy, an essential department for us in a Brexit context, and, again, changes of key personnel make a big difference to the way the Welsh Government has to conduct ourselves over the summer.

We were dealing when we last met with a Government that wanted to be there and apparently saw itself there for the rest of this Parliament. We now have a Government that doesn't want to be there, that declares it wants to be in a general election, and that creates a very different context when trying to carry out inter-governmental relationships. We've got a Government that has prorogued Parliament. The Welsh Government is a party to the Gina Miller case that will go to the Supreme Court tomorrow, and we're there to explain the impact that prorogation has on the Welsh Government, but also on the National Assembly for Wales—all the hours that this committee and colleagues on the floor of the Assembly have spent scrutinising legislation that we had involved ourselves in on the grounds that there was a Government that intended to see those pieces of legislation onto the statute book. The agriculture Bill, the fisheries Bill, the trade Bill, the migration Bill, the environment Bill—all of those gone, swept aside in the prorogation decision. We're there at the Supreme Court to explain why, as a devolved administration, we had a direct interest in that decision and don't believe that it was taken in the right way.

Does all of that mean that we have changed our basic position in relation to 31 October? Well, I don't think it does. I think prior to this Government and, indeed, over the last 12 months, we have been planning for real as far as a 'no deal' Brexit is concerned and we continue to do so. That still is our default position, in planning terms, while continuing to argue, wherever we have the chance, that a 'no deal' Brexit should be taken off the table.

13:35

Thank you for that, First Minister. You've highlighted and hinted upon a few things we want to ask some questions on. Perhaps we'll start off with the negotiations issue. Delyth.

Thank you. Prynhawn da. In the Assembly recall debate, First Minister, you said that Boris Johnson had told a deliberate, intentional lie in terms of the reasons he'd given for proroguing Parliament, and that's not the first time that we've seen something like that happen. On 2 September, he had said, outside the steps of No. 10 Downing Street, that he did not want an election, and the next day, he said that he did want an election. And on 3 September, he said that negotiations were going well with the EU, but we've heard from the European Commission that no traction has really happened; there have been no developments and no real development, certainly, with regard to the Irish border. How can the Welsh Government keep practically working in good faith with a Government whose Prime Minister has such a fluid relationship with the truth?

Well, thank you. Chair, just for the record, to be clear, that what I've said on the floor of the Assembly was that the Prime Minister's spokesperson had been put up to say something that documents that were then revealed in the Scottish court demonstrated not to be true. I think, in my opening remarks, I tried to indicate some of the difficulty of having reliable relationships with a Government whose position is so fluid on these very key issues.

You've always got to distinguish, Chair, I think, between those high-politics relationships that are more difficult and harder to navigate today than they were during Mrs May's premiership and the detailed work that goes on at official level in the routine parts of Government where we continue to play our part and we continue to work with people who, when they tell us that they're working on something, then we have to assume that we're being told the truth.

Okay. Thank you. In terms of what Mr Johnson has said, though—because, obviously, that colours so much of the debate—he's written today in The Daily Telegraph saying that the UK Government is working flat out to achieve a deal. Do you believe that that's true?

Well, that's today's story, isn't it? Tomorrow, a different audience will be told the UK Government is working flat out on a 'no deal' Brexit and it oscillates from one to the other. Everything we have seen suggests that there has been very little specific proposals worked up that could be put to the European Union. I think the new negotiator on the UK side says that nothing specific has been put into that debate. The European Union chief negotiator says that discussions are in a state of paralysis. And even when there are so-called new ideas being discussed, they turn out to be reheated ideas—ideas that we had, in some cases, extensively rehearsed with the previous UK Government, and the previous UK Government had discarded them. So, I don't get any sense that there is a fertile list of new solutions that the Government has at its fingertips, and I don't see the evidence for that being put together in some new coherent package that could be negotiated with the European Union.

13:40

Thank you. And, similarly, he said to ITV that ports, farming communities, everybody will be ready for a 'no deal' Brexit. I mean that, again, can't be true. Practically, what effect does that have on the Welsh Government, would you say, that you're having to deal and continue with these negotiations? Does it mean, in effect, that you have to disregard what the Prime Minister is saying?

Well, we work on the detail, Chair, and in a way, what we say is, we will reach 31 October, and if we were to leave the European Union without a deal on that day, we will be as ready as we can be and that will never be ready enough, because you simply cannot mitigate the impact of a 'no deal' exit. So, any suggestion that everything will be fine, that life will continue without anybody noticing any differences, simply does not measure up to everything we know and it doesn't measure up to everything that the Yellowhammer document, which the UK Government was obliged to publish, tells you. So, our aim is to be as well prepared as we can be, and that does mean working with the UK Government in those detailed official groups that are set up. But do we think we're doing it against a background where everybody will be prepared, in the sense that every eventuality will have been covered off? We know that that won't be true.

No, no, of course. But if I could press you on the impact that it has practically that the Prime Minister is saying things that might be undermining, presumably, what some of this detailed work is doing, what is the impact of that on the Welsh Government's work at the moment?

Well, again, Chair, I want to distinguish between the day in, day out detailed stuff and I don't think it has a huge impact there, because there you are dealing with people who have been working on this sometimes for months and they understand the challenges and they carry on. At the political level, does it mean that we are able to have some of the conversations that we had back in the early part of this year when I used to attend a meeting of the UK Cabinet focused on 'no deal' exit? No, those opportunities have receded a good deal and we no longer have them in the way that we did, because it would be such a standoff between our point of view and the point of view of the current Prime Minister.

On that point, you had said, again, in the Assembly recall debate—and I'm quoting your words from then—that

'We were due to attend a meeting on Friday',

which is now a few weeks ago,

'but that invitation has been withdrawn.'

So, is that something that is happening generally? And I wanted to ask specifically—without getting into too much about inter-governmental workings, because we'll return to that—are there specific mechanisms that the Welsh Government can use to compel the UK Government to work along the same conventions that the previous Government had been working on, or just is there no strength, then, in order to make sure that those conventions are anything more than just conventions that can be disregarded?

Well, if you use the word 'compel' and take it in its normal meaning, the answer would be 'no'. Nobody has the power to compel somebody else to come to the table in that way. We work closely with the Scottish Government to make sure we work jointly with them to create these opportunities. Our strongest card is that, without us being there, lots of the things that the UK Government need to do can't be done, because lots of the things that will be required are powers and responsibilities and capacity that lies at the devolved level. Chair, if I could, I'll put the difference in this way: earlier in the year, there was a Cabinet committee that focused on preparing for planning if we were to leave the European Union without a deal. We were invited and the Scottish Government was invited to that Cabinet and we went to every meeting, other than by exception. Sometimes, the UK Government would say, 'Well, there's nothing on the agenda today that impinges on devolved competencies', but, basically, the default position was that we went unless there was a reason why not. I think we now see the mirror image of that. Mr Gove, we are told, is meeting every single day on these preparations, and we get invited every now and then on an exceptional basis. So, before, we were invited, and occasionally weren't. Now, we're not invited, and occasionally are.

13:45

Yes, if I could. I think it's inevitable, whenever there's a change of Government, there's a change of style, and, quite often, a change of personnel. That's a part of the democratic process, in many ways. The Prime Minister, as the First Minister, has an absolute right to construct the Government of their choosing. But you seem to be describing something that is a little different to that, and, listening to that exchange between you and Delyth Jewell, it left me thinking that whilst the personnel may be different, the structures and the process of governance will provide a level of continuity and a level of reassurance for the population and for the citizen that governance continues—you seem to be suggesting that that actually isn't the case here, that the United Kingdom Government has almost, in the comments about Michael Gove, withdrawn from a great deal of this planning work and is looking within itself rather than fulfilling its duties to the whole of the United Kingdom. Does that not reflect, then, on the weaknesses of the structures of governance within the United Kingdom, that we don't have the processes, we don't have the structures in place to act as a United Kingdom, except where the United Kingdom choose to do so?

Chair, could I say I think those are really important points and I agree with them completely? The difficulty of the issues that I was discussing with Delyth is the way in which current arrangements rely so heavily on what is, in the end, the whim of individuals, isn't it? When you've got a person who wants to work with you and is prepared to have a good understanding of devolution and thinks that it's important, you get one sort of set of discussions, and if you fall into the hands of different people who have different views, those things don't work, and that cannot possibly be sufficient for the future conduct of the United Kingdom. It has to rest on a much firmer set of institutional arrangements and relationships, within which all players are then properly constrained, and that's what we don't have. So, I would have said that Mrs May's decision to invite, maybe I would say, particularly the Scottish Government to be part of a UK Cabinet sub-committee looking at very sensitive material was quite a brave decision, knowing that that was a Government that had a different approach to the future of the United Kingdom. So, to be sharing information was quite brave, and never did I see any example of where the Scottish Government didn't respect the confidences that were being shared with them. But, then, a different person takes a completely different view and all of that get swept away. This is why the Welsh Government has argued for so long that we need a new set of institutional arrangements that are beyond the predilections of individuals, and that that's where the citizen gets confidence that the United Kingdom will operate successfully, because you can see the mechanisms in place that everybody has to work within that give you that confidence.

And those mechanisms would be subject to democratic oversight and democratic accountability.

Absolutely. You'd have Ministers, elected people, in charge of them, but they wouldn't be subject to one party being able to redesign them from scratch, more or less, every time you get a different person through the door.

If I can ask a supplementary on that, First Minister, I certainly agree with you that the mechanisms of inter-governmental working need to be strengthened, but when you said earlier that the Welsh Government can't compel another party, so the UK Government, to come to the table, how, practically, again, can we have any faith that, within the current set-up that we have, those workings inter-governmentally could be improved to such an extent that the improvements couldn't be disregarded at the whim of a future Government?

Well, they'd have to be entrenched, wouldn't they? Lots of the problems of our current system are that it relies on convention, and it hasn't been entrenched. So, we spent quite a bit of our time—not as successfully as we would have liked—arguing for ways in which the Sewel convention could be entrenched—maybe in a piece of legislation, maybe in an agreement between the four nations. But we need a different settlement in which the dispersed nature of sovereignty in the United Kingdom is understood, and in which the practical mechanisms through which we choose to pool that sovereignty for certain purposes—the rules of engagement, the parity of participation that we've talked about—all of that needs to be put together in a way and codified in a way that doesn't allow any party simply to walk away from it. Every partner has to have the confidence of knowing that if there is a difficult issue and compromises have to be made and people make a commitment to them, you won't unravel those by being able simply to walk away from that table.

13:50

Thank you for that. I know that you’ve announced a review, which will be chaired by my committee colleague Alun Davies, looking into this. I would be interested to hear why the Welsh Government decided not to lead that from a Government point of view, and why it has not put the strength of Government resources into it.

Well, they're not either/ors, Chair. We have work going on inside Government. I hope to be able to say something in October particularly, putting some further detail around some of the proposals that we've made in the past about future governance of the United Kingdom. But I was very keen to make sure that we had the widest repertoire of ideas available to us, and it's an inevitable part of Government, really, that Government sometimes becomes self-referential. You get a piece of work going and everybody that's involved in it talks around that issue from similar perspectives. So, it's not that we are not doing work ourselves; we are—detailed work, important work, work that we will publish and talk about. But I don’t think that all the ideas are to be found inside the Welsh Government either. I particularly wanted to ask Alun to do a piece of work in which he will have a slightly freer hand, in a way, to engage with people who will have a bigger pool of possibilities that we as a Government will then be able to draw on.

Okay. And drawing on that, in the future, can I take it that there would be an opening, then, for a Government piece of work working cross-party looking at that?

I've always believed myself, Chair, that, in the end, to get to where we need to constitutionally, it will have to be on a cross-party basis and beyond-party basis as well. We have long advocated a constitutional convention on a UK basis in which citizens and that wider civic and civil society would also be able to play a really important part, and part of the work that Alun will be doing will be to draw on those wider voices in the thinking that he'll be carrying out.

Thank you, First Minister. Before I move on to areas that are more specifically on preparedness, just from what I'm hearing here this afternoon, for points of clarification, can you confirm, therefore, that perhaps because you've seen an indication of a change of collaboration attitude within the Government—have they been involving the Welsh Government in any preparation for bilateral trade agreements? Some are starting to go through now, and there are continuity agreements going through. Has the Welsh Government been involved in those? The impression I'm getting from your earlier comments is that there seems to be less of a mood of collaboration from the UK Government.

Well, there are very few bilateral trade agreements this Government has assigned, Chair, as you know. Other countries and the European Union will not enter into trade negotiations until the UK is a third country. What the UK Government has been focused on is what Liam Fox told us would be the easiest set of negotiations in history, which was just replicating the agreements that the European Union already has with non-European Union countries. I can't remember—is it 40 or 50 of those—and a handful of them have been, in some cases partially, in the Swiss case very partially, replicated in an agreement with the UK. So, it's not as though there has been a huge scope of agreements for us to be involved in. We tend to hear late in the day. I don't think it would be fair to say this afternoon to the committee that we have had any shaping influence on those things. I don't want to make it sound as if we've had no opportunities, because we sometimes have; as I say, late on in discussions, we may have some opportunities, at official level particularly, just to check that things are accurate, and so on. But it's not as though there's been a great deal to be involved in, because these have not been easy at all.

13:55

I appreciate there might not be a great deal, but it does give the direction of travel, in one sense, as to how they're thinking behind those things. If there's an easier one to be involved in, one would think that this is the time to make sure how it works, but there you go. 

If we move on to, perhaps, some questions in relation to specifically 'no deal'—Mandy.

Are you content that the Welsh Government is as prepared as possible for all Brexit outcomes? If not, which ones are you not prepared for?

Thank you. Well, there are three basic Brexit outcomes, it seems to me: we leave without a deal, we leave with a deal, or we don't leave at all. Our focus has been on leaving without a deal, because we believe that that poses the highest risk to Wales and, given the tenor of the current Government, is the most likely. So, there we think we are as well prepared as we can be and we'll continue to work on that as every week goes by. By the end of today, we will have published our 'no deal' preparation action plan. I think I said in that recall debate that I hoped we would do it as we came back, and we will publish it before the end of today. That will set out in much more detail the practical actions that we are taking to try to deal with the issues that you read about all the time in a 'no deal' Brexit—food, fuel, medicines, ports, all of those practical things that we will have to deal with. So, our efforts have pivoted very much in that direction. 

If we leave with a deal, then we will also publish, over the next couple of weeks, a successor document to 'Securing Wales' Future', which we published jointly with Plaid Cymru in January 2017 and which set out a way of leaving the European Union that seemed to us to offer the best protections that we could to Welsh jobs and Welsh communities. We've updated that and we've shown how we think that would best work. Of course, it depends on there being a transition period of two years. You can put lots of things in place.

Where I think we have probably missed out will be in some of the work that we would have been doing at this point in the cycle had we been sure we were remaining in the European Union, because we're coming to the end of the current structural funds round, for example. There's lots of discussion going on inside the European Union now to prepare for the next round, the next version of the common agricultural policy, and so on. And, at this point in the cycle, the Welsh Government would have been involved absolutely in the detail of all of that, trying to shape those arrangements, making sure the UK's position adequately represented Wales. We are keeping a watching brief on all of that through the Welsh European Funding Office. We know what's going on, but in other circumstances, we would have been at the table and engaged in them. And, if we were not to leave the European Union, we would have to be working very fast to recapture some of the opportunities that have been lost to us. 

Well, Wales has already vote 'leave', so—.

My next question is: can you update us on what discussions you've had with the Irish Government on practical preparations for a 'no deal', in particular with the port authorities in Rosslare and Dublin—unlike the UK Government officials' not discussing of Calais?

Well, Chair, I think the first thing to say is that we have to be very sensitive to the Irish Government's position here. The Irish Government won't have bilateral discussions of that sort because they are represented by the EU negotiating team. They're simply unwilling to act unilaterally, and we shouldn't expect them to either, and I think we're always very careful not to put the Irish Government in what would be a very difficult position for them by trying to persuade them to act in a way that they are absolutely clear with us that they won't.

That doesn't mean that, at official level, we don't have information flows, particularly information flows from us to Dublin. So, we are very careful to make sure when we are making preparations at Holyhead, for example, that we keep the Irish Government informed of everything we are doing so that their plans can take account of all the things that we are putting in place. I don't expect that there's a huge flow of information back to us as a Welsh Government on that, because I think that would not be consistent with the way the Irish Government sees itself as a European Union player, part of collective European Union effort.

We have good relationships otherwise, though, Chair. I attended a British-Irish Association conference in Cambridge the first weekend of this month. The Irish ambassador was there, the Irish foreign Minister was there, there were people from all the main political parties north and south of the border, and there was a very rich conversation that went on across the whole of the conference. So, although official relationships have to be careful and respectful, that doesn't mean to say that there isn't a lot of talk that goes on that we are part of in that sort of way. 

14:00

Yes, I'd like to, Chair. On the issue of relations both with our colleagues in the Republic of Ireland but also with politicians north of the border, in particular Democratic Unionist Party politicians, there's been some interest in exchanges within Parliament about what would happen in the case of a 'no deal' with the imposition of tariffs, albeit on a temporary basis, that they certainly wouldn't be happening north to south, which is interesting—they wouldn't be happening—but they could be happening east to west. What are you hearing on official channels, let alone diplomatic channels, about the preparations for east to west tariffs? Where will they be? How much will they be? Have they been disclosed to you? Have you been consulted on it? Will it be in ports in Wales? Will it be in ports in Belfast, in the Republic? 

You can take those questions one at a time if you want. [Laughter.]

Chair, I said to you in my opening remarks that one of the frustrations for us is that we find ourselves going back to a reheated discussion of options that the previous Conservative Government had discarded. Mrs May said that no British Prime Minister could ever sign up to a set of arrangements that treated Northern Ireland as though it were not an equal part of the United kingdom. And yet, an east-west border in the Irish sea does exactly that—it treats Northern Ireland in one way and it treats Great Britain in a different way. 

Now, as Huw said, it relies on the idea that goods can enter from the European Union into the United Kingdom with no checks at all. They will come from the Republic into Northern Ireland and there'll be no tariffs, no checks, nothing. What happens to them then? Well, I think World Trade Organization rules are very clear that there is only a very temporary period in which those checks do not have to be imposed on goods that have come from the European Union via Northern Ireland and into mainland UK. 

It was noticeable in the exchange on this between Michael Gove and the chair of the relevant committee in Westminster that Michael Gove, when pushed on this, when the chair said to him, 'How is that allowable under WTO rules?', Michael Gove said, 'I will have to return to explain in detail having revisited the legal advice.' I'm just wondering whether any legal advice has subsequently been shared with Welsh Government to show the role that Welsh Government will now be expected to play in enabling east-west tariffs.

I've seen nothing; I don't know if others can tell me whether we've seen anything at an official level that is updated legal advice. I do remember very clearly the discussion in that UK Cabinet committee. One of the ones I attended had a discussion on this issue. I think the advice to UK Ministers was very clear at that point that the WTO rules do allow for a temporary derogation, but it's temporary, and there's a discussion as to how short temporary would be, but it's a plausible understanding that it's months, not any longer than that. In that month period, the problem from a Welsh point of view is that goods that have come from the Republic to Northern Ireland, and then across to the mainland, may not have checks at the mainland either, whereas goods coming directly from the Republic to Wales would inevitably have to have those checks. And that puts Welsh ports at a disadvantage. And when we did have proper discussions with the previous UK Government about a border in the Irish sea, we had an opportunity at least to make them aware of the fact that there is a direct Welsh interest in that sort of solution. But that solution was taken off the table by Mrs May, saying that no UK Prime Minister could possibly sign up to it. 

14:05

So, just a final question on this, because it is very important, not simply for Wales, but for the politics of Ireland and Northern Ireland as well. If an approach were to come in the coming days, or next couple of weeks as the days run out, from the UK Government, to say, 'First Minister, we need your help and support here. We're looking for some sort of temporary ability to impose tariffs on an east-west basis and that's going to impact on Holyhead; it's going to impact on trade, albeit for a short period until we sort something out', what would the Welsh Government's response be in that situation?

Well, Chair, our response would always start from the importance of the peace process on the island of Ireland. And when we had these discussions before, the position I took then was that if the UK Government was able to come forward and say that this was an arrangement that was agreeable on both sides of the Irish border, and that the political parties on both sides of debates in Ireland were committed to it, and that it safeguarded peace on the island of Ireland, that even though there might be some difficulties from a Welsh perspective, we'd regard peace in Ireland as the most important thing to achieve. 

I find it difficult to see, in all the discussions that have gone forward since, how an east-west border could be put to us as having the solved the difficulties on the island of Ireland. But if it did, then we would do our very best to look at it through that lens first, and then look at ways of mitigating any temporary issues that we would face in Wales. 

We should remind ourselves that this is the EU's preferred model, to treat Ireland as a single customs area. Our own ports are ports of entry as well, so there are customs arrangements there at the moment. Obviously, the scale would be larger still for Welsh ports. There's precedent way back to the Anglo-Irish treaty of 1921 to treat Ireland as a single economic entity, and there's open speculation that there'll be a longer transition period when we will, in effect, still be in the EU, but we'll call it something else, seeing as the same custom arrangements would apply, and we'd have two years to work out how to implement this sort of arrangement. Now, it does seem to me that there's a bit of compromise emerging here, that the EU is encouraged to go along this road; the Republic of Ireland is. Would you need a lot more work to get our ports up and ready, or was that work already being done when this was the initial suggestion as the basis of a UK-EU deal, which was three years ago?

Well, Chair, I couldn't say to you that a great deal of practical work was done in Wales on the basis of the EU's preferred arrangement, when that arrangement was so comprehensively rejected by the UK Government of the time. It's part of the immense frustration for the European Union that the backstop was invented to secure a position that the UK Government wanted, not the original proposal of the European Union. To then hear that described as 'unpatriotic' by the Prime Minister whose own Cabinet includes Cabinet Ministers, including the Secretary of State for Wales, who voted three times for this apparently unpatriotic deal. You know, it's easy to see why they are frustrated. Well, I'll just—. All I can do, really, Chair, is to repeat what I said to Huw, that our approach to the Irish issue has always been to say that peace on the island of Ireland is the overriding concern. And if there are proposals that are put forward that command the support of people and political parties on both sides of that border and will protect everything that's been gained in the post Good Friday Agreement period, then we would not seek, as a Welsh Government, to do anything that would make that more difficult. Even when there are some significant Welsh issues at stake, our aim would be to find ways of protecting those Welsh interests and mitigating some of those impacts and so on, but not at the expense of making peace on the island of Ireland any more difficult. Whether it's possible to be optimistic that these ideas will come to anything I think isn't quite so easy, because, as I say, we've rehearsed this idea extensively—up and down, round and about. And Mrs May, clearly, came to the conclusion that it was undeliverable and undesirable.

14:10

I accept the knockabout—and it is curious that we are back to the status quo ante, if I could be so optimistic. But it seems to me that, with preparation and planning, Holyhead, Fishguard—our great ports—can operate as full custom-administrating ports. It's only because so much of our trade at the moment is with the EU—and their geographical location limits the trade from the rest of the world, potentially. But they are used to dealing with customs arrangements now, so—. The scale would change. I cannot see what the strategic, long-term vulnerabilities are to our ports should we have time to plan. Unless you want to tell us.

Well, the short-term vulnerability is this, though, isn't it, David—that goods coming directly from the Republic of Ireland to Wales will face customs checks very fast. And most of the trade that comes into Wales comes directly from the Republic. Whereas, in an east-west border, goods that go from the Republic to Northern Ireland and then across to Liverpool won't face checks at all. So, if you were a trader, what would you prefer—to send your goods via a route where there are no checks and no delays and no hold-ups, or send them via a route where there are checks and hold-ups?

I just don't follow your logic, because if the border is, in effect, between Ireland and Britain, then it would apply via Northern Ireland or via the Republic, because they'd be in a single customs area. That's my understanding, anyway. So, the example you gave, the checks would be in Liverpool or the checks would be in Holyhead, depending on where they landed.

Well, I think there is a genuine vulnerability, and we've discussed this. I don't think it's—. I'm not saying anything that isn't absolutely accepted as part of the normal discussion of these things, that goods that come from one part of the United Kingdom to the other—and that's what they will be doing, they will be coming from Northern Ireland to Liverpool, inside the United Kingdom—

What makes this arrangement radical is that Northern Ireland wouldn't be just one part of the United Kingdom, and that's the whole issue, I grant you. But Northern Ireland is sui generis to start with, isn't it? It's constructed to allow a very delicate compromise, and has been for 100 years. That's what the EU seems to be thinking, and there are certain hints coming from the UK Government—maybe no more than that—that this may be where the compromise will be drawn. And I really do think you're misunderstanding the—. I don't want to be quite so rude, but, anyway, I'm not sure you've grasped that—or one of us has got it wrong, anyway. But my understanding is that what's back on the table from the EU is treating north and south Ireland as a single customs area, and therefore it's that unit—with Britain—that would have the border. And so this issue of being landed in Dublin, then going up to Belfast and across to Liverpool—it would be the bit from Northern Ireland to Liverpool that would cross the border.

Yes. And that border would be in the hands of the UK Government at both sides—both at the Northern Ireland part of it and the Liverpool part of it. And the UK Government will be able to decide in Liverpool not to introduce any checks. They will not be able to make that decision in Wales because the goods will have come directly from a different country from the Republic of Ireland. In that period, the risk to Welsh ports is that trade that comes into Welsh ports at the moment will be diverted from the Republic to Northern Ireland and then across, because that will be an easier route for them to follow.

14:15

Okay. And what are you doing then to advocate treating Britain equally in the sense then that you would not apply the customs check in Belfast but you'd do so in Liverpool?

Well, Chair, these are exactly the discussions that we had 18 months to two years ago when this idea was last being explored. It was part of the reason why the then UK Government decided that this wasn't a viable solution to the issues of Ireland. We will have to re-emphasise these arguments all over again if this does become—if it does become—a new preferred solution by the UK Government.

I think we've explored that particular point now. I want to move on to Yellowhammer and Alun.

Thank you very much. I have a copy here of the document that was released by the United Kingdom Government in response to the vote in the House of Commons—five pages. On the one hand, it's quite terrifying in some of its assumptions—three quarters of our medicine supply comes through Dover, for example, and the disruption caused to that—but, on the other hand, it's very lacking in substance. As a Minister, I received more information than this from the United Kingdom Government. Does the Welsh Government hold additional documents on Yellowhammer that are in addition to this document that has been published?

The first thing to say, Chair, is that we do recognise that document, that that is a document that we have seen previously on a bilateral basis with the UK Government. But has the Welsh Government had access to papers that lie behind that? Then the answer to that, of course, is 'yes'. When I would have attended the meetings I referred to back in the earlier part of this year, then that committee would have seen detailed documents dealing with many of the issues that are then crystallised in that paper. So, yes, Mr Davies is right that there is a great deal of detail that lies behind that document and that parts of that detail, at least—. We only know what we're shown; there may be more, I'd guess. But, yes, certainly, we have seen other documents that lie behind that. 

Okay. I think I probably know the answer to my next question as well: would you be prepared to share those documents with this committee?

I don't feel able to do that, Chair, just as I wasn't, didn't feel able to publish Yellowhammer. These are documents that belong to the UK Government. They are shared with us under very strict conventions. I fully believe myself that if we were to break those agreements and publish a document that was given to us on the basis that it was not for publication we would never see a document again—and that's not in Wales's interest. The people who have to do the work to prepare for things would be denied the essential information that they would need. So, I think the way that this document has emerged is the right one. It's for the House of Commons to put that pressure on the UK Government and for the UK Government then to comply with whatever the House of Commons has required of it, rather than for the Welsh Government or the Scottish Government, which equally has not published any of these documents unilaterally, to break with arrangements that in the end serve the interests of Welsh people.

Thank you very much for that. I accept that point, but it's very clear, Chair, that the UK Government hasn't complied with the request of the House of Commons and it may well be a matter for this committee to write to the UK Government asking for sight of those documents, because I think it would help our scrutiny of the Welsh Government to understand what documents are being shared.

But, moving on and reading what we have been allowed to see, there's a mention of Wales once here in terms of fisheries, and yet the position that you explained to the committee in answer to earlier questions is that lots of things—powers and responsibilities—lie at a devolved level. So, it's rather curious that in its high-level planning the United Kingdom Government mentioned devolved administrations only once, and then in terms of fisheries. Certainly, the example I quoted in my first question to you about access to medicines, one would anticipate that there would be a recognition within the United Kingdom Government that the devolved administrations should be involved in dealing with that. But, reading through this, as I said, as somebody who represents Blaenau Gwent, of course, the sentence that stands out for me is that that says:

'Low income groups will be disproportionately affected by any price rises in food and fuel.'

I think that's a very clear message to anybody who might fall within those groups. But this covers most areas of devolved responsibilities, and I think it would be useful for committee to understand the impact that you believe that this is having on the ability of the Welsh Government to run its day-to-day business, because it appears to me that if we're planning for such different scenarios, which are quite frightening in lots of different ways, then that must take up the energy and resources of a Government when you would wish the Government to be delivering other parts of its responsibilities.

14:20

Thank you, Chair. Again, I think those are very important points. As a Welsh Government we have done our very best through the whole Brexit period to continue to discharge all those day-in, day-out responsibilities that matter in people’s daily lives. Everything that we do in health, in education, in transport, in housing—all those things that matter day in and day out—we have done our best to keep all of that going at the rate that we had originally planned, while coping with Brexit as well. I believe we are coming close to the end of our ability to be able to do that. Simply to continue everything that we were planning already plus Brexit on top of it, especially if we end up leaving the European Union without a deal at the end of October—there will be a period when the Welsh Government will be so focused on dealing with the immediate and emergency impacts of a ‘no deal’ Brexit I think that it is inevitable that some things will take longer than we had otherwise planned. That’s partly because there will be time constraints, but it’s also to be clear with the committee that we are having to divert people as well to work on Brexit preparation planning, and that these are often people who would have been playing a very important role in other parts of the Welsh Government. Now, we are able, by borrowing people from here, filling gaps there and so on, to keep the whole show on the road, but sometimes these are people who have got very important expertise in an area that we are doing our very best to deliver, and then those people are now working on something different. Des can probably give you some examples of that.

Just to substantiate the point, if I may, Chair, so, since this committee last met, as you know, the law of the land has changed. UK law has changed. Up until a couple of weeks ago, the law of the land was that we would be—the UK would be—leaving the European Union without a deal, if it hadn't been negotiated, on 31 October. That has now changed, as you know. The law of the land now is that if no deal is in place, the European Council, on 17 or 18 of October—. Whoever is Prime Minister on 19 October must write that letter that was in the legislation that passed through the House of Commons a couple of weeks ago. That means that we will not know, and nobody else will know, whether we are leaving on 31 October or not until 19 October—or the couple of days before 19 October on different scenarios. That means that the many, many people across the Welsh Government, and indeed all the public bodies with whom we have relationships, and indeed industry, all have to be kept in harness in terms of our ‘no deal’ preparations right up until 19 October. We can’t afford to relax a muscle on any of this before 19 October. We then may find that we’re standing people down, there’s a bit of a lull again. Plainly, that is not an ideal or a sustainable situation. We’ve already had to operate on that basis for 29 March earlier this year, then for the next date in April, now for the end of October, and then possibly again for the end of January. It is undoubtedly the case that there are many, many people—I think we've all forgotten what we used to do before Brexit came along, but there are lots of people across Wales who are engaged on this and, by definition, are not doing other work, in the way that the First Minister has described.

14:25

Could you give us some examples of that other work that has been disrupted as a consequence of this?

Well—I'm hoping I'm remembering this correctly—I think the education Minister has written to committee in the last few days on the Additional Learning Needs and Education Tribunal (Wales) Act 2018 implementation. The development of the code of practice is going to take longer than we had originally anticipated. Now, part of that is because there was a very rich consultation on the code, with lots of new ideas, but some of the key people who were working on that are now working on Brexit issues, so picking up the consultation and putting the revised proposals together is going to take longer than we originally anticipated. It's a combination of the volume of suggestions and the fact that the people who had previously been concentrating on it are now having to do other things. It's that sort of level of practical impact on the Welsh Government's programme that, if we do end up having to deal with a 'no deal' exit, will be compounded and multiplied in other parts of what we do as well.

The First Minister'll be aware, but I was the Minister who took that legislation through the National Assembly, and I think it's very frustrating that some of our most vulnerable children in this country will suffer as a direct consequence of this nonsense. And I think that that is something that is a very sobering reality of the impact of Brexit on people in our communities.

In terms of other matters, reading through this paper—and I recognise that you will be publishing further papers, and it would be useful, Chair, if we could have an opportunity to debate those additional papers at some point—I'm reading through this, and I accept some of this is worst case and the rest of it, and I also accept that mitigation will have a positive impact on some areas of this, but I also understand that this will have a significant financial impact on the ability of the Welsh Government to provide resources to the delivery of core services. Many of us, as constituency Members, are well used to having conversations with members of the public who are concerned about the impact of austerity on different services and our ability to deliver services. Do you believe that the impact of preparation for a 'no deal', which, in the way that Mr Clifford has described, is essential at the moment, will have a wider impact on the Welsh Government's ability to sustain and support front-line services?

Well, I think that will depend a great deal, Chair, on the extent to which the UK Government funds the Brexit impact. So far, we've provided the European Union fund that we've established; we're going to be putting £2 million of that into sustaining foodbanks in Wales, because of the impact that we think that a 'no deal' Brexit will have on family incomes and people's ability to manage.

But, going for a moment to Alun's point about vulnerable families, which is highlighted in the paper, those impacts will be felt in food inflation, they will be felt in fuel inflation. And these are families whose incomes have been at a standstill since 2015. Their benefits were frozen then and they haven't been uplifted since. Now, what we would expect is we would expect the UK Government to ensure that that impact was taken into account and there would be a benefit uplift so that those families have money in their pockets to deal with the consequences of a 'no deal' Brexit, rather than expecting that the Welsh Government will find safety-net solutions that will protect some families from the very worst of it. We just don't know, and we won't know, how far a UK Government will act to deal with the impact of a 'no deal' Brexit in the rural economy, in the manufacturing industry that is affected by it, in vulnerable families. We do our best to quantify things ourselves so that we're in a position, when it comes to it, to be able to put that to the UK Government. But, without knowing more about how they intend themselves to shoulder those responsibilities, it's difficult for us to know how much money we would need to have through the Welsh Government to do the things that we do. 

14:30

Can I ask a question then, First Minister, because, obviously, Michael Gove has raised the point of Operation Kingfisher, which is supposed to be about support for businesses across the UK: have you been made aware of what funding has been allocated to Operation Kingfisher, and would anything come to Wales?

Well, Chair, Kingfisher won't operate on a geographical basis; it'll operate on a sectoral and case-by-case basis. So, there will be a set of criteria that will tell you whether you qualify for help from the Kingfisher fund. If every single firm that qualified was in Wales, Wales would get the whole of Kingfisher. If not a single firm in Wales meets the criteria, nothing will come to Wales. Geography won't come into it. 

But it will have an impact upon how you allocate funding as a consequence, then, because, if Kingfisher is going to fund some businesses, then, clearly, the Welsh Government will be looking to support businesses in other areas. 

Yes. That's absolutely right, that we will look to be—additionality will be the key thing for us. Now, we did succeed, working with some others, in persuading the UK Government to take into account supply chain effects as one of the criteria in the Kingfisher arrangements. Originally, supply chain effects were not part of the way that a decision on whether or not to award Kingfisher funds would have been taken. We argued for that, the Scots argued for that, and the criteria were changed. But the criteria will be UK criteria, and we won't know how many Welsh firms will qualify for it until further down the track. 

Thank you. Mandy, you had a question on fisheries and Yellowhammer. 

Yes, I do. The Yellowhammer document states that up to 40 EU and European economic area nations' vessels could enter and fish illegally in Welsh waters on day one of a 'no deal' Brexit. Have you had talks with the EU and the Irish Government, at the conference you went to there, to see if the EU would actually give assurances that EU vessels would not be fishing in Welsh waters illegally?

Well, we don't have direct conversations with the EU, Chair, because that's done at UK member-state level. The European Union has made proposals, in relation to fisheries, to extend the current arrangements through into 2020 to allow the opportunity for longer-term arrangements to be brought about. If that doesn't happen—and it won't happen in a 'no deal' exit—then you end up with the dangers and difficulties that you see in Yellowhammer. And Wales is exposed to those dangers, particularly south-west Wales, because it's inshore fishing. And vessels from elsewhere in the European Union come in quite close to the Welsh coast, and, if there are clashes between Welsh or UK fishers and people from outside the newly third countried status of the UK, then those could be happening off the Welsh coast. And we're having to prepare for that. This is where the madness of it all really strikes home, I think. We are having to spend money on recruiting more people, and investing in training of people, to deal with a set of events that need never happen, and ought never to happen. 

Yes. And it's my failure for not reading the detail on the continuity arrangements. But I'm assuming they would also include the reciprocal arrangements around enforcement, tracking of vessels and so on, although that still doesn't get rid of the opportunity for rogue vessels, rogue skippers, to sail off wherever they want to, frankly, and make the most of a couple of weeks of—I'm avoiding the use of the word 'chaos'.

Well, in a deal exit, where there is agreement and transition, then the EU will put a set of proposals about how the current arrangements could be rolled forward while negotiations happen over longer-term arrangements. And, in those circumstances, I'm sure Huw is right that the current enforcement and control measures would roll forward as well. What Yellowhammer focuses on is what happens if there is no agreement, and how do we then have control and enforcement arrangements when the possibility of clashes at sea are real.

14:35

Is that all right? I want to move on, because I'm conscious of the time we have. The rest of those areas of preparedness we might come back to at the end of the day, if we have sufficient time, or we'll write to you about. But if I just move on to, in particular, perhaps, the legislation areas you have already highlighted this afternoon, because the prorogation of Parliament that has affected you, and we need to discuss perhaps some of those aspects that relate to the Welsh Government and to the National Assembly. Huw.

Yes. As we know, before we had the summer's events, there were five pieces of legislation—significant pieces of legislation, including ones that impact on trade agreements—that were working their way through Parliament at different stages. There were no continuity Bills passed to actually say, 'We'll take these forward into the next session'. What's your assessment of where we currently are with the legislation, much of which, as you touched on earlier, we've been looking at, we've been preparing for—where are we now?

Well, we're not where we would like to be, Chair. And it's partly, as I said, why we've sought to be associated with the Miller case, because the prorogation decision has such a direct impact on us as a legislature here—and the same case, I'm sure, will be made by the Scottish Government as well. So, we hear at official level, for example, that the Agriculture Bill will be reintroduced immediately, through a Queen's Speech. But, even if that is the case, you have a Government that is seeking a general election. So, the show could be back on the road very temporarily before further delays and further barriers to that legislation will occur. Now, if we leave without a deal, ironically enough, the fact that EU law has been frozen into domestic law means that we will have everything in place to deal with the immediate issues. What we will have lost will be some of the abilities we were looking to have to have the powers to plan beyond Brexit for 'Brexit and our Land' and all the things that we've been consulting intensively on in rural communities. We were looking to the Fisheries Bill to extend Welsh territorial waters, so there would have been an extension to the remit of the Assembly that would have allowed us to bring a fisheries Bill forward that would have reflected that new set of arrangements and so on. So, in the very short run, in a 'no deal' exit, we have the frozen EU position, which will get us through the immediate future. What we will be needing to catch up on will be arrangements for the longer run. But, if we leave with a deal, then you get the two-year transition period, and that will allow some of that legislation to come back in front of Parliament.

I hesitate to even mention this, but, in the most severe case of leaving with a 'no deal', we're in prorogation, we leave with a 'no deal', we have a general election—perhaps that will resolve everything; perhaps it won't. Is the Welsh Government considering at all at the moment the eventuality where it would need to bring forward its own legislation?

Yes, Chair, of course. Well, there are two different sorts of legislation that we have to think of. There may be a need for some emergency legislation—and of course we will keep the committee and the Assembly informed about any thinking there. That emergency legislation might have to operate at a UK level, so there's that axis to take into account. And then there is legislation for the medium term, when we get past the immediate shock. And we've already committed to bringing forward an agricultural Bill. It would not have happened in this Assembly term, because everything the Welsh Ministers needed for the medium term would have been secured through the UK Agriculture Bill. If there's no prospect of a UK agriculture Bill, then we will have to at least think through again whether the timings of our own legislation need to be revisited. So, it's impossible at this point to reach firm conclusions, because there are so many uncertainties and moving parts that you could come to a conclusion today and it would be completely different tomorrow when the Supreme Court—

14:40

Because much of this does depend on a sitting and functioning Houses of Parliament with a Government in place. If you were to bring forward emergency legislation or other legislation, it would have to be very neatly slotted into the available timescales. So, I guess what I'm suggesting or asking is whether, albeit with the stretched resources that you have, that work on emergency legislation is already being considered and prepared in order to identify the opportunity, should it be necessary, to bring it forward at a rate of knots and to deal with this in a way that respects as well the parliamentary sovereignty in the UK. 

Is work going on? The answer to that is 'yes', Chair. Is it possible to be completely confident that all the cogs are lined up completely? Well, no, because the cogs move all the time, beyond our own hand. So, you're always having to fit it into a different set of circumstances. But I'm happy to assure the committee that the thinking happens all the time. The context changes all the time, that's the trouble.

As Huw's pointed out, the emergency legislation that may be required—are you in a position where, if we left without a deal, the Welsh Government has established what emergency legislation it will need to place before the Assembly?

The difficulty about being categoric about that, Chair, is, as I've said, some emergency legislation might be brought forward on a UK basis, but we don't know yet exactly what that would be. So, anything that we brought forward in front of the Assembly would have to depend upon what emergency action was being taken elsewhere. We think that through and we've got contingency thinking about what that would be, but it just wouldn't be sensible to say categorically to you, because some of those other things will shape what we ourselves will have to do. 

Correct me if I'm wrong, but I understand that it is possible to lay SIs during prorogation, and as such there will still be some SIs that may be laid by the Government—they will not be scrutinised, as a consequence, but they could be laid. Are you aware of whether the Government intends to lay any?

I'd need to check the point about whether SIs can be laid during prorogation. I just don't know. On the face of it, it seems curious, because there is no Parliament to lay it in front of. What we are anticipating is that there will be a rush of SIs when Parliament returns and we hear a bit about the possibility that a special procedure may be invoked to deal with those SIs. The committee will be familiar with it, because we've adopted it in relation to some of our own tax legislation, where a Government can make a change in the law and then the legislature has a period of 40 days in relation to tax legislation in which it can confirm or overturn that decision, but the decision is made at the point that the Government chooses, rather than when the legislature agrees. That would be a very unusual course of action in relation to SIs, but we are hearing that that possibility is being considered.

If we move on to EU funding, again, in a situation of a 'no deal', it has been obviously referred to about whether we will continue to pay into the EU budget or not, and if we do not it is likely that we will not therefore be given support for continuing EU programmes. What discussions have you had with UK Government about the ongoing EU programmes within Wales?

Many conversations, Chair, and they happen both at the JMC, where there's a sort of overview of things, but they happen at individual meetings of Ministers. Finance Ministers, I know, will have discussed this, but education Ministers, for example, will have discussed Horizon, Horizon Europe the successor, and Erasmus. On all of these occasions, really, the Welsh Government’s position is that we should take up the EU offer to pay into the budget for the remaining period that these programmes currently have left, which is essentially to the end of 2020, and then we will be able to continue to benefit from them on the basis that we have. That is the simplest and—from the point of view of users in our universities, for example—that is by far the best way of doing it, and we continue to urge the UK Government to act in just that way.

14:45

It does bear repeating, Chair, that there isn’t a penny in the bank account beyond the end of 2020 in respect of the money that we currently receive from the European Union. It has been our top priority in everything that we have said—every statement, every document we have published since the summer of—. Was it 2016? It seems so long ago. It was one of the six priorities that we identified in 'Securing Wales’ Future'. We get about £680 million a year. In fact, it’s higher than that now, because that was at 2016 prices. So, there’s something in the region of £700 million plus of European money, which now forms part of the Welsh Government budget, and there is not a penny earmarked for us from the UK Government as replacement funding beyond the end of 2020. And you might just add to that we have been promised by the Treasury for some time now that there would be a three-year spending review to enable us to do some proper medium-term financial planning. That has also not been forthcoming. What we had from the Chancellor of the Exchequer a few weeks ago was not a three-year spending review as we have expected for probably the last two years. What we had was an annual funding statement which takes us through the next 12 months, subject to Parliament actually agreeing to the statement that was introduced a few weeks ago. So, the future of finances for Wales are in a very, very indeterminate state at the moment, which is really unhelpful, obviously.

I appreciate that, because, clearly, the Welsh Government’s finance Minister has actually stressed that that one-year statement about two weeks ago didn’t reflect upon the continuance of EU funding in that, and therefore I was just wondering what arrangement the Welsh Government is now making to look at the programmes it currently delivers through European funding, and what discussions you’re having with the delivery groups to ensure that, where we are on Brexit, we are able to continue with supporting some of those vulnerable people.

Well, Des and you, Chair, are both right in that in that spending review statement, the Chancellor of the Exchequer did not mention the shared prosperity fund once. It was entirely absent from the statement. A junior Minister has said that we will not see any proposals around the shared prosperity fund until 2020, so we’ll not see anything for the rest of this calendar year. It’s been the most announced and withdrawn fund that we’ve ever come across. But its impact for us is enormous. We continue to plan on the basis of the Treasury guarantees that were provided by the previous Chancellor of the Exchequer, and I’ve said on a number of occasions in front of this committee that we always welcomed those assurances, and have always been willing to say that they were helpful, and they’ve helped secure buy-in from the groups that Huw chairs and so on. If we leave on a ‘no deal’ exit, that doesn’t imply immediate termination of EU funding programmes at all for Wales. So, I’m very keen to get that on the record today, because there will be organisations and companies and so on who are fearful that if we leave without a deal, then all the help they’ve been getting suddenly disappears. The guarantees mean that isn’t the case. We will be able, for a short period, to rely on the Treasury through to the end of current programmes, and that’s why we continue to work with all our partners to get the very most out of them. It’s beyond that that we have not just no certainty—the glass is as cloudy as you can imagine; we’ve got no idea of what proposals the UK Government is genuinely working on.

But the funding will come from the UK Government, because the European Commission, actually, on 4 September, published its sixth communication on this, which actually says that

'payments would therefore have to be suspended, and could only be made if and when a financial settlement is agreed'.

So there is a difference as to who will fund the continuation—

But it will be a Treasury guarantee that we are having to rely on, rather than funding that comes directly from the European Union. This is not to say for a minute that this doesn't introduce enormous complexities. What we wanted was the UK Government to agree that we were staying in these European Union programmes until the end and that we would have normal closure of programmes. Because, you know, we've always had what's called n+2 [correction: n+3]. So, you come to the end of the programme, then you've got two [correction: three] more years in which you can continue to spend and programmes come to an orderly end, and you get the most out of the investment that has been made. 

The Treasury guarantee doesn't offer us any of those advantages and could end up with some programmes having to have two closure points—the UK's closure point and then, still, there'll be things we will have to provide to the European Union at the end of it all because we've been in the programme for most of it. So, that goes back to your very first question, which is: 'What is the best way of doing this?' Well, assuming we're leaving the European Union, we will not be in the next round of these programmes, but let's bring them to an end in an orderly way by staying in the ones we're in now until they end, and let's be willing to pay into the European Union to stay in those programmes that we think are to the benefit of the United Kingdom.

We certainly think that Horizon has been hugely beneficial to Wales. We've drawn out of Horizon far more than our population share would lead you to expect. Creative Europe—we've had fantastic things go on through the arts community in Wales. We say that the UK's interests would be served by staying in Creative Europe. The territorial co-operation programme between Wales and Ireland—the Republic—is something we've had for 20 years. We think that the UK should go on paying in so that we can continue to get the benefits of all of that as well.

14:50

Thank you. If we can move on to, perhaps, inter-governmental—

It was just the scale of this risk. Is it the biggest you face, do you think, in terms of—? As Mr Clifford indicated, at the minute, a substantial amount, in effect, of the Welsh Government budget is delivered through these EU programmes, which, one way or another, tend to equalise our economic potential. If the UK prosperity fund is not analogous to what we get at the moment, presumably the potential risk to us is considerable. So, where do you place it in your order of risks at the moment? 

In the short term, it's not the biggest risk, because we have the guarantees and so on. Beyond that, if Wales were to lose out on the £700 million that we currently get, it would be an enormous risk to us and it would fly completely in the face of what people in Wales were told during the referendum—that Wales would not be a penny worse off as a result of leaving the European Union. To be £700 million worse off is an awful lot of pennies.

Chair, if we can digress for a second, we face enormous financial uncertainties at the moment. All of the things that were announced by the Chancellor in that one-year spending review Parliament hasn't voted for. Governments can only spend money that Parliament has voted for. So, when is Parliament going to have an opportunity to vote for the money that the Chancellor has announced? I don't think they'll do it when they come back from prorogation. Then, there'll be a general election—there may be another Government.

So, how far can we rely on the moneys that were announced for us only two weeks ago? We're so much not in normal times that even things that in any other period you would just take for granted—that if a Government announced money, we can plan on the basis of it—. We have a Government without a majority and a Government that wants a general election and that I don't think can bring legislation forward, or the finance Bill it would need, to make sure that that money—. And that's another huge uncertainty—that's £600 million there that we will put into our draft budget that we'll publish later this autumn, but it won't be with the certainty that we would normally associate with that sort of announcement.

I was going to ask you where you thought the Dunlop review was, but as I gave evidence to Dunlop this morning I don't think I need to ask you whether it's still going on. But have you had an opportunity yet, or will you, and is it your understanding that that review enjoys the confidence under the new Prime Minister in terms of its salience because, obviously, it was commissioned just before the installation of the new Prime Minister?

14:55

I'll be giving evidence to the Dunlop review tomorrow. So, Welsh Government is participating in it and will do everything we can to make sure that the way that we see these things is fully conveyed to it. I don't think it's possible to be as confident that a review that was set up by one regime will be regarded with the same seriousness as a new regime that has different priorities and different views, but we will participate in it fully on the grounds that the opportunity is there and our responsibility is to make sure that Welsh views are well-known.

And in the hope it receives a similar priority. That's very helpful. And I know it's early days in the new premiership, but have there been any indications on the general attitudes to the development of common frameworks, and particularly the concept of shared governance, which I know is something that you've worked on and so did your predecessor? Are we getting any further? In fairness to the Welsh Government, it has produced some very coherent suggestions about how this could be achieved. I just wonder where they stand at the moment.

Chair, the common frameworks were discussed at the JMC(EN) that met on 12 September, last Thursday. I understand it's on the agenda for the next JMC(EN), which we expect on 10 October. I think the point that we were emphasising last week, which Jeremy Miles emphasised, was that it's time to get these things out into the public domain. I dread to think, in a way, how many months ago it would have been that I came to this committee and said that David Lidington had discussed with me his ambition to get a draft of the common frameworks out so that stakeholders could comment on them and help shape them before they came back for final ratification, but that's never been achieved. So, yes, work has gone on and we continue to participate in it and we continue to have a relatively positive view about the way that that has developed, but we do think it is time for the rest of the world to be able to see the product of some of this work and then to be able to be scrutinised here, or others who will have a direct interest in some of those areas to be able to help to improve them further.

And should we have a 'no deal' Brexit, do you think that will have an impact on the type of common frameworks that emerge and the procedures around their future governance? Do you fear that there will be a lot of pressure to sign these off very quickly in that process? Maybe certain flaws would be built into the new system that might take some time to remove. I mean, how do you think a 'no deal' would actually affect the inter-governmental relations as they're emerging in this area anyway, around common frameworks?

Well, in general, I think a 'no deal' exit will introduce further stresses and strains into inter-governmental relations and we've talked previously about the future of the United Kingdom under the pressures that Brexit will create. So, at that broad level, I think things will be harder, not easier.

I'm guessing rather than knowing, David, but I think what is more likely is that there will be a set of emergency operational ways agreed to manage the immediate issues that a 'no deal' Brexit will throw up, rather than a rush to try and push frameworks into that space to try to fill it, I think. Probably, it will be more immediate and slightly hand-to-mouth in that sort of just keeping things going in the immediate impact, and then frameworks would come in at a point where, maybe, things have settled down a bit, but that could be months rather than weeks.

Delyth. No questions? Well, that leaves me to say we've come to the end of our time, First Minister. Can I thank you very much and your officials for attending this afternoon's session? We have one or two questions that we will probably need to write to you on, once we get a confirmation. You will receive a transcript, as you know, and if there are any factual inaccuracies, please let the clerking teams know as soon as possible so that we can have them corrected.

15:00

Thank you. Diolch yn fawr.

3. Papurau i’w nodi
3. Papers to note

The next item on the agenda is Papers to Note. We have several papers to note. The first one is 'European Union (Withdrawal) Act and Common Frameworks: 26 March to 25 June'. That's the paper from the UK Government. Just as a point of interest, you might notice that three of the members of that committee are no longer members of that committee; there's only one remaining. Are Members content to note the paper?

The second one is correspondence from the Counsel General and Brexit Minister regarding Brexit preparedness, dated 18 July, which might have been superceded by events. Are Members content to note?

The next one is correspondence from the Future Generations Commissioner for Wales regarding involvement in the first future generations report, dated 9 August. Would Members like to input into that report and the recommendations or not? I will highlight the fact that we have a very busy schedule coming up with events, and we might find difficulty in actually putting together time for that. But I understand it's going to various committees across the Assembly anyway, so Members will have an opportunity to put views into that through other sources, if that's okay.

The fourth one is correspondence from the Minister for Environment, Energy and Rural Affairs regarding preparedness for Brexit, dated 22 August, in response to the request we put in. Are Members content to note that?

The fifth one is correspondence from the Counsel General and Brexit Minister regarding UK-wide common policy frameworks. This one was actually more recent on 6 September. Are Members content to note that?

The seventh is the correspondence from the Minister for International Relations and the Welsh Language on the draft international strategy. Just to remind Members that the Minister is scheduled to be before the committee next week when we'll have an opportunity to question her on the proposals and the draft strategy. And the Minister has asked her officials to prepare a quarterly report that gives high-level performance data for our overseas offices. The first of these should be issued on 1 October. Okay?

I missed one, did I? I missed No. 6, which was the correspondence from the First Minister to the Chair regarding the questions we asked following the 8 July meeting. Are Members content to note that?

I'll go back to No. 8, correspondence from the Minister for International Relations and the Welsh Language on international trade. Again, the Minister has agreed to update us on work across the Welsh Government to ensure that there's a consistent picture of the negotiating position. I think, again, we'll have an opportunity to question her next week on these points.

The ninth is correspondence from the Counsel General and Brexit Minister that was sent to the Chair of the Constitutional and Legislative Affairs Committee on inter-governmental relations, and that's just simply for us to note at this point.

And the last one is correspondence from the First Minister regarding international obligations that bind the UK and that was dated 12 September. Are Members content to note that? Okay.

4. Cynnig o dan Reol Sefydlog 17.42(vi) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
4. Motion under Standing Order 17.42(vi) to resolve to exclude the public from the remainder of the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

Okay, we move on to the next item on the agenda, item 4, and that's a motion under Standing Order 17.42(vi) to resolve to exclude the public for the remainder of today's meeting. Are Members content to go into private session for the remainder of today's meeting?

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 15:03.

Motion agreed.

The public part of the meeting ended at 15:03.

Explore the Welsh Parliament