Y Cyfarfod Llawn - Y Bumed Senedd

Plenary - Fifth Senedd

26/06/2018

The Assembly met at 13:30 with the Llywydd (Elin Jones) in the Chair.

1. Questions to the First Minister

The first item on our agenda this afternoon is questions to the First Minister, and the first question is from Bethan Sayed. 

Spy Cops

1. Will the First Minister make a statement on the support for Welsh women affected directly by the spycops issue? OAQ52395

It is important that women affected by this issue receive the help and assistance that they need. I understand that the inquiry that the UK Government has put in place is not due to report until 2023. 

Thank you for that response. The reason why I was asking this question was because I think that it's important that the Welsh Government reaches out to some of the women from Wales who have been directly affected by this operation—the special demonstration squad unit within the police that infiltrated activist groups, and then, clearly, those police officers acted inappropriately with those women. Lisa was with Mark Stone. She discovered this in 2010. He was an undercover policeman called Mark Kennedy. Rosa, an anti-racist campaigner, had a relationship with Jim Sutton/Jim Boyling, who had two children with her. Eight women are taking action and we have an event tonight in the Pierhead with these two women involved. I'm asking what you can do as a Government to support these women in this public inquiry to make sure that nothing like this ever happens again to Welsh women, so that they're not violated in this way, and how can we go about changing the practices within the police so that we ensure that if they do need to go undercover, it is done in an ethical and an appropriate way?

Can I first of all congratulate the Member for hosting tonight's event and raising a very important issue that I suspect many members of the public are still not yet aware of? Now, it's some time—five years it seems—before the report will be prepared. In the meantime, however, it is important to provide services to those who have been affected. What I can say is that we do fund, of course, the Live Fear Free helpline, which is managed by Welsh Women's Aid. Those contacting the helpline will be listened to, believed and offered help and support. It provides support and advice to victims of violence and abuse, as well as their friends and relatives, and practitioners. So, the support is there, but it is hugely important, of course, that, when the inquiry reports, that it does make robust recommendations to ensure that unacceptable practices are not repeated. 

Terms of reference for the undercover police inquiry, which I think was launched in 2015 by the then Home Secretary, says the investigation would include but not be limited to whether and to what purpose, extent and effect undercover police operations had targeted political and social justice campaigners. However, it makes no explicit reference to the many women deceived into sexual relationships by undercover police officers. What, if any, representations has the Welsh Government made to the inquiry on behalf of women in Wales who were exploited in this way, or, if not, can you explain what limitations on the Welsh Government's intervention there might be in this respect?

Well, this ultimately is a matter for the UK Government, although it is taking a great deal of time, I have to say. March 2015, as the Member rightly says, was when the inquiry was announced. It potentially will take eight years before it actually reports, for reasons which are not clear. The inquiry itself will be looking at the deployment of police officers in undercover roles. It has been established following the controversy surrounding the conduct of undercover officers. Now, the inquiry will make, as I understand, recommendations as to how undercover policing is conducted and will scrutinise the use of undercover officers by the now defunct SDS and the National Public Order Intelligence Unit. Now, among the allegations, of course, are that undercover officers took fake identities from dead children, had relationships with the campaigners and fathered children. Those are on the record. It would strike me as hugely difficult to understand if the inquiry itself did not also look at those issues in order to provide a comprehensive report. 

Glastir Grant Payments

2. Will the First Minister make a statement on Glastir grant payments? OAQ52433

The Welsh Government has consistently delivered Glastir payments to claimants in a timely manner, and done so consistently. To date, over £39 million has been paid to Welsh farm businesses during this year. Further Glastir small grants windows will open this year and in 2019 to promote the restoration and creation of vital habitats.

Thank you for that response. I have spoken to a number of farmers and representatives who have been assisting them in making applications for the small Glastir grants, and that as a result of concern that payments were taking a long time to arrive. The response I’ve had from the Government is that the payments aren’t late, and, technically, that is correct because no time limit is set in relation to how long after applications are made that payments are to be made. When we consider that, especially after a hard winter, cash flow is important to farmers, will you, as First Minister, consider introducing guidelines in terms of setting a time frame in which farmers can expect to receive payment where their applications have been successful?

13:35

I can tell the Member that European Commission regulations were recently changed in order to ensure a window in terms of payments, and that means that Glastir payments will be made between 1 December this year and 30 June next year. For the first time, there will be a window, and during that window farmers can expect payments.

What other schemes are available to help farmers bring forward environmental schemes on their farmland, other than the Glastir scheme?

Well, farmers, of course, can look at schemes such as the existing agri-environment schemes. There is the small grant scheme that Members will be aware of, and also, of course, Farming Connect, which can help farmers to become more sustainable in terms of their businesses. So, there are a number of options available for farmers in order to make their practices more sustainable and, of course, to make their businesses more sustainable.

Questions Without Notice from the Party Leaders

Questions now from the party leaders. The leader of Plaid Cymru, Leanne Wood.

Yesterday, your Labour Government backed Westminster's multibillion investment in a polluting new runway in the south-east of England. Do you stand by that decision, considering, on the same day, Westminster cancelled a clean, green, renewable energy project in Swansea?

I'm not responsible for the way votes go in Westminster, as I've said many, many times, but I do share her very great concern—and that's probably an understatement—with the failure to go ahead with the Swansea bay tidal lagoon. It is a huge disappointment for the Swansea bay area and it's a disappointment that's shared, in fairness, by Conservatives as well in this Chamber. They've expressed that great concern. It's a shame the UK Government didn't look at this in a far more rounded way—the fact that the project would've lasted a century, the fact that it would've created jobs not just in the short term, but potentially in the long term as well. It would've created a technology that we could've exported around the world. Now, others will steal a march on us.

It is hugely important that the UK Government doesn't give the impression, which it has done now, that nuclear and offshore wind seem to be the only options for energy generation in the future. We have around the coast of Wales, particularly but not exclusively in the Bristol channel, one of the highest tidal reaches in the world. The fact that it's not being harnessed is a sign that the UK Government sees Britain as being a boring and backward place and not one that's bold and bright and wants to go forward developing new technology. It's a huge shame for so many people in Swansea bay and beyond.

First Minister, the contradiction in all of this is shocking. Any Government that is serious about tackling climate change cannot seriously take such contradictory positions as this. Not only do we see Heathrow being built, but new nuclear to be funded by the taxpayer at the same if not higher rate than the stated cost of the tidal lagoon. Now, First Minister, I acknowledge that the Welsh Government has made an offer of financial support for the tidal lagoon, but that wasn't enough. Now, we need action and not offers. The window of opportunity is small, but I believe that the Swansea tidal lagoon project can still be saved. So, will you now keep hope alive by honouring Labour's manifesto commitment to set up a national, publicly owned energy company to take over and progress this project?

On a day when people in different parties have been united in expressing their concern at the UK Government's decision, Plaid Cymru start moving the blame elsewhere. There is a fair question and that is: what plans do you have for the future? And that is a fair question, but today, what I have to say is that Wales has been let down by a decision of the UK Government in London. That's what's happened. We cannot fill in the gaps that they have left; they are responsible for that. They're the ones who have to explain what they have done to the people of Swansea, and we will continue to press them.

Now, in the future, what plans can there be for other projects that we'll be looking to support? Of course the door is open and of course that's something that we want to do, because we believe that there is huge potential around the coast of Wales in terms of energy generation. What we cannot do, however, is fill in enormous gaps that are left by the UK Government and are the UK Government's responsibility. Surely she will join me today in expressing her great concern at the way this has been dealt with by the UK Government—18 months of delay, despite the Hendry review; the fact that this would have been a game-changing project for the whole of Wales and, indeed, for the world, and that will not now happen because of the actions of the UK Government.

13:40

So, you're just going to wring your hands; you're not even going to bother trying. And remember, you promised in your manifesto that you would set up an energy company and that could, if you were prepared to look at it, progress this project. First Minister, railways not electrified, lagoons not built, Airbus not investing—it's clear that the Secretary of State is Westminster's voice in Wales and not Wales's voice in Westminster. First Minister, Airbus employs around 7,000 people here in Wales, and their reason for reconsidering their investment in this country is our place in the single market and customs union. Now, I recognise that the First Minister may well say that he supports our membership of both, but the actions of his party indicate the opposite. Just a few weeks back, a majority of Welsh Labour MPs failed to vote on a crucial amendment that would have kept us in the single market. We now need clarity. Will you, First Minister, join with us in condemning your Labour MPs for supporting pulling Wales out of the single market and customs union, directly endangering those Airbus jobs?

This is like watching somebody playing darts and deliberately trying to aim at the wall to the side rather than the dartboard itself. On a day when people from different parties have expressed concern—they've expressed it in different ways, of course, which they have to do, according to which party they're a member of—on a day when people have expressed concern at the decision of the UK Government, Plaid Cymru have left them off the hook.

I'm asking you to do something about it. Do something about it—

On a day when blame should rest in Westminster, where the decision has been made, Plaid Cymru are trying to turn this into an exercise in presenting themselves as being relevant when, in fact—[Interruption.] It is First Minister's questions. First Minister's questions doesn't involve answering questions about what happens in Westminster. That's one of the things that are absolutely clear. I am here to give the view of the Welsh Government. It's a matter of great regret today that, as politicians from across Wales have expressed their concern at the decision taken by the UK Government—even those within the Welsh Conservative Party who have expressed their view—Plaid Cymru decided to let them off the hook.

Thank you, Presiding Officer. First Minister, last week, the report into the tragedy at Gosport War Memorial Hospital came forward and, in particular, the excessive use of opiate painkillers that potentially led to the untimely death of at least 650 patients. Has the Welsh Government had a chance to consider the report, the findings of that report and any implications for the Welsh NHS and changes that it might need to make?

We will, of course, consider any reports that are relevant to Wales, and many of the issues that arise elsewhere in the UK and beyond will inform our future thinking. Officials and the Minister will look at the report to see if there are any lessons that can be learned for Wales.

Thank you for that answer. I hope that there will be a timely report back on that, because there are some very concerning aspects in relation to the circumstances around the premature deaths of the patients concerned. But one of the things that has come to light, certainly in press comment, is the use of Graseby syringe drivers, which basically administer opiate painkillers, either over a 24-hour period or over an hour. Now, various safety notices have been put out over the last 20 years in relation to these instruments, and in Australia and New Zealand they were banned many years ago. The NHS was supposed to have withdrawn from service these syringes in 2015. Can you confirm today whether the NHS in Wales is still using these syringes, or is the Welsh Government still investigating this?

What I can say is that he's right about the media coverage of the syringes. The syringe drivers, which are called Graseby MS26 and Graseby MS16A, were loaded with capsules and programmed to release drugs into a patient's bloodstream over an extended period. They delivered drugs at different rates, and, of course, we know from the report that led to a dangerous over-infusion of drugs. Hazard notices were issued by the Medicines and Healthcare products Regulatory Agency—MHRA—to ensure that NHS staff knew the difference between the models. This was also the subject of an England and Wales-wide National Patient Safety Agency publication—a rapid response report—in December 2010, which gave the NHS five years to transition to drivers with additional safety features whilst mitigating the risk in the meantime. What I can say is that all relevant NHS Wales organisations have confirmed compliance with that patient safety requirement. We will be writing to health boards and trusts asking them to audit existing practice and to provide assurance that they remain compliant with this advice, and I understand that the same thing will be happening in England.

13:45

I'm grateful for that very detailed response, because the reports over the weekend will have caused a huge amount of distress to families of bereaved relatives that might suspect some wrongdoing or some faulty equipment that might have caused an untimely death. What is important is if families do have those concerns—and the numbers we are talking about run into the thousands if you put it across the whole of the NHS, because these machines were used right across the NHS in England, Wales, Scotland and Northern Ireland—that families can raise their concerns and ultimately have those concerns addressed. What actions will the Welsh Government be doing to work with health boards so that families who do have those concerns—bearing in mind you have confirmed that the Welsh NHS is compliant with the directive that ruled out their use up to 2015, but families will have concerns that need addressing, so how can families go about having those concerns addressed?

Well, if anybody has a concern, of course, they can raise that concern directly with the health board, or with their AM, or indeed with the health Minister. There is an outlet to do that. We're not aware of any concerns, but obviously it is right that there is an audit to make sure that the compliance is still there in the way that we would want. That is the way we will seek to give assurance to both patients and their families across the NHS.

Diolch, Llywydd. First Minister, the past few months have been brutal for the Welsh high street, with many large retailers announcing closures of their stores. Mothercare is closing 50 stores across the UK, including its Newport branch. New Look is closing 60 stores, including its stores in Cardiff, Monmouth, Rhyl and Pontypool. Carphone Warehouse announced nearly 100 store closures across the country, and other retail giants like M&S are announcing closures, and planning closures as well. In the last week, we had the devastating news that one of the high street's most iconic names, House of Fraser, was closing its stores in Cardiff and Cwmbran. So, we've seen many high street brands disappear in recent times, and thousands of jobs have been lost. So, First Minister, the UK Government are not appearing to address this issue, and some are calling this 'hell on the high street', so please can you tell me what your Government, the Welsh Government, is planning to do to help halt this decline?

Well, retail is an important sector for us; we're making it a priority. I'm not going to pretend that the challenges facing retail are easy, because they're not. There are many people who shop online. There are many people who go into a shop and then shop online, not shopping in the shop itself. And there are some challenges there. Where does the answer lie? I suspect it's ensuring that our town centres are more mixed, making sure that more people live in town centres, and also ensuring that there are more offices. I know from my own experience in Bridgend that there is a lack of office space and there is too much retail space. What we need is to get the balance right so that there is more good-quality office space, creating, then, the footfall during the day for the shops that are there. So, it's a question, I think, of rethinking what our town centres should look like, not seeing them purely for retail but a far better mix in terms of what they offer, and people living there and people working there.

I appreciate what you're saying, First Minister, but, over the weekend, retail experts outlined the scale of the problem facing Wales's department stores, following the announcement by the House of Fraser and the news that Chepstow's Herbert Lewis was to close. Howells has been on Cardiff's high street since 1879 and will soon go the same way as David Morgan, which was the mainstay of Cardiff's retail experience for over 125 years. Herbert Lewis has been part of Chepstow's shopping experience for 140 years. The managing director of Newport's Wildings department store, which recently had to downsize, said the future was not good for traditional stores, due to the rising costs and growth of online sales. So, First Minister, do you think it's time we took radical action, such as massively cutting business rates, in order to save Wales's remaining retail icons?

It will take more than that. I think one of the issues that does need to be dealt with is we need to make sure that online retailers are paying taxes properly. The reality is that, if you are a shop, you are paying business rates. You might be competing with somebody who's paying next to nothing, because they're online, and there are issues there that only the UK Government can resolve. They have been issues that have arisen many times over the past few years, but that's where the level playing field has to be established. Simply saying, well, because an online shop is based outside of the UK or is subject to a more favourable tax regime—it's never going to work for the high street, if I can put it that way, or even for the bigger chains, if they're competing against online retailers who just don't pay the same taxes as they do, and that's where I think the focus has to be.

13:50

Yes, but we have to redress and look at the balance and have a level playing field. Unfortunately, according to Cardiff Metropolitan University's business school, it is too late to save our traditional retailers. According to Chris Parry, senior lecturer in accounting and finance at Cardiff Met, the time to cut rents and rates was 2008, not 2018. He said that the challenge for us is what we do with our town centres and our high streets to look like that in 10 years' time. What do we do with it? That's something we need to urgently consider. So, if the exponential rise in online sales continues—and we have no reason to believe that it won't—then, by 2028, many of our traditional retailers will have disappeared. So, First Minister, we have to plan for that future. Chris Parry said that, if we sit and do nothing, our town centres may well be derelict wastelands in the next decade. So, we have to avoid that at all costs. First Minister, what plans does your Government have to accelerate mixed-use of our town and city centres, replacing closed-down stores with housing, restaurants, GP surgeries, and everything else needed for true urban living?

I agree, and it comes back to the point I made earlier on—and planning guidance has been changed to reflect this—we do need to make sure that our urban centres are more mixed. Some of them are, some of them are not. People have tended not to live in town centres for some time. We know that there are some businesses that will do well because they don't have online competition. If you're a cafe, there is no online competition. If you are a barber or a hairdresser, there's no online competition. There are some shops that have specialised particularly strongly in some products. They also perhaps have an online shop as well, which helps them to sustain their business. Ultimately, of course, the problem is that people aren't going through the doors as they used to; they're looking elsewhere. How do we look to resolve that? Well, making sure, I think, as well, that people are around in the day. One of the issues is, to my mind, that, in many town centres, shops are open between 9.30 a.m. and 5.30 p.m. when most people are not around, in reality. It's a question of looking again about flexible opening hours so that shopping centres are open, particularly in town centres, when people are actually out of work and back from work and able to shop, rather than having a model that is a model, really, that hasn't really existed for 30 or 40 years, where people would go in and shop during the course of the day because perhaps they weren't in paid employment. Those days have changed, and I think it's important as well that the challenges that exists with the retail sector are met with looking as well at how they can become more flexible in order to cater for the fact that life has changed for most of their customers.

'Swansea Bay City Region: A Renewable Energy Future’

3. What analysis has the Welsh Government undertaken of the opportunities outlined in the Institute of Welsh Affairs’s case study, 'Swansea Bay City Region: A Renewable Energy Future’? OAQ52429

Well, can I welcome the recent report that IWA produced, under their Re-energising Wales project, on the potential for the region? It will be extremely valuable for us, and particularly for decision makers in the Swansea area, in order to inform the direction of the city deal.

Thank you, First Minister. Not content with cancelling green trains to Swansea and pulling the plug on subsidies for renewable energy, yesterday the Tory Government pulled the plug on the tidal lagoon, when their own former energy Minister said it would be a no-regrets policy. The Welsh Secretary had the brass neck to tour the TV studios and say that the 30p annual subsidy was expensive, when he's happy to subsidise Hinkley by £12 for every customer a year. So, I think we should call out the hypocrisy of the Tories and the way they've led investors up the garden path who are going to think twice about putting money into innovative technology again. But I think the message of the IWA report is that there is still a possibility for us to lead the way in Wales, and it's for us, as the Welsh Government, to be at the front of that. The case study set out in detail how Wales can meet 100 per cent of its renewable energy demand by 2035 just from green technologies. The city region leaders are supportive. Will the First Minister make sure that the Welsh Government gives its full-throated support to this effort to make sure we still can be leaders in this field?

Yes, and we've already done it, of course, in Pembrokeshire particularly, with projects that we've supported there. I think the problem is that the mood music created around the announcement today is that tidal energy is too expensive. That's the message that's been given. Now, that will apply wherever potential investors are looking at tidal energy projects. If I were a tidal investor now, I'd start thinking twice about investing in the UK, because the UK Government haven't given any encouragement to tidal energy. It's a matter of great regret. What they have said is, 'Well, nuclear is there and offshore wind'—not onshore, but offshore wind is something they want to pursue. The message is that tidal energy is not seen as important by the UK Government, and I regret that very much. Bear in mind that all we were asking for was the same financial deal as was offered to Hinkley. No more than that. We weren't asking for special favours beyond that. If the contract for difference was there in the same way it was for Hinkley, I believe the lagoon could have moved forward, but the UK Government did not accept that, and that is something I know that is a matter for regret not just for Members on this side of the house, but also for Members in other parties as well.

13:55

It was my understanding that Ministers made it clear that the door was still open on tidal energy and future discussions on that. But let's talk about something that we can do something about more quickly, and that is rapid and fast electrical vehicle charging points. The same report mentioned that Wales is behind the rest of the UK in the number of charging points available, and suggested as a key action that increasing the number of charging points at major transport nodes, park and rides and tourist attractions should happen fairly quickly. Now, Swansea bay city region is awash with these types of locations, and, as the role of transport within the city deal area is something we're all talking about now, including local businesses, can you tell me whether the money you've given for scoping out the South Wales West metro includes perhaps increasing the number of electrical charging points in the bay, and have you had any further conversations with Ford about whether they're considering electric car production within the South Wales West region?

Sorry, I missed the last point.

Oh—whether you've had any conversations with Ford about electric car production in South Wales West.

Well, there have been discussions with Ford on a number of potential opportunities. To my mind, battery production is where the future lies. The technology's not far away when batteries will become far better used. I suspect that the step change will come if the day comes when people are physically able to take a battery out of the car that has discharged and then able to put one in that has been charged, so there's no delay in terms of the charge. We're a long way from that point at the moment, because the batteries are huge.

In terms of charging points, Tesla, of course, have invested heavily in charging points, but the reality is that there are very few Teslas on the road. There are charging points available in, I think, almost every service station at the moment as well. A number of retailers, like Ikea, for example, have charging points as well in the shops, and it is possible to—. There is an app available that gives you an idea of where all the charging points are. So, we want to roll out charging points across Wales. We know how important that is, and that is something that will be a priority for us as a Government.

The IWA report on the Swansea bay region certainly sets out an exciting vision of the region's energy future. Taking ownership and control is a theme that runs throughout that report, as you know, and it clearly shows that the growth of renewable energy projects in Wales is still dependent, to a large extent, on Westminster. Yesterday certainly proved that point, as regards the tidal lagoon decision.

In view of your earlier comments to Leanne Wood, we look forward to your full support tomorrow in the vote of no confidence in the Secretary of State for Wales. But notwithstanding, whilst the Wales Act 2017 transfers some new powers to Wales for projects generating less than 350 MW, for example, do you now believe that Wales should, as Scotland has, have a greater influence over the strategy to develop offshore wind and marine energy technology as well as setting subsidy levels and priorities for supporting community energy and energy efficiency schemes?

Yes, but we still wouldn't control the market. That's the issue—the GB energy market. We need to have a Government in London that sees renewable energy as important and is willing to make the investments in renewable energy that are going to be needed for the future. That is not the case at the moment. What we've seen over the years are solar panels having their subsidies removed, the same for onshore wind, and now what we have is a situation where the UK Government has limited itself to a small number of ways of generating energy. They need to be more expansive than that, and be far bolder in terms of supporting projects like the tidal lagoon.

The Hydrogen Economy

4. What steps is the Welsh Government taking to support the hydrogen economy in Wales? OAQ52431

Hydrogen has the potential, in terms of power, transport and heat, to play an important role. Several Welsh Government initiatives are exploring hydrogen opportunities in Wales to improve our understanding of its potential.

Thank you for that response, but, eight years ago, Peter Hain and Jane Davidson announced that the M4 would become a hydrogen highway for Wales and, by now—for two years, in fact—there would have been a list of places where hydrogen could be stored and used as part of decarbonised transport. We haven’t seen that dream realised and we’ve seen virtually no progress over the past few years in developing the potential of hydrogen. We have, this morning, been discussing decarbonising the Welsh economy. This is technology devised in Wales, where research is currently happening in Baglan and elsewhere, where there is a golden opportunity for the Welsh Government not only to lead in Wales but also to lead internationally. Will you take that opportunity to be, as you said to Leanne Wood, bold and brave?

14:00

We are. A reference group has been established to lead our thinking on hydrogen. We have been ensuring that resources are available to show how the technology will work. We commissioned a study to look at opportunities with hydrogen in Rhondda Cynon Taf two years ago and recommendations of that report are being considered at the moment to see how they will work. We are helping Monmouthshire County Council, for example, to look at opportunities to build on Riversimple, which is an application happening in their area looking at sustainable fuel and, of course, looking at how that will happen. A sum of £2 million has been given to Riversimple. That shows our support in terms of supporting the low-carbon economy on a local level. Of course, we’re working with Pembrokeshire council and Milford Haven port in order to develop a zero-carbon area in the Milford Haven area. So, quite a number of things are being supported and, of course, there’s a lot of potential available with research. Sêr Cymru is funding research in Swansea University on the use of hydrogen in vehicles and Cardiff University is also looking at research in terms of technology to create green hydrogen.

First Minister, there have been concerns expressed from some quarters that we may be putting all our eggs in the electric basket and the electrification basket in terms of rail and cars at the very point when some countries are moving fast towards a hydrogen economy. I suspect that, over the medium term, it will be a mixture of both that will provide the carbon reductions that we need. Will you undertake that you will look, in the first instance, for exploring the potential for hydrogen fuel on freight, railways and buses? I think it was Simon Thomas who mentioned the M4 as a potential hydrogen highway. And looking beyond that, clearly, we are moving down the line of electric vehicles at the moment. There were all sorts of issues with providing electric charging points in the early days of electric cars, and there are still some issues there. In the future, hydrogen cars might be much more of a reality. Have you done any provisional work in terms of developing our highways, developing the infrastructure for a potential hydrogen future, not just in the case of trains and buses, but also in the case of cars as well?

If I remember rightly, the hydrogen fuel cell was invented in Wales. So, in some ways, we've stolen the march there and we must make sure that we continue to be at the forefront of this technology. We did look at the option of hydrogen technology with the train bidders during the procurement process. That wasn't something that we could take forward at this stage, but we'll continue to look at how the network can innovate in the future. If we look, for example, at the research I made reference to earlier on—the research work at Swansea University and Cardiff University—looking at how we can develop hydrogen in the future as well, it's hugely important for us to be ahead of the game in Wales in terms of the scientific research. I think there are great opportunities there, in the future, in terms of developing hydrogen as a fuel, and he will be aware, of course, of Riversimple, the trial that took place in Monmouthshire. Again, it's a question of supporting the research and supporting the trials to move the technology forward, and we'll continue to do that.

Local Development Plans

5. Will the First Minister provide an update on the implementation of local development plans in South Wales Central? OAQ52430

There's complete coverage of local development plans in the South Wales Central region. The implementation, of course, of local development plans is the responsibility of each respective local planning authority.

Diolch. I didn't really expect a proper answer, so I'm going to give you an update on the LDP in Cardiff on behalf of residents, because your local development plan is bringing absolute chaos. Traffic jams already go on for miles, and yet there will be over 10,000 extra cars on those roads that are already rammed. There's no new infrastructure in place, no new public transport, and communities will be suffocated with dirty and polluted air. GP surgeries are about to have thousands of extra patients when they are already at breaking point. New places will not be provided in doctors' surgeries or hospitals until 3,000 houses are built. You denied announcing that all this would take place. Your councillors stood in green fields pledging to protect them; those very same green fields are now full of bulldozers. Do you accept that you and your party have a very strange relationship with the truth?

14:05

I'm sorry; I don't know what the allegation was there, Llywydd. I'd like a ruling, please. 

Well, if you fail to understand the allegation, you can't answer the question. Thank you. Andrew R.T. Davies.

First Minister, in relation to LDPs, it is really important that, obviously, local people's voices are heard in the process. There does appear in the current system to be a disconnect with the ability for local people to feel they're having an influence in the development of LDPs. I appreciate that that's a responsibility for local authorities, but ultimately the Welsh Government signs those LDPs off. Where do you think real improvements can be made in the process so that local communities do not feel that they are excluded from the development of plans that are supposed to govern the development of their own communities?

I think what's key is that people are involved in the LDP development process at the start. He will know, I'm sure—and I've had the same experience—that people will object to a planning application when, in fact, the land has already been allocated in a development plan for a particular purpose, at which point, of course, it's too late in the day to bring forward the objections that they would want. So, I would expect local authorities to be fully engaged with the local community in the development of a local development plan.

It is hugely important now that we move on to strategic development plans. One of the issues that is correct in Cardiff is that Cardiff is a popular place to live. There is a need for more housing, otherwise house prices will go up to a point where people will be forced out of the city in order to live. There are real challenges in terms of infrastructure—that much is true—which is why it's hugely important that in the south-east of our country we see the development of a strategic development plan that looks at a much larger area, rather than thinking that local authorities can only look at their own areas when it comes to setting out a development plan. That's not how the economy works—we know that—and that's where the next stage of planning must go.

I agree with the First Minister; I think strategic development plans are the answer. I'd go further to say that LDPs fail to deliver within their boundaries in areas like South Wales Central, and those authorities that stand against them then find themselves victim to speculative planning applications, where chief inspectors overturn democratically elected councillors on appeal, which is why I would praise the Welsh Government for its proposal to temporarily disapply paragraph 6.2 of technical advice note 1, the advice note to planning inspectors, relating to the provision of the weighting of a five-year housing land supply. I've written my own response to the consultation supporting it. However, I was disappointed to receive a letter recently from the Home Builders Federation, which went to other Assembly Members, opposing the Welsh Government's plans. I feel that the Home Builders Federation are far too keen to support the cartel of large house builders, and the planning system is stacked in their favour. They deliver barely any affordable housing. I think the Home Builders Federation need to rethink their position. Would the First Minister agree that we need to look at how we develop small and medium-sized house builders, who have far more of a focus on their local communities than the needs of the market? Will he stand firm against lobbying groups who have vested interests?

It's hugely important that we have a planning system that works as effectively as it can. He's right to report that a consultation has taken place on the disapplication of paragraph 6.2 of TAN 1. We're considering the evidence on that now. But there is here a responsibility on local authorities as well, because it is important that local authorities agree governance arrangements to move on rapidly to progress a strategic development plan.

The difficulty is, of course, that local authorities will look at producing a development plan for their own areas. The reality is that people will live in their area and work somewhere else. If you look at my own constituency, many thousands of people work in Cardiff and happen to live in Bridgend. To suggest that, somehow, you can have a development plan in Bridgend that's wholly separate to that of the Vale of Glamorgan or Cardiff really doesn't work, because in reality it's one large area.

So, it is important now—. He will know the pressures, of course, in Caerphilly, as he's mentioned them many, many times. It is hugely important now that local authorities do now get together and do decide who is going to take forward the strategic development plan, in order to make sure that there's a greater distribution of people around the area. Otherwise, it's right to say that most of the development, I suspect, will fall on Cardiff, it'll fall on southern Caerphilly, and we need to make sure that a strategic development plan is in place to make sure that there is not overdevelopment in some parts of south-east Wales when, in fact, there might be opportunities elsewhere. 

14:10
Chronic Obstructive Pulmonary Disease

6. Will the First Minister outline the number of admissions resulting from chronic obstructive pulmonary disease to accident and emergency departments from 2016 to 2017? OAQ52405

Data on the number of COPD-related admissions to emergency departments is not routinely collected by the Welsh Government. However, information from the patient episode database for Wales indicates there were 5,044 admissions in 2015 and 4,768 admissions in 2016—a fall of 5.5 per cent.

Thank you for that. Of course, as you’ve mentioned, the data shows that there are more admissions to accident and emergency departments than have been historically, and there is a clear need to ensure access to rehabilitation services for these patients, and also to refer them and support patients to take part in exercise. So, what more are you doing as a Government to ensure that patients across Wales have access to these treatments, in order to reduce the risk of their condition getting worse, and resulting in unnecessary admissions to A&E departments?

A new pathway is being developed at the moment to assist people with COPD to consider activities in terms of exercise, so that they can manage their condition. That means courses to help people have the exercise that they require, people to teach them how to exercise, and also to encourage them to exercise and to ensure that they look at new ways of managing the condition that they have, rather than constantly feeling that they have to go to hospital. So, I think that’s where the work needs to happen.

Of course, First Minister, I'm sure you'll agree that it's not just a new pathway we need, but people with the passion and commitment to deliver it in a really proactive way. Just recently, I made it my business to go and meet Louise Walby, who was this year's Royal College of Nursing nurse of the year, because Louise has in Cwm Taf developed an excellent programme for dealing with people with COPD. It's gained a lot of traction within Cwm Taf, and she's very keen to, obviously, spread that best message out across all of Wales, because it is innovative, it is kind to the patient, and it really brings people on board in a non-hectoring, non-lecturing way. What can you do as a Government to ensure that these very small green shoots that pop up in the NHS, full of great ideas, do get that opportunity to grow and to spread that best practice, so that everybody can benefit from the experience of a nurse such as Louise Walby?  

What I've found over the years is that quite often the best ideas come from an individual—an individual who might observe what's happening in their local area, shape that observation into a practical example that can help people. It's hugely important that that practice is able to spread. I would expect health boards to look at innovative practices elsewhere in Wales. I will, however, ask the health secretary as well to write to you with his ideas as to how this might be taken forward. 

Problem Gambling

7. Will the First Minister make a statement on the Welsh Government's strategy to tackle problem gambling? OAQ52418

A cross-Government group has been established to develop a strategic approach to reducing gambling-related harm across Wales. The group is currently considering the recommendations from the chief medical officer’s latest annual report and will co-ordinate existing action and identify new activity that might be required.

Thank you for that answer, First Minister. You will recall the number of debates we've had in this Chamber over the issue of fixed-odds betting terminals and, of course, the UK Government gave a commitment that they would now take measures to reduce betting on these to a maximum of £2 per bet. It now appears that it may be at least two years before any such legislation is forthcoming. We do have some powers within this, although not as extensive, but it does seem to me that this would be an appropriate time now for Wales to take a lead and to introduce legislation at least to use the powers we do have to minimise the amount of fixed-odds betting terminal bets that can be placed, under powers in the Wales Act 2017 now, rather than wait for legislation that will take several years to arrive or may not even arrive at all. 

14:15

The Member's right. The difficulty, of course, is finding time for legislation in what is a packed legislative programme. That's not to mean we do nothing, of course, and it's important that we know that there are other tools available to us in order to reduce problem gambling. I can assure the Member that the Chief Medical Officer for Wales has made several recommendations in his annual report and the cross-Government group is currently considering them, certainly as a first step to dealing with problem gambling and we're keen to work with the CMO in order to address the problem. 

First Minister, public health enemies like problem gambling are things that we have the opportunity to tackle here in Wales through the education system. There were some startling statistics at the Beat the Odds conference last week that 80 per cent of children have seen gambling adverts on tv, 70 per cent of children have seen gambling adverts on social media and two thirds have seen gambling adverts on other websites. Now, whilst I appreciate we don't have the opportunity to deal with adverts per se, we do have an opportunity through the education system to educate our young people about problem gambling and the harm that it can cause to them and wider society. So, what action is the Welsh Government taking through the new curriculum and other opportunities that might be presented to tackle this problem as a public health enemy? 

Well, I was explaining to my children last week that there was a time when cigars and tobacco were freely advertised on television, which they couldn't quite understand, but they were. Gambling was more tightly regulated. It's gone the other way, that's the problem. There is scarcely a time when somebody can watch a sporting occasion without there being some offer to make a bet halfway through the game—next scorer, you know. Even something I saw in the papers a few days ago where it would be a free bet if England won against Panama—a lot of losers there, I suspect. But the serious point is this: this has happened since the Gambling Act in 2005, and I regret that happened under the watch of my own party. I think that was the wrong decision to take because what we have seen is the proliferation of gambling adverts that make it appear that a bit of gambling is okay, basically, and then that's where the problems arise. 

What can we do in the education system, because we don't control, obviously, the advertising industry? Well, health and emotional well-being is a theme of the personal and social education framework, which forms part of the current curriculum framework, that does give schools the chance to pick up issues such as problem gambling. Financial education will be a key element within the new curriculum—something that the Member Bethan Sayed has championed—and that will offer robust provision to help learners develop their financial skills, including the management of money. I can say that pioneer schools are working with some of the key organisations to develop new areas of learning as well. So, yes, we can address it through the education system and we are doing that. It's going to take more than that in terms of the advertising industry, though. 

I'm delighted to hear, First Minister, that you're aware of the huge dangers there are in linking gambling to sport. You can support your team without having to place a bet, but obviously children have been pushed this idea that the one goes with the other.

What is the possibility of introducing legislation to change the planning criteria for betting shops so that they have a specific category, and that means that we can firmly control the number of new betting shops and ensure that other businesses closing down don't then get made into betting shops? 

I'll ask the Secretary to write to you on that.FootnoteLink It is right to say that we don't want to see a proliferation of betting shops, but that's part of the problem. Online gambling—it's never been easier to gamble. There was a time when you physically had to walk into a betting shop in order to do it. Most people didn't do that. There were some people for whom it was a lifestyle choice, but it didn't happen to most people. Now, of course, because it's so easy to gamble—. For example, just to give some figures to Members here, there were 152,000 adverts in 2006 relating to gambling; in 2012—and I suspect the figure's gone up since then—there were 1.39 million. Well, that kind of barrage of information is bound to have an effect to encourage people who otherwise wouldn't have gone into a betting shop years ago to gamble, to gamble more, and then, of course, to create problem gambling. If we don't allow advertising for tobacco and alcohol on tv, why do we allow the advertising of gambling? I think that's a question for the UK Government to resolve.

2. Business Statement and Announcement

The next item, therefore, is the business statement and announcement. I call on the leader of the house to make the statement—Julie James. 

Diolch, Llywydd. There are several changes to this week's business. The Cabinet Secretary for Economy and Transport will make oral statements today on the Swansea bay tidal lagoon and the recent Airbus Group announcement. As a result, the statement by the Cabinet Secretary for Education on initial teacher education will issue as a written statement. And, finally, Llywydd, the Business Committee agreed to schedule an additional debate tomorrow afternoon on a no named day motion tabled by Plaid Cymru. Otherwise, business for the next three weeks is as shown on the business statement and announcement found amongst the meeting papers available to Members electronically.

14:20

Leader of the house, can I raise two issues with you, if possible, please? I was grateful for the clarity that the First Minister showed in the questions that I put to him in First Minister's questions, but I'd be most grateful if the health Secretary could bring forward a statement about opiate use within the Welsh NHS and the guidance that is out there. Some of the stories that have come out and the report that has come out last week do raise genuine and serious concerns in patients' and clinicians' minds, and it would be most helpful if a statement about opiate use as pain relief, especially in the palliative sector, could be made available by the health Secretary for Members and the wider public to be able to see.

And, secondly, you did say last week, when I raised the question with you about the Permanent Secretary and her engagement with us around issues in the QC-led inquiry, that you would make representations to the Permanent Secretary. As we haven't heard anything, I was wondering whether you are in a position to update us as to any information that might be forthcoming, as I believe, to date, I haven't seen that information come available.

Yes, on the first one, the Cabinet Secretary's indicating that he's more than happy to update Members by way of a written statement on the situation there. And on the second, unfortunately, my meeting with the Permanent Secretary wasn't able to go ahead last week due to issues with my diary, but as soon as I do see her, which I hope will be this week, I will be bringing that to her attention.

First of all, can I thank the leader of the house for accommodating the no named debate tomorrow? I think it's very important that the Assembly has an opportunity to debate not only that we have a statement on the tidal lagoon today, but actually to debate the political circumstances that led to this decision. Obviously, Plaid Cymru feels, in our motion, that we no longer have confidence in the Secretary of State for Wales or, indeed, in the post, really, and the way that post is being used, rather than as a bridge between here and Westminster to achieve Welsh ambitions, as an obstacle and a gate between our ambitions and Westminster's. So, I think the vote tomorrow will be very important. I understand it's open to amendment today. I'm sure the Government won't agree with every approach that we've taken in this, but I hope very much you won't defang the motion tomorrow and that we do send a very strong message to the Secretary of State about his relationship to this place as a Parliament, but also the way he acts on our behalf in London. I think it's our duty to send that message following the events that we'll discuss more this afternoon. Thank you again for tabling a statement on the tidal lagoon so we can have a future debate.

Can I ask just a couple of specific things about how the Government might address business over the next few weeks? First of all, I understand the EU withdrawal Bill has become an Act today, and John Bercow, as the Speaker of the House of Commons, has noted the Queen's assent to the Bill. So, now that we have an EU withdrawal Act, and I take it, unless you will tell me differently, that the inter-governmental agreement that you have agreed with the Westminster Government will come into operation, you will therefore be seeking to repeal the Law Derived from the European Union (Wales) Act 2018, which is also an Act, of course. So, we have two Acts now that are not necessarily compatible with each other, or, at least, they're not compatible with the inter-governmental agreement.

Can you set out for us what the process is by which this will happen? How will a Bill be withdrawn? We haven't done this before. So, how do we withdraw a Bill that has become an Act, actually? What consultation will there be? How will that happen? What will the debates—? What do you foresee, as the leader of the house, will be the role that this Parliament will play in that? How will we ensure the widest possible discussion around that? Clearly, you've made that commitment as an inter-governmental agreement, but some of us will have different views on that, and we'll be keen that the proper processes are followed and we have our say on it. So, I'd very much appreciate if you set out how you intend to ensure that, in your view, that Act now is withdrawn.

The second thing that I'd like to briefly raise with you—which has already been discussed but this specific aspect has not—is the gambling issue. We have, and many of us welcomed, the £2 limit on the fixed-odds terminals. We were very disappointed to understand that that was now going to be extended to at least 2020. So, the Westminster Government are doing nothing for at least two years on this. We have very strong recommendations from our chief medical officer. We have a pledge signed by Members of all parties, a cross-party pledge on a cross-party group here to take action on this. It would be interesting to know whether the Government does have any legislative intention—or regulatory intention—to use the limited but still important powers you do now have to deal with the plague of fixed-term terminals. By delaying for just two years, it's estimated the betting shops will rake in £4 billion. That's the size of this business now, and the untold misery of those who get addicted to such heavy gambling is plain to see and has been demonstrated last week in the conference at the Pierhead. So, what is the Government likely to do, and what action are we likely to see on gambling?

14:25

Well, in the time-honoured tradition, Llywydd, of tackling the issues in reverse, on the gambling one, the Cabinet Secretary for health and I also wrote to the Advertising Standards Authority about this. The fixed-odds betting terminals—I can never say that right—are absolutely a scourge, and, of course, attack some of the most vulnerable members of our society. The First Minister just answered some questions around that.

I think there is cross-Government concern about this. There's a massive, massive issue with online advertising, and although the Advertising Standards Authority has set out that it attacks adverts specifically aimed at children, nevertheless, if you are an online gamer, you will see those adverts all the time. I see them constantly. So, we are very concerned about that, and, Llywydd, I will make sure that we bring forward a statement of some description setting out what can be done in the context of the First Minister's answer to the question earlier, as I think it's a matter of some considerable concern and the delay is very concerning.

In terms of the EU Act, I admire Simon Thomas's invitation for me to set out all of the ins and outs of that, but, Llywydd, I won't try your patience by attempting to do so right now. The Counsel General has a statement very shortly that will afford Members the opportunity to question him closely on the exact legislative position. I think that's the appropriate place to take that up.

In terms of the tidal lagoon, we have got a statement this afternoon, and, Llywydd, I don't think I've made any secret of the fact that I don't think the Secretary of State has covered himself in any glory at all in terms of him standing up for Wales in investment decisions in the UK Government. We will amend it because there are some constitutional issues, but I think the sentiment is entirely shared.

I know the leader of the house knows what an incredible occasion it was here in the Senedd last Friday, when we celebrated the Windrush generation, and how deeply moving it was to hear about the contribution of all those people who came to the Senedd. And, obviously, it's 70 years since the Windrush came to the UK, and it was particularly moving, I think, to hear from the elders and to hear about their contribution. I think the point was actually made at the meeting: why didn't we celebrate 50 years? Why didn't we celebrate 60 years? I think we all know why we're celebrating 70 years. So, I wondered if we could have a statement about anything that the Welsh Government could do to recognise the achievements of the elder Windrush generation.

Yes, it was a truly moving experience, and actually, when I came to speak, Llywydd, I was actually a little bit choked because I followed on from the speech of one of the elders outlining their contribution. It was highly emotional, and I think we were all very touched by some of the personal stories. I'm very grateful to Joyce Watson—I think she's not in the Chamber at the moment—she came down to the Saturday event in Swansea where some of the elders had a little more time to elaborate on some of their stories, which was also very moving.

I will discuss with Cabinet colleagues who have an interest in this about some of the things we're doing. We are being a platinum sponsor for Black History Month this year to make sure that we get some of the oral histories put, and I'm exploring ways of making sure that the elders can visit Tilbury docks, because there was an issue about whether some of them would be able to. I think one of the elders was very forceful in saying that it was the least we could do to recognise their contribution to Welsh society to ensure that they had their chance to contribute in a way that they saw fit. So, I am exploring and actively ensuring that that trip can happen.

My colleague Vaughan Gething said something very memorable on the occasion, actually, as well, which is to remember that we have a long way to go. You only have to look around this Chamber, Llywydd, to see what a long way we have to go in achieving diversity. One of the things he said, which I'm very keen on taking up with him and others, is to ensure that we have the right ladders—the mentoring schemes and the pathway schemes—to make sure that young people from every part of Welsh society come forward and take their rightful place, building on the incredible work that the Windrush generation and other elders took forward in circumstances that were both uplifting but also shameful in some regard.

14:30

Leader of the house, may I ask for a statement from the Cabinet Secretary for health on the availability of multiparametric magnetic resonance imaging scans to detect prostate cancer in Wales? According to a report by Prostate Cancer Wales, detection in Wales is lagging behind England, where 92 per cent were provided with a scan before biopsy. In Wales, only three out of seven health boards provide the scan, which can put prostate cancer diagnosis time from weeks to a matter of days. I know the Welsh Government has said that the use of mpMRI scans is under review, but could we have a statement from the Cabinet Secretary indicating the timescale for this review, which could have a dramatic effect on prostate cancer survival rates in Wales?

The Cabinet Secretary has indicated to me that he is very happy to write to Members and update them on the timescales. 

Leader of the house, notwithstanding the unbridled fury that people in Swansea feel about the tidal lagoon decision yesterday—but more of that later, plainly—a different issue: you'll be fully aware that transport solutions are desperately needed in the Swansea bay area. The level of congestion and accident rates on the M4 around Swansea and Port Talbot are not helping us to attract companies to south-west Wales—I've raised this before with you—and are a clear source of frustration locally. Indeed, only this morning we had yet another multivehicle M4 accident, which caused traffic chaos on roads around Swansea.

Clearly, the Swansea bay and western Valleys metro has the potential to transform travel locally and help to develop alternatives to road travel in the region. However, I do not hear much in terms of progress on this front. In my attempts to engage with Swansea council, which is the lead authority in the region in developing the strategic outline business case for this metro, I understand that the project structures, work streams and engagement strategy have yet to be agreed by the different authorities within the region. People locally are crying out for a proper public transport system, so we need to up the pace. 

Given the strategic importance of south-west Wales in transport terms, would the Cabinet Secretary for transport therefore be prepared to bring forward a statement on this issue, outlining clearly the key outcomes that he expects, the extent of the joint working between the local authorities and Welsh Government, and key timescales? Diolch yn fawr. 

Llywydd, I would just like to extend my heartfelt sympathies to the families of the people who were killed, unfortunately, in the fatal crash on the M4 very recently. Heartbreaking stories—we all know how awful such a thing can be. The Cabinet Secretary is indicating to me that there's good progress, and he's happy to update Members by way of a letter. 

Leader of the house, I'm sure you're well aware by now that MPs last night voted in favour of plans to build a third runway at London's Heathrow Airport. I remain in favour of this project and I'm very pleased with yesterday's outcome, especially because of the regional benefits, the benefits to Alyn and Deeside as a border constituency, and the wider benefits to Wales as well, to lead better connections from Wales to the rest of the globe, to improve tourism and to give more opportunities for Welsh businesses to reach new exports markets. 

Analysis shows that an expanded Heathrow will add up to 8,400 more jobs, and a significant increase in economic growth to Wales. I was delighted to recently attend a meeting where we discussed Tata Shotton's bid to be named as one of Heathrow's final four logistic hubs. And these hubs will ensure that communities across the UK share in the opportunities of the overall expansion. 

With all that in mind, leader of the house, I would like to know if we could get a Welsh Government update on what's being done to secure these benefits that we know expansion will bring across Wales, including the location of the expansion hub in my constituency. 

Jack Sargeant highlights a very important point. There is an ongoing piece of work to champion shortlisted Welsh sites for the Heathrow logistics hub, which will, of course, as he highlights, provide hundreds of jobs in Wales and inject millions of pounds into our economy—much needed in the light of the various decisions not to invest in Wales made by the current UK Government.

Of course, we also have a long-awaited scheme to provide western rail access into Heathrow Airport, which is crucial to ensure Wales gets the maximum benefit. And this is an issue we also continue to lobby the UK Government on. We're continuing to press for the new runway to have sufficient landing slots for flights to and from Wales, in order to increase our connectivity, and the Member makes a very good point about us lobbying on behalf of Welsh sites for the logistics hub, which I'm sure the Cabinet Secretary has taken on board. 

I last week met with Docs Not Cops, and I know that you've met with them, as has Mike Hedges. This issue was raised in Plenary a few weeks ago with regard to seeking a statement on the Welsh Government's position in relation to the Immigration Act 2014. You did respond, but you responded in relation to the current policy in relation to asylum seekers. So, I want to try and understand: anyone from outside Europe who is lawfully applying to work or study here will be forced to pay an extra NHS surcharge of up to £200 per year before they're given a visa or charging rules that used to apply only to secondary care will now be extended into primary care, GPs and other accident and emergency departments. Abertawe Bro Morgannwg University Health Board have said that patients not ordinarily resident in the UK are potentially liable to pay. So, I don't think that this issue has entirely been rectified yet. I know that this is a UK piece of legislation, but we could choose, here in Wales, not to implement elements of the Immigration Act that will penalise people. You will have to start racially profiling, I'm afraid, if they do enter the health service. So, I'm wondering if you can give us an update as to telling us distinctly what you're going to do on this particular policy.

14:35

Yes. The Cabinet Secretary is indicating that there are some serious complexities and he's indicating his willingness to write to Members and set out exactly what the position is as to powers to implement or not, and what effect that will have in Wales.FootnoteLink

3. Statement by the Cabinet Secretary for Education: Initial Teacher Education

The next item was to be the statement by the Cabinet Secretary for Education on initial teacher education, which has now been tabled as a written statement.

4. Statement by the Cabinet Secretary for Economy and Transport: The Swansea Bay Tidal Lagoon

Therefore, the next item will be the statement by the Cabinet Secretary for Economy and Transport on the Swansea bay tidal lagoon. I call on the Cabinet Secretary to make the statement. Ken Skates.

Diolch, Llywydd. Yesterday, a statement was made in the House of Commons by the UK Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, on the proposed Swansea bay tidal lagoon project. 

The UK Government made it clear that, 

'it would be irresponsible to enter into a contract with the provider'

as the

'proposal has not demonstrated that it could be value for money'. 

The UK Government has concluded that the project should not be provided with public funding. This decision by the UK Government not to support the Swansea bay tidal lagoon is deeply disappointing and a further blow to Swansea following on from the UK Government’s decision not to electrify the Great Western main line to Swansea. Despite our serious offer to help the UK Government make this proposal work, they are letting an important opportunity slip through their fingers. In doing so, they have badly let down the people of Wales.

This announcement demonstrates that the UK Government has, once again, made energy policy decisions for Wales based upon English energy priorities rather than reflecting the opportunities here in Wales. We have significant sustainable energy resources in Wales, not available in England, that we must harness if we are to meet our decarbonisation targets as part of our wider UK obligations. The UK Government has failed to recognise that the Welsh energy mix will be different to that in England.

We have called for the UK Government to respond to the Hendry review of tidal lagoons on many occasions. Even now they have failed to give an adequate response to the important recommendations that he has made. The Welsh Government is clear: the decision whether or not to back tidal lagoons is a UK policy decision. They have the ability and the financial backing to shoulder risk in areas of new and emerging technology that other smaller Governments across the UK simply do not.

From day one, the Welsh Government recognised the transformational potential of the Swansea bay tidal lagoon project and we made an offer of significant funding support to the UK Government to help make the project a reality. Sadly, the UK Government’s short-sightedness and complete lack of ambition has thwarted this project—a project that could have positioned Wales and the UK as a world leader in a new global industry. We have consistently stated that the Welsh Government stands ready to work closely with the UK Government and other administrations across the UK to develop a vibrant UK marine energy industry.

We are in no doubt as to the potential that marine energy represents to Wales, not only from a decarbonisation and energy policy perspective, but also from a social and economic benefit perspective, too. Indeed, marine energy offers huge potential to the UK as a whole in terms of developing know-how, technology and supply chain developments, which would be of value to future international trade.  

We have held this view for many years and this is why we have prioritised the growth of a vibrant energy industry as a key tool for economic development. Wales has an excellent track record in supporting marine energy. Over €100 million of EU funding, along with domestic support, has been and continues to be invested through the Welsh Government to support wave and tidal stream projects. EU funding is supporting the Morlais west Anglesey tidal stream demonstration zone, the south Pembrokeshire wave demonstration zone, as well as wave and tidal stream developers. We also supported Marine Energy Wales who are developing a marine energy test area in the Milford Haven waterway. Pembrokeshire and Anglesey are becoming hubs for wave and tidal stream development, but further development will be dependent on revenue support from the UK Government.

Marine developers, who have ambitious plans to deploy their devices in Welsh waters, will view this announcement as the UK Government, sadly, closing the door on the industry. Some are already considering scaling back their plans in Wales. I therefore call on the UK Government to rethink their long-term support for the marine industry.

My colleague the Cabinet Secretary for Energy, Planning and Rural Affairs will be writing to business and energy Secretary, Greg Clark, to stress the importance of supporting the renewable energy sector in Wales. We've already stressed the importance of funding the most affordable technologies, such as onshore wind, to keep the overall costs of support low.

The Welsh Government has a long-standing commitment to the renewable sector and we'll be seeking the views of the industry and respective bodies through an energy summit to better understand how momentum, particularly in the area of marine energy, is maintained over the coming months and years.

In light of this disappointing decision, we are working closely with leaders in the region to better assess the wider economic implications and to consider what action can reasonably be taken. I've already held discussions with the leader of Swansea council about other projects that can support economic development in the area, and I'll be having further such discussions with leaders in the area over the coming months.

My colleagues and I will keep Members appraised of progress on this and will also be pressing UK Ministers on the outcomes.

14:40

I welcome the opportunity to respond to this statement. I wish it was a different type of statement, a statement welcoming the good news that we should have got from Westminster yesterday. I make no bones about it: I believe a positive decision was what was required yesterday, and I lobbied right up until the last minute to try and achieve that positive decision. Regrettably, it did not come through, and I commend everyone, from the Welsh Government right the way across the political divide in this Chamber, and those in civic society and in the business world, who championed the cause of the Swansea tidal lagoon. I bitterly regret that a more positive decision was not made yesterday, albeit, it is fair to say, that the numbers were always challenging if you looked at it on the economics of just the raw power that was generated.

And that, Cabinet Secretary, would be my first question to you. The UK Government have arrived at this decision based on their analysis of the information before them. The Secretary of State, in his statement yesterday, highlighted how Welsh Government have had at least 10 meetings with his department in this calendar year. Can you confirm that your officials have arrived at the same decision that officials within Greg Clark's department arrived at, or if there is evidence to prove that that decision was incorrect, based on the same paperwork that the officials from the two Governments were looking at, will you make that information available so that, obviously, we can have the fullest account of how the decision-making process arrived at the conclusion that it arrived at?

I'd also like to understand how the Welsh Government will be taking forward new opportunities. Obviously, the Secretary of State, in his statement yesterday, highlighted how the UK Government are in possession of alternative offers, alternative bids—I hope I've categorised it correctly, but certainly alternative proposals were definitely something that was put before the House of Commons yesterday in the statement. It would be beneficial to understand what role the Welsh Government will be playing to engage with those potential alternative offers that the Secretary of State identified in his statement yesterday.

What, for me, is really important here now is that, obviously, we assess where we can go from the position we find ourselves in today, which I say, quite openly, is not a position I would want us to be in, full stop. I wanted us to be in a position today of welcoming the Swansea tidal lagoon. I pay tribute, as I said, to all Members who have worked tirelessly on this. But it is a fact that we are in an era now where we need to assess how we can promote some of the most positive energy opportunities that exist around the whole coast of Wales. Since I've been in this Chamber, there have been two proposals—one of the Severn barrage and now the Swansea tidal lagoon—and neither one has come through. But what we do know is that raw asset does exist on our coastline and it does need to be tapped into and developed.

I would also ask the Cabinet Secretary, given that, listening to his statement today, I could have closed my eyes and heard the same argument coming from the opposition benches when he announced the Circuit of Wales proposals that were put before the Welsh Government, about supporting that particular project, where, in his opinion, obviously, that project was unaffordable and didn't stack up to the test that the Welsh Government had laid down. Now, being in the position to make these decisions, obviously the Cabinet Secretary would understand the process that is involved, and the process that was outlined by the UK Government yesterday seemed very familiar to the process that the Welsh Government was outlining in its decision when it came to the Circuit of Wales. So, I'd be grateful to understand how the Welsh Government will in future work to deliver major infrastructure projects, not just in energy but other major infrastructure projects, the length and breadth of Wales that can give developers confidence to look at Wales as an attractive destination.

In closing my remarks, I would just point out that, sadly, the statement only came into my possession two minutes before I stood up. So, I'm not quite sure what happened this afternoon. Some Members might not have even had that statement. It is normally a courtesy that Members do get sight of the statement. I appreciate it's a courtesy that doesn't have to be extended, but it is a courtesy that normally does happen, and I'd hope that he would look at what the communication problem was with the statement. Thank you.

14:45

Can I thank the Member for his questions? I apologise for the lateness of his receipt of the statement. I, too, received the statement, due to it being redrafted at very late stages, just a few minutes ago. But I have to say, I've been there when tough decisions have had to be made, and the Member identifies the Circuit of Wales decision as one primary example of how, in the face of intense public pressure and campaigns for a project to be given the go-ahead, you have to make sure that you assess it on the grounds of value for money and the wider benefits that a project can bring. But this project is distinctly different to the Circuit of Wales. The Circuit of Wales would have been on balance sheet. It would have required a potential £300 million of Welsh Government spend be put on hold as a consequence of that adjudication being that it had to be on balance sheet. The Circuit of Wales was not backed by an independent review by a former energy Minister. And, let's just remember, the main point of this project was that it was a pathfinder project and, as a pathfinder project, you would always expect additional costs to be incurred. The value-for-money test of a pathfinder project should be very different because of the opportunity costs that could be incurred in not pressing ahead with a particular project.

In terms of the Member wishing that it could have been a positive decision, I reflect on possibly what would have happened had David Cameron not called for a referendum on our membership of the EU. He would likely still be there as Prime Minister, we would not be facing the catastrophe of failed Brexit negotiations and, in all probability, given his personal support for this scheme and its inclusion in the 2015 Conservative Party manifesto, we would have seen a very different decision being reached yesterday. We may well have also seen a different decision over electrification. And for those reasons, I put responsibility for the decisions that have been made firmly at the door of Theresa May as Prime Minister and leader of the Conservative Party in Government in the UK.

Now, in terms of engagement, the developers contest the figures that have been produced. I received the detailed appraisal today. I've asked my officials to carry out a thorough assessment of it, but, again, as a pathfinder project, costs are always going to be higher. If we look at the development of onshore and offshore wind, costs were higher 10 years ago than they are today, and it's the opportunity costs that we now face having been lost. The opportunity costs could be substantial indeed if Wales does not become a world leader.

Now, the Member rightly identifies the point that was made in Parliament yesterday—the assurance that the UK Government is in receipt of proposals from what they say are other promoters of tidal energy schemes. I think we need to know who, and where those schemes are being promoted and where they would be installed, because we don't know, as of yet, whether any of those schemes—I understand that there are perhaps as many as half a dozen—are based on Swansea bay. We don't know who the promoters of those schemes are. We don't know what the costs will be of seeing those schemes through to completion. So, we await with very, very great interest the detail of those particular proposals.

I think we also need to make sure that discussions are maintained with city deal partners. I met yesterday with leaders of the Swansea bay city deal, and it's absolutely essential that we look not only at the future of marine energy in Swansea bay, but also at the wider economic development and regeneration of the region. I'm acutely conscious of the impact that this decision and the u-turning on electrification has had on the communities of Swansea bay, and in particular Swansea city itself. Granted, the UK Government will not be to blame for this, but, in addition, Swansea faced relegation this year from the Premier League. All of these factors contribute to a negative impact in terms of confidence and self-belief. That has to be addressed. The Welsh Government will work relentlessly and tirelessly with the local authority and partners across the Swansea bay city region to find investment projects that can rebuild the confidence of the people of Swansea and ensure that the marine energy industry in Swansea bay, and across Wales, has a very strong and positive future indeed.

14:50

Can I thank the Cabinet Secretary for his statement, and thank him also for being able to fit it in this afternoon? But I have to say, as a representative who lives in Swansea, this has been an absolutely devastating decision. I don't know if I can do justice to the unbridled fury that people were communicating with me last night about this decision. Basically, words cannot convey my depth of devastation. This is a wonderful project. There's tremendous potential for tidal energy in Swansea bay and the Bristol channel—the second largest tidal range in the world. People are always saying, 'You haven't got any resources in Wales'. We have, you know; it's just we don't tap them. This decision is incredible in its foolhardiness, I have to say, denying us releasing the tremendous potential for tidal energy. As you've said, this first pathfinder project—a pilot scheme, obviously—was not the biggest, and quite a small one, but five far bigger ones would follow, and Wales would then eventually become completely self-sustaining in energy terms. That is the renewable future, surely.

This comes on the same day as we've had a third runway expansion in Heathrow and obviously, a previous announcement about nuclear energy receiving more public subsidy. In other words, the idea is already there—public subsidy for large energy projects—and as the tidal lagoon companies say themselves, yes, there would be an increase in energy prices on bills for consumers, as Lee Waters pointed out earlier: 30p per year for households, compared to an extra £15 per year for nuclear. That's the comparison. Obviously, the tidal lagoon company—lots of us have been meeting with them over the years. Plaid Cymru first passed a policy of having a tidal lagoon in Swansea bay in our Swansea conference in 2006. Some of us have been working on this for nearly 15 years with the company, and it is immensely devastating what's happening. The company have heard nothing from the Westminster Government for two years. You've got to ask—and I would ask you now to confirm—what lines of communication have there been? The company says they've heard next to nothing from Government for two years:

'The lack of engagement with us during this process has been highly disturbing'.

That's the chair of Tidal Lagoon Power saying that. We've got to understand how we arrived at this decision 18 months after Charles Hendry and his superb report said it would be a no-regrets decision and a no-brainer. So, all of a sudden now, 18 months of waiting for a big enough decision to try and bury this bad news, and then it seeps out after lots of delays, and we're devastatingly disappointed that innovative, world-leading technology now looks to have been denied to Wales. I know there's a feeling in Westminster sometimes that little Wales couldn't be a world leader in anything, but we could have been here, and I want to know from the Cabinet Secretary how he intends to take this whole agenda forward, because the tides are still there, ebbing and flowing as we speak, only not being utilised for the benefit of the people of this nation.

It's the same strike price as Hinkley Point—like I said, a negligible addition to annual electricity bills for consumers. We've lost electrification to Swansea. Despite electrification being a live process in railways north of Manchester, it's somehow obsolete when it comes to Wales, and the Secretary of State for Wales says we're better off with diesel, and people say diesel is adversely affecting our health. Yes, it is adversely affecting our health.

More about the Secretary of State tomorrow no doubt, but two questions to finish. There was all-party support here which, to be fair, has been reflected. Westminster crushes that despite all-party agreement here. We really need to take control over our future generally, but particularly now in energy terms. So, how is the Cabinet Secretary going to move this agenda forward? Because I have an abiding feeling, after this huge decision, with any marine energy project in Wales now—how is that going to be viewed outside? How is that going to be viewed? Dead in the water?

My other question is: there is a very important debate tomorrow on a motion of no confidence in the Secretary of State for Wales. Westminster's man in Wales, certainly. This decision has crushed us. Will you be supporting that no-confidence vote?

14:55

Can I thank the Member for his contribution, the points that he's raised, and the obvious fury that he's relayed from Swansea bay? I think it was Shakespeare who said something along the lines of 'could not wield the words to matter', and right now I think people are lost for words in expressing their anger, their frustration, their disappointment with the UK Government for taking a short-sighted view of marine energy.

As I said earlier, what we wanted to see happen through this pathfinder project was the creation of an entirely new industry that Wales could lead the world in—an entirely new industry with enormous intellectual property owned by Welsh-based companies. That would have created jobs and opportunities not just in Swansea bay, but in the other locations where tidal lagoons were proposed. It could have led to a huge increase in opportunities in terms of the visitor economy as well. But all is not lost. We made an offer of £200 million to get this project over the line. What we intend to do is to host a marine energy summit in Swansea as soon as possible, with key stakeholders, with leaders in industry, to discuss how we can maintain the momentum that we've built in terms of marine energy in recent years, how we could potentially utilise the £200 million that we've made available for this particular project, how we can look at other proposals—hopefully by then we'll have some detail on the alternatives—how we could potentially use those alternative proposals to benefit Swansea bay and, indeed, the rest of Wales, and how collectively we can build on the Welsh Government investments to date to ensure that Wales maintains its position as a global leader in terms of marine energy. Because I fear, Llywydd, that if Welsh Government doesn't take this action for the people, with the people, and on behalf of the people of Swansea bay, then we'll end up with the French taking ownership of this project and taking a lead globally. It's a once-in-a-lifetime opportunity that could be granted to the French as a consequence of the UK Government making this decision.

So, we will not abandon the sector. Far from it; we'll look at how we can build on those projects in south Pembrokeshire, in Milford Haven and also in Anglesey, and we'll look at how we can go on building the strength and the capabilities, the research capabilities, within the sector as well.

I have to say, the Member touched on the crucial point of energy independence and energy security, which is so important to a vibrant economy. The United States of America managed to secure energy independence through its course of action on fracking. We in the Welsh Labour Government have been absolutely committed to securing as great a degree of energy independence from renewable sources. We remain absolutely committed to that cause and we will explore every avenue to deliver greater, greener growth in terms of energy production. We're determined to ensure that fairer opportunities for economic development are passed right across the regions. I'm acutely aware of the frustrations that exist in Swansea bay and elsewhere in Wales in terms of regional inequality. That is the whole point of the new economic action plan—to iron out inequalities across Wales and to make sure that those regions that currently feel marginalised feel emboldened and empowered to be as strong as they can possibly be, based on their existing capabilities. And, within the Swansea bay region, we know that one of the finest strengths that they possess right now concerns marine energy and we will support that region all the way.

15:00

Thank you for your statement, Cabinet Secretary. I, like all of us in this Chamber, am deeply, deeply disappointed by the UK Government's announcement yesterday. Yet again, the UK Government has shown utter contempt for my region by reneging as well on the promise to deliver electrification to Swansea and now have scuppered Swansea's chance to lead the world in innovative renewable energy.

I shouldn't be surprised by yesterday's announcement, because the press seems to have known for months that the tidal lagoon was going to be rejected. I had hoped that furious negotiations were going on behind the scenes. Cabinet Secretary, in your discussions with the UK Government and Tidal Lagoon Power, was it at all clear that the two sides were even talking to each other, or do you believe, as I do, that the UK Government were merely seeking time to build a case to support their decision to reject the proposals?

Cabinet Secretary, the UK Government shouldn't be surprised by the depth of feeling from this Chamber—and not only in this Chamber, from my constituents as well, and I've just been reading e-mails regarding how they feel. All sides in this Chamber have made it abundantly clear that we have supported this project—even the Government’s own advisers supported this project, and it’s shameful that Theresa May has ignored all of that support.

The UK Government cite costs as the sole reason for rejecting this bid, claiming offshore wind is much more cost effective. Cabinet Secretary, in your interactions with the UK Government Ministers, has the significant investment in offshore wind been discussed? Offshore wind is only cheaper now because of heavy subsidies in its earlier development.

And, finally, Cabinet Secretary, are you aware of whether or not the UK Government considered energy security when reaching their decision on the tidal lagoon? The UK is currently at the mercy of geopolitically unstable nations for much of their energy needs, and the tidal lagoon would help the UK become more self-sufficient. So, I thank you for your support on this, Cabinet Secretary. You have my party's support in fighting this decision by the UK Government. Diolch yn fawr.

Can I thank Caroline Jones for the contribution she's made today, her comments and her questions? First of all, with regard to the speculation that has appeared over many weeks now in the press, it would appear to me—perhaps I'm just becoming more cynical, but it would appear to me that a decision perhaps was reached some time ago and that an opportunity was being looked for in order to conceal this decision behind it. And yesterday, with the vote on Heathrow, does appear to have been a great opportunity for the UK Government to have buried the Swansea bay tidal lagoon beneath a third runway at Heathrow.

It's also ironic and tragic that, yesterday, Welsh Government was able to announce a hugely ambitious world-first proposal for test facilities for the rail industry here in Wales and, at that same time, the UK Government was turning down an opportunity to develop a new world-class industry for Wales—incredibly ironic that these two decisions came on the same day, but tragic also.

As I've said, we will not give up on the sector in Wales and the Member is absolutely right that offshore wind power generation, in its inception, was very expensive, and costs have been reduced over time as it's been mainstreamed. In terms of energy security and whether this was a factor in their decision, as far as I'm aware, it was not. However, as I say, the detailed appraisal was received just today. I'm going through it currently—I've asked officials to analyse it as well.

I think what's important, as we move forward, is that we continue to engage with the sector, even if the UK Government turns its back on the sector. It would appear, based on what Tidal Lagoon Power have said, that discussions broke down some time ago between them and the UK Government, in which case I must come to the conclusion—it's the same conclusion that Charles Hendry has reached—that, actually, the UK Government could have said that they weren't going to support it many, many months ago and saved the company and saved an entire region the heartache of the decision being delayed and delayed, and hopes being raised in the intervening time.

15:05

The proposal straddles the boundary of my constituency and that of my friend and colleague David Rees. I think that Dai Lloyd did mention the anger and the betrayal, and there's been a tremendous feeling amongst people of anger and betrayal. I went out last night and people wanted to come and tell me how angry and betrayed they were. But that wasn't what hurt—the bit that hurt was those who said, 'Well, we were never going to get it. We never get anything in Swansea. We're always left behind', and this feeling, really, of a lack of hope. I think that that is the bit that I found most hurtful—that people saw the lack of hope, that we were on the periphery of the Westminster Government's radar and we were very much left behind.

I think that you've got to remember that prototypes cost more—they always cost more. Can I take people back to wind and solar, when they first came out and they were incredibly expensive? Do you remember those people were saying, 'Gas is cheaper. Why are you doing this? We could be using gas. There's plenty of gas around. We can be using gas turbines; it would save lots of money'? Do you remember that?

Also, can I mention nuclear? Calder Hall, created in 1956—they've had 62 years to bring down the cost of nuclear and still they have failed, with what we're paying now for the electricity that's going to be generated in Hinkley Point. That is an example of something that hasn't come down in price to the level we expected, but we would never have built Calder Hall if it had been done on a price comparison against coal—coal was a lot cheaper. In fact, every power station in Britain would be coal, because coal was cheaper than any other method at the time the new methods came in.

Can I just use two historical examples? Because I know that Suzy Davies did that in her IWA article, which I pay credit to, but also two that she didn't use: Stephenson's Rocket—I can just imagine now these people saying, 'Rail? I can get faster from Stockton to Darlington on horseback than I can by rail. What a stupid idea to bring in rail. It's much cheaper and quicker on horseback'. And the other one is, of course—let's talk about steamboats, because steamboats were small, weren't very successful. Sail was so much better. But they developed the technology and it created steamships, which made the world a much smaller place in terms of the time it took to move around.

I have no doubt that Swansea will have a tidal lagoon. My concern, and I ask the Cabinet Secretary if he shares it, is that we'll be the ninth or tenth in the world to have it, we won't have the design capacity, we won't have developed all the skills in the area; we'll be buying in the technology like we do now for solar and like we do now for wind. Wind was mainly developed in Denmark and Germany, and that's where the design is, that's where things are made. Those people who live in Swansea will know that we've had a lot of transport activity taking devices, because they've come in by boat and they've been taken because they aren't ours, built by us. Does the Cabinet Secretary agree with me again that we've lost the chance to be the first in the world to start creating tidal energy? We will have it, but we'll be buying in the technology from abroad, rather than developing it.

Yes, I agree entirely. I talked about the advances that the French have made, and I am in no doubt that some of the competitors that we faced in this field are cheering the decision by UK Government. I think Mike Hedges makes a very, very important point that, if you're not open to new ideas and new technology, you're not going to make progress; you're not going to maintain your competitiveness. And, recently, the editor-in-chief of The Economist globally said that the greatest threat the global economy faces right now is protectionism, and it was part of the presentation that he gave on the new divide—the new political divide, the new technological and economic divide—and it can largely be characterised as the open versus the closed: those who are open to new ideas versus those who are closed to new ideas, those who are open to technology versus those who are suspicious and closed to the emergence of new technology, those who are open to outsiders, open to challenge, versus those who are closed off from challenge and closed to the potential that outsiders bring as well. And I think this demonstrates most clearly that the UK Government under the current leadership of Theresa May is most certainly closed, and it's probably time that they were closed right down. 

I do fear that there is a sentiment in Swansea—a very, very deep sentiment—of having been left behind. For that reason, the city deal becomes even more important and must deliver for the people of Swansea bay and must draw down the resources not just from Welsh Government, but also from UK Government. I'm able to say to the Member that I'd already agreed to commence a piece of work with the leader of Swansea council concerning a number of investment projects and regeneration prospects within Swansea. Of course, we will also be taking forward the work on the metro vision but that, in all likelihood, given its reliance on rail, will also require a commitment from the current or future, potentially future Governments for considerable investment in infrastructure, and we know that there is a very poor record of UK Government spend in terms of rail infrastructure in Wales, perhaps highlighted best by the cancellation of the electrification of the main line. 

In the future, we must see a fair share not just come to Wales, but a fair share of resource that's spent in Wales spent fairly in Swansea bay and other parts of Wales.  

15:10

I agree entirely with Mike Hedges's comments, but I would like to extend the debate slightly. I think this decision by the Westminster Government actually besmirches us all as politicians. When you have a policy statement made in a manifesto that you will support a tidal lagoon in Swansea just three years ago, and you break that manifesto promise, when you're in a position to reject £1.3 billion for an important development in Swansea, but are willing to give £1 billion to 12 MPs in Northern Ireland just to keep your Government in power, then this is what gives politics a bad name.

And I am not surprised that people are saying, ‘Well, we get nothing from this system’, and there is a risk for us all in the way in which the Westminster Government has made this decision, the way that they have extended the process, and the way that they commissioned an independent report and then rejected that report’s findings because they didn’t like those findings.

And it leaves us in something of a quandary, I think. I know that the Cabinet Secretary wants to work positively in Wales, but what message has this sent to all of those companies involved with marine energy? You’ve mentioned some of them, and I will be visiting Anglesey myself at the end of the week—I will see Morlais and SEACAMS. There is over £100 million of European funding and Welsh Government funding that has been invested in this sector, and now they see that the Government doesn’t want to support that sector. Because it’s not just the proposals that are important—you must bring those proposals to fruition, and that means they need grid connections, they need a contract for difference. In order to turn those proposals into real energy-producing methods, the Westminster Government has to make the same decision in the context of these proposals as they have refused to do in the context of the tidal lagoon.

So, although I welcome the fact that you are going to hold a summit in Swansea, a marine energy summit was held in Swansea just a year ago, where the whole sector was behind the tidal lagoon, and wanted to see it as something that was a signal of belief in this sector. So, how are you going to restore confidence in this sector now that the Westminster Government has told every investor, large and small, ‘Go away, we’re not interested in this sector anymore; we’re only interested in nuclear and the offshore wind sectors’? That is a very difficult message.

Can I also ask you what you as a Government will now do with the £200 million that you put on the table for this proposal? Is that £200 million now available for delivering low-carbon projects of this kind, be it marine or on land? I have no information about this, but because, I’m sure, the company behind this plan will have to wind up in some way or another, and we want to avoid what Mike Hedges referred to, namely that we accept inward investment rather than owning the technology ourselves, is it possible for the Welsh Government to consider how they could go into partnership with either the current company, Tidal Lagoon Power, or other prospective companies, so that we can retain this technology in Wales and retain leadership here in Wales? Is that £200 million available for that purpose? Because it appears to me that although you rejected Leanne Wood’s ideas on an energy company for Wales, you do have resources here to make a difference and to show investors that Wales is open for marine energy businesses.

If I can just conclude with a more political point, except it wasn't spoken by me, it was spoken by the chief executive of Tidal Lagoon Power, Mark Shorrock. When this decision was made yesterday, he said it was a

'vote of no interest in Wales, no confidence in British manufacturing and no care for the planet'.

We will have the opportunity tomorrow to show that we have no confidence in this decision as well. 

15:15

Can I thank Simon Thomas for his contribution? I think given the points that he made right at the outset of his contribution, it's quite clear that the UK Government has become a master of both pork barrel politics and broken dreams, having invested so much in so few votes within the House of Commons but letting down so many people in Wales by taking the decision that it has. I think what it says to industry is not helpful one bit and it also contrasts with what we're saying to the sector, which is that we will support you in every and any way that we possibly can help you. I think we've demonstrated that with the investment that has been made and that I've already spoken about.

Clearly, it's not for Welsh Government to plug UK Government funding gaps. The Welsh Government has neither the power nor the resources to compensate the UK Government, and Welsh Government isn't in a position to take the project forward alone. But, as I highlighted just before, there is the £200 million that we'd put on offer for this project to get it over the line. I think we're going to be pretty open to investment opportunities provided that that funding can be used in a way that enables it to be drawn down through the particular funding stream that it sits in. I think some of the discussions that need to take place will happen at that summit that I've already announced, however I've asked officials—and I know this has happened right across Government today—we've all asked officials to engage with key partners in the sector to ascertain as soon as possible what the likely implications of the decision are, and means and ways of us supporting those businesses within the sector to continue to grow.

I'm in no doubt that businesses, business leaders and loyal, decent, skilled workers within this sector are feeling pretty bruised today. That's why we've asked for immediate engagement between officials and those people to take place. But, in the months to come, we will look at every opportunity to take what is a strong sector in Wales to a position of greatness. That may well be without the assistance of Welsh Government, it may well be without Tidal Lagoon Power taking forward this particular project, but we are absolutely determined to grow the industry here in Wales, and in particular in Swansea bay.   

It is very difficult to understand, really, how we got from that meeting here with Charles Hendry some time ago now, where there was such positive cross-party support for the tidal lagoon in Swansea bay and tidal lagoons further afield in Wales. In fact, I can remember Charles Hendry saying how struck he was by the strength and depth of that cross-party support, and yet here we are today with this decision after much delay. It really does, I think, leave a bitter taste in all of our mouths, considering that process and the ultimate decision. 

I know that in Newport, and I know in Cardiff, there's a great deal of interest and support for the tidal lagoons that are proposed for either side of the mouth of the River Usk. From my constituency office, I can see the amazing rise and fall of the River Usk, which is such a natural phenomenon that strikes so many people who visit Newport, and, obviously, that applies to the estuary as well. And I know that very many people are simply amazed, really, that at a time when we're looking for renewable energy, and we're all so clear about the positives of renewable energy, that wonderful natural phenomenon remains unharnessed and, as yet, there are no projects in the immediate offing that offer the opportunity to harness that incredible energy on a daily basis.

I know that there will be a great deal of anger at this decision further afield than Swansea and Swansea bay, and that will extend to Newport as well. There are people who want to look at the possibilities of going ahead with those lagoons around the mouth of the River Usk regardless of what happens with Swansea bay, because some of the economies of scale are different, but obviously Swansea bay was the pathfinder, as the Cabinet Secretary has mentioned, and it would have looked at some of the environmental effects and environmental issues. It's quite difficult, actually, to perhaps come to a considered judgement on some of those aspects without the actual experience of having that lagoon in Swansea bay and those aspects monitored and detailed. But I just wonder, really, Cabinet Secretary, what you can say about the wider picture in Wales, including those proposals for either side of the mouth of the River Usk in the light of this decision that has now been taken, because, as you rightly said, it was a wider, bigger picture. It really should have been considered, the Swansea bay proposal, in terms of its pathfinder nature and the other lagoons that could have followed off the Welsh coast and much further afield. Is it your understanding that there was adequate consideration of that wider picture? If not, is there any mileage in returning to that bigger picture, and even at this late stage looking at the overall vision and how that should be assessed?

And just finally, Llywydd, a further aspect: people pointed to the tourism opportunities and benefits that would have followed from the establishment of a tidal lagoon, but another aspect, of course, was community benefit, and there was a great deal of interest, excitement and, indeed, forward planning in Newport as to what could have been done with the income that would have been generated in community benefit from those local lagoons were they to proceed, and I think that's another very unfortunate aspect of this decision that has been handed down from on high.

15:20

Can I thank John Griffiths for his contribution? I'm conscious of time, but I would like to put on record my thanks to Charles Hendry for the work that he did. He produced a report that was compelling in terms of the evidence provided to support taking forward this project as a pathfinder, and I'm sure that Members across this Chamber would wish to thank him for the commitment that he showed throughout the process of compiling that report and seeking evidence.

John Griffiths is absolutely right: the pathfinder project had cross-party support in this Chamber and, indeed, it had support from across Wales, because it was a pathfinder project that could have paved the way for lagoons from the north to the south. Now, we need to understand what the alternative proposals are and whether they could form an alternative pathfinder for lagoons to be built here in Wales and, indeed, whether any of the proposals concern Swansea bay at this very moment in time. We need to understand what the details are and we need to have information shared with us given our determination as a Welsh Government to proceed with tidal power. But I have to wonder whether doing this with UK Government leadership is a realistic prospect, whether delivery through UK Government leadership can be achieved given yesterday's decision and strong, negative message that it sends out to the industry. I can only conclude that, perhaps, lagoons will come only when Theresa May goes. I have to say as well that the benefits of tidal power and, particularly of this pathfinder project, the economic benefits, I think, are well known. The social benefits, though, would have been enormous too. The benefits in terms of the confidence and the identity of Swansea and Swansea Bay would have been enormous; to have become a global leader in a new green industry. I'm not sure that this is really fully understood at Westminster in the current UK Government.

15:25
5. Statement by the Cabinet Secretary for Economy and Transport: The Recent Airbus Group Announcement

The next item, therefore, is a statement by the same Cabinet Secretary for Economy and Transport on the recent Airbus Group announcement, and I call on the Cabinet Secretary to make that statement on Airbus—Ken Skates.

Diolch, Llywydd. I am grateful for the opportunity to make this statement today. Last week, Airbus Group published its own risk assessment outlining the urgent threats to its business arising from the UK exiting the European Union without a withdrawal agreement. The risk assessment is deeply concerning; it identifies that should the UK leave the EU next year without a deal, and without any transition period, it would lead to severe disruption and interruption of UK production and would force Airbus to reconsider its investments in the UK and its long-term footprint in the country. Even with a transition period, a hard Brexit that takes the UK out of the single market and customs union would make the company reassess its future plans.

As the First Minister said last week, this warning is of very serious concern to the Welsh economy. Companies such as Airbus are now actively making plans based on the worst-case scenario. What businesses have been saying in private for some time is now being said publicly, and it is clear that they are losing faith in the UK Government’s ability to negotiate a sensible outcome that works for our economy and that protects jobs. My message to the UK Government is a very simple and very clear one: the situation is now critical and it is time for them to recognise the fundamental threat their approach to Brexit poses for Wales, for our economy and for our communities. It is time to rule out a 'no deal' scenario and relaunch the negotiations on a basis that puts jobs and the economy first.

We share the significant concerns expressed by the chief operating officer of Airbus commercial aircraft, Tom Williams, last week. Airbus Group is the largest employer in Wales in the aerospace and defence sector with around 6,500 individuals employed at its site in Broughton and a further 500 or so in Newport. Across the UK, over 100,000 jobs rely on the Airbus presence on these shores. Since the referendum in 2016, the Welsh Government has been very clear that in leaving the European Union, the UK cannot take the huge risk of cutting our economy adrift from the single market and customs union arrangements. We have made the case, clearly and consistently, that any deal to leave the EU must see us stay in the single market and negotiate a new customs union with the EU.

This warning by Airbus, alongside others given by manufacturers such as BMW, make real the threat we face. Indeed, the concerns expressed by Airbus are certainly not confined to the aerospace industry. Just today, the Society of Motor Manufacturers and Traders, which is the voice of the automotive industry in the UK, has given the UK Government the starkest warning yet from a business sector, saying that it needs, as a minimum, to remain in the customs union and a deal that delivers single-market benefits. Their chief executive, Michael Hawes, has sent the simple but clear warning to the UK Government:

'There is no Brexit dividend for our industry'.

The stakes could not be higher. It is clear that the time for warm words and for meaningless platitudes is over. Clarity is now urgently required from the UK Government. The detail the UK Government needs to come forward with needs to address the three key issues raised in the Airbus risk assessment: the movement of parts within an integrated supply chain, the movement of people, and future regulatory environment. The possible disruption to the flow of materials caused by changes to the customs union and single market could have a negative impact running into many billions of pounds, leading to irrecoverable delays and many of our businesses in Wales losing their competitive edge. Restriction of the movement of people would cause major disruption to Airbus operations, with 1,300 Airbus-employed UK nationals working in EU members states—the majority being in France and Germany—and 600 Airbus-employed EU nationals working at Airbus operations in the UK. The third key issue relates to regulations and the European Aviation Safety Agency in particular. Without EASA approval, UK aerospace suppliers will no longer be part of the aircraft manufacturing supply chain. And supply chains cannot simply be switched on and off again like a light switch. They take years to build, and businesses have a right to expect more certainty from the UK Government two years on from the referendum.

The First Minister has pressed again for the UK Government’s White Paper to signal a change of direction to commit to staying inside the single market and a customs union with the EU. We all recognise the importance of the aerospace and defence sector to the Welsh economy. The sector in Wales adds £5 billion to our gross value added and employs over 20,000 people. We will continue to support Airbus at Broughton and Newport to mitigate the impact of the approach being taken by the UK Government. We've already shown our support for the sector through our financing of the Advanced Manufacturing Research Institute at Deeside, worth £20 million, in order to secure the prototypes of Airbus’s wing of tomorrow.

We urge the UK Government to respond and to provide clarity as soon as possible, and before this situation escalates even further. Prolonged uncertainty would do irrevocable damage to our manufacturing base in Wales and its extensive supply chain—employment that in Broughton, and across Wales, is the lifeblood of many communities. This is the most serious economic threat facing Wales in a generation. Airbus is a jewel in the crown of the Welsh economy, but it is also strategically vital to the United Kingdom. It's time for the Brexit parlour games to end. It's time for the UK Government to give business and our economy the certainty that it needs.

The Deputy Presiding Officer (Ann Jones) took the Chair.

15:30

I think it is clearly concerning when any major employer issues a warning that they may withdraw from Wales. It's also important that we all aim to ensure that this, of course, doesn't occur. The Cabinet Secretary has made various comments in his statement, and I would say that I think the UK Government on countless occasions has restated its commitment to getting the best possible deal for the UK and the Welsh economy. And I firmly believe that we will remain plugged into the wider European economy, but also be able to seize on those opportunities for trade with the rest of the world.

In order to provide reassurance, Cabinet Secretary, to Airbus workers, and the wider supply chain, would you, Cabinet Secretary, be able to provide an update on the outcome from the First Minister's talks with UK Ministers in a recent meeting of the British-Irish Council? I think that would be helpful. Clarity over Brexit is clearly important for businesses in planning for the future—I for one completely understand that—but there are clearly devolved levers here at the Welsh Government's disposal to encourage inward investment and retain major employers here in Wales. So, can I turn to this? What specific measures are you implementing to create the right economic conditions to ensure that companies such as Airbus remain in Wales? For example, regardless of Brexit, I do have concerns that Wales has failed to capture the opportunities of world growth over the past 20 years, and has failed to diversify into the export market. What intention do you have, Cabinet Secretary, to ensure that Wales seizes on those opportunities to access non-EU markets, and what are you doing to raise the commercial presence of both advanced and developing economies in particular? 

I've looked again at the Welsh Government's 'Prosperity for All' action plan and I can't see any mention of the Welsh Government's plans to attract and retain foreign direct investment into Wales. So, I would be grateful if you could outline the Welsh Government's approach to this. You've also previously mentioned, Cabinet Secretary, that the Welsh Government will focus on the high-value manufacturing sector as one of its new priority sectors. So, can I ask: why does the Welsh Government's budget fail to allocate additional funding to this sector, and doesn't this undermine, of course, the Welsh Government's commitment to ensuring that the Welsh economy develops an advanced manufacturing capacity to deter companies like Airbus from investing in Wales? My point here, Deputy Presiding Officer, is that, beyond Brexit, which I acknowledge we need to get absolutely right, of course, there are devolved levers here at the Welsh Government's disposal, which can and should be used to ensure that companies such as Airbus are encouraged to remain and indeed expand their operations here in Wales.

15:35

Can I thank Russell George for his contribution and his questions? I'll say at the outset that I know that there are also good Conservatives in Westminster as well, who, like the Member, share concerns for the future of Airbus. I think, based on the comments that both Stephen Crabb and Guto Bebb have made recently, we do have Conservative parliamentarians who are there to champion Airbus. And although it wasn't featured on Radio 4 when I gave the interview, I did press the case for Stephen Crabb to be brought back into Government and Boris Johnson to be evacuated from the building. 

In order to get the best possible deal for Britain, what Theresa May first of all has to do is drop her red lines and free herself from the handcuffs that people like Boris Johnson and Jacob Rees-Mogg have applied to her. The First Minister, I believe, has issued a statement following discussions that were had during the British-Irish Council, but I will happily ensure that that statement is shared with Members again. The discussions that took place, I believe, in Guernsey covered the announcement by Airbus and the response from the First Minister, and also the joint statement from the First Ministers of Wales and Scotland.

Parking Brexit for one moment, the Member is absolutely right that the Welsh Government can and must have a role in ensuring that the right conditions are created for sustainable economic growth, not just within the aerospace sector, but in other sectors right across the economy as well. For our part, I was determined some time ago—and it was for this reason we built it into the Welsh Labour manifesto some years ago—to ensure that we captured the wing of the tomorrow. This is the future of Airbus composite manufacturing processes. If we don't get the wing of tomorrow, it's going to be far more difficult to ensure that the Broughton site has a long-term, viable future.

In order to capture the prototype of wing of the future, we decided to invest in the Advanced Manufacturing Research Institute. This is based on the well-proven model of the Advanced Manufacturing Research Centre just near Sheffield. It was a proposal that was also promoted by Plaid Cymru Members, including Steffan Lewis. Just a few months ago, I cut the ground on the AMRI. This is a crucial facility that will enable the prototypes of the wing of tomorrow to be developed in Wales. Okay, it may only have been £20 million, which, compared to investments that Airbus makes very regularly, may be a small sum, however, our contribution of £20 million will lead to an increase in GVA for the area of something in the region of £4 billion over the next 20 years. And if we get the right deal from Brexit negotiations, it will also secure employment for 6,500 people for many years to come.

Now, in addition to developing the AMRI, what we are also doing is making sure that the supply chain remains strong. It's quite a striking fact that the aerospace and defence sector in Wales employs 20,000 people across over 150 companies. We are incredibly strong in this sector, and that's part of the reason why we are so vulnerable and exposed in terms of Brexit. Six of the top 10 aerospace and defence companies worldwide have located significant operations in Wales. Airbus have two sites, General Dynamics have two sites, GE Aviation, Raytheon, BAE Systems—[Interruption.] No, the Member, from a sedentary position, says 'in spite of Brexit'. No, these are companies that have been based here for a good length of time and who share the concerns that Airbus have expressed recently, but which Airbus has been telling Members such as himself. If he would only get up to Broughton to talk with managers there. If he would only get over to Newport to talk with managers there. If he would only get over to General Dynamics, to GE Aviation, to Raytheon, to BAE Systems, to Safran who’ve acquired Zodiac. If he’d only get to companies like Qioptiq, like British Airways, the Defence Electronics and Components Agency, Babcock, Triumph. All of these companies have been consistent in the message that they have given to us in Welsh Government and to UK Government—that a 'no deal' scenario will hammer the defence and aerospace sector. In order to keep jobs in Wales, in Britain, we need a decent deal. To get a decent deal, Theresa May has to drop her red lines.

In terms of the wider economic conditions that can be created to support growth, the economic action plan clearly articulates a need to invest more in export and trade. As we exit the EU, we need to make sure that we rebalance the export profile of the Welsh economy. But we also need to make sure that we are exporting in the aggregate far more, that we are trading far more, and that's why we are opening more offices and we're having a greater degree of a presence in key territories around the world. We've opened offices recently in places like Montreal, and we'll be opening in other territories that are crucial to the future of the Welsh economy.

The economic action plan as well is clear in creating a lens through which we will support businesses that is designed to reduce the productivity gap between the Welsh economy and the economy of the rest of Europe. So, we will only invest in projects that can demonstrate that they are contributing to decarbonisation or improving trade and exporting figures, or ensuring that we embrace the fourth industrial revolution, that we are at the forefront of new technological change, or that ensure that we are creating high-quality employment. For that reason, because we are developing a consolidated fund, we expect to be able to allocate more resource in the future to those businesses that create jobs that are sustainable, that require higher skills, that are more productive, that contribute more to the Welsh economy and that offer opportunities for fair work and progression, to ensure that anybody that gets into the workplace can have an escalator of opportunity to get as high as they can possibly get.

15:40

We all remember, I'm sure, back in 1980, when Deeside saw the worst mass redundancy of modern times when Shotton steelworks axed more than 6,500 workers in a single day. Of course, it took the area a generation to overcome that. In fact, I'm sure the effects are still being felt. But it has re-established itself—the area—as an industrial powerhouse in the north-east of Wales, but, of course, last week's intervention has cast another shadow that is causing huge concern in terms of the jobs, in terms of the impact on the wider economy and in terms of the wider supply chain, certainly. And were Airbus to abandon its operations in Broughton, then I fear that the effects wouldn't be as bad, they would probably be worse than those experienced back in 1980.

So, this is a real Brexit wake-up call for people in all parts of the UK. This is the reality check that many of us have been warning about for a long, long time, and it leaves highly skilled and well-paid workers facing huge uncertainty. It won't happen overnight. Whatever the circumstances, it'll take years, if this is to happen, for investment to disappear, but it certainly casts a shadow over those hard-working, dedicated and loyal workers at Airbus, the youngsters who are currently there, studying their apprenticeships, and the thousands of workers, as I said earlier, in the wider supply chain who fear the impact Brexit will have on their jobs. 

I'd just like to refer to a press article that I saw in The Leader where Shaun Hingston, a 15-year-old youth council representative from Saltney—you've seen it; I'm glad. He raises some real, pertinent points about how Airbus leaving the UK would be devastating for young people in Wales, and he really reflects the angst felt by the younger generation, who, of course, will be the generation that will live longest with the legacy or the consequences of Brexit, and he says that

'The moving or closure of Airbus in the UK would result in huge job losses, that would start a negative multiplier effect, businesses in the local area would relocate or close.'

By moving, of course, that would mean that people don't have the opportunity to go on work experience at Airbus or to complete apprentice programmes—the programmes that hundreds of young people across the area are doing and want to do, and are aspiring to do because they see Airbus as one of their dream jobs. 

Now, Shaun clearly understands the effects of the chaotic Brexit policies currently being pursued by this UK Government, even more so, I venture to say, than some UK Government Ministers. And that's the underlying issue here, I think, isn't it, that the current Brexit policy being pursued by the UK Government to leave the EU single market and the customs union—? I recognise, as you referred to, I think, earlier, that the Welsh Government's position on Brexit is to maintain membership of both. It was certainly detailed in the White Paper, 'Securing Wales's Future', that was co-authored with my party, but I have to say that the actions by the UK Labour Party have contradicted that. I'm just wondering whether the Cabinet Secretary shares some of my frustration at how ineffective Labour MPs have been in stopping this prospect of a hard Brexit.

We've seen the banners at Labour Live, we heard the chants and the singing at the rally at the weekend. Does he not feel a smidgen of regret that Labour opposition at Westminster is failing to change this trajectory that is leading us down this horrible path? And does he not wish that things were being done differently by his own party, whilst not letting the Conservatives off the hook? Because if that trajectory isn't successfully changed, then I fear, as many other people have said before me, that this Airbus example is just the tip of the iceberg. 

Usually, when I respond to a statement, my first questions is, 'What's the Government going to do about this?' But, of course, the scale of this prospect is so huge, it's so unprecedented in the devolved era, that it's quite a difficult question to ask, let alone answer. But I would like to know, and following on from the questions asked previously, what scenario planning the Government has done. Have you plotted out what the impact of a hard Brexit would be and what action you would consider to try, as much as you can, to mitigate those impacts? 

You mentioned your economic action plan, 'Prosperity for All', are you revisiting that in any way in the light of this? Because the thrust of it, and it's one that many of us support, is that we need to grow more well-paid and highly skilled jobs here in Wales. But, of course, this will require a rearguard action, because we're moving in the wrong direction. It will be about consolidation, as best we can, let alone growth in that particular respect. 

Airbus, of course, has its risk assessment, as we've all read. Where is the Government's risk assessment? Have you done some of that work? Maybe you could let us know. 

And, of course, the impact that this will have on further education and higher education is significant. Both the Cabinet Secretary and myself were at a meeting of the cross-party group from north Wales, last week, where we were left in no uncertain terms about the impact on important institutions in north-east Wales, such as Coleg Cambria. It would be significant, and I'm wondering what discussions the Cabinet Secretary has had with his Cabinet colleagues about maybe how some of those impacts could be mitigated and managed if they were to be realised. 

15:45

I am, I am, yes.

The NHS was supposed to enjoy a £350 million a week Brexit dividend. Of course, the Centre for European Reform has told us now that the true cost is already £440 million a week, and that's a Brexit deficit, and this is before Airbus, BMW and the others potentially up sticks. Now, I didn't see that on the side of the Brexit bus that was driven around this country. But does the Cabinet Secretary, therefore, sense that with the reality of a hard Brexit now dawning on people, and what the real impact of that hard Brexit would be on people's jobs and people's wages, that there actually is now a shift in public opinion, and that if the referendum was held today, the result actually would be quite different?  

Can I thank the Member for his questions and his contribution as a whole? It's a tragic fact that Shotton still holds the European record for the most lost jobs in a single day in modern industrial history across Europe. I was in receipt recently of a 1963 black-and-white photo of that year's intake of apprentices. It featured my dad, that's why it was sent to me, and upon scrutinising this photo, it became quite clear that most of the people in that photo were not in work at that site within 20 years of the photo being taken. I do wonder how many people at Airbus today will have work at that site in two decades in the event of a 'no deal' scenario.

I think it's also tragic that Shaun, a 15-year-old, can articulate far better and with greater maturity the threats and challenge we face than Jeremy Hunt is able to do, in terms of what could happen to Airbus and the aerospace industry. Airbus are not fearmongering. Airbus are stating the facts. Airbus are doing what a responsible business should do, which is to share candidly, frankly, openly and honestly with a Government the likely outcome of a bad deal being reached or, even worse, a 'no deal' scenario, and Airbus are not alone in expressing these concerns.

Today we heard that companies representing something in the region of 850,000 people across the UK share those very real concerns. Although Airbus is clearly the biggest private sector employer in north-east Wales, and certainly the biggest employer in Wales in terms of aerospace and defence, within that small part of Wales there is a strong cluster of businesses in the aerospace and defence sector. There's Airbus of course; there's Magellan; there's Qioptiq; DECA; Raytheon—businesses that employ people who are incredibly, incredibly well-skilled, and paid good salaries, people who are really loyal, people who contribute hugely to the local economy and to the Welsh economy as a whole.

I think, as we look to the future, we need to just reflect on the very clear and consistent approach that the Welsh Labour Government has taken since the referendum, and it's an approach that, on occasions, has been adopted—perhaps stolen—by UK Government, certainly in terms of the free and unfettered access to the single market. It is something that, at times, the UK Government tried to replicate, in terms of hyperbole. Sadly, the red lines that have been drawn out by the Prime Minister would not allow that to happen in reality, based on the discussions that have taken place, but I do think that Keir Starmer has done a fantastic job in holding the UK Government to account, and continues to do an outstanding job in holding UK Government Ministers to account.

In terms of what we're doing, we've looked at the impact of various scenarios on the Welsh economy, sector by sector, and what is quite clear is that if there is no deal, we cannot possibly mitigate against all of the consequences; this is just too grave a situation. The economy would shrink by more than 10 per cent in all likelihood, but the EAP, the economic action plan, has been designed as such to allow for automatic stabilisers to be deployed, rather than for the strategy to be shelved and a new strategy to be adopted for panic circumstances. The economic action plan is designed to be robust in any environment, but clearly, depending on the type of deal—and whether there is a deal at all—that emerges in the coming months, support for businesses will be focused on those areas that can weather the storm that is to come. But I don't think that we should believe that we can endure a 'no deal' scenario without the loss of significant jobs in the Welsh economy.

I regularly speak, not just with my colleagues in the department for education, but I also speak with leaders in higher and further education and, again, their concerns are very real, and very grave indeed.

I think it's fair to say that any deal that is reached should be agreed by the Parliaments of the UK. Should Parliaments decide that a deal is not sufficient and reject it, then in all likelihood, a general election could be called, and it may well be the case that another vote would have to take place. We shouldn't rule out the likelihood of people turning on the decision that was made, given the very real threat that so many people now face in terms of their livelihoods.

15:50

Well, it's hard to stifle a yawn at the latest example of fake news from project fear: the latest in an interminable line of such prognostications over the last three years. This is a political statement, more than anything else, in the propaganda war by the remainer establishment that—as the Cabinet Secretary just let the cat out of the bag in his final words—refuses to accept the referendum result of two years ago, where 17.5 million people voted to leave the EU.

He knows as well as I do that most aircraft components would be tariff-free under WTO rules, and even in the few cases where they would be subject to tariffs, those tariffs would be very, very low—certainly less than 5 per cent. But of course we all want a free trade deal with the EU—it makes common sense on both sides—but the obstacle to this deal isn't Theresa May; it's Michel Barnier and the EU Commission, because they put the political interests of the unelected European federalist establishment ahead of the economic well-being of the people of Europe. A free trade deal is clearly in the interests of EU citizens, because last year they sold to us £192 billion more in goods than we sold to them. So, if they had to face reciprocal tariffs to compensate for the ones that would be imposed upon us as a result of a Brexit 'no deal', then there would be massive convulsions in the EU as well.

To take up one point that the Cabinet Secretary mentioned in his remarks a moment ago about the Society of Motor Manufacturers and Traders joining Airbus as prophets of doom, 14 per cent of every single vehicle produced in Germany is exported to the United Kingdom. If they had to face a 10 per cent tax upon imports to this country as a result of doing the same to us exporting to the EU, that would be massively against the interests of German motor manufacturers.

So, I hope that these individuals are putting as much pressure upon Monsieur Barnier to agree a free trade deal as their counterparts in this country are doing to the United Kingdom Government to give in to every demand of the EU establishment. I'd like to know, for example, if Airbus bigwigs have written to Monsieur Barnier to complain about his point-blank refusal to discuss a sensible free trade deal, as agreed recently with Canada, and a few years ago with South Korea. Why shouldn't we have a deal of that kind? What is the political objection to that?

That a company like Airbus should act as an accomplice of a hostile foreign power seeking to undermine British interests, I think, is disgraceful, but I wonder whether this might be in some way connected to the $18 billion-worth of illegal state aid that they've received from European Governments in recent years, as recently adjudicated only a month ago by the World Trade Organization. As a result of that, the US trade representative has said this paves the way for the United States to impose retaliatory tariffs upon EU goods. This is not the way to go if we're to have sensible policy making in Europe, and I hope that the Welsh Government will agree with me in that respect.

But this statement today, of course, is really an illusory one because there is no prospect whatsoever of Airbus closing down its entire operations in this country. Where otherwise would the wings for the plane be made? It isn't so easy just to close down and transfer to other parts of Europe or the world. Let's look at the context in which this statement has been put out. How many huge companies have made similar prognostications of doom that have been overtaken by events and shown to be false in recent years? Goldman Sachs's Lloyd Blankfein made some of the most apocalyptic statements about the effects of Brexit, and yet, in April this year, opening a new £1 billion office complex in London, he said,

'I am wrong because I would have thought there would have been a worse outcome...The UK economy has surprised to the upside'.

Look at Siemens: again, Joe Kaeser, a massive remainer, said that Brexit would disrupt the economy, uncertainty about the relationship with the EU would have significant negative long-term effects, the UK would be a less attractive place to do business, it may be a factor when Siemens considers future investment here, and yet, in November 2017, whilst cutting 3,000 jobs in Germany and 1,000 across Europe, he announced an investment of £39 million to expand its largest UK plant in Lincoln, which employs 1,500 people.

Just to turn to Airbus finally, and its previous remarks in this respect, of course, Airbus say now they will pull investment, whatever that means—or may pull investment, whatever that means—if there is no deal. It's hedged around with so many 'ifs' and 'buts' and caveats it's impossible to draw any conclusions from it. But only two years ago, of course, Tom Enders was one of the chief players in project fear during the referendum campaign. In intervention after intervention he threatened to pull investment if the company voted to leave, and yet, of course, they haven't done that. Since then he has admitted that the company plans to retain its operations—and I quote—'long into the future'. He wrote to Greg Clark in February of this year to say that they regard the UK as a home country and a competitive place to invest. The 'home country' reference, of course, is important because that means that, within the economic strategy development within the company, Airbus's national divisions are regarded as a priority and influence the decisions on production and strategy.

So, what this is all about, actually, is trying to make sure that 'no deal' is well and truly off the table. Well, he hardly needs to do that because Theresa May's incompetence and the shambolic Government that have completely wrecked the whole Brexit opportunities that were presented two years ago have already achieved that objective: in effect, we will remain part of the EU, in form if not in name. So, Airbus has nothing to worry about.

16:00

This is—. It's embarrassing, frankly. I hope nobody within any industrial sector and no investors have listened to this contribution. But just one quick question that's been playing on my mind whilst listening to the Member: where is the Member that is supposed to be representing the 6,500 people in Broughton within your party right now? I don't see the UKIP Member for North Wales present behind you cheering what you were saying. I don't see her supporting what you were saying about the future of the Airbus plant.

It is frankly shameful that you choose to rubbish not just Airbus, but the likes of—[Interruption.] You were rubbishing Airbus. You were rubbishing their concerns. You were claiming that the likes of Oxford Economics are merely opposed to Brexit and therefore motivated by one factor rather than carrying out objective analysis on behalf of Airbus. I don't know whether you've read 'The impact of Airbus on the UK economy'. I don't know whether you've visited any of the Airbus sites. You have? Have you visited the Broughton site recently? Have you spoken with senior managers? Because you surely haven't listened to them. The words may have been spoken, but—[Interruption.] Look, my message will be really clear: get out of your trench, take out your ear plugs and listen to people who know about the aerospace sector a hell of a lot more than you do, because 6,500 jobs in Broughton are on the line, 400 to 500 in Newport are on the line. This company does not play petty party politics. This company is an international operation that is determined to make sure that it has future growth, and, if it can't do that in the UK, it will do it elsewhere.

This isn't just about tariffs. The Member seems to think that the only question in town in terms of Brexit is whether we have to apply tariffs. It's not about tariffs for Airbus. It's very clear, if you read 'The impact of Airbus on the UK economy', that actually it's about the movement of people and it's the regulatory environment that could cause severe disruption.

In terms of car imports, are you seriously suggesting that consumers would be happy to pay an extra 10 per cent for cars that are imported into Britain, in spite of the fact that a huge number of components of those cars are actually made in Britain, that jobs depend on those cars, that—?Okay, their final assembly may take place outside of Britain, but the jobs that supply the components are actually here within the UK, and therefore tariffs will have a major impact—[Interruption.] They would have a major impact, and they would lead—[Interruption.] Within the supply chain, they could lead to considerable loss of jobs.

Look, these are warnings. At what point are you going to actually accept that warnings need to be heeded, that you cannot ignore warnings that a 'no deal' scenario would be far more damaging— far more damaging—for the UK economy than a decent Brexit deal? Instead you just want to march full steam ahead to a cliff, without any due regard for the 6,500 people employed at Airbus in Broughton, the 400 to 500 that are employed in—[Interruption.] I notice that the Member is making comments from a sedentary position. If he has an intervention to make, I'd happily take it.

No. No, there are no interventions, and I would ask—[Interruption.] Just a minute, just a minute. I would ask all Members, just listen to the Cabinet Secretary. You've asked a set of questions and you should listen to what the answers are. Thank you.

Finally, in terms of the point that the Member made concerning false warnings that have taken place elsewhere in the industry, not just concerning Brexit, but other historical, other factors, one big point to bear in mind is that many politicians only woke up to the threats that Tata were making, and the concerns that Tata were expressing, when the businesses here in Wales and across the UK were put up for sale. Will it take the loss of tens if not hundreds of thousands of jobs in the UK for those who are championing a 'no deal' scenario to actually wake up and accept that they were wrong and that they put people out of work?

Can I start by thanking the Cabinet Secretary for bringing forward this hugely important statement today? From the outset, I think it is important to recognise that this isn't just a warning unique to Airbus—it's a warning right across the sectors and industries in Wales, and across Europe as well. Over the weekend we've had BMW and we've had many others, including Ferrovial today, and SMMT, which you've made reference to within your statement. All these warnings have one thing in common, and that one thing is uncertainty. Just last week, I was asking the finance Secretary about the issue of uncertainty, and it's been a common theme throughout my time on the external affairs committee. Whenever I've visited workplaces, such as Airbus, Tata Steel or Toyota, it's always been an issue that has been raised. Unfortunately, the clarity that we all have been seeking has not been forthcoming. So, could the Cabinet Secretary update Members on whether the UK Government has made any clear representations to him since Airbus's announcement? In addition to that, could he say whether he's had any correspondence with Unite the Union on this particular issue over the weekend? I spoke to representatives from the union and they shared many of my concerns, mainly because they know the incredible contribution that Airbus makes to Alyn and Deeside, to Wales, and to those right across the UK.

You've mentioned that Airbus is one of the largest employers in Wales, employing nearly 6,500 people, and that makes it the second largest private employer in Wales. So, would the Cabinet Secretary agree that it is not too late for the UK Government to show leadership and provide the clarity that the business needs, and not only the business, but, more importantly, the workforce, needs? Airbus makes a substantial direct contribution to the Welsh GDP, as Members know, and in 2015 the company made a direct value-added contribution to Wales's GDP of £563 million. Now, that's the equivalent to over 5 per cent of the economic output produced in Cardiff during the same year.

I welcome the Cabinet Secretary's continued support, and, most recently, the investment of the Advanced Manufacturing Research Institute within Airbus's plant in Broughton, and I believe we need more investment from the Welsh Government. But I just need to say: would the Cabinet Secretary agree with me that those figures that I've mentioned there and this announcement should be a wake-up call for the UK Government? And, if it isn't, I really don't know what will be.

Just briefly, I'd like to touch on a point made by my colleague from across the Chamber Llyr Gruffydd, when he raised the importance and recognition of what happened during the Shotton closure. You're absolutely right; it won't be as bad, it will absolutely be worse, and that's something we simply cannot let happen.

Finally, Deputy Presiding Officer, I would just like to pick up on a point, where—. I do not believe this a political stunt from Airbus, I believe this is a clear warning and a warning that should be taken very, very seriously. I'm not sure if you've seen it over the weekend, Cabinet Secretary, but, on the Daily Politics show, Nigel Farage attacked Airbus as a political project before sniggering at the talk of Welsh people, Welsh families, potentially losing their jobs. So, would you join me, Cabinet Secretary, in denouncing this complete irresponsibility and join me when I say to those Welsh workers and their families, and the workers in the future, that we are with you during this difficult time, and we will stand up with you?

16:05

Can I thank Jack Sargeant for his contribution and for his questions? He's absolutely right—what investors want when they look at any country is certainty in terms of the political and economic environment and they need the right skills to be available and the right infrastructure in place. In Wales, we're improving the skills base, we're developing the right infrastructure, but Brexit risks impacting on us terribly if there is no deal or if there is a deal that does not meet the needs of Welsh businesses.

Can I say to Members that I have spoken with Greg Clark? I spoke with the Secretary of State for Business, Energy and Industrial Strategy on Friday. I conveyed to him my very serious concerns and also expressed my support for Members within his own party, albeit most from the back benches, including Anna Soubry and Guto Bebb, in terms of their comments recently concerning the statement by Airbus. It is not too late for the UK Government to change course. They need to drop the red lines and they need to accept a pragmatic arrangement. Unfortunately, because the Prime Minister is being shackled by those on the far right of her party, such an outcome is increasingly unlikely.

Now, I can say that, in addition to speaking with the Secretary of State, I speak very regularly with Unite the Union and with Airbus itself, with managers. Indeed, I recently appointed Katherine Bennett, senior vice-president of Airbus UK, to the new ministerial advisory board, recognising her insight, knowledge and expertise not just in the aerospace sector and manufacturing as a whole, but also in terms of the UK economy and the opportunities that we have, if we get the right Brexit deal, to develop the supply chain for the aerospace original equipment manufacturers. 

Now, Jack Sargeant is absolutely right, we are investing very heavily in Broughton; we have in the past. It's as a consequence of the repayable aid and the skills support and other forms of support that have been offered to Airbus over many years by successive Labour Governments that we now have 6,500 people employed at that site. We have helped to grow that site and we'll die in a ditch defending those people who are employed there; we will not give up on them.

As far as Nigel Farage is concerned, and his sniggering on television at the prospect of people—thousands of people—losing their jobs, this is the behaviour of a silver-spoon-sucking toff who, I'm afraid, has no awareness of what a decent hard day's work is like in the aerospace sector. If all he can do is respond by sniggering, then I'm afraid he won't be welcome at Airbus or any other industrial site where jobs could be obliterated by a 'no deal' scenario.

16:10

Thank you. I've got two more speakers. I will extend this statement, but that's not to say that I expect the next two speakers to go on at length, so—. Jayne Bryant.

Diolch, Deputy Presiding Officer. I'd like to thank the Cabinet Secretary for bringing forward this important statement today and for his strong words. Last week's announcement has been very worrying. Airbus employs thousands of people in Wales, and, whilst the vast majority of workers are based in Broughton, Airbus employs 450 people in Newport. Airbus Newport is home to the digital transformation global cyber centre of excellence, and the team of cyber research engineers delivers world-leading research in the field of cyber defence. They predominantly work in highly classified environments, delivering high-grade cyber protection. 

Following the uncertainty of Brexit, I understand Airbus are already seeing an impact on their space business with the Galileo satellite navigation programme. I visited the Newport site in my constituency immediately after the Brexit vote to listen to their concerns. We must not lose these highly skilled good-quality jobs nor see a decline in investment. There will be a significant knock-on effect on the economy and the local area if we do. In addition to those who work in Newport, some of my constituents work at Airbus in Filton, which manufactures wings for military aircraft, as well as the design, engineering and support for Airbus commercial wings. 

Airbus has been consistent with its messaging to the UK Government since the referendum—a 'no deal' Brexit would severely disrupt production. Furthermore, Airbus are concerned that the current planned transition is too short for a company to implement the required changes within its extensive supply chain. So, does the Cabinet Secretary agree that the warning from Airbus and others must be a reality check for the UK Government, whose lack of clarity is putting future investment and jobs at risk?

Yes, I'd agree very much with Jayne Bryant. I know how much she's championed Airbus in Newport since being elected to this Assembly, and I also know how much this particular employer matters to the region—450 skilled people are employed at the site. The site is one of our proudest industries of tomorrow, offering immense opportunity for many people who are entering a specific field in which we have great capabilities, great existing capacity as well, and I do fear that if Brexit continues to go in the direction that we've seen in recent months then those jobs could be at risk, as Airbus have identified.

I'd also agree that the transition period is too short, insofar as what businesses have told Welsh Government. Generally, we've been told that two years, as an absolute minimum, are required for a safe transition period—often, three years are identified as the best period for which we should have a transition.

I know that Jayne Bryant, and many other Members in this Chamber, will feel incredibly frustrated that in spite of their warnings, in spite of the concerns that they have expressed in this Chamber and outside, those warnings still fall on deaf ears in Downing Street. It's for the Prime Minister to change direction, and the way that she can do that is to remove the red lines and negotiate sensibly with our European partners.

16:15

Diolch. Of course, I have visited Airbus very many times. I've known Katherine Bennett for many, many years and discussed this and other matters with her. I've even been to Toulouse and met senior management and employees there, some of whom were from Broughton and were working alongside their colleagues in Toulouse. 

After Friday's announcement by Airbus, I received an e-mail from an employee of Airbus who said that the news that no deal has been forthcoming to protect the thousands of highly skilled UK jobs at Airbus and their suppliers is rather worrying to say the least. Of course, the negotiations are ongoing, so I responded by saying that negotiations on the withdrawal agreement are ongoing, that the Prime Minister has made it clear that instead of a hard Brexit, she seeks a

'new, comprehensive, bold and ambitious free trade agreement', 

and that she said that the agreement we reach with the EU must protect people's jobs and security. 

However, given the mixed messages and the concern that employees got the message that negotiations are over, no deal is being done and they could be up the swanny accordingly, what action will you take to help balance their understanding—yes, understand the risks, but also understand the broader scenario? For example, we know that last December the European Council agreed that sufficient progress had been made in phase 1 of the Brexit negotiations with the EU to allow talks to move on to phase 2.

In March, EU and UK negotiators reached a political deal on the terms of a Brexit transition period in a new draft withdrawal agreement, following which the director general of the British Chambers of Commerce said that this was a milestone that many businesses across the UK had been waiting for, and that the agreement of a status quo transition period is great news for trading firms on both sides of the channel, as it means that they face little or no change in day-to-day business in the short term. 

Will you join me in emphasising to those employees in Broughton that the UK Government last month agreed that it would be telling the EU it wished to extend Britain's membership of the customs union beyond the initial transition period, until such time as arrangements for whatever customs agreement is reached can be implemented in accordance with that agreement, and to tell them that on 19 June, last week, a joint statement from negotiators of the European Union and the UK Government on progress of negotiations under article 50 said, 

'The statement details the articles of the draft Agreement where agreement has now been reached at negotiators' level, as well as those areas where further progress has been made'?

And there's a long list of areas already agreed. They concluded:

'note that the progress recorded in this statement will contribute to the finalisation of the Withdrawal Agreement'

and

'The negotiators commit to making progress as quickly as possible on all aspects necessary to reach such an agreement.'  

Is it not, therefore, vital that we balance this by ensuring the workforce know that these negotiations are ongoing, know that transition has been agreed, know the UK Government acknowledges, now unanimously, the need to extend transition into extension of the customs union, for the reasons that I describe, and know that only yesterday, Greg Clark, who you referred to, the UK business and industry Secretary, told a hearing in the UK Parliament that an agreement that ensures that avoidable threats of frictions and tariffs do not take place is absolutely within our grasp, and it is what all parliamentary parties should back during the months ahead?      

I'm pleased that Mark Isherwood has discussed this issue with the senior vice-president of Airbus UK and with many other managers in Broughton and in Toulouse. I imagine that pretty much all of those senior executives will have disagreed with the Member over the vote to leave the EU. And those UK Airbus employees that he'll have met in Toulouse, I'm afraid, if the course of direction is not changed, won't be able to get on a plane in an instant to go to any of the European Airbus facilities as they are now, and that is an essential factor that the company needs to consider in terms of where they invest. They need the surety that, when a fault develops, when maintenance is required, they can deploy skilled people, experts, technicians at the drop of a hat. I'm afraid, based on the negotiations that have taken place so far, they cannot be given that certainty. 

I don't think employees have had mixed messages from Airbus. Airbus couldn't have been clearer in what they said last Friday. I think it's the UK Government that are all over the place in terms of the messages and the negotiations that are taking place. Although the request is in for me to give Airbus workers messages of comfort over Brexit negotiations, I'm afraid I have no warm messages of comfort over the negotiations, because unless Theresa May is able to drop those red lines that she's clinging to so fervently, I'm afraid that it could be catastrophic for people who are employed in the aerospace sector in the UK. Yes, ongoing negotiations are taking place, but it's the red lines that are preventing the sort of deal that we believe is in the absolute vital interest of the aerospace—[Interruption.]

I'm afraid the Member's holding up a sheet of paper with lots of words on it. If only he would read about the impact—it's a longer document, granted—but if only he would read about the impact of Brexit on Airbus he might have reached a different conclusion when the referendum took place. Let's just remind those 6,500 employees at Airbus in Broughton that the Member for North Wales from the Conservative Party actively campaigned for Britain to leave the European Union.  

16:20
6. Statement by the Leader of the House: Enabling Gypsies, Roma and Travellers

Item 6 on the agenda is a statement by the leader of the house on 'Enabling Gypsies, Roma and Travellers'. I call on Julie James to make that statement—Julie.