Cynulliad Cenedlaethol Cymru

Yn ôl i Chwilio

Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol

External Affairs and Additional Legislation Committee

30/06/2020

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

Kati Piri Aelod Senedd Ewrop
Member of the European Parliament
Louise Parry Swyddfa Ysgrifennydd Gwladol Cymru
Office of the Secretary of State for Wales
Robin Healey Swyddfa'r Cabinet
Cabinet Office
Simon Hart MP Ysgrifennydd Gwladol Cymru
Secretary of State for Wales

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

Good morning. Can I welcome everyone to this morning's session of the External Affairs and Additional Legislation Committee? Can I remind Members that we are now operating on a virtual platform, and under Standing Order 34.19, we've determined to exclude the public from the meetings, in the sense that they are not able to be present at those meetings, in order to protect public health? We are going to be broadcast live on Senedd.tv, and I would remind you that simultaneous translation is going to be available on the system for members of the committee. And just to remind people, there is usually a five-second delay when the Welsh interpretation is being provided to when you hear the English again. That's just simply the technicalities of it, so please do not panic if you are waiting for a short space of time.

Are there any declarations of interest that need to be made before we start? None. Thank you. We've not received apologies; we have a full cohort of our Members this afternoon. And can I remind Members that in the circumstances, if I lose my connection—and it is possible, because we had a power cut this morning when I did lose all power—then Alun Davies will take over as Chair on a temporary basis whilst I try to reconnect?

2. Sesiwn dystiolaeth gyda Kati Piri ASE
2. Evidence session with Kati Piri MEP

If we move on, then, to the business of the day, and item 2 on the agenda is an evidence session with Kati Piri, Member of the European Parliament. Can I welcome Kati to this morning's meeting?

I think this is possibly the first Zoom meeting we've had with an international colleague, so it will be interesting technology-wise. This actually shows how wonderful this can actually provide the circumstances very much.

Kati's role is as co-rapporteur for the European Parliament in relation to the negotiations between the UK and the EU on a future trade deal. So, Kati, if I hand over to you just to give a short presentation, perhaps, on how you see the role and how you see issues happening in Brussels at this point in time.

Sure. Thank you very much. Thank you. Good morning to everyone and thank you for this kind invitation. I hope you'll forgive me—of course, English is not my native tongue, but I'll do my best, and if anything is not clear, I'll be happy to explain again.

I think this is a timely meeting, also, because we are halfway through the transition period. And as you will know, tonight, of course, is also the deadline for the extension of that transition period, and we don't expect that the British Government will suddenly change its opinion and ask for an extension, which means that we will need to reach an agreement on what will happen after 31 December of this year.

We also had, two weeks ago, the so-called high-level conference of the UK Prime Minister together with the three presidents of the European Union, meaning the President of the Commission, of the Council, and, of course, also, of the European Parliament, and we see that there will be intensification of the talks in the weeks ahead.

Now, allow me, in this short presentation, where, of course, I'm happy to answer any of your questions, to tell you a little bit about the procedure in the European Parliament, about the content of the parliamentary position that we adopted last week, and the expectations of the road ahead. When it comes to the procedure, as you know, the European Parliament's consent will be required for any deal. So, that means, also, that's of course the reason we are fully engaged in the negotiations. We have very regular discussions with our chief negotiator, Michel Barnier, and we have set up, established, in the European Parliament, the so-called UK Coordination Group, which is chaired by the chairman of the Foreign Affairs Committee, David McAllister. But it also contains a member of each political group in the Parliament, the chairman of the International Trade Committee, and the two rapporteurs of the lead committees—one of them is me, and the other one is my colleague Christophe Hansen from the International Trade Committee.

As you saw, we also had the participation of our Presidents solely in the high-level conference, and the European Parliament report was quite an exceptional procedure. We had two committees in the lead, which were the Foreign Affairs Committee, for which I'm the rapporteur, and the International Trade Committee, but we also had 17 opinion-giving committees, and they all had their own rapporteurs, for instance in the fisheries committee or in the transport committee. Last week, we put that to the vote, and there was an overwhelming majority of 570 votes in favour, and, actually, only 34 of more than 700 Members voted against that report. So, I think the political message of the Parliament is clear.

Very shortly on the content, we base ourselves—and the whole framework that we look at is, of course, based on the political declaration that was signed by both the UK Prime Minister and the EU heads of state. It's clear for us that without a deal on fisheries and without a clear level playing field there can't be a trade agreement. I think this is a very clear message from the European Parliament. We also expect a proper implementation of the withdrawal agreement, where we still have some concerns, and we have restated, of course, the primacy of the European Court of Justice when it comes to EU interpretation—interpretation of European law. This is the so-called governance chapter. I think the message is also that the European Parliament is ready; we want to play a constructive role in reaching a deal, but a deal cannot come at any cost. So, we should also be prepared in the case there will be a 'no deal'.

Now, finally, the third point is more on expectations. Of course, we are under time pressure. We need to have a final agreement before the European Council meeting on 15 October to also allow the European Parliament, and, if necessary, of course, also, the national Parliaments to ratify the deal that has been struck. What I see are mixed messages coming from London; also in the last days we see on the one hand Michael Gove saying that he welcomes the stepping up, the intensification of the talks, but we also hear that the Prime Minister continues to talk about friction-free commerce between Great Britain and Northern Ireland, which as far as I'm concerned is not what's in the withdrawal agreement, and that he is ready to leave on Australia terms. Now, Australia terms means no deal. I think UK expectations to keep all the benefits and rights as if it were still a member state and not having any obligation is simply not realistic. Of course, we welcome the enthusiasm of Boris Johnson to say that he wants to strike a deal within six weeks, but I'm very much also looking forward to the details on how he would like to strike a comprehensive deal in a six-week period.

And then finally, of course, I think the reason why I can be with you today is also because of this online meeting, and that has everything to do with the COVID crisis that has hit our countries very hard. Of course, that also means that a period of economic recession is coming ahead, and I just can't—well, I think we can all be clear that it's not in the interests of UK citizens, but also not of any of the European citizens to have a 'no deal' at the end of this year. The European Parliament is ready, of course, to play its constructive role, and, of course, I'm happy to answer any of the questions you may have.

09:35

Thank you for that introduction, and it's been very helpful in understanding, perhaps, the position of Parliament. But, of course, the reality is we do have some questions, and I'd like to start by asking Huw first.

Good morning, and thank you for those opening remarks. One of the things that would help us as a committee is if we could understand a little bit better, with a little bit more detail, what the timescale would be going forward. Let's go for the first scenario, which is that, within the next six weeks, we not only have clarity from the UK Government on a range of issues that you've touched on and others, but also it gives clarity that you can work with, both as a Commission but also from your perspective as a raporteur and as parliamentarians and as committees. On that basis that in six weeks there was—I'm being optimistic here—something to work with, is it still achievable, what would the timescales going forward be then, and what would the key milestones be from your perspective as a parliamentarian and from committees?

09:40

I can reply immediately, right, Chairman?

Yes, okay. Thank you for the question. We are now, I think—. A clear deadline is 15 October, when there will be a European Council meeting. So, of course, if the chief negotiators reach an agreement, it will have to be approved by the European heads of state, by the European leaders. So, I think it's realistic to say that the October Council will be the crucial Council, and if there is a green light from the European Council, then it will have to be ratified by the Parliament—both the European Parliament and, depending of course on what's in the treaty, also by the national Parliaments. And to allow time for that before 31 December, everyone in Brussels assumes that mid/end October is the last deadline to do so if we want to have an agreement that can be applied as of 1 January.

Of course, when it comes to fisheries, tomorrow would have been, in the political declaration, the deadline for reaching a new agreement, which clearly we didn't manage. So, we assume that on fisheries we continue to negotiate in parallel, of course, to all the other negotiations, and the same deadline there applies, which is also important for not only our fishermen, but of course also the UK fishermen, to have clarity, and to have clarity for businesses as well, on what is expected of them from 1 January. So, the sooner a deal can be struck, of course, the better.

I think that's really helpful, to know that the October deadline is really the last stopping point. There is no further slippage beyond that. There has to be some momentum at that point, and some clarity.

Can I then ask about the alternative scenario, which is—? Knowing what the overwhelming position is of parliamentarians and committees, there seems to be some real hardline sticking points here, not just in fisheries, but in those level playing field matters and other matters as well, in the role of the European Court et cetera. These are fundamental issues. I'm hesitating from using the phrase 'red lines', but they are fundamental. The reason I put this to you is, if the UK Government comes back by October and said, 'We've got some movement in some areas that we can work with you on, but on fisheries, on the European Court, on a level playing field, on our future trade negotiations with other countries, we're going to do different things', would your reading be, because of your special role seeing across the Parliament, that parliamentarians at an EU level, committees at an EU level, will simply say, 'No. No deal. There's nothing to discuss here'?

Well, of course it's always difficult to talk about 'what if?' scenarios and we don't know what the deal will end up with. So, we have set out the parameters for us, the framework to which a deal should adjust. So, when you talk about fair competition with high standards on labour, on social rights, on environmental standards, I think if you want to talk about red lines from the European Parliament, I would say this is a red line: no unfair competition. And I also can't imagine that there would be any deal struck to which our chief negotiator can agree to which doesn't have this fair competition part. But the UK is a big economy, it's around the corner, it's our neighbour, and I don't think we can explain to our citizens that we would lower our own standards for a market of 450 million people by allowing trade with a country with a 70 million market. So, why would we lower our standards there?

I also want to say clearly that what we have to offer, I think, is perhaps the most comprehensive agreement ever the EU has struck with any country, where I think, if we can find an agreement, it would be very much to the benefit of both UK citizens and European Union citizens.

Now, of course, the Parliament could, for any deal, say 'no' while the heads of state would say 'yes'. I don't think that's a very likely scenario. I think what you can see is that not only the European Parliament across all the political parties—. As I told you, 95 per cent voted in favour, or a small portion abstained on the report, but we also see a very united European Council, meaning the heads of state, who all stand behind our chief negotiator, Michel Barnier. So I can't imagine a scenario in which our heads of state would agree to a deal and the European Parliament would not, because I think we are all very united on our positions. I hope this answers your question. 

09:45

It does. Chair, could I just ask one supplementary to that, which is: from what you're saying, if Michel Barnier, in October, were to say as the chief negotiator for the EU, 'Broadly speaking, I think we've got something to work with', certainly the Council of Ministers would engage with him very positively, so would the Commission, but you're also saying that, by and large, the parliamentarians would as well. They would listen to what Michel Barnier says, and if he said, 'We needed to make some compromises and we can live with them', they would follow. 

Yes, because of how the structure is. So, before every negotiation and after every one, Michel Barnier comes to the European Parliament to brief us and, of course, also hear from our committee Chairs, from the rapporteurs, from the various political parties to know where he can move and where he cannot move. So, we have established a very intense contact with our EU negotiation team, who are briefing us, actually, constantly on the talks. So it's not like we will now say goodbye to him and see him back in October telling us what the agreement looks like. He's mandated to negotiate also on behalf of the Parliament and we very well know what he's putting on the table or what he's asking back also from the Council of Ministers, of course. 

Diolch yn fawr, Cadeirydd, and thank you very much, Kati, for giving time this morning so that we can explore some of these issues. I think it's very generous; I'm sure your schedule is a very busy one and we're all learning to work with the intensity of Zoom and the like.

I just want to explore what you said in the report about the European court, because my reading is that it says that the European court must be the sole interpreter of EU law, which is in no way an extraordinary statement. It would be quite amazing if you made any other statement. What it doesn't say—at least I hope that I'm making a logical inference here—is that the European court must be the sole interpreter of any free trade agreement. Now, those are very different concepts, because the UK Government wants some sort of arbitration that's made up of a joint committee, and they would then look at disputes and resolve them. And then of course it's quite possible that the European court could strike that down, saying it's not compatible with EU law and then obviously we're in a difficult position. But it may not be the obstacle that some people in the UK currently think it is, or am I being too optimistic?

Well, I'll tell you immediately that I'm not a trade expert of the Parliament, but from how I understand it, of course it depends on what the final deal looks like and how much European law is in it as to how big the role, of course, of the European court would also be. What we don't want is that—. As we have already struck in some trade agreements, for instance with Switzerland, there is already an application of EU law where, of course, the final legal jurisdiction is up to the European court. It very much depends on whether we have a comprehensive agreement or a small agreement. You know, what will be the content of the agreement, of course, also will determine how big the role of the European court will be. But we certainly don't want to have, next to the European Court of Justice, a different mechanism, a different arbitration court for the interpretation of EU law. So, that's how you can read that article in the report. So, any aspect that is related to EU law also, if it's written, of course, in a trade agreement, there the final say is for the European court. 

09:50

And my second question is perhaps a broader political one. Now, obviously, we know the deadline is today; we also know that we're in the most extraordinary circumstances on top of the United Kingdom leaving the European Union, which is something I think—. I was born in 1962, and I never thought I'd see this day, but it's happened and we're a democracy, and we've got to live with the choices we make. But nor did I think that we would have, in the twenty-first century, a pandemic over which we had so little control and knowledge that would affect so fundamentally public health and economic prospects. So, we're clearly in—. Outside the time of war, we're in the most exceptional circumstances.

But if at the end of October, there's still no deal and then the UK Government says, 'Well, actually—', and goodness knows where we'll be with the COVID crisis, says, 'Well, we would agree now to extend the transition period', I know that causes all sorts of constitutional problems because we had to do it by today, and that's in the political agreement, but I don't think the EU would be obdurate on that point; it would just have to make things up as it went along, given the incredible situation we're in in Britain and in Europe, wouldn't it? So, I'm not sure how real these deadlines are, given the political space we're in is such an extraordinary one.

Well, let me say: of course, in these last four years, we have had many deadlines being shifted every time, right, in the past. The way this deadline is seen is much more strict than the earlier ones, to be honest, in Brussels. So, again, I'm not a constitutional lawyer, so I can't explain legally how tough the deadline is, but we all are preparing for either a deal as of 1 January or a 'no deal' as of 1 January. No-one in Brussels is talking about the possibility, after the deadline passes today, of having a prolongation. Of course, you could have smaller deals for a limited period of time, negotiate later for a further deal, but here the question also is: yes, we do have exceptional circumstances; I believe COVID would be the reason for success and not the excuse for failure not to reach a deal.

Of course, I think the pressure is up, not just by the regional Assemblies from what I've seen, but also by businesses, by citizens whose first occupation right now is the health crisis, and now in the coming weeks, of course, the economic crisis that will be hitting all our citizens very, very hard. But the Government knows very well that there is a deadline on 15 October when it comes to a new future agreement. The Government knows that when it comes to a withdrawal agreement, there is a deadline by 31 December, and the time pressure that is upon us is a choice that London made. They could have asked for a one or two-year extension of this period in advance, the moment that corona hit, the moment that some of our chief negotiators were personally affected also by the corona crisis, but I think it made a political decision not to do so.

So, the offer is clear, the offer and the framework that is signed in the political declaration. That is, I think, something we can find a broad majority on also in the European Parliament to stand behind that. We are ready to negotiate and to even come back from holidays, if necessary, to make sure that we do everything possible to make a deal possible. But the October deadline, perhaps if it's not 15 October then two weeks later, that's kind of what we do see as a tough deadline for reaching a new agreement.

09:55

I'm Dutch, by the way. So, that's normally—. We are also straightforward. [Laughter.

Kati, can I just go back to one of David's points on the judiciary? The EU want the ECJ to arbitrate over the UK obviously, yet in a speech to the EU Parliament, you yourself stated that there is clear concern in Parliament about the independence of the judiciary, freedom of expression and the freedom of the press. So, if you and the Parliament are concerned about the independence of the judiciary in the EU, how can the EU expect the UK to trust it?

Well, I never made that statement on the European Court of Justice, where, of course, I have full confidence in the independence of the judiciary. I don't see any reason not to do so. Where I have great concerns about the rule of law is inside some EU member states. My parents were born in Hungary. My father was a refugee from Hungary. If you see what is happening in Hungary, where judges are sent with a pension 10 years before their normal pension time, how the judiciary is being politicised in a single EU member state, and we do have similar concerns, of course, also in Poland, that's where my concern is about the rule of law in Europe. It has nothing to do with the European Court of Justice, which is the independent court that is judging on EU legislation.

So, please make sure that—. And you can—. I never made any—. I don't think it's up to a politician to make bad remarks about a judiciary, right? I respect the judiciary, but I also see that we have some problems in some EU countries—I named two of them: Hungary and Poland—with the independence of the judiciary, and that is probably the speech you are referring to.

Diolch yn fawr, Cadeirydd. A allaf longyfarch Kati, yn y lle cyntaf, am gyflwyniad arbennig mewn iaith sydd ddim yn famiaith iddi? Mae'r un un anhawster gyda rhai ohonom ninnau hefyd yn fan hyn, felly dyna pam rydw i'n siarad yn Gymraeg.

Roeddwn yn mynd i holi am faterion daearyddol—gwnaethoch chi gyffwrdd â nhw yn eich cyflwyniad—yn benodol ynglŷn ag Iwerddon. Wrth gwrs, mae Cymru drws nesaf i Iwerddon. Dim ond ychydig o fôr sydd yn ein rhannu ni oddi wrth Weriniaeth Iwerddon. Mae Gogledd Iwerddon ar lefel uwch. Felly, mae prif borthladd Gogledd Iwerddon, sef Larne, ger Belfast, fel rheol yn cysylltu'n uniongyrchol efo Stranraer yn yr Alban. Mae'n porthladdoedd ni yma yng Nghymru, sef Caergybi, Abergwaun a Phenfro, yn draddodiadol yn gysylltiedig efo porthladdoedd yng Ngweriniaeth Iwerddon. Ac felly, mae symud unrhyw ffin galed sydd yn ymddangos lawr y môr rhwng Cymru a Gweriniaeth Iwerddon yn mynd i effeithio'n uniongyrchol ar borthladdoedd Cymru. Felly, dyna'r cyd-destun, dwi eisiau codi'r pwynt yma i chi rŵan. Hynny yw, beth ydy barn Senedd Ewrop, a chithau fel Aelodau unigol, ar weithredu'r cytundeb ymadael yma—y cytundeb ymadael sydd yn cael ei negodi ar hyn o bryd—yng nghyd-destun y protocol ar Iwerddon a Gogledd Iwerddon? Jest cyfle yw hwn i chi efallai ehangu ar y teimladau o Senedd Ewrop ynglŷn â sefyllfa Gogledd Iwerddon yn benodol felly, hynny yw, yn rhan o'r Deyrnas Unedig, ond eto yn agos iawn i Weriniaeth Iwerddon, yn enwedig yn ôl y trafodaethau sydd yn mynd ymlaen.

Thank you very much, Chair. May I congratulate Kati, in the first instance, for an excellent presentation in a language that isn't her mother tongue? We ourselves find that quite difficult in this place, so that's why I'll be speaking in Welsh.

I was going to speak about geographical issues—you touched on these in your presentation—specifically with regard to Ireland. Of course, Wales is next door to Ireland. There's only a small patch of sea between us and the Republic of Ireland. Northern Ireland is on a higher level; it's above us. So, the major port of Northern Ireland, Larne, near Belfast, is directly linked with Stranraer in Scotland. Our ports here in Wales, namely Holyhead, Fishguard and Pembroke, are traditionally linked with ports in the Republic of Ireland. And so, any shift in a hard border that appears down the sea between the Republic of Ireland and Wales is going to have a direct impact on the ports of Wales. So, that's the context in which I want to raise this point with you now. What is the opinion of the European Parliament, and you as individual Members of the Parliament, on the implementation of the withdrawal agreement, which is being negotiated at the moment, in the context of the protocol on Ireland and Northern Ireland? This is just an opportunity for you, perhaps, to expand on the feelings from the European Parliament side with regard to the situation of Northern Ireland specifically, in terms of it being part of the United Kingdom, but also being very closely connected to the Republic of Ireland, especially in the ongoing negotiations.

Yes, thank you very much for the question. And I fully understand wanting to speak in your native, mother tongue, and we, of course, in the European Parliament, also very often use that opportunity and are thankful for having interpreters in our political lives.

I think, of course, what was clear in the withdrawal agreement, which we are not renegotiating—let that be clear. So, we have a joint committee looking—because it's a complex agreement—for the implementation of it. But, of course, there's no renegotiation of something that has been agreed and ratified also by both Parliaments and is now international law.

We wanted, of course, to avoid a hard border, not only preserving the all-Irish island economy, but, of course, very much also preserving the peace agreement. We also want, on the other hand, to preserve the EU's integrity of the single market, which is, of course, a key issue also for us. And then we also had to respect, of course, the place of Northern Ireland as an integral part of the UK's internal market. So, these were the three issues that I think are the three basic principles for the Northern Irish protocol.

Now, when it comes to the implementation, we have the joint committee under, I think, it's Commissioner Šefčovič, who is busy with the negotiators, to check about the implementations of the Northern Irish protocol, and where we do have some concerns. We have seen some moves in the last two months, to be honest, but we still have some concerns about the interpretation that the UK Government has given to the withdrawal agreement, but also when it comes to the preparation. Just to give you an example—I think I wrote it down here just to make sure that, in my testimony, I'm not giving you wrong numbers. The UK will need to train 50,000 new customs officers in the next six months, and progress on this is limited. From what I have seen, actually, it has hired and trained only 8 per cent of that number. Now, you can't train a customs officer in a single week, so this takes time. So, here we are under quite some time pressure, where we have the feeling that a lot still has to happen when it comes to the implementation.

In general, the feeling in the European Parliament on the withdrawal agreement is, if we can't have a proper implementation of something that we have already agreed on and ratified, this doesn't give us a lot of confidence for any future agreements that you are going to sign and ratify with the UK Government. So, the withdrawal agreement plays a central role also for the European Parliament. We know it’s a very delicate issue. We know, of course, there are also a lot of economic interests that are involved in it, but we don't yet see the 100 per cent full preparation that we expect from the UK Government in making sure that the withdrawal agreement is implemented by the end of this year. I hope this answers your question.

10:00

Diolch yn fawr am hynny. Rwy'n deall, yn naturiol, y teimladau, wrth gwrs. Yn y sesiwn yma, dŷn ni'n holi'n benodol ynglŷn â sut rydych chi fel Aelodau o Senedd Ewrop a'r Senedd ei hun yn teimlo ynglŷn â'r holl fesurau yma sy'n mynd ymlaen ac sydd yn rhaid digwydd. Ac yn benodol, felly, ar gefn beth oedd David Melding yn ei ofyn i chi yn benodol sydd rhaid digwydd erbyn diwedd y cyfnod pontio, sydd ar hyn o bryd yn dal i sefyll ar 31 Rhagfyr eleni, sut mae Senedd Ewrop a'r gwahanol aelod-wladwriaethau sy'n rhan o Senedd Ewrop yn paratoi gogyfer y posibilrwydd real y bydd diwedd y cyfnod pontio'n dod ac efallai ni fydd cytundeb? Dwi'n derbyn—ac hefyd ddim jest yng nghyd-destun y pandemig COVID—bod yna flaenoriaethau eraill gan wladwriaethau Ewrop, ddim jest y ffaith bod Prydain yn mynd i adael. Ond, allech chi roi syniad i ni o ba fath o baratoadau sy'n mynd ymlaen yn y gwahanol wledydd gogyfer y senario posib o gyrraedd diwedd y cyfnod pontio a bydd yna ddim cytundeb wedi'i arwyddo?

Thank you very much for that. I understand, naturally, your feelings, of course. In this session, we are asking specifically about how you, as Members of the European Parliament, and how the Parliament itself feels about all of these measures that are in the pipeline and what has to happen. And on the back of what David Melding was asking you specifically, all of this will have to happen by the end of the transition period, which is currently expected to come to an end on 31 December this year, how are the European Parliament and the different member states that make up the Parliament preparing for the very real possibility indeed that the end of the transition period will come and perhaps there won't be a deal or an agreement? I accept—and not just in the context of the COVID pandemic—that there are other priorities facing the member states of Europe, not just the fact that the United Kingdom is going to leave the EU. But, could you just give us an idea of what preparations are going on in the different member states for the possible scenario of coming to the end of the transition period and there being no deal signed?

10:05

Well, I think it's very different, of course, for all 27 member states. Let me first tell you about the EU. Of course, these are also talks that we are having as the European Parliament also with our chief negotiator. Perhaps it's time to take from the closets again the papers that were there for a 'no deal' scenario and take the dust out of them and review them. This is also, of course, what also the negotiating team is doing. We have to be realistic and prepare for two scenarios. Now, this is, of course, also coming in the midst of the budget discussions in Europe, so it's not, of course, making it any easier.

When it comes to individual member states, I think that all the member states had provisions, foreseen, for a hard Brexit in the earlier time. Now, for instance, in my own country, money had been put away in the fisheries sector on what to do in case of a hard Brexit, then. Now, although the papers are still there, we should also be honest that a lot of the reserves that we had foreseen for a 'no deal' scenario have also been used up, perhaps more than once, during the corona pandemic. All the reserves that member states had foreseen for a 'no deal'—it's very likely that they're no longer there.

So, this is also the signal in our communication with colleagues from national Parliaments. We're also saying that we have to—although, this is not the scenario we want, but of course, also for our businesses, we have to prepare even for the worst-case scenario, which would be a 'no deal' agreement by the end of this year. And that means reviewing which sectors will be hit the hardest and how we can have measures for at least a couple of weeks or months for these sectors, to help them.

But on top of the corona crisis, you can imagine, for instance, the fisheries sector is already hit hard, not because they cannot fish, but they don't have the market to sell the fish anymore. How a 'no deal' scenario would go on top of not just that sector, but actually, almost all the sectors—. We're so interlinked; our economies, after 47 years of being together in the same union. Also, the Netherlands, of course, being a big trade partner of the United Kingdom. To be honest, I think this is a scenario that we're all trying to avoid, but we also have to look seriously at the preparation, and I have the feeling that we are not ready yet, of course, for that scenario.

Diolch yn fawr am hynna. Gadeirydd, dwi'n ymwybodol o amser, felly gwnaf i ei gadael hi'n fanna ar hyn o bryd. Diolch yn fawr.

Thank you very much for that. Chair, I'm aware of time, so I'll leave it there for now. Thank you very much.

Thank you very much, and thank you very much for your time, Kati, this morning—we're very grateful to you for it. I read your speech to the Parliament on 17 June. I thought it was fascinating in terms of seeking to understand where the Parliament is sitting at the moment in terms of its overall approach. There were a number of parts of that speech that really stood out for me. First of all, it was the unity between the Commission, the Council and the Parliament—the institutions of the EU. In the words that you used, you certainly demonstrated a very clear unity of mind as well as a unity of purpose. I thought that was quite interesting because when I've been involved in negotiations as a Minister in the EU, that hasn't always been the case, so I was interested to see that.

Secondly, you used some language about the United Kingdom Government that was very critical—criticisms, by the way, that I absolutely agree with—and I was interested as to what you were looking at, because there were two parts of your speech that stood out to me. The first of all was when you said,

'Our consent is conditional on the United Kingdom Government's adherence to its own commitments'.

And secondly, you said that the UK Government had backtracked

'on its commitments, and continues to put ideology over the interests of its own people'.

That's a real fundamental criticism of the UK approach. And I was wondering if you could outline to us where you believe the UK is putting ideology over the interests of its people, and where it is not sticking to the commitments that it has already given. So, where those areas are.

10:10

Thank you. Of course, I'm the rapporteur of the Parliament, which means that I'm neutral but I'm also a social democrat and Dutch Labour MEP. And in my speeches, of course, I also give my personal opinion, which I still think a majority of the European Parliament stands behind, although the wording is, of course, not the wording of our report—let that be clear.

I think that, if you want to reach such a comprehensive agreement in only a couple of months' time, if you don't want to have a transition; if you want to have no quotas and no tariffs, that is actually written in the political declaration, what we both mean with that comprehensive agreement, and under which conditions. And this is where suddenly, after four rounds of negotiations, we were stuck in a stalemate, because we still couldn't agree on the scope, on the legal issues of the agreement, although they're written in the political declaration, which UK Prime Minister signed, so that's where, for me, it's puzzling to see we enter a negotiation with a given political framework agreed at the beginning, and halfway through, we are still seeing that the UK Government is actually saying, 'No, no, no, what we mean is something else'. Then, why did you sign the political declaration a couple of months ago?

So, of course, you can have different parameters, or perhaps a less comprehensive agreement, but then, you need more time—right? And you don't want more time, because they're not going to ask tonight for prolonging the transition period, and on the other hand, you also say, 'The parameters that we agreed upon, we also don't like them anymore.' So, then, we're just stuck in a stalemate, and that's where we are now. I mean, where is the backtracking? I think the backtracking is on the scope. So, suddenly, not wanting, for instance, foreign policy, development co-operation, security and defence—the UK Government doesn't want to discuss this anymore. The scope is also, of course, when it comes to the level playing field; we're not even entering into the details. There just seems to be not even a starting point for a discussion, although it has been agreed in the political declaration.

And why do I say ideology? First of all, I think this UK Prime Minister is very much every time saying, 'Well, I won the election based on the election manifesto of the Conservative Party', but that's not the basis of a negotiation with the EU. And I think the other promise he also made to the British people and for which he was elected by a majority—let that be clear; he won the elections—was to reach a deal, a comprehensive deal, that would be in the interest of the UK citizens. Now, no-one could explain to me how having a 'no deal' would be in the interests of UK citizens—no-one. So, the Australia deal, which, again, is a synonym for having no deal, because we do not have an EU-Australia trade agreement—how, on top of the economic hardship that our countries are being hit by now, would that be to the benefit of UK citizens? So, this is where I think this whole ideology of the so-called taking back control, sovereignty, and how to interpret that, is standing in the way of delivering into the benefit of the United Kingdom citizens. And thinking that, on top of this economic hardship, no-one will notice the damage that is done by a 'no deal' scenario is not realistic, really. People are going to have perhaps the deepest recession, probably the deepest recession in their lifetimes, and you don't want to not have an agreement with your biggest trading partner at that moment. And I don't think a US-UK trade agreement, even if it could be struck, even if you want to strike it now before the US elections, would, in any way, take away the damage that would be done with a 'no deal'.

10:15

Thank you very much. That's very, very useful for us, and very interesting for us to hear. Of course, the European Parliament is the only Parliament able to scrutinise these matters, because the UK Government has legislated to prevent parliamentary scrutiny taking place in the United Kingdom itself. So, it's quite difficult for us sometimes to understand these matters, and we're very grateful to the European Union institutions for providing us with the sort of information that the United Kingdom Government is not prepared to share with us. So, that is very useful for us to understand these things.

Chair, it may be useful for us to give some consideration to some of the issues that Kati has raised in this evidence, as we go through the next few months, to formulate our own approach and our own view on these matters. Thank you very much.

Thank you, Alun. I'm very conscious of the time, and I know that Kati has another meeting she has to attend—I think starting probably about now. So, although I've got some questions, I will hold them back, and perhaps we could write to you and just have discussions on them. Can I thank you, Kati, for your time today? It's been very interesting to have the perspective of the European Parliament in overseeing the negotiations going on, and hopefully we'll keep in touch over the months ahead of us, so we may have another opportunity to have further discussions. 

Thank you very much. Thank you for this kind invitation and for having the possibility for this exchange. Although we are calling, of course, for institutionalised parliamentary scrutiny also. In the future, I hope perhaps the British Government will change their opinion on that, because I think it would be fruitful for any agreement in the future to have that parliamentary scrutiny. Thank you very much, and I wish you good luck in your work.

You will receive a copy of the transcript. If there are any errors in that, please let us know as soon as possible so we can get them corrected. 

3. Cynnig o dan Reol Sefydlog 17.42(vi) i bernderfynu gwahardd y cyhoedd o eitemau 4, 5 a 7 o’r cyfarfod
3. Motion under Standing Order 17.42(vi) to resolve to exclude the public from items 4, 5 and 7 of the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd ar gyfer eitemau 4, 5 a 7 o'r cyfarfod yn unol â Rheol Sefydlog 17.42(vi).

Motion:

that the committee resolves to exclude the public from items 4, 5 and 7 of the meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

If we move on to the next item, which is item 3, and that is, in accordance with Standing Order 17.42(vi), we resolve to exclude the public from the meeting for items 4, 5 and—I'll just get my numbers—7 of today's meeting. Are Members content? We are, therefore we move into private session for those items.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 10:17.

Motion agreed.

The public part of the meeting ended at 10:17.

13:00

Ailymgynullodd y pwyllgor yn gyhoeddus am 13:03.

The committee reconvened in public at 13:03.

6. Sesiwn graffu gydag Ysgrifennydd Gwladol Cymru
6. Scrutiny session with the Secretary of State for Wales

Good afternoon. Can I welcome back Members to this afternoon's session of the External Affairs and Additional Legislation Committee? This afternoon we'll continue our session and we have a scrutiny session with the Secretary of State for Wales. Can I welcome the Rt Hon Simon Hart MP, Secretary of State for Wales, and with him Robin Healey, deputy director, devolution legislation and negotiations, constitution group, in the Cabinet Office, and Louise Parry, deputy director of policy at the Office of the Secretary of State for Wales? Can I welcome you all this afternoon, and can I thank the Secretary of State for taking up the opportunity?

I know that we contacted the Chancellor of the Duchy of Lancaster, who was unable to join us today, and he asked the Secretary of State to take his place, so you might get some questions that would have been directed to your colleague. But, I also hope that, perhaps in the future, he will be able to join us. He has in the past, and, clearly, as the Cabinet Secretary with responsibility overall for the negotiations, there are some questions that we may want to put to him that will be very helpful for us in our future work. But, thank you very much for your attendance this afternoon, Secretary of State. As that's the case, we'll go straight into questions, and Alun Davies.

13:05

Thank you very much, and thank you very much, Secretary of State, for your time this afternoon. I wonder, to start, if you could characterise the relationship between the UK and Welsh Governments over the issue of EU negotiations.

I can—well, I'll try, anyway. First of all, thank you, and thanks, Chair, for the welcome. As we've heard, I'm a sort of 'Gove lite' for the purposes of this hearing, so if there's anything that is beyond Robin Healey's or my area of competence, we may have to revert back to you with the proper answers when we've spoken to Michael's team. I hope that won't be necessary, but if it is, we will do that.

In answer to your question, I've been at a number of meetings between UK Gov, Welsh Gov and, indeed, other devolved administrations over the last few months. By and large, those meetings have been constructive, they've been quite exhaustive, they have covered what we believe to be all of the key strategic issues. Is there a question, or could there be a legitimate challenge, as to whether these have been frequent enough—I've heard Jeremy Miles's comments and I've read Jeremy Miles's observations on that, and others—and I suspect there's no such thing as an absolutely perfect set of circumstances. But my feeling is that the relationship, just as it is with COVID, is better than the media would necessarily have us believe. As I say, it could always be better, particularly as I know Welsh Government would have taken a different approach to this and, therefore, we start from a position of slight divergence. But, as I say, I think we've attempted to be as collaborative, so far, as we can.

Okay. That's interesting. I have to say, I think the relationship has improved since you took over from your predecessor. I think that is certainly the case. But I'm less interested, Secretary of State, in agreement between the two Governments, because when you have two Governments of different colours, you have agreement on some issues, disagreement on other issues. That's the nature of life and it's the nature of politics, and it doesn't have any concern for me at all, really.

What I'm interested in is structures of engagement, because I think that is fundamentally important, particularly, of course, when there are those disagreements and where you have to manage a situation. Jeremy Miles said two things, didn't he? It was, first of all, where he said that the UK Government is fundamentally uninterested in hearing the views, which I haven't heard. Jeremy is far milder mannered than I am, you know. It's interesting that he should think that, and I'd be interested to understand where you believe it should be.

And secondly, the structures that exist through, mainly, the JMCs and the rest of it, only work if the JMCs meet and if those JMCs are able to have constructive conversations. My experience of JMCs isn't particularly good, if I'm quite frank with you. They tend to be people sitting around, reading out lines to take to each other, and, you know, you can spend as much time as you like with that. I'm interested in how you would see, as Secretary of State, the mechanics and the structures of governance between our two Governments, and within the United Kingdom, could be improved and could work so that both Governments feel the same satisfaction that, at the moment, only you feel.

Well, that is a very—. The sting is in the tail of that question, because I'm not sure there is a model that I'm aware of that could absolutely guarantee those circumstances. And I don't necessarily, by the way, think that that is a bad thing. I think that when we took the first steps down the road of devolution all those years, it was in the certain knowledge that there would be different attitudes, different Governments, different political persuasions, and that that would always pose a challenge where we were dealing with subjects where a degree of collaboration was necessary.

And it's interesting—I've said this before, and I don't think it's as controversial as it might sound, over the COVID period—that you could argue—some would argue—that there is no such thing as complete devolution or complete reserved powers either. There is always a little bit of a blur round the edges, and that's where some of these tensions appear.

I note what you say about Jeremy's concerns about a lack of interest. That's the bit of your comment that I do disagree with. I don't think there is any lack of interest. In fact, I think the opposite. I think that, under the umbrella of strengthening the union, levelling up—the expressions that you heard at the tail end of last year and again this morning, actually, in the PM's speech— that makes collaboration and co-operation over this huge set of challenges all the more important.

But it does also raise the question, ultimately, that we do have to make progress in these things. We have to undertake a negotiation; we have to negotiate trading agreements. Somebody has to be at the front of that process, and there are elements of it, clearly, that are well within the devolved space, or the consequence is well within the devolved space, but the actual process of negotiating to this very tight timescale in the end has to be led by UK Gov, and I suspect that can leave people—. And I know exactly what you mean when you say you've been in those rooms, those JMC rooms, and it's quite formulaic, it's quite a limited timescale—I recognise and understand all of that. But, still, we have to be very clear that we are going to stick to certain deadlines, this is how it's going to happen, this is the person in charge, this is what we want the outcome to be.

So, the problem—. Sorry, I'll just finish on that. The problem isn't necessarily, I don't think, what happens in JMC, it's what happens in between; it's that relationship between us. I remember being in the room when Mike Russell from Scottish Government was talking about the three-room principle, and recognising—even Mike was recognising—that, in the last room, which is the room where you're actually doing the table thumping, UK Government has to take the lead, and, hopefully, we will have ironed out our differences before we get into that room.

13:10

Can I say I don't necessarily disagree with much of what you've said, Secretary of State? However, I've been in rooms where those tables are being thumped, and so has Huw Irranca-Davies, as a Minister. When you say there's no perfect solution, that's probably correct. But there is a less imperfect way as well. I remember reaching an agreement with the Scottish Government, the Northern Irish Executive and the UK Government nearly 10 years ago on our engagement within the European institutions, and that called for almost weekly or monthly meetings between the different departments who were responsible for, in this case, agriculture, fisheries and environment, and direct sit-down negotiations with UK Ministers and then with the presidency and the Commission in those airless rooms at the end of the day, which did work, and it worked very well. We worked on the basis that the UK voice may have different accents, but is still a UK voice, and, when we had that agreement, which I don't really remember being broken by any one of the four Governments, quite frankly, we had a more constructive and a stronger engagement than we do today with the JMC structure. I would very much want to see the UK Government going back to the memorandum of understanding that William Hague signed as foreign Secretary and learning from some of that experience, because, at the moment—we're both unionists, we both want to see the United Kingdom succeed, but, at the moment, the structures that we have are preventing that happening and not enabling it to happen.

I think that's an interesting observation. I take the view, and, as I say, I think COVID is possibly the more vivid example of this, that, actually, the need for—. I suppose it's actually that the two Governments have been, throughout COVID, almost forced into a position where we've had to meet more regularly and reach a common view more often and to try and also explain where our policies might diverge. That's, I think, been quite a good discipline. I actually think it's something that should endure beyond the end of COVID. So, I do take your point, and I don't think it's a bad one, about when you extend that into the arena of Brexit policy. The difference, I suppose, is that we're working to a very tight timescale. The Government has laid out its position in terms of there being no extension to the transition, which I know colleagues of yours are not entirely comfortable with, but nonetheless that is the position. So, we're working to a tight timetable, which I suspect restricts the ability for us to co-operate in precisely the same ways that we have done over COVID—which, by the way, as I said to the First Minister, works in seven or eight times out of 10; we only read about the three where it's a bit more—[Interruption.] But it works quite well.

But I do—. I will repeat what I said on the day that I was appointed, I think—that there is a strong argument for both us in Westminster and yourselves in Cardiff to be quite open-minded and broad-minded about addressing these issues where they occur. If there is a way in which we can do it better within the timescales, we're not going to resist that just for the hell of it.

13:15

Yes, sure. I'm very happy to do that, yes.

I'll just finish with one final question, with your permission, Chair. It would be useful, I think, for us to understand and for us to know that the United Kingdom Government commits to established agreements not to make any change to any devolved competence without the consent of the institutions.

I'm not aware that there are—. That sounds to me like a loaded question that's suggesting that there's a plan afoot to do that. I'm not aware of any attempts to do that. I've always—and some people have accused me of being naive, probably rightly—been determined that we can achieve this very, very difficult and challenging set of objectives without demolishing or even damaging the devolution settlement in the process. I think once we get into the meat of our discussions, which were, sadly, shelved by COVID, around things like the shared prosperity fund, that's where it's going to become very, very testing, but, nonetheless, the commitment remains that it is our ambition to make sure that devolution is not—the purposes, the principles are not—damaged as a consequence of any of these big challenges. But it will be—. Life will be different, but that's not to say we're, as I say, aiming our fire on the devolved Governments with any ill intent.

Thank you for that, Secretary of State. I'm sure, therefore, we take from that you do not expect any changes to the competencies of devolved institutions without their permission. And that's not—. Can I ask you this, Secretary? You wouldn't expect that to happen without the permission of those institutions.

No, I don't—. As I say, I don't anticipate a situation where we have anything that is—sadly, in a sense—quite that clear. What I think there will be are some really significant discussions—hopefully positive ones, by the way—around funding models and about how we transition from the existing funding model to the post-Brexit and indeed post-COVID funding model. I think there's going to be a lot of that, and I can tell you now I'm absolutely expecting some people to cry foul at the slightest suggestion of any changes, even if they're not changes that impact on the devolution settlement.

There will be those who will always say that any shift from where we currently are in a post-COVID Great Britain represents an attack on devolution. I don't see it that way at all, and so I hope we can—. As I say, I think shared prosperity is an absolutely good example of this, and my conversations with Jeremy Miles right at the outset were on how we create a model around the existing arrangements and the existing quantum of money, but where UK Gov is in, clearly, a role much more aligned to that which the EU is, or has been, currently, occupying all these years. So, the fact that there would be a greater visibility of UK Gov in that structural funding debate is not the same thing, I argued with Jeremy—and, by the way, I didn't think he disagreed at the time—as suggesting that this is a land grab or some kind of assault on the role of the Senedd and the Welsh Government, absolutely not, but the world will change in a post-Brexit way. The funding will—. The way it looks will change, hopefully for the better, and shouldn't spook anybody on this call or anywhere else. But the idea that it's just going to look and feel exactly the same after the end of December as it did before now—. Clearly, we wouldn't have gone through this entire process if we'd just wanted everything to be the same.

13:20

You've mentioned the shared prosperity fund and we'll come back to that, don't worry—

Yes, I'm sure—[Inaudible.]

—we've got some serious questions on that. But we'll move on now then to Huw Irranca-Davies and some questions on preparedness. Huw. 

Thank you, Chair. Good afternoon, Secretary of State. Yes, on preparedness, one of the first things I'd like to ask you is why the co-ordination of activities has changed from what was there in the run-up to a 'no deal' Brexit. During that period, Government preparedness activities were being co-ordinated through the Cabinet Office. Is there a reason why that's been changed now? 

I'm not aware of that reason. If it's within Robin's knowledge, can I—? It's difficult when we're not in the same room, but can I just ask him if he might have the right answer there? Robin, are you on?

Thank you, Secretary of State, yes. So, I know a little bit about it. I think what I would say is that the Government's approaching preparedness—[Inaudible]—largely through engagement, depending on the policy area concerned. There is a role for the transition taskforce within the Cabinet Office in co-ordinating—[Inaudible]—the Department for Environment, Food and Rural Affairs and others, who have a strong role to play in this, are now reaching out to their devolved counterparts. It's not my focus, it's not my area of expertise, but I can offer that as a partial explanation.

Thank you, Robin, and Secretary of State. I didn't catch all of that; I'm not sure if I was alone. There might have been a little break-up in the transmission there. But I just wonder, Robin or Secretary of State, whether perhaps you could write to us, because we understand that there has been a material change in the way that it's being co-ordinated, and we were just curious as to the reason behind that, because that cross-Cabinet working that happened previously seemed to be a model. 

Very happy to write, Huw, on that point. I didn't catch all of Robin's response either, by the way—I think the wi-fi might be a bit dodgy— but, yes, happy to provide some clarity on that, which we'll do after this call. 

Brilliant. Thank you very much. And, on the wi-fi thing, I always find it's safe to blame the Government, but I won't say which Government, of course. [Laughter.] 

I know that feeling. [Laughter.]

Can I turn—? And I can just see mine is flashing up—my internet connection's unstable—so, if I go down now—. Can I turn to the issue of the UK Government's transition period readiness portfolio board—it's simply a matter for our information—if you could tell us when this board was established, how often it meets, and also who has the ministerial oversight of that transition period readiness portfolio board?

I can't tell you that. Again, we'll have to see if Robin's connection has improved at all. So, he—. Is he there? 

I'm here, Secretary of State. Can you hear me now? 

Okay. So, I was saying under the last question, on general questions of preparedness, I do know a little bit. I'm not in the transition taskforce, which is the part of the Cabinet Office that is leading on preparedness within the Cabinet Office. But the portfolio board is an official-level board to which devolved administration officials are sometimes invited, and it sits within the Cabinet Office's organisation. It's not a ministerial organisation; it's at official level. 

Does that deal with the—? Does that answer the question that Huw Irranca-Davies has raised on the frequency of the board meetings?

It's a Cabinet Office board, so it comes under Cabinet Office Ministers, but it's an official-level board. 

Yes, the transition period readiness portfolio board. Maybe, Robin, if you could write to us on that as well, because the detail of that is important to us as a committee, but we can have that in writing. Let me go on—

13:25

What I can tell you, which I think you probably know, is that there is Welsh Government presence on that. So, it hasn't been raised with us at official level of Welsh Government that there is a deficiency in the transition board—and you're not suggesting, by the way, that there is; I think you just want further information—but, as I say, Welsh Government officials do sit on that transition board, so they should be in as good a position to inform us on this as anybody. So, I'm hoping the fact that it hasn't been raised as an issue with us suggests that it's a function that operates satisfactorily, but we will get some clarity on it. 

Thank you, Secretary of State. Let me move on to the issue of exports of products of animal origin to the EU. UK Government was taking forward some work on identifying those UK establishments that were involved with this, and clearly, this has quite an importance for Wales in particular. But, we understand that that has been put on hold. I just wonder if you can enlighten us as to why that work has been put on hold. 

From memory—again, Robin will correct me if I'm wrong on this—it's purely COVID-related; nothing more sinister than that. It's just been rearranging of resources during the COVID crisis, which ought to now be reverting to—touching wood my end—that ought to be reverting to something resembling normality. 

That's really helpful. So, hopefully, soon, we will see it coming back on stream, that piece of work—that's good to hear.

Yes. As part of the increasingly lengthy letter that we're going to be sending you after this meeting, we will add a paragraph on that for clarity. 

[Laughter.] Okay, thank you. I will try—. Listen, I promise you some of these are more straightforward than what we're going to ask you.

No, I do understand, and I'm not trying to be evasive in my answers either. These are areas of some quite precise knowledge, and I can see why Michael Gove asked me to do this now—[Laughter.]

If I can turn to an issue that I understand that there might have been some updates, even within the last few days, and that's to do with the publicly available technical guidance relating to export and import requirements for trading with the EU from 1 January next year. They were updated at the end of 2019, we think, and we were wondering now whether they are really up to date. But there might have been some movement in the last couple of days. 

That's definitely Robin's part of the ship. 

I'm sorry, Secretary of State, that's not an area that I know anything about. My area of expertise, just for everyone's clarity, is the engagement on the negotiations on—. So, I do know a little bit about preparedness, but I can't really do much more than refer to colleagues on questions around readiness on borders, and to give you my informed knowledge on some of those issues—just for clarity. 

Okay, thanks for that. Can I turn to the issue of border controls, and the announcement on 12 June from the UK Government that the new border controls on EU goods will be introduced now in three stages over a six-month period? We are wondering as a committee how does this affect the estimated 50,000 new customs officials that are needed to operate these post-Brexit customs procedures, and what does it mean in particular for 1 January in terms of numbers?

Again, I would—. The reason for the line behind the sort of phased approach is to obviously limit the potential administrative and economic impact, or any administrative or economic impact associated with the transition with a small 't'. As far as we are concerned, the arrangements with the ports in question, if that lies behind your question, is reasonably well advanced.

There are some, I think, daily discussions going on at official level and with the various ports in relation to the human requirements, as well as the fiscal requirements. As far as it's possible to say this far out—and I know that it doesn't feel very far out but this far out—those discussions are going all right. Can I guarantee that everything will slide seamlessly and painlessly into place according to the timetable? No, I can't. I don't think anybody else could either. So, I think it's one of those areas that has been the subject of quite a lot of discussion our end as well. I think the Welsh Affairs Select Committee have done quite a lot of work on it. At this moment in time, we think the arrangements are about on schedule. I don't think I can be much more precise than that, sadly, because it is a slightly moving target. 

13:30

Okay. Well, perhaps if we're not clear at the moment what it means in terms of that phasing of the introduction of the new customs officials, it's welcome that you are saying that the discussions are ongoing. Do you have a broad timeline, Secretary of State—? 

It's discussions with Welsh Government as well as with the ports—I  should've made that clear. Going back to the earlier questions, there is a significant amount of UK Gov-Welsh Gov collaboration required over this, and that is being done professionally and without fear or favour, as you would expect. But there is also the consultation with the ports in question. Sorry, I didn't make that distinction clear. 

Absolutely. That's really helpful. And the ports consultation itself, broadly—a timescale on that? 

Yes. I'm just looking at the notes that I've got here. They're what you would expect them to say. From 1 Jan, UK will reduce the controls that apply to all goods imported to Great Britain from the EU and a UK global tariff will apply to all goods imported into the UK from day 1, with certain exceptions—I don't think that's anything particularly new. Can I give you any other timetable? The UK Gov consulted with ports across the UK, including Holyhead and Fishguard, to agree what infrastructure is required. This includes working with Welsh Gov, recognising devolved responsibilities with regard to ports, and from 1 Jan, autonomy introduced own approach—UK, this is—to goods from the UK.

So, most of those timetables, I don't think that there's any shift around those, and, as I say, the consultation with the ports, which, I think, remains a daily and ongoing project. 

That's brilliant. Thank you, Secretary of State. Just one thing David, Chair, that might be helpful, if you are following this up with any letter, is that if you do have an indication in that three-part phasing of the new border controls, what does that mean in terms of numbers on borders control by 1 January? I appreciate that you may not have that to hand, but it would be good to know. Thank you, Secretary of State. 

Yes, we will get you that. We will get you that. 

Can I then add a question to that? Clearly, as far as Wales is concerned—and I know that questions from Dai Lloyd will ask about ports, but the infrastructure agenda in the Welsh ports will need to be something that the UK Gov is putting into place, because border control remains the responsibility of the UK Gov. And I understand that the three phases were introduced to actually have a situation where you will get there by July 2021 and have that period of time—so January 2021, April 2021 and July 2021. But, what will be in position for January I understand is initially for businesses to understand how they will operate. Are you having discussions with Welsh businesses to ensure that they fully understand the processes that they will have to abide by as these new regulations come into place? 

The one-word answer to that is 'Yes'. It is quite early days yet, and, of course, the Wales Office are dealing mainly with Wales-based stakeholders in this; there are, of course, wider considerations for those who are involved in this process who are not necessarily resident in Wales. So, it's got a rather bigger UK, pan-European impact.

I take your point about the relationship and devolved and reserved responsibilities around this, and the official note does account for that; it recognises the UK Gov's role in this and its responsibilities. So, that is, I think, clearly understood, and is not in any sense being denied by UK Gov. But there is, of course, then, the issue of ports being a devolved matter, so there has to be—. It's one of those areas, of which we've seen so many in the last few months, where it is impossible to separate the function of a port as cleanly as any of us might desire, because of exactly this kind of example—an area where there is reserved responsibility and devolved responsibility running alongside one another. But, through the necessity and the timescale, that is proving, I think, to show where the two Governments can operate together, often quite below the radar, but effectively. I'm comfortable that that is happening at this moment in time.

I think the other thing I meant to add earlier on to one of Huw Irranca-Davies's questions, of course, is that all of these very, very important, practical observations are also seen through the prism of ongoing negotiations. And, in a sense, if we're sounding a little bit like we are sticking to a script, that's a reasonably legitimate accusation to make, because what underpins all of this, in fact, is that we're not bluffing in terms of our negotiating stance with our colleagues in Europe, and we don't want to give any indication accidentally that, somehow, all of this is up for grabs and that we might not be quite so rigid about the timetables. We are deadly serious about sticking to all of the timetables and all of the deadlines that we have stipulated, and it's very important that, when we're talking about these, it's through that prism that we look, because we do want to get the best possible deal on time, sewn up, as we have committed to on so many occasions. And so, everything is looked at with that in mind.

13:35

Thank you for that, and we had a session with an MEP this morning. I'm sure that they will tell you exactly the same—that they are also not bluffing and they have their own deadlines. But it's all about preparedness and understanding how we can ensure that Welsh businesses are able to travel through this period of time successfully, and that's the crucial element we want to—

Well, we hold—I hope it's of interest to the committee, but the Wales Office, and I know other UK Gov departments as well, have regular stakeholder engagements. They have been more COVID-focused and COVID recovery-focused of late, but, whether it's the Confederation of British Industry or the Federation of Small Businesses or the various chambers or the various sector representatives—those are probably fortnightly or three-weekly gatherings that we have as a matter of course. And, clearly, the challenges of the last few months have rather occupied our time together on Zoom calls. But this has also been under discussion and continues to be under discussion, because we want to make sure that nobody, particularly in a period of time where everybody has been through some quite challenging economic moments and will continue to be so for some time—the last thing that we want is for this to add to that pressure. So, it is beholden on us, I think, in UK Gov and Welsh Gov, to make sure that our stakeholders fully understand exactly what's happening and when.   

Can I ask the final question on this point, then? Obviously, we had a discussion this morning, and it was made quite clear to us that it's likely to be mid-October, at the October council meeting in Europe, that will decide upon an agreement or no agreement. Can you confirm, then, that, by that point, if there is no agreement on a future trade deal, the UK Government will actually have all the necessary communications and paperwork ready to help businesses travel through this new process as it will be as of 1 January?

Well, what I want to avoid—and, in doing so, I know I'll annoy everybody on the call—. What I want to avoid suggesting is that, somehow, we don't think there is a really strong and certain likelihood of reaching an arrangement and a deal as planned, and so, as far as I'm concerned, all of the effort and all of the focus and all of the ambition remains to get a decent deal, and I don't want to be the person who says something that implies accidentally that I don't think that's a likely outcome. I do think it's a likely outcome, but it might happen at five minutes to midnight because, as we've seen in the last couple of years, that's the nature of these discussions and any discussion involving transitions of this magnitude. They will be argued about late into the night—and a lot of you on this call have already done these things—and right up until the wire, but I'm confident that we'll get there, so I don't want to give the impression—because I don't believe it—that somehow we're going to already start our plan B and our plan C and our plan D in the event that plan A won't work; I'm not going to fall into that trap.

13:40

It wasn't a trap, Secretary of State; it was just simply a question.

No, I don't mean to accuse you of setting a trap, but I know that there are those who might be watching these proceedings who might think that they might be able to nuance my words in an inaccurate manner, and I don't want that to happen.

I, for one, Secretary of State, am really glad that you're sticking to your guns. I noticed on England's motorway signs before the lockdown that they're pointing hauliers in the right direction for import and export information. I've also noticed that that's not on any Welsh motorway signs at all. Can you confirm what engagement the UK Government has had with the Welsh Government regarding the transition public information campaign, please?

Well, I don't know about individual examples like the signage; that's not crossed my radar so far. But in terms of all of the other issues that your question covers, there is—I think I can safely say—daily liaison, daily discussion, daily debate about how we make sure that everybody is as prepared as possible and everybody knows exactly what that means and that all of the necessary stakeholders are fully familiar with the situation.

I said earlier on during the meeting: COVID and Brexit have necessitated a relationship at ministerial and at official level, I think, between Welsh Gov and UK Gov, which I hope will be preserved into the future because, I think—. And it needn't, I don't think, threaten the authority or the reputation of either body. I actually think our voters and our businesses expect there to be a degree of co-operation and collaboration at moments like this, and for us to park our political differences for the immediate periods before an election and that kind of thing. And I think, actually, probably one of the very few upsides of COVID is to see just how well we can do that when we have to. And in the context of Brexit, I think there's a lot of similar work going on with a common aim, which is to make sure that when this thing is implemented it doesn't disadvantage Wales in any way at all, and indeed actually enhances opportunities for businesses and jobs and livelihoods in Wales. That's where we're aiming, and I think that's quite a common aim between—. Whatever our position on Brexit may be, that's been a common aim between the two Governments from the word go.

Yes, brilliant. Internal UK Government data, as referenced in the letter of appointment for the transition public information campaign, states that 61 per cent of businesses have said that they have not even looked for information on how to prepare for a 'no deal' scenario. Do you have any information on whether or not this situation has improved?

Well, off the top of my head, I don't. I'm familiar with the figure that you recognise and there have been fairly regular updates over the last few months, before COVID in particular, around the level of uptake, the level of understanding, the level of preparedness, and I don't know what the latest set of figures says. However, I do think that the Government narrative around this is about getting a deal. We remain absolutely determined that this—. Even though it might be tough, and even though it might go to the wire, a deal is possible and a deal is likely, and I think that's a slightly separate point to what people's understanding of the alternatives might be. That information is out there—we know it's been out there for some time—but what we want to make sure of is that we get the deal that we promised everybody we'd get.

13:45

Thank you, Secretary of State. Moving on to questions from Dai Lloyd in relation to the Northern Ireland protocol.

Ie, diolch yn fawr, Cadeirydd, a phrynhawn da, Ysgrifennydd Gwladol. Yng nghyd-destun y trafodaethau ynglŷn â gadael Ewrop, ac yn benodol felly y protocol yma efo'n ffrindiau a'n cyfeillion yn Iwerddon a Gogledd Iwerddon, y cyd-destun ydy'r pryder ynglŷn â'n porthladdoedd, wrth gwrs, porthladdoedd Cymru, fel rydych chi wedi crybwyll eisoes: Caergybi, sy'n cysylltu efo Dun Laoghaire a Dulyn, ac wrth gwrs Rosslare efo Abergwaun, a Doc Penfro, yn naturiol. Ac wrth gwrs, rydym ni'n ymwybodol hefyd fod Larne, porthladd Belfast, yn cysylltu efo Stranraer yn yr Alban. Felly, o gael y cyd-destun yna i gyd i mewn, i'n hatgoffa ni i gyd o'r ddaearyddiaeth, allech chi, Ysgrifennydd Gwladol, ymateb i asesiad Arsyllfa Polisi Masnach y Deyrnas Unedig y gallai masnach rhwng Cymru a Gweriniaeth Iwerddon ddirywio, gan y bydd cymhelliant i gynhyrchwyr Gweriniaeth Iwerddon ddefnyddio cysylltiad Gogledd Iwerddon-Prydain Fawr—hynny yw, yr Alban—oherwydd bydd y gwiriadau yn llai cyfyngedig?

Yes, thank you very much, Chair, and good afternoon, Secretary of State. In the context of the discussions with regard to exiting the EU, and specifically this protocol with our friends and colleagues in Ireland and Northern Ireland, the context is the concerns with regard to our ports, and the ports of Wales, as you've already mentioned: Holyhead, which is connected with Dun Laoghaire and Dublin, and of course Rosslare with Fishguard, and Pembroke Dock. And we're aware, of course, that Larne, the Belfast port, is connected with Stranraer in Scotland. So, in setting out that whole context to remind ourselves of the geography, could you, Secretary of State, respond to the UK Trade Policy Observatory's assessment that trade between Wales and the Republic of Ireland could decline, as there will be an incentive for Republic of Ireland producers to use the Northern Ireland-Great Britain link—namely, Scotland—due to more limited checks?

Thank you very much. I'm not sure I automatically sympathise with any claim that that would be just a natural consequence of what is going on. So, I think we probably start from a slightly different place; I'm possibly a little but more optimistic than Dai Lloyd is, and I make no apologies for that.

Clearly, there has been—. Of all of the areas of controversy during the Brexit discussions right from the outset, and what ultimately triggered the series of huge political events of last year were the difficulties over the Northern Ireland protocol and border issues, and so we are very, very, very sensitive to the fact that there are all sorts of issues around this around which we need to be very, very careful. And I thought it would be useful—. I'm just going to read out four very short points here, which I just think for the record might be worth repeating.

They are UK Government commitments, and they might as well be given another airing. 'That we will deliver'—and I quote here; forgive me—'unfettered access for Northern Ireland producers to the whole of the UK market; ensure there are no tariffs on goods remaining within the UK customs territory; give effect to our obligations without the need for any new customs infrastructure in Northern Ireland; and guarantee that Northern Ireland businesses will benefit from lower tariffs we deliver through the new free trade agreements with third countries.'

I just think that deals with the implementation of the protocol in as crisp a way as I can. And the other commitments around unfettered access remain. I don't think there's anything new about those, and they have been repeated many times in these committees and elsewhere, but I don't think I can—. I'm not sure I can put it any more clearly than that, even though they're not my words.

Diolch yn fawr am hynny; mae'n rhannol ateb y cwestiwn. Dyna pam y gwnes i bwysleisio y ddaearyddiaeth, achos mae Gogledd Iwerddon ar yr un un lefel â'r Alban yn y bon, a'r Weriniaeth sydd ar yr un un lefel â Chaergybi ac Abergwaun, felly o gael ffin galed lawr y môr rhwng Cymru a Gweriniaeth Iwerddon, mae yna oblygiadau yn dilyn o hynny, yn enwedig i Gaergybi, sydd yn un o borthladdoedd mwyaf y Deyrnas Unedig, ond gosoded hynna lle y mae.

Y cwestiwn nesaf ydy: allwch chi ymateb i asesiad arall gan yr un ffynhonnell y gwnes i ei dyfynnu gyntaf, sef Arsyllfa Polisi Masnach y Deyrnas Unedig, fod y protocol ar Iwerddon efallai yn creu cymhelliant i nwyddau o drydydd gwledydd ddod i mewn i Ogledd Iwerddon neu'r Weriniaeth yn uniongyrchol, yn hytrach na thrwy borthladdoedd Prydain Fawr a Chymru?

Thank you very much for that; you've partly answered the question. That's why I emphasised the geography, because Northern Ireland is on the same level as Scotland and the Republic is on the same level as Holyhead and Fishguard, so in having that hard border along the seaboard between Wales and Ireland, there are implications to that, particularly for Holyhead, which is one of the largest ports in the United Kingdom, but we'll leave that where it is.

The next question is whether you can respond to an assessment by the same source that I initially quoted, namely the UK Trade Policy Observatory, that the protocol creates perhaps an incentive for goods from third countries to enter Northern Ireland, or indeed the Republic of Ireland, directly rather than via Great Britain and Welsh ports.

13:50

Well, that is not in the—whether it's been raised with Michael Gove is a question for him. That is not a question that has been raised by the individual ports. Leaving aside where Welsh Government may sit on it, that is not an issue that has been raised—I'm trying to think even recently or even sort of more historically—by the ports in question, bearing in mind that I have a port in Milford Haven in my own constituency, so the port authority would probably have been onto me pretty early on if they really, genuinely believed that, as far as their business is concerned, that is a legitimate concern. Admittedly it is a very different port from Holyhead; obviously it's a different business model, but nonetheless.

So, if that is the case, if that assertion has any merit to it, it isn't being reflected in the regular correspondence that we have with the ports in question. That's not to say that it doesn't have merit. All I'm saying is that it hasn't been raised with us as a significant enough issue to warrant a change in policy in this particular area. Now, if for any reason there is anybody from the ports who is listening to this and believes that that comment is wrong in some way, I'd happily speak to them and indeed refer back those conversations to the committee, but that's not as I see it at the moment, even though, as I say, it has been asserted.

Diolch yn fawr am hynny. Cadeirydd, dwi yn ymwybodol o gyfyngiadau amser, felly af i'n syth ymlaen i'r ddau gwestiwn olaf, achos mae'r drafodaeth yn hynod ddiddorol, mae'n rhaid i fi ddweud, ac mi allwn ni fod yma drwy'r prynhawn, ond fyddwn ni ddim. [Chwerthin.]

Allwch chi esbonio sut mae Llywodraeth y Deyrnas Unedig yn disgwyl i Lywodraeth Cymru ddefnyddio ei phwerau yn Neddf yr Undeb Ewropeaidd (Cytundeb Ymadael) 2020 i weithredu’r protocol yma ar Iwerddon a Gogledd Iwerddon? Sut ydych chi'n disgwyl i Lywodraeth Cymru ddefnyddio ei phwerau?

Thank you for that response. Chair, I'm aware that time is against us, so I'll go straight to the last two questions I have, because this is a very interesting discussion and we could be here all afternoon, but we won't be, I'm afraid. [Laughter.]

Could you explain how the UK Government expects the Welsh Government to use its powers in the European Union (Withdrawal Agreement) Act 2020 to implement the protocol with regard to Ireland and Northern Ireland? How do you expect the Welsh Government to use its powers?

I don't know how to answer that. I mean, it has devolved powers, so it's up to Welsh Government to decide how it's going to deploy them. I'm not sure it would be right for me to speak on behalf of Welsh Gov in that regard. Sorry.

Dim problem, awn ni ymlaen. Y cwestiwn olaf wrthyf fi, Cadeirydd: allwch chi egluro pryd, Ysgrifennydd Gwladol, y bydd y llif gwaith ar y cyd ar weithredu'r protocol yma—Gogledd Iwerddon—y llif gwaith ar y cyd y cytunwyd arno yn y Cyd-bwyllgor Gweinidogion (Negodiadau Ewropeaidd), pryd fydd y llif gwaith yna yn cael ei roi ar waith?

No problem, we'll go on to the final question from me, Chair: could you clarify when, Secretary of State, the joint workstream on the implementation of this protocol with regard to Northern Ireland, this joint workstream that was agreed at the Joint Ministerial Committee (European Negotiations), when will that joint workstream be put in place?

As is my habit, I can read you an answer to that, which is probably better than me trying to come up with another version. It says here: progress is already under way with the first joint committee taking place on 30 March, the Ireland-Northern Ireland specialised committee on 30 April, and the first joint consultative working group will take place in the coming weeks.

Thank you, Secretary. I know we're running short on time, but we have two questions. I want to bring David Melding in first on common frameworks, and then before you go at the end of session, I will want to come back to the shared prosperity point in particular.

Yes, of course. Yes, of course, Chair.

Good afternoon, Secretary of State. You've referred repeatedly to the effect that COVID has had, and I think we all appreciate that, and the Welsh Government acknowledges it as well. But, by now, we would I think have thought that the common frameworks would be well advanced and certainly complete by the end of December, when we leave the transition period and then have a new form of governance, and these common frameworks are clearly an important part of that. So, where is the programme now, given that COVID has obviously had a big impact?

13:55

I think they're still on course. I don't think, again, there's any reason to believe that the—. Whilst the attention on them may have been rather obscured by the events of the last few months, the progress is still on track in terms of the overall ambitions for Brexit. Again, I'm not picking up, either through Michael Gove's office or indeed through Welsh Government, any signs of panic or nervousness around the frameworks. They're coming back into more regular discussion, that is for sure, just as a number of other issues are too in the post-COVID period of time. As far as I can say—Robin may have a different view—as far as I'm concerned, they're where we would expect them to be at this stage in the cycle.

I agree with the Secretary of State, if you're looking for a comment from me. I think the frameworks are in development and there's good co-operation there between the Governments and they continue to move forward. I agree with the Secretary of State. 

Jeremy Miles, Counsel General, I think does acknowledge that there's a reasonable working arrangement with the UK Government and the common frameworks are going ahead. And, of course, I don't know how many there are going to be, but it's in the region of 30, as I recall, and some of them are fairly technical and are unlikely to generate very much political need for close scrutiny, perhaps, or consultation widely, but some of them will. Agriculture, the environment—these are the big ones. Have these been prioritised at all in terms ensuring that they're at least in an advanced state? Because I sense from Welsh Government that some of these, even, will not being signed off by 31 December. They may be in interim form, or they may be in 'draft for consultation with stakeholder' form. But I sense from you that you think certainly the ones that are likely to attract considerable attention because of their scope are pretty much going to be done within the anticipated cycle.

That's as I understand it. I think there will be sequence, by the way, as to which ones are dealt with first and which ones are dealt with last, but I don't think that necessarily should be code for implying that there might be a delay. I think it's just that there will be a sequence, which will end in line with the current timetable. But I think the point you make about monitoring the areas that are going to require arguably greater attention and scrutiny and debate and discussion—clearly, they are going to be further up the menu than some of the ones that are perhaps fairly routine and can go through on the nod.

And then, finally, this concept of the UK internal market and how that's governed is analogous in some ways to the European single market, isn't it? For instance, our agricultural policy is completely devolved, but when that settlement came in in 1999, although it was devolved, it sat within a European orbit for much of the major strategic policy, and then we had powers to vary and all the rest of it, but this sense of having a single market was really important. And the UK Government has emphasised that the need to preserve a UK—I think it's called the interim single market—[Inaudible.]—concept is really important, and the common frameworks clearly fit into that to some extent. But will there be any need for UK legislation, do you think, to underpin the basic statutory character of an UK internal market? That, obviously, potentially, is going to affect devolved—

Everything you said in your preliminary comments is right about the importance the UK Government is attaching to this, and to make sure that we don't accidentally create trade barriers in the rush to meet the deadlines that we've set.

In terms of the legislative programme, everybody is aware that it's pretty congested between now and the end of the year, but it's congested because we are determined to get any associated legislation through, and whether that includes, by the way, a specific piece of legislation around internal markets, or whether internal markets is part of a wider piece of legislation. But the reason there is congestion, the reason that we're actually sitting through September for the first time that I can remember, I think, is so that we can get it all done on time. And so, it is going to be busy, but it's busy for a reason.

But the really crucial point is that—. And this has been under discussion since 2017—again, a good example of co-operation and shared thinking between UK Gov and Welsh Gov. There are some icebergs we need to avoid in this process, and, again, because we started the process early, and we've been having these discussions for some time, and that we have legislative time between now and the year end to deal with them, I'm confident that we can. But it absolutely is probably the—well, there will be crucial questions, which have been raised this afternoon, but none more so than this, because there are significant unforeseen consequences that we need to foresee.

14:00

And in that process, given that there will have to be a fairly coherent legislative statutory basis to some of these things—like some common recognition of standards, for instance, in environment and agriculture—and, you know, the parameters that need to be set if you're going to have direct payments and such things—. But, presumably, on those, either if it's UK legislation—well, it would be UK legislation—the full participation of the devolved administrations is really important in that to ensure that we do get a framework at the end to enable the internal market that everyone thinks is at least fair to them, even if they don't agree with every aspect.

We can't—. I absolutely agree with with that comment, and I think that the idea that we could proceed with this without, or in some way diminishing the role of the devolved Governments in the process, would not be the right place to be, and I know there have been some suggestions that there might be almost an English domination of this process. It's absolutely crucial that that is not the case. I think the fact that this has been raised now, that it's been a subject of discussion for some time now—and I know, from my conversations within the Wales Office and elsewhere that this doesn't work unless the devolved Governments play a very, very clear and obvious and significant role in the process. So, there's no resistance our end to that being the case.

Thank you very much, Secretary of State. I'm encouraged by those remarks.

Thank you, Secretary of State. We've actually just gone over and exceeded our time, but I can't let you go without a couple of questions on the shared prosperity fund. And we haven't yet touched on the citizens' rights issues; we may well write to the Chancellor of the Duchy of Lancaster on those points, particularly as there's been an exchange of correspondence between himself and the EU Vice-President on aspects of that. So, we need to explore some of the avenues in that area.

But the shared prosperity fund: clearly, this has been an issue ever since it's been announced, because we're still lacking detail as to what it actually entails, how it will be distributed, how it will be prioritised, on what areas it will work. And I understand that the latest we've heard is that, in response to letters from the Chair of the Welsh Affairs Select Committee, and other Chairs, the announcements will be made in a spending review, and then details will follow that. Why are we taking so long in getting to this? I understand COVID has been a problem recently, but why are we taking so long to get this? Because this has been mooted for a long time now, and we need to be in a position where we can tell both businesses and other organisations that have benefited from EU funding what will be the replacement and on what basis we can fund that replacement. Why has it taken so long?

14:05

I am very aware—because I've got a fair few of them in my own constituency, by the way—of institutions that are doing valuable work and that are wholly reliant on EU structural funding in order to do that work, and are making their plans for next year and, in some cases, a year after that as we speak. Therefore, the decision over this needs to be as soon as it is practical to do so.

There is also the commitment, which I think has been repeated on a few occasions, that Wales would not receive a penny less than its current settlement, which I think is in the region of £660 million, but somebody else may tell me if I've got that wrong. So, a significant sum of money and a significant, therefore, element of our effort to help those who need it most in Wales is dependent on this sum of money, and I completely have never disputed that fact.

I think the discussion that I hinted at earlier on, which Jeremy Miles and I had started having back in the beginning of the year, before COVID, was around how we could ensure that that money was prioritised in such a way as to benefit jobs and livelihoods, which is, of course, a shared ambition, if you like, between UK Government and Welsh Government. I don't think there's much disagreement around that general heading—jobs and livelihoods are a pretty good place to start when you're looking at the distribution of funding at this level—but how we would then develop a model that enabled us to prioritise those commitments in a way that was fair and equitable and recognised regional differences, local authority pressures et cetera, et cetera. And then COVID struck, and so those conversations came to an end at that stage. You are absolutely right that the time is now fast ticking by, and we need to revisit those as soon as possible.

What I would say, on the wider UK question of shared prosperity, is that there is, of course—and I don't think there's any reason for anybody to be remotely concerned about this—the added dimension of how economic recovery looks across the four nations in a post-COVID world. We heard the first hints of what that might look like this morning from the PM, and we'll hear more from the Chancellor either at the end of this next week or the beginning of next on a bit more detail. Now, that fits—and sorry to make this a rather lengthy response—very much with the levelling up and the strengthening of the union comments that the PM has frequently made, and, in fact, is now re-emphasising or adding additional emphasis to in the post-COVID world. It was very much his mantra in the run-up to the election, but it's become even more significant. I think that the debate we are currently having is how the shared prosperity fund can best help the people who need it the most in the post-COVID landscape that we are hopefully entering into. So, what I—

Sorry to interrupt you, but are you now saying that you are now rethinking or—? We actually saw no details of it beforehand, so is it now being readjusted to address post COVID, rather than address what the EU funding originally was?

Well, I think everything's changed. Everything's changed in a post-COVID world, but what I'm trying to say to you isn't that, 'Ah, by the way, every promise we made before is now changed.' What I'm trying to say is I think there is a positive to come out of this, because I think that if you listen to the PM's speech this morning, it's all about big-ticket capital projects to help revive the UK economy in a post-COVID world, and I think a combination of retaining the commitment to the shared prosperity fund and the additional commitment to rebuild the economy with some big-ticket ideas around infrastructure-related activity—if there is a good-news story in the post-COVID scenario, this is it, because I actually think that between Welsh Government and UK Government, we've now got even more expansive plans than we had before. So, when I sort of almost avoid answering your question, because I don't want to say, 'Oh, by the way, we've ripped up the whole concept behind shared prosperity and we're starting again from scratch', I know what reaction that would have. That's not what I'm saying. What I am trying to say is that we are looking at shared prosperity now in the context of a wider spending package that hopefully will benefit the areas of the UK, including areas of Wales, which most need it. So, we should be excited about this prospect rather than suspicious of what it might include.

But I wanted to say what I've said to Jeremy on a few occasions: hitherto, under the EU structural funding arrangement, it was principally an arrangement between the EU, unsurprisingly, and Welsh Government. I think it will be much more—and I'm surmising here; nothing's agreed, and I've not had these discussions—I think it is much more likely that there will be a closer relationship between UK Government and Welsh Government, where UK Government is a much more visible partner in this arrangement than it has been before, because the EU won't be a partner anymore. That's something we should actually welcome and celebrate rather than being something that we consider to be at risk of being an attack on our devolution settlement. The reason for that is, whatever that arrangement is, and however the UK Government and Welsh Government do this—whatever model we come up with for the shared prosperity fund—it will be the first time—and whether we like this or not, it is the truth—that the thing will be completely under the control of politicians elected by the people of Wales in Wales. That is the first time that will have happened. So, all I'm saying is that if UK Gov and Welsh Gov have to come up with a slightly different way of maximising the benefits of the shared prosperity fund, let's start by looking at it as an opportunity, a big democratic step forward, but also a big economic step forward, enhanced by the post-COVID announcements that are currently being made, to revive the economy in the places that most need it. I see this—and I've said this in public—as a nice problem to have. I think it's a nice problem for me and Mark Drakeford to have, to have an argument about how we're going to distribute these vast chunks of taxpayers' money in the best way possible for the economy of Wales. That's nothing to be frightened of, I don't think.

14:10

Is he still there? Yes.

I am. I feel a bit cheeky in asking this, but I'm that sort of cheeky person, anyway. I was at one of those first meetings you had with Jeremy and I was really taken with the positive approach that you had to this engagement. But I just wonder—. One of the other hats I wear is as chair of the regional investment Wales steering group. Even with COVID going on, we've just had several hundred people take part in the final stages of our consultation on a regional framework for Wales, and we mentioned this at the meeting we were at with you, Secretary of State. I just wonder whether you think still that there's that opportunity for UK Government to dovetail with that work that looks at how we get all of the moneys—not just the UK whatever-it's-called, shared prosperity fund, or whatever, but also existing streams of money—out to the regions of Wales to be well used and determined by them. Because we've worked so hard for 18 months, and it would be a shame to have to start again.

I think the area of tension, if there was one, that existed between me and Jeremy—it might have been Jeremy, or I might have done him a disservice—is that, if we were completely honest at the outset of all this, one of the reasons this debate is happening at all, and one of the reasons there was a referendum on our membership of the EU, and one of the reasons why the result was the way that it was, was because people were beginning to get tired of the fact that there were always references to large sums of money swishing around but none of it ever seemed to end up exactly where you wanted it to. People were probably unfairly blamed—Welsh Government was probably unfairly blamed—for getting the priorities wrong. The EU might have been unfairly blamed for getting the priorities wrong. Nonetheless, the public mood was beginning to get frustrated with the fact that, actually, as I think the rather crude example was, a plastic dragon might appear in a town square somewhere where the money could have been better spent on some sort of young person's opportunity somewhere else. So, there was always a rather tabloid example of where these systems went wrong. Actually, what I would like to see is a closer collaboration between UK Gov, Welsh Gov and, by the way, because we don't have all of the answers and we don't have all of the wisdom, I would like to see local authorities and stakeholders much more closely involved in this, too. Devolution doesn't stop in Cardiff, and I actually think that if we're to be able to say in a few years' time that we've got the prioritisation right, it's when 22 local authorities in Wales rise up in honour of Welsh Gov and UK Gov and say, actually, 'Yes, this spending is now appropriate, proportionate and correctly focused on the areas that need it the most.'

So, as I say, I see it as a really exciting opportunity. I don't see it as a land grab. I hope that Welsh Government can say that, if I end up or if my successors, or whoever, end up playing a more prominent role in this, that shouldn't be seen as us parking a tank on anybody's lawn; it should be seen, actually, as a much better way of getting large sums of money to the places in Wales that need it the most, and your example is a good one. That's where I'd want to be. 

14:15

Thank you, Secretary of State, for that. We have run well past our time. 

I'm going to have to go, I know. Sorry. 

On the issue of the shared prosperity fund, I think you can appreciate the concerns that have been raised because there is a need—. I quite agree with you that we all want to make sure that the money is well spent and spent for the benefit of the people of Wales but, as you have highlighted also, the Prime Minister has been quoted in the past as indicating that perhaps he would like to have more say as to where that money should be spent, rather than where it was in the Welsh Government. My understanding is, really, the shared prosperity fund as it was then may be changing now, and it was not necessarily going to be part of the way in which the Welsh Government saw the needs of Wales, but more the way the UK Government saw the needs.  

I know we're running out of time, but I would like to respond to that. I should have caveated all of the comments that I've made by saying that I will not be the decision maker in this particular process; that will be for a higher authority, ultimately, to outline. But I think that it's really important that UK Gov and Welsh Gov find a model that we can both live with in this regard, and I think we can—I really think we can. I am absolutely determined that that risk that you point out, which is where we might disagree over prioritisation, we have to be able to find a way of mitigating that risk, because I can't believe that if there is a greater degree of UK Gov involvement in this process, which will presumably be articulated through the Wales Office, I would like to think that I'd probably got more means of detecting what the priorities in Wales are than perhaps the people in the European Union who used to be co-partners in this process before might have had.

And so, I don't want Jeremy or anybody else in Welsh Government to think that the involvement of UK Gov in a more visible way is designed with anything other than the best interests of Wales in mind, because definitely we think this is a— . I think this is a really good opportunity for us, and it's democratic because, you know—

So, what involvement do you have in shaping the shared prosperity fund as it's being put together now?

Well, at this stage, the actual mechanics of it are at a fairly early stage. There is some inter-departmental discussion about it and, indeed, Jeremy and I had had discussions between Welsh Gov and UK Gov right back at the beginning of the year, and I think there's been some more recent correspondence from him—but I'd need to check—to UK Gov on the topic with some further ideas. So, this is progressing. In normal circumstances, the fact that it's taking a little bit of time wouldn't be a particular issue, but I'm very mindful of what you said earlier on—that there are people who are trying to make their financial plans for 2021 who need some certainty around this. I have taken that on board and we will try and see if we can get, at least when we get back in touch with you, some sort of a timescale around when these decisions will be made. 

Thank you very much, Secretary of State. It's now 14:20, so we've gone well past the time. As you know, you will receive a transcript of the meeting and, if there are any factual inaccuracies, please let the clerking team know as soon as possible so we can correct it. So, thank you for your time. I thank the officials for attending as well. I'm sure we'll write to you with some other areas that we haven't yet explored. We will look forward to future meetings, and, hopefully, Robin can take back the message that we hope to have a future meeting with Michael Gove, the Chancellor of the Duchy of Lancaster. 

14:20

Thank you all very much indeed. Much appreciated. Cheers. Diolch. 

And with that, we will move on to the next item. We agreed this morning that we would move into private session for the remainder of the meeting. So, we'll now go into private session. 

Daeth rhan gyhoeddus y cyfarfod i ben am 14:20.

The public part of the meeting ended at 14:20.

Dysgu am Senedd Cymru