Cynulliad Cenedlaethol Cymru

Well, good afternoon. Can I call Members to order, please? Thank you.

Before we move to item 1 on the agenda, I would like to warmly welcome Speaker Christopher Collins and Clerk Mr Donald Forestell of the Legislative Assembly of New Brunswick, Canada, who have joined us in the public gallery.

Croeso cynnes iawn i’r Senedd.

A very warm welcome to the Senedd.

So, item 1 is questions to the Cabinet Secretary for Finance and Local Government. And the first question is Huw Irranca-Davies.

Diolch, Dirprwy Lywydd. And I feel I’m under pressure now, with our esteemed visitors in the gallery.

Well, Dirprwy Lywydd, implementation of the code will be monitored through annual reporting by public bodies. I also expect those reports to be considered by our social partners at the workforce partnership council.

I thank the Cabinet Secretary for that answer. And could I say, as the chair of the cross-party group on universities—and I know I have fellow members here—how welcome was the announcement by the chair of University Wales, Professor Colin Riordan, when he said that, by the end of July 2017, all Welsh universities will have to become signatories to the Welsh Government’s code of practice for ethical employment in supply chains? And he went on to say—and this is the practical implementation—that Universities Wales members are committed to paying the Living Wage Foundation’s living wage to all directly employed higher education staff by 2018-19, and to starting the process of implementing the living wage across their outsourced HE activity. Does he agree with me that we should all as Assembly Members, of all parties, take pride in this part of the devolution dividend, when this Assembly, and this Welsh Government, can force the pace of progressive change in employment?

Well, can I thank the Member for that? I absolutely agree with him that the code is an example of how we have been able to use the powers available to us to break new ground, in ensuring that, in the supply chains that are there in the Welsh public sector, ethical employment is at the heart of the way in which goods and services are procured. Now, the code was only signed off at the workforce partnership council in March of this year, so it was great to see Higher Education Wales very early into the field, in making their commitment to sign up to the code and its consequences. Since then, we know that all police forces in Wales are going to be signatories to the code. We have local authorities in Wales signing up to it, housing associations, there are 20 private sector and third sector organisations already signed up to it, and, of course, the Welsh Government itself is a signatory to the code. And I look forward very much to seeing that code rolled out further, doing the work that we need it to do, and then to be able to report on its impact in supply chains in the Welsh public sector over the months ahead.

The code of practice, of course, sets out actions to tackle illegal and unfair employment practices. And, as Huw Irranca-Davies indicated, paying less than the living wage is unfair employment practice, and we are all aware of allegations made in both the care and the hospitality sectors, because services from those sectors can be procured by public services, of course. Is it possible that the mechanisms you mentioned a little bit earlier can miss picking up those instances where employers say they’re paying the living wage, but may not, in fact, be doing so?

Well, it is very important—I agree with Suzy Davies—that we are alert to those instances where employers try to subvert the minimum wage. We know that there are instances, sadly, in Wales where, through tied accommodation, or tied transport, for example, in effect, people are paid below the statutory minimum. Now, we rely on our trade union colleagues very heavily to be part of that network that alerts us to those instances when they happen.

The document that we published as a Government a couple of weeks ago on fair movement of people sets out a series of actions that we believe the UK Government needs to take to make sure that the rights that people have at that part of a labour market are properly protected, but steps that the Welsh Government intends to take as well, to make sure that, where people are not having their rights properly observed, we have strong mechanisms for identifying those instances, and then pursuing them.

I thank Russell George for that question. The possibility of a growth deal for mid Wales has been discussed in a number of meetings that I have attended with the leaders of Ceredigion and Powys county councils, both before and after this year’s local authority elections. Informal, official-level discussions have also taken place. Local bodies continue to take the lead in developing any growth deal proposition.

Thank you for your answer, Cabinet Secretary. As we know, economic development is the backbone to rural economies’ survival. I was pleased that the First Minister confirmed last week, in his statement on the national strategy, that the Welsh Government will be looking at creating a mid Wales growth deal to support the economy of the region. So, on that basis, can I ask what initial finance you have considered putting in place to support early work that will be required to make a mid Wales growth deal a reality?

To date, Chair, the funding that has been needed to develop the idea has been contributed by those who have been members of the partnership that has been set up: members drawn from the private sector, from manufacturing, agriculture and tourism, together with higher and further education, the voluntary sector and local government. Where the Welsh Government and, indeed, the UK Government will come into the picture, should a growth deal be developed, is when we get to the point of having specific ideas identified, a core set of purposes, an agreed set of priorities, and then, we are committed to discussing purposefully with the UK Government and with local players the financial contribution that the Welsh Government may be able to make to such a deal.

May I first of all welcome the fact that the Cabinet Secretary is here today, rather than listening to his leader in Brighton? I’m sure he would prefer to be at the seaside there, but we are very pleased to have him here. May I ask specifically about this concept of some sort of growth deal for mid Wales? We must think in terms of the whole of west Wales, in my view, because we have what’s happening in south Wales, we know about the city regions, and there is something specific in that regard from the Government here and the Government in Westminster. In north Wales, there is this concept of the pan-north Wales, and there are links over the border to England and different agreements with cities there. But there is a void in the middle, and what I’m seeking here from the Cabinet Secretary today is some sort of idea of where this Government stands on that. Do you believe that we should fill that void, or vacuum, with some sort of growth deal for those areas? I know that it has to be grown from the bottom up, but are you eager to see that happening?

Rydym ni yn awyddus, Dirprwy Lywydd, wrth gwrs, ac rydym ni’n awyddus i gefnogi pobl leol sy’n gweithio ar bosibiliadau am y dyfodol. Nid wyf i’n dechrau o rywle ble rwy’n meddwl bod rhaid i bob lle yng Nghymru gael rhyw fath o fargen, ond, ble mae diddordeb gyda phobl leol, a ble maen nhw’n ymwybodol, fel roedd Simon Thomas yn ei ddweud, am sut maen nhw’n mynd i weithio dros y ffin gyda phobl eraill mewn sefyllfa arall, yn Lloegr, neu yng Nghymru, rydym ni’n awyddus fel Llywodraeth i’w cefnogi nhw, i weithio gyda nhw, a gweld os maen nhw’n gallu creu syniadau sy’n mynd i weithio i bobl leol, ble rŷm ni a Llywodraeth y Deyrnas Unedig yn gallu helpu i’w hariannu nhw ar gyfer yr uchelgais y maen nhw’n eu greu yno.

Is the Cabinet Secretary aware that, on Friday, I spoke at a meeting of the rural division of the Welsh Local Government Association, where I encouraged the councils that were present there—Ceredigion, Powys, Pembrokeshire, Carmarthenshire, Gwynedd and Anglesey—to work together to develop a broader, place-based rural deal, which they agreed to do? I wondered, in terms of the possibility that the new economic structure to deliver economic development that is supposed to be based on the footprints of city deals, whether the Cabinet Secretary would speak to his economy Secretary to consider the opportunity, further on down the line, if a rural deal is developed, that that new structure may be considered as a new grouping in that new economic structure.

I thank Eluned Morgan for that. I was indeed aware of the fact that she was speaking with the WLGA and at the group of rural councils on Friday of last week, and no doubt following up in that discussion the report that she herself put together earlier in the year.

I think the point that I would make is a point that Simon Thomas started with: that we will need some flexibility to allow arrangements that lie under the umbrella of the wider regional arrangements that we are setting up to be able to take root and prosper where those ideas are good ones. In this Chamber, quite often, Sian Gwenllian has raised the need for a regional arrangement that links the whole of the western side of Wales, building on the report that Rhodri Glyn Thomas produced for the Welsh Government about a year or so ago. So there’s another example of where, within the umbrellas of regional arrangements that the Welsh Government is pursuing, we will need some flexibility to allow arrangements that sometimes cut across those boundaries and sometimes operate within them. We’ll need the necessary flexibility to allow those ideas to be pursued and, where possible, to be brought to fruition.

We’ll now turn to spokespeople’s questions, and the first spokesperson today is Conservative spokesperson, Nick Ramsay.

Thank you, Deputy Presiding Officer. Cabinet Secretary, this year’s Welsh Government budget represents a milestone in this the twentieth year of devolution. It’s the first budget that will cover a period that will include tax devolution, of land transaction tax and land disposals tax in the first instance, kicking off from April next year. I know that you’ve been heavily involved with me in the Finance Committee in devising those taxes. Can I ask you: can you update us on the rates of the new taxes?

I suppose it lies under ‘a good try’ sort of question. Llywydd, I will be announcing rates and bands for landfill disposals tax and land transaction tax in the draft budget that I will lay in front of this Assembly on Tuesday of next week, 3 October.

I think the Cabinet Secretary knows where I’m coming from on this, because I’ve checked the Welsh Government website page, which you may or may not be aware of, in regard to LTT, which says that the rates and bands will be announced, or were due to be announced, by the end of this month, by October 2017. So, there is not much time left for that announcement. If the information isn’t going to be published by that deadline, then can we be absolutely sure that it will be announced next week in the draft budget, and can we be sure that there will be full detail of the rates and bands as well, and not leaving us waiting for further information further down the line?

Chair, the Member will be aware, I know, that in correspondence with the chair of the Finance Committee it was agreed that announcements on rates and bands would happen on 3 October as part of a whole-budget package that I will be announcing on the floor of this Assembly next week. I’m very happy to give the Member that assurance that the rates and bands that the Welsh Government proposes will be set out in full on that day.

As you know, Cabinet Secretary, some of us on the Finance Committee, and indeed other Members of the Chamber in general, did feel that there was a very strong argument at the time for having the tax rates and bands on the face of the Bill, but your commitment at Stage 2 to publish the rates well in advance of April went a long way to allaying these concerns—a commitment that you repeated on 28 March in this Chamber, which, according to the Record, says that you said they would be published by 1 October, and I think that is the commitment that was given to the Finance Committee. [Interruption.] Okay. I’m not going to be pedantic about it at this point, Cabinet Secretary. You have committed to publish those rates and bands next week. I’ve already asked you if you will ensure that we do get the full information. Will you agree with me that the Welsh taxpayer does, at this milestone point of devolution of taxation, need to have full confidence that they do have the information at their disposal in advance of April so that, when we do get to that point of tax devolution, we have the smoothest transition possible, and we get the successful tax devolution that everyone in this Chamber would want.

Dirprwy Lywydd, Nick Ramsay has made that point very consistently during the passage of both tax Bills, and in the Finance Committee, that certainty for Welsh taxpayers as we move into the new set of arrangements is very important, as is certainty for businesses. That is why I was happy to make that commitment to make an early announcement on the Government’s intentions in relation to rates and bands, and by announcing it on 3 October in the context of the budget as a whole, I think that that will assist people in understanding why we’ve come to the decisions we have come to. Alongside the budget, we will publish a whole new set of information that has not previously been available to the Assembly, including, for example, the Bangor business school’s independent assessment of the tax forecasting that lies behind the rates and bands that I will be announcing.

Thank you. UKIP spokesperson, Neil Hamilton.

Thank you, Deputy Presiding Officer. As my maternal grandmother was born in Moncton, New Brunswick, I’d like to welcome our distinguished guests in the gallery as well. It makes me quarter a New Brunswicker, I suppose. [Interruption.]

We’ve missed the cheery presence of the Minister for lifelong learning this week, because he’s at the Labour Party conference, where I see he said yesterday, further to John McDonnell’s announcement that Labour are going to end private finance initiative contracts and buy them back, that in Wales there is no PFI. But of course I’m sure the Cabinet Secretary will agree with me that that’s not quite correct. In fact, the total capital value of PFI contracts that are related to the Welsh Government amounts to £565 million, on which the total unitary charges—the amount that they will have all cost by the end of the repayment period—are nearly six times that at £3 billion. Does it not now make sense for the Welsh Government to look into the possibility of refinancing this on a more cost-effective basis?

Well, Chair, where my colleague Alun Davies was speaking from was the fact that, in the devolution era, we have not signed up to new PFI deals. The Member is right that there are 23 historic PFI deals that pre-date devolution, only two of which are actually ones for which the Welsh Government is directly responsible. Indeed, there are examples in Wales already where organisations that embark on PFI deals have come to the conclusion that they would move to other arrangements. So, we do not have a recent history that we have to unravel in the way that it has to be unravelled in other parts of the United Kingdom, and where other arrangements are better made we’ve also got a track record of seeing those arrangements alter.

I fully acknowledge that the record of the Welsh Government is far better than the UK Government’s on PFI contracts. Indeed, the total percentage of the unitary charges, the annual repayments, that are going to be made is only 1.7 per cent of the UK total. So, that’s a very good thing. But there’s still a substantial debt that is in gestation for repayment over many years, and reducing the costs of those repayments will, on an annual basis, mean that there is more money to spend upon other good things on which the public sector needs to spend.

Of the projects that are currently outstanding, there’s the A55 from Llandygai to Holyhead; the capital value of that was £100 million. There’s the Lloyd George Avenue and Callaghan Square development here in Cardiff; the capital value of which was originally £45 million. That’s nearly a third of the total outstanding projects by value, on which, for £145 million of capital provided upfront, the repayment costs are nearly £800 million. That’s an appalling deal and the sooner we can unravel these contracts the better.

The Member has accurately identified the two of the 23 schemes that are the direct Welsh Government schemes, and I don’t disagree with him in the principle of what he has said, that all these schemes need to be kept under review, so that if it is possible to rearrange things to the advantage of the Welsh taxpayer, we will always be open to doing that. As I said, there are examples of that already happening in Wales. So, we’re clearly not inimical to that possibility.

I’m very pleased to hear that answer from the Cabinet Secretary. Does he agree with me that the Blair and Brown Governments have a great deal to answer for, for the profligacy with which they entered into such contracts with abandon during those locust years, that although the Welsh Government can pride itself on its performance relatively speaking, the performance of Labour Governments at Westminster has been absolutely abysmal? Eighty four per cent of all the PFI contracts that have even been let were let under Blair as Prime Minister or Brown as Prime Minister. So, the Labour Party has quite a stain on its record.

Well, Llywydd, ‘Aliae gentes, aliae mores’, where other people are responsible for the decisions they made in the circumstances in which they made them. Here in Wales, we faced those same decisions from the very beginning, we took a different view, but the nature of the problem that we were seeking to address may have been different as well.

Thank you. Plaid Cymru spokesperson, Adam Price.

I’m very intrigued by this new broad front that’s emerging between John McDonnell and Neil Hamilton; I never thought I’d live to see the day, quite frankly. But, Chair, could I just delve a little bit deeper? I was very interested and listening intently to what the finance Secretary was saying. In the wake of the shadow chancellor’s announcement about bringing these projects back inside the public sector, is it now Labour Party policy in Wales, and therefore of this Government, to bring those existing PFI projects in Wales back in-house, and therefore onto the Welsh Government’s balance sheet in the event of the election of a Labour Government in Westminster?

Well, Chair, I’ll repeat what I’ve said earlier because it is very important to get the context of this right. The scale of the issue that we face in Wales is of a very, very different order to the scale faced elsewhere, and the recency of PFI schemes that we would have to address is very different as well. There have been only 23 schemes in Wales and very, very little new PFI in the devolution era, and of those 23, 21 of them are not the direct responsibility of the Welsh Government, belonging to local authorities and to the health service. But we are absolutely open to keeping under continual review whether or not those arrangements could be improved and a better deal secured for the taxpayer, and when we have the next Labour Government, then our ability to do that will be much enhanced.

Could we turn to the present, then? Because the Welsh Government obviously is involved in the use of public-private partnerships, yes, through the mutual investment model involving a minority share held by the Welsh Government, but the majority share, 75 per cent and above, is held by the private sector, using the Government’s own language, where

‘private partners build and maintain public assets’,

and where

‘the Welsh Government will pay a fee to the private partner, which will cover the cost of construction, maintenance and financing the project.’

Similar schemes in Scotland have been described by the Scottish Labour Party as ‘PFI by another name’. Indeed, the contract for the new A465 project, which has just been laid, is based on the old NHS PFI standard contract. So, can the Cabinet Secretary say whether it is now Labour Party policy in Wales, and Welsh Government policy, to bring the 75 per cent or so of these projects, which will remain in private ownership, back into public ownership in the event of the election of a Labour Government at Westminster?

Well, Dirprwy Lywydd, I have never been anything other than clear that I have an approach to capital spending as the Welsh Government’s finance Minister in which my first recourse is always to direct public capital. I’d always rather finance capital projects in that way because that is the cheapest way as far as Welsh taxpayers are concerned. And if I was in the happy position of having sufficient public capital to be able to do all the things that are necessary to secure Wales’s future, including the things that we will do through the mutual investment model, then I would prefer to be able to go ahead in that way. When we have the next Labour Government, then we will be in a much better position to do just that. As it is now, I have to plan for the position I am in today, where we will have, in 2019-20, a capital budget £400 million shorter each year than it was a decade earlier, and urgent needs that have to be met. That’s the context in which we have had to be more imaginative about the way that we secure capital investment in Wales. If I didn’t have to do it, if I had conventional public capital at my disposal with sufficient amounts, then I would always use that first.

You raise another dimension: the creative asymmetry that sometimes, I think, characterises Labour’s policy position, sometimes saying one thing in Westminster or Brighton and another thing in Wales. We did have, I thought, a rather bizarre statement by the Labour leaders of the three largest councils in Wales, where they said they would support strike action by their own council staff against their council against a pay cap that they and their own Labour Government in Wales could lift. So, can the Cabinet Secretary say whether we he will join with his Labour colleagues in saying that he would encourage and support strike action in Wales by public sector workers, or is he prepared to lead by example and lift that pay cap as the Scottish Government has done?

Well, Chair, I read very carefully what was said by Labour leaders, and I see that Councillor Andrew Morgan was very clear in saying that his first priority was to avoid strike action, not to encourage strike action; that is our first priority. But he went on to say, as we would say on these benches, that where public sector workers have seen their wages held down year after year after year, and now find themselves going into the eighth and ninth year of austerity, that it is absolutely understandable that people feel that they have to make the impact that that has on their lives apparent to others. Our position in relation to the pay cap is as clear as can be. We say to the UK Government, ‘You must lift the pay cap. This is your policy. You are responsible for it. You must lift the pay cap, and you must provide the money that would allow public sector workers in Wales to find their wages increased in line with the value that we attach to the work that they do.’

Thank you. We return to questions on the agenda paper, and it’s question 3, Jayne Bryant.

I will announce the provisional local government settlement for 2018-19 on 10 October.

Thank you, Cabinet Secretary. Since 2010, the austerity agenda of the UK Government has seen an overall Welsh Government budget cut by 8.2 per cent. In that time, local government in England has suffered real-term cuts of 25 per cent in their revenue budgets and, conversely, the Welsh Government has limited cuts to local government here to 5 per cent over the same period. We’re now in year 8 of the Westminster-imposed austerity and local authorities are under severe budgetary pressure. With further significant cuts to the Welsh Government budget projected over the coming years, what more can the Cabinet Secretary do to help local government to protect key services?

Dirprwy Lywydd, the first thing that this Government did was to provide Welsh local government in the current financial year, partly as a result of our agreement with Plaid Cymru, with a no-cash-cuts budget for the first time in many years. I made it clear—I couldn’t have repeated it more often, I think—to local government colleagues that the breathing space that that budget provided needed to be used to plan for tougher times and harder choices that lie ahead. And I have to say that to them because the resources available to the Welsh Government go down every year in this Assembly term, and it is simply the reality with which we have to grapple that if the resources available to us to invest in public services reduce—vitally important public services that local authorities provide—that will have an impact on the budgets we can make available to them. I can assure the Member that in the budget round that I will report on Tuesday of next week, we have worked as hard as we can to protect those services on which people rely, but I would not be sending a message out to colleagues in Wales that had a ring of truth about it if I didn’t repeat to them that the years ahead are going to be very challenging.

Cabinet Secretary, I heard your answer to Jayne just now. Further to that, Welsh Government figures reveal that spending on central administration by local authorities is increasing by £11 million this year. Meanwhile, across Wales, budgets for roads and libraries are set to fall by nearly £6.73 million. The central running cost is rising and spending on vital public services is falling. What consideration will the Cabinet Secretary give to this matter when he decides the local government funding settlement for 2018-19, please?

Well, Dirprwy Lywydd, in my discussions with local authority leaders, I believe that, across different parties, they work very hard to try to make sure that they can move as much of their funding as possible into front-line services and to minimise the take from their resources spent on administration. In the local government reforms that I have announced on the floor of this Assembly, you will know that we intend to make a serious push with our local authority colleagues on backroom services, on shared services, on trying to make sure that the money that is needed to support services centrally is minimised so that that money can be deployed at the front line. That’s a conversation that I believe local authorities in Wales are very open to having, and I intend to go on having it with them.

I thank the Member for the question. All Ministers draw on a range of evidence to monitor effectiveness of spend. New policies and programmes are subject to the rigorous scrutiny process set out in the Treasury Green Book. I monitor all existing spend across Government according to a monthly cycle.

I’m grateful to the Cabinet Secretary for his answer. Now, it’s been brought to my attention recently that the Welsh Government has invested in certain marine projects off the coast of Pembrokeshire, one of which will be in the ownership of a local authority based in England. Now, some of my constituents are concerned that, if projects in Wales are run by local authorities outside Wales, then we could end up where places like Pembrokeshire and indeed the whole of Wales don’t actually get the benefits from such projects. Now, I raised this issue with your colleague the Cabinet Secretary for Environment and Rural Affairs yesterday, but can you tell us how you, as the Cabinet Secretary responsible for finance, are making sure that any grant funding provided to projects across all Government departments will be reinvested in Welsh communities? And can you tell us how your department is monitoring the effectiveness of such projects to make sure that communities here in Wales actually benefit from publicly invested money by the Welsh Government?

Thank you to Paul Davies for the question. He makes an important point. I heard his exchange with Ken Skates yesterday. There is a series of actions that we take as a Welsh Government to try to make sure that the spend that is invested in activity in Wales through the Welsh Government and our partners has the maximum impact on the wider economy. The National Procurement Service, for example, in the years that it has been in existence, has more than doubled the amount of common and repetitive spending that goes to Welsh firms compared to the year before it came into existence. In relation to the specific point that he makes, I intend, through the local government reforms that we are bringing about, to provide local authorities with a general power of competence, which will allow them to do more things than local authorities in Wales are able to do at present, including some commercial activity, which local authorities across our border have been able to become involved in. That has to be done sensitively and carefully, otherwise it leads you into a different sort of difficulty, but, by making sure that our local authorities have the scope to do more than they are able to do at the moment, it will be another way in which we can make sure that the resources they have and we have are invested in ways that continue to show a return for local people in Wales.

There are many budget review techniques that are available to look at budgets. Has the finance Secretary considered introducing zero-based budgeting to functional areas so people have to re-prove the need for some of the expenditure that’s taking place?

Thank you to Mike Hedges for the question. I’m aware, of course, of zero-based budgeting and how it can make sure that budgets are built up again from the base and how every aspect of spend is properly challenged. We did use a form of zero-based budgeting in bringing forward our four-year capital programme this time last year, by looking again at all the different schemes that were in the pipeline and making sure that the ones that we were able to fund were at the top end of our priorities. And my colleague Vaughan Gething has been involved in some zero-based budgeting activities within the national health service. So, Dirprwy Lywydd, we are always interested in using techniques to make sure that we align our spend with our top priorities and zero-based budgeting is one of the potential tools that we will keep under review in trying to do just that.

I thank Darren Millar for that. Good public services play a vitally important role in the lives of all citizens in Wales. Each and every one of us has a direct interest in shaping how public services are delivered.

Cabinet Secretary, one of the things that can hinder the delivery of public services is incidence of fraud in the public purse. Many people will have been aware of the concerns that have been raised in respect of some issues in Cardiff and Vale University Local Health Board, and, indeed, there have been others within the NHS, including in the Betsi Cadwaladr University Local Health Board also in recent years, in terms of its management of some of the capital expenditure in that particular health board at Ysbyty Glan Clwyd. What specific action is the Welsh Government taking to ensure that taxpayers can be sure that they’re not being ripped off as a result of incidents of fraud? What safeguards are you putting in place, and are you considering the safeguards that are already there as a result of these latest stories?

Well, can I just agree with Darren Millar that fraud is corrosive of public trust? It has a direct impact on the resources available to authorities for public services, and very often, at the individual level, fraud is practiced on those people least able to deal with its consequences. So, as a Government, we take fraud very seriously for all those reasons.

On Friday of last week, I was able to address the annual conference of those people who work in the fraud field here in Wales, where there were speakers from outside Wales as well, all of it designed to try to find new and better ways in which fraud in our public services and in other aspects of public life in Wales can be addressed. It’s a challenge, Dirprwy Lywydd. If you were there in that audience and hearing people speak, you would know that fraud is the single fastest growing set of offences across the United Kingdom, and there are always new possibilities. For all the fantastic advantages that the internet and other forms of electronic communication bring, they offer new opportunities up for crime and for fraud as well. So, the Welsh Government has a very direct interest in bearing down on this, on learning the lessons of examples where fraud is uncovered just to make sure that we can block loopholes and make sure that it doesn’t happen again, and in trying to make sure that our workforce, who work so very hard in this area, are fully equipped and kept in touch with developments in other parts of the United Kingdom to help us all in the business of combatting fraud.

Schools are a very important part of the public services we provide and I congratulate the Welsh Government on its funding for the twenty-first century schools programme. Would the finance Secretary congratulate Cardiff Council on the planned new joint building of Ysgol Glan Ceubal Welsh-language primary school and Gabalfa Primary School in my constituency of Cardiff North? I attended the turf-cutting ceremony last week for these two new schools. What plans does the Welsh Government have to continue funding these exemplary new buildings across Wales?

I thank Julie Morgan for that, and absolutely associate myself with her congratulations to all those involved in the development of Ysgol Glan Ceubal. It’s fantastic to see a new Welsh-medium facility in that part of the city, alongside the Gabalfa Primary School. It’s been made possible by the local government borrowing initiative, which my predecessor in this post, Jane Hutt, established, and where we’ve been able to support £170 million-worth of spend by local authorities in the first tranche of the twenty-first century schools programme. We are now actively planning band B of that programme, through the mutual investment model, where we hope to be able to support new building of new schools across Wales to the value of up to £500 million.

In accordance with the Well-being of Future Generations (Wales) Act 2015 we need to establish public services boards in all local authorities, and each board needs to assess the economic, social, environmental and cultural state of the area and publish the results of those assessments, and publish a well-being plan that will outline local objectives according to the goals of the Act, as well as a means of achieving those. I’d like to know how this work is developing and how effective it is from the point of view of contributing to the well-being goal in particular.

Well, thank you very much, Sian Gwenllian, for that question and for drawing attention to the work that is ongoing in this field.

Dirprwy Lywydd, i mi, mae’r gwaith a wnaed gan y byrddau gwasanaethau cyhoeddus ar gyflawni eu hasesiadau lles yn galonogol iawn. Rwyf wedi cael cyfle i ddarllen nifer go lew ohonynt. A bod yn hollol onest, credaf y gallech ddweud eu bod yn nodweddiadol o gymaint o’r hyn a wyddom ynglŷn â’r ffordd y mae pethau’n digwydd yng Nghymru. Ceir enghreifftiau da iawn mewn perthynas â rhai agweddau ar y cynlluniau ym mhobman—mae’n debyg nad oes llawer sy’n dda ar draws yr holl ystod o bethau y gofynnwyd iddynt eu cwmpasu yn yr asesiad. Felly, gallwch fynd—. Nid wyf am ddechrau crybwyll enghreifftiau o ddim, Llywydd, ond pe baech yn mynd i Gaerffili, er enghraifft, mae’n enghraifft wych o ymgysylltu â’r cyhoedd ac yn enghraifft ragorol o sut y maent wedi llwyddo i gyfleu dimensiwn diwylliannol lles, ac eto, nid yw mor gryf mewn agweddau eraill, ac mae byrddau lleol eraill wedi bod yn well mewn gwahanol ffyrdd.

Felly, y peth gwirioneddol allweddol yn awr yw dysgu o’r rownd gyntaf hon ohonynt, a chadw’r asesiadau hyn fel dogfennau byw, fod pobl yn eu hadnewyddu, eu bod yn dysgu oddi wrth ei gilydd, a’u bod yn symud yn bwrpasol i’r cam nesaf, fel y dywedodd Sian Gwenllian, sef symud o asesu anghenion lles i gynllunio sut y gellir diwallu’r anghenion hynny. Fy nod, wrth weithio gyda chydweithwyr yn yr awdurdodau lleol, fydd ceisio sicrhau, lle y gwnaed y cynnydd cyflymaf, y caiff y gwersi hynny eu trosglwyddo i eraill ac y byddwn yn gweld symudiad ledled Cymru fel y gall y cynlluniau hyn fod mor dda ag y gallant fod.

Thank you for that question. Invest-to-save funds are deployed against principles, which include delivering improved public services, generating significant cash-releasing savings, encouraging greater collaboration between public service bodies, and disseminating lessons learned and best practice.

Thank you for that response. I would like to suggest to the Cabinet Secretary that investing in developing medical education at an undergraduate level on a comprehensive level in north Wales—that is, including first-year students, and all the way through their studies—would be an excellent example of implementing the principles of invest-to-save. We know that Betsi Cadwaladr health board spent £80 million on locums over the past three years, and somehow we must break that vicious cycle, and investing in training doctors locally would be a huge contribution towards that. We not talking about a full, independent medical school here; that may come in due time, of course. But, whilst there are all sorts of reasons as to why this development is needed, although the Government doesn’t seem to understand that to date—but to the finance Secretary specifically, I appeal to him to recognise this and to see this as an example of sensible investment now in order to create long-term benefits.

Well, Deputy Presiding Officer, I hear the case the Member is making and I acknowledge what he says about the way in which the money is spent in north Wales at present. He will be eager to know, I’m certain, that a meeting was held this morning with the Secretary with responsibility for health to discuss the developments in north Wales.

Cabinet Secretary, I know Members will be pleased to hear that an independent review found that for every £1 invested, about £3 in savings followed. That is really good and a sign of profound innovation. We want more of that. However, housing has only received 0.4 per cent of the investment of nearly £14 million under the scheme so far. I just wonder if you’re going to look at possible ways that the housing sector could benefit, perhaps by reducing upfront costs for the building of homes, and particularly measures to support high energy efficiency standards. They have a big impact on the health and well-being of the tenants and people who then live in those houses.

I thank David Melding for that point. He draws attention to one of the characteristics of the fund, which is that it has been used by some parts of the public sector far more regularly than others. So, the health service in Wales has an excellent record of using the fund for energy efficiency measures, and has saved a great deal of money in the health service as a result. Local authorities have been slightly later to the party in relation to the invest-to-save fund, but we are encouraging those who have made less use of it to date to make more use of it in the future. We are taking applications at any point in the year now, rather than at fixed points in the year, and working with people who’ve had less experience of making applications to the fund, so that they have some mentoring along the way in order to encourage exactly the sort of application that the Member has mentioned.

Dirprwy Lywydd, I will publish the Welsh Government’s outline draft budget on Tuesday of next week.

Thanks. The bedroom tax is, by far, one of the most unnecessary burdens faced by some of the most disadvantaged people in Wales. This is a tax that has only added more pressure to those who already struggle to make ends meet. The bedroom tax has, in many cases, been applied to those who simply don’t have the option to move into a smaller house. So, isn’t it about time that the Labour Government in Wales abolished a tax that punishes the most vulnerable in our society? If the Scottish Government is able to abolish the bedroom tax, why isn’t the Welsh Government doing the same? So, I want a commitment from the Cabinet Secretary whether or not he will commit to abolishing the bedroom tax through the next budget round.

Dirprwy Lywydd, the bedroom tax is not a matter devolved to Wales.

We will continue our efforts to protect local government in Wales from the worst of the cuts to the Welsh Government’s budget. I repeat, however, the advice I provided earlier this afternoon that this year should be used by local government to plan for harder times and tougher choices that lie ahead.

Thank you for that answer, Cabinet Secretary. As you say, the number of questions you’ve already fielded this afternoon on this issue shows the importance of ensuring fair funding for local government, particularly in the times of austerity being imposed upon us by the Tory Government in Westminster. At the beginning of this month, Jeremy Miles and I attended a question-and-answer session of staff at Neath Port Talbot council in which they raised these concerns with us. They also raised other concerns such as the issues of grant funding and the hypothecation applied to that and the challenges they faced that could be avoided. When you announce your settlement on 10 October, will you look at the issue of hypothecated grant funding to see if you can actually put that into the RSG to ensure that councils can use the money as they best see fit to deliver services?

Dirprwy Lywydd, I read reports of the meeting that David Rees and Jeremy Miles had attended, and I absolutely understand the points that local workers in services were making about the pressures that they face and the impact of austerity in the lives of those that they try to assist. I have listened hard to what local authorities in Wales have said to me about moving more specific grants into the RSG to give them some more flexibility and to lift the bureaucratic burden, and I will be taking that advice very seriously as I move to outline the draft local government settlement on 10 October.

And finally question 9, Jeremy Miles.

The £1.3 billion Swansea city region city deal aims to boost the region’s economy by £1.8 billion and generate almost 10,000 new jobs. Two of the deal’s projects are based in Neath Port Talbot.

I thank the Cabinet Secretary for that reply. At the start of the city deal process, it was understood that the projects comprised within it, which draw both on public funding and private sector funding, would be evaluated and approved separately. It’s emerged, during discussions that we’ve had—with David Rees, and others in the region—that there may have been a change of approach at some point, requiring each of them to be signed off together, so to speak, which, given that there’s a mix of funding that contributes to each of those projects, obviously poses an obstacle to the execution of those projects. Could the Cabinet Secretary clarify what the Welsh Government’s position is in relation to this?

Well, Dirprwy Lywydd, I understand the point that Jeremy Miles is making. I think it’s important for me to say that when the deal was signed by the UK Government and the Welsh Government, together with local colleagues in the Swansea bay city region area, it was on the basis of 11 projects coming forward together to form a deal. Now, I’ve had further discussions with people locally as well. It remains important that those 11 projects develop as a coherent package. They are not 11 stand-alone separate things. They must mesh in with one another to create maximum impact. But I’m happy to confirm that we will not require all business cases to be signed off before funding for any one of them is released.

Thank you very much, Cabinet Secretary.

Item 2 is questions to the Assembly Commission. There are no questions tabled.

So, we move to item 3, which is a topical question. Andrew R.T. Davies.

In light of Transport for London’s decision to revoke Uber’s private hire operator licence, will the Cabinet Secretary outline the Welsh Government’s position on the firm’s presence in Wales? (TAQ0046)

Local authorities are responsible for licensing taxis and private hire vehicles in their local areas, and as part of the public transport system, the safety of passengers must be paramount. It would not be appropriate to comment on this case, but we will be tracking developments in readiness for the transfer of responsibility for licensing, which is expected in early 2018.

Thank you, Cabinet Secretary, for that answer. I appreciate licensing is a local authority issue, but obviously you have Cabinet responsibility for transport and it is important that there is a choice—a choice for consumers to actually engage with—whether it’s the more traditional taxi model or the Uber model that is available in some parts of Wales. So, is it your belief that that choice should continue to prevail here in Wales, or do you believe the actions taken by Transport for London and supported by the mayor, Sadiq Khan, should be replicated here in Wales, to withdraw that option of that choice for the consumer to engage with?

Well, we still do not know precisely what led Transport for London to reach the decision that it reached, so it wouldn’t be necessarily the proper thing to do to actually reach a decision in the way that the Member has asked. However, I have recently consulted on reforming the law in relation to the licensing of taxis and private hire vehicles, which will include the introduction of national standards. I am more than happy to recirculate the consultation that took place, together with the Government proposals that will tighten passenger security and passenger safety.

Uber’s business model is attracting quite a lot of attention: a 25 per cent return on somebody else’s capital—i.e. the drivers. I just wondered if you’d had any discussions with local authorities on how they can ensure that a company like this, which is not based in this country, can nevertheless make the appropriate contribution to the upkeep of the roads and the regulation of cars for hire, because other taxi companies are having to pay an appropriate sum, and it’s unfair competition if they are coming in and not facing this level of regulation.

The Member is absolutely right, and this point has been raised on numerous occasions during the course of putting together the consultation document that resulted in a good number of taxi firms agreeing that there should be a fair contribution. As tempting as it is to wade into the current disagreements, especially given the tribunal result last year, I haven’t seen the judgment—and this matter is between the licensing authority and the private hire company—but I can say again that our proposals for taxi reform will address some of the loopholes that Members in this Chamber have raised today.

Thank you, Cabinet Secretary.

Item 4 is the 90-second statements, and the first of the 90-second statements today is Mike Hedges.

Thank you. Tabernacle Chapel has been voted Wales’s favourite church or chapel. The Cymru Sanctaidd—Sacred Wales competition was launched by broadcaster and journalist and vice-president of the National Churches Trust, Huw Edwards, in July of this year. He called on the public to vote for their favourite church or chapel in Wales. Tabernacle Chapel has today been revealed as the winner, with 7,081 people voting for it on the Cymru Sanctaidd—Sacred Wales website. Tabernacle Chapel beat off competition from 49 other churches and chapels. A grade I listed building, Tabernacle Chapel was designed by Welsh architect John Humphreys, and it opened its doors in 1870. It was said to be the most ambitious chapel in Wales, and cost what was then a huge sum of £18,000. It is known as the cathedral of Welsh nonconformity. Tabernacle Chapel will receive a special Cymru Sanctaidd—Sacred Wales glass trophy, designed by Sandra Snaddon, and a prize of £500.

Later this week, the ancient town of Montgomery is preparing to turn back the clock 750 years to celebrate the signing of the Treaty of Montgomery. On 29 September 1267, King Henry III of England and Llywelyn ap Gruffudd, Prince of Gwynedd, signed the treaty, which recognised Llywelyn as the Prince of Wales. The 1267 treaty gave Llywelyn Builth, Brecon and Whittington Castle in mid Wales. He also received an assurance that no castle would be built at Hawarden for 60 years by Robert of Mold, securing the north-eastern border of Wales. However, following the succession of Edward I as King of England in 1272, relations between Wales and England deteriorated and Edward declared war on Llywelyn in 1276. To celebrate the seven hundred and fiftieth anniversary, Montgomery Town Council and partners have agreed a short re-enactment of the treaty signing, and local schoolchildren will be taking part. Later in the evening, there’ll be a mediaeval banquet and entertainment in the town hall, which I’ll be attending. I’m sure everyone will wish to join me in wishing the people of Montgomery well as they mark this special occasion.

On Thursday 7 September, I joined members of the local community to celebrate the opening of a new Co-op store on Canal Road in Cwmbach, in my constituency. In fact, I was delighted to be asked to formally open the store. The £0.5 million development brought a disused building back to life, providing an invaluable community resource and the creation of 16 brand-new jobs. It will also directly benefit community groups in Cynon Valley, such as the local football club, AFC Llwydcoed, Hirwaun OAP Association and Women’s Aid RCT. More importantly, this investment brought the co-op back to Cwmbach. As historian of the co-op movement, Alun Burge, has noted, the original Cwmbach Co-operative Society, founded in 1860, may be considered as the beginning of co-operation in Wales. In south Wales communities like my own, the strength of the co-op was in small Valleys towns. As was said of the Blaina co-op in the 1920s, it was the biggest thing in the valley outside of the coal industry itself. The co-op movement, with its commitment to education and cradle-to-the-grave services offered a way of life for many, through its extensive social provision. It was a pleasure, both as the granddaughter of a co-op worker, and as someone who grew up in Cwmbach, to welcome the co-op back to the village.

Thank you very much.

Item 5 is the motion to amend Standing Order 26 in relation to committee Bills, and I call on a member of the Business Committee to move the motion.

Formally.

Formally. Thank you. The proposal is to agree the motion. Does any Member object? No. Therefore, the motion is agreed, in accordance with Standing Order 12.36.

Item 6, again, is a motion to amend Standing Orders 11, 12 and 13 in relation to the Wales Act 2017 and the Secretary of State for Wales. And again, I call on a member of the Business Committee to move the motion.

Formally.

Thank you. The proposal is to agree the motion. Does any Member object? Therefore, the motion is agreed in accordance with Standing Order 12.36.

We now move to item 7, which is the debate on the Standards of Conduct Committee’s ‘Report 01-17 to the Assembly under Standing Order 22.9’. And I call on the Chair of the Standards of Conduct Committee to move the motion—Jayne Bryant.

Thank you, Deputy Llywydd. As Chair of the Standards of Conduct Committee, I formally move the motion.

At the committee’s meeting on 11 July 2017, we considered the report from National Assembly for Wales Commissioner for Standards in relation to a complaint made against Neil McEvoy AM, regarding his failure to comply with the rules and guidance of the use of Assembly resources, which is a breach of the code of conduct. The Standards of Conduct Committee gave the commissioner’s report careful consideration, and our report sets out the committee’s judgment as to the sanction that is appropriate in this case. The motion tabled invites the Assembly to endorse the committee’s recommendation.

Thank you. Neil McEvoy.

Diolch. I’m here today to apologise for using the media briefing room in a way that was inconsistent with the Standing Orders of this Assembly and the code of conduct for Assembly Members. I fully accept the findings of the committee’s report, because, when I’ve done something wrong, I admit to it.

I didn’t set out to break the code of conduct. The truth is, I didn’t know the code of conduct well enough at the time, and that’s nobody else’s fault but my own, and I accept that. However, the reason why I can be found to have broken the code of conduct is because there is a code of conduct that does apply to me. But there’s one person in the Chamber who the code of conduct does not apply to, and that person is the First Minister.

The First Minister’s answers to questions have been inconsistent on matters of fact, but the Presiding Officer has no power to investigate his behaviour. Even the Committee for the Scrutiny of the First Minister has no power to investigate on this, and I think it’s undemocratic and wrong. That’s why, yesterday, I wrote—

Sorry, Neil. Could I just ask you to think about what you’re saying in relation to the standards report, please?

I am. Okay.

And don’t stray away from its content.

The points that I’m making—and I’ll probably draw things to a close a little bit quicker than I want to. Because I fully accept the censure, if that’s the wish of the Chamber, and I fully apologise once again. But I believe the First Minister of Wales should refer himself, through the ministerial code of conduct—

No, you’re straying outside of the report. So, just think, and if you want to, that’s fine.

Okay. I’ll close by saying—and I wrote to the First Minister on this yesterday—no Member of this Chamber should be more equal than another. A code of conduct should apply to every single one of us. I did wrong, I made a mistake, I hold my hand up. Every AM should do the same. Thank you.

Do you wish to reply?

I’d just like to say, we’ve heard the Member’s apology, and to thank him for that—that he said that today. And I’d ask the Assembly to endorse the recommendation of the committee.

Thank you. The proposal is to agree the motion. Does any Member object? No. Therefore, the motion is agreed in accordance with Standing Order 12.36.

We now move on to item 8, which is a debate on the Economy, Infrastructure and Skills Committee’s report, ‘On the right track? The Rail Franchise and South Wales Metro’. And I call on the Chair of the committee to move the motion—Russell George.

Thank you, Deputy Presiding Officer. I move the motion.

In 13 short months, the running of most of Wales’s rail services will transfer to a new franchise. This is an exciting moment, and one that offers a once-in-a-generation opportunity for a new chapter in public transport in Wales and the borders. And it’s, of course, absolutely crucial that the Welsh Government gets it right.

The Economy, Infrastructure and Skills Committee’s report we are considering today sets out our views on the Welsh Government’s procurement of the next Wales and borders rail franchise, and phase 2 of the south Wales metro. The report sets out 10 key priorities for the new contract, based on a survey of almost 3,000 people in Wales and the Marches. This was a substantial and complex inquiry, which I think is appropriate, because this is the most substantial and most complex procurement process taken by the Welsh Government in almost two decades of devolution. It is the largest single investment decision Wales has ever made. And on top of being big, the process is innovative, which brings new opportunities and challenges.

The Welsh Government and Transport for Wales are using a competitive dialogue procurement procedure. A system that has been tried and tested in other fields—for information technology contracts, for example—but never before for rail procurement. They are also seeking to award the first major vertically integrated contract for rail services in Britain, where the successful bidder will manage the tracks and train services on the core Valleys lines. Now, considering this is the first time the Welsh Government has procured a rail franchise, I think it’s fair to say that it has not taken the easy or the safe option. What they are attempting to do is incredibly ambitious. In fact, I think I said at the launch that it’s heroically ambitious, and I think I used that term when I launched the inquiry.

The committee made 19 recommendations in this report, in three main areas: the procurement process, priorities for the franchise specification, and some rail infrastructure issues that came out of our evidence. On the procurement process, we identified a number of risks and challenges, and these include the need for agreement with the UK Government on devolution of procurement powers—still not devolved despite agreement being reached to do so in 2014; funding; and also the transfer of ownership of the Valleys lines to the Welsh Government. Since the report was published, there has been much discussion between the UK Department for Transport and the Welsh Government. Public correspondence between the Cabinet Secretary for Economy and Infrastructure, Ken Skates, and the Secretary of State, Chris Grayling, has only served to put some of the tricky issues that remain to be resolved into the public domain. I know the Cabinet Secretary will tell us this afternoon–as he told us in committee this morning—that progress has been made.

The delays we have seen so far mean there is very little room for contingency. From now on, everything will need to run exactly to timetable, which isn’t always the case as regular rail users will know. For passengers, the priority is getting the new contract in place and getting services running, and I hope both Governments will do what they can to resolve these differences and allow passengers in Wales to enjoy the twenty-first century rail services that they are crying out for.

The second part of our report covered priorities for the franchise specification, and the committee set out its top 10 priorities to improve the quality and value for money of rail services, and they include: one, effective monitoring; two, a greener railway; three, an integrated network; four, adaptable services; five, affordable fares; six, new trains; seven, better communication; eight, modern stations; nine, fair fares; and 10, reduced disruption. The committee’s survey received almost 3,000 responses from all parts of the network. That’s an overwhelming response, I think, to a committee survey from the Assembly. And key priority areas for passengers were, in this order: punctuality and reliability; capacity of seats when you travel; journey times and frequency of service; price of fares; and handling delays and disruption. Just below that level, passengers wanted to see: connections with other train services; quality; clean trains; access and facilities for older people and for people with disabilities. Our results mirror findings by consumer watchdog Transport Focus in their annual surveys. Passengers want and expect the basics done right in the next franchise.

The third and final area we covered was rail infrastructure issues. We hadn’t intended to cover these, but the evidence we received was of sufficient concern that we could not ignore it. The committee urged the Welsh Government to continue to lobby the UK Government for rail electrification in north Wales, and the redevelopment of Cardiff station. Our concerns about the Swansea line proved to be well founded as, following publication of the report, the UK Government Secretary of State for Transport announced that plans for rail electrification to Swansea would not take place. The arguments being used by the UK Government to justify this decision—faster journey times while avoiding disruption—cast a shadow of doubt, of course, over the north Wales electrification as well.

In its response to our report, the Welsh Government has accepted 10 recommendations, with the remaining nine accepted in principle. I’m pleased that the Cabinet Secretary shares the committee’s vision of a high-quality integrated transport network. I look forward to the publication of a summary of key elements of the new franchise specification in due course. I also look forward to the urgent resolution of the outstanding issues to be agreed with the Department for Transport and Network Rail. There remain questions—

Will the Member give way?

Yes.

I’m grateful to him for giving way. I know we are discussing a report that he’s already produced, but I was also aware of the evidence taken in the committee this morning. It seems that it is not resolved yet as to whether the franchise powers will be devolved in time for the agreement to be made. Is he content that an agency agreement is sufficient cover for both the Welsh Government and the Welsh taxpayer, to ensure that this franchise arrangement is strong enough?

I would hope that the Cabinet Secretary will be able to respond to that specific point when he comes to bring his conclusions.

There remain questions—or perhaps the Cabinet Secretary won’t be able to answer all the questions today. But exactly what role the Government wants Transport for Wales to play is another question as well, and how it will ensure that Transport for Wales has sufficient people with the relevant skills that are required. The committee understands that Transport for Wales has been created to be flexible. But, as time ticks on, like any public body, in order to deliver, it will need clear instructions, clear expectations and sufficient funding and expertise to meet the challenges. There remain questions around how the Government will demonstrate value for money in the new franchise. To my mind, it’s not enough to say, and keep saying, that competitive dialogue drives value for money. Whilst a process can make value for money possible, it cannot itself demonstrate value for money. The process may, after all, be mishandled. The recommendation has been accepted by the Government, yet it’s hard to see, in my view, how Cabinet Secretary’s response moved beyond his evidence to us in April. I’m not convinced it will be enough for the Wales Audit Office, and neither for the people of Wales. We need to see clear evidence that this major contract offers value for the public money involved.

Finally, in the response—recommendation 14—there is a strong suggestion that the Welsh Government may be moving away from running freight on the core Valleys lines. This is a move that could have a significant knock-on effect for businesses wanting to use the lines to move goods in or out by rail in the future, and reduce opportunities to move freight off our roads. It is not to be taken lightly, and I trust there will be a thorough evaluation of costs and benefits both now and in the future before irreversible decisions are taken. I look forward to the debate today and hearing Members’ views, and comments from the Cabinet Secretary.

Thank you for your report. I think the issues it raises for my constituents is that the competitive bidding process has made it very difficult for residents of my constituency to be able to be part of the consultation on where they want the metro to be in order to enable them to make that modal shift transfer. I hope that once we do get round to awarding a contract to the new franchisee, they will instantly start to engage with citizens in order to ensure that their views are properly reflected. Because if we’re going to get modal shift from the motor car to the metro, it obviously has to be put in in places where people need to travel to, particularly around travelling to work, because we cannot go on with the situation we have at the moment, where far too many people are commuting into Cardiff by car, with all the adverse impact that that’s having on people’s health. I look forward to hearing how the Cabinet Secretary thinks we’re going to be able to fast-forward that arrangement once we have established who the franchisee is going to be.

As our report states, for the Welsh Government to be letting a franchise for the first time represents a big challenge, and as the Welsh Government response states,

‘Passengers expect a high quality and efficient service that is affordable and accessible to all.’

In this response, the Cabinet Secretary states that if the Welsh Government secured the repeal of section 25 of the Railway Act 1993, they would take steps to ensure that future franchises are developed on a not-for-profit model. I proudly spent my previous career working in the mutual, not-for-profit sector, and they must be allowed to compete on a level playing field. However, because of my experience, I also know that they’re just as capable of inefficiency, poor service and financial failure as any other model. How then can the Cabinet Secretary justify putting such a monopolistic approach before his responsibility to passengers and taxpayers?

As UK Department for Transport officials told committee,

‘concession models can work in urban environments…but…on wider franchises such as Wales and borders, giving bidders the flexibility to innovate, develop new services, develop new ticket products, being incentivised to do so by the profit motive, is preferable.’

We also heard that—and I’m quoting—even the Chinese Communist Party recognised the need to incentivise risk.

In accepting recommendations 12 and 13 in principle, the Cabinet Secretary states that, as part of the procurement process, he expects to see higher quality rolling stock introduced, and that this will help to reduce the impact on the environment. In April, I hosted the Senedd launch of Furrer and Frey’s white paper for developing sustainable, agile, multimodal transport solutions for Wales. Speaking afterwards with Vivarail, the company rebuilding former London Underground metro cars for mainline use, they told me that they have sufficient stock to produce just over 70 three-car trains and that they could give us a fuller picture of the next steps for their business, including new battery-powered and hybrid trains. They also said that they were in discussions with Wales and borders rail franchise bidders. I shared this with the committee, and I think I raised this with the Cabinet Secretary in committee, and hope that he can update us on this today.

In accepting our recommendation 14 in principle only, the Cabinet Secretary stated that he was reviewing freight policy for the core Valleys lines and would update committee once the policy position had been confirmed. After discussions with the chair of the Rail Freight Forum and the Chartered Institute of Logistics and Transport at the Furrer and Frey event, I shared with committee his statement that rail freight is an important component of the Welsh economy, keeping 4,000 maximum-rate heavy goods vehicles off the roads each day and reducing carbon emissions by 76 per cent, but he said this must, of course, be protected in any enhancements to passenger services under the franchise. There is potential for increasing further the use of the Welsh rail network for freight, notably for slate waste and timber in the north and intermodal traffic along both the A55 to Holyhead and the M4 from the Thames to south Wales. I therefore hope that the Cabinet Secretary can say more about this today as well.

It is concerning that he only accepted in principle recommendation 15 that the Welsh Government should establish robust passenger and stakeholder engagement structures, including strong representation from the English regions. In July, I hosted an Assembly event organised by the ESP Group, highlighting the importance of inclusion and well-being in the design and delivery of transport services in Wales. They work in the area of inclusion and well-being in transport, including dementia and transport, older people and car cessation, rural transport and younger people accessing jobs and training. What engagement, therefore, has the Cabinet Secretary had or will be having with organisations such as the ESP Group and the Community Transport Association on this critical agenda?

It’s also concerning that the Cabinet Secretary only accepts recommendation 16 in principle, where the chair of the body set up by the Welsh Government to deliver the new franchise, Transport for Wales, a senior civil servant in the Welsh Government, should not be line managed by his own deputy. As the committee report stated, these arrangements are highly unusual and not sustainable.

Finally, given the Cabinet Secretary’s identification of risks and consequences arising because the UK Department for Transport was not in a position to support his intended tender issue date for the Wales and borders rail service, the UK transport Secretary’s response on 8 August, detailing what still needed to be done by the Cabinet Secretary to underpin this, raises serious questions.

Can I thank Russell George, first of all, for an excellent introduction to this report? I’m pleased to be able to contribute to the debate this afternoon. Plainly, rail is not devolved to Wales at the moment. In particular, rail infrastructure is not devolved, and, obviously, the franchising process, meaning passenger service procurement, similarly remains not devolved.

Now, despite every commitment to the contrary, Labour will hand the next rail franchise to a private sector operator, and, by all the evidence so far, they are even failing to do that effectively. Incompetence from Westminster and the underperformance of Labour here has meant that delays to the devolution of the Welsh rail franchise will already cost taxpayers an extra £3.5 million, and possibly derail—pun intended—the whole franchise procurement process.

A £1 billion black hole remains in the funding of the franchise, and the Welsh Government still does not have the powers to procure the franchise. I look forward to an update. Westminster’s apathy and Labour’s issues here are costing Welsh taxpayers millions and could mean delays for rail passengers.

Now, more on the delays in transfer of rail procurement powers, Plaid Cymru politicians in Westminster and here have consistently highlighted concerns that the transfer of functions relating to procurement has not taken place. We’ve noted several responses before and obviously we’ve had some public responses over the summer, but those issues remain unresolved and the franchise and tender documents still do not appear to be fully functional.

Now, despite various commitments in their manifestos and on the floor of the Assembly, Labour in Cardiff have shortlisted four train operating companies to run the Wales and borders rail franchise, as we all know, from October 2018—four private operating companies. Labour claim to be restricted by the Railways Act 1993, which precludes public sector operators, which is the clarification sought in recommendation 2 of the committee’s report. But it’s fair to note that, during the passage of the Wales Bill, now the Wales Act 2017, Labour in Westminster attempted to amend the 1993 railways Act to allow a public sector rail operator to compete for the Welsh franchise, as is the case in Scotland since the most recent Scotland Act. But despite failing to gain this concession, they supported the Wales Bill LCM here in the Assembly, making any long-term commitment to public ownership somewhat vacuous, considering they supported a Bill that actively precluded them from doing so.

So, challenges remain as regards tendering and the whole franchise procurement process. I look forward to the Cabinet Secretary’s reply this afternoon. As I’ve mentioned, delays have already cost taxpayers an extra £3.5 million: money that ideally should have been used towards improving rail services and the litany of issues identified by passengers that Russell George ran through at the start, moneys that could have been used to improve accessibility and improve facilities, train punctuality, cleanliness, and to bring about fair and affordable ticket prices. But at the end of the day, is control over our own railway system too much to ask? Diolch yn fawr.

Well, Dai Lloyd’s put himself through some intellectual contortions there in order to pin the blame on the Welsh Government, and I think that’s deeply unfair, particularly given the depth and breadth of evidence that was gathered in this report. I really don’t think that Dai Lloyd did it justice with that speech. I think it was deeply, deeply unfair. It is absolutely the case that the previous franchise is a failing franchise, and every time a constituent in Caerphilly gets on a train to travel either from Rhymney to Cardiff or any point on that journey, I can hear people getting angry. Overcrowded trains, poor quality carriages, trains that are regularly late and expensive ticket prices—these are all things that are not good enough, but that’s a failure of the previous franchise and it’s something that the Welsh Government is taking steps to address.

The other thing I would say is I’ve raised these issues with Arriva time and time again, and although I would question Arriva’s competence as a corporate body, individual members of staff at Arriva have been incredibly helpful and supportive in trying to find solutions, for example in finding ways to add two carriages in the morning to the peak first two-carriage service of the day on the Rhymney-to-Cardiff line, which travels through Bargoed and Caerphilly. They’ve been incredibly helpful in trying to achieve that, and have also added additional Sunday services on the Rhymney-to-Cardiff line. So, they are, I think, doing their best, including heroic jobs to keep the poor-quality Pacer stock running on the service.

With regard to the report, recommendations 5 and 7 concern that responsibility for the core Valleys lines and the need to secure adequate funding and mitigate liabilities and risk, and the Welsh Government has accepted those recommendations, and recommendations 10, 12 and 13 concern the issue of rolling stock that I’ve just mentioned and the need for the next franchise operator to ensure that enough is provided to deal with these numbers. The issue is, of course, rolling stock: that if it’s diesel and not electrified, it’s very hard to get hold of, and indeed procuring new rolling stock takes a number of years, which is a challenge I’m sure the Cabinet Secretary will be addressing immediately.

Yes, of course.

I thank the Member for giving way. He rightly points to the age of the rolling stock on the Welsh franchise. I wonder if he agrees with me that due to the age of the rolling stock and the incidents of doors jamming and even fires on them, built into the next franchise contract—whoever gets it—should be a commitment not to cut the number of guards on the Welsh franchise from the point of view of the safety of the passengers and the staff that have to use such old rolling stock.

Safety is an issue that the Secretary should be considering and he’s nodding, so he’s heard what you’ve just said; absolutely fair. The other issue, of course, is the funding dispute that’s currently going on with the Welsh Government. The Cabinet Secretary gave evidence this morning to the Economy, Infrastructure and Skills Committee, and he showed remarkable restraint, and I think it’s subject to the fact that he’s having ongoing dialogue with the UK Treasury and I would expect nothing less from him. Nonetheless, I reserve the right to say the UK Government has let us down. In 2014, the transport Secretary in the UK Government wrote to the predecessor of the Cabinet Secretary to say the block grant would be unaffected and reasonable protection provided against the impact of regulatory reviews and track access charges. That promise was made to safeguard that. That was further made to the predecessor Committee to the Economy, Infrastructure and Skills Committee in 2015—September 2015—an official from the Department of Transport made exactly the same promise and, therefore, the Cabinet Secretary was able to tell the Committee in April this year that we expected the block grant to be reasonably protected from the impact of track access charges. Something has changed; something has changed in the UK Government and we can’t work out what it is. The UK Government are now refusing to safeguard the block grant from those track access charges, which is threatening this rail franchise and the Government working hard to resolve it. I think it’s a good thing that that issue has been separated from the issue of the awarding of the contract, but this is something that must be resolved, and I can see that the Cabinet Secretary will work on that. If the Welsh Government is to effectively implement these recommendations in the report without being hamstrung financially by the UK Government, then we could see a transformation of rail services. And what I would say to Dai Lloyd is that I’m seeing a Welsh Government working hard to do that, in spite of difficulties that have been put in the way by the UK Government, and I urge all parties in this Chamber to get behind this report and get behind the Government in resolving this rail franchise.

It must be acknowledged by all parties in this Assembly that the intransigence of the UK Government in both the commitment to funding and the devolution of the necessary powers to the Welsh Government is making procurement and the franchise award infinitely more difficult for the Welsh Government to realise its ambitions for rail services in Wales and the delivery of the metro. This must also be seen in the light that in order to deliver these objectives, the Welsh Government has decided to instigate a totally new governing body in the form of Transport Wales. We also acknowledge the huge complexities in the transfer of the ownership of the core Valleys lines and the ongoing commitment this means for the Welsh Government. Perhaps the Cabinet Secretary could also update us on the position with regard to the £125 million that was promised for electrification of the core Valleys lines, and whether this will be forthcoming if electrification does not go ahead. Given these issues, or perhaps one would say ‘almost insurmountable difficulties’, is the Cabinet Secretary confident that the aspirations of the Welsh Government for the rail network in Wales, as envisaged, will indeed by achieved?

Following an update session with the Cabinet Secretary’s staff yesterday, I fully understand why the Welsh Government has decided to go ahead with the issues of the tenders. We were told that if matters went beyond Christmas, there was a very real possibility of two bidders dropping out of the tender process. UKIP calls upon the UK Government to give full funding and devolvement to the Welsh Government.

It’s a pleasure to be able to contribute to this inquiry and to the resulting report as well, as a Member for a Valleys constituency, where improvements in rail infrastructure are so very desperately needed. For my contribution today, I want to focus on just a few of the recommendations. First of all, recommendation 10 is critical to ensuring that we meet future demand. The previous franchise, as has already been mentioned, failed to make any provision for growth, whether through carrot or stick, and we are facing the consequences of this now. My constituents frequently contact me to complain about the cramped travelling conditions they can face during peak-time journeys. So, I welcome the Welsh Government’s accepting of this recommendation, both in terms of expecting bidders to show how they will build in the capacity to meet demand, and how they will use a range of tools to monitor passenger satisfaction.

Recommendation 12 raised the linked issue of those occasions when passenger demand spikes, for example, in connection with sporting events in Cardiff. Just yesterday, I met a group of my constituents here who’d come to visit the Senedd, and the very first thing that they wanted to speak to me about was the challenges that they felt they faced in accessing rail services when they want to come to the capital city to attend football or rugby matches. It is good that the Welsh Government has accepted this recommendation in principle, but I am still concerned that bad experiences on occasions like this could deter people from relying on our train services and using them on a more regular basis, when we so desperately need to try and convince more of our citizens to make that shift from the car onto public transport.

The Welsh Government accepted our recommendation 17 that

‘the evidence base for future decisions and prioritisation of the Metro considers the spatial context.’

But I have some reservations here on the need to get this right. ‘Prosperity for All’ committed itself to

‘ensuring that all new and significant developments…are sited within easy reach of a station.’

This is a laudable aim indeed, but I would appreciate clarification that this could refer to bus as well as train stations within the context of the pan-south Wales metro. My reason for saying this is because I feel there are particular challenges around the topography of the Valleys, and the northern Valleys such as Cynon in particular, where our most disadvantaged communities are the ones that are actually furthest from the railway line. It’s really important that we recognise that and that future developments don’t just restrict themselves to that central flat Valleys floor, but are actually encouraged to go further up into the Valleys where we will see the bus stops for the metro as well. I think that’s an important social justice angle and one that I would appreciate some clarification on.

I have to say that a lot of these arguments are very familiar. I think that those of us who have served since 1999 are now affectionately known in the Assembly as ‘the lifers’—[Laughter.]—and it does feel that way sometimes. I see there are two other lifers in the Chamber. Indeed, Dr Lloyd was first elected in 1999, but because of his good behaviour, he was given a brief period of parole, but of course we are delighted that he’s back serving his time. The point I want to make is that, when all this was discussed in 2003, we didn’t have the powers. These wider arguments about infrastructure and how we would be able to control the wider sort of environment so that we could make effective decisions were discussed. When I was Chair of the Audit Committee, there was a report pointing out some of the shortcomings in the procedures that were adopted and, you know, regretting perhaps the decision of the Welsh Government at that time not to take these powers because they thought they were getting such a poor deal from the UK Government—then, of course, a Labour Government. So, I think it is really important that the committee points to the issue of more effective collaboration being required between the different Governments, because there’s a strategic issue here, and it’s slightly depressing that, 15 years later, people are making similar points. I don’t express how valid they are, but, clearly, many people hold these views and some of them, no doubt, do have some substance.

Can I say that I particularly note, as a Member serving the Valleys, that the risk of transferring ownership of the Valleys lines to the Welsh Government does concern me, as does the rather sad plight of freight in the Valleys? Most of the Valleys networks were actually developed for freight, and it was a secondary thing to have passenger transport on them. So, I do think we should be very careful about losing that capacity to carry freight.

I’m particularly pleased to see the recommendations around greener railways, effective monitoring and affordable fares, as well as the redevelopment of Cardiff Central station and the long-promised rail electrification to Swansea. I’d say, as a Welsh Conservative, that I only wish that that commitment had been maintained, and we’re completely right to argue that it should be reinstated.

I’m a regular user of Arriva trains, and, you know, I speak with experience about the quality of the service over that time, but it actually does return to a rather dull franchise being awarded in the first place. I noticed that the Welsh Affairs Committee looked at this and called the service rather ‘old and cramped’ and said that at the heart of the failure was the inability to anticipate remarkable passenger growth. We should be celebrating the passenger growth. In fairness, I don’t know quite how active Arriva Trains have been in that but, I mean, it has happened, and that ought to be something that we really want to take further because that rather dry phrase ‘modal shift’ is really, really important. Even in the last few years, this process has continued with over 0.25 million extra commuters now using the service in south Wales, so those are really important things.

I want to make some more general points about freight, having referred earlier to the Valleys. I’m not quite sure that the Government knows quite where it’s going, because the previous administration under Rhodri Morgan did identify freight and its growth and development as being really important, so I’m disappointed that you are only accepting recommendation 14 in principle. I have to say, as a former Chair of the Constitutional and Legislative Affairs Committee, I never quite like Governments when they accept ‘in principle’ because you don’t really know what that means, do you, other than some sort of milk-and-water endorsement that doesn’t get you very far? But, the Cabinet Secretary’s response highlights that the demand for freight has reduced recently due to the closure of opencast mining in some areas. But, previously, the potential for increasing freight in such areas as maritime containers has been identified by the Government, and I fear that perhaps they’re losing sight of that now.

The report says that the Government’s intentions are on a heroic scale and I don’t think we should criticise them for that, but we do need to ensure that the monitoring and scrutiny is effective, so that some of these ambitions are realised. But, I do congratulate my colleague Russell George and his committee members on a thoroughly good piece of work. I think this report will stand us in good stead to monitor the Government’s performance in the future.

I’m not sure in what level of detail Dai Lloyd was able to read the committee report, but I suggest it might bear re-reading, because it represents a much fairer balance of the issues than he found himself able to represent in his speech.

The rail franchise is an example of the tortured transition in which we find rail devolution: a franchise where the powers are held in Westminster, but are exercised by Welsh Ministers, where the Welsh Government has pumped in millions of its own resources to plug gaps in funding for a franchise that isn’t even devolved, and where rolling stock is falling apart because the Welsh Government doesn’t have the power, and the UK Government doesn’t have the inclination, to order better stock in a timely fashion.

We’re approaching a situation now where the franchise is being let despite of, not because of the UK Government, in my view. Nowhere was this clearer than in the evidence of the Department for Transport to the committee, which suggested to me that the UK Government had all but washed its hands of responsibility for the franchise, whilst, at the same time, dragging its heels on devolving the powers to the Welsh Government. That is the absolute antithesis of good government and transparent administration. And so the rail franchise runs the risk of being trapped in the first circle of Dante’s hell, which the First Minister spoke to the Labour conference about, which is a state of limbo.

Powers should’ve been devolved in January of this year. We now hope that they’ll be devolved by the end of this year, but as we heard in the committee this morning, that may not even be the case by the time the franchise is let. All the Department for Transport officials could say, when they came in front of the committee, was that the franchise could be delivered in time with a fair wind. But, far from a fair wind, we’ve seen storm clouds gathering over the summer months, as the devolution of powers was linked to yet another financial dispute, this time over track access charges, which could adversely impact the Welsh Government to the tune of £1 billion. As Hefin David has already mentioned, the 2014 agreement between the UK Government and the Welsh Government confirmed that the block grant would not be cut, which is, in effect, what the UK Government is now planning. As we are in the midst of Brexit, we are used to being told repeatedly that this is a UK Government that meets its obligations to the European Union. Well, it’s now time for it to meet its obligations to Wales.

We’ve already seen, as the report lays out, the question mark that arose over the UK Government’s commitment of £125 million to the Valleys lines electrification and we know what’s happened in relation to the promise of electrification west of Cardiff. This situation is compounded by the persisting limitation caused by the failure to repeal the Railways Act 1993 in Wales, which, in truth, frustrates the Welsh Government’s scale of ambition in introducing a genuinely not-for-profit operation across all aspects of the franchise in Wales. This was dispensed with by the UK Parliament in relation to Scotland; it should’ve been and needs to be in relation to Wales as well. I agree with the Welsh Government, with our rail unions, the Co-operative Party and others in this Chamber that we need a genuine not-for-profit solution across all aspects of the franchise. I’d like to hear from the Welsh Government that it plans to continue pressing for the repeal of that provision in the Railways Act and what it will do during the lifetime of this franchise if it succeeds in that aim. I’d also like to encourage social enterprises and co-operatives to engage with the procurement of the range of ancillary services that will need to be in place when the franchise has been let.

We all look forward to a better, more passenger-focused franchise for the next 15 years than we have seen in the current franchise, and we want to see the metro come to fruition quickly. We call it ‘the south Wales metro’, but let’s not make the mistake of believing it solves the transport needs of all of south Wales. It’s, in truth, the south-east Wales metro. It’s no less important for that, but the real prize here is to see this as the beginning of an integrated rail and bus service that allows our citizens to travel from Monmouth in the east to Hirwaun, down the beautiful Vale of Neath to the mainline station at Neath, and on to a Swansea bay region integrated transport west to Mumbles, Llanelli, and beyond.

Can I thank the Economy, Infrastructure and Skills Committee for the report? And, in doing so, I’d like to support the importance of the metro network as a whole and the related investment in my own constituency. It’s on that particular point that I’m going to confine my more generalised comments, rather than the more specific comments on the franchise as a whole.

Both Merthyr Tydfil and Rhymney valleys have rail lines connecting them to Cardiff and the wider rail network, and both of these lines have seen new investment, for example in new stations, platforms and signalling, but the frequency of those trains remains an issue. For example, Merthyr is less than 25 miles from Cardiff, but the journey time of over an hour is not a pleasant experience in a dirty, overcrowded train. That’s the kind of thing that needs attention if we are to encourage more people onto the trains to help reduce the use of cars around our capital and to make all travel more sustainable, and indeed encourage people to travel in the other direction from Cardiff and all other points in between.

Similarly, the Rhymney valley line: again, we’ve seen investment in that route, as Hefin referred to earlier, but journey times clearly need attention. And, as Jeremy Miles has said, the metro is not just about trains. The other aspect that requires our attention is the importance of local bus services. These are often the vital lifeblood that help people to move around local communities, and I note that these matters weren’t directly addressed as part of the report, but they will be an important part of providing better connections as part of the whole metro package.

In this age of flexible working and people holding jobs in different locations, we could usefully think about how we provide a network of bus services that better meets local needs. For example, it can be difficult, if not impossible, to get services around some parts of Merthyr after the traditional working hours of 5.30 p.m., and, if we are to give people who don’t have their own transport access to work opportunities, or, as Jenny Rathbone was saying earlier on, encourage them out of their cars, if they have them, that needs to be improved, and more flexible travel arrangements provided as the metro network evolves.

I also think we need to be careful that we don’t end up with people perceiving the south Wales metro as just new trams serving Cardiff Bay, but then missing out on the vital investment elsewhere. But, like all of our committee reports, we’re also hostages to events, and, again, Jeremy Miles and David Melding have already remarked on this, that, when this report was published in July, the concerns being expressed over the electrification project have since become a hard reality, and we can now see, unfortunately, another broken Tory promise to the people of Wales.

So, I just want to thank again the committee for the report, and to hope the Assembly accepts the recommendations, and that we ensure that the Welsh Government remains firm about its investment plans and the needs of the whole transport network across south-east Wales.

I call on the Cabinet Secretary for Economy and Infrastructure, Ken Skates.

Thank you, and thank you to all Members for your contributions today, and especially to members of the Economy, Infrastructure and Skills Committee for their report and the very welcome scrutiny that the committee has given to this important matter. I’d also like to place on record my thanks in particular to the Chair of the committee, who I believe has led an excellent exercise in an entirely impartial and objective way.

Over the summer, I’ve been involved in complex and, at times, as you will have seen, controversial discussions with the Secretary of State for Transport. But my priority is securing a way forward that is in the best interests of the people of Wales. Now, firstly, I’d just like to briefly touch on where we have come from with the current franchise. Members have already identified the incredible growth in passenger numbers, up 60 per cent between 2003 and 2017. It’s a staggering fact that the Welsh Government, since 2011, has invested £200 million in the network, in spite of the fact that rail infrastructure remains non-devolved.

Looking forward, we need to ensure that our network can facilitate growth, and I do welcome your views within the report to help support me in achieving this. My ambition is to lay the foundation for a network of transport infrastructure across Wales, and especially within the metro area, that has the potential to deliver a step change in the way that we can use transport and, in the south Wales metro area, to develop a model that can act as a blueprint for elsewhere in Wales.

I agree with the committee’s 10 priorities for the procurement of the new Wales and borders rail service. These are reflected in our requirements for the next rail franchise and are included in the procurement specification and across the evaluation criteria.

I would like to briefly touch on a number of points that Members have raised this afternoon. Firstly, the contribution from Jenny Rathbone—I can assure you, Jenny, that the design of the metro will take place in a way that complies with the objectives of the well-being of future generations Act, especially as far as consultation with communities and with passengers is concerned, and in a way that promotes active travel and encourages modal change.

Mark Isherwood, you spoke about the need to reward risk. I’d heard that within the banking sector prior to the financial crash. It’s my view that the current franchise offers no demands for service improvements, as Vikki Howells has identified. Instead, our proposals will incentivise—

Yes.

Do you recognise that a number of not-for-profit mutual banks and building societies also crashed for the same reasons as some of the for-profit larger banks?

I do, but I would insist again that it was because of the risks that those larger banks, particularly on the other side of the Atlantic, were taking—that led to the financial crash, and we should learn from that. I doubt that many Members in this Chamber would support any approach that leads to an operator maximising profit at the expense of reinvesting that money in the Welsh network. So, our proposals instead will incentivise service enhancements, but there will also be a cap on profits so that we can reinvest excess profits back into public transport. I think that is exactly the right approach to take.

Jeremy Miles and Hefin David both responded accurately and fully and properly to the contribution of Dai Lloyd.

I'd like to now just touch on some good progress that we have made against the committee’s priorities. We’ve recently procured 20 additional train units. The lack of capacity on the network is one of the most frequently raised issues in my department. I’d like to pay tribute to a number of Members in this Chamber who regularly raise it on social media and with me directly, including Hefin David, who is a great champion for his constituents, regularly posting videos about the frustrations that his constituents have on the rail network. The 20 units will be commissioned for use from June 2018, providing additional resilience to the existing fleet of trains, but they will also open up the opportunity for us to enhance the existing fleet for persons of reduced mobility. These additional trains will provide the capacity that is required for us to make all trains accessible for persons of reduced mobility. I have committed to removing the old Pacer trains as a priority replacement procedure.

By undertaking wide-ranging engagement, by gathering public views on the policy priorities for the next franchise, we have been able to incorporate views expressed by the public transport users as a fundamental part of our thinking throughout the procurement process, and we fully intend to deliver on the public’s expectations. I am pleased to announce that, following the process of competitive dialogue, we will be issuing final tenders tomorrow, with the intent to find a preferred partner early next year.

A key issue referenced within the committee’s report is funding for the core Valleys lines. I have had a positive dialogue with the Secretary of State for Transport, and my officials are currently working with counterparts in the UK Government to agree the final details needed. Furthermore, I agree with the committee that we must secure a robust agreement regarding the transfer of ownership of Valleys lines. Initial headline terms have been developed between the Welsh Government, supported by Transport for Wales, and Network Rail. An agreement has been made to enable further and more detailed development work to be undertaken alongside the procurement process. I’d just like to—[Interruption.] Yes, of course.

Thank you for giving way, Cabinet Secretary. You’ll probably recall that yesterday, in the business statement, I raised the issue of the rolling stock. I know it’s secondary to the core of this report, but would you agree with me that it’s important, at the earliest opportunity, for the Welsh Government to engage with the franchise, with the new franchise holder, to make sure that that rolling stock—new rolling stock—is brought on stream as quickly as possible, so that the Welsh public get the full benefits from the new franchise?

I would agree entirely that the Welsh public would expect nothing less of us, and that will certainly happen. I’d just like to also address a number of points raised by Vikki Howells, Dawn Bowden and David Melding, and also Jeremy Miles. Both Vikki Howells and Dawn Bowden raised the important point that the metro must be a piece of infrastructure, a public service, that spreads wealth-creating opportunities across all communities. It is a multimodal service, and will comprise more than just rail services. Where rail services are unable to reach, we anticipate new bus services to be able to carry passengers to and from services and to and from places of work. And, further, through reforms to local bus services, we would aim to improve the delivery and the accountability of bus service managers to the communities that they serve.

David Melding raised the point that many of our railways across Wales, and indeed the UK, were designed for freight, especially the movement of industrial goods to ports, and also munitions to and from factories at times of war. We have an ongoing programme of liaison with businesses, such as Tesco and Aldi, as well as with freight operators, to discuss the modal shift opportunities and how we can help, including the potential for public subsidy.

However, there are major challenges in persuading the market to shift to rail generally, and specifically to Wales, because of the relative lack of critical mass, even in south-east Wales. That said, accommodating existing freight needs and future growth in freight is an integral part of the procurement process for the next franchise, including metro.

Jeremy Miles and Hefin David made important contributions, offered a fair, accurate, and objective analysis of the frustrations that we have encountered over recent months, and also identified the need for us to have the powers that we’ve been pressing for and will continue to press for. Should we be successful, in particular in seeing the repeal of section 25 of the Railways Act, as has been the case in Scotland, we would take steps to ensure that future franchises are developed on a not-for-profit model. Whilst I recognise the obstacles and the risks that need to be overcome to achieve my ambitions, it’s important to appraise the benefits that vertical integration of the core Valleys lines can provide. It opens a range of long-term opportunities for us to develop a railway that meets the needs of passengers and provides important links between communities and connectivity to employment opportunities.

So, while reflecting back on the hard work that has been done to date, there is more work to be undertaken if we are to realise our heroic ambition. This is the largest procurement exercise the Welsh Government has undertaken, and I realise the challenges this brings, including the complex negotiations that remain, but I hope that I can rely on your continued support in delivering a vastly improved transport system that will benefit every citizen in Wales.

I now call on Russell George to reply to the debate.

Thank you, acting Presiding Officer. Can I thank the Members who have taken part in this debate this afternoon? To pick up on a few points myself, Jenny Rathbone made some points about public involvement, and the committee really agreed that the competitive dialogue process did make it very difficult for public engagement and involvement. This was certainly noted. We’re pleased that the Government accepted our recommendation to produce a user-friendly specification, but still the concerns remain about public involvement in a competitive dialogue process, which is perhaps a lesson to be learnt.

Now, the Cabinet Secretary—I thank him for his comments about my being fair and objective as Chair of the committee. I don’t intend to get drawn into party political matters in my contribution this afternoon, but I would agree that I am disappointed, as others are disappointed this afternoon, that there has been that delay in the devolution of powers, and I hope that those issues will be resolved.

Hefin David made some points about track access charges, and I would agree with Hefin to a point—with his view that something has changed. My view is that there’s some missing information that our committee is not aware of. There are some gaps in the story, and those are yet to be revealed, and that’s potentially a future piece of work for us to do. In fact, I am very pleased that the Welsh Affairs Select Committee will be undertaking an inquiry, which may well draw out some of those missing gaps that we’ve talked about today. I hope that our committee can have some involvement with that piece of work in some way as well, and I’ll certainly be writing some letters in regards to working across those two committees.

I should also say that I have also written as the Chair of the committee to the Secretary of State, Chris Grayling, and asked him to appear before our committee. Certainly as a committee we’re more than happy to accommodate him on our timetable; we will move our timetable to accommodate him. Also, I would say, I am pleased that, since that public correspondence between the Secretary of State Chris Grayling and Ken Skates over the summer, where there appeared to be a lot of contention in those public letters, it seems to me that there has been a positive move forward in recent weeks. And, in fact, the fact that the Cabinet Secretary has announced today that the tenders will be issued tomorrow, which is a new piece of information that he’s relayed to us this afternoon—I think that demonstrates in itself that there’s been a lot of goodwill and working, and a goodwill gesture, between both Governments in recent days and weeks.

I think it’s also right that I do thank a few people as well. I certainly thank our 3,000 contributors to our survey, and to let them know that their involvement in our survey influenced our work and our recommendations. I should also like to thank all those who gave oral evidence. There was a large amount of people who gave written evidence, which takes a great deal of time, so I would like to thank them. We did hold a number of stakeholder events—and particularly the people who helped us in organising and accommodating the right people for those events; I would like to thank those particular people.

I’d also like to thank our clerking team, and the wider integrated team, and also the great resource we have in the Research Service. We had some real, real complex issues that particularly the members of the Research Service have really managed to support us on as a committee, and it’s clear that, without them, we would not have the report today. I’d also thank again those who have taken part in this debate today. I’d also like to thank the Cabinet Secretary for allowing his officials to give us some technical briefings, which was a great help to us as a committee.

A lot has happened since we produced our report. It’s one of those reports that has perhaps quickly gone out of date, to an extent. And the Cabinet Secretary and his team are, of course, very aware that there is a lot more that needs to happen in the weeks and months to come. But, as it stands at the moment, we have a once-in-a-generation opportunity for a new chapter in public transport in Wales and the borders. I hope our report has shed some light on the process, highlighted the priorities of passengers, and provided a challenge to move things forward. Passengers deserve nothing less.

The proposal is to note the committee’s report. Does anybody object? The motion is therefore agreed in accordance with Standing Order 12.36.

We move on now to item 9, the debate on the External Affairs and Additional Legislation Committee’s report, ‘Inquiry into the future of regional policy—what next for Wales?’ I therefore call on the Chair of the committee to move that motion, David Rees.

Diolch, Gadeirydd. It’s a privilege to move today’s motion and to bring forward this opportunity for the National Assembly to debate our report on the future of regional policy—where next for Wales. Before I go into the discussion on the report, I would like to express our thanks to the witnesses who came to the committee, to the clerking team, who provided the excellent support, particularly Nia Moss, who obviously is our link to the EU and who underpins everything we’re doing at the moment, but also to Members for their contributions through the whole report process.

Following the referendum decision to leave the EU, which was agreed on 23 June 2016, this Assembly charged the External Affairs and Additional Legislation Committee with the task of examining the implications for Wales of the UK’s withdrawal from the European Union, and to scrutinise the Welsh Government’s actions so that this Assembly can be assured that Welsh interests are safeguarded during that withdrawal process. Given that, every year, Wales receives £370 million from European structural and investment funds for the purpose of regional economic development, it was clear to us early on that we would need to look at these issues in more detail. And whilst we’re talking about regional policy, it’s important to remember that though the report does highlight regional policy, it cannot be delivered without the support of funding behind that being available. The loss of access to these funds could result in a funding black hole, possibly, for a number of investments in areas such as skills and apprenticeships, research collaboration and excellence, infrastructure and innovation. Indeed, we stand to lose more money than any other nation in the UK if European structural funds are not replaced.

Our inquiry found that on a per capita basis, the Welsh funding allocation from the EU was 458 per cent of the UK average. The next highest was Northern Ireland at 197 per cent, way behind Welsh needs. The principles that underpin the current system of support from the EU to the member states are based on fairness and need. Regions that have a per capita GDP of less than 75 per cent of the EU average qualify for the maximum level of support. And there are two areas in the UK that manage that—one is Cornwall and the Isles of Scilly, the other is west Wales and the Valleys. Cadeirydd, our report makes a total of 17 recommendations, and we are very pleased that the Cabinet Secretary has responded positively, and in detail, to them. This afternoon, I will only cover some of the recommendations and the Cabinet Secretary’s response in more detail, though every one of those recommendations is important for the future funding of our communities.

Our first set of recommendations looked at the immediate challenges for the current funding round. Members will be aware that in autumn 2016, the Chancellor of the Exchequer guaranteed funding for projects until 2020, and we as a committee were unequivocal in our support for this. The picture is less certain, however, when it comes to threats posed by currency fluctuations post Brexit. Whilst it was heartening to hear that the Welsh Government, working with the Welsh European Funding Office, has been able to mitigate some of the risk posed by currency fluctuations, we believe it is incumbent upon the Welsh Government to ensure that the risks posed by this are constantly monitored and assessed, as we already know that currency goes up and down quite easily, and is, at the moment, down.

During our inquiry we looked at the case for a new regional policy after Brexit. The available data paints a sobering picture and shows us that the United Kingdom is the most unequal country in the European Union. We believe that the case for a future regional policy for Wales, with funding made available to us on the basis of objective need, is unequivocal. One of the many areas that we all agreed upon is that Wales should not be any worse off as a consequence of leaving the European Union than we would have been if we had remained in the EU. However, the big question is: how do we achieve that? Not only should those who were on the ‘leave’ side of the referendum campaign make good on their promise of new funding for Wales after we leave, but politicians from all sides and from all nations of the UK must come together to agree a new needs-based formula for the allocation of funding for the purpose of regional policy. We believe that this is the best guarantor of equity, equality and fairness between the UK’s constituent parts.

The Cabinet Secretary, in his response to us, alludes to the work that is being undertaken behind the scenes to press the UK Government on a replacement for funding after we leave the EU. Perhaps he could shed light on how those discussions are actually progressing when he rises to speak in this debate afterwards.

Recommendations 7, 8, 9 and 10 all looked at how we evaluate the effectiveness of past experience in order to inform the future. As a committee, we felt that it is critically important—that we make the most of the opportunities to design future policy in ways that maximise the benefits for the people of Wales. We recognised that, in the three tranches we’ve had so far, we have seen different levels of success. This does include also looking at a broader range of indicators than solely economic indicators. It also means that we can look across the globe for best practice. And it was heartening to see that, in his formal response to our report, the Cabinet Secretary is amenable to this concept and open to adopting experimental approaches.

The Cabinet Secretary also makes reference throughout his submission to the Welsh Government’s forthcoming paper on the future of regional policy. I would therefore ask whether the Cabinet Secretary can give us an idea of the timescales for the publication of this work, because his response indicated ‘in the autumn’, and I would be grateful for further clarification on that particular point.

We heard concerns during the inquiry about the complexity of the landscape for the delivery of regional policy, and recommendations 11 and 12 relate to this. Brexit gives us an opportunity to look again at the delivery models for regional economic development. The current landscape, described as a ‘spaghetti junction of layers’ by one witness, in our view must be simplified after Brexit. And whilst, in recommendation 13, we agree that the Welsh Government retains strategic oversight for this future policy, it is essential that future policy is responsive to local needs as much as possible. This should include ensuring that rural areas, not covered by the recent introduction of the city deals, are given a role in shaping policy in the future.

In terms of future approaches, we heard about the importance of productivity and innovation. The past performance of the Welsh economy in this area has been stubbornly weak. We therefore recommend that the Welsh Government addresses this in a number of ways, including through looking at the overall strategy for innovation, and through maximising opportunities through procurement policy.

Our seventeenth and final recommendation was a broad one, setting out some of our priority areas for the future. These include support for skills and human capital—and that term, ‘human capital’, was repeated several times throughout the witness evidence—investment in infrastructure and, importantly, engagement with the private sector wherever possible. That is something that I know was moving forward within the EU, but we need to make sure that that goes further. To that end, the Welsh Government should redouble its efforts to break down the barriers to collaboration between the public and private sectors.

Dirprwy Lywydd, before concluding, I want to say a little bit more about the sense of disappointment that we felt with the evidence we received from some witnesses during the inquiry. We heard very little ambition or constructive challenge from some quarters, and perhaps even less appetite to seize the opportunities that looking again at regional policy could bring. We felt very much that we heard that more of the same was the way forward. Things cannot and should not continue in the same vein. More of the same is not acceptable in the way we move ahead. And in a week where we are marking the twentieth anniversary of the devolution referendum, which was last week, we should take stock, look ahead to the next 20 years, with our sights set firmly on opportunities for forming a new regional development policy focused on the innovation, collaboration and, above all, excellence that all those opportunities can bring to the Welsh economy.

I look forward to discussing and hearing the Members’ contributions this afternoon, but our focus must be on taking Wales forward at the point we leave the EU.

I wholeheartedly concur with that last sentiment expressed by the Chair of our committee. Can I thank everyone who was involved in this inquiry and, in particular, our witnesses, who might actually be surprised by some of the comments in this report? Wales, as we’ve heard, has received far more per capita in terms of economic development money than other parts of the UK, but even so, it was accepted by some witnesses that even this augmented sum of money has not been transformational. That’s not to say that it hasn’t been useful, but it confirmed a long-held view of some of us that the investment has not always been value for money. I don’t just mean economic levering, but levering of social capital and well-being too. I’m pleased that the Welsh Government has agreed that, whatever the future policy looks like, it will need to be measured on indicators other than quantitative economic key performance indicators.

Even though this wasn’t the focus of our inquiry, we heard a number of explanations for why EU structural funding had not been transformational, as popularly expected. One was that, in the scheme of things, it’s not actually that much money. The value of these funds is less than 1 per cent of economic activity in Wales, although I think that, perhaps, listening to some debates we have had in this Chamber in recent years, we could be forgiven for thinking that they played a more important role. Another was that structural funds come with conditions that affect how they are targeted and on what they can be spent. While this wasn’t always an issue, it was raised with us to help us understand why, whatever a future policy looks like, we all need to be careful that the need for strong accountability doesn’t replicate the disconnected and voluminous reporting requirements they currently have to manage.

A number of thoughts occurred to me on the back of this. As David indicated, we don’t have to stick with plan A. It’s not working. The Welsh Government response to the report recognises this and makes some welcome points about reducing bureaucracy and losing those geographical limitations that accompany funding at the moment. But if it isn’t to be business as usual, it will be interesting to see exactly what scoping or scenario planning or even just blue-sky thinking, which is what I think you said, Cabinet Secretary, in your response—experimental ways of thinking—that you will be able to reveal in the forthcoming policy document, as there was some nervousness in the committee about how much work had been done on this. We accept, of course, that there can be no concrete plans until we know the terms on which we leave the EU, but it isn’t acceptable either to fail to plan, so we do look forward to that paper.

Secondly, while insisting upon commitments made by the UK Government on continued funding for regional development, which I support, Wales still needs to get more bang from every buck it spends on regional policy. We serve no-one by insisting that we get every penny we would have had from structural funds had we remained in the EU, if that money is not better spent in getting Wales, down the line, to a position where, in the old world, we would no longer have qualified for less-developed region status.

Thirdly, some witnesses didn’t seem, as David Rees indicated, to have moved on from plan A and aren’t mentally ready for this brave new world. It’s not wholly surprising, as a devolved Wales has developed with its eye on EU structures. It’s what everyone is used to; the only thing is, we can’t stay used to it. We are the most unequal nation in Europe. That is absolutely nothing to be proud of. If we are, on other fronts, becoming a co-productive nation, we can’t constantly ask the public sector to come up with all the ideas and predicate funding to the third sector on delivering those ideas without seeing what others outside those sectors can do for themselves as well.

There are recommendations that relate to the private sector in this report—which includes social enterprise, of course—and they’ve been accepted by Welsh Government, who agree with us, then, that sustained private sector engagement, wherever possible, has to be part of future regional development policy. With notable exceptions in infrastructure construction and maybe some training, I think we even found, didn’t we—you mentioned it David—that R&D is proving stubbornly weak? I think those were the words you used. It’s difficult to argue, I think, that EU structural funds have been felt in developing the Welsh economy—partly, I suspect, because of the strict rules about public authorities holding the purse strings. In future policy, I think Welsh Government should be expecting more from the private sector, but even now, with the Swansea bay city deal, it’s still looking a bit top-heavy on council control of structure and financing, which is not particularly encouraging.

Sustained private sector engagement is very difficult in a nation of SMEs. I get that. They’re small, they are very busy, and they’re not always aware of the role that they could have. But in future regional policy, I think the Welsh Government really has to crack this to get anywhere near achieving the co-productive aims of the Well-being of Future Generations (Wales) Act 2015 and to help Wales rise above its less-developed nation status, and look forward with ambition, as the Chair said. Thank you.

I’d like to echo the previous speakers in thanking all those who gave evidence, and to put on record my thanks to the Chair as well for the way that he has conducted this inquiry in particular. I think all Members are going to be echoing the same point—that one of the disappointing parts of our inquiry was to see that there was almost a hope for business as usual among those that we took evidence from, rather than a hope that this very difficult situation we find ourselves in might yield different ideas that yield better results for our citizens.

But I think having this inquiry on regional policy was of course wholly appropriate for a committee of the National Assembly for Wales. One of the central promises during the referendum campaign was that Wales would not be one penny worse off, and structural funds were one of those areas cited by the ‘leave’ campaign repeatedly. It may not have been emblazoned on a big red bus, but it was a promise that was repeated to the people of this country. I think, in looking at the evidence that we received, we were all, I think, in agreement that the Welsh Government/Plaid Cymru position in the joint White Paper ‘Securing Wales’ Future’ was the right premise, i.e. that the Treasury should replace funding that Wales would rightly have expected to receive from the EU had we remained a member, but that the Welsh Assembly and the Welsh Government should have full autonomy in implementing its own regional policy. I’m pleased that, in the Government’s response, it has reaffirmed that position.

This is really important in terms of regional policy, for a variety of reasons, because it was notable when we were taking evidence on regional policy from a variety of sources that defining regions meant different things to almost every single person and organisation we had evidence from. So, some referred to west Wales and the Valleys and east Wales, the EU regions, some referred to the city regions, others to distinct geographic locations that most people might identify with, such as north Wales or the Valleys, and others saw Wales itself as the region in a wider context of UK regional policy. This inconsistency is understandable because we haven’t had a substantial clarification from Welsh Government yet about what exactly it sees as Wales’s future in terms of regional policy, notwithstanding that we’re anticipating a paper this autumn to set out some principles. So, we support the principle, here on the Plaid Cymru benches, that Wales should decide, but what we need now from Welsh Government is a vision for regional policy that goes beyond the transition period. What will regional policy look like? What will the Welsh regions be? What will the funding mechanisms be? What will the thresholds for qualifications be? What would be the balance between skills and economic development on the one hand and then on the other hand microcommunity projects and regenerations?

Just as a proponent of economic spatial planning myself, I would implore the Cabinet Secretary to think very carefully about the boundaries of those regions. I know he’s had boundaries on his mind for a while since taking his current portfolio, but I have a great fear that if the city deal regions form the basis for regional policy, there will be consequences for the poorest in our communities. You can imagine—at the moment, the Gwent Valleys are in west Wales and the Valleys, one of the poorest regions, sadly, in the whole of Europe, and then if we all of a sudden have as the model for a new regional policy the Cardiff capital region, without a single penny being added to the value of the economy or an uplift in wages or anything, we’ll be in the most prosperous region in Wales. I think that will have a knock-on effect. Then we have, of course, legitimate questions about those parts of Wales that are not covered by city regions at all, particularly rural communities who have very real challenges when it comes to overcoming deep-rooted poverty. So, there needs to be a local buy-in—that was clear in the evidence that we received—and I think, partly, getting local buy-in is down to people being able to identify with the regions. I’ll just make the point again, in terms of how we define those regions: the Government published its ‘Our Valleys, Our Future’ publication in the summer, and I was there waiting with baited anticipation for this master economic plan that was going to overturn the fortunes of the south Wales Valleys—only three mentions to the European Union or Brexit, in an area that is absolutely among those that is most dependent upon European funding. So, I’d ask the Cabinet Secretary, not just in his paper on future regional policy but actively in Cabinet meetings from now on, to implore colleagues about the need to prepare every department and every community in our country for post-transition Wales, and that means getting every community Brexit prepared. Diolch yn fawr.

To a large extent, the UK’s regional policy over the last few decades has been shaped and driven by the European Union, and substantial funding has transformed some of our most deprived communities. Over 200,000 people have benefitted from training thanks to EU funding and more than £2 billion will be funnelled into poor areas between 2014 and 2020. But the fact is, we all know that problems in these communities are unlikely to be overcome entirely by 2020 and there will therefore need to be continued substantial support.

This morning in Finance Committee we learnt that economic development spending at the local government level has reduced 66 per cent over the past six years, and cuts to planning in local authorities have meant a 45 per cent reduction. Both are key areas where we hope and expect wealth generation to come from. We’ve been able to bear these cuts to an extent because of the fact that we have these various EU funding pots, but beyond 2020 there are absolutely no guarantees.

Now, the Welsh Government suggested in its White Paper that they’d like to see a one-off adjustment to the block grant to make up for European funding losses to Wales. Whilst this, in principle, was something that should be considered, we in the committee were concerned, I think, that this approach may pose risks in the longer term and that there is a need to futureproof any adjustments to the block grant made at this point so that we don’t lose out in the longer term.

We published this report in June, which was too late for us to consider the proposals made in the Conservative Party manifesto in May for the establishment of a shared prosperity fund, which would be, they suggested, established for the whole of the UK. I note in the Minister’s response to our report the rejection of such an approach. But if that’s what the UK Tory Government’s intention is, it would be useful to know if the Cabinet Secretary will simply not engage with this discussion, in which case there’s a risk that Wales will be presented with a fait accompli that we will not have influenced, or whether the Minister has had any discussions on this proposal, whether the idea proposed by the UK Government is based on an objective needs-based formula, and whether this is a proposal that will have to be approved and agreed by all of the nations in the UK, as we suggested in our report.

I think we’d be concerned that, if the Welsh Government does not have to approve the shared prosperity fund criteria, then the criteria may not be drawn up in a way that would benefit Wales. Our unemployment figures, for example, are relatively low compared to many other regions in the UK, but our gross domestic product in some areas lags significantly behind. So, to what extent are you going to engage in that shared prosperity discussion?

One of the great advantages of the European structural funds is that they allow the Welsh Government, public authorities and other interested parties to plan on a multi-annual basis. The committee was very keen to ensure that this should also feature in any future regional model of economic development. I think it is worth re-emphasising the point that other members of the committee have said, including Steffan, about the fact that actually we were quite disappointed with the lack of imagination and creativity, this desire for more of the same, from a lot of people who are currently benefitting from European regional funds. I do think we’re going to have to think very radically and in a new way in terms of how we engage with regional developments in future.

I’d also like to highlight the fact that we received evidence from many witnesses who agreed that, whilst the Welsh Government should have its hand on the tiller in relation to regional policy, it’s imperative that sub-regional structures in Wales are established. The area I’m specifically concerned about is the need to develop a sub-regional rural area of economic development, which will not be imposed from Cardiff, but will respond to the unique needs of rural communities. I’m delighted to say, once again, that the WLGA confirmed at its rural meeting on Friday that they will now proceed to develop a sub- regional place-based plan for economic development in rural Wales. I’m glad that the Welsh Government has agreed to this particular recommendation in the report, but I do hope that the Welsh Government will engage actively with this new local government grouping to live up to its promise, made here, to ensure that rural priorities are given sufficient emphasis in the design of regional policy.

I’d just finally like to thank the Cabinet Secretary for agreeing to all of the recommendations in this report; that’s the kind of engagement that we like to see. But we will take an active interest and follow up to make sure that the Welsh Government does indeed follow through on their promises.

Thank you. I now call on the Cabinet Secretary for Finance and Local Government, Mark Drakeford.

Diolch yn fawr, Dirprwy Lywydd. Thank you to all those who have taken part in what’s been a really interesting discussion of a very important report. So, thank you to the committee for putting the time and the effort into making what I think is a constructive and significant contribution to this very important area of public policy. Dirprwy Lywydd, there are only three things, really, that are at stake in trying to devise a future regional policy here in Wales. We’ve heard them all during the discussion: we need the money, we need the autonomy, and then we need to have the creativity to be able to design a set of policy proposals that meet the challenges of the future. So, I’m going to say something briefly about the first two and then focus a little more on the third.

As far as the money is concerned, well, David Rees in introducing the report made that point on behalf of the whole of the committee that the UK Government must live up to the commitments made during the referendum that Wales will not be a penny worse off as a result of the decision to leave the European Union. I repeat the positive welcome that the Welsh Government gave to the Chancellor of the Exchequer’s early decisions on the funding of European Union obligations in this area, but the time has come to move beyond those original guarantees to making sure that Wales has, in the long term, the resources that we will need to put our policy proposals into practice.

That takes me to autonomy, and that’s a point that was made very directly by Steffan Lewis, but taken up by Eluned Morgan as well, because a shared prosperity fund—if we are not careful—is a Trojan horse for a further rollback in the devolved powers of this institution, above and beyond those we are already struggling with through the European Union (Withdrawal) Bill. Have we had any discussions with UK Ministers? Not that I am aware of. I see this fund in headlines. As far as I’m aware, the Welsh Government has had no discussion with the UK Government as to what it means by such a fund.

How might such a fund be devised? Well, all too easily in a way that would cut against Welsh interests. What if, as Eluned said, unemployment was to be a basic criteria for access to the fund? What if reductions in economic inactivity, where Wales has outstripped the rest of the United Kingdom altogether, was to be a criteria for access to such a fund? Wales has benefited enormously from European funding and we know that there are other parts of the United Kingdom that look jealously at that and see this as an opportunity to share in some of the resource that has come to Wales because our needs are greatest. It’s really important to put on record again, Dirprwy Lywydd, that the money we get through the European Union—I know that sometimes, in a way, people find it a sclerotic and complex rulebook, but it’s the only money we get where there is a rulebook, where the reason we qualify is because there are criteria laid down and we benefit from it, and where there are disputes there is a rulebook you can go to to get an arbitration on those points. The Barnett formula, as we have found in the DUP deal, has none of those essential characteristics. And that’s why, while I understand the points raised in recommendation 4 of the report—and the Government has accepted all the recommendations in principle where they rely on actions by the UK Government, and wholly where they are entirely in our hands—why, in our commentary on recommendation 4, we make the point that while we are absolutely committed to a truly needs-based formula for funding in this area, the open and transparent EU approach to allocating funds has served us well, and the simplest way of guaranteeing Welsh interests in this field is through full replacement funding in the baseline of the Welsh Government, giving us a permanent uplift to the annual core budget and then the autonomy, in the way that Steffan Lewis set out, to be able to deploy those funds in the way that will work best here in Wales.

That brings me then to the third point that I started off with. If we’ve got the money and we’ve got the autonomy, then we need to be able to demonstrate that we have the policy capacity and the policy imagination to be able to design a regional policy that will be fit for the future.

The sixth recommendation in the committee’s report encourages us to develop such a vision and purpose for regional policy in consultation with partners, and that’s been an important part of the way we try to go about this and why our policy paper, which will be produced in the autumn, is still in the final stages of gestation, partly because we wanted to make sure we were able to take full account of the committee’s own report and the debate that we’re having here this afternoon, but also because we wish to continue to discuss it in our European advisory group, with our partners at the programme monitoring committee that Julie Morgan chairs.

Will you take an intervention?

Yes, of course.

I’m very grateful to you for taking the intervention. I wonder if you can just give us a flavour of who those partners are. I’m not expecting a long list, but perhaps just one or two examples.

Well, Suzy, I wanted to say—I was about to say—that we are very keen that the strong sense of partnership, which we think has been a strength of the way that European funding has been deployed in Wales so far, that we need a partnership that reaches beyond those most easily able to take part, which I think is the point you made earlier in your contribution. We need to make sure that we have partners from local government, from the universities, from the third sector, from the private sector, but not just the people who are able to turn up already. We’ve got to be able to move beyond that if we are going to be able to, as the committee in its recommendation 17 suggests, create a policy framework for the future of regional policy in Wales that has simplification, responsiveness, innovation and is able to hold the tension between investment in places—that’s to say, infrastructure investment—and investment in people, the human capital that a number of contributors have emphasised here this afternoon. In doing that, we want to be able to draw on ideas in Wales, but beyond Wales as well, and that was an important part of the committee’s report, encouraging us to be innovative and looking to models beyond the United Kingdom to open up a wider range of options.

At the root of all of this, Dirprwy Lywydd, in responding to new opportunities, opportunities that build from the strengths that we have created during the period that we’ve benefited from European funds, but recognise that now is the point at which we have to be able to look forward to Wales beyond the European Union, to use the funds we will have, to use the powers at our disposal, and then to apply that policy imagination to make sure that we have a regional policy that will work for all parts of Wales.

Thank you. And I now call on the Chair of the committee, David Rees, to reply to the debate.

Diolch, Dirprwy Llywydd. Can I thank all Members who’ve taken part this afternoon for their contribution, and the Cabinet Secretary for Finance and Local Government for setting out the Government’s response to our work in a little more detail this afternoon? I wish to go ahead with a couple of points. As Suzy highlighted, one thing that was mentioned to us was that it was not transformational, and that was told to us several times, but they also, as you rightly pointed out, highlighted the fact that percentage-wise the funding wasn’t perhaps huge enough to create transformational change. But what they also did say was that it might have meant things didn’t happen that could have happened otherwise, in the sense that we may have gone backwards as a consequence rather than standing still, perhaps. So, maybe not transformational, but it has meant that we haven’t lost ground; that was, I think, an important point. But you also highlighted the fact that we rely too much, perhaps, on the EU pot of funding sometimes in our public areas and that we should address this, and this is what we’re talking about: more creative thinking and more sector involvement.

Steffan highlighted the NUTS 2 regions that are in Wales, and I fully agree with him that we need to define regions. One of the questions that was raised was: what does a region mean in Wales? Are we still talking about the two regions that were originally part of the EU funding? How do other parts of Wales fit into all of this? How could it work better? And it is important that the Welsh Government perhaps looks at those specific questions as to what the regions are, and they might not be the same as the local government combinations. They might be different as a consequence. We do need to look at the region for economic development on that side of things and how we can support those policies—the regional policies—and then funding the needs that are local needs, perhaps, and they’ll be different. That worries me a little bit about some of the criteria you place on them, because the criteria will be different in different areas.

And, yes, we definitely need to be Brexit-prepared. But you raised several important questions to the Cabinet Secretary. I think, actually, when you scratch the surface, there’s a lot more to it than that, and I think that showed the complexities that arise and the need to replace regional policy. But we need to replace them quickly. We can’t take our time whilst this process is ongoing. We know the clock is counting; we’ve been told that enough times by everybody—by UK Government, EU negotiators. We need to move forward to a point where we’ve got some position.

Eluned highlighted the fact that regional structures, particularly in the rural areas, are important. We can’t forget that, and it is important that we address those things, but she also highlighted the fact that there seems to be a breakdown, once again, in intergovernmental relationships. I was disappointed, Cabinet Secretary, to hear that the UK Government have not been in discussions with you regarding this shared prosperity fund. Perhaps it reflects the UK Government’s whole approach to Brexit, because every time we ask you about the Joint Ministerial Committee and everything else, we seem to get a response that they’re not really listening. I think it’s about time the UK Government listened to the people, not just in Wales but across the UK, because we are approaching an edge very quickly, and unless we get some answers and things in place, we’re going to fall off with a big bump. So, that does worry me.

On the multi-annual funds, again, it’s been very beneficial, not just for the EU ones; it’s been beneficial for the people running the programmes because they’ve known the timescales they’ve had and the funding they’ve had for that. Perhaps the Cabinet Secretary will—because he didn’t answer this today—look at the multi-annual funds concept in any future regional policy. Cabinet Secretary, I totally agree with you: money, autonomy, creativity are very important for us to actually deliver a regional policy that is fit for Wales, and we need to ensure that that goes forward.

The report and today’s debate show us there’s much to discuss. In the debate, we face a future outside the EU and, in laying this report, we hope to make an initial contribution to this debate. It’s going to be an ongoing debate about our economic future after Brexit, but we must ensure it’s always evidence based as well. We look forward to further contributions, and I remind everyone in this Chamber that this will affect every single one of us—my constituents and the constituents of all of us, whether we’re constituency AMs or regional AMs; everyone will be affected by this process. We need to safeguard the interests of the people of Wales in the years ahead and we need to make sure this is achieved. Thank you.

Thank you very much. The proposal is to note the committee’s report. Does any Member object? No. Therefore the motion is agreed in accordance with Standing Order 12.36.

We now move to item 10 on our agenda, which is a Welsh Conservative debate on the Welsh Government’s national strategy. I call on Andrew R.T. Davies to move the motion.

Thank you, Deputy Presiding Officer. It’s my pleasure to rise and move the motion in the name of Paul Davies on the order paper this afternoon, in relation to the document that the Welsh Government brought forward last week, ‘Prosperity for All’, which the First Minister introduced as a statement in the National Assembly here. And, obviously, we had the education tranche statement yesterday to put a bit more meat on the bones of the original statement. And the document obviously tries to encapsulate what the Welsh Government will be seeking to do in the weeks, months and years left to this Assembly and how people, by 2021, would be able to judge the Government and the effects that that Government has had on the people of Wales.

The debate today is moved on the basis that, obviously, the document is so light on the indicators that the people of Wales will be able to use to benchmark the progress that this Government has had in improving the outcomes in health, education and the economy and a whole field of other areas that the Welsh Government has responsibility over. And it is to try and tease out from the First Minister some more detail as to exactly how this document will differ from previous documents that successive Welsh Labour Governments have brought before this Chamber and previous Assemblies when looking to, obviously, map out how the Government is seeking to improve education, the economy, and health.

We will not be supporting the Government’s amendment to the motion and we will be supporting the two amendments tabled on behalf of Plaid Cymru.

If we take the economy to start with, and the questions that I put to the First Minister during his statement last week, no-one actually wants to see Wales get poorer, and we do all want many of the proposals that are put forward in this document to actually succeed. But when you’ve had a Government in place for 18 years and you look at the economic outcomes here in Wales, they aren’t something that we can particularly celebrate. Time and time again, I’ve used GVA—and other politicians in this Chamber have used GVA—as a good benchmark to see exactly what the economic performance is of Wales. And the First Minister uses an example of himself, being a resident in Bridgend, but obviously working in Cardiff, as a distortion to those figures—it doesn’t really show the full picture. Well, actually, if you take Wales’s GVA as a total, it amounts to some £55 billion. That means that Wales accounts for about 5 per cent of the UK population, but it only produces just over 3 per cent of the UK’s wealth—this after 18 years of Labour in Government.

Now, from this document, it would be good to try and understand how the Welsh Government will seek to push those percentages higher, which, ultimately, then, will have a dramatic impact on the wealth of the country, and, in particular, the wealth of individuals, by pushing up take-home pay rates here in Wales. If we look at the GVA figures around Wales—and I used, in my response to the statement last week, Anglesey as a good example—Anglesey’s GVA stands at £13,411. The Gwent valleys, for example, is £13,608, and the central Valleys area is £15,429, and Cardiff and Vale, then—the disparity—£22,783. But you look at other areas of the UK that have successfully, over the years, increased the GVA rates. If you take the GVA rate in Anglesey, it has only grown by 1.3 per cent, but, by contrast, if you take the Wirral, for example, just across Offa’s Dyke, that has grown by 5.5 per cent. Tower Hamlets, for example, has grown by 3.5 per cent. So, it can be done in areas that you could say have struggled over the past. And this document that was presented by the Government doesn’t offer you any encouragement to believe that this Welsh Government will have any more success than previous Welsh Labour Governments.

If we look at take-home pay, for example, the average take-home pay for someone in Wales is only £492. The UK median weekly wage is £538. If you could get up to the average here in Wales, imagine how much more money would be circulating in the entire Welsh economy. Twenty years ago, Welsh and Scottish workers had identical pay packets of £301 per week, but, 20 years later, a Welsh pay packet contains £492, whereas a Scottish pay packet contains £535. That’s £43 a week extra in a pay packet in Scotland as opposed to Wales. Again, I refer to the document and I cannot see how the Welsh Government will be closing that gap. It’s fair enough for the Welsh Government to point out that their budget is not as big as they would like it to be, but, if that capital was introduced via take-home pay into the Welsh economy, think what a difference that would make here in Wales.

We also look at urban regeneration in particular as a way of driving economic growth and cities, in particular, being the engine for growth for regions. Yet, if you look at the way the Welsh cities are identified in the league tables—Cardiff, Swansea and Newport, for example—they rank among some of the worst-performing towns and cities in the UK in relation to GVA, export activity, and employment rates. In Cardiff, the employment rate is 69 per cent, ranking Cardiff 48 out of 63 towns and cities. I’m as proud of Cardiff as any Member in this Chamber, actually, as I have the huge privilege of being a regional Member who represents Cardiff; I want to see the youngest capital city in Europe being the most successful capital city. But, when you look at those sorts of numbers, you can’t refer back to the document and actually find a route-map that will show how the Welsh Government are going to move Cardiff and the other cities forward.

I do pay tribute to the activities of Lee Waters on this, in particular around automation and robotics. And, when you look at the figures that are projected over the next 10 years, 15 per cent of jobs are factored in to be lost because of automation and robotics in the workplace. By 2037, only 20 years on, 35 per cent of jobs that we understand as jobs today will not be in the workplace. Again, this document does not address those real challenges that, ultimately, if addressed correctly, could make Wales a far more prosperous and ambitious country.

If we move into health, a constant debating point in this Chamber, and rightly so when nearly 50 per cent of the Welsh Government’s budget is allocated to health and social care and projected to go above 50 per cent in the coming years to 57 per cent—. When we look at waiting times, for example, where it’s not unreasonable—that’s most probably the biggest benchmark that most people measure the success or failure of our health service to respond, because, if we have a condition identified, we want it treated in a timely manner. But yet we found out only last week that 450,000 people are on a waiting list here in Wales—one in seven people on a waiting list—as opposed to other parts of the United Kingdom, which do have their challenges—all parts of the modern health service in the western hemisphere have challenges—. But, time and time again, our waiting times are deteriorating and, equally, when you flip the coin and you look at the financials of the health service here in Wales, where four of the health boards have a combined deficit of £146 million in this financial year, I just cannot, when I refer back to this document, which will be the guiding principle of the Government’s actions on health, be able to understand how this Government will be addressing the real, challenging issue of getting on top of the waiting times here in Wales and addressing the financials in the same breath.

It is difficult to reconcile the equation where the financials are running out of control and the waiting times are running out of control, with the recruitment crisis we see in GP practices, and, indeed, many consultant posts, especially in rural health, as identified by my colleague from Preseli Pembs, in Withybush hospital and other hospitals, and sustaining services so that we can have a health service that addresses the health needs here in the twenty-first century.

And I would have appreciated far more meat on the bone when it comes to air quality, for example—something that we’ve debated in this Chamber. I’ve gone specifically for this area because we know we have 2,000 premature deaths a year because of poor air quality here in Wales. Those are preventable deaths, but yet, in Stage 2 of the Public Health Bill, the Welsh Government chose to strike down a Conservative amendment that would have greatly enhanced the ability of that piece of legislation to make real progress in our communities in Wales on this pressing issue. Again, when I refer back to the document, other than fine words—warm words—around public health, I really cannot see where this document will improve the life expectancy of people here in Wales. So, I’d be grateful if the First Minister could enlighten me as to exactly what gains in public health he would like to be marked against when it comes to 2021 and the close of this fifth Assembly.

I’ll close my contribution by addressing the education aspect of the document as well, which, to its credit, identifies that too many children are lacking the opportunities when they leave school and, in particular, not getting the grades that they require. This is after 18 years of Labour in Government. I appreciate—I’ve congratulated the Cabinet Secretary on her appointment, and I’ve congratulated the Cabinet Secretary on some of the measures that she’s been taking, but we cannot go on, time and time again, with the PISA league tables indicating that we are not making progress when we are internationally benchmarked against other education systems in Europe and the world. And that is something that, when you try and refer back to the document, which—. As I’ve said, the Cabinet Secretary yesterday highlighted in her very speech—in her statement, sorry—the historical lack of focus on leadership, and those were her words in the statement. That clearly does rest at the door of the Welsh Labour Government.

There is not a Member in this Chamber who would want to see our education system go backwards. We have seen strategy after strategy come forward from successive education Secretaries, and I can well remember, week after week, Leighton Andrews standing in that very position that Mick Antoniw sits in at the moment, introducing ‘bold’ reforms to our education system that would transform the outlook and the prospects of Welsh students. Yet, when we look at where we are today—some five, six years on from many of those reforms—we haven’t made the progress when you internationally benchmark us against the other education systems that we are rightly compared against. It is important that, when initiatives are brought forward—. And this Cabinet Secretary got rid of the Schools Challenge Cymru initiative, which was only some two years into its seven-year scheme of delivery. Ultimately, it was introduced for 2014, had a life expectancy to go to 2020, but was wound up by the Cabinet Secretary. That is no way to give education professionals, parents and pupils the confidence that initiatives and policies that are brought forward by the Welsh Government will last, will make the impact, and will make the improvements that we want to see.

Again, you refer back to this document that is there to map out how the Government will take forward public services here in Wales, and you cannot—you cannot—have any confidence that this document will be any more successful than other documents brought forward by successive Governments here in the Assembly. I look forward to hearing the First Minister’s response, and I call on the Assembly to support the motion before the house this afternoon, which merely seeks to actually mark where we will be by 2021. Because, if you just use this document, you will not be able to do that when it comes to the close of this fifth Assembly.

Thank you very much. I have selected the three amendments to the motion. If amendment 1 is agreed, amendments 2 and 3 will be deselected, and I call on the First Minister to formally move amendment 1, tabled in the name of Jane Hutt.

Formally, Deputy Presiding Officer.

Diolch. I call on Adam Price to move amendments 2 and 3, tabled in the name of Rhun ap Iorwerth. Adam Price.

Diolch, Dirprwy Lywydd. I rise to support the two amendments in the name of my colleague. One of them expresses, once again, our sense of deep frustration, which I know is shared more widely, that we still haven’t got the new economic strategy that we were promised. I remember the Cabinet Secretary saying in this Chamber a year ago that the economic strategy would be presented in the new year to the First Minister. I suppose, technically, he wasn’t misleading us, but he said this morning to the economy committee that it would be produced in the autumn. When I pressed him what ‘the autumn’ actually meant, because, remember, we were promised it in the spring, in the summer, before the recess, et cetera, he said that it will be published before Christmas. You have to ask, ‘Which Christmas are we talking about?’, but let’s actually hope that something will be forthcoming in the meantime, because we need a new economic strategy badly.

Now, what we have to rely on at the moment—. Because there have been two changes of administration since the last economic strategy that the Welsh Government presented, so we have to read the runes to understand what is the thinking behind economic policy. Now, the only comprehensive statement I’ve been able to come across, and, to be fair to him, it was written in a personal capacity, was by the chief economist of the Welsh Government. It gives us a flavour of the thinking that lies behind the Welsh Government’s economic thinking. In that, he says—it was published in the ‘Welsh Economic Review’ last year:

‘In terms of the trends since devolution on these key economic outcomes, the story is broadly positive.’

Now, ‘You get two economists in the room and you get three different viewpoints’ is the old saying. But I have to say I have to disagree. As Andrew R.T. Davies has said, if you just look at the figures—and you can cut it in a variety of ways, but, if you look at the key figures of GVA per capita, mean average weekly earnings, gross household disposable income per head, which used to be the Welsh Government’s favoured measure, on all of those we’ve gone backwards since Labour have been in power over a period of 20 years. So, that devolution dividend has not delivered. Certainly, we’ve gone backwards—marginally on some, more significantly on others, but certainly there has not been the improvement in our standing that we were hoping to see.

So, we need a new economic strategy because the old one has failed us, and, if we continue doing what we’ve done, of course, then we shouldn’t be surprised, as we know, if we end up with the same results. So, ‘Where have we gone wrong?’ I think is a good starting point. I think that there are some clues there in some of the data. If we look at issues like entrepreneurship, for example, in the early years of the Welsh Government, to be fair, there was the publication of a national entrepreneurship action plan. I know because I was a little bit involved in the drafting of it at the time. That actually did begin to have some early success, if you look at the figures, in terms of new starts for businesses. During the period 2002 to 2005, you saw a 21 per cent increase in new starts for business in Wales, compared to just a 13 per cent increase in the UK. That wasn’t replicated, of course. There was a change in the political weather or the policy weather around the middle of that decade, and so, from 2005 onwards, we saw a reduction or a return to a fall in terms of the business numbers.

There was an attempt with the economic strategy in 2010 to actually arrest that decline, and that economic strategy was quite clear that we needed to shift the emphasis back into indigenous capacity, where we’d started in 2000 in terms of the entrepreneurship action plan. Unfortunately, that economic strategy in 2010 was binned, effectively. There was a reversion to the old-style thinking, which has been this over-obsession with foreign direct investment, which may give you some short-term gain in terms of a press release and some job numbers. It may, actually, in difficult times—. And we realise that, in the economic crisis, we were in defensive mode. So, in the short term there can be reasons why you want to emphasise it, but in terms of the long-term task of changing the underlying trend of the Welsh economy, then we need to return to that thinking at the heart of the national entrepreneurship action plan, which is investing in indigenous enterprise and innovation, because it’s the skills, knowledge and ideas of our own people that will ultimately deliver to us the economic improvement that we want to see.

I’d like to thank the Welsh Conservatives for bringing forward this motion today. The Welsh Government’s national strategy aims to improve the health and well-being of Wales. Like the Welsh Conservatives, I am disappointed there are no clear, measurable targets for the health service. I welcome the ambition behind the Welsh Government’s strategy, but without clear, measurable outcomes, we are in danger of having yet another ambitious strategy that fails to deliver.

I also welcome the fact that the strategy highlights the need for a seamless experience when it comes to health and care. At the moment, this is sadly lacking. I am, as I have stated last week, dealing with an 83-year-old constituent who was left to fend for himself following a triple heart bypass. He was discharged from hospital without any care package from social services being in place. A frail elderly gentleman, totally abandoned and let down by the statutory services. There was no-one to ensure that even his most basic needs were met, and without friends and former work colleagues, this man would have been without food and drink, unable to collect his pension and unable to pay his bills. This should not be happening in 2017. This man should not have had to phone around begging for help. The system did let him down.

Unfortunately, this is not an isolated case, and we have seen examples across Wales of people let down by the health and social care system. In the cross-party group on dementia yesterday, people with dementia and those caring for people with dementia outlined the difficulty in getting support and respite care. The Social Services and Well-being (Wales) Act 2014 was supposed to address these shortcomings, but we have 22 local authorities, all interpreting the Act differently. Despite being entitled to a carer’s assessment, many carers have not had one, despite repeatedly asking for this assessment. We heard that some social services departments simply ask, in front of the person being cared for, if the carer is coping. Of course, the carer is going to say they are coping in those circumstances. This merely highlights the issue with the strategies: the ambitious plans don’t always get delivered.

Time and time again we have seen enormous variation in delivery of health and social care from area to area—some good, some not so good. Services vary between the seven local health boards and the 22 local authorities. How can we be sure that this strategy will be any different, as there are no targets and no measurable outcomes? How can we possibly hope to deliver equitable healthcare to every person in Wales, regardless of where they live, irrespective of their age or gender, if we are to have seven different health boards and 22 social services departments all delivering and interpreting health and care differently?

We are supposed to have a national health service, but in reality, the quality of your care depends upon your postcode. If the Welsh Government truly wish to improve health and well-being in Wales to achieve prosperity for all, they will have to do better than this strategy. The people of Wales deserve much better than warm words. They’ve had those for the last 18 years. It’s time for action and, unfortunately, the national strategy promises more of the same. Thank you. Diolch yn fawr.

I’m pleased to take part in this debate this afternoon, and I intend to focus my contribution on what, in my view, needs to be done to ensure prosperity for all the people in my constituency.

The Government’s ‘Prosperity for All’ document plans to target interventions to the different economic needs of each region of Wales, ensuring that all parts of the country benefit from growth, and I hope that the Welsh Government will honour that commitment and start seriously investing in west Wales, which, until now, seems to be at the bottom of the Welsh Government’s priority list. Of course, it’s great that the Welsh Government has recognised that there are distinct challenges facing different parts of Wales, but for people living in Pembrokeshire, the continued lack of investment in the area shows that, whilst Government strategies and documents say one thing, Government policies say another. I’m sure that all Members understand that a one-size-fits-all approach to governing Wales just doesn’t work, and that’s why the Welsh Government now needs to develop a detailed and robust strategy that explains how rural Wales will be supported through this Assembly.

For example, the ‘healthy and active’ section of the ‘Prosperity for All’ document doesn’t even reference rural health services at all. The Welsh NHS and the provision of services continues to be the single most important issue that my constituents face, and yet this document doesn’t even recognise or even try to reassure people living in my area that the Welsh Government is listening.

The strategy talks of the importance of rapid treatment for people when they need it, as close to home as possible, and that’s something that the people of Pembrokeshire continue to fight for. However, the continued removal of health services away from families in Pembrokeshire is completely at odds with the Welsh Government’s own objective to deliver services as close to home as possible. You only have to look at the situation surrounding paediatric services in west Wales as an example of people having to travel further afield for treatment.

When the Welsh Government decided to close the special care baby unit at Withybush hospital, I made the point that travelling from St Davids to Carmarthen in an emergency situation is similar to people in Cardiff being forced to travel to Nevill Hall Hospital in Abergavenny for emergency care. Now, of course, that would not be right for the people of Cardiff, and it’s not right for the people that I represent. Therefore, if the Welsh Government is seriously committed to delivering care as close to home as possible, then it’s time it started to reverse the centralisation of health services in west Wales and start to deliver proper investment in local health services.

The ‘Prosperity for All’ document doesn’t just focus on health objectives. It also reiterates some important infrastructure investments, including one commitment that will be of huge benefit to people and businesses in Pembrokeshire. I’m pleased that the document commits to enhancements to the A40 in west Wales, and I’m sure I don’t need to keep rehearsing the same lines in support of these enhancements other than to emphasise the fact that dualling the A40 is now needed to open west Wales up to the rest of the country and beyond. The case for dualling the A40 has been talked about since the 1950s, and so it’s high time that this project starts progressing. I hope that the First Minister shares my ambition to see the A40 in Pembrokeshire dualled, and I appreciate that that can’t happen overnight, and it will take significant funding, but all I’m asking now is for a firm commitment from the Welsh Government that it shares my objective to dual this stretch of road, and perhaps the First Minister will give this commitment when he responds to this particular debate.

I’m also pleased that the document commits to delivering fast, reliable broadband to those parts of Wales not currently served by the market. Again, Pembrokeshire falls into that category. We know how important access to the internet is, not just for businesses, but to everyone. For many people, it’s an increasingly important part of their lives and enables them to live much more independently by giving them access to information, education and good, reliable services. Indeed, in rural communities like Pembrokeshire that have already been hit disproportionately by bank closures, access to a fast, reliable broadband is essential for many people to be able to continue to have access to banking services. However, the reality for some people living in Wales is that they still don’t have access to an adequate broadband service and, as a result, they can’t enjoy or utilise the access to services that those in other areas do. Therefore, I again ask for more detailed information about when the Welsh Government will be specifically targeting notspots across Pembrokeshire, so that I can give local communities a much-needed update on when they can expect to see improvements.

So, in closing, Deputy Presiding Officer, the Welsh Government quite rightly states that there is much to be proud of, but many challenges remain, and it is only by being honest about these that we can tackle them. It’s time to be honest about the lack of investment and attention given to west Wales by previous Labour Governments and recognise that more must be done in the future to help our rural communities. Rural Wales can be so much more than it currently is. It just needs support and investment, and the people living in rural communities need to know that they are being considered by Welsh Government policies. So, I hope that the Welsh Government starts improving its support for west Wales. Therefore, I urge Members to support this motion.

This ‘Prosperity for All’ strategy represents another attempt to relaunch this tired, directionless and not-successful Labour Government in Wales. The fact is that, although the aims of this document are laudable, it is sadly lacking in details. Without the details on matters of delivery and measurement of outcomes, these commitments are simply ambitions. Welsh Labour has been in power in this place for over 18 years, and Labour has let west Wales down all the way since then.

Nowhere has there been more abject failure than in the education system in this country. After 18 years in office, successive generations have been let down by the Welsh Government’s complacency on education. Our children deserve a first-class education system here, but the PISA rankings show that Welsh Labour has relegated Wales to the bottom half of the global education league table. Wales has the worst performing school system in the United Kingdom. This year’s GCSE A to C pass rate was the lowest since 2006. The Future Generations Commissioner for Wales said recently that nearly 45 per cent of school leavers in Wales will not have five good GCSEs between 2015 and 2020. It’s not me; it’s the commissioner for future generations.

We face a crisis in teachers’ training and their retention. Thirty-eight per cent of secondary school teacher training places remain unfilled. A significant number of teachers who are already actively teaching are considering leaving the profession. Deputy Presiding Officer, Wales desperately needs a strategy to bring new teachers to the country and to retain those whom we already have. On higher education, Wales has seen declining participation in part-time learning at higher education institutions. Between 2009 and 2014, student numbers dropped by 11 per cent in Wales. This decline has been aggravated by sustained Welsh Government cuts to higher education budgets. Allocated public funding for Welsh universities has been cut by nearly £36 million since 2015-16. Further education has fared no better. The Wales Audit Office has highlighted the fact that the grant funding in this sector has reduced by 13 per cent in real terms between 2011-12 and 2016-17.

Deputy Presiding Officer, we need more clarity on how the Welsh Government will address the skills gap in Wales. According to the CBI, 61 per cent of Welsh businesses fear they will not be able to recruit enough high-skilled workers to meet demand and to grow in Wales. Despite increases in employment levels, economic activity rates in Wales continue to illustrate the extent of the low-skilled workforce and poor educational attainment. The Welsh Government pledges to deliver 100,000 all-age apprenticeships and to use them to raise the overall level of skills in the workplace. But, they have not provided a framework within which they will deliver this pledge, or how they intend to do so.

Adult community learning can play a key role in improving the quality of life of Welsh citizens. However, provision has contracted across Wales, and in some areas severely eroded. The Welsh Government community learning grant, used as direct ACL grant funding, has fallen. Adult community learning can play a key role in improving the quality of life of Welsh citizens if properly supported.

Deputy Presiding Officer, the lack of measureable outcomes in this document undermines the likelihood of these objectives being achieved. Unless the Welsh Government addresses these issues, it will suffer the same fate as it has on Objective 1 funding and Communities First areas. It will fail to deliver, and I’m sure they’ll reconsider again to make more improvements in this whole scenario. Thank you.

Only yesterday here we spoke about the importance of open data collection, and recording useful data to inform and develop strong policies. So, how bizarre is it, then, that this strategy is so lacking in measurable targets, giving such little allowance for Assembly or public scrutiny. We are sixteen months into the fifth Assembly term, and the people of Wales are quite right to be questioning why a party that has been in power for over 18 years is unable to establish and work to coherent, clear and, again, measurable goals for delivery. Local authorities do it all the time. Where are they in this document?

Maybe this Welsh Labour Government is dissuaded from drawing attention to their record on the economy, business, housing, health, education, infrastructure, rural communities, because they have so consistently failed in those areas. Health and social services—we know that, in their current form, health and social services in Wales will not be sustainable in the near future. Health boards in Wales are facing significant deficits, overspending by £149 million this year alone. Since 2013 there has been a 400 per cent rise in the number of patients waiting over a year for surgery, yet the Welsh Government reduced funding for health and social care by 8.2 per cent in real terms between 2009-10 and 2015-16, exacerbating the pressures on the service, whilst the Health Foundation estimates that health spending in Wales will need to rise by 3.2 per cent per year in real terms to bridge the projected funding gap.

Can you tell us what representations to the UK Westminster Government to improve the funding to the Welsh Government?

I would say that’s a job, actually, for the First Minister, and for your party. [Interruption.]

Housing waiting lists in Wales are a national embarrassment, with 90,000 people currently on a housing list in Wales, the same figure as in 2011. Even more worrying, 8,000 families in Wales have been on an affordable housing waiting list for more than six years, and a further 2,000 have been on the waiting list since 2006. Homelessness in Wales is a further scandal. [Interruption.] During 2016-17, 9,210 households in Wales—

Can we all settle down, please?

[Continues.]—were assessed as facing homelessness within 56 days, increased by 29 per cent of households, temporary and bed-and-breakfast accommodation by 75 per cent—[Interruption.]

Can we all settle down, please?

Thank you. You might not like these facts, these figures, these stats, but they are true. We know we have 23,000 empty properties in Wales. Conwy alone has over 1,500. Yet the ‘Prosperity for All’ document doesn’t even mention this. This is a national resource, the use of which is a no-brainer.

On infrastructure and transport, seamless infrastructure is key to economic growth in Wales. However, the rate at which infrastructure is being delivered in Wales is a national embarrassment. We continue to see chronically poor broadband coverage in rural areas, with over 94,000—that’s three in 10 properties—unable to obtain a connection of over 10 Mbps. The number of registered bus services in Wales dropped from 1,943 in March 2005 to 1,283, leaving many of our rural communities and our residents facing increased isolation. The Enterprise and Business Committee stated last year that the Welsh Government’s response to a report on community transport in 2013 was disappointingly slow, despite the Welsh Government pilot project, Go Cymru, being completed in April of that year. Community transport is an essential service for older people and rural communities, enabling many to get out and about and reach vital services that they would otherwise struggle to access.

Deputy Llywydd, this document does little to reassure the people of Wales that Welsh Labour are making a targeted effort to work for them. I believe that this document will go exactly where the programme for government is—it will just go on a shelf, gathering dust. There are no deliverable or measurable targets. There are no outcomes. This Government is failing the people of Wales. You are failing the people of Aberconwy as well. [Interruption.] I rest my case.

I call on the First Minister, Carwyn Jones.

Thank you, Dirprwy Lywydd. There were a number of points that speakers raised that are important points that need to be addressed, and the challenges need to be recognised. The first thing that I have to say, of course, is that the document, ‘Prosperity for All’, is the basis on which Government decisions will be made. It will lead to more detail in due course. The economic action plan will be published by Christmas this year, if I can make that absolutely clear, and then, of course, we will be able to show what we are doing to further improve the lives of the people of Wales.

I have to say, there was an air of unreality, wasn’t there, around the Conservatives’ contributions? The Welsh budget has been cut by more than £1 billion. Yet, in the land of the Welsh Conservatives, the magic money tree sits and we’re able to spend as much money as we want. I accept that they are so inept that Janet Finch-Saunders has said that I have to take on board the issue of dealing with the UK Government, which I will do because they clearly cannot.

Where is the £1.67 billion that Northern Ireland had, breaching the Barnett formula? Not a peep from the Welsh Conservatives. [Interruption.] Not a peep from the Welsh Conservatives. So, yes, somebody has to speak for Wales. We know that it’s not the Welsh Conservatives.

I listened carefully to what Janet Finch-Saunders had to say about homelessness, but you cannot end homelessness by selling off public housing, which is exactly what they want to do. Their solution to homelessness is to sell off more houses to make people more homeless, and it ignores the effect of the bedroom tax on people. It ignores what’s happened with universal credit. I was in Brighton on the weekend, I know that they saw me there, I have never seen such homelessness. It struck me in Brighton that weekend how bad things were in Brighton and how many homeless people there were there, and that is as a result of policies pursued by her party.

I applaud her brass neck. She stands up and she talks about infrastructure. It was her party that scrapped electrification between Cardiff and Swansea. It’s her party that refuses to electrify the line along the north Wales coast. These are not devolved issues, they’re in the hands of the UK Government. Wales has 11 per cent of the railway track of England and Wales and it has 1.5 per cent of the investment. That is the reality of what the Tories do for Wales.

And where is the tidal lagoon? We said this yesterday: if you want to make a real difference to the lives of many people and improve the Welsh economy and create clean, green energy, we need to see the tidal lagoon move ahead. Why don’t you tell your colleagues this, rather than relying on me to do it? I’m happy to do it for you, but you clearly need lessons in how to influence your own party.

I listened carefully to what Paul Davies said. I don’t accept that rural Wales is forgotten, far from it. It’s hugely important that we deliver healthcare as close to people’s homes as possible. What I can never accept is that healthcare has to be in a position where it’s either local or better. People deserve access to the best healthcare wherever they live in Wales. That’s it from my perspective. If it can be delivered as locally as possible, fine. That’s exactly how it should be. But if people have to travel a little further to get better treatment with better outcomes, then that is something I don’t think we should be afraid of.

On the A40—we want to move ahead, of course, with the dualling of the A40. We recognise how important that is to his constituency. On broadband notspots, it’s difficult to give a timescale for particular communities. If he writes to me, I’d be more than happy to provide him with timescales for particular communities. He says there’s no investment at all. Well, look at the schools that have been built in the whole of the west of Wales. New schools being built, the reopening of Fishguard and Goodwick town station, for example, and better rail links into north Pembrokeshire—it’s not even devolved. It’s not even devolved and it’s something that we’ve spent money on in order to improve the lives of his own constituents.

Some of the other issues that have been raised, if I can deal with them in the time that I have: in terms of the economy, we know that unemployment now is routinely at the level of or lower than the UK average. That would have been unheard of back in the 1990s. We know that employment rates are higher than they were in the 1990s. We also know that GDP has gone up, but it has not increased by the same rate as some other parts of the UK. That much is true. Why? One of the reasons, of course, is we need to make sure that we continue to invest in skills. As people have more skills, so they can get better-paid jobs, so they can put more money into their pockets. That’s exactly what we’re doing. We have a commitment to have a 100,000 all-age apprenticeships that will give people the skills they need to earn more money but also enable us to answer the question that we always get from investors: ‘Have you got the skills we need to prosper in your country?’ Increasingly, we can say ‘yes’. They don’t come to Wales because of the money—Aston Martin made that clear—they come to Wales because the skills are here.

Two figures I put to you—and I identified that you said you’ve got the skills, or ‘We’ve got the skills here in Wales’—one was on GVA, and nationally, we only contribute 3 per cent of the wealth of the UK but we have 5 per cent of the population. On take-home pay, Scotland and Wales had parity 20 years ago; there’s now a £43 difference per week. So, where will Wales be in 2021 on national GVA in relation to the UK and where will it be on take-home pay if, as you’re identifying, we’ve got the skills the industry needs?

Better, because we’re attracting investors now that we would never have attracted 20 years ago. The policy of the UK Government in the 1990s was to replace well-paid jobs in coal and steel with badly paid, unskilled jobs. So, GDP and GVA—same thing, more or less—went down. Yes, the unemployment rate may have gone down with it, but the money that people had in their pockets also declined as a result. That is turning around; it’s been difficult to turn it around, I grant you, but it’s turning around now and we’re seeing investors coming into Wales and bringing better-paid jobs with them—jobs we would never have had 20 years ago because nobody would have been there to advocate Wales’s position 20 years ago.

In terms of the economy, turning to what Adam Price said, I don’t accept that there’s a choice to be made between supporting indigenous business and foreign direct investment. I accept there’s a balance to be struck. We’re seeing now more businesses in Wales, we’re seeing businesses becoming more successful. I see the entrepreneurial streak that was there in our young people being encouraged now in a way that wasn’t there before. I see our universities working to help start-up businesses in a way they didn’t do 10 years ago; they didn’t see it as their mission to do that. Now, they’re beginning to do that. So, I see that entrepreneurship being able to flourish as a result of it. [Interruption.] Of course.

Would he accept, perhaps, that the decision made in the last administration to increase the number of priority sectors from six to nine, which actually then covered two thirds of all businesses in the economy, was a mistake, because that doesn’t really sound like targeting as anyone would understand it?

No, there were too few sectors. One of the problems we faced was—and it was an issue I remember discussing with my former colleague Ieuan Wyn Jones, as Deputy First Minister—that in years before that, attempts had been made to attract investment in any area and, of course, you can’t do that. Unless you can show you’ve got a track record quite often it’s very difficult to attract another investor in the same field into your country. So, the decision was taken to have sectors. Yes, we increased that to nine because we saw new sectors appear over the years and sectors becoming stronger over the years. The issue that we need to focus on as well is the issue of regional disparity. That’s been raised and it’s a fair point to raise. How do we do that? Well, we need to make sure that we have regional economic plans and also regional delivery structures. We don’t have them at the moment.

If we’re going to talk about devolving powers downwards, perhaps financial powers as well, which, you know, is an idea that deserves careful attention, we have to be clear that the regional delivery structures are there; they are not there. The local government Bill will give us the opportunity to do that. It’s not possible for 22 local authorities to be able to deliver effectively on their own. That’s why, of course, we need the regional collaboration. That’s what the Bill will do. And that, of course, gives us the opportunity, then, to start looking at how we can empower other levels of government to be able to improve economic conditions in their own areas.

With regard to health, again, the leader of the opposition says, ‘Well, everything’s gone backwards’—it hasn’t. I mean, diagnostics waiting times have improved, ambulance waiting times have improved. If you look at cancer, if you want cancer treatment in Wales, you are at least as likely to be getting good cancer treatment as quickly as anywhere else in the UK, if not better. The reality of the situation is we spend 7 per cent more on health and social care: it’s a figure that we’ve used in this Chamber—it is true. And we know, of course, that when it comes to recruitment, the campaign we’ve put in place is bearing fruit. We are seeing training places now being filled in a way that wasn’t the case, perhaps, a year or two ago. That will strengthen the health service over the next few years here in Wales.

In terms of some of the other issues that were raised in the course of the debate—education: well, I have to say, you know, I heard what Mohammed Asghar said. I was in school in the 1980s, in a comprehensive, and I can tell him now, I remember those days when schools were never built, they were never maintained, we had a Conservative Government cutting over and over and over again the education budget, we had performance levels going down; I never want to see those days again. I’m happy to take him to schools all round Wales that are brand new being built. I’m happy to show him the work that’s been put in. I’d like to show him the work that’s coming through via the leadership academy. I’d like to show him the consortia that are delivering now. The reality of the case was that we did not have consistent delivery of education across all local authorities: six of them were in special measures at one point. The system didn’t work consistently across Wales. Yes, we had some excellent examples of delivery, but there weren’t enough of them across Wales. Now we have the consortia, we are seeing improvements—best GCSE results we’ve ever had. If you compare where GCSE results were in the 1990s—

Are you taking an intervention?

[Continues.]—they were far, far lower when it came to A* to C grades than they are now. It’s a tribute to our teachers and to our pupils.

You told us last week about the best ever GCSE grades, but, of course, with respect to the results from this summer, the overall pass rates were at their lowest level for a decade.

No. If you look—. [Interruption.] If you compare the figures on a like-by-like basis, they’re clearly not. If you compare them with the days before 1999 when around about 38 per cent of Welsh pupils got five A* to C grades, that figure is now well beyond that—well beyond that—and that’s a result of what we have done in terms of education delivery. So, no, what we are seeing in education is better delivery, we’re seeing better results. If you look at A-levels, for example, in A-levels we are often—not that it should be a competition, but people compare us—better than England in many, many subjects and that’s as a result of the work that’s been put in by the current education Secretary, of course, building on the work that’s gone on in previous years.

So, I think we need to be positive about our country. We deliver against a background of extreme austerity. We know that there are still £3.5 billion-worth of cuts across the UK that are not yet even allocated by the current UK Government. We don’t know where those cuts will lie. And so, yes, we’d like to deliver more—we’d like to do the things that the Conservatives call upon us to do, even though we haven’t got the money to do it. We’d like to hear more from the Conservatives about what their ideas are. One thing I noticed in the speeches was that they criticised, which is their right; not one positive idea was put forward as to what they’d do differently—not one. So, they are still in the position where they’re unable to offer the people of Wales anything, unable to offer the people of Wales a positive way forward, unable to offer the people of Wales any kind of hope for the future. We will continue to do that, the people of Wales understand that, that’s why we saw the result that we did in June, and that’s why, of course, we’ll continue to work for the people of Wales. We will join with others who want to work with us in delivering the best future for our country, based on fairness, on justice, on opportunity and on prosperity for all. [Interruption.]

Thank you. And just to say that I decided because there were three interventions, and if you’ve got anything to say, well, wait to see who’s winding up your debate before you start criticising. Nick Ramsay.

What’s that supposed to mean? [Laughter.] Thank you for that warm introduction. [Laughter.] I’ve had worse. [Laughter.] Could I first of all just start by thanking everyone who contributed to today’s debate this afternoon? I’ve got to say, I did particularly enjoy the response of the First Minister, a response mainly directed at Janet Finch-Saunders—well, for the first five minutes of his contribution anyway. To be fair, First Minister, you did then turn to Paul Davies and the problems of rural Wales.

But I have to say it is a bit rich to lay all of Wales’s woes at the door of the Welsh Conservative party and the Welsh Conservative group. In case you haven’t noticed, we haven’t been in power here for the last 18 years. In fact, let me think who has. Who could it be? Ah, of course, it’s the Labour Party, the Welsh Labour Party that have been in power. But I have to say things—. [Interruption.] And I have to say—. [Interruption.] In a moment. And I have to say, Mike Hedges, things didn’t get much better when Labour was in power in Westminster either for over 10 years, and we had a Labour Party in Westminster in power and a Labour Government here. Did GVA suddenly spiral up through the roof? Did it suddenly improve? Did we get electrification of the Great Western line? Did we get the tidal lagoon? All these wonderful things that apparently the Welsh Conservatives have not delivered. Well, actually, electrification is happening. Actually, a lot of these happening are in the process and far more than they were in the pipeline when Labour were in power in Westminster. And if the Welsh Government here wants to work with the UK Conservative Government to help deliver these projects, then we welcome that and we believe in being positive. And, you know, you might say that this has been a negative debate. Well, the reason why there’s been a lot of negativity is that we’ve been following a document that didn’t actually have a great deal in it.

I think it was Caroline Jones who spoke about warm words. And, yes, we have heard lots of warm words here in this Chamber over the last 20 years. We’ve marked the twentieth anniversary of devolution over the last couple of weeks. We have had lots of warm words and lots of strategies. And Adam Price said—. Wales isn’t suffering from a lack of strategies, is it, Adam? I think we’ve had so many strategies—more than we can count—and too many of them either haven’t been followed through, haven’t been enacted or, as Janet Finch-Saunders said, have just ended up being dumped, left on a dusty shelf somewhere not to be followed through. So, I think we do need you to get in perspective exactly why we’re in the situation we are.

Will the Member give way?

Have I got time to give way briefly to Mike Hedges?

You have time to give way briefly, yes.

Can I just say that the reason the tidal lagoon wasn’t brought in by a Labour Government is that it hadn’t been thought about back in the time of the Labour Government? But the real problem with suffering in Wales is Tory austerity from Westminster. Don’t you agree with that?

I seem to remember a lot of time being spent by certain members of the last Labour UK Government on a tidal barrage, and certainly there were people talking about tidal lagoons back at that time. But, nonetheless, we are where we are; we have to move forward. Our debate today is simply noting that the Welsh Government’s national strategy, ‘Prosperity for All’, is with us. I notice that the Welsh Government are supporting that. That’s progress. However, we do expect to see more specific measurable targets. It’s not a case any more of simply having warm words. If the next 20 years of devolution are going to be more successful in delivering on the economy, delivering on the health service, delivering on education, delivering across the range on public services for the people of Wales, then we have to do, all of us, a lot, lot better than we have done over the last 20 years. I urge people to support this motion and make a start.

Thank you very much. The proposal is to agree the motion without amendment. Does any Member object? [Objection.] Therefore, we defer voting under this item until voting time.

So, unless three Members wish for the bell to be rung, I will proceed directly to voting time.

Okay. So, I call for a vote on the motion, the Welsh Conservatives’ debate on the Welsh Government’s national strategy, tabled in the name of Paul Davies. If this proposal is not agreed, we vote on the amendments tabled to the motion. Open the vote. Close the vote. For the motion 17, no abstentions, 38 against. Therefore, the motion is not agreed.

We’ll now move to vote on amendment 1. If amendment 1 is agreed, amendments 2 and 3 will be deselected. So, I call for a vote on amendment 1, tabled in the name of Jane Hutt. Open the vote. Close the vote. For the motion 29, no abstentions, against the motion 26. Therefore, amendment 1 is carried.

Amendments 2 and 3 are deselected. Therefore, we vote on the motion as amended.

Open the vote. Close the vote. For the motion 29, 10 abstentions, 16 against. Therefore, the motion as amended is agreed.

We now move to the short debate. If Members are leaving the Chamber, please do so quickly and quietly. So, we now move to the short debate, and I call on Joyce Watson to speak on the topic that she has chosen. Joyce Watson.

Diolch, Dirprwy Lywydd. I will be speaking today about surface water flooding and why, in short, we need more gardens and fewer patios. I look forward to hearing from my colleague for Swansea East, Mike Hedges, and from the Cabinet Secretary for Environment and Rural Affairs. It was one of the Cabinet Secretary’s predecessors, Jane Davidson, when she was the Minister for Environment, Sustainability and Housing, that I first lobbied on this particular topic, and it was in the wake of the devastating floods of 2007 and the Pitt review that followed.

In 2009, the Assembly approved my proposal to introduce a backbench Bill, or what was known then as a legislative competence Order, to deal with flooding by curbing the use of hard surfaces around people’s homes. That was one of the main recommendations of the Pitt review, given that almost 80 per cent of flooding was caused by surface water flooding, not by rivers overrunning and not by seas reaching the coastline. At the time, the UK Government was bringing forward its own legislation—the Flood and Water Management Bill—that overlapped with my LCO, so it fell by the wayside, but my interest did not fall by the wayside and neither has the problem.

Just a couple of weeks ago, flash flooding once again disrupted communities across my region. Mid and West Wales Fire and Rescue Service crews were called to 12 incidents in Carmarthenshire and Ceredigion. There were yellow weather warnings for the upper and lower Teifi, as well as the Taff and Cynon. Torrential overnight rain flooded parts of Talsarn, Lampeter, Llandysul and Newquay, and the Teifi’s flood peak travelled downstream between Llanfair and Glan Teifi and the ford near Talgarth school was closed. Fields turned into floodplains affecting ponies and other livestock. There was traffic chaos on the A486, the A487, the A475 in Ceredigion and the B4333 between Aberporth and Newcastle Emlyn, as well as the A485 in Carmarthenshire and all the back roads around Beulah. And, there was flash flooding in north Pembrokeshire from St Dogmaels and Abercych to Llanfyrnach.

I don’t like to be a doomsayer, but it is only September. I was prompted to revisit the idea of the legislative route by a column that I read very recently in ‘The Guardian’ by Michele Hanson, entitled ‘Why it’s time to ban concrete in front gardens’. In it, she observed how a drive from London to Sussex had changed in the past 25 years, and I quote from it. She says that,

‘the lovely green front gardens had nearly all disappeared and been turned into parking bays.’

She said it’s a scene that many of us here will recognise from our own communities, with more and more patios and conservatories paved over for gardens and also for parking. Nearly 5 million front gardens in the UK are now completely paved over and more and more disappear every single year.

Actually, one of the first things that I did when I moved into my house 25 years ago was dig up the driveway and I planted a front garden with shrubs and flowers. Michele Hanson did exactly the same. She says that she

‘used to have a concrete front garden, with no run-off, which flooded in heavy rains’.

So she dug it out and planted magnolia and hollyhocks, and the flooding stopped. So, why not make it mandatory, she says,

‘Better to have a sensible nanny state than a catastrophically flooded one. Do it yourself’,

she proposes,

‘or the council nips round with a pneumatic drill and does it for you.’

Now, I’m not actually going quite that far today in what I’m proposing, however, I do think she has a point. The effect of this—[Inaudible.]—is more rainwater ending up in sewers and drains, washing pollutants into our water courses. I spoke last week at the Assembly question time about river pollution from livestock farms going too often unpunished, and flash flooding creates exactly the same problem. But it’s made worse by our changing weather patterns: the sort of very intense heavy downpours that we experience, the wetter winters that we have, and the estimates from climate scientists predicting that there will be only an increase in extreme rainfall over the next few decades.

So, I’d like this opportunity to revisit my original LCO, and to look at what has changed since 2009, and why hasn’t and whether the Assembly should look afresh at the need for tougher laws. And I think the most notable change in the intervening years has been the regulations that apply to building work that can be done without planning permission. In September 2013, new regulations did come into force in Wales restricting the type of material that can be used to cover the land in front of your house if it leads to a highway—and highways include public roads, footpaths, bridleways, and byways—but that basically brought us in line with England, where this had been the rule for a number of years.

So, now, if you do want to lay or replace a hard surface at the front of your house, you have to use permeable or porous materials that allow water to soak away, or direct water from a hard surface like concrete to a permeable or porous area at the front of the house. But you are allowed to replace or repair up to 5 sq m of the existing hard surface without those restrictions, and I would suggest that, for most small, mid-terraced houses, that will result in those concrete and hard surfaces existing forever more. But there are no restrictions on laying patios or concrete paths and other areas of hard-standing at the back of your house—none whatsoever.

I think, if we seriously want to do something about this, we really need to reconsider this oversight, because it is the case that most people have more land to the back of their houses than they do to the front. I think that we could, through regulation or beefing up the SuDS, or sustainable drainage, aspects of the 2015 Water Strategy for Wales, or by offering incentives to owners—carrots, as opposed to sticks. And I think that there would be public support for garden-greening proposals. Look at how, in recent years, people have started to recognise the importance of gardens as habitats for pollinators, for birds, and other wildlife. Across Britain, domestic gardens account for nearly 20 per cent of urban land use. So, there’s a huge potential resource for delivering environmental goods.

On the one hand, if we continue to concrete over more and more of that space, we are doing big environmental damage—. It’s a matter of the future generations. We all have a responsibility to look after our own patch, but there is a role for Government as well. But, this Government, and successive Welsh Labour Governments, have prioritised flood prevention investment, with more than £240 million since 2012, and a further £47 million from European funding. And, thanks to that money, more than 12,000 properties across Wales are more secure, and, thanks to the deal the Welsh Government struck four years ago with the insurance industry, 64,000 properties at risk of flooding are guaranteed cover for 20 years, with a premium cap. That compares very favourably with what has happened in England.

Earlier this year, in May, the Welsh Government published recommended non-statutory standards for sustainable drainage for designers, property developers, local authorities, and other interested parties, and it is considering whether to make those binding, as set out under Schedule 3 to the Flood and Water Management Act 2020. There are some ambitious projects that are already reducing surface water, and you will have heard many times me referring to the RainScape project in Llanelli. That had an investment of £113 million, and it’s an excellent collaboration between Natural Resources Wales and Dŵr Cymru, and there are other projects, like Greener Grangetown. So, I do think that the time has come for us to recognise that the back garden does need to be looked at and that we can create a habitat that will sustain us for the future.

First of all, can I agree with everything Joyce Watson has said and thank her for allowing me a minute in this debate, but, more importantly, for raising this incredibly important issue? I want to highlight the importance of trees and bushes. Can I start with a short anecdote? There was a house in my constituency that had never had a problem with water, but, one year, the front step turned into a waterfall, and I mean that quite literally—the water was coming down as if it was a waterfall. What had changed? Trees and bushes had been removed from behind the house, so what you then had was the water coming down. I believe we need to plant far more trees and bushes to soak up the water before it starts making its way down to areas where it is creating problems. When you take the bushes away and you take the trees away, you lead to the reverse, which is the rain turns into mud and you get mud sliding down. I live in a constituency that is exceptionally hilly; I think anybody in Swansea would probably say Swansea was exceptionally hilly. It’s very important we make sure that we have trees and bushes there. Am I a hypocrite? No, because, if you go into my front garden, you will see a hedge and one large tree.

I call on the Cabinet Secretary for Environment and Rural Affairs to reply to the debate.

Thank you very much, Chair. I too would like to thank Joyce Watson for choosing this topic as her short debate this week. We know that flash flooding can have devastating effects on the lives of those affected and that’s why it is a priority area of work for this Government. This is reflected in our commitment, through ‘Taking Wales Forward’, to continue to invest in flood defence work and take further action to better manage water in our environment. Research shows future climate change will bring increased sea levels, more intense storms, which will also lead to more flash flooding. Therefore, we need to continue to work together to reduce this risk, help communities adapt, and to build our resilience.

Earlier this month, we saw a number of isolated flood events as a result of flash flooding in Pembrokeshire and Ceredigion and Gwynedd. I do offer my sympathy to those people who have been affected and had their homes flooded. So, we continue to support local authorities and Natural Resources Wales to build resilience to such events. I recently announced additional £1.2 million revenue funding for local authorities and NRW to support work in carrying out asset inspections and maintenance before the winter, so that we can ensure that we do absolutely remain resilient to flooding. This vital flood-risk management work ensures assets continue to function effectively in severe weather conditions, and I’m pleased the take-up has been so positive.

So, we now have a four-year capital settlement, which means, over the lifetime of this Government, we will invest over £144 million capital with local authorities and NRW to reduce the risk of flooding and coastal erosion. Together with the coastal risk management programme, this means a potential investment of £256 million through our flood programmes. This financial year will see significant schemes in Boverton, St Asaph, Little Haven, and Pontarddulais complete, which will reduce the risk of flooding to over 800 properties. I also committed £1 million of annual flood budgets for local authorities earlier this year to carry out small-scale and essential maintenance work. I think the grant really was welcomed by local authorities, because they recognise that whilst the big, high-value schemes are, of course, vital—. I think smaller works are just as important at a local level, particularly if we are going to reduce the risk of flash flooding.

So, remaining resilient to flood events is not just about our investment in assets, it also includes the vital work NRW and local authorities do with communities to make them aware of the risks they face and how they can prepare.

Joyce Watson made a particular point about amendments that were made to permitted development rights to allow only porous surfaces in front gardens without the need to apply for planning permission. We know this has encouraged the use of types of surfaces that then help reduce run-off and reduce risk of flooding to properties. You’re quite right: that doesn’t apply to the rear of buildings. Neither does it apply to the side of buildings. So, it’s something that I would certainly be very happy to look at.

Mike Hedges raises the point that we should be planting more trees. I cannot disagree with you on that, Mike, and, certainly, I think it’s a discussion that I’m having. I don’t think we are planting enough trees. I’ve been in front of the committee that you chair, Mike, around this issue. We need more trees for many reasons, and this, clearly, is one of them.

Part of our approach to flood-risk management in Wales is the acknowledgement of what the natural environment can do in holding back water, minimising run-off, and reducing the amount of water to enter our rivers during rainfall events. So, schemes such as tree planting, the creation of storage areas, and better use of sustainable drainage, can all help reduce the risk of flash flooding, so we are encouraging more natural flood-risk management through our national strategy for flood and coastal erosion risk management in Wales. In addition, Members will be aware of my recently published natural resources policy and that, again, outlines opportunities to manage flooding using such techniques. However, unfortunately, we know we can’t stop all flash flooding, but we can put maintenance schemes and processes in place to reduce the likelihood of them happening, and work with nature to manage water more effectively, both in our urban and rural environments.

Thank you. That brings today’s proceedings to close.