Cynulliad Cenedlaethol Cymru

Good morning, everybody. Welcome to the Committee for the Scrutiny of the First Minister. We're delighted to have the First Minister and his team with us. Just before we start, we've had apologies from Janet Finch-Saunders and from Russell George. And I just wondered whether Members could just put their electronic equipment on silent, please. I don't want you to turn them all off, but I can't cope with the pinging—I always think the microwave meal's ready—so if we can just switch them off, that would be good. We operate bilingually, so there are headsets. We've had no instructions that the fire alarm is going to operate, so if it does, we'll take our instructions from the ushers who will direct us as to the best course of action.

So, as I said, it's scrutiny of the First Minister, so welcome. Can I ask you just to introduce your officials and perhaps give us their titles, please?

Thank you, Chair. On my right is Des Clifford, who is head of many things in the Welsh Government, but for the purposes of today is head of the First Minister's office and head of the team of people we have working on Brexit across the Government. And to my left is Liz Lalley, who works in that team but whose particular brief is for Brexit preparation.

Okay, well, thanks very much. We had had—well, we still have had a paper to—. Brexit is what we want to talk about today, and it was going to be the main area of scrutiny, as you can imagine. However, things have moved, as we know, so we just thought we'd ask you: could you give us an update as to where you think we are now in terms of how it will affect Welsh Government, and then we'll take questions from that?

Thank you, Chair. I think perhaps the easiest way I can do it is just to recount some of the events of this week up to this point, beginning on Wednesday. So, on Wednesday, I went to London to hold a joint press conference with the Scottish First Minister, and the purpose of the press conference was essentially twofold. First of all, it was to set out our opposition to the deal that has been struck between the Prime Minister and the European Union and to explain why, in my case, I believe it to be such a bad deal for Wales, and the Scottish First Minister did the same in relation to Scotland.

Our objections to the deal are the ones that you will know—that it goes backwards on the Theresa May deal, and substantially backwards on the Chequers White Paper of June 2018, which in terms of where our views and the UK Government's views got closest together, it was probably in that Chequers White Paper. The Chequers White Paper offered dynamic regulatory alignment for goods and agricultural products, which would have meant that, for the manufacturing industry and the rural economy in Wales, there would have been access to the single market. It had a customs arrangement—they wouldn't use the word 'union', but, in practice, it was pretty close to it. And it had a commitment to at least non-regression in relation to workers' rights and environmental rights. It didn't do what we wanted, which was to keep pace with developing rights inside the European Union, and we had objections to the political declaration and so on. But the Chequers White Paper, we gave a cautious welcome to it. By the time Mrs May came to put her deal in front of Parliament, she had moved back from the White Paper, largely in response to the resignation of the then Foreign Secretary, the then Secretary of State in the Department for Exiting the European Union, and so on. So, to please people on the right of her party, she had compromised further away from our position, and we weren't able to support her deal.

And the deal struck by Mr Johnson is far worse for Wales—twice as bad, we think—in terms of the detrimental economic analysis. The Chequers deal, the Government's own analysis said, would've left the UK economy 4 per cent smaller than it would've been had we simply carried on inside the European Union. The Johnson deal is twice as bad for Wales as that.

So, we set out our objections to the deal and we set out our objections to the process. Because, as you know, at that point, the Prime Minister was hoping to railroad this deal through the Houses of Parliament in a matter of a few days—far fewer days, for example, than the 2017 Wales Act was debated on the floor of the House of Commons. And we were there to make it clear that there are rights that the National Assembly and the Scottish Parliament have in all of this, because of the need for legislative consent motions. Now, that afternoon on the floor of the House of Commons, the Prime Minister answered a question from the leader of the SNP in the Commons that denied that there was any role for this Parliament and the Scottish Parliament at all, despite the fact that his Government had already written to us by then, seeking our consent. So, part of what we were doing for the UK media was to draw that to the surface in a way that, if they relied on London and Whitehall sources, they may never have known that we had a constitutional obligation to consider a legislative consent motion. So, the other thing we were there to do was to set all of that out.

I went later that afternoon to do a briefing for Welsh Members of the House of Lords and the House of Commons, from all parties. There was a general invitation to come. It was a very well-attended meeting; it was standing room only in it. There is a real appetite in both those Houses to understand the Welsh position and the arguments that we are putting, so I thought that was very encouraging to see. There were no Conservative Members who came to the briefing, but there were Members from all other parties that we would've expected to see there.

What has happened since? Well, the Prime Minister appears to be saying to the House of Commons that if it doesn't agree to do things in the way that he wants to see them done, the Government will go on strike. We've heard that the budget that was scheduled for 6 November has now been cancelled. But unless everybody else agrees to an election on the date of his choosing, then he will refuse to bring the withdrawal Bill back for debate on the floor of the House of Commons. And he will refuse to bring any Queen's Speech legislation through as well, despite the fact that he won a vote at the end of the Queen's Speech debate, which I think a few days ago there was quite a lot of doubt whether he could manage to do that. But the DUP voted with him on that. So, he's got a Queens Speech and he's got a legislative programme that only a few weeks ago we were being told was so urgent and so important that Parliament had to be prorogued for weeks in order to make sure that that Queens Speech could be prepared and debated. Now it's not to go ahead at all.

We will wait to see whether later today the European Union comes to a conclusion on the request that the Prime Minister sent in that unsigned letter asking for an extension to 31 January. I think the indications are it may not come today; it may not come until after the weekend, by which time we are literally a handful of days away from leaving the European Union without a deal at all. And in the Welsh Government, we continue to prepare on the basis that that could still happen. So, our emergency control room is up and running, it will go to 24 hours a day from 28 October, because I don't think we should talk ourselves into the comfortable position of believing that it's impossible for that to happen. At the moment, we are leaving on the thirty-first, unless and until we get an agreement to the extension.

What will the House of Commons do? Well, I'm in no better position than anybody around the table to make a guess about that, but I think we've heard today that the Scottish National Party and the Liberal Democrats will not vote for an election on 12 December and I think, in those circumstances, it's very difficult to see where a two-thirds majority for that date comes from. Now, my understanding is that, unless a general election is called next week, it will be practically impossible for it to happen before Christmas, because of returning officers having to find the ballot boxes, book the halls, and do all of those very practical things. But there'll be no general election this year in those circumstances. And what happens then, I think we'll—well, I, certainly, will just have to wait to see.

Okay, thanks very much. Llyr, shall I come to you, around the finances, first?

Okay, yes. Clearly, you mentioned the statement that the UK Chancellor has made this morning, or the comment that he made regarding not preparing a budget for this autumn. On 16 September, in evidence to the External Affairs and Additional Legislation Committee, you and your officials pointed out that the Welsh Government's budget planning, of course, is dependent on a lot of EU funding. I think a figure of something in the region of £700 million of European money was quoted as forming part of the Welsh Government's budget, and there's not a penny earmarked for us—I'm quoting from the meeting—from the UK Government as replacement funding beyond the end of 2020. What impact is all of this having on your preparation of a draft budget that we're expecting to see in a matter of weeks?

Well, it does have a very significant effect, Chair. I'll deal with the specific point of European funding in a moment, but it has a general effect. We're marched up the hill and marched back down again, because we had the sudden decision to announce a one-year comprehensive spending review—one year for Wales, one year for Scotland, three years for many English departments, but for us a one-year CSR—having been promised, right up until a matter of weeks beforehand, that we would have a comprehensive spending review for the next three years and that it would happen in November, where suddenly, at very short notice, they told us it would be one year and it'll happen in September. Having tried to absorb the changes to our budgets from that, we then get told there's going to be another fiscal event in November, having already had to renegotiate with the Chair of the Finance Committee a change to our timetable once and then fearful we might have to come back and do it a second time.

Chair, this sounds like a footnote, but it may not be: there was a comprehensive spending review for one year, setting our budget for next year. Governments can only spend money that Parliaments vote, and there's been no vote in the House of Commons on the comprehensive spending review. So, we are having to plan on the basis that that money will come our way, but, actually, I don't feel there's any certainty even about that, because if this Government is on strike and there is no business going through the House of Commons, and even if they did put a Bill to regularise the announcement that the Chancellor made, it's a Government without a majority. So, even something as normally straightforward as, if a Chancellor makes an announcement and we get a letter saying, 'This is what it means for you', that we can rely on that and plan on it, well, we are planning on it, but whether we can actually rely on it this time I think is a different matter.

Specifically in relation to European funding, what we have had is an exchange of letters with the Treasury about existing EU programmes, and for the next financial year, because we're still in the current multi-annual financial framework period. I think I've said here, certainly in front of David Rees's committee several times, that we recognised that the actions that Philip Hammond took as Chancellor immediately after the referendum to offer guarantees about the current round of funding programmes was helpful and gave confidence to our partners that they would have the money and could go on planning for the programmes. And the letter we have from the Treasury has now given us further detail about the funding that will come our way for the rest of this round. I think this will be a surprise to many people, but parts of this round will last in Wales until 2030, because, in the rural side of the funding we get, we will be signing contracts with some farmers that last for 10 years. We'll be signing them next year and we'll still be paying them, under the current round of European funds, in 2030. 

So, we have a figure of just under £2.3 billion now covered by the guarantee from the current round of funding that will take us through right to the very end of it, and that probably gives us the certainty we need for next year. Our problem is the year after that, or the years after that, because the shared prosperity fund is a genuine unicorn of British political life; many people have heard of it, but nobody has seen it.

We've been promised sight of it many times now. I think this will be the third year. We've been promised it now in 2020, so I think there will be three different calendar years in which we have been promised that there will be a consultation paper and that the Welsh Government will see it in advance and that we'll be able to—. So, the fact that the Chancellor's budget is cancelled means that's the last chance in this year for us to get any further detail at all about how the UK Government intends to deliver on the promise that was made to people in Wales that, if they voted to leave the European Union, Wales would not be a penny worse off, let alone buses with slogans on their side telling them how much better off they would be. We have no detail, Chair, on that at all, and the disappearance of the 6 November budget means there's now no opportunity to offer us that.

Okay. So—. Thank you for that, that's very comprehensive. So, we're clear then, in terms of next year's budget, that we are aware in terms of European funding, and that, notwithstanding everything else that you mentioned, makes it likely that we can stick to our timetable here. Is it likely the Government is just working at one draft budget and not another draft budget without EU funding and that kind of thing?

Yes. I've not yet had an opportunity, Chair, to discuss it with Rebecca, Rebecca Evans, because we only heard it overnight, but my working assumption would be that we will now be sticking to the original timetable we've agreed with the Finance Committee.

Okay. Diolch.

Okay. Anybody else around Brexit?

I'd like to ask one thing, then.

Go on then.

You've just mentioned—you went on to the issue of Sewel very, very briefly. It was made very, very clear that the Government does not see Sewel as being important. This, if the Government proceeds without consent, is effectively almost the death—you know, it's the nail in the coffin of Sewel. Sewel, effectively, will have lost all credibility if that event takes place. Now, Sewel, in some ways, is the oil of the devolution machine that makes the things work together. Without Sewel, there is a real further crisis in terms of all the future legislation coming forward. All the post-Brexit legislation, all the framework agreements, all of them hang, to some degree, on areas of consent in devolved areas. Once Sewel has lost credibility it brings into question the ability of us to participate, I would have thought, within any of those discussions on agreements, because there is no longer a basis, a Sewel basis, that gives credibility to any agreement. I know probably there isn't an easy answer; I just wonder what your thinking is, though, as to how we proceed within that environment. 

Well, Chair, this is a really important issue. I know it must seem very obscure to people outside this room who don't have to deal with it, but the Sewel convention is there to protect the devolved responsibilities of this institution and the Scottish Parliament. If the UK Parliament seeks to legislate in areas that have already been devolved to us, they should only do it with the permission of the National Assembly for Wales. That's what a legislative consent motion is there to secure. In 20 years, the UK Government has never overridden a set of circumstances where we have denied legislative consent where they agreed that we should be asked. We've had a couple of examples where we thought that our devolved competencies were engaged and they disagreed with us. But, whenever they have agreed that our responsibilities are engaged, if we've said 'no', they have taken us out of the Bill and they have not legislated on our behalf. So, in that sense, Sewel has been an effective defence for Wales during the 20 years. 

There has been one example in Scotland, and it's a Brexit example, as you know: the Act where we came to an inter-governmental agreement and Scotland didn't feel able to. The Scottish Parliament voted to deny legislative consent and the UK Government went ahead and legislated against their wishes. And that has created an enormous—. I'm trying to find the right word for it, Chair; I was going to say 'poison', but that's probably the wrong word—but it has poisoned relationships around the table in JMCs because of the actions that the UK Government took. So, this idea that it is a consequence-less action for the UK Government to override the democratically-expressed views of this institution or the Scottish Parliament is nonsensical; it has a direct and adverse impact on relations.

I caught a brief few moments of Mr Gove's appearance in front of David's committee yesterday, and that seemed to be his reply there: 'Well, we'd like to have your consent but, if we don't have it, we'll go ahead in any case'. And that is just absolutely—. We can't go on on that basis I don't think, which is why we put forward in the document that we published last week—the 20-point plan—two solutions to Sewel. The here-and-now solution is for Sewel to be codified. So, at the moment, it's entirely in the hands of a UK Government Minister to decide whether or not the situation is not normal and, therefore, the UK Parliament can override us. They don't have to tell you how they've come to that conclusion, they don't have to show you their workings out, they don't have to put anything in front of the House of Commons or the House of Lords that explains to Members of Parliament why they are being asked to override us, and we have no opportunity to put anything in front of Parliament, either. 

So, our here-and-now solution is for the codification of Sewel: that there should be a book of rules agreed, where, if the UK Government wants to try and override us, they have to be able to set out their reasoning, explain how they've come to that conclusion. Then, they would have to report that conclusion separately to the House of Commons and the House of Lords, and, if it was the National Assembly for Wales, then the Llywydd would have an opportunity to put a document in front of the House of Commons and the House of Lords as well explaining why we had taken the view that we had. And, at least in those circumstances, I think Sewel would become what lawyers call 'justiciable', because some Members here will remember that, in the Miller case, the Supreme Court ruled that Sewel as currently used is not testable in the courts; it's a political convention and the courts can't rule on it. I believe that, if there was a rule book, the courts might take a different attitude, because we could go to them and argue that the rules had not been properly applied. This would give us—the Assembly, the Scottish Parliament—confidence that Sewel was not arbitrary and that all the power rests simply in the hands of UK Ministers in an unchallengeable way.

Our second position—and my preferred long-term position—is that Sewel should be taken out of the equation altogether, and that there should be no right of the UK Parliament to override the National Assembly or the Scottish Parliament when we are making decisions in areas that are devolved to us, because that's what this is about—these things are in our hands, and, if they're in our hands, we should have the final say, not the UK Government. 

Okay. I've got Dai, Lynne, Nick, still on this issue.

I've got one more.

Oh, so you've got one more. Sorry, Mick. 

It was not on Sewel now; it was going on to the Wales Office in Brussels and the role that that plays within the post Brexit—

Can we see if we—? On Sewel, then—Dai, on Sewel and then I'll come back to you for your one.

Lynne.

Thank you, Chair. I wanted to ask about the joint research that's been undertaken between Cardiff and Edinburgh universities. I'm sure you'll have seen the coverage, which found that a majority of voters, leave and remain, believe that violence towards MPs was a price worth paying in order to get leave or remain, the outcome that they wanted on Brexit, and Richard Wyn Jones was the person in Wales who led the research, which, I think, is pretty alarming research, really, and I just wanted to quote what he said. He said,

'I think this division is now existential. It's about who we think we are and who we think we're not. It's very hard to see how the state of the union in its current form survives Brexit'.

And I just wanted to ask you, really, about—. It's a horrifying survey. I don't support a general election, I want a referendum, but even that would be terribly, terribly divisive and quite a frightening prospect, as much as I want to see one, and I just wanted you to comment on how we're going to try and bring things together again, really. I know it's a big question, but surveys like that really show just how much things are deteriorating across the UK.

Well, Chair, I've seen the summary of the survey and I thought it was just as shocking a document as I can remember reading. The idea that people believe that violence is an acceptable price to pay for getting your own way in a democracy, well, it just takes my breath away, really, and on both sides of the argument. Some of us who are one side of it tend to believe—and, maybe, you know, it's a bit sobering for us too—that the people who are on our side of the argument are not that way inclined, but that's not what this survey shows. And there's no difference across the United Kingdom either. There's no sense that Welsh people are in any different place on this than people elsewhere, and it's not simply, to me, the horrifying idea that people think that violence against individuals would be acceptable, but there's a sense that almost anything will be acceptable to get your own way, and that includes, in the way that Lynne started, being willing to put the future of the United Kingdom up for grabs as well. So, I think it's desperately sobering.

I think one step, at least, would be for people who are in prominent roles in politics to stop making it worse and to stop using language and inflammatory position taking that encourages people of that cast of mind to feel that they're legitimated in those views. I don't think you can say that the type of language we see coming out of Downing Street is language designed to halt. That's, 'People against the Parliament', 'People against elites', 'Us against them': it's calculated to persuade people that that way of thinking is okay. So, a start would be to stop making it worse, but the business of healing afterwards is going to be huge, isn't it? And it's going to be hugely difficult.

I think, some way or other, this will eventually be resolved, and then there is this enormous task of trying to persuade people, as we always say, we use the slogan that, 'What unites us is always more important than what divides us', but the survey suggests that for quite a lot of people the opposite has come to be true, and persuading people that, in the end, there's never a way forward in that way, is there? The politics of persuasion, which is, on the whole, I think what devolution has been based on. I think if you look back over the 20 years in the Chamber, and so on, most of the time our politics has been the politics of persuasion, where people are willing to respect people who have a different point of view and to have the argument and win it or lose it, and regard the issue as settled for the time being. We will need to try and persuade others to be part of that way of doing things.

I've got Nick and Llyr. Are you all on Sewel? It's on Sewel, okay. 

Yes, it was. It seems a long time ago now. I was just thinking, was it Churchill who said, 'Jaw-jaw not war-war'?

Yes. Always better. 

Yes, very good comments you just made about how we put all this back together eventually. I was just thinking about Lord Sewel when you were speaking earlier. It's a bit like Lord Barnett, cursed for years to come to have a name associated with a short-term fix that never really worked at the time, and really wasn't designed to. Dai Lloyd covered a lot of the points I was going to ask, really, but I just wondered how you would—. I'm not sure whether you mentioned legislative consent motions in the document about the union that was released last week; maybe it's become more prominent since. But I was just wondering how you actually would—. I think it's a good idea to try and cement it in some kind of, what was the word you used, 'judic—'?

'Judiciable'. I can't say it.

I'm not even going to try. Too early.

'Justiciable.'

'Justiciable.'

There we are, Des can say it. 

How do you say it?

I think it's 'justiciable'. 

'Justiciable'.

I think that's the word. 

Okay. I won't say it again. I just wonder how you do that, how you cement it. Would that require a written constitution, or would it require—? As in your document, you said that you'd actually take this away, almost federalise in a way a sort of a central union body, rather than the Westminster Government always being in the driving seat. 

Chair, I don't think that codifying Sewel requires a written constitution. I think if you had a written constitution, it would be part of it, but I don't think you've got to go all the way to have the one aspect. What you would do is you would sit round the table with the parties and you would agree what a process would look like. Well, officials would do it, civil servants, who are very good at this sort of thing, would get round the table, and they would say, 'How would Sewel be triggered? What would be the rules? What would you need? What would the threshold be?' We'd all agree on that, then, 'What would be the next step if a UK Government believed that Sewel would engage? What would they need to do?' And you just work out a process that everybody could see, and it would mean that it wasn't arbitrarily in the hands of a single UK Minister. 

And once you've got a process there, where the UK Government would have to say, 'Ah well, we believe at this point things have moved to so serious a situation that we could recommend to the UK Parliament to override the consent, or the lack of consent'—to make Dr Lloyd's point clearer—'of the National Assembly for Wales', well, you'd then be able to argue that point, wouldn't you? You'd be able to say, 'Well, we don't agree with you. We don't think that threshold has been reached. Look at this point, look at that point, we've got another chance over there to resolve this.' Suddenly, the process all becomes one in which you can develop an argument that you might be able to persuade a court to look at and take a view as to whether or not that book of rules had been properly applied. 

Because as things stand at the moment, there'd be nothing to stop a future Government using this sort of excuse all the time.  

Yes. The fact it's never been used, though, I think tells you how significant it is when it does get used. For 20 years, it's not been used. For 20 years, we've always managed to agree between ourselves and the UK Parliament from here, and only once in Scotland's case. Now we're heading into a situation, if last week's vote were to be repeated in an LCM motion, that the National Assembly and the Scottish Parliament had both denied consent. 

There was one issue here, wasn't there? Was it policing? 

Yes, but in that case the UK Government argued that it wasn't devolved. We said it was. The aspect we said, 'This is devolved to us', they didn't agree, and in that case they went ahead. But in this case they have agreed, because we have a letter from the Department for Exiting the European Union asking us for our consent, and setting out the areas in which they say our consent is needed. 

Boris didn't sign that one either. 

He didn't, no. [Laughter.] 

Right, okay. Llyr, on Sewel, then we're going to move on, I think. 

Shall we come back to Mick, who's sat patiently, for his supplementary on the Wales office?

As you say, we are working on the assumption, quite rightly, on 31 October, that we have to be prepared in respect of Brexit, no deal and so on. There are all sorts of implications, whatever happens over the next few months anyway, in respect of our subsequent relationship with Europe and the way in which we manage that. As you know, for example, in the Committee of the Regions, there's been a lot of discussions. It's difficult to finalise some sort of post-Brexit relationship or association with that part of the EU until the EU knows exactly what has happened. But, of course, there are all the ongoing relationships between local government, which is a devolved matter, between education bodies, which is a devolved matter, and so on, and also in terms of research and innovation. So, it's the whole nature of much of our work, which has gone through different channels in the past, that we now may have to prepare to do, as a Welsh Assembly, as a Welsh Government, completely separately and almost independently of the UK.

I wonder what your thoughts are in terms of how we gear up to pull together all those Welsh interests that exist within Brussels, because, whatever happens, it is still a fundamentally important economic and social body that we must, probably, this time develop our own specific relationship with. I'm wondering what your thoughts are as to, one—I will say it, I commend the enormous amount of work that they do out there. But that relationship is going to change and it may even be that we have to increase and step up our representation and presentation within the European Union, but as a specific Welsh Government, rather than as part of the UK. I wonder what your thoughts are on that.

Thank you, Chair. Des might help me in a moment with some of that. Just before I answer, could I say, Chair, that a point I ought to have made—Mick reminded me of it—when I was describing the current situation is that I ought to have mentioned, of course, the fundamental change in the deals struck by this Prime Minister and Mrs May in relation to Ireland and the impact of that, of creating a border in the Irish sea, on Wales and Welsh ports in particular? So, I don't know whether you were intending to come to that issue, but I just should have mentioned it when you gave me the opportunity at the beginning.

Our intention all along, Chair, has been to sustain our office in Brussels. The fact that we're leaving the European Union does not mean that that office will not be there. It will have a different job, certainly. One of the things that I have been struck by right through this process is, as I would see it, the astonishing generosity of people in the European Union at regional government level we deal with, although we are leaving, and in some cases doing harm to them and their economic prospects, and their willingness to go on talking to us and to keep the door open and to have continuing relationships with us, I think, has struck me hugely during the process. It's partly why I was keen to appoint a Minister in the Cabinet for international relations, because the other side of the European Union, if that's where we end up, and lots of us hope still that that's not where we will end up, but if we were to, then we will need to work even harder to keep those relationships alive and fruitful, and having an office in Brussels working with a whole range of—. Lots and lots of regional governments have offices in Brussels and operate very effectively and play a really important part in the workings of the European Union, and our office will be there still to do that.

Des.

Thank you, Chair. Just to add, if I may, if we leave with a deal, then I think there will be substantial continuing operational work to be done from Brussels. We will indeed have to look at the level of resource to make sure that we've got it right. You may come on to talk about the political declaration, but if the way is open for us to continue to participate in the Erasmus programme and Horizon 2020 and Creative Europe, we would very much like to remain part of the INTERREG programme. That is potentially available without being a member state of the European Union. INTERREG is not mentioned in the political declaration, we noticed with some concern, so that's something we want to be clear about. So, there's a whole range of programmes that we would need to keep engaged with to continue to lobby on with the Commission if we leave on the basis of a long-term deal that is in any way aligned to the ambitions of the Welsh Government.

There is also really important work to be done in terms of alignment with European regulation. Clearly, the Welsh Government's position is that we want to remain substantially aligned in respect of environmental legislation and general rights of people where we have opportunities to do so. It remains to be seen to what extent the UK Government, whichever kind of government it is, shares the enthusiasms of the Welsh Government for that. As the First Minister has said, Brussels is the most convenient place for us to do our business with our friends with whom we co-operate in Europe—our Flanders colleagues, the Basques, the Catalans, the Bretons and the others, because they're all there, available in that 1 sq km around Rond-point Schuman. So, we have a continuing interest in that respect.

In terms of the UK, we work closely with UK colleagues, with UKREP at the moment in Brussels. I think we will carry on co-operating. In a sense, though, what we have done over the years is a combination of what you call hard and soft power. We have exercised hard power within the UK context, so our Ministers have been able to attend the European Council, and our officials in Brussels are able to go to working groups in respect of Wales's particular interests. But, we have always, side by side, used our presence in Brussels, as you and many Members will know, to try and develop softer relationships with other regions, with trade bodies, with collective bodies, with the European Commission and others. So, we've always done those two things together. In the future, we lose the opportunity for access to the hard power and we'll be relying solely on the soft power mechanisms. That will be an adjustment for us, but it will be an almighty shock, a really big shock, for our UK colleagues. So, the UK permanent representation will convert on the day that we leave into, I think, a UK mission—that's what the diplomatic parlance is for a non-member state that has relationships with the European Union. They have expanded. They have more people now working in preparation for that, so I think it will be a very big change in the way that UK colleagues work in Brussels. In some senses, the dialogues that we've had with them, they're quite keen to learn from us, because we have worked in that softer way over the 20 years that we've had our presence on the ground in Brussels.

The point of it is, though, that our interests and the UK mission's interests are very likely to diverge, and it means that almost for the first time we are almost developing a Welsh European or international policy in respect of some of the ways in which the European Union operates, because what we will want to influence in terms of devolved responsibilities is likely to be quite different from what the UK mission does. And it's the preparedness, really, for that level of engagement that is the area that seems to me that's very acute. 

I think you can see that in the international strategy document that Eluned has published and which we're still towards the end of consulting on now. But it does set out a specifically Welsh approach to some of the issues, and it will not always be identical. 

Perhaps just one sentence to add onto that is, of course, as a result of leaving the European Union, we would no longer be bound by a UK position, so there is the opportunity for divergence in pursuit of policy interests at that time. 

I've got David Rees and Jayne on this very point, and then I'm going to move on. 

Just a very brief point. Mick has highlighted looking at the issues of where the Welsh Government's office has actually worked in Brussels, and the soft power that you talked about is very important. The UK position at the moment is that they're not attending, necessarily, all the sessions in Brussels. Has that hindered the Welsh Government in any way? Because you might be allowed to attend but as observers only and, therefore, not partake in some of those meetings, which may be relevant to Wales. Because if we are going to have this divergent approach, that's going to be crucial for us, to continue the relationships and to understand and influence. Because the biggest point is influence, particularly in European decisions. And if we're not there to influence, we've got a problem. So, are you also going to look at strengthening the office as well in Brussels? Because Scotland has done so, Northern Ireland has done so, but I'm not sure we've yet done so. 

Well, it's been quite a while since any Welsh Minister was actually physically present alongside the UK delegation in Brussels. It's happened during the time that I've been a Minister in the Welsh Government, but, in recent times, I can't think of a single example over the last year or so. But we have continued to participate in the JMC(Europe), which is a long-standing joint ministerial committee. It meets every quarter, ahead of the Council of Ministers. It goes through all the major items that are going to be in front of the European Union over the quarter ahead, and it seeks to agree a common position between the four component parts of the United Kingdom. I don't want to overstate it, but, because it's been established for a very long time, it has continued to work. 

But my concern is that the UK Government has decided not to attend all these sessions in Brussels, not to send officials to some of these meetings. They've basically decided to withdraw, effectively, from attending meetings of EU officials. We are allowed to attend as observers, if we request the UK Government to let us do that. Now, that is where the influence is important, because if you are talking about regulations, if we have a transition period, we have to abide by EU laws and regulations, and if we are going to do trade, we'll have to abide by EU laws and regulations on the trade side. It's the influencing factor that becomes important. Is it hindering the Welsh Government's ability to establish those links, those networks, post Brexit, where we can actually express that influence, this decision by the UK to pull out of all these discussions?

If I may, our officials in Brussels have continued to attend working groups where we have interests in agriculture and other things. The UK hasn't stopped completely. It's certainly cut down the number—there are dozens and dozens and dozens. I don't even know how many working groups there are—probably it's several hundred.

You haven't got a seat at the table. You're there as observers. You haven't got a seat at the table. 

No, but that's never been the case. We've always been there as part of the UK delegation and, in the future, we won't even have that opportunity. There won't be a UK delegation, so we won't be in the room at all for formal working groups. That is part of the cost of Brexit. It's one of the reasons why we're fundamentally opposed to what's happening. 

You're defending them too much, Des, because they have pulled out. There's no UK seat, there is no UK voice, but you're there as observers. So, how can you influence? That's my concern. 

There was a point that David made in his question that we haven't touched on earlier, but which I think is worth making, which is the business of trade and trade negotiations. 

I've got that later on. 

Then I'll wait.

Can we wait, then? We'll wait for that, because I've got several people. Jayne. 

Thank you, Chair. We know that Wales depends on Europe more for our trade than any other part of the UK as a whole, and Ireland is one of our top export markets. We know that Ireland has opened a consulate here in Cardiff. How valuable do you see that relationship, and how well is Welsh Government working with Irish Government and Irish colleagues, particularly when we know the impact that it could have on our ports, which you mentioned earlier?

Thank you, Chair. Well, our nearest European neighbours are in Ireland, and Wales is the closest part of the United Kingdom to them, so we've always had very strong relationships, and they are very important to us in terms of trade. One of our anxieties about a border in the Irish sea is that it will be to the disadvantage of Welsh businesses seeking to trade with the north of Ireland. As the chance has come, I want to begin by saying that our top concern as a Government, in all the whole Ireland business, has never been to say anything that makes it look as if we think that our interests should trump the need to preserve peace on the island of Ireland. So, nothing I'm going to say now should make it look as though I think we're more important than that; we're not.

The Johnson deal doesn't have a hard border on the island of Ireland, but this was extensively rehearsed during Mrs May's premiership, and, at that point, when this idea was being discussed, we were able to be in the room, explaining that if you did it that way there would be a direct impact on Wales, and that it should be taken into account and that it should be planned for properly. Mrs May, of course, concluded in the end that that solution was something that no British Prime Minister could ever sign up to. That's what she said in the House of Commons. And in fact, the current Prime Minister went to Belfast on 2 July and said that never, under any circumstances, would he sign up to such an arrangement.

The problem with this sudden volte-face, this sudden change of direction, is that we had no opportunity at all to make sure that the impact on Welsh ports and Welsh businesses was ever thought of in that sudden switch to a different solution. But it doesn't affect our relationships with Ireland—north or south. I was in Belfast on Friday of last week, and I had an opportunity to talk to lots of former colleagues in the Executive there and to speak at quite a major event in Belfast, and again to talk about the importance of Welsh relationships with people in that part of Ireland. 

Our relationships with the Republic continue to be very good, but are inevitably seen through the lens of their relationship with the UK Government, which is very bad, or has been very bad. And you sense that sense of limitation on the extent to which they are able to have a different relationship with us when they've got this bigger relationship that is going so badly. Nevertheless, because of the INTERREG programme and the direct things we do with the Government of Ireland, we've continued to work very hard on that. I've met the Taoiseach. I met regularly with the finance Minister when I was finance Minister, and since. I'm going to be in Dublin in two weeks' time for the next British-Irish Council. We continue to invest, and we do so in that soft-power sense that Des mentioned. There's an awful lot of goodwill towards Wales and a wish to go on having close relationships with us in the future.

Okay. Bethan, you've waited a long time.

I just wanted to comment on David Rees's question first. I guess if Wales was there as a nation state in our own right, we wouldn't have to be observers and we could have our own voices around the table. 

I have two separate questions. Earlier you said that if the general election isn't called next week, that would allow for practical problems. I just wanted to understand your view in relation to that. You said in press reports and in the statement with Nicola Sturgeon that, 'If an election comes our way first, I absolutely want it', and then you said, 'It's a matter of timing as to which opportunity comes our way first, whether that's a referendum or a general election.' Does that mean that you think that it shouldn't happen in December, and that you'd want that to be stalled? Or do you think that there are ways that it can be practical to do that in December, despite the issues that, inevitably, we will all face?

There were different points there, Chair—the 'do you want it?' and 'is it practical?' questions. I was reporting that the conversations I had in London on Wednesday suggested to me that, if a general election isn't called next week, the practicalities will defeat the possibility this side of Christmas, just because of the amount of time that returning officers, and so on, need to get an election done in an orderly way that doesn't leave it hugely vulnerable to legal challenge if large numbers of voters find that they were denied an opportunity to cast a vote, and so on.

The question that I was asked in the press conference was this one about, 'Should it be a referendum? Should it be a general election?' And, truthfully, that decision is not in my hands and not in the hands of the National Assembly. So, what I said there, and I'll say again here, is that I want this decision to go back to the people. I'll take whichever opportunity comes first. Whichever bus comes fist, I want to be on it.

I can make a case for why a general election would be the best vehicle, and I can make a case for why a referendum would be the better vehicle, but I'm not going to be in any decision-making capacity as to whether or not we get the one before we get the other. Because I want to see this resolved, and because I want to see it resolved by giving the people who made the decision in the first place the right to make that decision. If a referendum comes our way first, I'm in favour of a referendum, and I can make a good case why that would be the preferable course of action. But if a general election comes our way, I'm happy to try and resolve it that way, and I can give you some advantages to a general election as well. Because, that way, not only do we resolve Brexit but we have a chance to get a better Government. I can see pluses and minuses in both courses of action, but, for me, the key thing is I want it to go back to the people, and if either of those possibilities come our way, I'm keen to use them.

Okay, thank you. Then the second one was you mentioned Gove earlier, but the different context to what he said yesterday as well was the fact that they hadn't had an impact plan for Brexit in relation to the Holyhead port, and this hadn't been considered yet by the UK Government—these were questions that my colleague Delyth Jewell asked. He said there were so many variables in play. If the UK Government are not going to do this impact assessment, are you going to do it? And if you're not going to do it, why? And if you are going to do it, why?

Thank you. So, we've done a lot of work around Holyhead on the basis that there will be no deal.

I've seen that, yes.

So, you know we've got a three-tiered strategy—

But that's different to this. I'm not asking about that. I'm asking about the Gove—

I understood the question.

Brilliant.

What I'm saying is that the work done on a 'no deal' is not wasted in the new context. So, it's not that we're starting from scratch, because everything that we have done with the port authorities, with the UK Government, with the Irish authorities, will be there when we now have to recalibrate the impact that will be had on Holyhead if there is a deal. The big difference is, though, that if it's no deal, you've got to be ready the next day, and if there is a deal, we have at least until December of next year under the current rule book. So, we will have longer to plan with the port of Holyhead for the impact that it will have. And, of course, we will play our part in making that assessment, but quite a lot of the decisions about the impact will be made by the UK Government because of their responsibility for border control and customs arrangements and VAT declarations, and so on.

So, we will make the assessment that we can from the responsibilities we have as a highways authority, and so on, but it will be incomplete because we will be making it, unless we know how the UK Government intends to discharge its responsibilities too. But we will have longer. It won't be a day 1 impact in the way that 'no deal' would be.

So, let me just understand, the UK Government didn't approach you before this point to help them come up with an impact assessment of this or anything else that would need an impact assessment plan on this particular Brexit deal.

No.

And so, will you be approaching them now to be part of a conversation. We've talked about strained relationships, but, obviously, in relation to these impact assessments, they're key. So, now you will be asking, if there are plans that are going to be put in place for this particular Brexit plan, that you will be fully engaged in that process.

We'll have to be fully engaged, Chair, because just as we can't do a full impact assessment without knowing what they're doing, they can't make—

But you haven't been in this plan, have you? So, can you guarantee that you will be, going forward, if you weren't considered before they made this announcement this week?

Chair, I want to try to be fair. When we thought we were planning for 'no deal', we've had good co-operation, and we worked closely at official level particularly, and we've got a plan that we've agreed with all parties that we think will mitigate the worst impacts of 'no deal'. So, it's not impossible to work with others on this. The point I was making was that a sudden shift in the UK Government's position to solve the Ireland problem by putting the border in the Irish sea was never discussed with us, and the impact of it on our ports has never been discussed with us either. If that is what happens, there will be a year to prepare for it, and we will, of course, expect them to work with us and with others to make sure, as to the impact on Holyhead, but also on Fishguard and also on Milford Haven, that we use that time to properly prepare, because the impact will be real—there will be customs controls. We are the front line for the first time between the UK and the European Union. The front line will be Wales and Welsh ports.   

Okay. Before I bring David in on trade, I wanted to just go back to something you said earlier—that you have got a control centre in preparation for moving towards 31 October. And I wondered whether you have come to a position within the Welsh Government, or have reached a point in the Welsh Government, whereby you are now not doing the day-to-day responsibilities. What's the criteria, then, for your reprioritisation if you're going to have to do that in terms of the day-to-day job?   

Thank you, Chair. In my way of thinking about it, in recent months we've sort of moved beyond the position that we once talked about, which was that there was Brexit work over here and there was normal work over here, and were we having to stop normal work to do Brexit work. Normal work and Brexit work are almost the same thing now, because we're working on them both all the time. There are direct consequences you can see, and all Ministers have been having to look at the things they do, and decide whether or not they can continue to do them in the way they were planning. You particularly will know, for example, that Ken Skates has decided not to carry out work on the western carriageway of the A55 between now and Christmas, because he decided that, because of the risk of a 'no deal' Brexit and the impact on the port of Holyhead, he didn't want to add another layer of potential delays on that road. So, that's a direct consequence. If there wasn't Brexit, he wouldn't have made that decision.

Other Ministers are making other sorts of decisions. So, to give you maybe a different example, I know that Vaughan Gething had long conversations with stakeholders about whether to go ahead with the obesity plan that he launched this week, on the seventeenth, because it's so close to the thirty-first and with so much anxiety about medicines and other aspects of the health service, I think Vaughan was actively asking the question, 'Is this necessary at this point? Could we postpone it until after 31 October?' but there, the discussion with stakeholders I think convinced him that the work had been done, that it wasn't going to interfere, we should not delay it and go ahead. So, the intertwining of Brexit on the one hand and everything else isn't any longer, I don't think, a sort of 'Brexit over here, everything else over there'. They're intertwined with one another all the time.    

It might just be helpful, Chair, to add that the one thing that we have not been able to measure in any meaningful way is the opportunity cost of Brexit to the Welsh Government. There is a range of specific costs that have been talked about in various committees, but Liz and I and our very many colleagues, and there are some hundreds of us now across the Welsh Government, whose primary focus is on Brexit in one form or another, whether it's preparing contingency operations or the negotiations process, or the various other aspects of it, such as preparing legislation; many of our lawyers have been locked down on Brexit legislation. And, of course, in doing all of that, it means that we have not been doing other things that are priorities for us and which we'd very much like to crack on with. So, the opportunity costs have been very, very substantial. 

And that's true of the parliamentary side as well, Chair, isn't it? If it wasn't for Brexit, you would be asking a First Minister a set of questions about all the responsibilities that the Assembly has, and those are opportunity costs as well.

Yes. We've got some of those subjects in the topical questions, which I'm keen to get to. So, David, you've got some questions on trade, but if we could try and move to the topicals by about—

I'll be brief. 

—by about 10:45, that would be good. Thank you. 

First Minister, as you mentioned, Michael Gove gave evidence yesterday and it's quite clear the UK Government still believes that if we have a deal, they can negotiate a free trade agreement within 13 to 14 months. The vast majority of opinion elsewhere is that's not necessarily the case. But what's important is that the Welsh Government and Scottish Government are able to actually have an influence on the mandates in any negotiation, not just for the free trade agreement with the European Union, but for other nations as well. I got the clear impression yesterday that it's unlikely that you're going to have that opportunity. Have you had discussions with the UK Government to ensure that you're at the table, you're involved in setting the mandate for negotiations? Because if you don't get in early, you just end up being told what's happening. 

Well, Chair, I didn't get to hear the whole of Michael Gove's evidence, but I've seen a brief note of it and I know that Members pressed him there for amendments to the withdrawal agreement Bill that would guarantee the involvement of devolved administrations in the preparation of the negotiating mandate and to be involved where devolved responsibilities are at stake. And the case for that is so clear, isn't it—in a trade deal struck with another country, the implementation of that will fall to responsibilities held in Wales and in Scotland. So, there's no point in striking a deal that you can't make work because you haven't understood the way the United Kingdom works in the first place, and having us in the room, or at least in the room next door, as the provinces were in the Canadian trade deal—. They weren't in the room itself, but every day they were in the room next door and every day at the start and at the finish of the day, what went on in the negotiating room was checked and calibrated with the provinces to make sure that their interests were properly understood. So, that's why we want to be there. Not because we have ideas above our station, as it were, in the sense that we don't want to claim that we have responsibilities that we don't, but for a trade deal to be struck effectively, the negotiators need to know how that would happen in Wales and happen in Scotland, and I saw that Michael Gove at least agreed to consider that.

The Welsh Government is likely to draft amendments to that end, to offer to parliamentarians during the passage of this Bill, and when I was in the House of Lords on Wednesday afternoon, there was a lot of interest amongst Members of the House of Lords in seeing any amendments that we would draft of that sort. I never thought I would be likely to say it, Chair, but I sometimes find myself feeling sentimental for the days of Dr Fox being in charge of the Department for International Trade because we had in the end managed, I think, to get an understanding with him about the part that devolved administrations might have to play, and he had agreed a joint ministerial forum—with his Ministers and with our Ministers and the Scottish Ministers—as a sort of precursor to the arrangements that would be needed when trade deals were being negotiated. So, we'd managed to get somewhere up until July, and this is another example, really, of where that progress has been frozen since then.

Okay. Thank you very much, all. All very well behaved. 

We're going to move on to topical questions, First Minister, but given that you said the two are intertwined, we'll probably end up referring back, but I'm going to try and do it. So, we've got quite a few topicals, and the first two are from Bethan.

Thanks. I raised this with you in First Minister's questions recently, in relation to the cystic fibrosis drug, Orkambi. You will have seen yesterday that the UK Government has okayed it to go ahead for patients in England, as has already happened in Scotland. We know that Vertex has put in an application here in Wales, which we are thankful for, but I understand that it's going to take potentially four to six months for the All Wales Medicines Strategy Group to facilitate that progress. And in the interim, I understand there's been a call by not only the Cystic Fibrosis Trust but by campaigners to be able to have a discounted scheme, as was offered in both other nations, to Welsh patients.

So, my question is: can that interim scheme be implemented now? And can you give us a clearer idea as to when the actual drug will be available? Because we are getting people asking us every day. Now that Scotland and England have gone forward with that process, we know that that drug can work, you're already providing it compassionately to about 27 people here in Wales. Can we push this decision through faster than it's currently taking, please?

Well, I probably can't answer the first two questions because they are too specific for me to have the information I need to be able to answer them. I know, absolutely, how much this decision means to people who have cystic fibrosis, and I don't want to say anything today that leads them to believe that the decision has been made or I can promise something that I can't. What I—

Is it possible to have a note, then, First Minister?

Yes, absolutely. Very happy to provide a note. I'm very happy to say, in general terms, to answer Bethan's last question, of course we want to get this concluded as rapidly as we can. And if Vertex had come forward and made their application back in June, when they said they would, we would already be close to the end of the process, even if it took the normal four months.

We will want to do everything we can to get a decision made for Welsh patients. How quickly that can happen, whether it's possible for us to have access to the scheme that was struck in England, without having had a chance, even, to see the detail of the scheme or to know what will be needed—I don't want to sound like I'm giving specific assurances of that sort. But, in general, of course we want to get the matter resolved as fast as we can.

Okay. I guess a note would be useful because, of course, I think events are escalating and we don't want to be left behind. That's what I would say, as a nation. And we know that this is important for people's lives—there's nothing more important than that, in my view. That's why we're all here.

The second issue I had was if you could give us an update on the national visual arts gallery for Wales. I know that your Government, via the Deputy Minister for Culture, Sport and Tourism, set up a working group on looking at this distributed gallery concept, and they had their first meeting in June. I think that they met in September, also, to look through the costings and the issues that would arise with any Government indemnity scheme, in that regard. And we know the agreement between Plaid Cymru and your Government in relation to the funding that was put forward for the feasibility study into this. Speaking as someone who represents Neath Port Talbot—and I know David Rees would have had these concerns as well—I know they've put in a bid to you as a council to be one of those host galleries. Can you give us progress on this? Because I think people appreciate that research needed to happen, but where are we at with progress to realise this? Because, of course, having a national visual arts gallery for Wales will put Wales on the map, as well, and allow for that tourism and the international strategy ideals to thrive. So, can you give us a bit more detail about it that we may struggle, sometimes, to get from the Deputy Minister?

I'll do my best. So, it is still being thrashed out amongst different locations. There are many people who believe that they should have their place in that, so location is important. Location is complex because it involves access but it also involves capital and, of course, we put a significant sum of capital aside in this year's budget to be able to take forward the recommendations. Different locations have different capital requirements and, in the end, it will be a compromise between us wanting to have as many venues as we can, and as many accessible venues as we can, against the fact that some places—. I don't want to mention any—I was about to mention Pontio, but I shouldn't—but that's an example of a building that's modern and probably would not need a huge amount of money for it to be accessible. Others will have different demands. Then there's location across Wales, because you want a good spread of it. Then there are issues to do, as Bethan has said, with how you get the exhibits out there. Do you circulate them around? If you do that, what are the indemnity issues? So, in a sense, these are matters of professional discussion rather than—they're not particularly political in their nature, but there is a lively debate amongst different parts of Wales and different players in the visual arts world that was still being thrashed out in the meetings that happened in June and September. We are keen for them to come to a conclusion. I know the Deputy Minister wants to be able to have a set of proposals on his desk that he can agree with or interrogate. But I don't think we're quite at that point just yet.

OKay. Mike has one on steel. I imagine others will want to come in behind you on that.

I'm the fourth generation in my family to work in the steel industry, and the steel industry the length and breadth of Wales, including not very far from here, was a major employer right up until the late 1970s and early 1980s. I have concerns, I think many other people do, regarding steel. Is there any update you can give us regarding the steel industry in Wales? Perhaps I'll put on the record that the first place I ever worked was the Orb steelworks in Newport.

Thank you, Chair. Some of us will know that Ken Skates has taken repeated opportunities to urge Andrea Leadsom, the latest Secretary of State at Department for Business, Energy and Industrial Strategy, to convene a meeting of the steel council. It is pretty shocking that the steel council hasn't met since—is it June of last year? Now, there was a meeting yesterday. I'm not sure whether it was formally called a steel council, but it was a national meeting on steel, convened by the Secretary of State, and Ken, I know, has participated in that meeting, and there is a meeting of the global steel council over this coming weekend in Tokyo. And when I last spoke to him, the Secretary of State for Wales said to me that he hoped to attend that council on behalf of the UK Government. So, there has been some activity in this week at those levels, and it's an opportunity for us to continue to make the case on behalf of the steel industry for the UK Government to do the things that they need to do about energy prices and so on that are such an inhibition on the steel industry here in Wales.

In the meantime, we continue to be in discussions with Tata about the very difficult global steel trading position that they report, about their anxieties about the terms on which we leave the European Union and the fact that we will leave the defensive wall that the European Union is able to create around the steel industry on a European basis against dumping and so on. I'm looking forward to having the chance to discuss with John Griffiths and others the trade union report that has been, I think, now received in relation to the Orb steelworks in Newport. But the global conditions for steel are difficult, and the Welsh steel industry is not immune from the cold winds that are blowing around that industry.

You raise dumping, and I think that the real problem, of course, isn't it, that firms would export at marginal cost rather than absolute cost, and we have to actually sell at absolute cost? And therefore that big difference between the fixed costs that they cover inside their own economy, in countries such as China, allows them to export at only the marginal cost of extra production.

Yes, and the European Union is able to act to make sure that some of the unfairness in all of that is mitigated. In my discussions with Tata, one of their big anxieties is how effective the UK will be able to be as a sole trader in providing the same sort of defences, and whether we become somewhere where steel can be sold at rock-bottom prices.

John.

First of all, First Minister, it was reported that that meeting that Ken was to be involved in yesterday was cancelled—

Oh, sorry—

—so I don't know whether it did actually go ahead, but certainly the point that the UK steel council hasn't met since the middle of last year I think is shocking, given the seriousness of the challenges to the steel industry and its importance. And certainly, when you talk to people in the street, they feel very strongly that we need a proper manufacturing strategy, industrial strategy, in the UK and that steel must be a very important part of that, because people see it as a strategic, basic industry that much other manufacturing relies upon. So I think, in terms of public perception, there's bewilderment at times that the UK Government just doesn't seem to take all of this seriously enough and just seems to rely on services and the service industries to such an extent.

I just wanted to ask you really, as you said, I know the Syndex report will be looked at, and I look forward to our meeting, but just in terms of the general case, First Minister, again, I think people—. We had a march and a rally in Newport against the proposed closure at Orb just the other week. Jayne and I, and many other local politicians were there, and the unions of course and, more important than any of us, the workforce and their families. And people in the streets were puzzled again at what they see as a lack of governmental understanding of the case that, if there is to be an electric car revolution, which everybody is expecting for very powerful environmental, climate change and more practical reasons, then surely the UK wants to be at the forefront of that and wants the jobs and the economic benefit. They want the electric car production to take place in the UK and they want all of the supply chain to be in the UK. People feel that very strongly and there is such a strong case for the Orb steelworks to provide the electrical steel as part of that equation. And the Syndex report, I think, is quite practical in talking about the investment that would be necessary at the Orb, how Tata and the UK Government, and hopefully Welsh Government, could play a part in that. And, obviously, all that is to be discussed. But I just wonder what you'd say about that general case, really, that I know people feel very strongly should be accepted and acted upon by Government. Let's have the electric car production and all the benefits that go with it here in the UK and the electrical steel produced at Orb.

Well, Chair, what I hear John doing is making the strategic case for the steel industry, and that's where I've felt we've struggled with the UK Government to understand, if you're going to be a manufacturing nation, how can you be a manufacturing nation without having an indigenous capacity in steel? And if you're a Government that is strategically serious about climate change and the changes in the automotive industry, then how come you don't have a strategic grasp of what that means in the context of something like Orb?

I feel I'm striking lots of downbeat notes this morning and I didn't come here to do that, but one of the things that I think we have felt as a Government is that, in the changes that happened in July of this year, the people who left Government were very predominantly those people who we'd had the best relations with. So, the people we felt we were able to have the best conversations—and on the Brexit front, that would be somebody like David Lidington, where we felt at least we had a shared understanding of things, even if we didn't always agree, and Greg Clark would be somebody else, with the industrial strategy and so on, who at least had a belief that Government had a responsibility to intervene in the economy where there were strategic interests at stake. Whether that sense has survived into the Mrs Leadsom regime I think is an open question. But we will continue, certainly, to make that case on both fronts, and we make it with the industry, because the industry makes that case on its own behalf very effectively.

Thank you. Dai, do you want to do your Swansea Bay one first, because I've got several people with the second one?

Oh, right, so we're talking—

Sorry, was it on steel? I did look at you and you were obviously thinking about the rugby at the weekend. Sorry. Go on, then—on steel.

A very quick one, and you've already answered many of the points. Clearly, John has highlighted the important role steel has. We make electrical steel here, rolled steel and rebar; we have a real variation of steel within Wales. But what I want to ask is: there is no industrial strategy—Greg Clark didn't do it, he hasn't delivered it on the steel sector, Andrea Leadsom seems to be oblivious to the steel sector. The issues on British Steel and now this fact that we're now hearing that, in fact, the Turkish army's pension fund is talking about pulling out—have you done an analysis as to what impact that might have on the Welsh steel industry? Because, clearly, the loss—if that does decide to go down because no-one's now supporting it, that will have an impact upon steel as an industry across the UK, and particularly on the Welsh industry.

I couldn't honestly say, Chair, that I am familiar, directly, with that assessment. I'd be surprised if it wasn't an assessment that had been made in Ken's department by those people who work on this topic. I'm very happy to confirm that.

In general, I had heard some of the same information: that Turkey, at the moment, is not a country that it is easy to strike large and significant deals with, and the Turkish pension fund was the only—as far as I could tell, it was the only player in town as far as British Steel was concerned. So, if the tide has gone out on that, then that whole deal looks in trouble, doesn't it?

Dai. Will you do the Swansea bay rail first, and then—? Because I've got several on your second topic.

Mike, on this point.

Yes. On this point, very much so. It's not just the Swansea valley, though, is it? It's in Swansea itself. I mean, Llansamlet's got a station, but the bus that goes there actually stops quarter of a mile away behind it, on a road you wouldn't necessarily go to unless you knew it was there. We do need—. Does the First Minister agree we do need to get better integration of trains and buses? We've got exactly the same problem in Gowerton.

And also, as I always do when I get an opportunity, a plea for the reopening of Landore station, which would take a lot of pressure off both traffic going into the city centre and make life a lot easier for people getting a train to visit events at the Liberty Stadium.

Well, the general proposition, Chair, of course I agree, and it's been a long-term ambition to have better integration between all forms of transport in order to advance the cause of active travel, but also to make more efficient use of the resources that we have.

We are committed, as you know, to coming forward with a Bill in relation to buses in Wales, which will give local authorities greater powers to be able to make rational deployment of bus resources. So, I think there will be some help—to the point that Mike made there. Of course, I hear the case he makes and have heard him make before in relation to Landore. 

We're not going to go round the table and ask for everybody to have their favourite little old station reopened, because I could talk about—

Chair, if we haven't got any stations that we want to reopen—[Inaudible.]

I could talk about Rhuddlan.

But I think it's important to talk about it, because the south Wales metro is not just about railways; it's about buses as well, as you've highlighted in your Bill—

Absolutely. It is multi-modal. 

—because the Neath valley and the Swansea valley, basically, and then the Afan valley, are very much dependent on buses. You've just mentioned the Bill you're bringing forward. Can you give us guarantees, in a sense, that there will be funding associated with that Bill, because, whilst you're handing it over to local authorities, unless there's funding to ensure there are services—? I was talking yesterday in Glyncorrwg; two hours, they get a bus—every two hours. As someone said, 'If I have to go literally to do a bit of shopping or to go to the surgery, I've got to catch a bus—two hours—and then wait two hours for the next one to come back'. We need to improve that, but there needs to be funding associated with that Bill to allow local authorities to set out their plans.  

Llywydd, the Bill is about making better use—. Dirprwy Lywydd, Chair, the purpose of the Bill is to make better use of the resources that are currently in the system that we believe are currently wasted because the system is based on competitive ways of doing things that prevent local authorities from planning services and making best use of the significant sums of public money that go into bus services in Wales already. There are many calls on the limited and shrinking resources we have for further investment, but public transport is one of our top priorities. But the Bill is about the fact that we invest millions and millions of pounds in bus transport in Wales, and we don't think that the public gets an adequate return on the investment that it makes. It's designed to give local authorities the tools that they need to use the finance that is already in the system to better effect. 

Dai, can we come to your second topical, because I've got several Members who want to come in on the back of yours?   

The difference between this report, maybe, and previous reports, is its independent nature—it's entirely independent of Welsh Government in that sense—and the heavyweight nature of the commissioners who drew it up. We have the immediate past Lord Chief Justice of England and Wales. This is not someone who doesn't know his way around the system. And I met the current Lord Chief Justice in London last week and I know that he certainly intends to take this report very seriously and to give it the sort of consideration that you would hope that it would have.

So, the immediate reaction from the current UK Government is disappointing, of course. To some—to maybe a relatively minor—extent, it is explicable by the fact that they're overwhelmed by Brexit and almost any other topic doesn't get on to the list of things to think about, but it's probably deeper than that. It's probably a different cast of mind of the current Government, who aren't prepared, it seems to me, to even consider a case of the seriousness and the depth that we have in the report.

So, I'm not going to be in a position to give detailed answers to what I think about different aspects of the report. I genuinely do want to have my own opportunity to read it properly. I'm looking forward to the statement the week we're back. Even that isn't drawn up yet, but my very preliminary thought and the advice I've given to officials at this point in the process is that I want to focus in that statement as much as I can on the aspects of the report that lie in our own hands, because, as Lord Thomas said yesterday in introducing it, while lots of it lies for others to make decisions, there are lots of things he says in there about the things that we are now responsible for, and, by a week on Tuesday, I hope that I'm going to be able to say something about how we will go about addressing the aspects of the report that are the Assembly's responsibility and to think about how, together, in the way that the Government and the Parliament here will have an interest in the report, we begin to make some progress on the things that we can be in charge of. 

Dai, do you want to come back?

No, I'm fine. 

Mick.

Yes. First Minister, I don't want to do a spoiler on your bedtime reading over the recess, but the issue with regard to legal aid that is mentioned in the report I think is an absolutely fundamental part. That is, to some extent, not within our hands, although there are things that we do do and spend, et cetera, but the access to justice point, which is a theme that has just grown and grown in terms of a basic human right, in terms of access to the law, is quite a fundamental one. But, in addition to that, it's not just access to the law. It's also about things that we can do—for example, the need for a department of justice. We now manage—. We manage part of the justice system within Welsh Government, and there needs to be, obviously, clear separation in terms of Government and aspects of justice as well, but, nevertheless, the whole management of that process is something that clearly emerges from the report and is something within our hands and enables us to actually start taking the first real steps towards, I think, some of the aspirations we have with regard to the establishment and the development of the Welsh legal system. 

Well, Chair, I think one of the things Lord Thomas said yesterday that he had been surprised at, as the evidence emerged from the report, is the extent to which the justice system in Wales is already funded by devolved services, and the case for a Cabinet-level responsibility for justice in Wales that he makes is, I think, partly predicated on the fact that that investment is already very substantial. Obviously, I will certainly look at that, and Mick Antoniw is right that that is one of the recommendations for us to discharge, if we wanted to follow it. It's not for me at all to speak for Lord Thomas, and I didn't hear everything that his commissioner said yesterday, but one of the things I know from the evidence session that I gave to them is that they said that there were certain aspects of the report that had acquired greater significance as their work went on, and where they were going to say more about it in their final report than they probably anticipated in their first meetings, and access to justice I think was one of those things—that the more they went on, the more they saw that as a foundation stone of an effective system. Hence, we have a full chapter on all of that in the report itself.

I'm going to turn to Nick. You've got a couple of questions now, haven't you?

Thank you, Chair/Dirprwy Lywydd. There were a couple of issues that came across my desk as Chair of the Public Accounts Committee this week that you'll be well versed with. First of all, Cardiff Airport. An extra written statement was issued on Monday revealing that another £21.2 million is going to be loaned to the airport. That comes on top of I think it was a £38 million loan that the airport had before. We haven't really been able to get the details of this because of the citing by officials of commercial sensitivity, so I appreciate that there may be some issues for you with that as well. But, at some point, is it going to be possible for us to know, at least vaguely or in general terms, what that £21.2 million is designed to achieve in terms of the strategy of developing the airport in the future, and at what point the taxpayer can expect that money to be repaid?

Well, on the first, Chair, there shouldn't be any difficulty that I can see in people having an account of what that money is there to achieve. The loan is a commercial interest-bearing loan, with a repayment schedule attached to it. Airports are competitive businesses and lots of the decisions around Cardiff have been bedevilled, in a way, by the way in which the UK Government sees it as being in competition with Bristol. So, there are good reasons why some of the detail around the loan can't be made public in that way, but the purposes for which it is to be used shouldn't be difficult to get. The airport is an arm's-length company that should be able to provide that information to you.

On the other point, as I say, it is a commercial loan. It's an interest-bearing loan. There is a plan for it to be repaid and it's an investment—it's an investment that we make in the success of that essential economic asset.

Mike. 

Can I take you back a very long time when it was South Glamorgan County Council, when large sums of money were being put in by the three councils in order to make Cardiff Airport successful, or Rhoose airport as it was then? Then, it became so successful that the Conservative Government in Westminster forced the three councils to sell it. Do you see us making the same progress with Cardiff Airport by putting money in now to make it a very successful airport in the future, and will you guarantee we won't be looking to sell it in the shortsighted way the Conservatives did in the 1980s? 

I do absolutely remember when Mick Antoniw and I were both members of South Glamorgan council—we were exceptionally young at the time—but there were members of the council on the airport board. The councillors were able to ask questions of them, so they were publicly accountable for the decisions that were made and the airport was a significant commercial success. That's why, in an era where privatisation was the vogue, we were obliged to hand it over to private ownership.

I said in the Plenary session this week, Dirprwy Lywydd, that there are 4,300 airports around the world that have scheduled flights for them, and only 14 per cent are in private hands. So, our model in Wales is absolutely mainstream. It puts us in the same position as John F. Kennedy International Airport in New York or Charles de Gaulle airport in Paris. Around the world, Governments recognise that a successful airport is an investment on behalf of the economy and the population of that area, and it would be shocking to think that Wales would be—. I think I'm told we would be one of only two capitals in the world if we were not to have acted in the way that we did, and that didn't have an international airport offering connectivity to the rest of the world. So, we continue to be strongly supportive of the course of action we've taken, prepared to back it up with funding and have no intention of selling it off.

Right. And do you want to come back on that, and then move to your second?

Were you making a pitch there for the 'Mark Drakeford Airport' or was that—[Inaudible.] [Laughter.]

It's much more likely to be named after the Chair of the PAC. [Laughter.]

Do you want to come to your second?

Yes, I just want to say on that point—. And I think, probably, if we did have air passenger duty, then some of those issues could be mitigated, and my group has supported that, as you know. I think it would be helpful if there were some timelines, anyway, with these loans and with the payback, but that's something I can return to on the Public Accounts Committee.

The second issue that arose this week was the rural development programme, and the questions over the eligibility of some of the programmes that the Welsh Government have been providing funding for. I think there was an issue over whether €33 million was going to be successfully reimbursed—I think it's 'reimbursed'—to the Welsh Government. I think there's a negotiation between—. There was an issue, for Members who aren't aware, over whether some of these programmes breached competition laws, I think, so there's an ongoing discussion at the moment with the European Commission about this.

Yes. So, that is the position, Chair. This is not unusual; this is absolutely normal business in the way that we conduct relations with the European Union. We believe that we have operated within the rulebook. It's their job to check that we have. Sometimes, there are issues of interpretation that have to be discussed between us.

Wales has one of the best records in the whole of the European Union in having confirmation through the European Commission that we make our decisions within the rulebook. And we will continue to have our discussions on those RDP issues where we will have to provide further information to explain the case that we make. But we've got very experienced people dealing with all of this, who are familiar with the rules and have done it over many years, so I haven't directly spoken to the officials myself on this issue, but I was responsible for the Welsh European Funding Office myself as Finance Minister, and I have considerable confidence that they will have made the decisions and dispersed the money in a way that will be defensible.

Okay?

Just going back to the earlier discussion about Brexit dominating everything, these sorts of discussions, of course, as you say, are normal discussions, but it's set against the rather extraordinary circumstance at the moment. Are you finding, or are your officials finding, that discussions like that, which once would have been commonplace, are a little bit more frosty or difficult to have at the moment with the surrounding situation?

I don't think so, Chair. Immediately after the referendum, the European Commission withdrew, for example, the observers that it had always sent to the programme monitoring committee, but they've been restored and they've been coming since. And you couldn't claim that there's no seepage at all from the general difficulties into the way that the Commission operates. But at that official level, I get the sense that we continue to get a good service and that Wales is well regarded, in terms of the sadness of it all. Our reputation for the way that we've used structural funds, our ability to do it within the rulebook—we're well regarded. Every time I've met European officials who come to the PMC, they always say to me, 'If only every PMC we visited was run like this.'

Could I just add, Chair, if I may—the relationship with officials is remarkably good, and, of course, whatever happens with Brexit, these relationships will continue for a number of years, as the First Minister indicated in one of the answers to his previous questions? You will know from the PAC that there'll be reconciling of accounts on WEFO and rural development spending for a number of years after we've left the European Union, if that's what, in fact, happens.

And finally, Llyr.

Yes, thank you. You're aware of the terms, though, of course, that only 41 per cent of RDP funding has been spent. Now, I know there's a little bit longer at the end of the programme period next year to spend that money, but is there not a risk that there will be an underspend and also, is there not a pressure sometimes, in those circumstances, just to get money out of the door to get it spent and not to achieve, maybe, the strategic value that we would otherwise get from that?

All of that is true, Chair—I don't disagree with any of that—but that's the tension that's in the system. So, commitment is well above 41 per cent, but spend is at 41 per cent. I have been trying to bang the drum a lot, not just on the rural side but on the investment or infrastructure side of European funding, saying to our partners—. Up until now, they've always been in the position where they knew they had n+2, and they believed they would be in another programme. So, if you didn't spend money quite as fast as you'd planned, you knew there was a pretty strong safety net that would allow you to do it. That safety net isn't there this time. So, we've been trying to make the case a lot to our partners that commitment is one thing, and we've got very good levels of commitment, but now we've got to spend it as well, because if we don't demonstrate to the Treasury that our spending levels are where they need to be, they may decide that we didn't need the money in the first place.

The other side of that coin is just as Llyr described—that in the haste to get the money spent, you may end up making decisions that you wouldn't have made if you'd had a longer time horizon. But that is the result of the decision that was made in the referendum—that we find ourselves in this position. Forty-one per cent spend level puts us at the better end of the European Union-wide pattern—I think pretty much at the top of it. So, it's not that we are in an unusual position, in terms of the RDP in other member states. We're better than where most people will be, but the pressure, you can be sure, is on in the system to spend the money while making the right decisions as well.

Okay, thanks very much. We're going to finish this session there. I thank the First Minister and your officials for attending. As always, you'll be sent a draft transcript, which, no doubt, will look like a history lesson by the time we get it—for the first item, anyway. You've promised us a note around Bethan's first topical question, so that would be handy. And also to say 'thank you very much'.

I now propose that the committee will go into private under Standing Order 17.42, if Members are agreed. 

Okay, thank you very much. So, we'll go into private. Thank you.