National Assembly for Wales

Good morning, everybody, and welcome to the Acton Community Resource Centre here in Wrexham. It's great to be out and about again. This is the first time the First Minister has been out and about with us, so we hope you'll find it enjoyable. I just wanted to say at the start, as well, this is Janet Finch-Saunders's first committee meeting, since Janet recently joined us as the Chair of petitions. So, welcome, Janet. And just to notify the committee that our clerk, Graeme Francis, had quite a nasty cycling accident at the weekend, and so we send our best wishes to him. I did say, you know, people would do all sorts of things to not have to clerk alongside me as Chair; I don't know what that says about the clerk or what it says about my chairing. But we do send our best wishes to Graeme and we hope that he's okay. We've got Marc Wyn Jones with us clerking today. Marc and I have chaired and clerked meetings, so he'll keep me in check. So, there we go.

So, first and foremost, then, I wanted to really thank the Acton Community Resource Centre for their hospitality in hosting us. They always say we never travel lightly, and there are several demands that we all make, and so it's great that they've been able to accommodate us in this wonderful building. I was talking, just before we started, to the staff, and they were telling me some of the wonderful things that they do here. So, that's really good. We've got a list of apologies, so we'll just note the apologies and put them on the record. There's no point me sitting here reading them all out. First Minister, could I ask you to introduce your officials for the purposes of the record, please?

Diolch yn fawr, Gadeirydd. With me this morning are Emma Watkins, Gwenllian Roberts, who is the regional director for north Wales in the economy department, and Dickie Davis, who focuses primarily on manufacturing matters inside the Welsh Government. 

Okay. Thank you very much. Can I just—? Perhaps the Government officials hadn't heard; we're asking people if they can put their phones—. I think airplane mode is the one we've found will not affect the broadcasting, because we always attempt to live stream this. So, if we can do that, that's fine. The agenda today is quite a simple agenda—you know, we only ever pick a topic and then we have the topicals. But I just thought, First Minister, at the start of this meeting, I'd give you the opportunity to make a statement on the events of yesterday.

Thank you, Chair. So, just simply to remind the committee that yesterday, following the conclusion of the coroner's inquest and his report, I published a written statement. Of course, the first thing I wanted to do, as I know you would want to do, was to express our ongoing sympathy with the family in the loss they have sustained and the grief that they so clearly continue to experience. In issuing that written statement, I fulfilled the commitment I made to the Assembly in April, which was that once the coroner's inquest had concluded and his report was available, that I would put into the public domain all remaining documents available to me that had relevance to the inquiries that surround the loss of our former colleague. So, yesterday that included the leak inquiry report, and it included the exchange of correspondence between myself and the Treasury solicitor Jonathan Jones in relation to the operational protocol. I said in my written statement yesterday that I would take no further decisions that lie with me without further discussion with the family. The family said yesterday, at the conclusion of the inquest, that they now wanted some time to reflect on the experience and where they thought that took them next. The coroner also, as you know, issued a 'prevention of future deaths' report. Any public authority that is in receipt of such a report has 56 days in which to respond to the content of that report, and I said in my written statement yesterday that we would respond in full to the issues that the coroner covers in that report. There is nothing further that I will be able to add today to what I have now said to the committee.

Okay. Thank you. That's firmly on the record, and thank you for that. I'm sure all of us want to send our best wishes and our thoughts to Carl's family, and particularly to Jack, who is going to have to come back and work with us. I'm sure we'll all offer him as much support as we can. So, thanks for that.

Shall we go on to manufacturing and the manufacturing sector in Wales? Can I just ask you, perhaps—? I'll start off with a general question about what do you think is the current state of manufacturing in Wales and where do you think the greatest areas of strength and potential are. 

Thank you, Chair.

Quite a number of years ago now, and older listeners will remember, there was controversy inside the Labour Party between New Labour and old Labour, and I was in London with the then First Minister, Rhodri Morgan, and somebody said to him in the lobby, as we were going into the House of Commons, that he was a believer in spotted Labour. There were good bits of it and bits of it that were not so good, and I suppose my overall assessment of the Welsh economy is a bit the same, really: that it has very significant resilient strengths, but it also faces very significant challenges as well. So, the picture is a mixed picture in that way, as I suppose you would expect.

Now, many times on the floor of the Assembly I have recited those figures that demonstrate the resilience of the Welsh economy, and I don't plan to go through them all with you again today, because they're well known to you. But it is worth just reiterating some of them because it puts the manufacturing aspects of our economy into that context. We have the third highest business birth rate in the United Kingdom; we have the second lowest business death rate; active enterprises operating in Wales are the highest since records began, and they began in 2003; and the number of active enterprises headquartered in Wales is also the highest since comparable records began. So, in some aspects, the Welsh economy, despite the decade of fallout from the global recession, the Welsh economy remains in good health—record levels of employment, low levels of economic inactivity, and so on.

Manufacturing has certainly played its part in that. And manufacturing, of course, is a more significant part of the Welsh economy than any other nation or region of the United Kingdom. Manufacturing accounts for 10.5 per cent of total Welsh workforce jobs, and the comparable figure for the UK is 7.7 per cent. So, manufacturing is more important to us and is a bigger part of our economy than anywhere else. And, since 2009, manufacturing employment in Wales has continued to grow—it's gone up by 13 per cent since 2010, and the value of manufacturing to the Welsh economy over the same period has grown by 51 per cent compared to 37 per cent for the UK as a whole. So, manufacturing has been remarkably resilient in the face of those global challenges, and we started with a bigger proportion of our economy in manufacturing in the UK, and that gap has grown rather than narrowed over the last decade.

Chair, you asked what the challenges and what the strengths of the Welsh manufacturing sector are. Well, the strengths lie in particular sectors: in automotive, in aerospace, in rail, and in steel, as well as the more recent growth in compound semiconductors, which has been very significant in Wales. All of those things remain very important strengths in the Welsh economy. The challenges are shared with other sectors in many ways. Austerity is a challenge to manufacturing. Any sector that produces goods to sell is affected when effective purchasing power in the economy has gone down. If there's just less money to buy things and if you produce things to buy, then your business will be affected by that.

Brexit is a real issue for manufacturing—uncertainty surrounding Brexit, not knowing what to plan for. And, as I have to say all the time, if we were to leave the European Union on the worst of terms, then the impact on manufacturing in Wales will be very significant. There will be tariff barriers in the path of manufacturing industry in terms of export, which have never been there before. There will be extra costs on goods coming into the United Kingdom, so supply chain costs will rise for manufacturers. We will no longer have access to the collective protections that membership of the European Union provides. So, for the steel industry, for example, steel dumping is a real issue. We have the wall that the European Union erects, and that wall protects manufacturing in steel in the United Kingdom, as anywhere else, and that wall will disappear as far as the United Kingdom is concerned if we leave the European Union on the worst of terms. There will be country of origin issues that Brexit will bring with it. Can you describe something as being 'from the EU'? Well, it will depend on the percentage of that particular product that was made in the EU, and steel made in the United Kingdom will no longer count for those purposes, and that will be a disincentive, potentially, for manufacturers on the continent to use Welsh-produced steel in their manufacturing. So, there will be a series of Brexit-related barriers that manufacturing is alert to and will make a difference.

Productivity is a further issue that faces manufacturing in the Welsh context and the UK context, and automation is another one of those. You asked what the challenges were. Well, automation is a challenge, of course, and automation is a challenge in many ways. It might drive up productivity, and that will be a good thing, but how the fruits of that productivity will be distributed is a different sort of challenge—the differential impact of automation in terms of geography, in terms of ethnicity and so on, and different industries are differentially exposed to automation. If you're a low-cost-of-entry business—if you run a call centre, for example—then automation might be quite easy to bring about. Manufacturing has high costs of entry—expensive pieces of equipment, long-term commitments that you make, and, therefore, taking advantage of the productivity gains that automation brings may be more of a challenge to manufacturing than other parts of the Welsh economy.

Thanks very much. I think we're going to start drilling down into some things, so, Russell, you're going to look at the Welsh Government's economic action plan. So, a set of questions there.

Yes. First Minister, in December 2017, the Welsh Government introduced the economic action plan. Can you outline the Government's changes in approach following that plan?

Thank you. I'll try and separate them into a number of strands. So, first of all, the economic action plan introduces a new prominence to a theme of public investment securing social as well as economic benefits. So, the public is making this investment, and the economic action plan says that the Welsh public is entitled to a return on that investment. It gets it in terms of jobs created and so on, but it needs to get it more than just that; it needs to get it in the nature of jobs created and in the actions that companies take to support other social ambitions. I think we talked on the floor of the Assembly just last week about the things that the economic action plan looks to companies to do in terms of the health and well-being of their workforce, for example. So, the economic action plan puts a new emphasis on that contractual sense—that, in investing public money, the public is entitled to see a return on that investment. But the economic action plan also simplified the package of support that we offer to companies here in Wales. It simplified it by bringing together a number of previous strands to make it easier for companies to understand, easier for companies to apply for help from the Welsh Government, and a commitment in the economic action plan that the support that we offer Welsh businesses—indigenously, or companies that come to settle in Wales—would be competitive with what other parts of the United Kingdom are able to offer, because, make no mistake, this is a competitive market. Every part of the United Kingdom tries to do whatever it can to attract growth and jobs to its area. The package we have has to be competitive, and the economic action plan made a commitment that we would remain competitive in that way.

Can you give an example that illustrates the main differences in support that the manufacturing sector will see under the economic action plan—a specific example of that?

I probably will ask Dickie to give you that, because he will be more directly involved in the detail of the negotiations with companies and the sorts of offers that we put together.

That's fine. If I can add to that then, perhaps, as well, in terms of what the manufacturing sector would see as the biggest difference in support available, compared to before the plan.

If I may, Chair, I'll answer the latter question first. The answer is 'none'. There is no difference whatsoever; indeed, there is, potentially, an improvement—we're still very early days. But if we take a step back for a minute—

Could I just check—is that no difference, because I was asking—?

There's no difference.

There's no difference at all. Right.

Moving from a sector response to a regional response is actually improved because of the supply chain opportunities. But there is no difference to the quality of support or the assets that we can bring to support the companies.

So, no difference, but, I suppose, I would have thought that the action plan would improve support—

Yes, absolutely.

Right, okay.

Absolutely. Sorry, I thought I'd said that right at the start. It's improved it.

Sorry—carry on. Sorry, I thought that somebody else wanted to come in, but, no, you haven't—you were just picking out the first one. Sorry.

I think it's just worth explaining to the Chair and to the board in terms of the business development managers, the business development executives that would go in to a company, their real aim is to add value and to be able to discuss at board level with companies how they can support and how we can bring and refine and focus the support. What I mean by that is old-fashioned brokerage, introduction to companies, support of supply chain and, 'Are you aware of what is going on within your local environment and what else is going on within Wales?', and, 'Are you aware of what's going on in terms of the market and how you adapt?' So, an experienced business development manager, or an experienced business development executive, with, at minimum, a number of years' experience, will go in and will know the chief executive officer, will know the chief financial officer, will know the key primes who are supporting that business. They will say, 'I've got a concern about a spar,' 'I've got a concern about a widget,' or a bracket or whatever it is, and we can then use our forums, use our knowledge, and the chief regional officers can use their complete forums to identify if we have a company that can fill that delta within Wales. So, that's the brokerage piece.

In terms of the financial support, we use one gateway, but all the financial levers that we had are still there. If we just tease that out a little bit further, in terms of the Ford taskforce that we've got ongoing at the moment, we are talking to Ford about its premises and its workforce, we are talking to potential companies, and those companies that we are talking to, we are saying that we can help them with environmental support, we can help them with access support, we can help them with whatever their demands are in terms of the skills as well as physical bits and pieces. Does that answer your question?

It does, thank you. You mentioned financial support. Can you outline what difference in financial support there has been since the introduction of the plan?

If I may, I can use a practical example again. If we were having the discussion before the EAP, the limits were, obviously, the European limits, et cetera, and the state-aid limits. Those limits remain. They have not impacted on us in any shape or form, and the direction that I received from the First Minister a couple of months ago has not changed. As much as we have got, as much as we can bring to bear, we will support those companies, and that has not changed. 

Can I ask one more question, Chair? Or come back?

Nick's got a supplementary, and I'll come back to you. 

Very briefly, I just wanted to know about the role of the Development Bank of Wales in all this. We looked at this recently on the Finance Committee, and that's clearly been a change from the previous—Finance Wales, wasn't it, before? So, has that altered the support for manufacturing specifically?

You will probably add, but obviously the Development Bank of Wales is a major new part of the landscape of assistance we are able to offer businesses in Wales, and it has to operate in that very specific part of the market where commercial banks are not prepared to take the risk that is involved in lending, but where there is still a significant confidence that public money will be safeguarded and will be returned. We now have well over £100 million being put through the Development Bank of Wales, and some of the most significant streams in the development bank—the angel investment fund, for example—are specifically in the fields of helping businesses who otherwise wouldn't have access to finance. Manufacturing is definitely part of the landscape that the Development Bank of Wales assists. 

If I may, I cannot think of a negotiation at the moment ongoing where the development bank is not with us or advising us or guiding us. The senior representatives—we have, clearly, members on the board, and vice versa. The senior representatives will meet with the CROs on a very regular basis, and other deputy directors, to see how they can support, and vice versa. It's a very, very close environment, which is useful. 

When the Minister announced the economic action plan in 2017, he stated that in order

'To maximise our impact, we need to focus our financial resources and target our support—we cannot proactively work with every sector in the economy.'

So I wonder what assessment the Government has made as to whether this intention to maximise impact has been achieved?

Just to echo something that Dickie said a moment ago, Chair, the economic action plan has had no diminution in the amount of effort and engagement that the Welsh Government and its workers in the field have, nor has it led to a reduction in the amount of money that is potentially available to any company that comes forward for assistance. We're not picking winners in the Welsh Government. That isn't the way that we work. What we look for are the quality of the plans that come into us and the ability of those sectors to go on adding to the strength of the parts of the Welsh economy that we want to see grow into the future. So, I mentioned the compound semiconductor field a moment ago as one of the areas where we think there is real potential for that in the Welsh economy, and working with others we have put significant effort into that.

So, what the Minister said back in 2017 is the case. We're working differently in that way, but it is in order to support those aspects of the Welsh economy, and manufacturing particularly, where we think the case is strongest and the future prospects are brightest.

Okay. We move on to Team Wales's response to manufacturing job losses. I think Dai's got the first questions and we'll see how it goes from there. 

Chair, in my conversations with Ford management, I very directly put that point to them, that while the package that they have put together for people who work in the plant, depending on your point of view of it, but it's probably at the more generous end than some packages from other companies might be, the impact of Ford leaving Bridgend is not simply felt by those people directly affected, not even in the supply chain, but it is felt in its wider impact on that local economy. And £1 million after 40 years of being there simply does not measure up to the impact or the history, or, indeed, the reputational risk to the company itself, and I made all those points to them.

Could I say, Chair, to Dr Lloyd, it's further complicated in another way, which I'll just mention? It's slightly to one side of the question, but it is related to it. Because of the way that payments to departing workers are likely to fall, there is a very high risk that for quite a lot of those workers, they will end up paying tax on it, not at their normal rate but at the 40 or even 45 per cent rate. And that will be a windfall to the Treasury. It wasn't expecting this money, but significant slices of the money that Ford are putting up to go towards the future of those workers, because of an anomaly, just because of the way the money will fall, will end up going to the Treasury instead.

Now, my preference is that the Treasury amends its rules so that that money stays with the individual. That is the right answer. But if that is just too complex to bring about—and tax law is very complex, and the Treasury will be very worried, I'm sure, about doing things in a way that creates further ramifications in tax legislation—if that isn't possible, then the Treasury should give back to that local community that windfall sum in a community fund that can do other important things to create new economic futures in that area. So, as well as Ford's contribution, we have this emerging issue of the way in which money going to workers will find its way not to them but to the UK Government. I think there's a strong moral obligation on the UK Government to make sure that money finds its way back to Bridgend, preferably to the workers for whom that money was intended, but, if that proves just too complicated to bring about, then into a fund that can be used to secure the future of that community.

Yes, fine.

Chair, if I may, ladies and gentlemen, I just—I hope to put your mind at rest. There have been a number of discussions, a number of correspondence exchanged between Ford and ourselves. Some have been very robust, and I can absolutely guarantee you the First Minister and Minister Skates made exactly your points to very senior members of the Ford motor company. Minister Skates wrote on 6 June to the company, and, if I may, I'll just quote a number of paragraphs from the response. The response was from a gentleman called James Hackett, who's president and chief executive of Ford—the president and chief executive.

The second paragraph: 'firstly, I'd like to place on record my thanks for the support which the Welsh authorities have provided to Ford over the years, and would like to stress that this difficult decision in no way reflects on the public authorities or indeed the performance and the commitment of the workforce.'

Paragraph 5: 'We therefore appreciate the early opportunity to reach out to your team and know that you and First Minister Drakeford spoke directly with global automotive president Joe Hinrichs last week.' And then it goes on to talk about the level of support, and it says, 'We reiterate our full support for the taskforce you are establishing and hope that we will work together and may be able to make swift progress on potential opportunities'.

If I may, Chair, I'll pass those letters to the Clerk for the board to see, if you would be content with that.

That would be helpful—I think that would be helpful. I think committee members would appreciate it. 

And also, if I may, I lead on the negotiations for the First Minister with Ford and Minister Skates. I have not heard any limit to any form of financial support at the company at all. My negotiations—. We are negotiating at the moment—and when I say 'we', I mean Welsh Government and UK Government, with our colleagues in the Department for Business, Energy and Industrial Strategy and the Department for International Trade. We're currently negotiating with 17 companies who have serious interest in the facility, serious interest in the workforce, should the consultation period not work. Thank you. 

That's helpful. Jayne, you've got a point, not just on Ford but on other job losses. 

Thank you, Chair. Good morning. A few days after we had the Ford announcement, we had the announcement of job losses in Quinn Radiators in my constituency, in Newport West. And those workers weren't given any notice that there would be job losses. They turned up for work and they were turned away. Are there any—? I'm very grateful for everything the Welsh Government did immediately after that, organising a meeting for the workers and bringing people together, but are there any lessons that can be learned from examples such as Quinn Radiators, who gave no notice but have had Welsh Government funding in the past?

Chair, I think the main lesson, but I'm not sure it's a lesson that leads to any easy course of action—the main lesson is what a difference there is when you are dealing with a company that comes to the Welsh Government early, that lets us know when there are difficulties in the offing, that allows us to mobilise to help them to try and prevent things ending up in the worst situation, and those companies where we only find out about the difficulties when we read it in the newspapers. And, in some ways, Ford and Quinn Radiators are at the opposite end of that spectrum. As soon as Ford began to reach the point that they did, we've had very good contact with them and, within the very difficult context, they are playing a full part in—. The opposite was true of Quinn Radiators, where not only did the workers not know anything, but we didn't know anything either, despite the fact that they've had some investment in previous years from us. So, I think the big lesson is what a better job we can do when we have companies who are close to us and willing to work with us. And what we would want to do—and the regional offices, in the way that Gwenllian described, are key to this—is to build up those relationships that we have with businesses in all parts of Wales so that, when they are facing difficulties, they think of seeking the support of the Welsh Government early in that process, rather than us turning into the ambulance that turns up after the accident has happened. 

Just following on from that, one of the things that had been mentioned, because it was a Welsh product made with Welsh steel from Tata, one of the most energy efficient radiators, and one of the points that they've since made was around the procurement process and the difficulty they felt that that had. Now, I just wonder if there are any comments around procurement and how we can make sure that there is a future for these products that are made in Wales and have that impact on the supply chain as well as other matters. 

I don't know the specifics in relation to Quinn Radiators, Chair, but obviously in general in steel, we have a very strong policy of encouraging both public authorities, with all the infrastructure development that goes on in Wales, but private companies too, to use Welsh steel as much as possible. And there's a steel procurement note that we've developed with the industry to try and support that, and we've been a prominent player in the latest steel contract that has been developed at a UK level—I think the first Government to sign up to it. We try and make our own procurement arrangements as straightforward as we can, but we do make an attempt in them to persuade people who are spending money in Wales to spend money on other things that create jobs in Wales. I hope that isn't an inhibition to companies, but I think there is a trade-off sometimes between those two things, which causes some tension. 

Chair—

Just very briefly, because I don't want everybody to mention problems, because I've got plenty in mine, but—. So, you know.

Yes. That's fine. And it only needs a short answer, First Minister, but you mentioned the difficulties of Welsh Government not knowing when a company is in difficulties and it's too late by the time that the decision is made, but you also mentioned giving finance to those companies beforehand, so how can you use that as a lever to ensure that companies do keep you updated if you've given them finance?  

A bit depends there, Chair, on the length of time that has elapsed since the money was given. So, obviously, if we've been in recent discussions with companies and they've only had money from us in the last 12 months or so, then you would expect there to be a relationship that you should be able to draw on if there are difficulties.  

Can that time be extended? Should it be extended? 

It's a two-way street, I think is what I have to say. I don't think there's any lack of willingness on our part, but sometimes companies feel that they've got a contract with us, they get money for a particular purpose, they get on and do it, and they're not looking for a long-term relationship with us. And the longer the time elapses since the help was given, if a company doesn't see itself as a player in that way, the less likely it is that the intelligence we would have had when the grant or the help was provided—that intelligence will no longer be as up to date or as relevant. 

But perhaps they should have a long-term relationship with you if you are providing them with substantial finance. 

Well, we have a contract, of course, with wider returns on the investment we make, which pushes the relationship in that direction, but it is a two-way street. You're working with companies who are commercial organisations and not all of them want to have a long-term relationship with Government; they want to get on and run their business and—

Then don't give them the money.

Well—. [Laughter.]

Okay, let's move—. I'm conscious of time, so let's move on to—given that we are in north Wales—north Wales and north Wales manufacturing and issues there. So, Llyr. 

It's got three key themes in it. So, it isn't a scatter-down; it's already decided that the three key things it must focus on are: sustainable energy, with a particular emphasis on marine there because of its importance in north-west Wales; advanced manufacturing as its second key theme; and then, those aspects of the more foundational economy, particularly in more rural Wales—tourism, retail, all of those things. So, I think the North Wales Ambition Board has done well to be able to get agreement across the whole of north Wales that it's got those three key sectors. And then, alongside it, what my notes always tell me, are four key enablers, and I learn them every week in case somebody asks me. If I can remember them now, I think they are: skills, so making sure that we have a skills system that creates the people who'll be able to work in these sectors; connectivity, both digital and transport connectivity more generally; sites and premises, making sure that we are investing in those places where private businesses will be able to grow in future; and then—well, infrastructure I believe, from memory, is the fourth key enabler. That gives me a bit of confidence that the people who are designing the whole package have got themes that run through it so that those different projects are connected by those three key purposes and the three key things that, if the ambition board can deliver them, will create the foundations from which other investment can be drawn into it.

No pressure. [Laughter.]  

In other parts of Wales, public authorities don't necessarily work on a single footprint, whereas here, you have North Wales Police, you have a north Wales health board, you now have a North Wales Economic Ambition Board and you have a north Wales regional office from the Welsh Government. And our ambition is, absolutely, to make those things work together rather than tripping over each other in a competitive way. The regional skills partnership is on the same footprint as well. I think that's a real strength in north Wales, and I think the work the local authorities have done in bringing them all together and being willing to make the compromises that you have to make—because people come, inevitably thinking of their own particular part of north Wales—. But I think they've demonstrated a genuine ability to move beyond the entirely local and to think regionally in that way.

Yes.

The Wing of Tomorrow. So, Chair, as well as the real impact of Brexit, they were emphasising it's a terrifically competitive industry. Even if it weren't for Brexit, it's a very competitive industry, and the way that they have made the success that they have of Broughton is always to be thinking about what comes next. That's the story they said to me; they're always putting a significant part of their resource into planning for what the next development will be. And because they've been willing to do that—and that is not a typical UK story in many industries—because they've been willing to put significant resources always into planning ahead, they've stayed ahead of the game in the aerospace industry. The Wing of Tomorrow is the next big move as they see it, and the centre is really a very big part of how they see themselves being able to keep ahead of global developments in this field. So, they were very enthusiastic about it, very determined they would be the first anchor company to use it, and excited, I think as well about the opportunities for pushing more work into local supply chains if they're all under the one roof, and how physical proximity, just being alongside other people, sometimes throws up possibilities that wouldn't be there otherwise. I saw this on a much smaller scale in Wrexham itself earlier this year, where they have an open space where sometimes single entrepreneurs, very early in their careers, come and use a computer and have a room where they can meet people. And the number of people there who said to me that they've got new business because they hear a conversation going on on the other side of the room and think, 'Well, I could do something to help with that'—. Now, on a bigger scale, the advanced manufacturing research centre is designed to do the same thing—to bring people together and create opportunities that wouldn't be there otherwise.

Just in terms of the supply chain, I think it's important to flag that, with our ear to the ground in the region, we are starting to see a buzz and a critical mass of interest across a number of sectors in the region, and companies seeing this as an excellent facility. They don't want to have to travel far over the border, and they can see it as being a very good thing. So, I think word is getting around and it's really doing what it should be doing in the first place. So, that's quite positive, I think.

Okay. I just want to make one plug: that, while you're looking at all of that, don't forget we've got the fantastic OpTIC centre just off the A55 at—well, they call it St Asaph, but actually it's Bodelwyddan. We won't argue about that, but it's just off the A55, and that is the entrepreneurial part as well, because I think sometimes central north Wales falls between the two, and I think that there needs to be that continuity across north Wales for the economy to grow, and the economy to actually be able to sustain what we want to do in other areas. So, I'll just put that in—that's Chair's licence.

May I come in there? Just to reiterate, Minister Skates met Qioptiq and Airbus and the Airbus supply chain at the Paris air show only two or three weeks ago et cetera—so, absolutely.

Okay. Yes. And Minister Skates will not—well, I won't let him forget about central north Wales, and I know my colleagues from north Wales won't. So, we rest on that.

Jayne, you've got a quick question as well.

Just a quick question. I know that Airbus are really keen on this advanced manufacturing research centre in Broughton, and when I was at another Airbus event in east Wales at the Airbus cyber innovation hub—and you've mentioned IQE and the semiconductor cluster as well—it was really important at that launch how the relationship between Airbus and Welsh Government—they were very positive about that relationship, which is key. But in terms of advanced manufacturing, it's going to be crucial, I think, for the future competitiveness of Wales. Are the Welsh Government planning to develop further collaboration between academia and private businesses to make sure that we take advantage of this as much as we can in this area?

Well, Chair, Jayne will be very well aware of the fact that we have the largest cyber security cluster in the United Kingdom in south-east Wales. In terms of global cyber security, the UK is the third largest player in the cyber security market globally, and south-east Wales is the biggest player in that UK market, and part of that success has undoubtedly been because of early partnerships between what was then the university of Newport and some of those initial companies. I think what we are learning from that is that, whereas the conventional economic model is that a company appears and then jobs are attracted to it, actually, in some of these industries, you have to create a supply of labour—skilled labour—and then the jobs move to where the people are. And I think that's what has started to happen in that cluster, because we've been jointly working—the industry, the Welsh Government, the university—on making sure that we are producing people with the skills that are needed, suddenly jobs come there because the people are there. And so I think the point you make is a really important one. It's slightly the opposite way that conventional economics thinks of these things, and the cyber security cluster around Newport is a really good example of it, and more to follow. 

Okay. We have mentioned Brexit a couple of times, unfortunately; nearly every committee that meets mentions Brexit now. So, we've got a set of questions around Brexit and manufacturing, and then we're going to move on to Welsh Government Brexit-related activity, and then the immigration policy and manufacturing. So, there are three areas within Brexit. Janet, you've got some questions around the first. 

Thank you, Chair. Good morning. What role is the uncertainty around Brexit and the ongoing possibility of ‘no deal’ playing in the economic performance of, and recent location and investment decisions by, the Welsh manufacturing sector?

Well, Chair, I guess behind the question lies the debate about Ford and the extent to which Brexit played a part in its decision. I'll just say what the company said directly to me, which is that Brexit was not the foreground decision. They said that the foreground decision was to do with changes in the automotive industry globally and the need to bring on new products, but that Brexit was a background factor. It's not that it did not play a part—the uncertainty created by Brexit. You will know, Chair, an exhaust pipe that is put on a Ford car in Bridgend has crossed between the United Kingdom and Europe eight times. Something as simple as an exhaust, bits of it are created all over Europe and, at the moment, all of that happens without any barriers at all and no tariffs. If, in the future, every time something moves eight times it creates new costs, because there will be tariffs—there's no getting away from it; there will be tariffs—then Bridgend suddenly becomes a less attractive place to invest than places on the continent where those barriers don't exist. So, not a foreground decision for Ford, but genuinely a background decision and playing its part in all of that.

Brexit uncertainty, if you talk to any company, that's the first thing they tell you—how difficult it has been to make investment decisions not knowing what the future trading arrangements will be. And, in a way, it's ironic, I would think, Chair—the fact that the original date to leave the European Union was missed I think has made it more difficult to persuade some companies in Wales to prepare for 31 October, because there are companies who will tell you that they spent significant sums of money in the lead-up to 29 March only to find that it didn't happen, and that money wasn't well spent. And they're not keen to take another risk in spending another lot of money preparing for 31 October in case that doesn't happen either.

I'm only saying what you hear on the radio any day, that uncertainty is the worst set of circumstances for business—that if they know what they've got to deal with, they will find a way of dealing with it. They don't know what they've got to deal with. That's the hardest of all. And Brexit has been a three-year journey of uncertainty, and it's not finished yet.    

I suppose my questions are really about the role that Welsh Government has to play going forward in whatever eventuality. So, given the concerns expressed about the prospects of a ‘no deal’ Brexit by some Welsh representatives from manufacturing industries such as aerospace and automotive, what additional support measures is the Welsh Government planning should this scenario materialise?

So, there are probably three things to point to immediately. There is the Brexit business portal that has been available now for some time, and it provides businesses with a checklist that they can go through that tells them how well prepared they are for Brexit, including a 'no deal' Brexit. It's a sort of health check. Not enough businesses have gone through it, but that is true of the UK Government's parallel portal as well. But, I think we're getting on towards 1,000—

Yes.

Emma will know better than me. Getting on towards 1,000 businesses have been through the portal to do those health checks. We wish there were more. It's free. I think that people who have used it say it's very effective. It really helps them to focus on the things that they've done already and then to think of the things that they now need to do.

Then there's Paratoi Cymru, Preparing Wales, which is another source of assistance for businesses to think about some of the more nitty-gritty things—the permits they will need if they're going to go on exporting, for example. I know, Janet, that you and I have different views about this—

We do.

—but what they would say to us, I think, is that, at the moment, if you are exporting, there is one rulebook for 27 different countries, with 550 million people, and once you've mastered the one rulebook that applies everywhere. Now, there will be 27 rulebooks. If you are exporting to Latvia and Estonia, you will need to know the different rules that apply in both those countries, and Paratoi Cymru gives you the information you need as an exporter to know where you have to go to to get the permissions you will need, and so on, to do that.

And then a third source of assistance is from the transition fund, the £50 million fund, which we've established, and £9.2 million of that fund, so a significant slice of it—probably the largest single slice—has gone to making direct sums of money available to Welsh businesses to help them to prepare for Brexit, either to acquire skills they will need, to strengthen their ability to go on trading—. I can't quite remember—is it over 50 businesses, Emma, who've shared in that £9.2 million?

Roughly, yes. There's a specific element directed at SMEs within that as well to support them with things like marketing, looking at new opportunities overseas or, indeed, warehousing, and, actually, we've been fortunate to be able to top that up a number of times as well. And also that's supplemented by money that's available through the development bank, which was mentioned earlier on, where they are quite well placed. They've got quite a large sum of money that they've got set aside to respond in quite a flexible and agile way from a number of the pots that they have. So, that's an additional arrow in our set.

Okay. Thank you. And then, of course, the Federation of Small Businesses Wales recently told the External Affairs and Additional Legislation Committee that very few businesses were actively undertaking preparations for no deal. That was ahead of March 2019. So, how well prepared for different Brexit scenarios do you consider manufacturing businesses in Wales to be, particularly in relation to a 'no deal' Brexit? And I think it's fair to say that, during this current leadership challenge, the prospects of a 'no deal' Brexit have been very well mooted.

Well, I completely agree with that. The risks and the dangers of a 'no deal' Brexit have strengthened as a result of the leadership contest. The information from the FSB is very worrying, and it's worrying to them, given that they do an enormous amount on our behalf to try and get information to their members and to persuade them to do it. So, I think what you see in that, Janet, is that, of the getting-on-for 1,000 companies who have visited the Brexit portal, it tends to be the bigger businesses that have gone there, the ones that have got more capacity, the ones that have got a bit more—the ones that are organised in a different way. For small businesses that are stretched and that don't have that many people and so on, trying to take on Brexit planning on top of everything else is more of a challenge for them, and lots of them are simply looking the other way and either hoping it doesn't happen or deciding that they'll deal with it if and when it does. That's not sensible. We know it's not sensible. I guess that probably many of them do too.

And our fear, Chair, is that, for many of those companies, the way they will solve the problem will just be to give up doing things they're doing now. So, if you are a small business and you do bits of exporting, it's not a huge part of what you do but you export here and there and, cumulatively, that's quite important in the Welsh economy, the way you may solve this problem is just to decide not to go on doing that in the future.

On that point, I find that a little negative, as somebody who's been in business for many, many years. So, what more could you do as a Welsh Government to ensure that they don't have to look at the scenario, the negative, of not continuing to export? What more could you be doing as a Welsh Government to support those small businesses who have, perhaps, definitely not prepared and perhaps looking the other way?

Well, there are a number of things we will continue to do and do more of. I think I'm right that Ken issued a written statement again last week that set out a series of very practical things that we say to those businesses they need to be doing now, not in October; they need to be doing these things now, and the written statement set them all out. We distribute that everywhere and we try and generate a sense of urgency around it that we think it needs.

The Cabinet did discuss last week, Chair, a further tranche of investments from the transition fund. I mustn't anticipate the results because it wasn't the end of that process, but we're close to the end of that process, and there were a series of further ideas to invest in business-related assistance there. So, if we're able to do that, there'll be further announcements there. And then we work really closely with the Confederation of British Industry, the FSB, the Institute of Directors, all those business organisations, but in the end—at least this has been my theory up until now—if you're told by your own organisation that you ought to get on doing it, that might have a bigger impact on you than the Welsh Government telling you it. So, lots of the messages we try and send through those organisations that people would regard as the organisation they're a member of. And if it's telling you and we're telling you, then you hope that those messages begin to get through. But it's been very slow, and that's been true of the UK Government's efforts here as well as ours.

Thank you.

Chair, there's one figure that really worries us, and any help gratefully received. In terms of the EORI certificate, the export certificate, across the UK the stat at the moment is only 40 per cent take-up. We have promulgated that, we've pushed it, we've reminded it all the time, but it's still only 40 per cent—so, any help.

Without it, you won't be able to export.

Okay. Happy? Nick—Welsh Government Brexit-related activities.

Yes, two questions that I'll roll into one for time's sake. First of all, does the Welsh Government have any plans to do any more work with Cardiff University on some of the modelling that they've done on different Brexit scenarios and the effect of that on medium and large businesses? And secondly, does the Welsh Government have any further plans to make allocations from the EU transition fund to manufacturing sectors?

Well, the second one, Chair, I covered, I think, a minute ago. The Cabinet discussed the latest set of how much money's left in the fund. The fund is made up of three different sorts of money: there's revenue, there's conventional capital, and there's financial transaction capital. Applications have tended to be more interested in some of those sources of money than others. So, we looked at where money was left and we looked at the bids we've had in. Decisions will be made pretty shortly on making those allocations. I think all I can say today is there were definitely bids in that would have given more support to manufacturing and we'll make those announcements. On the Cardiff University thing, I don't think we are planning on any updating of it, largely because we think that the big picture conclusions that they drew are no different now than they would have been two years ago when the research was carried out.

Yes, okay. Thanks.

Okay. Post-Brexit immigration policy and manufacturing, so, Jayne, that's you.

The Wales Centre for Public Policy's report on the impact of post-Brexit migration policy gave some stark warnings. They suggested things like manufacturers, in particular, reporting recruitment difficulties and there are proposed changes to migration from EU countries, such as the salary threshold of £30,000. What representations has Welsh Government made to UK Government about the impact of its proposals around this? 

Thank you, Chair. Well, Janet will accuse me of being negative again, I know, in a minute, but I really do feel really strongly on this issue. Brexit, you know, people can legitimately argue that there was a referendum and people voted in a particular way, but migration policy is a completely different matter: it is entirely in the hands of the UK Government to make these decisions, and the decisions that they are making are ones that will compound the difficulties of Brexit rather than help to mitigate them. So, we were very disappointed at proposals that the UK Government has made.

Its two key proposals are a salary threshold of £30,000 and a skills approach that tries to divide people into high skills and low skills. Neither of those things works for Wales. At a £30,000 threshold, we will be cut out of the ability to recruit people from overseas, and so many of our public services or universities and our businesses rely on the ability to recruit those people. And we are hearing from all sorts of businesses this year that they're not able to recruit in the way that they were in previous years, because the message has gone out there to people: 'Don't go to the United Kingdom. You won't be welcome there.' And in tourism and in agriculture and in retail already—. You know, this is not an issue for the future, this is an issue for today and those jobs don't pay £30,000—not in Wales, they don't. And, if there is a £30,000 salary cap, then Welsh businesses are going to find themselves even worse off.

So, we make these points all the time. We make them whenever we do—I had the courtesy, which was appreciated, of a phone call from the Home Secretary before the White Paper was launched; he explained to me some of the things that would be in it and, from the very beginning, I said to him, from our point of view, that will not work. With his help—again, to be fair—he set up an opportunity for me to have a lengthy phone call with the chair of the migration advisory group, trying to find out why they had proposed a salary cap, and I can tell you that—you know, he said to me that they had done no work in Wales at all before they came to that figure; they were solving a problem for London and the south-east of England, and, ever since, with others, our aim has been to persuade the UK Government to have a different salary cap for Wales. And, again, if I'm trying my best to be fair, the Home Secretary has said that he has now asked the migration advisory group to look at differential salary caps in different parts of the country, and we don't lose an opportunity to try and drive that message home.

But the skills issue is also really important. I have a sort of objection of principle to the idea of describing people as being 'low skilled'. The skills they need are the skills they need for that job, and, if you're working in a care home, in a residential care home, the skills you need are not 'low skills', they are the right skills and we need people with the right skills. And saying to some people, 'Oh, you've got high skills; we'll have you', and to other people, 'You don't and we won't have you'—I just think it's such a wrong way to think about things. Our social care services, like social care services everywhere in the United Kingdom, rely on our ability to recruit people from overseas to come and help with them. And describing people as 'low skilled'—it's the wrong message, in every sort of way, and, again, we argue, whenever we have the chance, with the UK Government to avoid that terminology and to talk about recruiting people with the right skills and then to allow those people, who we need, to come and work in Wales. And we celebrate the fact that we're lucky enough to have persuaded them to come here.

Thank you, Chair.

Well, you've mentioned skills and we're going to come on to some questions on skills.

I think you've kind of answered the first question I was going to ask, which is: do you have confidence that the regional skills partnerships are understanding and reflecting the skill needs of the manufacturing sector in their regions?

Well, Chair, Members will know that the Welsh Government recently commissioned an independent review of the regional skills partnerships from a firm of consultants. Their report has been published. It draws, to an extent, on the Economy, Infrastructure and Skills Committee's work in the same area and I had a chance to look at that consultant's report. I think it says a number of important things in answering Nick's question. First of all, it does say that RSPs have sufficient resources, but little spare capacity. And, truthfully, in the conditions we are in, eight years or more into austerity, that's how I would expect any public body in Wales to be; nobody should have spare capacity in the position we're in. But it then goes on to describe ways in which capacity could be created by us, it says, eliminating some process-driven activity—so, the idea is that they spend a lot of their time, all three of them, separately analysing data. The report says, 'Well, you could do it on a shared basis, and that would release some capacity for you.' We've required them to produce an annual regional economic and skills plan, and yet I think the employers think things don't change rapidly enough to have a plan every year. So, the suggestion is it goes to a three-year cycle, and that would release quite a lot of time for three different purposes: firstly, for more consistent and comprehensive employer engagement, so that's Nick's main question—'Are we confident they do enough?' Well, they could do more if we freed up capacity in the way that the report suggests.

Secondly—

Sorry to interrupt—that was from a conclusion of the recent EIS committee report that questioned the data and whether there was enough ability to engage with employers.

Yes. I should ask the Chair, because I wasn't completely sure whether the committee has reported yet, or whether it's still collecting and working on the report.

I think it has reported, but I just want to check. It's been—. The committee have certainly given a steer, but I'll have to check if it's been—if we've reported.

Yes, thank you. Well—

Scrutiny of the Chair of the enterprise committee—[Laughter.]

I rely on his expertise.

You never know what will come up in this committee.

I've been following the committee's work, and I know that some of the things that the consultants picked up on were the result of some of the evidence that the committee had received, and then we will look at the consultants' report and the committee's report together. But that is a theme: how can you find more capacity to engage consistently with employers?

There's a very important point, I think, in the report, Chair, that says we've got to spend more time talking with learners. We've spent quite a lot of time in devolution trying to solve the problem of young people not having work, and finding, through different programmes—Jobs Growth Wales and so on—opportunity to draw them into the workplace. Maybe the next period of devolution will be the mirror image of that, where young people will be a really scarce resource in Wales and, where you can't recruit as you have previously from outside Wales, instead of finding ways of getting young people in the workplace, employers will be competing for those young people. So, learning more from them and finding ways in which we can make sure they know the range of opportunities that are available to them, including opportunities in manufacturing—that's what the consultants say.

And the third thing they say is the regional skills partnerships need to work in the way that Gwenllian said—on that regional footprint, with the growth deals, with the Welsh Government's regional approach, and freeing up a bit of capacity to allow them to do more of that is the prescription that the report provides, and I thought it was quite a convincing read.

So, just going back to your previous answer, I think you suggested that you could restructure some of the data collection—make it more efficient so that there's more capacity. Yes.

That's what it says.

Okay. Secondly, events—we've obviously discussed Ford, and there's been the Wylfa announcement as well in recent months. There's a general issue here where you can see—. I appreciated what you said earlier about skills are usually right for the job and we shouldn't talk about 'low skills' and whatever. There's a situation where the requirement for skills can change overnight when somewhere like Ford closes. Do you think that the skills system in Wales is robust enough and responsive enough to help workers re-skill in the future, because things will probably only get more volatile?

I think it's a very good question, Chair, about volatility and making sure the system is properly geared up for it. I think the ReAct programme, which we’ve got nearly a decade's experience of now, has demonstrated a genuinely robust ability to equip people with skills that they will need to compete elsewhere in the economy, as well as rewarding employers who are prepared to take people on and then train them up for the job that we want them to do. So, I think that that has been a significant strength of our system. There is more we need to do with colleges, further education colleges, to make sure that they are as responsive as they need to be to equipping people for the future. So, I think it's just an ongoing piece of work, really; we're making sure that we've got all the intelligence being shared between us all the time so that we can be as responsive as we can be to it.

And, if I may, just in terms of anecdotal and picking up in terms of, unfortunately, having had to deal with a number of the redundancy events you mentioned, what we're seeing is that we have very, very highly skilled people, and there is a transferability across sectors. From manufacturing, we've seen transferability to the energy sector, both here in Wales and outside. So, I think it's also about understanding the core requirements, the importance of science, technology, engineering and mathematics for very young people all the way through the system, but also not being blinkered by sectoral silos as well, I think. That's important.  

And I think, Chair, quality is really important, because, if you're offering a quality experience, then there will be opportunities for people elsewhere. So, all the apprentices in the Horizon project on Anglesey—when that didn't go forward, all the apprentices were found other places to complete their training, because the quality of the training that they'd had so far made them attractive to other people. So, as well as being nimble because of churn and things, I think you've also got to make sure that the training you are providing makes you attractive to other employers, if the employer you were hoping to work for is no longer there. 

I think we've come around in a big circle there, with your comment about moving away from a sectoral approach, to Mr Davis's answer earlier about the regional approach and the—. So, I think that's an appropriate time to end. 

An appropriate time to end. 

For me, anyway.

I think it is a very appropriate time to end, given that we've overrun that section. But that was worth it, and thank you very much. 

I'm going to move on to the topical questions, if I may. You know there's an opportunity for topical questions.

So I'm told. [Laughter.]

I've got two. Yes, we don't tell you like we do in the Assembly; we don't give you notice of them. So, we have two at the moment, and I think Nick will probably come in on the back of one. So, Llyr, do you want to—

—surprise the First Minister with your topical question?

Just yesterday, Chair, I had a meeting in Bangor with Natural Resources Wales and Marine Energy Wales. It's a tricky issue, because the marine energy sector has to be able to trial devices in very sensitive marine environments, and because they are new devices, you can't know in advance every effect that that device might have, and Natural Resources Wales has a proper responsibility for safeguarding that environment. But I was just trying to persuade everybody that, as well as thinking about the risks that are involved in trialling new ways of doing things, you've got to set that as well against the known risk to those environments from continued climate change. And that means we've all got an interest in new forms of renewable energy, and you can't just focus on the risks in the narrow sense; you've got to weigh those up against the risks of not doing those things, and those risks are really significant for the Welsh marine environment. 

Nick, on this point. 

Yes, very briefly. In answer to a recent question in the Chamber, you made an announcement about the proposals for a new Welsh forest as part of a carbon sink-type strategy for Wales, which I think is very important. Since then, I've been asked a few questions in my own constituency—because I think that's not going to be based in one area; there are plans to have it across Wales—whether part of it could be in my neck of the woods. So, I just wondered whether you'd done any more work on planning that forest—[Interruption.] Neck of the woods, indeed, there you are; that's a subconscious joke—and how you will actually go about the timescales for developing that forest. 

Thank you, Chair. I am very, very committed to the idea of developing a national forest for Wales, both because in a climate emergency context, it's an obligation on us to do more, and I also think it's just such a great thing to have for Wales. We have this fantastic coastal path, which is a tremendous draw to people in Wales, and a national forest, which is not just picking a new area and putting it there, but trying to link up the forests we have in Wales already so that you could walk continuously from one part of Wales to the other, almost, never leaving the national forest, is my vision of it. I want it to be somewhere where people want to go, where there'll be opportunities for leisure like mountain biking—lots of things we can do. 

It's a 20-year project, and the latest advice that I've been looking at is to look at the map and see where existing forests are already to be found and then how we can create corridors between them, so that, in the end, over a 20-year period, there will be this continuous forest, and looking to see where the first opportunities are to begin that. I've just sent some of the advice back, saying I'm quite persuaded by what I've been given so far. I want further assurance that these first steps are being planned against that bigger picture—that we have a vision of where we want to get to in 20 years' time, what it will look like, and how these first things will help us to get to that. I don't want just a set of first steps that then run out of steam or evaporate and we're left with a series of very nice things by themselves but don't have that national forest sort of impact. I think it's a really exciting idea, and I think we need to give young people particularly that sense that there are things that we, in our time, are doing that will create a different future for them. I think a national forest is one of those things we could use to try and give them that enthusiasm.

Russell, your topical.

Thank you, Chair. My question is around the M4 relief road. Clearly, on the day you made the decision, the Confederation of British Industry said it was a dark day for the Welsh economy, and other business leaders have made similar comments as well. And there's also a concern that £140 million is spent on a proposal—a Welsh Government proposal—only for the Welsh Government to reject its own proposal, following an inspector's agreement with the Welsh Government's original proposal.

But my question, as we are in north Wales, is north Wales-related. The Minister, Ken Skates, has said that, of course, one of the reasons why the First Minister decided not to grant the orders was because it would have drawn down capital from other vitally important social infrastructure. Now, I was in Holyhead port two weeks ago today. They were explaining the challenges of getting people and cargo from the port onto the A55, the challenges of congestion along the A55, and the potential for a third crossing. There's also the possibility of funding an east Wales metro, and the leader of the council this morning was talking about the challenges along the A483 and pinch points, and how, for a relatively small amount of money, those pinch points could really help develop the north Wales economy. 

So, the question is: that decision that you made, which was your decision, to cancel the M4 relief road, what positive aspects can north Wales business pick up from that decision, in terms of funding for this region of Wales?

Thank you, Chair. So, just to very briefly say some of the history. Members here will know that when the previous First Minister made a commitment to the public inquiry into the relief road, the cost of the relief road was estimated by then—it had gone up already a couple of times—by then, it was estimated at £960 million. But, at the same time, the Welsh Government was getting, for the first time, a new income stream—the ability to borrow, which we'd never had before, and the ability to borrow was at £1 billion. So, the whole of the M4 relief road could have been accommodated from a source of funding that we didn't previously have. In other words, we did not need to divert money from anything else that we needed to invest in—in schools, in hospitals, in houses and all the other transport things we want to do in the rest of Wales. 

By the time the decision came to my desk, the cost of the M4 relief road was predicted to be £1.6 billion, and rising. Across the whole of the United Kingdom, the cost overrun in schemes of this sort is 20 per cent. And that didn't include VAT either, which remained an unresolved issue between the Welsh Government and HMRC. So, the position I faced was not that we could fund the M4 relief road from income streams that meant that everything else we planned to do could go on, but having to take £600 million as a minimum out of things we were already committed to doing in order to fund the M4 relief road. And, in the end, I decided that that wasn't an outcome that I could support. Now, I've said, and I want to say it again, that the M4 difficulties around Newport have to be solved, and that original sum of nearly £1 billion, they have first call on that to do all the things they want to do. But I'm not now faced with a position of having to find large sums of money from our schools programme, or our hospital programme, or our transport programme elsewhere, in order to fund that project in that part of Wales. So, that's the first way in which north Wales can take comfort from the decision—that it doesn't have to think about things that it has already talked to the Welsh Government about needing in the future and me having to say to them, 'Well, I'm sorry, that can't go ahead because I need that money to complete the M4 relief road.'

Now, the other way, and this is still definitely to be discussed, is that when the commission that we have put together to find alternative ways and more rapid ways of addressing the difficulties around Newport reports, we will have a sense of what schemes they want to prioritise first and what the impact of that will be. And it may be that there will be some rescheduling of expenditure that will give some headroom to do some other things elsewhere in the immediate period. And I'm very well aware of some of the issues in north Wales. At a CBI council that I attended, while people from south-east Wales definitely wanted to talk to me about the M4 relief road, people from Wrexham wanted to talk to me about the difficulty that people face trying to travel in and out of Wrexham during the height of the day and what plans did we have to assist them too. So, I'm not for a minute—I wanted to say 'Dirprwy Lywydd'—Chair, making specific commitments here, but I am saying that if there are opportunities for rescheduling expenditure, then some of those schemes are well known to the Welsh Government and will be in the mix for investment.

Nick.

Thanks. I think we all agree that there needs to be a solution to the problems of congestion around the M4 corridor around Newport. I sit regularly on that road in congestion, and I know that Jayne, the Member for Newport, has issues there as well. This new commission that's been established, it was looked at recently by the Finance Committee, and the funding that might be available to it. And there were questions, with the recent supplementary budget, about the exact safeguarding or ring-fencing of moneys, so that whatever that commission decides is right and appropriate—accepting that the black route has been shelved—whatever other solutions are put forward by that commission, that money will be available. So, if there's a suggestion of public transport enhancements, or metro, or even an engineering solution, like new tunnels or realignment in some way, or improvements to the existing road, can you give us an assurance, and the people of Newport, that, at that point, the money that was available for the previous proposals—or at least a chunk of that capital—will be available to the commission and that we won't be in a position where the commission might come forward with some quite far-reaching proposals, including an engineering solution of some sort, and then, actually, the money that was earmarked originally for the other route has been spent on other commitments?

I absolutely want to give that assurance. And I gave it to Lord Terry Burns when seeking to persuade him to take on chairing the commission—that one of the things he didn't need to worry about was the money side of it. There will be lots of other things he will be scratching his head about in having to work with people with competing ideas over best solutions, and so on, but we were prepared to spend £1 billion in solving the problem around Newport, and he has the first call on all of that £1 billion. So, I don't want the money to be an inhibitor to his ability to come forward with new solutions. And I gave him that assurance that that wouldn't be the case, and that's what I intend to honour. And that would still be, by far, the biggest single sum of money that we've ever spent anywhere in Wales in solving a transport problem of that sort. He's a Treasury man, isn't he? He was a Permanent Secretary at the Treasury. He said he didn't take that as an instruction to spend £1 billion—and I was glad of that—[Laughter.]—but that he understood that, if there are good ideas that will make the difference, then the money will not be the thing that gets in the way of them.

What sort of timescale are you looking at for the commission? I think you said it would be quite a short, sharp commission. Because, obviously, over time, with volatility, you can have inflationary pressures as well on that money, and all sorts of things, so it needs to be dealt with quite quickly, doesn't it, I would imagine?

So, what I've agreed with the chair of the commission is that he will make a first report to us in this calendar year—it will be towards the end of the calendar year, I've no doubt. And that will give us the first set of the most immediate ideas that the commission think we should get on with. I then agreed that I would let him advise me as to how long he thinks he needs to have to work on the next set of ideas. Rather than me giving him an artificial deadline at this point, I think he will be much better placed than I am, at this stage, to say. I think, by Christmas, he will have a sense of how much they've been able to do in this year and how much time they need to work on what I think will be an extensive list of other ideas that can make a difference there. And of course I saw what the CBI said, but I was genuinely heartened, Chair, that when I had my meeting with the CBI, which I did in the same week, they came through the door and said, 'We're not coming here to rehearse the old argument, we're coming here to give you some new ideas about what can be done now that the old idea is not going to happen.' I thought that was a terrifically constructive way for them to come through the door. I think there will be a wider repertoire of ideas as a result of people now not going over the old ground but genuinely focusing on how we make a difference and a more immediate difference. 

Jayne. We can't talk about Newport and not allow Jayne in.

Thank you, Chair. I can't resist this bit, unfortunately. As has been said, really, I just wanted to put on record the M4 issue around the Brynglas tunnels is not just an issue about Newport, because I think it really is a Welsh problem rather than just a Newport problem. And it's not really just about getting people from one part of Newport to another, because there are similar problems, which I accept, whether, as you said, that's in Wrexham or any other urban area that we have. But, there is this issue on the motorway, and I have met Lord Burns, along with other MPs and AMs and the leader of the council.

First of all, we know that—I think, since the tolls have gone, we know that the percentage of traffic on the motorway has actually increased by about 10 per cent, and so I think people who live around the area or travel the area really do feel a sense of heightened alert to all of this and to the problems on the M4. The immediate measures that you announced, first of all, how do you feel that they're going? How are you monitoring them? And how will they be measured on their effectiveness from now until we have some other solutions as well? I'm just wondering how you've seen those immediate measures that you announced going.

First of all, Chair, just to agree with Jayne, it is a Welsh problem, but it happens to have its biggest impact in that geographical area, but it's not a Newport problem. I know exactly the point that Jayne makes.

On the immediate measures, I simply think it's too early to say. We're a few modest numbers of weeks into them being there. Of course, we will monitor them, because we're paying for them, so we want to know they are making a difference. Chair, you will recall that they are aimed at trying to make a difference to those delays that are not predictable, the delays that are caused by accidents, the delays that cause a sudden impact and have a big unpredictable impact, by having more patrols and a quicker ability to remove cars and get the motorway to keep flowing. So, we will certainly be of course monitoring it, and Terry Burns will want to know as well for the purpose of his commission what difference that is making.

I'm looking forward to feeding into that. Just quickly though, on cross-border issues, so I think it covers perhaps north-east Wales as well as south-east Wales, really, and just a point on the M4 that somebody made to me, because obviously there's a lot of traffic going both ways on the M4, going into and out of east Wales, and the same in north-east Wales, but the point was made to me around when there is a traffic problem, if somebody's coming home from work on an evening, or wherever they come from in England, they're not informed of any problem on the motorway in Wales until they actually get to that problem in Wales. I was just wondering—I assume that's the same problem in north-east Wales. I'm just wondering how we can work together to make sure that, if there is a problem the other side of the bridge, people are informed about that before they just get straight there and hit that traffic.

I think it's part of a wider set of issues. One of the things I talked with Lord Burns about was about him going to Bristol and talking with the mayor of Bristol, because decisions that are made there have an impact in Newport. Can we talk with them about things that they might be able to do? And better information for people so they can plan their journeys accordingly is something I know that he is interested in making sure is provided. It shouldn't be that you can't have information.

May I—?

Sorry, I feel like I've opened everything up now. 

It wasn't a question—

Go on.

I apologise, I did have to turn on my data for a short time to check, but the EIS committee has not yet reported on regional skills partnerships, but they will do in September, and I'll personally make sure I put a copy in the First Minister's hand myself.

Okay. That's a good point. Nick, you've got 10 seconds.

I forgot to ask: there were concerns in my local authority about the representation on the commission. So, I just wonder if you could tell us how you are making sure that—because you say it's not just a Newport problem; it's a Welsh problem—how areas around south-east Wales that are also affected—. How will their interests be safeguarded by the commission and the membership?

Chair, I'm very keen that the commission is a group of experts rather than stakeholders. I want people who understand transport and who have solutions that they can offer. I have made an exception for Newport county borough council because I think that quite a lot of the ideas that might come to the group will rely on the local authority to implement them in that Newport area. But, Lord Burns was more—. How do I put this in the best way? I think he was keener than I might have been—is that the fairest way of putting it—to make sure that he has genuine stakeholder engagement alongside the group itself. So, the committee itself I want to be experts. He was very certain that he would need to have the ability to have wider engagement with people beyond the committee itself while not appearing to re-run the public inquiry. 

Okay. On that note, I think that we are going to say thank you very much to the First Minister and to his officials for attending this meeting. As usual, you will get a draft copy of the transcript to check for accuracy. I believe that Mr Davis has offered to send us some information, which we will be very grateful for.

Two letters, Chair.

Yes, thank you very much. So, it falls to me to say thank you very much—diolch yn fawr iawn—and to thank again Lynn, as the centre manager, and all the staff at the centre for hosting us here, and to thank all the technical people in Bow Tie and the Record of Proceedings, and the police and the security. As I say, we don't travel light, do we? But, I think it's important to go on to thank those members of the public who stayed through it all. Some of them have gone, but never mind. I think it's important that we do this. I think it's important that people see how the committee works outside of Cardiff. So, thank you very much.

Diolch yn fawr.

Just for Members to know, we will host a meeting in the first week back in the September term to look at meetings for the future. Okay, so that's it. Thank you very much. Diolch yn fawr iawn. The meeting is now closed.