National Assembly for Wales

Good afternoon. Can I welcome Members to this afternoon's meeting of the External Affairs and Additional Legislation Committee, which is, once again, continuing in a virtual mode? And, in accordance with Standing Order 34.19, I determine that the public are excluded from the committee's meeting in order to protect public health. But the public are able to view the proceedings on Senedd.tv at www.senedd.tv, and it is possible to have both Welsh and English versions of the meeting—you can have a verbatim version on one of those channels and there's another alternative channel to have the English translation available to you, because we are a bilingual meeting. We've not received any apologies for today's meeting. If I lose my connection, we have agreed that Alun Davies will act as temporary Chair in my absence until I either reconnect or the end of the meeting. If any Member has a declaration of interest, now is the time to do it, please. You're muted, Huw. You're muted.

Sorry, Chair; struggling with the technology there. Just to declare, as per standard, my chairing of three relevant committees to the European agenda for the First Minister.

Thank you, Huw. No other declarations of interest, so we'll move on. Members will be aware that David Melding, who has been a member of the committee for a long time, has now been moved, shall we say, to an alternative committee, and I'd like to thank David for his time on the committee and the work he put in, and I have written on behalf of the committee to thank him and that has gone over the summer. Laura Anne Jones has been nominated in place of David and I would like to welcome Laura, but she's the one having technical difficulties this afternoon and is not yet with us. But I'm sure, when she comes, we'll welcome her to the committee and her contributions.

We'll go straight into the evidence sessions this afternoon, if that's okay. I'm aware that the Counsel General has a very tight schedule this afternoon and therefore I'm pleased that we have a scrutiny session with the Counsel General and Minister for European Transition, Jeremy Miles, and, with him this afternoon, he has Chris Warner, deputy director of the Constitutional Affairs and Intergovernmental Relations division, and Ed Sherriff, deputy director, European Transition (Negotiations). Welcome, all. And, because of the limited time we have, we'll go straight into questions. And can I thank you, Counsel General, for your statement this morning at 10:40 before you came to us—very helpful—and the letter from Tuesday? So, that gives an indication as to perhaps some areas, but there are parts of the preparedness we may want to explore a little bit as a consequence of that as well. So, we start off with Alun.

Thank you very much, Chair. And thank you, Minister, for the time this afternoon, and for the correspondence earlier this week. It was very useful. I was reading the first part of that correspondence, where you discuss your relationship with the United Kingdom Government, and I think it's fair to say that in one paragraph you give, and in another paragraph you take away. You say that you've now received some information on different areas of preparedness in this case, but you point out that it's four months after that work was completed. You're also aware that there are other areas that the United Kingdom Government is working on where you haven't had sight of relevant documents, and, given the debate we had in the Chamber and the statements you made on Tuesday on the internal market Bill, where it appeared to me very clear, from what was said, that there'd been pitifully little real substantive contact between the Governments on the matters contained in the Bill—. We had a conversation about the White Paper, I think, the last time you were in front of the committee. So, I wonder how you would characterise relationships between the two Governments at the moment, and how you would describe the structures and processes that are working or aren't working well.

Thank you to Alun Davies for that question. So, I think, if you were to look at it from the perspective of the Bill, then I would describe that as a new low, really, in terms of the approach that the UK Government has taken to that Bill. Not to rehearse discussions we've had before, but there have been discussions around the internal market between officials—they continued for about a year; that all dried up, really, in January of this year. Then the White Paper more or less came as a surprise. The Bill, as you will have seen, wasn't provided to us in advance. So, with a far-reaching Bill, which is clearly going to be contentious, knowing that this Bill obviously is, that is absolutely not an acceptable way of operating, and I described it to Alok Sharma as outrageous that the media had been briefed about the contents of the Bill before we had as a Government.

We'll, I imagine, come on to talk about the substantive issues in the Bill, which are, clearly, very, very damaging and problematic. On the other side, we've talked about the failure of the JMC(EN) to live up to its role in terms of the negotiations; there's nothing, I think, new I can tell you in relation to that. We still don't have what we need in terms of an involvement in the work of the negotiations—that's certainly the case.

On preparedness, Alun, the picture is a slightly more complex picture, I would say. And I certainly think that, in the last few weeks, official-level working has improved probably quite markedly, I think it's fair to say. At ministerial level, we've had reassurances that I, and other colleagues, will be invited to the ministerial meetings, which currently are going on. We haven't yet been in terms of the XO meetings—you know, the UK Government-wide meetings—and that needs to happen. There are some key areas—ports and borders, business readiness—where the need for that to be working hand in glove is absolutely imperative, and we are not where we need to be in relation to that. But, in relation to that work, I want to encourage the UK Government to bring us in on that in the interest of all parts of the UK, really.

Okay. You shouldn't be brought in on these things though, should you—you should be a part of these things. 

Certainly.

You know, the governance of the United Kingdom is too important to rely on goodwill. Chair, this debate goes to the heart of the work of this committee in terms of the structures of the United Kingdom. The Minister's given us a very good overview there, but I think we need, as a committee, to understand more of the detail of that. Rather than trying to put the Minister on the spot and ask all sorts of detailed questions about when and where meetings and letters and correspondence have taken place over the last few months, could I ask the Minister to provide us with some correspondence to outline the contacts between Ministers at ministerial level to discuss both the internal market Bill and that process and preparedness, and then, a second part of that correspondence, of the contacts between officials on those issues? And if I could ask the Minister if we could have that in a timely fashion then perhaps, Chair, that may be a substantive issue we may wish to discuss as a committee in the next few weeks. Because, I think, if we are to have a conversation about these matters and the governance of the United Kingdom, then we need to understand what is happening at the moment and to understand that in some detail. 

I saw the Counsel General nodding; I'm sure he'll therefore provide us with that detail.

I'm grateful. Thank you.

Dai Lloyd.

Can I interrupt, Dai, before you go on to preparedness? I just want to clarify something, Counsel General. From the questions and the answers that you gave to Dai Lloyd, is this confirmation that briefing from the UK Government on the negotiations at a Minister-to-Minister level is not really happening? Because if we're talking about—. We will come on to the internal market Bill later on, and the reasons being used sometimes for that. What we are being told by you is that you are unaware of what those negotiations are actually discussing, and, essentially, you are not being briefed on how they are progressing or the issues that are being raised or are challenging in those discussions.

Well, what happens, Chair, is that, at the JMC(EN), David Frost, who is the chief negotiator, as you obviously know, comes along and gives a read-out of the state of play, as you like. But that is what it is. There is no kind of engagement around how we might influence the future direction of those discussions. It's a simple read-out, as I say, of what his take is of the state of negotiations. All I would say, really, is, plainly, that isn't what the JMC(EN) should be about—but we've covered that ground very extensively, haven't we? That hasn't changed. 

But that's only at the JMC(EN) in that case—[Inaudible.]  

Yes.

Okay, thank you. Just for my clarification. Ed.

I wonder if it might be helpful if I just outline what we have at official level. As the Counsel General mentioned, we do have official-level updates from taskforce Europe, both before and after each round. So, we get an official-level update where the deputy chief negotiator typically gives us a rundown of whether any significant areas of progress have been advanced in those negotiations.

Their update is generally based around the high-level statements that we have from David Frost, which are published after each round. But we do have an opportunity to probe on some of those areas of detail to understand whether the negotiations covered various topics that are of interest to us, and we do have an update in terms of whether those topics have been advanced.

But I think that it's fair to say that they are updates on what was discussed, rather than an opportunity for us to be agreeing joint positions with taskforce Europe before and after each round. So, we do have those updates at that level, principally based around the statements that are made by the UK Government after each round.

So, it's an update that really doesn't give you an opportunity to perhaps put things in for discussion at the next round as a consequence of that update.

No, it's much more around an update of how the UK Government are approaching the forthcoming round, and then an update of what was discussed in that round. That happens afterwards. So, we have those broadly on a weekly basis, depending on the rhythm of the talks. 

So, effectively, you are told what's going on, or what's happened—and told what will happen—but you are not being encouraged to participate in it, effectively.

Yes, that's right. Yes.

Thank you. Dai, back to you.

Diolch, Dai. Huw.

Thank you, Chair. Minister, good afternoon. I wonder, just following up from Dai's question, whether you could enlighten us on what discussions have taken place with industry leaders within the sectors that are most identified within those letters.

Yes. Well, obviously, there's a continuous engagement, at this point, with sectors across Wales, given what we know lies ahead. The economy Minister in particular meets regularly—I think probably monthly—with leaders from each of the relevant sectors to discuss a range of issues, plainly Brexit and leaving the European transition period is at the top of those lists. But whether it's Industry Wales or the Welsh automotive forum, or Aerospace Wales, we have pretty ongoing dialogue, really, with those sectoral representatives, if you like. The CROs do a lot of work in their regions with businesses and employers that are particularly exposed, if you like, and I know that officials, I think this week—or perhaps last week; I think this week—met with Make UK to talk to them about the impact on manufacturing, and that's a fairly typical occurrence. At this point, plainly what we are doing is trying to raise the awareness of businesses that change is, clearly, pretty imminent, even if we can't at this point, unfortunately, describe as we would like to exactly what that change means. But, you know, we're very conscious of the effects of COVID on businesses, and so we're really trying to get people refocused on the change—that that change is coming, if you like—and to re-engage people is one of the key priorities at this point.

And would you say, Minister, that out there in the day-to-day reality of these businesses, there is a high degree of awareness, or does it vary from sector to sector or from size of business to size of  business?

Well, it definitely varies, based on all those characteristics, I would suggest, Huw. So, smaller businesses, for reasons that are probably commonsensical to us, have less capacity to engage in these issues than perhaps larger businesses. But the principal theme, I would say, across all of the engagements, is the risk of uncertainty. What we are hearing back, broadly speaking, are concerns about 'no deal' or no deal to speak of, if you like, uncertainty about what the protocol means, uncertainty about what the border regulations mean, and probably the other major issue that is coming through pretty strongly across the board is concerns about future skills gaps. So, those are pretty consistent—from those businesses that are, perhaps, more engaged and more able to be engaged, those are, I would say, the most consistent themes we're hearing.

Okay, thank you. Just a couple of questions that I wonder if you could confirm quickly. First of all, is it your department that has the sole, or primary, responsibility for implementation of transition plans, or does that responsibility lie right across the Welsh Government with different Ministers?

The principal responsibility for actions within portfolios obviously lies with portfolio Ministers. My role, Huw, is to lead the co-ordination of that across the Government, in the same way as the 'no deal' planning at the end of last year, and then chairing that Cabinet sub-committee provides the opportunity of bringing that all together.

Thanks very much.

I mean, there are internal structures, obviously, at official level—quite extensive structures that support that work. I'm obviously happy to provide more information about that, if you think it's helpful.

That would be helpful, but it's good to know that you're in that primary co-ordination role across Government as well, because that is key.

If I could turn to the issue of the list of UK-wide readiness projects, and just ask you to confirm—I hope it has happened—that the UK Government has shared now a list of all the UK-wide readiness projects with the Welsh Government.

I'll perhaps bring Ed in on some of the detail of this, Huw, but the basic picture is that we've got the details of the 70 projects and, by virtue of officials being involved now in the UK Government's portfolio board, we've got a high-level picture of projects outside that 70, but we're still awaiting the detail for those projects. Ed, maybe you can give a bit more colour to that.

Minister, before Ed comes in, I just wonder, picking up on the letter that we've had from you in the last few days, whether you can just touch on the notice that you've had of those, the timeliness, in order for you and your officials to engage on those.

Well, at its bluntest, we missed four months at the start of this year without getting any central level of sharing, really. I mean, there's been—. I should be clear—there has been sharing at a portfolio level, but you need the strategic, overall picture. So, that's time we're never going to get back, put bluntly. But it has enabled us to look at some of the key themes emerging that reflect our concerns. So, borders is one of those, sanitary and phytosanitary checks and infrastructure, and those sorts of issues—they're the sorts of things that appear on those project lists.

Thank you, Minister. Ed.

Yes, shall I come in on what we've seen? So, we're aware that there are around 200 projects and, as the Counsel General mentioned, we've had sight of 70. Now, what we have seen as being recently part of all of the transition portfolio board meetings—where previously we were just invited to every other meeting, we've now been invited to all of those meetings, and they happen every other week—we've now had sight of their central planning assumptions across all of the projects. So, while we haven't seen the details of the remaining 130 projects, what we have seen are their assumptions around those clusters. So, we've seen assumptions around their cluster around borders, which include some of their risks around HMRC-led projects, for example. We've started to see some information around the data adequacy arrangements, which we were previously unsighted on before.

So, through a very short paper that looked at those key assumptions and their central case and worst-case scenarios, we're getting more of a picture of the risks across the whole programme, yet we still haven't seen the details of exactly the projects that are within that programme. So, we've got a greater understanding of the programme as a collective, but not the detailed projects within that, other than the 70 that we're involved in and are sighted on.

Are you able to provide details of the 70 to us?

We're just checking that with UK Government. So, the information was shared as official sensitive, which normally means that you have to keep it within Governments. But we have checked that recently with UK Government and we're just waiting for a reply on what we can share, because I think one of the things that we're mindful of is that, as we're asking for sight of all of those projects, some of our stakeholders are also asking the same questions to understand the interdependencies between those. So, we're just checking with the UK Government about the level that we can share more broadly outside of Government.

Okay. Sorry, Huw.

No, thank you, Chair. I don't know whether this is for Ed or the Minister, but bearing in mind that some of this is coming to you a little bit late in the day and that for those that you don't know about it's a bit like identifying a black hole—you can't actually see them, but you can sense by the movement of the other planets that there's something out there, but we don't know quite what it is—are you confident that you have the resource and the time to adequately deal with all of these projects, particularly those with a real Welsh impact, if we haven't seen a substantial number of them yet?

Well, I think, on the broader universe that we haven't seen—the unknown unknowns, if you like, Huw; I think someone called it that—experience suggests from last year that seeing those is very beneficial because we might spot things that the UK Government wouldn't necessarily think we would have an interest in. I know from my own experience last year that the Welsh Government and other devolved Governments were able to make interventions that supported a UK-wide position having done that, so it's of mutual interest and benefit, I would suggest.

On the points about resourcing and so forth, what we're involved in continuously, bluntly, is a process of ruthless prioritisation as to which interventions are the ones that (a) are going to have most impact and (b) we have most chance of being able to influence. So, there'll be things on the list that are important but the prospect of being able to influence them is minimal, and there'll be things on the list that are probably going in a good way, so we've been very focused on identifying where to deploy our resources. And that's a continuing exercise, bluntly, depending on the changing picture.

If I might add to the black hole point as well, when we had the list of the 70 projects and we were aware of this wider 200 project list, we spent a lot of time and resource at official level looking at the 'no deal' plans that we saw last time where we had sight across all of those projects, and working through to see which of those would be relevant. So, we were using the old information that we did have to check with the UK Government, saying, 'Well, there was a project of x and y in this area. Are you running similar projects this time?' So, we put a fair amount of resource into that process of trying to guess what the projects were, based on what we had last time, while if we'd just had sight of the projects in the first place, we could have focused our attention on understanding those interdependencies and connections between them, rather than trying to plug that gap ourselves.

Yes, there's nothing like joined-up inter-parliamentary and inter-governmental workings, and this sounds like—. Well, anyway, I'll leave it there; I'll leave it hanging. Could I just ask you, Minister, finally—? We've touched on the issue of raising awareness of the end of the transition period for businesses of all different shapes and sizes. Could I just ask what specifically Welsh Government is doing in these final weeks and months to raise awareness, but also particularly with small and medium-sized businesses to prepare for the end of the transition, whatever the end of that transition might look like?

Well, the practical thing is we continue to work with the sector-wide bodies and industry-wide bodies to try and cascade information as we have it, but the principal challenge is trying to make sure the information is reliable and available, and people know where to go and find it. So, it continues to be the Brexit portal and the diagnostic tool and those aspects that are the key drivers for this. That's now linked to—since, I think, probably the end of July, mid July—the UK-wide UK Government comms in this space, where they are information sharing rather than political, if I can be blunt about it. That tool is continuously under review, and plainly it will have some more specific things as the picture becomes clearer about a deal. It's kept up to date, basically. 

Thank you, Minister. 

Thank you, Huw. Minister, on preparedness, in your letter you wrote on Tuesday you did refer to the border operating model. I suppose in a sense it's back to the question Alun asked at the very start on the relationship with the UK Government, because in your letter you stated clearly that you've had very little time to respond to some aspects of this model, that you had it last week, it's going out to stakeholders mid September, we're in mid September, and it's being published at the beginning of October, which is just over 10 days away. Do you think you have sufficient time to actually implement such border operating models, which will have to come into force on 1 January 2021?

I think, just on the border operating model itself, we did have very little time. I think it's probably true to say that that's true across the UK Government as well, as it happens, and we, I think, have, certainly in the early draft that we've seen, made some changes that have been accepted, but we obviously wait to see what comes out in the version ultimately. In terms of actual delivery of that, some of the requirements that are most relevant to us operate to a slightly longer time frame than the end of December. Many of them are coming in April or July of next year, so there is that much more time, as it were, which obviously isn't very much. But there's a question of infrastructure that goes with that, for which the lead-in times are obviously quite substantial—eight, nine, 10 months, perhaps. So, you've got to assume, in that context, that there's a delivery risk around that just because of planning and construction and time frames being what they are. So, obviously, our position as a Government was that we should have extended so that we could make these plans smoothly. That hasn't, obviously, happened, but there are—. I'm happy to talk about the infrastructure specifically if you like, but I think there's a significant issue around that. There's also a set of questions that we're exploring with the UK Government at the moment to ensure that the sorts of checks that are the expectation in Wales are consistent with the sorts of checks that would be the expectation in ports in England and Scotland. It's not entirely clear to me that that is the case at the moment, and it feels to me, for reasons to do with risks to rerouting freight and so on, that we need to make sure, basically, that there's a level playing field across the UK in relation to those issues. So there are several quite thorny questions in there, Chair. 

On that basis, have you had sufficient data on traffic modelling and other aspects so that, with infrastructure projects, for example, as a starting point, you know exactly what could be required in, say, nine months' time to be able to ensure that these can be delivered?

We've had commitments to share them, but we haven't had the reasonable worst-case scenario figures for disruption to Holyhead yet, which is obviously the busiest port. We've had, I think, a verbal read-out from the Department for Transport around the assumptions to do with traffic volumes or heavy goods vehicle volumes, but what we haven't had, which I think is the most important aspect of it, really—certainly it was when we were planning last year—the figures, the projections for unready HGVs, which are HGVs carrying freight from businesses who are not prepared in terms of the paperwork, they appear at the port, they need to be checked at the check-in by the ferry operators, and they haven't got the paperwork they need, and they're sent away. That's the biggest single variable, and we haven't got the data on that yet. What we would like to be in a position as a Government to do is to try and work with the ferry operators so that happens at booking rather than check-in, which might alleviate some of the pressure. And actually, as it happens in Holyhead, most of the freight comes from a relatively modest number of companies, so we want to understand not just what the downsides are, but how we can ameliorate some of those, and we need that information before we can do that properly. So that's why I'm telling you there's a delivery risk, because we can't at this point assess readiness against that set of assumptions. 

And can I ask a final question on this point, which will lead on to the internal market Bill area? Clearly, there's a lot of traffic that goes through Holyhead that goes to Northern Ireland—probably it's the only port at which we see a lot of traffic going to both the Republic and to Northern Ireland. Have you had a consideration as to what implications the protocol will have for that traffic, particularly if changes to the protocol occur? 

Well, the questions that we had about the protocol, which were the ones that the UK Trade Policy Observatory paper outlined earlier in the year, are I think more or less still outstanding. Ed will come in on this in more detail, but the command paper didn't answer the questions, and the recent business readiness document I think actually probably caused more questions rather than answered them. But I'll hand over to Ed for some of the detail. 

One of the things that the UK Trade Policy Observatory report highlighted is that potential for trade flow incentives if there aren't the same level of checks between Northern Ireland and the rest of GB as those from Ireland to Wales and those goods travelling from Northern Ireland through Dublin into Holyhead. We've made representations to the UK Government a number of times now for analysis of those trade flows and what information they have around that potential for those incentive effects. We've asked for this information for months now, and it's something that the UK Government keep telling us they're taking away, but we still haven't seen sight of that data or analysis. So, even though the report that we commissioned at the beginning of the year highlighted that potential, we still haven't got any information from the UK Government about the scale of that potential and the threat that that poses to Welsh ports. 

Okay, so you have raised these concerns but you've not yet had a response to those concerns. 

That's right. 

Okay. Thank you. If I could go on to the internal market Bill now, Minister. Mandy will start off with the first question. Mandy.

Thank you. Good afternoon, Minister. 

Good afternoon.

Talking about the internal market Bill now, can you explain to me why the Welsh Government sees the internal market Bill as a power grab and why would the Welsh Government rather be led by laws from the EU rather than the UK?

Well, that second question, I think, plays into a broader set of discussions that we're not going to agree upon, but I think it is not a fair characterisation of the situation. But, in relation to the question of a power grab, there are many ways in which this Bill is a power grab. There is a literal power grab in the sense of reversing the devolution settlement in clause 48(3). In clause 46, it gives powers to UK Ministers in devolved areas, therefore effectively circumventing the powers of Welsh Ministers. And the first four Parts of the Bill prevent in any number of ways Ministers' policies and Senedd laws from being properly enforced on the ground in Wales. So there is a whole catalogue of ways in which this is a power grab and cuts across the devolution settlement very significantly.  

Thank you for that. You do realise—? Right. The withdrawal agreement itself is only law—. It's a living, breathing document. It's going to be added to, and things like that. But it's only law because of the Act of Parliament that brings it into the UK law. The UK Parliament is therefore free to amend it as it sees fit. There are those in the Chamber and elsewhere in the newspapers who still seem to think it would be bad faith for the UK to exercise its sovereign powers in this way and claim it is a breach of international law to do so, which we've already discussed. But the agreement between the UK and the EU is not some world law enforced by a world court; it's an international agreement that is ongoing, where the two sides disagree about its meaning and each claim bad faith about the other. Those disputes have got to be sorted out between those two parties. This dispute could still be sorted out by that negotiation, otherwise it will be sorted out by the UK exercising its sovereignty over our single market and—

Can you ask a question on the internal market Bill and not the generality of the UK negotiations, Mandy?

Right. Okay. But, you know, as I said, the withdrawal agreement and everything like that is a living, breathing document. It's going to be carried on like that. But because I can't use that bit—sorry, Chair—the initial—. For Northern Ireland, with the border down the Irish sea, then, the initial withdrawal agreement is actually in breach of article 6 of the Act of Union (Ireland) 1800, which actually states:

'No duty or bounty on exportation of produce of one country to the other'

and

'All articles the produce of either country shall be imported free from duty.'

Can you see why they want to change it because of that? 

I'm not sure I understand; perhaps I'm not alone in that. I think the point to be made, really, is that in relation to the Bill itself, I'm not sure the scale of the issue has been fully grasped. The Bill provides for a breach of international law, and it provides for regulations to be made regardless of whether they're in compliance with domestic or international law. It's an attempt to oust the jurisdiction of the courts. It is, for anybody who believes in the rule of law, utterly repugnant, and that isn't actually a party political point, because Prime Ministers, party leaders, law officers and Lord Chancellors of the governing party absolutely share that view. This is not a marginal concern; it goes to the heart of the capacity of the Government to command the confidence not just of international partners, but its citizens and other Governments. 

Yes, but Jeremy, there's no such thing as international law; there are only treaties, agreements and the like, not laws. We're not going to break the law; we're trying to amend it to sort everything out for the whole of the UK, which is the normal legal way of passing new legislation, and the Government's prime duty is to safeguard the security, freedom and integrity of this nation. That's what's being proposed, so even if all the criticisms about the legal amendments were accurate, the proposed action is still the right thing to do for the UK. 

Well, it's not the right thing to do in my submission. I don't dispute the fact that Parliament—. In our constitutional arrangements, the convention is that Parliament is sovereign; I absolutely understand that, even if I don't think it's a faithful reflection of the realities. But that is a separate question about whether Parliament should be legislating to break international treaty obligations. I'm not sure there's much more I can add to that, Chair. 

I won't add anything at the moment. Huw, did you want to add anything in particular, or shall we move on? 

I just wanted the Minister to clarify from a Welsh Government position if his understanding is that there is no such thing as international law. As a former UK Minister and a Welsh Government Minister, I'm very familiar with the precepts of international law that are agreed to by sovereign Governments on behalf of their own people. 

Yes, there is such a thing as international law. It's not incompatible with parliamentary sovereignty in this sense, but, certainly, what Parliament is being invited to do in this agreement breaches it. 

Alun. 

Thank you very much, Chair. I'm grateful to you for that. Coming back to earth, in terms of where we are today, I presume that from your opening answer, Minister, you had very little time to consider this Bill before it was published. Were you able to discuss some of the matters you've outlined in earlier answers with UK Ministers prior to publication? 

No. Well, let me just tell you what happened, I suppose. So, there were discussions—. We have never accepted the internal market—the proposal that the UK Government has put on the table, effectively. So, there were discussions over a period; they came to an end in early January. We raised concerns before the publication of the White Paper in correspondence and subsequent to that. There were, I think, three official meetings—perhaps Chris can clarify this—dealing with individual aspects of the Bill, but not the breadth of the concerns that we had; we were not able to have those discussions. I still haven't, by the way, had a response to the letter that I sent on 14 August, which set out the Government's concerns. I would be content to have a meeting with the UK Government Ministers that described in detail our reservations, which are obviously significant, with the Bill, because I think it's important to take every opportunity to make the case. But obviously, there are a whole range of ways in which this Bill cuts across the devolution settlement.  

Thank you for that. I think it's very clear that I don't think any serious reading of the legislation can argue that it isn't undermining the settlement. There was an agreement, I felt, in place with UK Ministers and UK Government, that any amendment to the settlement would be agreed, and I felt there had been a process outlined by previous Secretaries of State that outlined how amendments to the settlement would take place in terms of conversations, and then agreed positions being placed before the UK Parliament and the Welsh Parliament in this case. It's surprising, therefore, that no conversations, serious conversations, took place prior to publication of this Bill. Is my understanding correct?

Yes. I'll ask Chris to come in on some of the detail of those discussions, in particular around the conventions and so on, but, certainly, that's my understanding.

Chris.

Thank you, Chair. So, to confirm on the meetings in between the White Paper and the Bill being published, we had three specific meetings on the Bill proposals. They were on mutual recognition and the office of the internal market, and on inter-governmental governance. The UK Government officials set out, in very broad terms, what we could expect in those specific areas to appear in the Bill. And we outlined our initial reactions in terms of the potential concerns and problems that we could see with that.

We weren't shown any draft provisions in the Bill at all, and what appeared in the Bill broadly mirrored the description that was given, albeit we didn't receive a huge amount of detail in those areas. And in terms of agreeing changes to the devolution settlement, typically, we had the types of negotiations that we've seen around the Fisheries Bill, which you've been aware of, but there is also the mechanism within the Government of Wales Act 2006 for an Order in Council to be made to change the reservations, but that requires the consent of both Houses of Parliament, as well as the Senedd, and that's a statutory requirement.

I'm interested, therefore, by this process, and I think this is something, Chair, we need to return to. Since the publication of the Bill, Minister, have you had any conversations with UK Ministers, or have officials had conversations, where you've had an opportunity to outline the concerns, having seen the detail of the legislation?

So, speaking from a ministerial point of view, there have been one, I think, possibly two—certainly one meeting, two actually—since the publication of the Bill on other matters. But because they were impacted, unsurprisingly, by the publication of the Bill, I took the opportunity of outlining our opposition to the Bill at that point. But in terms of any substantive ministerial discussion on the Bill and its detail, there hasn't yet been one. There has been the offer of one, and, as I say, I would be prepared to have that meeting in order to be able to outline our concerns on a ministerial level. Perhaps, Chris, you could—

Could you outline with whom those meetings took place and the points that you were able to make?

They were in the context of the—. One of them was a quadrilateral meeting in relation to preparedness generally, and one was in relation to inter-governmental relations. And, from memory, in the latter one in particular I made the point that—it was a very brief intervention in the context of a larger discussion—but I made the point that the Bill was repugnant to us, and explained that the points that I made in the letter, which remained unanswered, were still the points about which we had concerns.

So, there have been no substantive conversations and the UK Government hasn't made any substantive effort in order to engage with the Welsh Government since publication?

No, to be clear, there has been the offer of a meeting with Ministers to discuss this, and that's the meeting that I'm saying—that I mentioned earlier—I'll be content to have. But it hasn't yet happened.

And there isn't a date for that.

I'm not sure I could tell you that off the top of my head. I don't think so.

Okay.

One of the issues, just to be clear on that, is I would prefer to get a response to my letter, which outlines substantively our concerns, before having a meeting to discuss it.

Yes, that makes sense. In terms of—. Moving away from process to substance, in terms of the internal market, clearly the Welsh Government's position, and I think you outlined this in the Chamber yesterday, is that we need frictionless trade between Wales and England and Scotland and the north of Ireland in any settlement, and that the Welsh Government would actively seek to create that internal market framework. And I presume the common frameworks that you've been working on over the last few years have been in order to do precisely that. So, there isn't a principled objection to many of the objectives, if you like, or the ambitions of the legislation. The objection is a matter of how these powers would be exercised, what these powers are and where these powers would lie. Is that correct?

Yes. There's no objection, quite the opposite, to the idea of an internal market—we think that's in Wales's interests. We don't actually object to the existence of legislation. I think that some parts of the common frameworks would need legislation. You see in the Fisheries Bill, there's the outturn, if you like, of the fisheries set of discussions between Ministers around fisheries. I would actually say that the principle of mutual recognition, in a sense, is at the heart of an internal market, properly organised. The key question is how you arrive at that. You can't arrive at it by imposition; you have to arrive at it by agreement or by having a framework that allows either the agreement of common standards or a managed divergence, which is essentially the system that we operate now, and it's done in a very well established way, and all we wish to do is to seek to continue arrangements that work well—obviously to continue the principles if you like, and one of those is about agreement and one of them is around respecting devolved competence.

Which the UK Government, of course, is not doing in this legislation. So, if you can't trust the UK Government to do the right thing, it's going to be very difficult to achieve the ambitions that you've set out and with which I absolutely agree. And in the same way as the UK Government is losing trust across the world—we saw what the Democratic candidate for the American Presidency, Joe Biden, had to say last night. So, there's a very real loss of confidence across there; there's a very real loss of confidence elsewhere in the world. That same loss of confidence and loss of trust is taking place within the United Kingdom as well.

Yes, yes it is. I would say there's a contrast here, to be candid. If you look at the common frameworks process, there aren't any of those common frameworks that have come apart because a Government has walked away—all Governments have been engaging constructively in that process. In fact, the list of common frameworks is a list that, I think, from memory—Chris will remind me if I'm wrong—was a list originating from the UK Government and it was intended to map all the areas relevant to the internal market. So, we started from that premise and, actually, there have been delays for reasons that we've explored before, but, actually, there have been good levels of engagement in relation to that, which is why, actually, we think that remains a live option for resolving these questions.

So, how would you amend the Bill?

Well, there'll be a number of ways, I think. I suppose there'll be—. I'm happy to provide further detail at a later point, really, but there are questions about putting that—. There are some things that are unacceptable in their entirety, so let's perhaps just start with those: so, the clauses around breaching international law in relation to the protocol plainly are unacceptable. Section 46 around financial powers in devolved areas is plainly unacceptable. The addition of reservations to the Government of Wales Act is obviously unacceptable—that literally reverses the devolution settlement in those areas—

Can I stop you there, Minister? I'm sorry to interrupt. During the debate in the House of Commons yesterday, Conservative Members made it absolutely clear, from their perspective, that none of those matters that you've just described breach the devolution settlement. 

Well, one of them changes the devolution settlement. There's no conceivable debate around that point—it adds to the list of reservations. The reason for adding to the list of reservations is to extend them and you extend them at the cost of devolution. So, I mean, that argument I think is just—I don't understand it, if I can put it generously.

As a Minister, you will remember, I attended the EU Council of Ministers meetings in order to represent the Welsh Government, and that attendance was facilitated by the UK Foreign Office and by the UK Permanent Representation to the EU because they recognised that matters under consideration were devolved. That was all about the European programmes and, in fact, the European budget at that time as well. So, they were a very broad range—it was a Conservative-Liberal Democrat coalition Government, of course. So, there was a recognition in Government, by the United Kingdom Government, that those matters were devolved at that time. So, what do you think has happened since that has led the United Kingdom Government to change its mind on these matters?

Well, I don't wish to speculate about their motive, but plainly, state aid has become totemic as an issue in the negotiations about leaving the European Union. I think I may have made this point in the debate yesterday in the Senedd—when it comes to matters that are devolved, then the UK Government acts in relation to England for those matters, because, plainly, there are other Governments in the UK which act for their own countries. So, there's an obvious conflict of interest in that space, isn't there, where you've got UK Government acting for England on behalf of these things and across the UK?

The other specific point I'll just finally say on the Bill—and I don't think this has had quite enough focus elsewhere yet, and I want to share it, really—is the Bill effectively provides for the Act, if it were to be passed, to be a protected enactment, which means that even when it's in devolved areas, as obviously in a number of ways this is, it would not be open to the Senedd to change the Bill. So, that locks in the change in the devolution settlement, if you like. Now, there is no clearer signal to me that this is a constitutional statute Bill masquerading as a commerce Bill, if you like, because that mechanism eventually exists to lock in changes to the devolution settlement in practical terms. It does happen occasionally where the settlement is being changed or being affected, but typically operates, on a clause-by-clause basis, a very narrow basis, and it's applied across the board to this Bill, which is—I'm not sure if it's without precedent, but it's certainly highly unusual. So, those are the things that, on the face the Bill, need changing.

And then Parts 1 to 4 , which is the mutual recognition, non-discrimination—all that part of the Bill—all of those, in different ways, cut across the ability of the Senedd to enforce the laws of Wales or Ministers to make laws that can actually change things on the ground. I've talked about some of those in the Senedd before. They range from food standards to animal welfare, to waste, to housing standards, and there are chunks of Schedule 7A to the Government of Wales Act 2006 that would be affected by that in many ways.

I'll bring Dai Lloyd in at this point, and can I remind Members we have very few minutes left?

Not specifically on that point—I just wanted some detail, if the Counsel General would agree with me—. Under clause 46 and UK Government spend in devolved fields and the inclusion of water infrastructure there—. Some people get very exercised about Tryweryn and whether a future Tryweryn might appear in consequence to UK Government spend on large water projects, in direct contravention of the views of the people of Wales as enunciated in their Senedd.

Well, I don't have the clause in front of me, Chair, so perhaps I can be permitted further reflection about the particular application of that, but, plainly, the powers in clause 46 are powers that already rest in the Welsh Government. I've heard it said that they aren't taking powers away from Welsh Ministers and from the Senedd, and perhaps that is technically true, but when you have a Government in Westminster that seeks powers in devolved areas, and plainly has a significant control over the budget, that doesn't seem to me to be a Government that's interested in extending or preserving devolution.

Alun, have you finished?

I was going to make the point—these are, by their nature, complex maters. It would be useful if the Counsel General, when himself and the First Minister formally reply on these matters—that a copy is sent to all Members, as well as members of this committee, because it is important that we have an opportunity, alongside the justice and constitutional affairs committee, to consider these matters in some depth, and I would suggest with our colleagues in the Scottish Parliament as well, in order to respond fully to the constitutional vandalism that is taking place at the other end of the M4.

Thank you. Minister, we are almost at the end of our session. Just one final question from me in that case, and it's clearly linking to the LCM that follows as a consequence of this Bill. We have previously rejected an LCM, on the EU withdrawal agreement Bill, and so did Scotland, but the UK Government went ahead irrespective of our own views and used the 'not normally' approach, which was under Sewel. Do you see this as another means of using that approach if it is rejected and then amended? Because I think we are in a different position to where we were previously, because the current UK Government has a large majority. It's unamended and we oppose it. What are the discussions you'll be having regarding the future of this Bill and how it impacts upon devolution?

The first point to make is the UK Government has written seeking consent to the Bill as it is now. Given the nature of the Bill, I think my own view is that I can't imagine circumstances in which the Senedd would wish to consent to it, and I think the UK Government would struggle to justify how it could proceed in relation to a Bill of this nature without the consent of the devolved legislatures. You will recall from discussions about the previous instance to which you referred that we had reassurances that defying the Sewel convention, or rather proceeding in the absence of consent, was 'unique' and 'extraordinary' and that sort of language. So, I think the UK Government would not be able to justify proceeding in the absence of consent from the devolved legislatures in this case.

Thank you, Minister. We've reached the end of our session. We've still got many questions, I'm sure, and we'll want some answers from you. I would be grateful if you perhaps could write to the committee putting your views on the shared prosperity fund and what this Bill would relate to the shared prosperity fund. And if it does relate to the shared prosperity fund at all, it would be very helpful to have your views on that. And also perhaps just an update on the common frameworks progress that is being made. We haven't discussed that, but this is all linked in to the internal market.

Yes.

Can I thank you for your time? Can I thank the officials for their time this afternoon? As you know, you'll receive a copy of the transcript for any factual inaccuracies. If there are any, please let the clerking team know as soon as possible.

Certainly. Diolch yn fawr iawn.

And I look forward to you coming back to the committee in a short space of time, probably, the way things are going, to give us perhaps more information as to how progress is being made on both this Bill and preparations for transition end. Thank you very much.

Certainly. Diolch yn fawr.

For Members, we move on to the next item on the agenda, which is papers to note, and you will note that we have 15 papers to note. I propose that we do them as a block, unless there's something specific Members may wish to raise on a particular paper, in which case, we will then highlight that one. But, if you're happy, we will note all 15 papers, which are correspondence, effectively, between either the Counsel General and UK Government in relation to the issues we've been discussing today. Are Members content to note them all en bloc? Alun. You're muted.

In noting them, we are noting a letter from the Secretary of State for Wales, who says that he's welcomed the engagement with the Welsh Government and would build on it in order to develop the internal market Bill that we've just been discussing. It's very clear from the answers we've received this afternoon from the Counsel General that that engagement has been very thin on the ground. It may be useful for us to write to the Secretary of State for Wales asking him what he has done and what the Wales Office has done in order to facilitate and build on that engagement that he describes in his letter.

I think that's a fair point. Are Members content?

I support that, Chair.

Then we will do that and seek further clarification. With that additional point, are Members happy to note the 15 papers? Thank you for that. 

Item 4 is a motion under Standing Orders 17.42(vi) and (ix) to resolve to exclude the public from the remainder of today's meeting. Are Members content to do so? I see they are. Therefore, we now move into private session for the remainder of today's meeting.