Pwyllgor Newid Hinsawdd, yr Amgylchedd a Seilwaith
Climate Change, Environment, and Infrastructure Committee01/03/2023
Aelodau'r Pwyllgor a oedd yn bresennol
Committee Members in Attendance
|Delyth Jewell AS|
|Huw Irranca-Davies AS|
|Janet Finch-Saunders AS|
|Jenny Rathbone AS|
|Joyce Watson AS|
|Llyr Gruffydd AS||Cadeirydd y Pwyllgor|
Y rhai eraill a oedd yn bresennol
Others in Attendance
|John Howells||Llywodraeth Cymru|
|Jonathan Oates||Llywodraeth Cymru|
|Julie James AS||Y Gweinidog Newid Hinsawdd|
|Minister for Climate Change|
|Lee Waters AS||Y Dirprwy Weinidog Newid Hinsawdd|
|Deputy Minister for Climate Change|
|Lucy Corfield||Llywodraeth Cymru|
|Peter McDonald||Llywodraeth Cymru|
|Ruth Conway||Llywodraeth Cymru|
Swyddogion y Senedd a oedd yn bresennol
Senedd Officials in Attendance
|Andrea Storer||Dirprwy Glerc|
|Marc Wyn Jones||Clerc|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Cyfarfu’r pwyllgor yn y Senedd a thrwy gynhadledd fideo.
Dechreuodd y cyfarfod am 09:30.
The committee met in the Senedd and by video-conference.
The meeting began at 09:30.
Croeso ichi i gyd a Dydd Gŵyl Dewi hapus i bawb. Croeso i Bwyllgor Newid Hinsawdd, Amgylchedd a Seilwaith Senedd Cymru. Mae'r cyfarfod hwn yn cael ei gynnal mewn fformat hybrid ac, ar wahân i'r addasiadau sy'n ymwneud â chynnal y trafodion ar ffurf hybrid, mae'r holl ofynion eraill o ran y Rheolau Sefydlog yn parhau.
Mae eitemau cyhoeddus y cyfarfod yma, wrth gwrs, yn cael eu darlledu yn fyw ar Senedd.tv, ac mi fydd yna gofnod o'r trafodion yn cael ei gyhoeddi yn ôl yr arfer. Mae'r cyfarfod yn un dwyieithog, felly mae yna gyfieithu ar y pryd o'r Gymraeg i'r Saesneg ar gael. Cyn cychwyn, gaf i ofyn os oes gan unrhyw un unrhyw fuddiannau i'w datgan? Nac oes. Iawn. Ocê. Diolch yn fawr iawn.
Welcome to you all and a happy St David's Day to you all. Welcome to the Climate Change, Environment and Infrastructure Committee at the Senedd. This meeting is being held in a hybrid format and, aside from the adaptations relating to conducting proceedings in a hybrid format, all other Standing Order requirements remain in place.
The public items of this meeting, of course, are being broadcast live on Senedd.tv, and a record of proceedings will be published as usual. The meeting is bilingual and simultaneous translation is available from Welsh to English. And before we start, may I ask if any Members have any declarations of interest? No. Okay. Thank you very much.
Iawn, awn ni ymlaen, felly, at ail eitem y cyfarfod, sef y gwaith craffu rŷn ni'n ei wneud ar y gyllideb garbon gyntaf a Chymru Sero Net. A heddiw, wrth gwrs, rydyn ni'n croesawu'r Gweinidog Newid Hinsawdd atom ni. Mi gawson ni dystiolaeth ddifyr iawn gan yr Arglwydd Deben yr wythnos diwethaf, felly mae'n debyg y byddwn ni'n cyfeirio tipyn at hynny yng nghwrs y sesiwn yma. Felly, croeso i Julie James, y Gweinidog Newid Hinsawdd, a'i swyddogion. Mae Jon Oates yn ddirprwy gyfarwyddwr newid hinsawdd ac effeithlonrwydd ynni; mae Lucy Corfield yn bennaeth datgarboneiddio gyda'r Llywodraeth; ac mae John Howells hefyd am ymuno â ni—mae yna ychydig o drafferthion technegol ar hyn o bryd— mae e'n gyfarwyddwr newid hinsawdd, ynni a chynllunio gyda'r Llywodraeth. Felly, awn ni'n syth at gwestiynau, a gwnaf i ofyn i Huw i'n harwain ni yn y cwestiynau cyntaf.
We'll move on, therefore, to the second item of this meeting, namely the scrutiny work that we're doing on carbon budget 1 and Net Zero Wales. And today, of course, we welcome the Minister for Climate Change. We received very interesting evidence from Lord Deben last week, so we'll probably be referring a lot to that during the course of this session. So, I welcome Julie James, the Minister for Climate Change, and her officials. Jon Oates is deputy director for climate change and energy efficiency; Lucy Corfield is head of decarbonisation with the Welsh Government; and John Howells will be joining us—there are some technical difficulties currently—and he's director of climate change, energy and planning with the Government. So, we'll go straight to questions, and I'll ask Huw to lead us in the first questions.
Diolch, Cadeirydd. Bore da, Gweinidog. Could I begin by asking you to set out the key Welsh Government policy decisions that led to Wales meeting and exceeding both the carbon 1 budget and the 2020 target? And could I ask you also just to respond to the very good evidence session we had with Lord Deben, where he asserted that the 2020 target and the carbon 1 budget were exceeded because they were too low, they were insufficient?
Yes, thank you, Huw. I'm familiar with Lord Deben, obviously. We have had a lot of interaction with him and with the committee. Yes, so, the final statement that we issued was focused on the first carbon budget only, and although the Environment (Wales) Act was introduced in 2016, the first plan was only published in 2019 because we were out of synch for that first legislative cycle. So, it is important for the committee to get the timeline right. So, the first plan was in place for less than two years of the first carbon budget. So, it's important to take that into account. Also, most Welsh emissions occur in non-devolved policy areas. So, we rely on UK Government action to deliver emissions reductions in several key areas, which I'm sure the committee will come on to later on. So, we need absolutely to work in harmony with the UK Government so that they continue to deliver policies that reduce emissions here in Wales.
The final statement that we put out explains the monitoring and reporting system. I will say, Huw and Chair, it's incredibly technical. So, I usually like to get across all of this myself, but I'm going to rely on my officials for some of the technical expertise here, because you really do need to be a technical expert in some of this stuff. So, depending on the level the committee wants to go into, officials will fill in some of that. I'm sure you know that the final statement is split into sectors. So, power, the transport industry and waste are the main contributors to Wales's success over carbon budget 1. So, the final statement goes into our policies and which achieved the desired direction of travel, and they provide a qualitative update, but we're continuing to improve the monitoring and reporting system as we go forward.
There have been a number of areas where we have made progress: implementing energy consenting powers arising from the Wales Act 2017, the 'Planning Policy Wales' documents, and the Welsh national marine plan are all now in place. In January 2021, alongside other Governments of the UK, we implemented the UK emissions trading scheme, and, in terms of existing homes, the Warm Homes scheme has seen increases in the funding provided and its reach. We also have—and I know the committee has discussed this with me a lot of times—the innovative housing programme, targeted at new homes, which has provided grants totalling over £180 million, or just over 2,000 homes, between 2017 and 2020. We've also got support in the public sector for schemes like the Welsh Government energy service, which had £50-something million for energy efficiency public sector projects between 2018 and 2020. And the big piece for Wales, of course, is reducing the amount of waste sent to landfill, encouraging the adoption of what we call the blueprint waste collection systems, which is the Welsh Government's recommended way to collect household waste in Wales. We've had some really good successes, even just very recently, as authorities finally swap across to blueprint, having been able to demonstrate its efficacy. And we've also, of course, increased the number of social homes compliant with the Welsh housing quality standard.
Going to Lord Deben's particular point, the 2020 target and carbon budget 1 were placed in regulation in 2018 and they were entirely based on the Climate Change Committee's advice. I guess it's a self-criticism in a way. We agree they were too low for net zero, because we only passed net zero into law in 2021. It wasn't possible to amend the 2020 target or carbon budget 1 to align with net zero, because originally the climate committee's advice to us was that we would not get to net zero. We set the 2020 target in 2018, so we were on the pathway to the original 80 per cent reduction by 2050. That followed their recommendations at the time. Then, obviously, we received advice on the net-zero target in December 2020.
For carbon budget 2, we followed the CCC's latest recommendations to make it more challenging. We accept the view that Wales will need to outperform the revised CB2 to be on track for CB3 and beyond. Just to put that the other way around, we know we will make carbon budget 2, but we need an awful lot to get to carbon budget 3. We need to well exceed the targets to be on track for carbon budget 3. The latest advice in December 2020 recommended we increase carbon budget 2 from a 33 per cent average reduction to 37 per cent, because the Aberthaw power station had closed earlier than had been allowed for in its original advice. They also advised us that the economic uncertainty arising from the COVID pandemic, and the significant influence of UK Government action on Wales's short-term emissions, meant they did not recommend setting a higher carbon budget 2 in law. But they did recommend that we outperform the 37 per cent statutory target, to get on track for carbon budget 3, which is 57 per cent, and the 2030 target of 63 per cent. Again, to put that the other way around, Huw, we'll need to do twice as much in the next 10 years as we did in the last 20, so it's quite scary stuff.
I think, broadly, we agree with Lord Deben, but we were following their advice. I think this demonstrates that the world is changing in this regard. We are getting a much better grip of what needs to actually happen and some of the really quite radical changes that will have to be made to get anywhere near these targets. And again, Chair, and Huw, just to say, if you want more technical detail there, I've got various officials on the call who are much more expert than me in the technical details of it.
Minister, thank you very much for that. It's a comprehensive and a very frank assessment of where we are, why those targets were set, why they were exceeded, but how much further we need to go. Others will go into some more detail on the technical aspects that your officials might want to help with, but can I just ask you—? You seem to be very, very clear that what the Welsh Government needs to do is not rest on the individual COPs and not rest on the individual five-year cycles or the targets for 2030. There is a genuine attempt, it seems to be, from what you're saying in the Welsh Government, to ratchet up, as the phrase goes, year by year and to adjust and to accelerate the level of ambition year by year.
Very definitely, Huw. This isn't some kind of weird technical exercise; the world is changing around us and we need to do this. Every single nation has to play its part. There's no good pointing the finger elsewhere; we all have to play our part. And we can only do that on a global stage if we are doing everything we can do at home. And so, absolutely, we have to do that. And let's just be clear: these are not easy, nice-to-have things; a lot of these things are very, very difficult and they need a substantive change across society to get there. But I'm not at all convinced—. I don't want to be too fearmongering; I don't think apocalyptic talk is necessarily good. But, genuinely, the world is in real danger here and we need to really, really change what we're doing.
Thank you, Minister.
Thank you, Minister. Janet.
You may have touched on this, but I didn't quite catch whether you had. Why did you carry over the surplus emissions from carbon budget 1 to 2, especially when the Climate Change Committee's unequivocal advice was that there shouldn't be a surplus carry-over at all?
Well, we haven't carried the surplus over, Janet, so—
You asked to carry it over, didn't you, Minister?
No. We explored all of the options in front of us, including whether we should carry it over, and we explored with the committee whether carrying forward a surplus would be sensible. We needed to test our situation against all the circumstances that might arise in the future. This is a bit of future-gazing, isn't it? So, in one world, you'd say, 'Well, do carry the surplus over because we don't know what's going to happen, and we need to be able to make sure that we can do it—it's a huge change.' But I'm very pleased to say that, having gone through all of the arguments in the Cabinet about the pluses and minuses of both of them, and following my very firm recommendation, we did not carry it over.
It goes back to the answer I finished the last question with, which is that this is not a technical exercise—this is something we absolutely have to do. If it was a technical exercise, then of course we should carry it forward, we should take all the leeway we've got. But it's not a technical exercise; it's an exercise in changing what we're doing. And so we didn't carry it forward. But of course, rightly, we explored all of the various options before making that decision.
That clarifies it for me. Thank you.
Thank you. Joyce.
Good morning, Minister. You've already alluded to the challenge in reaching carbon budget 3, and I'm sure that that's the case. What I would like to explore is what are the main challenges that we face as a nation to get to that carbon budget 3.
Thank you, Joyce. I mean, gosh—many and various. I just think it's worth pointing out here that reducing carbon isn't the only problem that we face. Reducing carbon is fairly easy if you don't give a stuff about anything else. So, if you don't care about jobs and society and the way that people run their lives, then we could just do it tomorrow. We could shut down Tata Steel and all the power stations and all the rest of it and we'd all go back to not having any steel and not having any power and we'd have a lot less carbon. I'm being facetious, just to make the point, because clearly that is not the way we want to do it. We put social justice and a fair transition at the heart of our carbon-reduction policies. We need to do this in conjunction with also worrying about our economy, our environment and our social equity. And that's the problem, Joyce—trying to calibrate it so that you have a transition arrangement, so we get where we want to go, but we take everyone with us, and, frankly, the burden of it doesn't fall on the shoulders least able to bear it. The people with the most challenging socioeconomic conditions now actually have the lowest carbon footprints, but, generally speaking, policies in the past have not reflected that, so we really, really need to make sure that we can do all of that.
We've got an average reduction of 37 per cent against baseline over the five-year period of the second carbon budget. The plan has 123 policies and 100 pledges for action—I've said that so many times now, it's like a mantra. Our modelling at the time of publication showed that delivering that plan would actually put us on track to outperform it. We thought we'd get to a 44 per cent reduction against the baseline. But it's a Wales plan—it's important for the committee to really understand that this is a Wales-wide plan. It requires actions to be taken by others, including the UK Government, not just the Welsh Government. It requires actions to be taken by many parts of our society, not just the Welsh Government. We need to make sure that the conditions are in place for everyone to step up to that.
The CCC told us in 2020 that, by around 2050, about 60 per cent of the changes needed in Wales were influenced by powers mostly reserved to Westminster. In Net Zero Wales, we very much put that on the UK Government's plate, making sure, for example, that the real levels of investment are there to get our industries that we rely on entirely, like the steel industry, to transition to clean and sustainable futures. There are many others; we've met with the cement industry, and the oil and gas industries down there in your neck of the woods, Joyce. All of these industries want to work as fast as they can to be as carbon neutral as they can manage it, along a trajectory. But we also don't want to push them out of business, and, very importantly, we don't want to export our emissions. You could shut them all down in Wales, and then just import stuff from elsewhere, but we know that steel imported from elsewhere has higher carbon footprints than we have. We're very keen that we don't export our global footprint in that. We're on trajectory for that. And then, carbon budget 3 has a 58 per cent average reduction, and the 2030 interim target is set at 63 per cent reduction. So, we need to get carbon budget 2 under way, but also we need to make sure that we've got the increase in ambition for carbon budget 3.
The committee is watching us make some very difficult decisions, and they are not easy and not welcome. Changes in transport behaviour, for example, are very, very challenging, and you can see the reaction—it's dividing opinion in Wales, isn't it, the roads review, the 20 mph thing. I have at least as many people urging me to go faster as I have people telling me that I've lost possession of my senses on all kinds of social media platforms. But we have to do these things if we're going to get anywhere near these carbon budgets. Setting the targets is the easy part, isn't it? It's actually carrying through the necessary changes in the way that we live our lives and the way that we put our investment in order to get anywhere near meeting these targets. And I can't emphasise to the committee enough that this isn't about setting ambitious targets—it's about delivering it, and that is not easy.
Thank you. That was a very clear message. Of course, it's not easy. If we are going to transition in terms of energy production, there are two sides. One is the transition into the cleaner, greener energy, because nothing is carbon neutral, but also the production of whatever we decide to use to deliver that for us. Because, again, if we're importing everything that we use, there's going to be a carbon cost to that. So, how aligned is this with a few things—the skills agenda in the first place, but also the manufacturing of those goods?
One of the biggest things that we've been doing by way of changing the way that the Government looks at this was the creation of my portfolio, of course, which brings together a whole range of levers—power, transport, housing, waste, buildings, forestry, et cetera—to try and shift the dial on how we pull a lot of these things together, and trying to get a focus on some of the most difficult areas. We're also looking at our global footprint. Rebecca Evans and Vaughan Gething have been looking at procurement strategies, supply chain strategies, and so on. Yesterday in the Senedd in the afternoon, Vaughan introduced the net-zero skills plan, which, obviously, we've worked on together across the Government. We have a standing item on a number of civil service programme boards, which Lucy and the others can talk about, in terms of pushing other parts of the Government into doing the right thing as well.
We've got some real difficulties here. The committee will be very, very familiar with this. Yesterday in the cross-party group, I spoke with Jenny about the real problem that we have with decarbonising thousands of homes and farms. That's a very good example of what I'm talking about—meeting a target and not caring about somebody and meeting a target and caring about somebody are very different. I could decarbonise housing in Wales by moving everybody to electricity. I would also drive enormous numbers of people into fuel poverty by doing that, because we know that heating homes with electricity in current global circumstances is more expensive than it is to carry on heating them with gas. We don't want to do that.
We have a large number of problems with farms all over the place, having to work with the farmers about decarbonising, and, indeed, what do we even mean by that—what measure are we using, what are they supposed to be measuring their carbon footprint as, and against what targets. We're working with them. We have to find ways of storing electricity at volume and deal with seasonal variations for people like farmers, and, indeed, for domestic suppliers, and we have to do that in a way that doesn't destroy the planet at the same time. None of these things are easy. Batteries are not the best environmentally friendly sources of things. There is a lot of intertwined complexity in this, and trying to steer your path through the difficulties of all of it is really important.
I'm the politician in this, and I hope, Chair, we will get round to asking some of the officials about some of the technical details. But for me, it's about just saying what I’m saying now—it’s about the leadership in saying, ‘We must find this path’. We must find this path that allows our people to come with us on this journey and make it a sustainable path for them. I don’t want to make everybody feel poor. I don’t want to drive the farmers out of business because they can’t afford their energy prices. We want to work with them to find a way to do this that means that we have a sustainable system into the future. You’ll know that the new sustainable farms scheme is a really important opportunity for farmers here, and there’s loads going on in that space—you need to get Lesley Griffiths to come and talk to you about some of that. But again, we’ve worked very closely together on making sure that that’s calibrated, and we want to reward farmers for doing the right thing. My colleague Lee Waters—I’m sure you’ve heard him say on a number of occasions that it’s our job to make it harder and harder to do the wrong thing and easier and easier to do the right thing, and that’s the thread that runs through all of these technical papers on how we get to various carbon budget targets.
Chair, I don’t know if you want me to ask a couple of the officials to give you some technical detail, or whether you want to wait till later on in the session.
Yes, okay. We’ll pick up on those later, if you don’t mind, Minister, because I have a few Members wanting to come in now. So, Janet.
Thank you, Chair. So, what mechanisms are in place to ensure that you do have a climate-focused cross-Government policy? I know that you speak lots in your own portfolio, and it’s fair to say the Minister for agriculture does the same—we hear about climate change, but we never hear it about our health service. We know that there are problems in the health service, but they’ve still got their responsibilities regarding their aims towards carbon zero. So, how do you get that whole-Cabinet approach to supporting you, if you like, in us achieving those goals?
Yes, sure, Janet. So, as I said, the portfolio itself brings together a whole range of things that weren’t together before, and that’s driven some change. I obviously work very closely with colleagues right across the Government. We’ve got a whole series of internal governance arrangements to develop and deliver Net Zero Wales. I really want to call—well, John Howells, if he’s able to do it, with his technical difficulties, but otherwise I’m sure that Jon Oates will do it—to just talk to you a little bit about how the cross-Government Cabinet is supported by the portfolio boards that the climate change lead officials take part in, and its chaired, and John chairs that, so I want to get him to do that if you don’t mind, Chair.
We have a termly discussion on climate change right across the Cabinet. We have focused arrangements to monitor and drive the delivery of both the programme for government and net zero, and we track the targets and budgets on an annual basis, and we have a wider suite of well-being indicators, and there’s a well-being of future generations indicator on greenhouse gas emissions that I’m sure the committee’s familiar with. And I have what we call bilaterals—I love all this jargon for inter-governmental relationships. I meet with colleagues, one on one, to discuss what they’re doing in each of their portfolios, and I’m about to start chairing the portfolio board periodically as well just to push the civil servants a bit faster. So, if you take health, for example, Eluned and I very recently had a long discussion about how we’re going to help decarbonise the hospitals, and what can be done to move them, and I had the real pleasure of opening the solar array that now powers Morriston hospital in Mike Hedges’ constituency. Working with the health service on investments of that sort to decarbonise the health service and actually reduce our energy bills at the same time is one of the big things that we’ve been talking about in health, and then you saw Vaughan Gething doing the net-zero skills plan yesterday, and Jeremy and I have discussed this on the curriculum. But, you know, there are a lot of conversations going on across the Government.
But, Chair, I hope you’ll indulge me and let me let one of the Johns just tell you about the internal civil service structures. I think you need to understand that to get the picture.
Sure. And I understand that John Howells is on the call; his video is switched off because it allows for a stronger audio feed so he can respond. So, you tell us, Minister, who you think is most—
Yes, John Howells, if he can do it, please.
Can you hear me?
Yes, we can. Thank you, John, yes.
Thank you, Chair. Yes, the Minister’s absolutely right—the portfolio board brings together colleagues from right across Government with my department holding their feet to the fire, as we say, about progress on a regular basis. We’re also working with each department on the development of pathways as to how they’re going to meet their targets for net zero. But I think the other aspect of our work that I’d want to emphasise is that we’re also engaging within each of those portfolio areas, and actually, the health service is striking for the enthusiasm that the declaration of a climate emergency has generated right across the health service. There are very difficult questions about responding in terms of the capital that will be involved in transforming hospitals, but the enthusiasm that we've discovered at operational level is quite remarkable, given all the other things that the health service has to grapple with at the moment.
We're also really encouraged by the local authority response, which we bring together under something called the local government strategy panel on decarbonisation, which means that each of the individual local authorities are discussing with us on a regular bimonthly basis progress towards these challenging targets. They're also working with us to develop the monitoring regime, and, once again, we seem to be tapping into real enthusiasm across the public sector. We've got an awful long to way to go, but I'm really encouraged by the response we've had so far. I don't know whether Jon or Lucy want to add anything to that.
Would Jon like to come in?
Certainly on the public sector side, I've been involved in work trying to stimulate the public sector to act with greater urgency for five or six years now, and, certainly, it's night and day compared with what it was five or six years ago. There's lots of energy. It is very, very complex; it's very difficult. There are public bodies scratching their heads about, 'Where do I focus my attention?'
I think we've aided that by implementing the voluntary reporting mechanism for the larger public sector bodies to undertake on an annual basis. That is not only showing what they already knew, i.e. what kinds of emissions we get from our buildings, but also highlighting the kinds of emissions they get from the fleet, from people commuting, from the goods and services that they procure, and the grants that they push out, as well. So, that is creating a greater understanding of the challenge, but also better opportunities for bang for buck, as it were, or effort to decarbonise. So, as John says, an awful long way to go, certainly in the public sector, but I see a very energised public sector from top to bottom of these organisations. There's some asymmetry, clearly. Not all organisations are progressing as fast as the fastest, but there's lots of energy.
And we have the NHS and the Welsh Local Government Association coming in for our next meeting, I believe, to look specifically at the decarbonisation of the public sector, so I'm sure that we can pick up on some of that with them. Janet, you wanted to come back in.
Yes, just a small one, Minister. When you talk about transforming hospitals, I know I've raised this before, but, certainly, in north Wales, Maelor, Gwynedd and Glan Clwyd all have hundreds of housing units. So, so that it's on record, would you just, if you like, consider when you're talking about the health service in terms of net zero, there are properties there that are ideal pilots for the decarbonisation, because the majority of them need redoing; a lot of them are empty. I've raised it with you before. Maybe you could incorporate the decarbonisation of that housing stock as well.
Yes, Janet, you've raised this with me a number of times, and I've had a conversation with the health service about it. I'm afraid we're having difficulty tracing quite the number of homes you talk about and the empty ones. So, perhaps you wouldn't mind giving me better detail in—
I can, yes.
—you know, writing to me with better detail. I'm more than happy to have a look at it, but I'm struggling to trace it from our various interactions in public, I'm afraid, so, perhaps if you could write to me with the details, I'm more than happy to have a look at it.
Yes, I'm happy to do that.
Fine, thank you. Can I just ask one supplementary, as well? You've outlined the magnitude of the challenge that we face, and, obviously, we're very aware that the Government and the First Minister have brought together, if you like, in your portfolio, the big carbon emitters. You've probably been asked this before, haven't you? Is your portfolio not too broad for one Minister and one Deputy Minister? Because, if it is really the big, big push and the big focus, and I know others have their part to play, but surely it's too big a job for a Minister and one Deputy.
I'm hardly likely to agree with that, am I, Llyr, as I accepted the job in the first place? [Laughter.] I think it's important to understand what the politicians are doing. I have a myriad of able civil servants actually doing the work. What we're doing is focusing the direction of travel and giving the kind of political oomph and leadership to it, and the reason that we pull those things together is because you wanted to change the policy focus, and I think you can see that happening in transport; whether you agree with us or not, you can see the change of the focus, and you can see it in other areas as well, actually. So, you'll shortly be able to see the clean air plan coming through; you'll be able to see the change to the biodiversity things and so on. And that is just about us giving the leadership and refocusing the policy direction towards climate change in a much bigger way than it was before and towards net zero in a bigger way than it was before, and towards the nature emergency. They're all intertwined things.
So, I don't have to personally deliver the net-zero plan or the housing plan; for me, it's just about making sure—. I have a directors' meeting very frequently where all the directors come together with myself and Lee Waters, the deputy, and we discuss the kind of policy direction and push that we're giving—where the kind of oomph is, if you like. And that's what our job is. I don't agree that it's too wide. The issue has been always, of course: where do you stop?
You could actually just start to put your arms around, and that's the structure that John was talking about is how we then spread the tentacles out, if you like, into the Government, and make sure that that direction is happening elsewhere.
Okay, thank you. Delyth.
Diolch, Cadeirydd. Minister, good morning. It's actually on that exact point I wanted to ask you in terms of where you stop, because almost the inverse of the Chair's point—this came up when we were talking to Lord Deben in our last session—one of the most challenging industries in terms of reaching net zero is agriculture. Do you think that it's a challenge that, given that the department that you lead covers so many different areas, but agriculture's not in that, is that a particularly provoking challenge? I don't know if that's quite the right word, but is that one of the more challenging dynamics, almost?
So, one of the reasons that agriculture isn't with me is because it is one of the most challenging sectors, and we thought it needed more ministerial oomph, if you like, than being included. I'm not sure if that's the correct terminology, but I think the committee understands what I mean. [Laughter.]
We know what you mean, yes.
And so, Lesley Griffiths obviously does that, but we absolutely work hand in hand, step by step together, so all the way through the working of the sustainable farming scheme, my officials and hers have been working together. She and I have had numerous meetings about the content of it, as have officials. John's board has discussed it on a number of occasions. It's as intertwined as it's possible to be and you have to draw the edge somewhere.
You can say the same about economy: one of the big challenges we have, as I just discussed, is things like steel, oil and gas, cement industries, which are very important to Wales; Wales has a much higher manufacturing base than the rest of the UK, still. So, how do you fan it out, if you like. So, we just work very closely in lockstep together. The bits that are in my portfolio, I discussed with the First Minister when he set his Government up, and we decided that those were the ones that needed the kind of biggest pull, if you like, at that point in time. He could have split it differently, maybe other Governments would have, but I think it's working, and as I say, Lesley and I work very much in lockstep together. And I know that you're all familiar with the phosphate summit that's about to come up next week—is it next week, it's hard to keep track of these things—and you'll see there that we're pulling together sectors right across Wales in trying to come together to make a plan, and we're using that kind of methodology to do this across the Government. And frankly, the way that we put the net-zero plan together in the first place was done like that. You can see that it ranges right across the whole piece, and we're very familiar with working across Government. But I guess, Delyth, that the answer to your question is that you've got to cut it somewhere.
No, I totally take that point. Thank you, Minister.
Thank you, both. Okay. Huw, then.
Turning to private investment, away from public sector, but in the different sectors where you have this really stretching target, we're not going to do this on our own; we've got to lever in significant private investment. Can you give us an overview of how that is going, how successful it's being? And maybe we could ask as a committee if you could write to us in detail, sector by sector, because it would be interesting to know how this is going not just in renewables, but in transport, in housing, in agriculture and so on, where you've identified the potential investment, and how much is being levered in and how much we'll have in five years. But can you give us a top-line overview of how private investment is going at the moment?
Well, I can give it a shot, Huw. It's a very complicated area, of course, and it's quite difficult to stretch the thread through. So, just to give the example, it will be a range of everything from you and I making a different choice when we replace our heating system—so, that's private sector investment—from that domestic level, right up to how does Valero or Tata Steel make their proper investment decisions? So, we need a whole range of key drivers in that and we know that we can't do this alone—we have to key in private sector investment. We also need a UK Government to drive private investment, particularly using regulatory levers. So, there is a whole range of things that they can do to encourage private investment in net zero that we just don't have the levers to do—tax incentives and various other tools that can be used.
But we have done a number of things. We've set up sector and regional bodies and boards to identify investment challenges and create links with the private sector and establish appropriate financing models. We've got Net Zero Industry Wales, for example, and we've got the woodland financing group, both set up as private sector individuals to have a look at that. We've got sector and regional funding to incentivise private investment in decarbonisation-related activities. Examples that the committee might have heard of are the circular economy fund and the economic futures fund, which are both in place at the moment. We've got the Development Bank of Wales, and I hope you saw Vaughan and I announcing the loans and equity investments portfolio very recently for businesses to support decarbonisation. We've committed to delivering a network of electric vehicle charging points to incentivise uptake and investment in electric vehicles in Wales—charging points on the strategic trunk road network every 20 miles across Wales by 2025.
Can I just stop there a moment, though, and say that that, to me, epitomises the problem? Nobody expects a Government to deliver petrol stations—we just accept that it's something that the private sector does, but, somehow, we're expected to deliver electric vehicle charging stations. It bothers me a lot that people currently delivering petrol stations can't see that their industry is dying and that they should be investing in trying to do electric vehicle charging if they want to stay in a similar area. So, trying to get into existing business models of that sort and change them so that the private sector investment remains in place is one of the things we really need to do, and I just use that as a very good example of the swap to a Government intervention being needed from one that wasn't—. When cars were first introduced, the Government did not put petrol stations everywhere. That's not how it worked.
But the last one I would say, Chair, before I test you patience—one more—is we have done some regulation as well. This is this whole business about making it easier to do the right thing. So, part L of the building regulations, setting minimum standards for new-build housing is a very good example of that, as are the control of agricultural pollution regulations, which I know the committee is familiar with.
Lovely. Okay, thank you, Minister. We're about halfway through our allocated time and I think we have a number of areas that we still wish to cover, so we'll change gear a little bit, I think, and we're moving on now to look at some of the stuff in the net-zero plan. I think, Joyce, you're going to start off with this.
Yes. As we said, we want to look at the progress, so, in order to look at the progress, we need to look at the monitoring, because otherwise we won't understand how that's going forward. So, we had a response to Lord Deben's comment that the areas where Wales has made the best progress are those under the control of the UK Government, rather than those under the control of the Welsh Government. How do you respond to that?
Yes, thanks, Joyce. That's undoubtedly the case. As I said earlier, the statement of progress is focused on the first carbon budget and the plan's only in place for a year of that, and, as I acknowledged at the time, emissions occur in non-devolved policy areas. So, UK Government policy has large effects. So, the one that you're all familiar with is if you shut down a coal-fired power station, then clearly you reduce emissions vastly all of a sudden. I have to say that the same Government that did that has recently opened a coal mine, so it doesn't make my heart sing that they seem to be going into reverse, and I'm sure Lord Deben had quite a bit to say about that. He certainly has to me.
So, the UK Government has levers in a high level of emissions that are easily switched down if you have the right kind of investment. So, we have a large number of gas-fired power stations in Wales—we'd like to see a lot of those switched off. We want the investment made in the Celtic sea opportunities for floating wind and for other forms of renewables—tidal and so on—around the coast of Wales, which would allow those power stations to be switched off, but it would be a UK Government action to switch them off, not ours. So, that's what we're talking about.
Where our levers are are in areas where emissions are more distributed and complex. So, we've already discussed agriculture and housing, for example. We have a statement of progress that explains the monitoring and reporting system. At this point, Chair, if you really want to go into that, I really do need to get the officials to do it for you, because it's very complicated. But, at a sector level, that's power, transport, industry, waste and greenhouse gasses. So, they're the main contributors to success over CB1. We want to continually review emissions across all of those sectors to make sure that, for CB2, we're getting there, and you can see the changes that we're making in transport, and so on, and the clean air Bill will be introduced to the Senedd now in March, and you'll be able to see what we're talking about there in terms of emissions monitoring, and so on. So that's the kind of progress we're making, but ours are much more distributed and it's much harder to get that big-bang effect than with the UK Government's arrangements. But, if you want the detail of that, I'm afraid I'm going to have to ask the officials to explain.
We will be coming to the monitoring and the reporting and verification stuff in a moment, so we'll hang fire for a second if that's okay, Minister. I promise you we will get there. Jenny wants to come in.
Okay. So, I just wanted to look at the progress report that the Climate Change Committee laid last year, and particularly the Wales-specific recommendations, and also focusing on the tier 3 indicators, which are the ones that the Welsh Government policies can influence. You talk in your paper about the two tier 3 indicators that are rated 'red' within the waste and the power sectors, where the desired direction of travel hasn't been achieved. Could you say something about how the Government is addressing making it flow in the right direction?
Yes. We've got eight Wales-specific recommendations in the progress report, and we've provided an update to the UK Government's response to the CCC's report in March. So, on transport, I've already talked about the substantial amounts of funding allocated to reduce the amount of high-carbon travel and the delivery of a charging network.
On waste, we've obviously got the pathway for targets for recycling post the 70 per cent statutory minimum target, which came into place for 2024-25. We've got the 'Beyond Recycling' work, for example, the final consultation on the business, public and third sector recycling reforms are currently under way, and a go-live date for the deposit-return scheme has now been set at 2025. Those are later than I would have liked, but they're in place now and so we're going towards them.
On housing, the Warm Homes programme is being developed after the consultation at the end of last summer. A policy statement will be coming out very shortly now, Chair. We've got a heat strategy under way and a comprehensive delivery plan that incorporates decarbonisation across all housing tenures. We'll be introducing a new Welsh housing quality standard, for example, for social homes, and I've already spoken about Part L of the building regs that we've already done. So, there's a lot going on.
Some of them are taking slightly longer to get into place than I'd like. Some of them are dependent on a whole-UK conversation. So, on the deposit-return scheme for drink containers, I'm sure committee members will remember that when I said in Plenary that we were doing this, I was disappointed that England had come away from doing glass as part of the scheme, whereas that will be the case in Scotland, Wales and Northern Ireland. I think that's a real mistake by England, and I think that they are going to regret it and, within a year of us going live, I'm absolutely certain that they will come in line with that. It's very similar to the conversation about plastic bags, which the committee will remember—or those of us who have been here a while will remember, anyway.
So, that's where we are with some of that—
Okay. Can I come back to you on the thing that's most concerning me, which is the future Warm Homes programme? The committee has flagged up the fact that the current Warm Homes programme is coming to an end next month, and I think we're really keen to see how we're going to use the summer period to reduce the numbers of fuel-poor households who simply don't have enough money to heat their homes at the moment.
Yes, so as I said, Jenny, we'll be publishing the policy statement very shortly on that. We'll have both a heat and a warm homes strategy, actually. Last summer's heatwave makes it very obvious that we need both a heat strategy and a cold strategy—I'm not sure we'd call it a cool strategy, a—
Well, it's insulation that's the top thing, surely, because that will sort both problems out, and insulation surely is the quickest win whilst we're sorting out some of the complexities of heat pumps, which I don't want to go into here.
Yes, and, again, you've heard me say a number of times now that we've got a programme running that allows us to look at the tech that's available for each house and make sure that it's the right tech for the right house. So, it's all very well to say insulation, but we know from the first iteration of the Welsh housing quality standard, for example, that a small number of houses had real problems with condensation and damp as a result of ill-thought-through insulation policies, so it is absolutely important to make that right.
I have to say, I don't think the Warm Homes programme is going to make any difference at all to the 0.5 million households currently in fuel poverty. Without a significant shift in the energy pricing mechanism, there's absolutely no way we're going to make a very big dent there, but it's very important to do it and it does do very good things, but there is an enormous problem with the energy market at the moment. We've been urging the UK Government to do something about it. You've seen an enormous range of people from across civic society also urging the same thing, but unless that energy pricing system is changed, I fear that if the committee hopes that the Warm Homes programme is going to make a big dent in that, it's going to be disappointed, because it's not.
Okay, but reducing the energy inefficiency of buildings is clearly one of the ways forward. We can't control what the UK Government gets up to. We can agree on what needs doing.
I agree with that entirely, Jenny. We are going to do it, but I'm just saying if you're hoping that it will make a big dent in fuel poverty, it will not. I mean, clearly it needs doing for all kinds of really good reasons, but it's just not going to make that much difference to that.
So, is there anything concrete you can tell us, (a) about the amount of money we're going to put into the Warm Homes programme in the next financial year, and (b) when this policy statement is going to be published?
Well, in the spring, and I'm not going to preannounce it, I'm afraid. I'm always tempted by committees into preannouncing things, but I'm not going to.
Well, spring started today, so we're—
Indeed, it did, so there we are.
Yes, there we are—the clock is ticking. Okay, thank you for that. I know you've spoken a bit about the agri Bill and agriculture and the big part it has to play. Just looking specifically at land use, land use change and forestry, that sector saw a net reduction in the carbon sink during carbon budget 1. Now, aside from what we expect to see emerging from action as a consequence of the agri Bill, what else is the Welsh Government doing, or what action are you taking, to prevent further decline in that respect?
Thanks, Chair. So, we've got a real problem with good quality, complete and up-to-date data here, and there's a lack of some key data sets to characterise changes in the sector. We're working on a plan to try and sort that out, so I just wanted to put that as a start. And you're absolutely right—there was a decrease in the size of the emissions sink through the CB1 budget period, but it is still a sink, just to emphasise that. It hasn't turned into an emitter. So, it did achieve the anticipated contribution set out in the first programme, and you'll know and be very aware that we're now driving a lot of further action. Woodland creation in Wales doubled in 2021-22 to 580 hectares, and 69 per cent of that was broadleaf. It's encouraging, but we need a rapid increase to get to our 43,000 hectares of new woodland by 2030. We've done the trees and timber deep-dive, attempting to remove barriers to woodland creation. The recommendations are in the process of being implemented, and we hope they will drive a real increase in creation in future years.
We've got two big creation schemes: the small grants woodland creation scheme and the woodland creation grant, and, of course, the sustainable farming scheme will create a new system of farm support that maximises the protective power of nature through farming. I know the Chair is very familiar with our proposal for 10 per cent tree cover on all farms—the hedges and edges proposal, as we call it—which I'm very keen on and which many farmers across Wales have embraced wholeheartedly already. If the committee hasn't been to see Stump Up for Trees, do go—it's great. It shows the real power of what you can do if you harness private investment, actually, of course, because the farmers are doing it themselves. So, we're very much working on upping our game on a lot of that, but, again, Chair, you'll be very familiar with the fact that we have to take people with us. We have to do this so that people want to do it, and we have to do it in a way that's sustainable, that the communities embrace, so that we have as much community involvement as possible in the creation of new woodlands, and, of course, we've got the big new national forest project that we're working on as well.
Okay, thank you.
I want to come back to the Agriculture (Wales) Bill and the sustainable land management scheme. Having been involved in the Stage 1 scrutiny of the Bill in a minor way, people like Simon Wright were absolutely clear that we need targets for the way in which we're going to use the sustainable land management scheme to address the sustainability of what we're doing with our land. And I just wondered, in your conversations with the rural affairs Minister, what action you expect the agriculture Bill to do to support emissions reductions.
Just to be really clear, Jenny, obviously you know perfectly well this is a matter for Lesley Griffiths—
—the rural affairs Minister, and not for me, but obviously we work very closely with her. So, I'm not going to be answering on any very specific policy proposals. You'll all know it's going through Stage 2 of formal Senedd scrutiny at the moment. But, obviously, we've discussed with her the four objectives included in the Bill, which are, as you've just said: to produce food and other goods in a sustainable manner; mitigate and adapt to climate change; to maintain and enhance resilience of ecosystems and their benefits; and to conserve and enhance the countryside and cultural resources. It changes the way that the basic payment scheme and agri-environment schemes worked completely.
From our point of view, we were very keen to see included the woodland cover up to 10 per cent and making sure that we have a timber industry that integrates the trees in ways that make them an asset to the farm. I just want to make this point as well, Chair: timber is a renewable resource; that means that sometimes we cut the trees down in order to use them as a renewable resource, but we also want to maintain tree cover. So, what we want to do is find a way to do forestry at a farm level that allows the farmer to have a really good sustainable income from a sustainable industry and to keep the tree cover, which is essential for biodiversity. So, we don't want clear cropping and all the rest of it. So, we've been working really hard with people from across the world on how to do this kind of sustainable timber industry, and we'll be bringing forward a strategy shortly. I just wanted to make that point because that's part of what we're trying to do with the sustainable farming scheme. We want the farmers to have an income from this. It's not about just keeping it over there in a corner.
Can I just take us back to what is the biggest source of emissions by households, which is food? What sorts of things have you been discussing with Lesley Griffiths on how we're going to reduce our emissions from food, using our agriculture Bill, which is supposed to be for the next 20 to 30 years?
As I say Jenny, if you want to go into scrutiny of the Bill, you'll have to make sure you've got Lesley in front of you. I'm not here to do that.
That's fine. That's a fair comment. We are really up against time now, so unless there's anything—.
Okay. Well, I was just going to go on to the public sector.
I think the Minister has spoken a bit about that, if that's okay.
Okay. All right. Fine.
And we're revisiting it with the Welsh Local Government Association and NHS next week. So, Janet, I'll bring you in and then we will, I promise, Minister, get to the monitoring stuff.
Okay, Chair. Thank you. Minister, we've talked about the lack of progress during carbon budget 1, and I do take the point you've made about electric chargers—why are the private sector and the industry not just being more businesslike about it, really, if that's the direction of travel? But how will you accelerate the renewable electricity capacity rate in carbon budget 2, particularly in light of the more stretching targets?
Thanks, Janet. So, we've done a huge number of things in this space. The deployment rate since 2015 reflected a lot of uncertainty in the market, particularly the support available from UK Government funding streams. Again, we bitterly regret the loss of the feed-in-tariff programme, for example. But we did a renewable energy deep dive, and the recommendations have highlighted the changes we needed to make to improve deployment rates in Wales, to protect the natural assets and retain as much benefit and value in Wales as possible. So, we have three things we're trying to do at the same time: we're trying to deploy as much renewable energy as possible; we're trying to make sure that we do that in the most environmentally sustainable way possible; and we're trying to do it in a way that keeps most of the profits from that in Wales. So, all three together is what we're actually after.
So, we absolutely need to deploy offshore wind programmes and fixed offshore wind, and also the demonstrator-scale floating offshore wind projects in the Celtic sea. I've spent a large part of my life over the last three or four months talking about the Celtic sea opportunity with a very large range of partners. Just yesterday, I was talking in Delyth's cross-party group about it, for example, and we're very, very, very keen to make sure that the Celtic sea opportunity maximises both the production of renewable energy, but also the supply chain and employment initiatives in Wales, so that those green jobs that go with that opportunity stay here and that we have as much community ownership and community shares in that as we can manage.
Also, as I'm sure you know, we've made our own renewable energy developer here in Wales. We're going to be accelerating the programme there, and the whole point of that is to support community ownership and to keep the profits of deployment on the Welsh woodland estate, for example, here in Wales. But it's an enormous challenge, isn't it? We absolutely have got to do it and, again, Chair, I'm sorry, it would take a whole scrutiny session by itself to go into this, but one of the big issues for us is to make sure that the pressure on the UK Government to sort out the grid is kept up. So, if the committee can help us with that, that would be very much appreciated.
Indeed. Thank you. Janet.
And then, just a tiny one, coming back to you there, Minister. We've talked about petrol companies not willing to play ball yet, with putting their own infrastructure in, but, certainly, in my own constituency, I've got businesses, hotels where they actually have huge car parks that are not always taken up and they want to actually put in, say, banks of electric chargers, but they just don't know where to go to get that kind of advice to do it. They're willing to pay for it, and they're willing to charge for it as well, but how can they feed in to getting some kind of advice via Government or some organisation or what?
Sure, Janet. There's a Welsh energy service that can help, but, actually, if you're talking about a very large array, then you've probably got a grid capacity problem, depending on where you are in Wales—and that's why I said, Chair, I won't go into it now because it's an hour in itself. But one of the big things that we really need to do is make sure the holistic network design is rolled out in Wales as fast as possible, so that people who want to make that kind of private sector investment can do so and know that the grid is available for them to be able to do it. So, that's definitely one of the things. We've got our own grid study going on at the moment. We're hoping to feed into the grid study for Wales by telling them what our projection for future energy needs across Wales is, so there's no excuse, frankly, for saying that they didn't understand what they were looking at. So, we're very, very keen to do that as well.
I think the UK Government gets it now. It's taken a long time, but I think they get it now. I'm not convinced—and that really worries me—that they understand the speed with which they need to move now. So, I think you all heard the First Minister saying that one of the developers for the Celtic sea said to him—and it's a caricature, so I apologise, Chair—that he would arrive on the beach somewhere in south Wales with a plug, and there would be no socket to plug it into. And that's really a big problem for us, and what we really need to make sure doesn't happen is that energy grid constraints don't cause it to go over to Devon and Cornwall, or even worse, into the Republic of Ireland, where we miss the opportunity altogether. We just need to be really clear about how bad the grid is. So, we've got a housing development over in Newport that cannot be connected to the grid for three years. This is desperate stuff, so if the committee can help with that, I'd be very grateful.
So, Minister, on that note, I will be making representations to the UK Government about this, because it bothers me as well. If we're going to get all this renewable energy and all this investment, we need a grid that has the capacity. So, could we as a committee write to the UK Government to express our concerns that we're well aware of this? Because I'd be happy to sign a letter.
Yes. We could, and we are making these points in reports that we've published in the past, and no doubt we'll still be making them in future reports, regrettably. But, certainly, anything we can do to encourage action on that front, we will.
If it helps the committee, the current Minister is Graham Stuart. [Laughter.]
I was going to ask, myself. I'm like, 'Which one is it now?' [Laughter.]
Okay. Right, thank you for that. We have around 20 minutes left, so we're going to move on now to Huw, who's going to take us into our next area of questioning.
Thank you. And I'll try and bundle my questions on monitoring, reporting and verification into two questions, basically. First of all is your assessment of how effective it's been to date at monitoring the emissions impact of spending decisions. But also, then, going forward—and this is my first question, Minister—going forward, what have you learnt, to what extent are you going to change the way in which the MRV process worked, including around issues about the availability of data to track progress, and whether that's an impediment at the moment? So, how has it gone so far, what are you changing for carbon budget 2, particularly in terms of data, but anything else you want to tell us?
Thanks, Huw. So, the data piece is really important here; sectors have varying degrees of data availability, and some policies apply a much longer term impact on greenhouse gas emissions that can't be observed over a five-year-long carbon budget period. So, we need to find ways of making sure that we have data that can track that. I'm going to get Jon Oates to explain to you what the quantitative and qualitative indicators look like, and how the policy works with that, because that's his expertise, and certainly my level of knowledge is nothing like his. We probably want to try and focus down a little bit, Huw, so that, rather than have a plethora of indicators that aren't telling us very much, we try and focus action and align it to existing data sets, and then try and push progress. So, just to be really clear—and I know the committee knows this—the point of monitoring is not to say how well we've done, but to actually push progress along. It's nice to be able to say how well we've done, or not, but, really, we want these indicators to push people along this path, so that they go as fast as it's possible to go, and that they have good policies for looking at that. So, I'm going to get Jon, if you don't mind, Chair, to just tell us a little bit more about that.
Yes, of course. Over to you, Jon.
Thank you. Can I just urge a little caution as well? Because there's a temptation, I think, to think that an indicator system will tell us all we need to know, and give us perfect foresight, and make decisions easy. There's a key word here: they're 'indicators', so they indicate progress, or lack of. We have a very, very complex economy, as everybody will understand, and there is a temptation to think, 'Well, if we just put in place 50, 100, 1,000 indicators, and we add up all of the things that we think that they're doing, then that will meet the decarbonisation trajectory we were on.' That is never going to be the case, because there are things beyond those indicators for which we have no control—whether our winter is going to be cold or warm, how the economy is doing. Generally, when the economy is doing better, emissions rise, and the converse as well.
So, the indicator framework that we've set up, as has been articulated previously—and Lucy can help me here as well, because she knows it better than I do—has three tiers, essentially. The first tier is at that strategic level: did emissions come down or go up? Tier 2 is, for what reason do we think did they go up or come down. And then, the third tier, which is, to what degree do we think our policies contributed to that change. So, there are a whole bunch of things that aren't our policies that will have factored in the change: UK Government action, business action, individual householders' actions—turning down the flow in their boiler because the cost of gas has gone up. All of those different things affect the pathway that we're on. And these indicators are just a snapshot and an attempt to understand the degree to which our policies are actually driving action. They are more backward facing, and I think what the evidence paper articulated to you is that we finalised the indicator framework for carbon budget 1 in preparation for the final statement. For carbon budget 2, that work is now ongoing; we don't even have the first years of tier 1 data from the National Atmospheric Emissions Inventory yet—we'll get that in the summer—and that will help us to build the framework.
It's also worth noting that there is a separate system for budgets as well, which Treasury colleagues manage. So, when they are setting the budget, they are going out to officials, and trying to understand carbon impact assessments of the proposals for budget. So, there's quite a complex system of trying to understand where do we put our money to be of greatest effect, and least worst effect, actually, as well. Because that's really important: not just where do we spend our money that drives carbon down, but where do we spend our money that might drive it up. And then there's a whole other system that is trying to understand the effectiveness of our policies.
That's very well explained. Thank you for that, Mr Oates—really helpful. It seems to me like you're aiming a ship in a certain direction, and you're looking to pick the right things to measure and assess to keep you on that track, but things will buffet you, I understand that. So, you mentioned at the end there decisions that would then flow from this on particular policies. So, have there been any policies that have been either adapted or, indeed, ended as a result of tracking implementation and effectiveness with the MRV too, or is it too early to have done that yet?
Would you like me to pick that up, Minister?
Yes. I don't know if it's you or Lucy, Jon—whichever of you.
What I would say is that these indicators are part of that, but, clearly, all of the policies that are delivered across Welsh Government we would hope would have some assessment over time of their effectiveness. The indicators that we've been describing are largely about carbon, but what we haven't talked about for a large part of this meeting is it's not all about carbon. So, most of the policies that are driving down carbon, carbon reduction is probably not their primary function—their primary function might be improving the health and well-being of a certain community, it might be about building a new hospital, it might be about building a new school. So, we would expect, across the organisation, across the Welsh Government, all of the policies that are being delivered to be assessed for their effectiveness across the raft of those objectives. So, that, I would suggest, is the primary mechanism for assessing in-flight policies and whether they need to be adjusted, not the monitoring framework.
Right, but can you tell us whether—
Huw, can I translate that for a minute? Sorry, if you don't mind.
Poor Jon is struggling. So, policies are a bit more arbitrary than your question would lead, aren't they? We have a new policy called the roads review—that wasn't in contemplation when the budget was put in place. Two new Ministers came in, and they had a different policy, and now we have a policy, and that will impact on the carbon budget, but the policy wasn't necessarily in contemplation when the budget was set. That's what Jon's trying to say, I think.
And then there are others that are ongoing. So, you'll all be familiar with the innovative housing programme, for example. My colleague Jeremy Miles has made sure that all new schools are now at net zero. That's an incoming Minister making a change there. So, these things happen not necessarily because they were planned into the carbon budget, but because an incoming Minister has a particular action that they want to take that leads us along that path in perhaps a faster way, or a slightly different way.
That's helpful. Thank you very much.
Thank you. Good. Okay. Delyth.
Diolch, Gadeirydd. Minister, throughout the session this morning so far, we've been talking about how challenging the plans already are to reach net zero by the current target, and I'm actually going to push you further about the feasibility of reaching an earlier target of 2035. Could you talk us through, please, or could you give us an update on, the net zero by 2035 challenge group in terms of the terms of reference, how the group members were chosen, any involvement with the CCC committee, and, moreover, what you hope that will achieve?
Thank you, Delyth. As you know, this is part of the co-operation agreement between the Welsh Government and the Plaid Cymru group, and the agreement committed us to commission independent advice to examine potential pathways to net zero by 2035. I've had a lot of discussions with the designated Member, Siân Gwenllian, and, as a result of that, we asked Jane Davidson to chair the independent group, and she's very fortunately agreed. They've had two meetings already. The group is completely independent from the Government; it's for them to decide where they focus their efforts and what they think the emissions reductions could look like, what can be brought forward and what will result in wider benefit or harms. They're going to publish their terms of reference alongside a public statement to summarise the discussions at the last two meetings and then provide statements on each meeting going forward. The full minutes of the group's deliberations will then be published in the final report to the Welsh Government and to Plaid Cymru as part of the co-operation agreement.
So, just to be really clear, though, the group is different to the CCC. It's looking at the impact on society and sectors of our economy of accelerating decarbonisation and how any adverse effects might be mitigated, including how the costs and benefits are shared fairly. We're going to get the lead Climate Change Committee analyst to attend the group as an observer to just make sure that they're not crossing against each other. But they're doing a very different thing to the Climate Change Committee, I think: that's the point I want to get across. And if they can indicate ways that we can accelerate progress or exceed our carbon budgets in the way that we know that we need to, then great.
Thank you, Minister. I think Janet may want to come in on this as well. But, just quickly, if I could just push you little, I completely take the point that you were making that this is separate from the Government, but if there is a particular hope that you have about what will be the outcome of that group's deliberations—.
So, we hope the group will help us bring Welsh society along with us. That's what we want. That's the big problem for us. So, as I said right at the beginning, we could go to net zero much faster if we didn't care about anything else, but we do care—all of you care; we all care about other things as well. So, the idea is to find a pathway that's acceptable to people and to help us along the kind of behaviour change, 'change is difficult' route, and we hope the group will very much be able to help us along that path. That's a very different remit to the CCC. And it widens out the debate, and frankly it allows us to harness a whole series of experts in their field who are giving their time freely to us in order to help us along this pathway, and I hope that they will identify really good ways that we can accelerate this process in certain areas. I don't want to be cynical about it—I think it's quite difficult to accelerate everything in this way, but there will be areas that can be accelerated, and I hope that they will be able to help us along this path.
And then, I think, Delyth, just to say as well—and I know the committee knows this—no-one has all the answers to this. Nobody knows how to do it. The CCC doesn't know how to do it either. So, we're all just trying to follow the best pathway and the best evolving science, and we're all trying to keep abreast of the science as it evolves. So, harnessing the scientific community as much as we can is a really great thing to do as well, and I'm very keen to do that. We're very, very, very lucky in Wales that we have a large number of people with big reputations in their field who are prepared to come along and give us their time for nothing, for the sheer pleasure of being able to help society along this path, and that goes for this climate change group, it goes for the biodiversity deep-dive, it goes for the energy deep-dive, it goes for the tree deep-dive; all those people are doing this for the love of it. I'm very grateful to all of them.
Okay. Janet, you wanted to come in.
Yes. Just challenging a little bit on that group, what are its terms of reference? You've said what you hope the group will achieve. How did you choose those group members, from what backgrounds are they, and whether the CCC will be involved in the work of this group?
So, I answered that last one, Janet. They're going to come to the group as an observer, and then, tempting though it is to pre-announce things, and you're all very good at tempting me to do this, as I've just said, the group will publish its terms of reference alongside a public statement shortly. So, I'm not going to—
And how did you choose the people on it?
Well, they'll publish their terms of reference and how they were formed at the appropriate time. I'm not going to pre-announce it, sorry.
But there was a process, presumably.
There was a process, yes.
Okay. Okay. We look forward to seeing that soon. Right, we're coming to the last few questions now, Huw.
Thank you, Chair. Minister, we've got to the bit we've all been waiting for: we're going to turn our attention to the UK emissions trading scheme and the carbon border adjustment mechanism and what might be happening both in Europe and here. This is the spicy bit now.
So, the UK ETS: the balance here between making sure that we have this just transition, as you said, to a zero-carbon future whilst we still have steel in Port Talbot and elsewhere in Wales, where we have jobs in Milford Haven around the refineries and so on that are looking for this new future.
So, you've made it clear before that your view is that the ETS does need to challenge industries to move into a new space, but what's your assessment of where we are at the moment with the ETS, whether there is sufficient challenge, but also enabling those industries to actually move to a decarbonised future as well? Where are we?
Thanks, Huw. So, I'm definitely going to get Jon and Lucy to come in on this one, but just to start you off. So, this is based on the 'polluter pays' principle and it's a market-based policy—you already know this—incentivising investment in low-carbon technologies and it allows a journey for high-carbon industries to decide how and where to put their investment along that journey and to decarbonise as much as possible. So, obviously, the UK industry, as you've just said, needs to remain competitive. I have said several times in this session already that we don't want to just close down our industries and export our carbon footprint elsewhere. Actually, our industries are very efficient. It's actually better for the world that the more efficient ones stay in business and we very much want to help them do that. But we also want to encourage them along the road to decarbonising and we know that, previously, some energy-intensive industries have had up to nearly 90 per cent of their emissions covered by free allowances. So, that's not much of an incentive in my view to decarbonise, if you're just getting those allowances for nothing.
So, we're actually—it's called the UK Emissions Trading Scheme Authority and it's formed of the four Governments of the UK, and we're in the process of developing the scheme to make it align with net-zero ambitions. So, we are doing a lot of work and analysing exactly where we are, and, as I said earlier in the session, we have a much higher level of this kind of industry than any other part of the UK. So, it matters to us very much more, in some ways. And we also want—
Sorry to interrupt you, Minister. Could I just ask, because we are running out of time, just for your clear assurances that you're working with those sectors and those players in industry in Wales that are most affected, in making sure that their voices are heard, even if the challenge is strong—that at least we're trying to achieve this just transition?
Yes, Huw. So, I was just going to come to say that the biggest issue for us is greater transparency in the use of the revenues generated. So, when we finally hit on this scheme and people do have to pay for some of their allowances, then the reinvestment of revenues from the scheme should be used to support the decarbonisation of those industries paying the carbon price.
So, for us—that's why I was labouring the point about us having the higher percentage of manufacture—the UK Treasury will collect this in, and, if they just keep it and distribute it on a Barnett formula, then our industries will be paying disproportionately in and not getting proportionately back what they ought to by way of investment. And that's actually a very important point for us and it's one of the things that we're really labouring, I'm afraid, and we're having a bit of an argument with the UK Government about it. And absolutely, we're on the side of the industries here in Wales, because they need that investment in order to get along this journey. And they all want to go along the journey—we haven't got any pushback on it. They know they need to do it, but they need to be able to invest appropriately and to stay competitive. And also, all of them have global masters that they have to persuade to invest, so, they need the UK Government to do that. So, that's why I was labouring the point, Huw, I'm afraid, so—
No, no, fully understandable. I just wondered, Chair, whether it might be helpful, Minister, if you or your officials could drop us a note afterwards on the sorts of things you're trying to get out of those negotiations on a UK basis, because it may be that the committee wants to consider then strengthening your arm in those as well so that we do protect these interests and we don't get the negative consequences from doing this wrong.
We're into the final minute and 20 seconds, so, I'm going to ask for your views on the introduction of a carbon border adjustment mechanism in the UK, bearing in mind that the EU, which we have left, is seeking to introduce and implement this in October of this year. So, in this new post-Brexit landscape that we have, where are we on—?
So, we're very keen to bring forward the consultation as soon as possible. We want to get on with it, basically. We need to understand what the effect of the EU carbon border tax will be for the UK and we need to do that at some speed. I can see that Jon is literally bouncing in his chair desperate to tell you all about—
—yes—the carbon budget. I'm sure you could do it in writing, Jon, but do you mind, Chair, if I give Jon the last minute?
Very, very briefly, then, yes; thank you, Jon.
Very briefly, a CBAM would have two effects: (1) it protects from carbon leakage. We already do that in the UK ETS through those free allowances that the Minister said we give. So, it's an alternative to that—it's not an 'and'. The big thing globally that it potentially does is that, if you're trying to send something to a country with a CBAM, so, say, the EU, sending something into the EU, you are paying a tariff at the border. That tariff then goes to the EU. If you’re a country that is exporting a lot to the EU, why don’t you just put in place your own carbon price and not have to pay that tariff at the border? You keep the money within your territory. So that, globally, is the bigger thing. CBAMs are very, very complex. They work with World Trade Organization rules—they have to—and they don’t necessarily help people when they export outside of that territory. It’s very complex.
Jon, thank you very much. Jon and the Minister, sorry, we’ve gone over time, but I do need to ask—. We’re slightly behind the curve on this in the UK; are there discussions going on in our changed partnership now with the EU about doing exactly that, basically alignment with what’s going on in the EU so that there’s not a competitive disadvantage for the UK here, but also so that we can fit in with the thinking that’s already gone on? Is that going on or is it just a UK discussion?
Yes, it is going on, and that’s why we’re encouraging them to bring forward the consultation ASAP so that we can get on with it.
There we are. Lovely. Thank you. We have concluded this session. Can I thank the Minister and her officials for joining us? You will, as always, be sent a draft copy of the transcript to check for accuracy. Thank you very much on behalf of the committee for your attendance this morning. Diolch yn fawr iawn.
The committee will now break for 10 minutes—actually, less than 10 minutes, because we are keen to kick off promptly at 11:00 for our next scrutiny session with the Deputy Minister. Diolch yn fawr. Thank you.
Gohiriwyd y cyfarfod rhwng 10:51 ac 11:00.
The meeting adjourned between 10:51 and 11:00.
Croeso nôl i'r Pwyllgor Newid Hinsawdd, yr Amgylchedd a Seilwaith. Rŷn ni'n symud ymlaen at drydedd eitem y cyfarfod heddiw. Dwi eisiau, wrth groesawu'r Dirprwy Weinidog Newid Hinsawdd, ddiolch hefyd iddo fe am dderbyn ein gwahoddiad ni ar fyr rybudd i ddod o flaen y pwyllgor i drafod dau beth yn benodol, sef cynnwys a gweithredu adroddiad y panel adolygu ffyrdd a gyhoeddwyd ychydig o wythnosau yn ôl, a hefyd dyfodol cyllid gwasanaethau bysiau yn dilyn datganiad a wnaethpwyd hefyd ryw dwy neu dair wythnos yn ôl.
Mae Lee Waters gyda ni, y Dirprwy Weinidog—croeso. Yn ymuno ag ef mae Peter McDonald, sy'n gyfarwyddwr seilwaith economaidd gyda Llywodraeth Cymru, a Ruth Conway, sy'n ddirprwy gyfarwyddwr trafnidiaeth gyhoeddus ac integredig gyda Llywodraeth Cymru. Mae gyda ni awr wedi'i glustnodi, felly mi symudwn ni'n syth i gwestiynau, ac mi wna i ofyn i Huw i gychwyn.
Welcome back to the Climate Change, Environment and Infrastructure Committee. We move on to the third item of this meeting today. In welcoming the Deputy Minister for Climate Change, I'd also like to thank him for accepting the invitation to come to the committee at short notice to discuss two things specifically, namely the content and implementation of the report of the roads review panel that was published some weeks ago, and also the future of funding for Wales's bus networks, following a statement made about two to three weeks ago.
We have Lee Waters, the Deputy Minister—welcome. Joining him is Peter McDonald, who is director of economic infrastructure at the Welsh Government, and Ruth Conway, deputy director of public and integrated transport with the Welsh Government. We have an hour for this session, so we'll move straight to questions, and I'll ask Huw to start.
Diolch, Gadeirydd. Bore da, Weinidog. We've all read in detail, now, the road building review and the Welsh Government response to it, both from a national perspective, the detail of it, and also local issues for us as well. Let me go straight to what we've seen as the '4x4' of purposes and conditions of future road investment. We don't start from inventing a whole new world here; we start from inheriting an approach and inheriting some legacy issues and cultural issues. So, how do you see the cultural and organisational barriers to implementing this 4x4 of purposes and conditions, and how are we going to overcome them? It's not 'How are you going to overcome them?' I'm genuinely asking how are we, collectively, going to overcome them.
Thank you. I think it is a significant change, and there are significant cultural, practical and capacity barriers to doing this. This is not going to be easy. But I do think it is an exciting challenge, and I think Wales is one of the few countries fronting up to these challenges. But we do it fully aware of what we're trying to do and how hard it is. There are the purposes and the tests set out in the roads review, and we responded with our own set of tests in the road policy statement, which are based on and not significantly different from, but they are termed in our own way. The first is to support modal shift and reduce carbon emissions; the second is to improve safety through small-scale changes; the third is to adapt to the impact of climate change; and the fourth is to provide access and connectivity to jobs and centres of economic activity in a way that supports modal shift. In each of those, there are a set of challenges that I'd be happy to go into and explore. But in a general response to your question, there are numerous issues that we need to overcome.
I deliberately phrased my opening remarks and question by saying we don't start from a clean sheet. We've got some schemes that are semi under way, and some schemes have been on the board for years. They didn't work along those 4x4 criteria and challenges. They're going to have to now, I guess my assessment would be, do some real reappraisal in order to bring forward the schemes, which is going to be a significant challenge, and a challenge in terms of the previous modus operandi of highways departments, local planning departments and so on.
Let me ask you whether you think this new approach will overcome the challenges that we know exist in terms of integrating transport with trip-generating policy areas like land use planning, health and education and so on. We have talked about this so much over the years. We've developed communities and societies that actually cause you to travel further, and very often not to do it by modal shift to public transport but to rely on taxis or cars or whatever. How do you see that working? What further actions are you going to take to address these challenges of integrating transport policy with the wider policy on how people move and travel to work and socialise and so on?
I think that's what's important about this initiative. We are taking existing Welsh Government strategy on planning, on net zero and transport, and trying to operationalise it sincerely, because it's too often the case that, where strategies are published, they're motherhood and apple pie, but the world carries on as it always did. This is a serious attempt to face up to it and say, 'Well, in practice, what do we now need to do differently? How does the plumbing need to change?'
I think it will vary. It looked, as you know, Huw, at over 50 schemes, and they were in very different stages of development. For example, the Llanbedr bypass, which was the first scheme that we ruled on, was at the point of procurement. There are other schemes here that are at very early Welsh transport appraisal guidance stages. So, it's the whole spectrum of schemes. A lot of these were years off, but they were going through this never-ending pipeline. So, it will be different for different schemes, but all the schemes that are not mentioned by us in the national transport delivery plan will now be subject to the tests.
The scheme sponsors—primarily local authorities—will have to show, as they bid for Welsh Government funding, that they're able to meet the tests. What we've said to a number of them is, 'Look, we recognise you have a local transport problem here; we want to work with you to overcome that transport problem.' And, in almost every case, at the first options appraisal stage, other alternatives were addressed and identified but were not proceeded with. So, it's not as if there aren't other things that can be done in every case; it's just they haven't be taken seriously, and that's what now has to change.
On your specific point about sites of economic development, we recognise that there are some real challenges there. I think the example I've given is the Grange in Cwmbran—the Llanfrechfa site—where a hospital site has been built without public transport infrastructure, and there are plans now to build a large housing development alongside it. Clearly, that goes against the spirit of 'Future Wales', the planning policy. We now need to work with the local authority to understand, as the roads review panel says, how can you do this in a way that is an exemplar site rather than perpetuating the problems of the past.
That is really interesting, because there's been a lot of screaming about the announcement and the Welsh Government's response to the road review, accepting the recommendations, basically putting a complete halt on some schemes, others saying 'Come back and talk to us again.' You seem to be saying that there is an invitation here for local authorities, if they're serious about this, and fitting within the criteria, to come back to Government and say, 'Right, let's rethink this; let's put forward another proposal that fits within those 4x4 and the other criteria.' Can I just put one challenge to you in doing that, which others will pick up on? And I'm strenuously trying to avoid talking about my own local area as well, but it will be the common theme. Some of those things that were picked up in earlier WelTAG process parts and so on will indicate things such as significant enhancement of bus services, significant enhancements of rail and so on. I'm really trying to hold back from my own area here. Some of them can be done, but they may not be done for several years, including rail frequency along the south Wales line. Are you open to discussions with local authority leaders across all parts of Wales to achieve that wider Welsh Government desirability of well-being, but economic growth—good quality economic growth in the right places—but also to have proposals that say, 'Yes, we're up for this, but you've got to accept, as Welsh Government, that factors A and B will not be delivered; factor C needs to be done now'? Do you see where I'm going with this? Because some of the things that those earlier WelTAG processes across the country were flagging up were things that cannot be delivered right now, particularly in the multimodal.
There's a lot to unpack there, and they're all fair points. This exercise is about looking at the pipeline of schemes for the medium to long term, and that analysis stands. We need to disrupt that pipeline, so that we don't keep generating the same types of schemes. That doesn't detract from the short-term challenges we have around public transport. But these schemes weren't about that. Public transport is today's problem; these schemes would never have come to fruition for years to come in any event. These schemes are not an answer to a problem an area has with a lack of buses or a congested road, because it wouldn't have helped now. Some of those other measures that were discounted could have helped now.
The fundamental problem we have—we've just had a meeting with all the officials to understand what wiring changes we need to make—is that, with many of the alternative schemes identified, the toolkit to deliver those, and the funding to deliver those, is either not there or is hard to put together, whereas the road option, because we've been doing it, and the system is geared to it, is there; the powers are all packaged together neatly in a legislative suite of actions available. And so, very often, what will happen is that people will say, particularly with schemes that are on the strategic road network, for example, 'We're the strategic road network, so we'll take forward as a trunk road agent those schemes that we have the power to take forward. Those other schemes are for somebody else to take forward.'
And of course, because we don't have the expertise or the revenue funding for the behaviour-change measures that we want, those are almost put in the ’too hard to do’ box. So, we can do this because we know how to do it and we've always done it, so we'll do it. Those other things could solve the problem, but we've never really attacked that in a serious way. I think the fundamental problem we have is how do you rewire that system so a genuine transport assessment is taken of how do we solve these problems with a broad range of transport interventions, rather than saying, 'Let's build another road or let's widen this road', which is what we've always done and which is what everybody else always does. That's not easy and I'm not pretending it's easy. But until we confront it head on and grapple with it, we're never going to do anything differently.
The work has only started, then. There's going to be a lot of conversations with a lot of local authority leaders and others. Sorry, I'll park it there.
And we're not able to do everything we want to do in the here and now. That's the truth of it, and that's very frustrating. Because it's often said by people, 'Well, you should have the alternative in place first before you take away the road option.' But that chicken-and-egg argument is unanswerable, because we'll never have the resources, the bandwidth or financing to build up the alternatives if we're still doing what we've always done.
How will you respond to a local authority leader from north-west Wales who comes in and says, 'Right, we've seen what it suggests, but it's suggesting there we need to do greater investment in stuff, so how do we do that, Minister? How do we do that modal shift? We're up for it, how do we do it?'? I fully understand this is not a problem of your making, but you're going to say, 'Well, currently, the cupboard is bare on bus funding, and on the investment that we wanted in rail, not all the levers are within our power, we need investment in a UK partnership as well.' How do you get past that impasse? Because the hard reality of this is that this is, as has been described, immensely brave. We just had a session with Julie James, Minister, about the drive towards zero carbon and so on, and the need for some of these radical transformative things, but you're going to be facing local authority leaders saying, 'Yes, show us how we do this now, and where the resource is', and you're going to say, 'At the moment, I can't quite help you.'
It will need a willingness to engage from both sides, first of all, sincerely, based on the principles we've set out. These are, in some senses, engineering challenges, and engineers can find alternative solutions. Some of them are skills or attitudinal challenges: do we have the professionals with the training and the world view to carry out some of these things? Do we have the revenue funding available and so on? So, there's a package of challenges there. Transport schemes are not quick. A typical road scheme will take seven years from beginning to end. So, we're not going to solve these immediately, and these are not about the immediate schemes, because we are building new roads today and we'll continue to build roads. It's not saying we're stopping building roads and there's no alternative and we've just got to suck it up. We're not saying that at all.
Joyce did indicate she wanted to come in.
It's just on the same theme, engaging all partners to come on a journey, and pun is intended. There are three partners. The UK Government is one partner, because they have to give us some more money and it's going to take some capital as well as revenue, you've got the local authority and you've got us and anybody else in between. You highlighted very early that Llanbedr—. I'm going to use that as an example of where you stopped a programme and it seems that the local authority haven't come on board. Well, they definitely haven't come on board, because they've applied for money elsewhere. How are you going to persuade local authorities to rethink what they need to do? And again, staying in that area, I know that you've made a statement that it's your desire to use that as a pilot for public transport, and it has got the train network going along there, which has been invested in as well, and also the bus network. How are you going to get people to rethink and how are you going to help them where they need that help?
I've been very encouraged by the response of local authority leaders, I must say. With one or two, literally, exceptions, the overwhelming majority of local authority leaders understand what we're trying to do, they understand why we're trying to do it, and they want to work with us to be pragmatic to find a way through. And I'm hoping that the others will come along on that journey too, accepting that it isn't easy and it's made worse by the short-term funding pressures we have because of austerity and the cost-of-living crisis. So, in a sense, the policy is now settled. There's an evidence base behind it, there's an agreement; everybody accepts that we have to do things differently in transport to achieve our climate change target. Nobody wants it to happen to their own scheme, but that's the nature of human paradox. But I think what we need to do is practically work through each scheme, to find something that's going to make people's lives better that doesn't cause us harm in the medium to long term. So, I think it has to be done on a case-by-case basis. And I've said to the leader of Gwynedd, it takes two to tango, and we remain a willing partner, but the ball's in their court, really.
Okay. I've got Jenny and Delyth wanting to come in, and we've hardly started on the areas that we need to cover, so very briefly if you would.
It's good to know that local authority leaders are on board with your sustainable approach, but, as you say, seven years to build a road, and meanwhile, the planning process is completely not aligned with 'Future Wales'. We are still getting large house builders wanting to build where we don't have those public transport links. There's another one in the north of Cardiff, to add to the horror story that we've already got from Redrow, in Lisvane. Another large house builder now wants to build another huge scheme there. We are nowhere near getting the metro built to support that project. How do you prevent that just becoming another story like the one in Wrexham that we dealt with in the roads review report last week?
Well, I think there are wiring problems in the system, where different parts of the system are working against the policies of the other part, and that's partly what this exercise is about; it's about identifying that, calling it out and working to put it right. So, for example, one of the things we're looking at in developing new regional transport plans that the corporate joint committees have to do—. They also have to do do a strategic plan for planning. Now, those two processes have not been aligned traditionally, and we want to align them. So, we are talking about giving extra resource to local authorities to have people who are working across both transport and planning, so when they do both of those plans, they are in synchronicity. Now, that's going to take time, but that's what we need to do. And the exercise we had this morning was going through the recommendations in the roads review and understanding what wiring changes there are needed. So, one of the things, for example, your example of housing, is that transport assessments are used for housing developments, from a planning point of view, which are different from the Welsh transport appraisal guidance assessments used for road building schemes or for transport schemes. And they have different sets of criteria and different sets of levers. So, a large house builder, for example, could come along, use a transport assessment, say, 'We're going to build 500 houses and we'll make a contribution towards a larger roundabout', and that goes through on the planning side, but it doesn't take into account the broader transport system. So, there are misalignments in the way that we've wired our system, and that's why I think this piece of work is so important and so difficult, because for the first time, we are confronting that. And I don't have flippant, easy answer; we're going to have to work it through.
Thank you. Delyth.
Diolch. Minister, I do think that what you're doing is brave. Obviously, they are really important issues that we need to be scrutinising, and that's really important for the committee to be doing. I wouldn't want that to take away—and I want to put on record that I think that what you and your team are aiming to do with this is a really valuable thing that you are doing. Joyce mentioned three partners that you have, and I'd agree with that, but there is an extra—there's a fourth partner, which is the public in Wales. Now, I know that we're going to be coming on later to talking more about modal shift, but you talked earlier, in answer to Huw, about the attitudinal shift and maybe needing to look at the expertise that is available to get the public onside. I know that there are structural problems; it's not just about getting people onside. But, if we just look at the attitude, if there are people where there are public transport links available, but they would just prefer to use the car—and that is, for them, the only barrier—what work is happening in Government to try to bring the public onside with that, please?
Yes, that's a good question. First of all, I'd say we've become used to, in this country, putting these choices on individuals and, actually, a lot of individual responses are based on environmental or systemic or structural factors. So, the reasons why most people want to use a car is because that's the easiest way to get around. It is convenient, it is frictionless, because we've spent 70 years making it frictionless. Public transport is not frictionless—it is hassle, it is slow, it is relatively expensive, it is not 'turn up and go'. Now, there's nothing inevitable about that—that is something that we've created, and other countries that have made different choices don't have that. So, I think what we need to do is to make the system change, to make the alternatives easier to use.
Now, there will always be journeys by car, as the only practical way to get around. If you've got to take your grandmother to hospital and pick up a bag of cement on the way home, or if you've got a serious disability that you can't use public transport, then the car is only ever going to be the right thing to do. And particularly in deep rural areas, the car is always going to be the main mode of transport. But when you look across the whole system, those are in the minority of journeys; the majority of journeys, in principle, could be shifted to alternatives if alternatives were made easier to use and if we encourage people through habit change—just as we have through recycling—to make different choices. That's not quick or easy, but it's doable. And if we don't do it, we won't hit our climate targets.
Okay. Thank you. Janet, we'll move on to you now.
Thank you. Good morning, everybody. What considerations did you make in your roads review about the implementations in regards to autonomous cars—driverless cars? All predictions point to the fact that more people will actually use these vehicles once they come in, and, of course, there'll be an increase of vehicles on trunk roads once these autonomous vehicles are introduced. But to have them in use in Wales, enormous road improvements will be needed, for the infrastructure. Now, based on your new test for road schemes, a lot of these wouldn't actually be approved. So, is there a risk, Deputy Minister, that, potentially, autonomous vehicles won't be operating in Wales, they'll be stopping at the border? Just explain to this committee where in the roads review was it that you considered autonomous vehicles.
Okay. Well, I don't accept your characterisation of the scenarios there. The predecessor committee to this has done work on autonomous vehicles, and all the experts say that we don't yet know for sure what the reaction is going to be—there are various scenarios. It could be that it adds immeasurably to demand, and hyper-mobility increases, and there'll be lots, lots more car journeys. But there are other options that also might emerge, and we just don't know—it's uncertain.
But you've got to think of the technology, going forward—it's happening.
Sure. I don't deny that. I think what it will do is change our idea of what modes of transport are for. So, for example, if you are able to share journeys, through an autonomous vehicle, that's likely to alter our idea of what a bus service is or what public transport looks like. So, I don't think that it's inevitable to say that we're all going to go in our individual pods, from door to door, and we'll just makes lots more journeys—there are other scenarios that are possible too. But the logic of your argument is the predict-and-provide model that we've been wedded to for 70 years: 'Traffic is going to increase, therefore we should build more roads'. I was looking yesterday, for example, at the red route, which has been one of the schemes that we've decided not to proceed with. This is a circa £300 million, £350 million dual carriageway through ancient woodlands, which some of your colleagues have opposed. But the underpinning analysis of that showed that it would bring a 20 per cent decrease in congestion in the very short term, but, within 15 years, traffic levels on that road would have returned to where they are now. So, think of the embedded carbon in building that road, which is massive, plus the environmental damage, which is irrecoverable, and the amount of money that is then not available to put into alternatives, for a road scheme that would generate extra traffic, then, in 15 years, you'd be back to having a congested road. Now, under your scenario, under autonomous vehicles, we just gets lots more and more and more cars, and the roads would fill up, and then we build more roads. That's just another version of predict and provide.
The question was more about: did you consider it as part of your roads review?
And it's documented, and you've actually—.
We had a series of conversations about it. I had a discursive discussion with experts about a year ago, looking at it. We've considered doing a joint piece of work with other Governments to look at other developments; the UK Government is also doing some future thinking. It's unclear—
But, it wasn't part of your roads review—is that what you're saying?
Well, I'm not sure what you're suggesting as to how it should have been part of the roads review. We don't know what the future holds.
Well, obviously, you would have held discussions, you would have documented, you would have gone out to test the theories, as part of your roads review work.
But what scenario are you suggesting it would have produced that we might not have considered?
Well, it sounds like you're thinking of doing it—
No, not at all; I've just said. There is no science on this; nobody knows what's going to happen. There are different scenarios. Some of those scenarios might see us having lots of minibuses, or lots of cars that act as buses. Some scenarios are about hyper-mobility with a massive increase in demand. We just don't know for sure. In the event of the former—
But will our roads be able to accommodate?
That's a different question. It depends if you mean are they able to accommodate the volume, or are they able to accommodate the technology and the—
The technology and the volume.
Well, the volume, as I say, that's just a different way of making the argument that we should just keep building more roads to keep up with demand, which is not consistent with our environmental targets that you support. So, I don't think—
I have a small question as well.
Well, I'm answering your first question, if I may. On the technology of how we make our roads futureproof for 5G, and so on, yes, we are ducting the motorway now and the trunk roads in north and south Wales in order to put the fibre optics down to anticipate how that might work, but there is a challenge for the whole UK road network and the investment that goes with it. And again, we are uncertain about what that looks like. Peter, did you want to add anything?
I just wanted to add that, subject to other factors, you should, in theory, be able to fit more autonomous vehicles on a given amount of road space, because you don't have to account for the thinking time in braking. So, this was, for example, something that was considered by the Burns commission back in 2020. When they were reflecting on M4 congestion, it was part of the terms of reference that Ministers at the time set for the Burns commission. But this technology—. I mean, a lot of electric vehicle technology is a long way away. If you think about transitions to electric vehicles, we're still talking in terms of 10, 15 years in many time frames. Generally, on the basis of discussions we've had on autonomous vehicles, you can add some to that. So—
But I thought we were looking far ahead.
Well, we're not going to get bogged down by autonomous vehicles, because it is very much in the future and to be established—
Oh, it's got to be considered, and that's why I would have thought that it would've been—
Yes, sure, and I think you've asked the question about three times, so I think we've got as much as we'll get.
It has been considered, to answer your question.
Okay. And then, my final point. Knowing anybody who—. I know youngsters; I know what I was like. As soon as I become of driving age, I wanted to pass my test and have a car. There's something about car ownership that people love. [Interruption.] I'm sorry, but it's, you know—. Do you not think that—? I've already made the point that we're trying to squeeze or push people onto public transport. Certainly, the train system in Wales isn't working well, and buses are being removed from rural areas and things. So, I just—. It beggars belief that you're still forging ahead with this agenda of trying to minimise the use of cars in terms of not appreciating that people, we have a choice, we have freedom in this country. But would you not accept that, for some people—and really, the majority—if we're out knocking doors, the majority of people—
Let's just get to the question, shall we, because we're short on time, Janet? Ask the question.
—have cars in their drive because they want a car in their drive. Part of that is down to the ownership of a nice car. How did you consider any of that in your roads review?
Gosh, there's a whole bundle of issues there, Janet. First of all, on the first one, on the rite of passage, the cultural importance of owning a car, there's lots of evidence to show that that is changing. The current generation of young people are not learning to drive in the numbers that you did or I did in my generation, and the later in life you learn to drive, the fewer miles you travel and the less likely you are to use your car. They are very interesting new trends that you might wish to read some more about and consider. So, things have changed since you passed your test, and there's very good evidence to show that; I'm not making that up.
On the issue of pushing people and forcing people and taking away options, that's not what we're doing. You and I have both signed up to a set of climate change targets. Now, I haven't heard from you a single practical idea of how we might meet those in transport, other than complaints about what we are doing. And if you have a different way of getting to those targets, achieving our carbon budgets, achieving modal shift, which the UK Climate Change Committee says needs to happen, as well as electrification, I'd very much like to see them and consider them, because we've got an open mind on how we do this.
We've asked an international panel of experts to translate those targets into a policy of how it applies to our roads, and that's what we're considering, evidence based. What you've given me is a series of anxieties that people have about change, and I understand that. That's why we need to work with them and work it through to not feel like we're taking a choice from them, but, actually, to give them more choice, because currently, lots of people don't have a choice. That's why they have three cars in their drive, because they don't think anything else is practical. And if we give them other practical alternatives, it takes away the burden on those families to own so many cars. They may only need to have one car, and they can have a rental car, they can have a shared car, they can have public transport, they can have e-bikes. There's a whole range of things that, if you give people other choices, as they do in other countries—. We're not somehow an exceptional race in this country, Janet, and we have to have cars. Other countries manage perfectly well where their Governments give them choices. We have spent generations not giving them choices.
Okay. I'm just going to come in with a couple of questions, if I may, and I will come back to you then for questions around the budget, and then we really have to move on. On the North Wales Transport Commission, you explained when you made the announcement about which projects were proceeding and not, in relation to the Menai crossing, that you were expecting the North Wales Transport Commission to come forward with some recommendations about alternative approaches.
I don't think I'm breaching any confidences in saying that, when we had such a good briefing from Lord Burns as Members, there was a bit of a—. I felt there was some confusion around your expectation vis-à-vis his interpretation of that. So, can you just clarify to us what discussions you've had, and what you are expecting of the commission in relation to the Menai bridge, and whether that's feasible within the existing time frame of the work that they have to do?
Well, I'll ask Peter to add to this, but I spoke personally to Lord Burns, before this announcement was made, about whether or not he'd be prepared to look at this, and he consented to that. We're about to write to him just to formalise that. They were already looking at the whole issue in any event. I guess what particularly changed is this report was delivered to us last September. We've taken some time to go through lots of the detail of it. In the meantime, there were obviously the issues with the concerns on the Menai bridge, and the question of resilience was raised. That's why I decided to look again, not take the commission's recommendations on this at face value, but to ask Burns to look at it in the broader context of resilience and the corridor approach. Peter, do you want to add about the conversations you've had?
Sure. So, I met Lord Burns both before and after the announcement to discuss this, and the point, as the Minister said, was that the commission was already looking at this, because they were already looking at travel patterns, and there is a very clear corridor of travel between the island and the main line, and they were reflecting on what the right transport solution should be for that area. So, I think what the roads review announcement has done is just added a point of emphasis to that work, especially in relation to the bridges and road transport over them, and we will be continuing to support them to make sure that they can look at the range of evidence. So, for example, they're having a briefing, I think, this week from my roads team on the number of times the Britannia bridge has been shut, and resilience issues. So, we're going to make sure that they have all the information to allow them to come to that judgment, and I would expect that, given the nature of the commission and their terms of reference, their judgment will be about what type of transport solutions we need over that crossing given the types of travel patterns that we've had in the past, that we had during the bridge closure, and that we may have in the future. They will be thinking about what the right transport solutions are for the journeys that people are trying to make.
Okay, fine. Thank you. I just wanted to probe that a little bit. Janet.
Thank you, because that was part of my next question.
Yes, I know.
But anyway, moving on, Deputy Minister, have you advised the North Wales Transport Commission that they're supposed to be reviewing the A470 between Glan Conwy and Betws-y-coed? On 22 April, you wrote to me, stating,
'The section of the A470 between Glan Conwy and Betws Y Coed will fall under this commission'.
I had a meeting with the commission the other day and they weren't too sure of that. So, because I've raised that as a constituency issue, can you just say whether you still expect it to be part of that commission?
Well, they're looking at the whole of north Wales, Janet.
But, with this stretch in particular, when we had a meeting with them, they didn't seem to be too familiar. So, can you just go back to the drawing board on that one and make sure that it is included in the commission?
I think the Member has made her point, and a very valid point—more focused, maybe, on constituency matters than the general scrutiny that we're undertaking here. So, maybe you could write a note, or do you want to respond briefly?
Well, we've set the remit of the commission to look at transport in north Wales. It's for them to decide how they want to do that, and you need to make your representations to them as a key stakeholder.
Well, I have done, through you, and you tell me that it's happening—
No, it's directly to the transport commission, then, isn't it? That's where you need to make your point initially, because the commission will report to the Deputy Minister, and you will then presumably take action as a result of that. Okay.
Next one: the Welsh Government has published details of funding spent to date on the reviewed schemes. How much money has been spent on schemes that are no longer proceeding, how much of the work funded can be recycled in developing new proposals, and, given the need to manage public money responsibly, can the Deputy Minister outline the process you followed other than the review itself when deciding it was appropriate to write off any public funds? And you know where I'm coming from with this—£9 million in one scheme I'm aware of. When you look at the costs of money that have been involved—.
I'll ask Peter to answer on the detail, but, on the general point, I don't accept the logic of your question, that we should continue to spend money on schemes that we don't think are effective and are not in line with our climate change targets just because we've spent some initial funding on them. The problem that any incoming transport Minister has is because of this endless sausage machine of schemes that come from nowhere—a study is commissioned, a second study is commissioned, another study is commissioned, there are then Orders given, there's the planning inquiry given, a design is made. You're then at year 5, year 6 of a project. It comes to a Minister for final decision, millions have been spent on the scheme, local expectations have been created, and it's almost impossible to pull back from that. So, the whole point of this process was to try and stop that pipeline and apply our existing policies to say, 'Are these still in line with what we should be doing?' Inevitably, that is going to involve some redundant spend, but unless we did pull that brake, we would continue to spend money on things that harmed the environment, harmed communities and didn't get us to where we need to be. But Peter will answer your detailed question.
So, there will be, I'm sure, an element of redundant spend, but a material portion will be recycled. The extent to which elements will be recycled will depend on those conversations with the individual local authorities that we discussed earlier. But if you think about how a scheme is developed, a large portion of the time and energy is spent on understanding the transport problem, it's spent on understanding the journeys that people are making, looking at the data on where accidents have been. All of that is relevant to thinking about what the best solution is. So, I would expect a very significant portion of it to remain valid. We will not know the precise percentage of that—I can't give you a number today—until we know the nature of things that will be taken forward.
Okay, thank you. Before I come to Jenny and others who've been very patient, can I just check that you have, or have you, accepted all 51 recommendations, because I'm not sure that we've seen an itemised list of whether you've accepted them individually or not?
We haven't decided to respond to the report in that way. What we've said is we've accepted the core recommendations and the direction of travel, and we've published our own road policy statement and we've published the schemes that we are going to go ahead with. So, there aren't any of the recommendations we have any difficulty with. In our own statement, we've phrased the tests in a slightly different way. Let me give you one example, where in the roads review it said that—and I'm quoting from memory here, so this is not verbatim—sites for economic development should only go ahead if they have a potential high modal share. Now, we were concerned with the way that was worded. If we simply accepted that, that would mean there would be large parts of Wales that might never be able to achieve a high modal share and, therefore, would not have any economic development. Clearly, that was not something we supported. So, instead, we took the spirit of that, but worded it slightly differently. So, for example, we say—let me make sure I'm getting this right—in the fourth test,
'To provide access and connectivity to jobs and centres of economic activity in a way that supports modal shift.'
So, where a site is developed, everything needs to be done to maximise the modal shift that is possible at that site, rather than saying the other way around that, unless it has that, it can't go ahead. So, it was those sorts of nuances we put in, but we've absolutely accepted the principle and the core approach they've set out.
Okay, thank you. Jenny.
There's lots of really exciting detail in this that we haven't got time to go into. What I really want to focus on is how we're going to prioritise the best regional schemes to achieve modal shift and reduce car use, and whether the public bodies like the corporate joint committees and Transport for Wales really have the skills and the capacity to effectively deliver those regional multimodal investment programmes in the time that this requires.
Well, I think that's an excellent question and a very fair challenge, because the answer is 'not yet'. I think that's the honest answer, and that's what we're working towards. Peter, do you want to jump in at this point?
Only to confirm that it's an excellent question and one that—[Laughter.]
Let's hear an excellent answer, then.
I suspect it will take—. That's essentially my job now for the coming months. Iit is not to review individual schemes; it is to think about the capability and the skills that we've put in place to allow for those regional multimodal solutions. I'm quite conscious that if you look at our revealed preference for these things over the last few years, each time we've wanted a regional multimodal answer, we've established an independent commission. So, clearly, we have implicitly made the judgment that we didn't have the skills and capability in-house, so to speak, to make that happen. That is clearly not tenable for the long term, so the question now is how do we mainstream this in the thinking. What the roads review response does is clearly demonstrate that there is a different policy context. That's a very clear signal we now need to put, in particular with Transport for Wales and CJC colleagues, the plumbing in place, so to speak.
I think we have the ingredients, Jenny; it's just about putting them together for the best recipe.
So, we have the metro regional teams, for example, within TfW. We have the Burns commission delivery unit in south-east Wales, which is a tripartite of the local authorities, the Welsh Government and TfW. Hopefully, we'll have the same in north Wales as a follow-up to Burns, and, of course, we have the regional transport plans and the CJCs, and it's about pooling those resources to make sure that we get a regional and multimodal approach.
A good graphic is better than a thousand words. Do you support, then, the methodology suggested by the roads review that's on page 33, about getting all these problems identified by the local authorities, Transport for Wales and the Welsh Government, and to distil the proposals so that you get the best outcome without all the sausage machine that the Deputy Minister was talking about earlier?
Yes, we do.
There we are, lovely. Thank you. Joyce.
Thank you. In terms of other reviews and recommendations, beyond the new purposes and conditions—those things that will be taken forward—are we able to recycle some of that money? You've sort of answered that, but how are we going to address the skills gap, because there's going to be a big skills gap here? And it's not just the skills in terms of who is delivering it in terms of policy, but who will be delivering it on the ground, so to speak? How are we going to do that, and are you working with, or how are you working with—because I'm sure you are—the Minister for skills?
Again, a good question and a fair challenge, and one we're very alive to. So, some of this is about using the skills we already have, but within a different policy context. So, we're not saying we're stopping building roads. We're going to need roads, but when we do build roads, they are roads that meet the tests—so, for example, including bus lanes and active travel networks and lower speed limits. We have the skills to do that; it's just a different set of marching orders.
I guess the skills bit we are less strong on is the behavioural-change softer measures that go alongside that, which are also more difficult to fund, because they require revenue funding and not capital funding, which. again, is another example of how the system has been wired to produce, or to encourage, one set of outcomes rather than another. That is going to change. We are looking particularly at the role of Transport for Wales, for example, and how we can make them a multimodal transport delivery organisation. They were set up essentially to deliver a rail franchise. We're adding bus onto that, we've added active travel onto that, and we're considering adding roads onto that. But the challenge for them is just this: what would it take you genuinely to break down these cultural silos and have the delivery skills available to take a genuine multimodal approach? Where are the gaps? How do we fill those gaps?
Could I just add that there's a lot of interest in the industry in this? So, civil servants don't build roads, and that's probably quite a good thing. Who we have been talking to as we've been announcing the roads review is we've been talking to the consultancies that do a lot of appraisals, we've been talking to the civil engineering profession. They see a very strong case for doing more work in Wales because we are putting together a more innovative approach to building transport solutions. So, there's a really interesting story to tell about them bringing their best people to Wales, working with us creatively to come up with these solutions. So, we'll be spending a lot of time talking to the industry, to make sure that they, as the people who do the majority of the work, under the guidance of Transport for Wales and the Welsh Government, are investing in their skills and capability, and that we are explaining the policy in the best way to them. But there is a lot of interest in those conversations.
Okay, thank you. Did you want to carry on?
There we are, okay. Shall we come to Delyth, then?
I'm happy for Jenny—. On modal shift, I'm happy for you to lead on modal shift.
Okay. Let's get on with it. I think, just going back to overcoming the cultural shift that's needed, I just wondered how we're going to get the roads review recommendations fitted into wider plans for modal shift and particularly the elephant in the room, which is things like road user charging in order to generate the resources we need in order to improve our public transport system.
Well, as you know, the air quality Bill will include the option for clean air zones. You'll know that Cardiff Council are developing plans for road user charging in Cardiff and, in conjunction with the city region, potentially across the region too, and that work is happening now. We're in close discussions with them to co-design that. So, our policy in the Wales transport strategy is to support road user charging. I think it's an important demand-management intervention, but it has to go alongside alternatives, and I think that's what's attractive about the approach that Cardiff are proposing—that the money they raise from a relatively modest charge will be hypothecated to a cross-rail metro service in Cardiff, so people will be able to understand why they're having to pay a charge and how that charge will actually give them more options. So, I think that the design of it, and how we communicate that, as has happened in London, as is happening in Birmingham, is critical and that work is ongoing.
Okay. With my constituents on Newport Road in mind, how quickly can that be made to happen, because when talking to Cardiff Council, they're talking about five years' time, which feels a very long time away?
Well, there's always a balance between taking people with you and doing it quickly, and that, I think, is the tension. Now, there's a strong case for cracking on with it, but the powers to do it are complex and the planning around it is not simple. So, it is going to take some time. For Newport Road, there are active plans now for putting in better active travel infrastructure, which will help with modal shift and improving air quality as a consequence. But the whole frustration, Jenny, with the whole transport agenda is that the gap between having an idea and seeing the idea implemented is very long, and the real problem we have is that climate science tells us we haven't got long, and that, for me, is the great frustration—that the disconnect between the urgency for change and the ability to deliver it is out of sync.
Huw then briefly, and then I will come to Delyth.
Yes, very briefly. There are six or seven major cities and metropolises within England currently that either have considered or are considering congestion or clean air zone charging, et cetera. It has an effect. When I went up in the recess to London, I made the choice to take my bike with me and travel by bike across London because my diesel car would have a punitive effect. But the fact is that the money then goes into the transport—the public transport.
I just want to challenge you on one bit as you think about this, which is, it cannot be, I would suggest to you, Cardiff on its own as a local authority. It cannot even be a Cardiff and Newport. That whole M4 corridor needs investment. So, if you are going to say to people and bring people with you, you need to say, 'Well, there will be a regional approach to transport charging in the big congested areas and that should then go to regional funding, not just Cardiff.' I say that very strongly, because, equally, people who are travelling from Pontyclun or Llanharan on buses, not just rail, do not want to see another core Valleys and Cardiff strategy; they want to see this extended—that's a real metro.
Yes, I completely agree and that's one of the purposes behind the regional transport plans—that we do take regional multimodal approaches with carrot and stick.
Okay, diolch. Delyth.
Diolch, Cadeirydd. Minister, I've got a few questions on bus funding, specifically firstly on the bus emergency scheme. Could you talk us through, please, what changed in the four weeks—? [Interruption.] Or do you want to have some water? Are you okay?
It's all right; I've got a cough I can't get rid of.
No, no, it's fine. In the four weeks between when you sent our committee the draft budget paper, which included the £28 million allocation for that scheme, and then your statement on 10 February, what had changed in those four weeks? If you could explain that to us, please.
Well, it's been an evolving picture really. As the extent of the pressures within rail have become more apparent, we have got significant cost pressures, as has every infrastructure project in the western world, because of inflation, because of supply chain disruption, because of skills shortages, so, that is, I think, plain and clear to understand. That has created pressures within the whole main expenditure group, both from the housing costs—I think we covered this when we did the group budget session—as well as every infrastructure cost. So, we've had to absorb the cost rises, which have been very significant, within the MEG. So, that’s a significant issue.
There are also changes within the bus system itself—the way that concessionary fare demand has flexed, the way that we’re able to sustain that funding, given the other pressures within the Government’s overall budget. And that has created a very acute pressure, not just in Wales, but across England and Scotland too. What we’re doing in Wales is what they’re not doing in England; we are providing a three-month period, rather than a more severe cliff edge. But I’m not going to skirt around the problem: we do have a very difficult dilemma here, that the privatised bus industry has only been able to survive through public subsidy during COVID. Passenger numbers have not recovered, the fare box has not recovered, and unless we continue to subsidise to the levels that we can, we’re going to have to see service changes. We cannot continue to subsidise to the level we have been because of wider budget pressures. So, we need to figure out how we can get a smooth glide path out that keeps a core bus network in place, but does it in a way that we can afford.
Ruth has been leading on the discussions with the sector. Ruth, do you want to add anything to that?
No, I think it is difficult because of the quantum of funding. And, as you said, it’s bus emergency funding, and we can’t rely on that going forward. So, it is looking at what support we need to put in place and the work with the operators and the local authorities on the wider network planning.
And, just to say, we don’t just give the bus industry bus emergency funding. There’s well over £100 million of annual funding for the bus industry from the bus support grant, from concessionary fares, from school buses. So, we are putting significant ongoing investment into the running of the bus network.
Thank you for that, Minister. If we can delve into that, actually, a little bit further. You’ve quoted a number of times a figure of, I think, £150 million in terms of what’s been spent on supporting the bus industry during the pandemic. Could you tell us—? As I understand it, that figure includes the bus services support grant, the concessionary fare reimbursement, school transport. The last two are statutory duties and they would have to be provided, and both of those payments therefore are for a service that’s supplied, rather than a subsidy. What I mean is: if the service isn’t provided, no payment would be received. Do you think that that figure of £150 million is a fair reflection of emergency support or pandemic support?
Well, it’s the amount of money we’ve put in to sustain an industry. There wouldn’t have been school contracts when there were no schools open. So, I understand the position the industry are in. They’re in a bind, and we are working with them and talking with them. They recognise that without our support there would not be a bus industry in Wales at the moment. I realise that they are doing an awful lot of lobbying trying to keep things on an even keel. The reality is that we’re going to have to face changes and they need to and are engaging with us on what that future looks like. And energy spent on trying to say that we should keep things as they are is not well-spent energy because we can’t keep things as they are. Ruth, do you want to add anything on the specific question?
No. We are working with operators and local authorities to look at the networks.
No, that’s really welcome to hear. Thank you for that. You were mentioning earlier about the investment that has been put into TfW, and obviously all of us want to see public transport generally having that investment. Roughly 75 per cent of all public transport journeys in Wales at the moment are made by bus and, just looking at the disparity of the money that’s going in—I think that TfW’s business plan for 2022-23 shows £266 million revenue funding allocated to support the running of the all-Wales TfW rail franchise—and the difference in passenger numbers in terms of all the journeys, do you think that that breakdown is a fair one?
Well, this is a really good and interesting area to explore, because clearly from a climate change and a modal shift point of view, bus has a far greater potential to achieve modal shift than train does. Bus deals with a great social inequity in a way the train does less well. So, from a priority point of view, bus is absolutely where our priority should be. The bus system is a privatised system. So, we have got to a position where the market has declined and the buses are no longer commercial. Because the fare box has declined post COVID, they can only run with public subsidy, but that subsidy is going into an inefficient bus system. That’s why we are creating the bus Bill, to create a planned and strategic bus system so there isn’t leakage out. So, for example, under the new franchise, we would want to be able to cross-subsidise a profitable urban service with a less profitable rural service. Now, you can’t do that at the moment, so we're having to double-fund, in a sense. I don't think there's a good argument to just keep putting more and more money into a system that is inefficient. That's why we need reform, both to recognise current changed patterns of patronage, but also to recognise the need for a new structural system, and that's what will happen when we bring the bus Bill in, but again there's a time lag.
On the point on rail, I think the fact is that rail systems are really expensive—really expensive. Somebody was making the point the other day that in some services it would be cheaper to buy somebody a car than to run the rail. A single service can cost £30,000, for example, to run one carriage down and back a railway, when you're sometimes carrying six passengers. So, we do have a very expensive piece of infrastructure running, which politicians are very attracted to having more of. Everybody wants a railway service and station in their area and in their valley, and I'm sure if I look at my correspondence, you will all be on that list. But I think we need to face up to the fact it's a very expensive way of running a transport system. The truth is, we've taken ownership; we have a rail system—we have to support it. Were we just to stop running services tomorrow, we would save very little money because of all the fixed and sunken costs. So, we do have a dilemma of where we do want to improve, particularly the north and south-east Wales metros, because we're committed to doing that, and the work is under way. A huge investment on this £1 billion project has already been committed, and we can't pull back from that. We also have that, just as with bus, with rail, the fare box has been suppressed because passengers haven't returned, so we're having to increase the amount of subsidy to run the existing services, and we are investing in upgrades. So, there is a very difficult push-pull. Now, I understand the point the bus industry are making in their lobbying, 'You should be giving all the money to us and not giving it to rail,' but it's not quite as simple as that.
Last question, Delyth.
Yes, final question. There are some technical things that perhaps we could write to the Minister about.
But this isn't just from the industry though. In terms of, again, getting that model shift and getting the public buy-in, because 75 per cent of the journeys at the moment are made by bus, do you—? I recognise the points that you're making, but do you see that there perhaps needs to be more of a recognition or a look at where people are at the moment in terms of their public transport usage, and putting that investment there as well?
I'm not where I want to be in this situation, as I've discussed before. We've been working really hard to try and get a flat £1 bus fare, which I think would have been a significant intervention to have been able to have done, both to encourage modal shift and tackle social injustice, but also, frankly, politically, to help make the case for the roads review. We haven't been able to do that, not because we don't want to do that. So, I don't need any persuading at all about the value of buses and the desirability of increasing their frequency and their quality and reducing their cost. I am signed up to that.
What I have in front of me is a very difficult set of circumstances to navigate, to deal with the commitments we have, the pressures we have, the reduced funding we have because of austerity, and the increased costs we have because of inflation and the mismanagement of the economy by the UK Government. So, this is not a great position to be in, but I think we need to look, as the future generations Act tells us, not just at the short term but at the long term, and the decisions we are making in the long term, through the structural changes of a new bus Bill, about changes to local streets through 20 mph and pavement parking, about changes through the roads review to a multimodal approach, are all taking us in the right direction, but we do have some real short-term challenges.
Okay, thank you. Sixty seconds each to Huw and Jenny, and that includes an answer from the Deputy Minister. Huw first.
If the UK Government, of course, who've hit the cliff edge sooner, decide to actually inject some money, then that might give you some temporary breathing space again, but what I wanted to ask you was on the point that was made about coming out of this over the next three months with some sort of 'core service'—that was your phrase. I just want to be crystal clear: is that core service what we would understand as some of the discussions we've been having with local authorities and TfW over core lines of bus up and down valleys and so on, or are we talking about something more severe than that—a skeleton service? I want to be clear, because my understanding of what is a core service is some of the discussions that have been going on over the last 12 months. Or is it beyond that?
Well, that's what we're working through now with the industry, and to be honest, we don't know. We've asked them for projections of, 'If funding was adjusted by x, what would the impact be?' 'What service could you run for so and so?' We can't get a clear answer, because it's very hard for them to project and forecast that. Ruth, do you want to add anything?
We're not, I would say, in control over which routes would go. So, if there's reduced funding or no funding beyond the end of June, decisions will be made by the commercial operators, so it's hard to identify what that core—
So, it's not the work—to be clear—it's not the work that some of us will have been engaged with local authorities on.
It's not that work, no.
These are private companies who are free to make their own decisions. The only control we have is we give them all the money. When we don't give them all the money, we can't control the decisions. But the conversation we're trying to have with them is, 'In exchange for a certain amount of money, are we able to reach agreement on which services are more important than others, if you have to prioritise, and to preserve them?' And that's an ongoing conversation.
Thank you. Jenny.
Well, this is the eye of the storm, isn't it, and I just want to take us back to the regional approach that Huw Irranca is advocating, and is strongly advocated by Lord Deben as well in the context of the climate emergency. Because, it seems to me that, in the absence of any further funding coming from the UK Treasury, our only option is to start charging people for things that are contributing to the problem, in order to use that money to invest in better public transport. I just wondered how you're going to do that, either through the clean air Act or through the bus re-regulation scheme, because, if you leave it to local authorities, we all know that there will be a reluctance to do it.
The problem we have with the buses is a short-term problem. The suggestions you're making are not short-term solutions. That's the real dilemma that we have. We are in a short-term fix, which is distressing for all of us. It's not where any of us want to be. We have to do our best to find the best way through it that we can.
But your broader point about the need for incentive and disincentive is absolutely right, and I draw the parallel with recycling, where now we've got, I think, from memory, a 43 per cent drop in emissions from waste since 1990; in transport, a drop of 6 per cent. How have we achieved that? We've achieved it by central leadership by the Welsh Government. We've achieved it by close working with local authorities, investment in capital, and disincentives—you'll remember, we had fines on local authorities who didn't meet targets. No-one's suggesting that yet for transport, but that's what happened in waste. And we made it easy for the end user. It is now, depending on the local authority you're in, generally easy to recycle your household goods in a way that it wasn't in 1990.
So, we've achieved behaviour change, systems change and emissions reductions in waste and recycling. So, we can do it through transport. But I think we need to learn the lessons and apply them consistently.
Ocê, iawn. Wel, diolch o galon i chi, Dirprwy Weinidog, am ddod atom ni, a'ch swyddogion, y bore yma. Rŷn ni'n gwerthfawrogi'n fawr iawn y ffaith eich bod chi wedi bod yn barod i ymateb i'n cais ni i ddod yma heddiw. Mi fyddwch chi'n cael copi drafft o'r trawsgrifiad i'w wirio, ac mi fyddwn ni, wrth gwrs, fel pwyllgor, yn ystyried yr hyn rŷn ni wedi'i glywed. Mae'n debyg y bydd yna gwestiynau pellach gennym ni ar ffurf ysgrifenedig, ond, hefyd, dwi'n siŵr y bydd gennym ni efallai bach o adborth a rhai sylwadau i'w cyfleu i chi hefyd yn sgil yr hyn rŷn ni wedi'i glywed. Felly, diolch o galon. Diolch yn fawr iawn.
Okay, fine. Well, thank you very much, Deputy Minister, for coming here today, and thank you to your officials. We're grateful to you for being willing to come here today. You will receive a copy of the draft transcript for you to check for accuracy, and we as a committee, of course, will consider what we've heard. We're likely to have further questions in written form, and I'm sure there will also be some feedback and comments for you as a result of what we've heard. Thank you very much.
Diolch yn fawr. A Dydd Gŵyl Dewi hapus.
Thank you very much. And happy St David's Day.
Dydd Gŵyl Dewi hapus iawn, ie. Diolch yn fawr iawn.
A very happy St David's Day, yes. Thank you very much.
Fe wnawn ni symud ymlaen, felly. Ar yr agenda, mae papurau i'w nodi—eitem 4. Ydych chi'n hapus i nodi'r pedwar papur gyda'i gilydd? Ie. Ocê. Diolch yn fawr iawn.
We will move on, therefore. On the agenda, we have papers to note—that's item 4. Are you happy to note all four papers together? Yes. Okay. Thank you very much.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).
that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).
Cynigiwyd y cynnig.
Eitem 5, felly, yw cynnig i symud i sesiwn breifat. Felly, yn unol â Rheolau Sefydlog 17.42(vi) a (ix), dwi'n cynnig bod y pwyllgor yn penderfynu cwrdd yn breifat am weddill y cyfarfod yma. Ydy'r Aelodau yn fodlon? Iawn. Diolch yn fawr. Mi oedwn ni eiliad, felly, wrth i ni fynd i sesiwn breifat.
Item 5, therefore, is the motion, under Standing Orders 17.42(vi) a (ix), to resolve to exclude the public from the remainder of the meeting. Are Members content? Yes. Thank you very much. We will, therefore, pause for a moment as we wait for the private session to begin.
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 12:03.
The public part of the meeting ended at 12:03.