Cynulliad Cenedlaethol Cymru

Yn ôl i Chwilio

Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol

External Affairs and Additional Legislation Committee

02/06/2020

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Alun Davies AS
Dai Lloyd AS
David Melding AS
David Rees AS Cadeirydd y Pwyllgor
Committee Chair
Huw Irranca-Davies AS
Mandy Jones AS

Y rhai eraill a oedd yn bresennol

Others in Attendance

Ed Sherriff Llywodraeth Cymru
Welsh Government
Jeremy Miles AS Y Cwnsler Cyffredinol a’r Gweinidog Pontio Ewropeaidd
Counsel General and Minister for European Transition
Simon Brindle Llywodraeth Cymru
Welsh Government

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Alun Davidson Clerc
Clerk
Claire Fiddes Dirprwy Glerc
Deputy Clerk
Nia Moss Ymchwilydd
Researcher
Rhys Morgan Ail Glerc
Second Clerk
Sara Moran Ymchwilydd
Researcher

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 drwy gynhadledd fideo.

Dechreuodd y cyfarfod am 09:30.

The committee met by video-conference.

The meeting began at 09:30.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Can I welcome everyone to this morning's meeting of the External Affairs and Additional Legislation Committee? This is our first meeting that's using the virtual approach, and as such, can I remind you that, in accordance with Standing Order 34.19, it's been determined that the public are excluded from the committee's meeting in order to protect public health? The meeting will be broadcast live on Senedd.tv at www.senedd.tv.

We've not received apologies and we have a full list of membership today. If I lose my connection, we have agreed as a committee beforehand that Alun Davies will act as temporary Chair in that point in time until I'm able to be reconnected to the meeting or until the end of the meeting, whichever comes first. Does any Member, at this point, wish to declare an interest?

Chair, just my normal declarations of chairing the three groups with the European remit on behalf of the First Minister.

Thank you, Huw, and it is important, obviously, as we have the Minister in with us today, that that's clarified.

2. Sesiwn graffu gyda’r Cwnsler Cyffredinol a’r Gweinidog Pontio Ewropeaidd
2. Scrutiny session with the Counsel General and Minister for European Transition

We move on to the next item on the agenda, then. It's a scrutiny session with the Counsel General and the Minister for European Transition. Can I welcome Jeremy Miles, the Minister, to the meeting? Can I also welcome his officials: we have Simon Brindle, who's director of Brexit strategy, and Ed Sherriff, who's deputy director of European transition negotiations? Welcome. We'll go straight into questions, if that's okay with you, Minister, as we have one hour limited by broadcasting.

I'll start with areas of the UK-EU negotiations, probably including common frameworks in that, just because I think it will all link in, but we'll start with Alun Davies.

Thank you very much. I was interested, Minister, in the correspondence you sent to the committee last week, where you set out your view of the negotiations and how the structures around those negotiations are operating. I think the word that stands out for me is used in your first sentence—you use the word 'deficient', in terms of the engagement between the United Kingdom Government and the devolved administrations. I was wondering if you could outline why you think it's deficient and what you've sought to do in order to repair this deficiency.

Well, it's a similar message to the one I've given when I've appeared before the committee in the past, which is that we have been clear as a Government that the UK Government needs to share, discuss and seek agreement with devolved Governments in relation to those strategic choices that lie ahead.

We've taken every opportunity of ministerial engagement with the UK Government Ministers to put forward our position on behalf of the people of Wales in relation to what is in the interests of people in Wales. You know, we haven't ever got into that rhythm of getting proper advance notice of the sorts of issues that are coming up for negotiation, and then a detailed discussion, on a ministerial, quadrilateral basis, of what our views and thoughts are on those choices that the UK Government has laid out ahead of it. That, I'm afraid, has not improved in the slightest.

At the moment, we have had frequent calls with the Paymaster General, which is a brief-ish telephone call that describes, in a verbal way, what's going on, and there's a sort of conversation about it, but those have generally been bilateral; they haven't, until last week, been quadrilateral. We'd obviously been pressing for that. And they haven't had papers circulated in advance so that officials and Ministers can reflect on those choices that the UK Government are looking at negotiating. So, it's very deficient in that sense. I mean, I should say that all engagement is courteous and respectful, but, essentially, the UK Government is fundamentally uninterested.

09:35

You say it's uninterested. That's quite a powerful description of where you feel the UK Government actually is, because that implies that the deficiencies are not simply by accident, but almost by design, that the United Kingdom Government understands the structures, understands what should be happening, understands the commitments that it is making, and is quite deliberately not delivering on previous commitments. Am I overinterpreting your words?

Well, I don't want to speculate on motive, but you mentioned the word 'design', and the current process for engagement certainly isn't designed in a way that enables proper engagement and proper attempts to reach agreement between the four Governments in advance of negotiating rounds.

I'm interested in your tone as much as your words, quite honestly, because your tone seems to be one of frustration. Michel Barnier was interviewed in The Sunday Times last week, and he expressed a similar frustration, in many ways, where he described the political declaration as an essential text. He waved it in front of the interviewer: 'This isn't a speech or anything else, this is an essential text.' And then he described how the UK Government was walking away from, or appeared to be walking away from a number of commitments. I think he listed the level playing field, security, governance, Northern Ireland, fishing. We could all make a similar list.

So, in terms of how the UK Government is walking away from very serious commitments that were given in the political declaration just six months ago, is that your feeling, that the UK Government is walking away from commitments it made to the European Union, our closest allies, and walking away from commitments it's given, in previous times, to the Welsh, Scottish and Northern Irish administrations as well?

Well, I don't think there's much doubt that there is a shift in position on the UK Government's part since the political declaration. We, obviously, as a Government, took a different view about the direction of travel. That's obvious; there's no particular need at this point to rehearse that previous set of discussions, but the political declaration was an agreed position, and had that been reflected in the negotiating positions, I think we would be in a different place at this point.

So, the two sides have now started pretty far apart and it's just basically unrealistic, it seems to me, to expect movement to come from entirely one side. So, the UK Government's basic stance, as it were, is to say, 'Well, what we're asking for is perfectly reasonable and at some point the EU will need to move in that direction.' That isn't how negotiation works, it seems to me, and what we want to see as a Government is both parties coming to the negotiation in the spirit of compromise. What I see, and what we see as a Government, in the legal text, in the statements that David Frost and others have made is that, essentially, they lack that pragmatic attempt to seek to agree the best deal available. We would like that to be the closest economic relationship with the EU, as a Government, but it doesn't seek even to maximise the opportunity of getting the best available deal.

Okay, I'm grateful to you for that, Minister. We understand that, in terms of process, there's very little happening, apart from occasional, short telephone calls. We understand that the UK negotiating position has—I think your word was 'evolved' in the last few months. Have there been any realistic pieces of work done in the last six months between the Welsh Government, either at official or political level, and the United Kingdom Government in terms of the implementation of the withdrawal agreement?

In terms of the conversations taking place between Governments. The withdrawal agreement was a significant political agreement and political undertaking, and I appreciate that most of it deals with non-devolved subjects. But have there been any conversations about how that will be delivered within the United Kingdom?

Well, there are discussions, you know, and, in particular, parts of the issues in relation to the Northern Ireland protocol, there have been discussions around that. But, again, in that area—. I don't want to consistently be saying the same thing; I'm just trying to faithfully and reasonably neutrally reflect to you the situation on the ground, so to speak. In relation to that as well, there are a number—you'll have seen from the command paper that came out in the last few weeks—there are still a number of areas in there that require really significant clarification, and when the JMC(EN) met in Cardiff back in January, one of the requests that the devolved Governments made, and which we felt had been agreed, actually, was for there to be a joint workstream on that, to work through the detail of what that means. You'll remember the UK Trade Policy Observatory paper that we commissioned some months ago, which raised a number of questions around the operation and the impact on the economy in Wales of the protocol, so it would have been sensible for that to have been the subject of really pretty detailed workstream discussions, and that hasn't happened. So, there have been discussions, but not in that kind of granular way that you would expect there to have been.

What we said, just to echo the point you make in your question, is that much of that is reserved, obviously, and what we don't want, through the joint committee structure, for example, is for the way of working in relation to the withdrawal agreement to become the way of working in relation to the future relationship. Obviously, that forward-looking way of working will engage much, much more deeply matters of devolved competence, and so we don't want the precedent of current ways of working in relation to that to become a precedent, effectively, for that future way of working.

09:40

I'm grateful to you. And finally, Chair, the coming weeks are very critical weeks. We've seen the publication of documents from both the United Kingdom and the EU side of these negotiations, and David Frost, for example, is quoted as saying that the EU position needs to evolve. A lot of people are using the same term. Barnier seems to be ambivalent about whether that's possible, and somewhat frustrated that the United Kingdom is moving away from commitments that it made six months ago. So, over these critical few weeks that face us in June, what role does the Welsh Government, and what role do you, intend to play in order to try to push or shape or contribute towards this critical period of these negotiations?

I suppose there are two ways of approaching that question, really. If you were to say, 'What areas will we focus on?', as I mentioned, I think, in the letter to the Chair, we've decided that obviously we need to be pragmatic in the current circumstances. There are certain areas, clearly, with the UK Government's electoral mandate, plainly there is little point in pressing on some of those broader issues, they're simply never going to be conceded. So we are identifying areas where either because relations are good, or because the UK Government itself would accept that the Welsh Government and devolved Governments have a particular interest, and identifying those areas to focus substantively on those.

Significant amounts of work, obviously, have already been done in relation to those areas and more broadly, and so the question really is focusing effort on those areas where there's most likely to be the opportunity of influencing. So, you'll be unsurprised to hear that that's around things like agri-foods and the trade in goods, qualifications, supporting the trade in services, sanitary and phytosanitary requirements, environmental issues. There is a range, probably, of about 10 or 12 of those areas that we'd all be familiar with as being the ones that either have implementation responsibilities or relations with the UK Government have always been pretty pragmatic, as it were. So that's the kind of approach that we're taking in relation to the issues, the subject areas, if you like, and then, in relation to discussions with the UK Government, we will always take opportunities to put forward the case for Wales, even if that doesn't lead to the results that we want to see.

But we're coming up into a period in June where there'll be a high-level meeting, which is a stock-take, effectively, of where the negotiations are, and we have asked for a four nations meeting in advance of that. We raised that at the last JMC(EN) and most recently in the quadrilateral that we had last week with the Paymaster General. The point of that from our point of view would be essentially to remake the case, firstly, for there to be, just on pragmatic good-governance grounds, a pause and extension in the transition period, so that Governments can focus firstly on COVID and then on the negotiations, when there is more space for doing that. Then, to press the point that I made earlier about compromise and the point that devolved Governments need to be more directly involved. So, if that four nations meeting happens in advance, we will take that opportunity and that platform to rearticulate those points. 

09:45

Thank you, Minister. Before I bring David in on questions that link in to this, in a sense, the common frameworks agenda, which is clearly linked in closely to the decision to leave the European Union and where we'll be at transition point, you talked earlier about the texts, that you've seen the two texts—the legal text from the UK and, clearly, the EU. In your interpretation, how close are those texts, and is there really a realistic possibility of getting an agreement or are they so far apart from one another that this will be more challenging?

Oh no. I mean, there's no realistic prospect of an agreement based on what's reflected in the texts. That's really what's required: to move to a position where there's a pragmatic sense of compromise around it, but the texts are nowhere near where you'd expect them to be if there's going to be an agreement anytime soon.

The text published by the UK Government is a text for a legal agreement, a draft free trade agreement, but there were also separate agreement texts published that indicated that they might well be looking for a set of agreements, rather than a single one. What's the Welsh Government's view on that position?

Well, it's one of the four areas where the parties are furthest apart, isn't it, really? We've always said we see the sense in having a common governance framework in relation to the entire relationship. That would be our preference, but I think the question you ask shines a light on one of the key areas in dispute, really. In fact, it isn't one legal text; it's several legal texts that the UK Government have published, because obviously they have a different conception of the relationship and its fundamentals, really.

Before I ask David to come in, you just mentioned—you talked about 10 or 12 areas you're prioritising and I'd be grateful if you could give the committee a list of those 10 or 12 areas afterwards.

Diolch yn fawr, Gadeirydd. Counsel General, in your assessment, has the process to agree the common frameworks been equally thin?

Equally thin to the process you've just described—the negotiations between the UK Government and the EU.

I would say the challenges in that space have been very different, David, if I'm honest. There has been, I think, engagement from all Governments in relation to that process. The challenge that that process has faced, really, has been around the necessary emphasis on 'no deal' planning in the latter half, obviously and before then, but certainly coming towards the end of last year, when the common frameworks ought to have been making most progress, obviously the focus on 'no deal' planning; just the general logistics of four Governments with slightly different perspectives—that's not to say the will wasn't there, but just that aspect to it; and then lastly, of course, the impact of COVID. So, those are the things that have fundamentally impacted on the common frameworks programme. 

Those are major disruptions. Obviously, COVID is not one that could have been reasonably anticipated. I suppose a change in UK Government position to at least contemplate a non-agreement or an agreement that falls short of a free trade agreement has had a big impact on the time and capacity available for working on the common frameworks. So, are the major ones going to be complete by the end of December?

Well, the first point to make, if it's not already clear, is that it's essentially impossible to deliver the common frameworks programme in the way that it was originally envisaged by the end of this year. That simply isn't going to be possible. So, the four Governments now effectively are working on, and have worked on, a shared understanding, really, of what the priority frameworks are. We would like to be in a position come the autumn to share maybe two or three of those for scrutiny, but even the priority ones won't all be in place by the end of this year, I would say. So, there may be two or three that will be available for scrutiny in advance. I would say the rest of those priority frameworks would be what we are hoping we can agree, at least. I should put it in no stronger terms than that at this point, really: that by the end of the year, for those priority areas, there would be an outline framework that has gone through JMC(EN), effectively, and would then be the document that, in the new year, would be put out for engagement with stakeholders and consultation and scrutiny, and then there'll be a range of others where we'd be working towards interim arrangements that would have a sense of the timeline for resolution, a mechanism for resolving disputes, a mechanism for managing divergence, perhaps, and an overarching statement of purpose for each of those areas. So, I think it's helpful—certainly, I find it helpful—to look at them in two categories: the priorities and then ones that are important, but not quite as pressing in that sense, really.  

09:50

My understanding is that they're all going to be operational in January, so the priority ones may be published at least but not scrutinised. The interim ones are going to operate with any parliamentary light of day being cast upon them. Is that the case or am I being too pessimistic in my assessment? 

Well, they'll be published but they won't have gone through a process of being scrutinised by legislatures. That won't be just physically possible by the end of this year, given the constraints that we now face, but they— 

I thought what you said, Counsel General, was that the priority ones wouldn't have gone through a scrutiny process either; they would not have had stakeholder involvement and consultation. So, I just want to have an idea of what we're going to be doing as a legislature in terms of our scrutiny role. Now, I understand that this is not principally determined by you, but, obviously, you're the conduit as far as we're concerned to have these issues addressed. 

So, of those priority ones that I mentioned, there'll be two types: ones that we will hope to get into scrutiny before the end of the year, and we hope to be in a position to put those forward—maybe two or perhaps three of those—in the autumn; but then the others, even within that priority category, would not be coming for scrutiny during the course of this year. 

Simon put his hand up; he wanted to be able to add something. [Inaudible.]—unmuted.

Thank you. It's worth adding that they key constraints around the deliverability of the framework programme are going to come from the timing, the quality and the depth of the discussions that come through the negotiations. So, when those positions come through and become clear, we'll then have a fundamental shaping of what those frameworks need to cover, and also, domestically, how the four nations are going to operate an internal market and how that interplays with things like the Northern Ireland protocol, and whether effective inter-governmental relations are in place to hold the frameworks together. And actually, all of these work streams are under strain, given the pressures, as the Counsel General described.  

Thank you for that clarification. It's obviously true that the further away we are from a deep and comprehensive agreement, or whatever was the aspiration three or four years ago, then the common frameworks are going to be much more critical because they will determine so many issues that would partly have been determined in a proper free trade agreement, potentially. So, I think that factor is a really important one to emphasise. 

Being slightly more optimistic, from your tone, Counsel General, I think you expect broad agreement on the frameworks—that there's nothing causing you great anxiety at the moment in terms of their outcomes, albeit a lot of work still needs to be signed off, or am I just being a bit Panglossian there in that we're heading to the best of all possible worlds in terms of the framework? 

Firstly, I'm not in a position to give you that assurance; I'm not seeking to shroud a veil around it, I'm just not in a position to give you that assurance, because work necessarily in some of them isn't sufficiently advanced to do that. There are some significant issues coming down the track, David. So, Simon mentioned there the work on the internal market, for example. Whilst conceptually slightly separate, that's in a similar sort of space, if you like, about the working together as four Governments. One of the risks there, for example, is how that work is taken forward. Currently, the UK Government's preference is for there to be a statutory underpinning to aspects of the internal market, rather than a kind of framework-based, economic co-operation-based approach, which is our preference. And the risk there, I think—and it's a risk that we all need to focus on—is that one of their current proposals is a sort of mutual recognition principle, so that goods put on the market in any parts of the UK, compliant with local regulatory environment, would be required to be accepted in any part of the UK. So, if you have a Government, which we appear to have, that is keen on deregulation, then goods put on the market in England to a lower regulatory standard than other parts of the UK might require would have to be accepted in the markets in other parts of the UK.

Now, if that were to be the principle that we ended up with, you can easily imagine that, whilst our rights to regulate differently under the devolved settlement are technically and legally protected, the economic imperative, across the UK, would be to produce to the lower standard, which puts in question the purpose of those powers that we have. So, that is a fundamental question about the nature of the devolved settlement and how that relates to the economy, and that's a significant challenge that lies ahead.

09:55

And I completely accept that these things are deeply linked if there's a fairly clear and accepted level playing field between the UK and the EU and its trading relationship, then that makes any concept of the internal markets in the UK easier, potentially, to negotiate, because you're not going to have those sorts of variants and, in effect, crowded out of policy options just by the size of England, which is, clearly, in our model of devolution, a danger.

My final question is, given that stakeholders may not even be involved formally until early next year, what have you been doing informally to involve them? It's not just about common frameworks. One of the kites being flown at the moment is that we won't have a free trade agreement, but we'll have some form of agreement that accepts some quotas and tariffs. But you can just imagine what that might do to farming, and lamb in particular. So are these things being discussed by the key stakeholders, and with you in the Welsh Government?

Yes, there's a pretty consistent level of engagement with stakeholders, I would say, David—across portfolios, obviously. But the European advisory group, for example, which Huw chairs, and which I attend, which has a cross-sectoral representation, has a continuing discussion on the state of negotiations, and priorities, and so on. And that's a cross-sectoral representation. But in each of the portfolios there's ongoing stakeholder engagement. But as I say, in the weeks ahead, plainly, by focusing down on a narrow set of priorities, that is, bluntly, a pragmatic response to where we are and what is the likely response of the UK Government to representations that we make.

Counsel General, you've highlighted your set of priorities. Can you provide us with the list of priorities?

Yes, certainly, Chair. The list of areas to focus on is the one that I've committed to provide you already—those 10 or 12 areas. And then, obviously, in the preparation of the negotiating mandate, the First Minister wrote to the Prime Minister with priorities within those areas, which I think we have shared, but we can make certain that that's available.

And also the common frameworks, you identified—[Inaudible.]—as well.

And a second point from me before we move on to preparedness, you just basically mentioned I think a concern that one of the deep worries is the way in which the UK Government may be a token agreement, which could constitutionally put devolved powers, basically, to one side. Are you therefore still in the situation where we are looking at perhaps constitutional discussions and inter-governmental review, to see how things can work? Because if there's a possibility where the UK Government could put that into place, as you say, it's a very strong possibility therefore that the powers we have become ineffective, because the UK Government is making decisions. So where are we in that situation?

Okay, there are two aspects. One is the powers that the Secretary of State has in any event under the devolution legislation to direct compliance with international agreements effectively. So that remains an issue, plainly. But the point I'm describing is, effectively, an economic driver, really. The inter-governmental review was raised—I raised it in the last JMC(EN), last week, or the week before last—with a particular focus on making progress in relation to the dispute resolution, which I think is what's at the heart of your question, really. And I think there is a recognition that, of the areas that ought to be progressed that's the one that really is at the top of the list, and we had some reassuring indications, Chair, but that now needs to turn into quick progress, effectively. And obviously, progress on the review generally has been slow unfortunately, but I think that area is the one that we would certainly be pressing hardest, and I think there is a recognition that's probably the one that we should try and make progress on. 

Can I just say—I'm mindful of the fact that you want to move off this topic—just to say it might be helpful to you, Chair, if I was to write more fully to you in relation to the common frameworks generally, because there might be some more areas of interest in there for you?

10:00

That would be very helpful, thank you. I'll move on to preparedness now, and leading on that is Dai Lloyd. 

Diolch yn fawr, Gadeirydd. Bore da, Weinidog. Gyda'ch het yn gallu rhagweld y dyfodol, rŵan, ac edrych ymlaen at y cyfnod ar ôl pontio, allech chi olrhain y senarios posib yn y dyfodol ar ôl y cyfnod pontio, a derbyn bod y cyfnod pontio yn mynd i orffen pryd dŷn ni'n credu ei fod yn mynd i fod ar hyn o bryd? Pa senarios posibl mae Llywodraeth Cymru yn eu paratoi ar eu cyfer? 

Thank you very much, Chair, and good morning, Minister. Now, with your predictive hat on now and in looking to the future, and looking at the post-transition period, could you outline the possible future scenarios, post transition period, assuming that that transition period will conclude as expected? So, what possible scenarios is the Welsh Government preparing for? 

Wel, petaswn i'n gallu darogan buaswn i'n boblogaidd iawn, Dai, rwy'n credu. Ond mae dau, efallai, senario bras. Yr un cyntaf yw bod dim cytundeb, wrth gwrs, a'r ail un yw bod cytundeb efallai sydd yn delio gyda nifer o feysydd, ond efallai ddim yn ddwfn iawn. Yn y ddau senario, mae cynnydd yn y gwasgedd ar y ffin, er enghraifft—friction ar y ffin—felly, mae hynny'n elfen o'r ddau senario hynny. Mae amryw o senarios, wrth gwrs, yn y canol ond, o ran blaenoriaethu gwaith, dyna'r ddwy brif senario. Wedyn, rŷn ni'n troi off darnau o waith ac mae'n mynd yn amlycach bod rhai pethau efallai ddim mor debygol â phethau eraill yn y broses wrth ei bod hi'n esblygu. 

Well, if I could predict the future I'd be very popular indeed, Dai. But there are two possible scenarios, broadly speaking. The first is that there is no agreement—a no deal—or that there is an agreement that deals with a number of areas that isn't particularly broad. In both those scenarios then, there would be an increase in friction on our borders. So, that's an element of both those scenarios. There are many other scenarios between those two, of course, but, in terms of work prioritisation, those are the two main scenarios that we're looking at. Now, it's clear that certain things aren't as likely as others in the process as it evolves. 

Diolch am hynny, a jest i ddilyn un agwedd, oes yna baratoadau bydd angen i Lywodraeth Cymru eu gwneud, hyd yn oed os deuir i gytundeb ar berthynas yn y dyfodol? Ac os oes yna ryw baratoadau bod rhaid i chi eu gwneud yn y fath senario hynny—bod yna rhyw fath o gytundeb—pa gynnydd sydd wedi ei wneud o ran y paratoadau hynny? 

Thank you for that, and just to follow up on one aspect of that, are there any preparations that the Welsh Government will need to make, even if an agreement is reached on the future relationship? And if there are any preparations that you need to make in that kind of scenario, where there is an agreement in place, what progress has been made in terms of delivering those? 

Wel, mae rhai meysydd gwaith yn berthnasol mewn unrhyw senario. Hynny yw, mae Llywodraeth y Deyrnas Gyfunol nawr wedi dweud eu bod yn bwriadu dodi checks ar y nwyddau sydd yn dod mewn. Felly, mae hynny'n lefel newydd o angen, fe petai, o broses, o gost. Felly, mae gwaith ar tsieciau ar y ffin; gwaith ar oblygiadau hynny o ran—wel, rŷn ni'n gyfarwydd â hyn o'r trafodaethau ar ddiwedd llynedd—bwyd a meddyginiaethau a nwyddau craidd eraill; gwaith ar sail rhaglenni a gwaith ar sail paratoadau sectorau. Felly, mae'r gwaith hynny'n gymwys ar gyfer unrhyw senario.

Beth fuaswn i'n dweud, o ran ymwneud yn gyffredinol gyda Llywodraeth y Deyrnas Gyfunol ynglŷn â pharatoi, yw bod dim wedi bod yn digwydd ar lefel ganolog drwy'r Cabinet Office ers mis Ionawr. Hynny yw, mae rhywfaint wedi bod yn digwydd ar lefel portffolio, ble mae'r perthnasau yn weddol, ond fel oedd gyda ni ar y gweill llynedd, hynny yw, strwythur ganolog yn sicrhau bod y wybodaeth i gyd yn cael ei chasglu a'i rhannu mewn ffordd systematig—roedd sialensiau yn hynny hefyd, ond o leiaf roedd y strwythur mewn lle—dyw hynny ddim wedi bod yn digwydd am bedwar mis. Nawr, dyna bedwar mis nad ydyn ni byth yn mynd i gael yn ôl. Felly, mae hynny wedi bod yn colli amser yn y paratoadau yma. Beth bynnag yw eich safbwynt chi ar Brexit, dyw hynny, yn sicr, ddim yn dderbyniol.

Yn y trafodaethau yn y JMC(EN), gwnaethom ni gael syniad bod hynny ar fin gwella. Felly, mae gwahoddiad wedi dod i swyddogion i ymuno â phwyllgor newydd sydd wedi ei greu, ac rŷn ni wedi cael o leiaf rhyw fath o syniad bras o'r meysydd gwaith y mae Llywodraeth y Deyrnas Gyfunol yn ei wneud fel bod gyda ni gyfle wedyn i ymwneud â'r rheini lle maen nhw'n effeithio ar Gymru hefyd, felly. Ond mae angen lot fwy o fanylion ar hynny. Maen nhw wedi dweud bod hynny ar y ffordd, ond gobeithio y bydd hynny'n digwydd.

Well, there are certain areas of work relevant in any scenario. For example, the UK Government has now said that they intend to put checks on goods entering the country. So, that is a new level of process and an additional cost. So, work on border checks and the implications of that—. We are familiar with this from the negotiations at the end of last year in terms of food, medications and other core goods. There is work in terms of programming and sectoral preparation. So, that work is applicable whatever the scenario. 

But what I would say, in terms of our general dealings with the UK Government on preparedness, is that nothing has been happening centrally through the Cabinet Office since January. There has been a certain amount happening at the portfolio level, where relationships are relatively good, but where we had work in train last year, that is to say a central structure ensuring that all of the information was gathered and disseminated in a systematic manner—of course, there were problems there too, but at least the structures were in place—but that hasn't been happening for four months, and that's four months that we'll never get back. So, that has been time lost in terms of these preparations. Whatever your view on Brexit, then that certainly isn't acceptable. 

Now, in terms of the JMC(EN) negotiations, we were given a hint that that was about to improve. So, there's been an invitation for officials to join a new committee that's been created, and we have had at least some sort of broad idea of the areas of work that the UK Government is focusing on so that then we have an opportunity to work on those where they affect Wales. But we need far more detail on that. They have said that that's on its way, and I hope that they do deliver on that.

10:05

Diolch yn fawr am hynny. Yn symud ymlaen i'r prif senario arall, allwch chi olrhain pa baratoadau y mae Llywodraeth Cymru yn eu gwneud ar gyfer y posibilrwydd o Brexit heb gytundeb masnach, a sut mae'r paratoadau yna'n wahanol i'r senarios posibl eraill rydych chi newydd eu holrhain? So, symud ymlaen rŵan i'r posibilrwydd o Brexit heb gytundeb masnach. Pa baratoadau amgen, ar ben rheini rydych chi newydd eu holrhain, sy’n digwydd i fynd i'r afael â'r posibilrwydd trychinebus yna?

Thank you very much for that. Moving on to the other scenario, could you tell us what preparations the Welsh Government is making for a possible 'no trade deal' Brexit, and how do those preparations differ from the other possible scenarios that you have just set out? So, we're moving on now to the possibility of a 'no trade deal' Brexit. So, what alternative preparations, in addition to those that you've just outlined, are ongoing in order to grapple with that disastrous possibility?

Wel, mae lot o'r gwaith a wnaethpwyd llynedd ar gyfer gadael ar ddiwedd llynedd heb gytundeb o unrhyw fath—mae lot fawr o'r gwaith hynny yn berthnasol, wrth gwrs, i adael ar ddiwedd y cyfnod pontio heb gytundeb masnach. Dyw e ddim, yn amlwg, cweit yr un peth, ond mae tebygrwydd, ac mae lot o'r gwaith hynny yn berthnasol. Felly, beth rŷn ni'n ei wneud ar hyn o bryd yw gweithio drwy hynny a sicrhau ein bod ni'n blaenoriaethu'r elfennau pwysig. Ond mae lot o'r gwaith wnaethon ni llynedd yn berthnasol yn y cyd-destun hynny. 

Well, much of the work done last year in terms of exiting at the end of last year without any deal of any sort—much of that work will remain relevant, of course, if we were to leave without a trade deal at the end of the transition period. Obviously, it's not quite the same, but there is similarity, and much of that work would be pertinent. So, what we're doing at the moment is working through that and ensuring that we prioritise important elements. But much of the work that we did last year is relevant in that context.

Diolch yn fawr. Cadeirydd, dwi wedi gorffen.

Thank you. Chair, I'm finished.

Okay. Thank you, Dai. Now, Huw's got some further questions on preparedness, and then Mandy will ask some as well. Huw—wait.

Thank you, Chair. Chair, are you happy if I go directly on to the issues of Northern Ireland?

Thank you. Minister, when you wrote to us on 27 May, you raised several areas of concern over the potential implications for the Northern Ireland protocol. You've just touched on the issue that, at that point when you wrote to us, there had been limited or no progress on the joint work stream at the JMC(EN), although you've updated us slightly. And also, the worrying fact that you didn't have sight of any of the documents regarding the protocol or any opportunity to comment on the matters that would directly affect Wales—so ports, transport, freight transport and so on. Could you give us an update on that? We've had a few days gone past. You've mentioned the fact that your officials have been engaging now on the JMC(EN) and what might come from it. Are you a little bit more optimistic as the days have gone by since that letter?

I wouldn't say anything substantively has changed, Huw, in relation to that.

I just want to make, if I may, one point, in relation to the Northern Ireland protocol and the command paper that the UK Government published, which, as you say, rightly—we're not involved in that. Plainly, it has been broadly welcomed by the Governments of the island of Ireland and by the Commission in relation to the overarching purpose. My concern, really, is in how that relates to the economy in Wales. The joint work stream, which I mentioned earlier, still hasn't been put in place. That isn't an element of work that's going on in that detailed way. And I think, as I said, even though the Northern Irish Executive, plainly, have the leading interest, for reasons that are obvious, there's certainly recognition that the four Governments are impacted by its content, obviously.

So, there are aspects in it that remain unclear to us. So, we're not in a position, at this point, until those points are clarified, to form an assessment of the impact on the Welsh economy, for example. So, whether it's goods travelling from Northern Ireland into Great Britain, or the incentivisation, potentially, of goods travelling from the Republic through Northern Ireland and then through to Great Britain—there's the possibility of loss of transit and traffic across from Holyhead to Dublin. That's certainly a potential issue. It isn't clear what infrastructure might be required in order to manage the new relationship, indeed in Holyhead or anywhere, at this point. And there are still quite big questions around goods that go into Northern Ireland and which are at risk of going into the European Union, because there's a whole range of considerations that's attached to those, and that isn't clarified in this document.

So, the short answer is that we haven't really got any clarity on the questions we were raising several months ago, which the trade observatory helped us to devise, and obviously we're hoping, clearly, to get further clarity on that.

10:10

In your hopes that you will get further clarity on that, Minister, what are you and your officials doing currently, day by day, to try and get that particular work stream up and running to give you the clarity that is needed, both for yourself and for different industry sectors within Wales—not just the ports, but everybody who uses the ports? And in particular, do you have any hope that this work stream will get up and running very rapidly? 

Well, I think the first question is understanding some of the detail of the points that I've just raised now, and I'll bring Ed in in a second on that. I think the first point is to raise those prior questions that the paper hasn't shone a light on—those need to be answered before the kind of operational outturn of that can be worked on. But I'll ask Ed to come in on that, if I may. 

Thank you. So, in terms of the official-level engagement over the last few weeks, we've been holding what the UK Government is calling 'escalation sessions' to focus on some of those priorities, at which there have been areas around frictions at the borders, picking up our priorities around manufactured goods—trade in particular. Throughout those discussions, particularly led by Northern Ireland officials but also supported by the other administrations, we've been calling for details of how the protocol is going to be implemented, and having someone there from the transition taskforce along there, so we can understand the interaction between future relationship issues and how the protocol will work. Over several weeks the UK Government resisted that, saying more details of the protocol will be published in the command paper, and as the Counsel General has outlined, there's still a lot of unanswered questions in that command paper. So, we'll continue to press at official level. And now that's been published, let's start talking about some of the details that aren't in there and how that's going to operate. So, we'll continue to push at official level, but at this stage, we haven't had any detailed discussions around the protocol. But, like I say, we continue to push across all these areas of work.

So, in that case, are we—? As the weeks go by, we're still in a position where we cannot yet fully assess the implications either for Welsh ports or for industry sectors in Wales. I can see the Minister is shaking his head. We simply can't do that where the weeks are ticking by and we're not in a position yet to get into that detailed discussion.

Well, there are two challenges. Huw's asked the first challenge; the second challenge is, as we sit here today, businesses don't have the capacity, really, to be able to engage and prepare in the way that obviously would want them to. So, there are two areas of great uncertainty, I'm afraid, that businesses in Wales face. 

So, in which case, could you take us through, in your own mind at the moment, in an ideal scenario, if now that engagement, both on the protocol but also the detail of it, does get under way, let's be optimistic for the moment—in an ideal scenario, what are the key milestones here in developing the detailed plans going forward, so that you can actually talk with those industry sectors and we can get into some of the detail of this? 

Well, I mean, the first milestone is to get a sense of what the relationship is going to be the European Union after the end of the transition period, because that will govern—you know, if you had a no-tariff, no-quota relationship, then that would affect the relationships that we're talking about here quite fundamentally. So, that's the kind of big picture aspect of it. We've just had a conversation about how likely it is that that's going to reach an early resolution, if you like, and then the next question is the detail of some of the points we've just been talking about here. And then, once that picture is cleared—is clearer—then Governments, businesses and others can start to make more sensible judgments based on that new reality. Even if it's a reality that we don't want to see materialise, at least then there's a sort of scenario against which people can begin to do what they can to prepare. Ed, do you want to come back in on that?

I was just going to pick up the issues that were raised by the UK Trade Policy Observatory in their research; they all seem very pertinent. So, they talked about how goods will flow between Northern Ireland and Great Britain if there is regulatory divergence. The command paper says there won't be any checks, but it's difficult to understand how that would work if regulations did differ significantly. There's then the issue that the Counsel General raised around at-risk goods. We've approached that at official level, saying, 'What is the classification of those goods that are at risk of entering EU markets from Northern Ireland?', and we still haven't had the details about what those goods are. It feels quite difficult to understand which goods could be at risk of entering into EU markets, given the—[Inaudible.]—to the border on the island of Ireland, so that seems quite difficult. And then the command paper then talks about additional checks at the border, additional documentation, and the only information that is in there is the work Her Majesty's Revenue and Customs have been doing with businesses, but it doesn't go into any of the details about what those additional range of documents and additional checks are, or what additional infrastructure will be required. So, the real fundamental questions are still unanswered, based on comparison of the command paper and the research that the UK Trade Policy Observatory did for us.

10:15

My goodness, there's a lot of work to do. Could we at least clarify that Welsh Government will be involved in the UK Government's business engagement forum on the implementation of the protocol, because that would at least give us some assurance that we're keyed in right at the top table of those detailed discussions?

Well, we'll take any opportunity to engage, Huw. The work stream is the ideal, clearly, but where there are fora and opportunities for us to make that case and to prepare better, then obviously we'll do that.

But do we know, Minister, yet for certain whether Welsh Government has been authorised to be involved in that business engagement forum?

I don't myself know if we've had an invitation to that. I wonder if Ed or Simon happen to know that.

Okay. Chair, I think in the absence of any progress on the detail, let alone the high-level aspects of the protocol at the moment, I suspect that's probably as far as we go. Until we get into this real detail, the committee has got a limited amount it can bite on nowwith this, let alone the officials and the Minister.

It is difficult, and I think we need to perhaps reflect upon that in our discussions afterwards. Mandy, do you want to come in now on some last questions on preparedness you wanted to raise?

Can I just make a statement first of all, Minister? The political declaration is only a way to move forward into the future, and it's not legally binding. And those were actually the words of Michel Barnier. It's not set in stone; it is a future road map.

Back to some of the questions, and some of them have answered, what I was going to ask, but in relation to the UK Government's transition period, their readiness portfolio board, can you outline how often the board meets, when the board was established and what the future work programme of the board will be, please?

No idea, I'm afraid. You need to ask the UK Government for that. Officials have been invited in the last, I think, week or so. I think there's a meeting coming up, but, you know, I think that's emblematic of the depth of engagement on it so far. Hopefully that will improve.

Okay, thank you. All right, I'm trying to deal between phones and iPads here, which isn't very, very good at the moment.

It seems to me, and from what I've read and from what papers have come through, that the EU's main objective is not economic but to assert the maximum degree of economic and political control over the UK. If you compare that with the UK's main objective, which is to escape those political and economic controls from the EU, we therefore see that the primary interests of parties are in direct opposition to one another. If that remains the case, the prospects of an agreement—a free trade agreement like the one the EU wants—looks rather gloomy. What are your thoughts on that?

I think it's just generally preferable to avoid that kind of dramatic characterisation when what you're looking for is a compromise on both sides in order to reach agreement, and I just think that what we want to see out of this is an agreement, the best available agreement. You and I will differ fundamentally on what the best kind of agreement is, for obvious reasons, but there's no particular need to rehearse that again. But the real problem at this point is that you have one party that is essentially saying, 'I know that we signed up to a declaration but, actually, what we want is different', and ultimately saying, 'And we're confident the EU will move its position.' Just as a basic mode of negotiation, that is not likely to be effective. And so, if what we want is to have an agreement, and the best available agreement, that is going to require the UK Government to take a different stance. Now, it's not a question of taking sides; whichever party wants to put forward an agreement that is in the best interests of Wales, they will get my support in pressing for that kind of agreement. But it's not going to be possible to do that if one Government is simply refusing to move its position.

10:20

Compromise on both sides is what we need. The core of the UK's proposal is basically a standard free trade agreement. This is not even vaguely comparable to EU membership; it's an entirely different concept. The EU has exactly that sort of relationship with around 35 other countries, so why is it trying to keep all the power when the UK has actually voted to leave and we're out? Why has it not put those things on the other 35 plus different countries?

Because their trading relationships with the EU are a fraction of the trading relationship of the UK, and their geographical proximity is nowhere near in most cases, which is a fundamental aspect of trade policy, isn't it? If you've got a very significant trading partner much nearer, the prospects that you're going to have an agreement that relates to a smaller trading partner further away are obviously unrealistic, which is basic economics, really. So, I just think that's where—there needs to be a level of reality check going into this.

I'm keen not to dramatise the discussion between the two parties, because, at the end of the day, what we want at this point is an agreement that best reflects—you know, the best available agreement in what I would describe as very difficult and challenging circumstances. But the notion that you can simply cut and paste an agreement that is applicable to an economy with which trade is significantly less and replicate that, frankly, is for the birds.

But would you agree with me, though, that, compared to a lot of those other smaller countries that the EU deals with, the UK is far more affluent and we're a much richer country than a lot of those smaller ones? So, I know they say it's better to trade with 500,000 people than, you know, the smaller one, but don't you think—? Because you've just said about basic economics. Don't you think that they—well, in fact, they do need us as much as we need them, and I'd love to see a free trade agreement come through, but do you think that our economy, as in affluence, would be any different? How do you see that?

I think the Minister has answered the questions in relation to the relationship the UK and the EU are going to need to have. Unfortunately, the Minister is not in the negotiating team and therefore is not part of the negotiating team. So, it's a question now—it has to be how the Welsh Government is viewing the role of Welsh Government in this process, and not perhaps trying to indicate as to the discussions going on between the UK and the EU and the positions they have. The Minister has made that, I think, quite clear at this point in time. So, can we focus upon the Welsh Government's agenda, rather than the UK Government's agenda on this one? Okay. Sorry, Mandy, but—

Okay. Minister, in relation to preparedness, there are a couple of points I would like to bring to your attention, if I can, just to clarify. The European transition team, clearly, have been mentioned—that they've been redeployed to support the Government's response to coronavirus, and I understand that totally, and that's the right thing; that should have been done. But when do you anticipate staff returning to prepare for the end of the transition period? Because it is likely now that we will be facing the end of the transition period at the end of this calendar year. So, we need to prepare for whichever scenario is possible, and you've identified those yourself, but when do you see the teams being returned to the work on the transition?

Well, as soon as possible is my ambition. Obviously, it's a temporary redeployment, which is common to Governments everywhere, clearly. I think what I wouldn't want to give the impression of is, as I hope is evident from the discussion this morning, that it's been binary in that clear cut way that the question perhaps is leading me towards. There's obviously work going on throughout in relation to preparation, simply because the judgments are being made now in the negotiation, aren't they? So, there's a window, not a great window, but the extent of our influence is now in those discussions and in the preparation. So, that activity is continuing but in a much more narrowly focused way, if I can put it like that. But, obviously, this is a challenge that Governments, as I say, are facing everywhere.

10:25

The reason we ask, obviously, is that there were obviously concerns, prior to the pandemic, over the capacity within Welsh Government, and that capacity has been reduced to address the pandemic issues. But it is important as we approach—we are now six months away from the end—the transition, so that we may prepare. For example, how are businesses being supported to prepare for the changes to, maybe, customs and regulatory processes?

Well, there are two points there, Chair, if I may. Firstly, we face a number of challenges at the moment. COVID is a significant challenge, and many of us would agree that Brexit is another significant challenge. So, whilst we face at least two significant challenges, we will end up having one single future. So, these things affect each other, and it's important to see the aggregate effect of these influences on one another, and I think that's an important way of looking at some of this. Sorry, Chair, your second question was—?

What's the Welsh Government doing to support businesses at this point in time in preparation for changes?

Well, at the moment, many, many businesses are dealing with the consequence of COVID, aren't they? So, if you're asking me how confident I am that businesses are able to deal with it, I'm not even remotely confident, bluntly. I think many businesses aren't operating at all, and the notion that we could persuade businesses to start thinking about a set of facts that exist in six months' time that none of us can properly describe today, when most are worrying about how they're affected in the coming weeks and days, just isn't realistic, Chair. That's exactly one of the reasons why, on a pragmatic, good-governance basis only, there are strong arguments—let alone the other arguments—even on that basis, for there to be a pause in the negotiations so that they can be conducted more sensibly, and to give businesses, organisations, services, individuals, right across the UK at least an opportunity to prepare for the challenges that lie ahead.

Thank you, Minister. We've got a few minutes left, and I just want to ask one question, please: how much legislation are you preparing for transition, and do you think we have sufficient time between now and the end of the year to complete that legislation?

Well, until we know what the relationship is with the European Union, it's obviously not possible at this point to describe to you what legislation will be required, because we don't know the terms of that relationship.

On the secondary legislation front, I guess, we will recall vividly, won't we, the volume of work that happened last year. We are looking at a significantly larger volume, under some scenarios, for the end of transition. So, I think we had 620 or 630 last year; there are some estimates that suggest we're looking at about 500. That's just very, very, very broad at this point, without taking into account any statutory instruments required by a future economic relationship with the EU or with third countries, if those were to be negotiated. So, the scale is extremely significant, Chair. I don't think any of us should underestimate that, and the time frame for doing it, obviously, is much, much shorter. Again, just on a pragmatic, good-governance basis, you would think that would suggest that a delay would be in everyone's interests at this point.

Okay. Thank you, Minister. We've come to the end of our session. Can I therefore, unless there are any urgent questions from any Members, which I see there are none—can I therefore thank you, Minister, and your officials for attending this session? As per usual, you will receive a copy of the transcript for any factual inaccuracies. If there are any, please let us know as soon as possible so we can have them corrected for the record. So, thank you for your time, and we look forward to seeing you again before the summer recess.

3. Cynnig o dan Reol Sefydlog 17.42(vi) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
3. Motion under Standing Order 17.42(vi) to resolve to exclude the public from the remainder of the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).

Motion:

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.

Motion moved.

We move on to item 3 on the agenda, which is a motion under Standing Order 17.42(vi) to resolve to exclude the public for the remainder of the meeting. Are Members content to do so? They are content, and therefore we now move into private session.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 10:29.

Motion agreed.

The public part of the meeting ended at 10:29.

Dysgu am Senedd Cymru