Cynulliad Cenedlaethol Cymru

Diolch yn fawr, Cadeirydd. I'm an honorary member of the British Veterinary Association.

Honorary member of the BVA. 

Diolch. I'm Lesley Griffiths, Minister for Rural Affairs and North Wales, and Trefnydd. On my left is Richard Irvine, the Chief Veterinary Officer for Wales, and, on my right, is Gian Marco Currado, the director of rural affairs in Welsh Government.

Thank you for those introductions. Of course, this could well be your last scrutiny session with the Economy, Trade and Rural Affairs Committee. So, just in case, I just want to put on record the committee's thanks to you and your officials for engaging with us over the last few years. Now, reflecting on your time as Minister for rural affairs, can you tell us what you believe has been one of your biggest achievements during your time in your portfolio?

Wow. Gosh. I wasn't expecting that question. I think, for me, food and drink has been a massive achievement—not just for me, obviously, but for the whole of Wales. So, I've been very, very fortunate to have visited—. I remember going out to Gulfood, I've been to Anuga and Salon International de l’Alimentation—I was trying to think of the other one—selling Welsh produce, and it's a very, very easy job. I think we're known for our fantastic food and drink, and to have watched it grow over the time I've been in the portfolio has been a real pleasure. I think, within food and drink, BlasCymru, probably, is what I would look back on and think has been my biggest achievement—again, not on my own, obviously, but with a massive team. But it was my idea to try and bring the world to Wales. Because having gone out to, as I mentioned, Gulfood, and other trade shows, it was very apparent that perhaps it would be easier to have more spread if we brought them to Wales. So, when you go to Dubai, or to Anuga or SIAL, realistically, how many Welsh food and drink producers can you take? Maybe up to ten. Whereas, at BlasCymru, the one we had in October, we had about 250 Welsh food and drink producers meeting buyers from overseas. So, I think, as you put me on the spot there, I think I would say that, and to have seen the exports grow, to see the value of Welsh food and drink grow—. And you will have heard me say, in this committee and in other places, when my predecessor announced the growth he expected in Cabinet, I remember thinking, 'That's very, very, very ambitious, perhaps unrealistic', but it was surpassed by the sector, and, again, the next target we've set will be surpassed as well. 

Okay. Thank you very much for that. Now, moving on to something particularly topical, the sustainable farming scheme consultation. Now, obviously, the consultation closes tomorrow. So, what assurances can you give Members here and, more importantly, the agricultural sector, that the consultation will be meaningful and changes will be made as a result of the views expressed by farmers in the consultation, because farmers are very concerned at the moment, and they want to hear from you, Minister, and to have that reassurance that, obviously, this is a meaningful consultation?

Well, I think they've heard that message very clearly. I hope everybody's absolutely taken that in, because I've said it repeatedly. I've never done a consultation that isn't meaningful, as Minister, ever. You have to show people that that's the case and I absolutely agree with that. There will be changes; there are no two ways about it. Now, every proposal that's set out in SFS is not set in stone. Nothing is set in stone at all, and I hope people heard that message, because I don't tell lies. That is absolutely the way to get the scheme to be the very best scheme that we want for our farmers, and not just for our farmers, for everybody. This is benefits for the public as well, and everybody has to recognise that, to get that, you have to work together, and we have done that for seven years. So, I find it incredibly frustrating to hear that we're not listening, we're not paying attention to what everybody wants. And it's not just farmers, is it? It's everybody. As I say, this is about making sure this is right for Wales, but, of course, for our farmers and for our rural communities, those payments are very important.

You will have heard me say many times that we want as many farmers as possible to be part of the scheme, to have access to that scheme. Officials are working incredibly hard to make sure that, on day one, as many farmers as possible and as want to go in that scheme will go in the scheme. Now, realistically, are you going to get 100 per cent? No. There aren't 100 per cent of farmers in the basic payment scheme. So, I think you've got to be pragmatic as well about it, and accept that it's not going to be right for every farmer; it's not going to be right for every farmer's business or their business plan. So, for me, it's making sure that, if a farmer does want to be a part of the scheme, it's absolutely right for them, for every farmer in every part of Wales on every type of farm.

So, you will take on board farmers' views, and there will be changes to the SFS. You can definitely assure us of that.

I can definitely assure you of that. Obviously, the consultation hasn't closed yet. I'll ask Gian Marco to say a little bit more now, but Gian Marco was one of the officials that attended many of the roadshows that we held, the farmers' roadshows, and after every roadshow—we had 10—I met with officials to hear what the feedback was. And as I think we're all aware, we know what the main concerns were, but now and again you would pick up something that was different, so it was really important that we had that catch-up after every roadshow.

I remember, I think it was in the first one, CPD came up, continuous professional development came up, as something of concern to farmers, particularly, I think it's fair to say, perhaps older farmers. I think younger farmers, online, obviously, is completely natural to them, it's part of life, but for some farmers it's not, so to do CPD online, for instance. So, we know there are going to have to be changes. I don't want people to think I'm pre-empting, because I'm not; that is the sort of thing that I think—.

However, when we get all the consultation responses in, we've got all the feedback from our roadshows, we've got all the feedback from the National Farmers Union and Farmers Union of Wales roadshows—. I'm meeting with the Country Land and Business Association—I think it's tomorrow—they've been having some roadshows as well. I've got lots of farmers that have just dropped me a little e-mail with one paragraph in it; I've fed all those into the consultation as well. So, if anybody thinks, 'Oh, I've dropped her a note—.' That's fine, it's gone in. There will have to be changes. There always are when you have a meaningful consultation like this, and it's such an important consultation that we need to get it right.

Llyr Gruffydd would like to come in on this. Llyr.

Maybe you're expecting a rather unprecedented level of responses, potentially, so, clearly, that'll need some extra time to process, and, as you say, to give all of those responses justice, then you'll need to allow plenty of time for that to be considered. You're suggesting as well that, given that it is a consultation, there are likely to be changes, clearly, otherwise, what's the point of having a consultation? So, where does that leave the timeline now, then? Clearly, you've always said regularly that you're up against it, and I think that was reiterated again this week, in terms of getting this up and running in 2025. So, are you now—? Throw in as well, of course, a new First Minister, who might want to look again at proposals or whatever. So, are you broadly accepting now that 2025 is rather unrealistic?

So, I don't know about unprecedented responses. The last time I asked, we hadn't had an unprecedented number of responses—

Okay, but you still want to give those time and—

However, we're in the last week, and we all know, don't we, that we all leave things to the last minute, and you always get a rush of responses in the last week. So, it could be that this will be the biggest consultation response we've had in agriculture, but, at the moment, I don't know. But it doesn't matter, as you say. What is really important is every single one is read, every single one is assessed against the proposals and the information that's in it. It is a tight time schedule. There will be a new First Minister, as you say, and a new Government in two weeks' time. There is always a period of reflection when you get the consultation responses in, but there is that added element, as you say. We are still working towards 2025, but I've always said we can't go from BPS to SFS until that scheme is absolutely ready. You can't rush these things, so I would say it's open to what responses we get, what information we get, what we need to change going forward. And we don't know the budget yet, of course, either.

So, the overriding sentiment is it's more important to get it right than to get it done by 2025.

I think so. Absolutely. I absolutely think that.

Diolch, Llyr. The proposed payment methodology for the SFS is based on costs incurred and income forgone calculations. Farmers are very concerned about this, because it could provide them with no meaningful income. Why have you taken this approach?

You will be aware that the proposal of SFS is to provide an annual universal baseline payment for them to carry out a set of universal actions. We want those universal actions to be delivered by all farms across Wales and go above and beyond what's required by legislation. What those payments will do is support the sustainable land management objectives of the Agriculture (Wales) Act 2023 as part of sustainable food production. We've been very clear that the payment methodology in the scheme is payment for action, and that's made up of two parts—you referred to the income forgone and costs incurred, but also social value. The social value, I think, is a really important part of it. It's very complex, I think it's fair to say we're trying something a bit different and a bit new, but I think it's really important that we recognise the amount of work our farmers do for the rest of us. So, it's not just about sustainable food production; it's all the other things that our farmers do.

What we're proposing is a payment in recognition of the different costs incurred, and income forgone, for the completion of the associated universal actions. It will be for the whole farm in a way that obviously BPS isn't at the moment, and it will include areas of habitat and areas of woodland, which obviously BPS doesn't do at the moment. The social value part of it is ongoing. As I say, it's very complicated, it's very complex, but I think it's a very important part of it. Obviously, I'm working with Plaid Cymru as part of the co-operation agreement in relation to this. I think it's right that we recognise things that farmers don't get paid for under the BPS, as I've just described, but it's really important that they do.

You mentioned the social value. Are you confident, therefore, that this will offer fair reward for farmers?

Absolutely. This is part of doing something different, doing something bespoke for Wales. You've heard me talk again about our wonderful countryside; that's because our farmers provide it. So, obviously it provides recreational benefits to the public, and it's really important that we don't just—. Sustainable food production is very important, obviously, and if you ask a farmer what their job is, of course they'll say, 'Producer of food', but there are lots of other things as well. It is very important that we do reward them, I think, for that social value.

Thanks. I'll now bring in Samuel Kurtz. 

Diolch, Gadeirydd. Good morning, Minister. Good morning, witnesses. Where does the 10 per cent tree cover target come from?

You'll be aware of the advice we received from the UK Climate Change Committee that we needed 43,000 hectares of new woodland by 2030. That is the target. Those best placed to help us with that target are our farmers. So, that was where the 10 per cent came from.

The CCC recommend 5 per cent. So, why the jump from 5 per cent to 10 per cent?

What the CCC advice included was the reference to achieve annual tree planting rates of at least 4,500 hectares per year by 2030, so that's where the 43,000 comes from. Then it needed to rise to 7,500 by 2035, then we've got agroforestry to plant trees on 2 per cent of farmland by 2025 whilst maintaining its primary use. That rose again, I think, to 5 per cent by 2035. We’ve also got the extension of hedgerows by 2035. I think the hedgerows—

Those three points that you just mentioned then, are they all CCC recommendations?

Yes.

Okay. Sorry, I cut across you then.

It was 2035 for the hedgerows and the need to better manage existing hedgerows. That was another piece of advice. So, I think it's really not a choice between the two—I think we need to bring the balance together now. I want our farmers to be right in the front to get the benefits from that additional woodland.

One of the reasons we did it in the way we have was to spread the load—I don’t like saying ‘the load’ really—across Wales so that we didn’t get massive land management changes or land use changes by having a massive new woodland here. It was better to spread the load between all of our farmers.

And just to say, obviously, the 10 per cent target in the consultation does include existing. I think that's been lost a little bit in the rhetoric out there. It’s not 10 per cent of new woodland, it’s not 10 per cent of new habitat; it’s the existing, and then making it up to 10 per cent.

What is the 10 per cent tree cover trying to achieve?

It's obviously to help us with our net zero obligations, but also we want farmers to look at the advantages that additional tree planting would have on their farm. We've discussed it in relation to animal health and welfare: if animals can keep cool under the trees, then they lose less energy—I suppose that's the right word—to keep cool, and things like that. So, there is economic productivity in relation to that as well.

In terms of the net zero response, have you acknowledged that there are better ways of carbon sequestration, of achieving net zero, than a 10 per cent tree planting target?

I don't think it's one or the other—I think it's to enable us with net zero. There are lots of ways of storing carbon, as you know—you've got sink, you've got store—and we need to work through the carbon sequestration as well. But, as I say, I don't think it's either/or; it's both. I think we need to make sure that we don't keep having this argument in relation to trees and net zero or trees and the environment. I think we need to look at it holistically.

That brings me back to last year's Royal Welsh Show, where it was made pretty clear by one farming union that it would be a barrier. Why then the perseverance with the 10 per cent target within this consultation? Why continue, knowing that it is a bit of a red line for farmers in acknowledging and accepting that they could join this scheme? Why continue with having that 10 per cent tree target in the subsequent consultation?

Because it is a really important target. I'm not on about the 10 per cent, I'm on about the 43,000 hectares and the new woodland. As I say, I want farmers to be absolutely at the fore of getting the benefits. If you look at the way our land is managed in Wales, it's our farmers who manage the majority of it.

We have listened, and some parts of it have been altered—if you think about tenant farmers, for instance. In the last co-design period, particularly, last summer, we certainly changed things ahead of it going into the consultation. We took out, as I say, the tenant issues, which were, I think, very, very important. I've spoken to tenant farmers, who showed me their leases and said, 'My landlord won't let me'. Well, obviously, we need to think about that.

Coastal areas is another area where, obviously, we recognise that there could be some issues—priority habitat, permanent features, and, as I say, exposed coastal areas. So, it's not that we didn't listen. It was important, I think, to keep that target in. And I don't think it's a red line in the way that you said; it's just part of the consultation. It could come through the consultation, obviously, that it is a red line, and we will have to look at that very closely. 

The argument that's put forward to me by some farmers is that it's not just the 10 per cent on this—it's also the scrapes, it's also the shelter belts around hedgerows. So, when you're looking at potential loss of productive land, it's greater than the sum of the 10 per cent tree planting and 10 per cent habitat. Far greater analysis is needed for this to be understood. While I think you're right that focus has been around the 10 per cent, potentially, I think the greater threat is everything else that sits within the universal actions and the potential loss of productive land. Is that an analysis that your team have looked at?

I don't think it's true to say that the proposals will take out 20 per cent of productive land from food production. I really don't think that is the case. Certainly, the team, I presume, have been looking at that, before we even brought the final consultation forward, but it's something that will have to continue to be looked at. 

On the universal actions, I had an interesting conversation. I met with both the farming unions on Monday. Some farmers have said to me that they think it's insulting that people think that they're not doing those universal actions already. Obviously, some farmers probably think it's insulting that we're asking them to do it. I appreciate I'm being a bit general now, but some farmers have said to me that it's very disparaging that people think they're not doing universal actions as a matter of course.

Could I add something on that? There's obviously been a lot of interest in the two 10 per cent scheme rules, and I think it is worth remembering that both of those scheme rules around trees and habitat include existing woodland, include existing habitat, whether it's hedgerows—well-maintained hedgerows—existing ponds, heather moorlands, all those things. So—

But not irrigation units. Irrigation ponds aren't accepted.

Not irrigation ponds, but ponds and scrapes otherwise are. So, I think the reality is that there will be an awful lot of woodland and habitat there already, and part of what we have said we will do, and we've been talking about it in the roadshows, is a data confirmation exercise over the summer to get to a point where, collectively, farmers and us as Government have a better understanding of what that is. 

I think the other thing that's worth mentioning, just on the habitat, is that a lot of that habitat is not lost to food production. That habitat exists because it is grazed by animals, by livestock. So, it is part of the food production system of the farm. And where it isn't up to 10 per cent, what we're proposing is not to create permanent habitat but temporary habitat. It's temporary habitat that is in line with or works with the farming system—so, for instance, mixed herbal leys, those sorts of things, which is not land that's taken out of production. I think it is important to clarify that, because I think if you look at just the numbers, I understand that it scares people. But I think that what we're trying to do is to try to work within the grain of the food productive element of the farm.

It's the same with the universal actions. A lot of the things that we're proposing, as the Minister said, are things that farmers are saying to us are actions that they are taking anyway because it benefits their business, it benefits their business of producing food, whether it's understanding the soil that they have so that they can better target their activities, whether it's looking after their livestock through the animal health improvement cycle. So, again, I just think that it's worth looking at that in that context, because the picture will be different for different farms, depending on what they already have and what they do. 

Thank you for that clarification. I think it is an important point, because of where we currently are in the discussion around the sustainable farming scheme. People will naturally, now, after this consultation, after last year, see 10 per cent and instantly think, 'Not for me.' So, has there been a bit of a failure in conveying what the sustainable farming scheme is in terms of these 10 per cent tree planting targets, habitat restoration targets, or is there now flexibility in knowing that just having a figure of 10 per cent is too much for some people—they now think, 'Well, I can't engage with the sustainable farming scheme, because I just instantly see 10 per cent', and the rationality of it is lost, given where the discourse has gone? So, does that give you as a Government, and as the Minister in charge of the policy, an opportunity to be flexible in that 10 per cent tree planting to mitigate some of those fears that have been raised in this consultation and previous consultations?

Yes, absolutely. As I've said, nothing is set in stone in the consultation. I certainly don't want to pre-empt the consultation. Has there been a failure to communicate that? Well, we've tried really hard to communicate to our farmers. As I said, I can't meet every farmer in Wales, it's not possible. So, you have to look at your main stakeholders, the two farming unions. Probably only 50 per cent of farmers are members of the farming unions, so there's the other 50 per cent. How do you engage with them? So, it's the roadshows. And it's great, we had over 3,000 people at the roadshows. I was really pleased to hear from the FUW—and I'm not saying the NFU didn't do this, but it was a discussion I had with the FUW—that if you turned up to an FUW roadshow, you weren't asked to show your membership card. If you were a farmer, you were invited in.

The NFU did the same.

I'm sure the NFU were the same. As I said, the FUW was the one I had the conversation with. We try to communicate the best we can with our farmers. We have newsletters that we send—I think it's three times a year that Gwlad goes out—and we have, as you know yourself, a presence at all the main agricultural shows in the summer, at the winter fair there's always a very busy Welsh Government stand, where officials work very hard to be able to communicate that. You know, you can say it until you're blue in the face that something is something, and, you know, if people choose not to believe it, well, that's really, really difficult and very, very frustrating—

Because the point I'm raising is, if people, if farmers are now looking at the scheme, the SFS, and thinking, 'I'm not signing up to it', we all lose—farmers lose, our environment loses, food production, everything that we hold dear loses. So, the Government have got to recognise that they've got a job to do here in bringing farmers back into the discussion, back into, 'This is the journey we're going on for post-Brexit subsidy support'. At the moment, that's not there, is it, because farmers are quite vocally saying that they're not going to be signing up. So, that's where I'm thinking flexibility needs to be an olive branch from Government, saying, 'We will be doing this and we will be bringing you along with us. Work with us and we've got a solution that satisfies some of those red lines', that farmers are saying are quite clearly red lines.

Well, as I say, there are no red lines because, you know, it's a meaningful consultation. And I think, you know, there are some common misconceptions, and I think they've been repeated and repeated. You know, 'I'm on this side', repeat—. And it's the same, isn't it? If you think about when we left the European Union, the UK Government was saying, 'There are lots of benefits'. Nobody was listening to that because we all thought there weren't benefits. And I get that it is really hard sometimes to get your message out, and how do you do it when there's a lot of noise? One of the things I kept hearing was that habitat land was going to be lost to production. It's not. You know, we haven't proposed an additional 10 per cent. As I say, it's very, very, very frustrating when you hear that being out there all the time. We've all got roles, as leaders, to make sure that the correct message gets out.

I'll go back to the 10 per cent of trees last year at the Royal Welsh. It was completely hijacked; the whole show was completely hijacked by the 10 per cent of trees, and that was a real shame because you were trying to talk to farmers about other things and you couldn't because that was the top story, if you like, for the entire show, and it's very hard to get that back. But I hope, by showing that we have been listening, so there have been changes—. The co-design, I think, was incredibly helpful last year—1,600 individual farmers giving their time to help us with the scheme is, I think, really, really positive. And, again, I've never engaged with individuals in that way around a consultation as a Minister ever before. I can just keep repeating, can't I, that it's a meaningful consultation. I appreciate that the proof of the pudding is in the eating and what we need to show is that we have listened and this is what we're coming forward with. But it's not just the farmer's voice; there are lots of voices around this table, aren't there. As you say, if they don't become part of the scheme, it's not just farmers that will suffer; it's all of us.

Yes. If I may, just very quickly—?

Very, very quickly.

Very quickly. I wrote to you, Minister, last week, following a busy day for both of us in the Senedd Chamber, regarding, firstly, the statement that you and the First Minister announced. In the statement, it's clear that it says we are making £20 million of additional funding available to help farmers. In your contribution in the Chamber, you say,

'In the statement, that £20 million—[Interruption.] It was just referred to; it didn't say it was additional money'.

I was just wondering if you could clarify?

To clarify, I meant 'new', if you know what I mean.

Okay.

It wasn't new money, because I think we'd been—. I think, earlier on you'd said to me, 'Was it new money?' as well. But that's what I meant.

Okay.

So, it's the £20 million that was announced previously.

Yes.

Of which, I think we've spent about £3.4 million. We will be opening another window for this funding.

Okay.

Sorry, Chair, this is in relation to agricultural pollution regulations. So, we will be opening a new window very soon.

Yes. And, just on the technical advisory group for TB, when was it launched?

When was it launched?

Yes. When was it announced?

I think it was March 2023.

Yes. So, if I may, Chair—

Yes, by all means.

As the Minister said, it was formally launched, if that's the right word, as part of the new five-year delivery plan. That was, as the Minister just described, March 2023. There will have been discussions that led to the formation of that five-year delivery plan. There was consultation and engagement with industry groups. It was before my time, so forgive me if I don't have the specific timelines, but, in the year prior to, I think, 2021-22, there was engagement with stakeholders to inform the development of the new five-year delivery plan, so those ideas will have come through those consultation—with a small 'c'—and engagement events. But the actual formal launch, if we want to call it that, was because it was written in as part of the new partnership working arrangements that are very clearly written through the five-year delivery plan—

In March 2023.

—and that was March 2023.

So, why, then, was Professor Glyn Hewinson announced as the chair in July 2022?

Glyn wasn't announced as the chair of the technical advisory—

In a written statement, Glyn Hewinson was announced as the chair of a technical advisory group to tackle TB, and it was in the press as well.

That definitely was before your time, Richard. So, Glyn—. I didn't think we used the term 'technical advisory group' back then, when Glyn brought a group of experts together, because I met them in the August, I think, but I don't think we referred to it as a technical advisory group then.

Okay. Well, I'm happy to check the written statement and the Farmers Weekly, and I've pushed my time, Chair.

Thank you very much. If I can just come back, very, very quickly on the 10 per cent tree cover, just for clarity, obviously, you think that the 10 per cent tree target is not a red line for farmers. If it is a red line for farmers, will you then look to change that target?

Well, I can't pre-empt the consultation, but, as I say, we'll see what comes out of the consultation.

But you're open to doing that.

We have to, absolutely. Nothing is set in stone. So, the 10 per cent isn't set in stone. The 10 per cent is there for all the reasons I've described, but, obviously, when we look at the consultation responses, we will have to look at that target.

Okay, thank you for that. I'll now bring in Vikki Howells. Vikki.

Thank you, Chair, and good morning, Minister. I've got two very active commoners associations in my constituency, and we know, across Wales, common land plays such a vital role in our nation, but often those who farm common land feel the most marginalised, both in terms of the land that they farm and also in their relations with the Welsh Government. So, I've got a series of question for you on that. Firstly, can you evidence how the common land working group's advice fed into the current SFS proposals?

Thank you. I am well aware of the number of common associations you've got in your constituency. I know you meet with them regularly. We did convene a sustainable farming scheme common land working group—there was NFU, FUW, the National Sheep Association's Wales commons forum, the National Trust, we had representatives from national parks, and also some local authorities, which, as you know, play an important role as well. We also had some individual common land grazing association representatives attending. I think it's fair to say some considerable contributions came from that group. I think it met three times, but there was a lot of information that came forward.

The group, I think, were unable to conclude on questions about whether all rights holders should be supported or just those who exercise their rights. We know, for a common land holder, they generally only have the right to graze, for instance. They can't be held responsible for other activities that happen on common land. They themselves then can't take responsibility for soil quality, for instance. So, they are a very, very specific group. We've got some experience from the Glastir Commons scheme, which showed us that a collaborative approach should work. That was the reason for bringing that working group together—to see if they could be part of universal actions, and I suppose some of them, obviously, can be, but, in general, to see what layer of the SFS would be beneficial for them.

Thank you. On that, we've taken evidence as a committee, and certainly my commoners associations have also told me that they believe that collaborative agreements for common land support under the SFS will not always be possible to achieve, and that's their worry, then—how they're able to access the scheme if those collaborative agreements just cannot be reached with all of the commoners. Could you comment on that?

I don't disagree with that. I think the working group certainly discussed that there would be instances where a rights holder couldn't access the scheme, so I'm very conscious of that. What we really need to do is consider what level of participation is required to enable those who do have commons rights to be able to participate in the scheme. I think, again, going back to assumptions that we make around the SFS, I don't think you would ever get 100 per cent of common land graziers as part of it. If you look at the common land Glastir scheme for instance, it's about 80 per cent of common land graziers who participate in Glastir. So, perhaps a working assumption for the team should be 80 per cent, again similar to Glastir. But I think it is fair to say there's going to have to be some really further significant work in relation to common land graziers.

Minister, if I could add, just on this, one feedback that we had at several roadshows was around whether we could introduce, basically, the equivalent of the Glastir Commons officers that we have to try and facilitate that. So, that's one of the things we're looking at—is there more that we could be doing in delivering the scheme to facilitate common rights holders coming together and working in collaboration to be able to access that element of the scheme?

I think that came up quite a lot in the workshops.

It did. 

So, I'm expecting quite a lot in response to the consultation on that particular point. So, we will have to look at it, obviously. 

That's really useful, thank you. And finally on common land, is there anything else that you'd like to add about the evidence base upon which the proposals for common land have been developed?

Is there anything else?

No, I think, as the Minister said, we are very conscious that, because of the rights that most graziers hold, it will not be possible for them to deliver the universal action. So, it's a question of now looking back and saying, 'Okay, is the collaborative layer, and what we envisage for that, sufficient, or is there more that we need to do to try and support common rights holders?' But we absolutely recongise that this is one of the top priorities for both the development of the scheme and also the development of the optional and collaborative layers. 

As you probably know, Vikki, it's the universal layer that we want to be ready for day one, and every farmer, if they want to be part of that, can come in from day one. There's a lot more work to be done on the collaborative and optional layers, going forward. They won't be ready for next year at all. 

Diolch. Thank you, Chair. 

Thank you, Vikki. I'll now bring in Buffy Williams. Buffy. 

Thank you, Chair, and thank you for joining us this morning, Minister. I have some questions around national minimum standards. Can you update the committee on the Welsh Government's intentions for national minimum standards, above which farmers would be paid for under the SFS, and will there be opportunity for consultation?

Thanks, Buffy. So, the regulatory baseline for agriculture, which is what we refer to as NMS, already exists, and what that does is establish the minimum requirements every farmer must comply with and the associated criminal offences for any serious contraventions. So, as I say, that's already there; it's not part of the consultation. Obviously, NMS, or the regulatory baseline, is kept under review, and if there are any changes required—agricultural pollution regulations is an example—we always, obviously, consult before we bring them in.

Thanks. Will these standards be published, and how will they be communicated to farmers?

Yes, they're already published. They're available on the website. 

Thank you. And will the national minimum standards include both statutory management requirements and good agricultural and environmental conditions?

Both of those are sub-sets of the regulations and are available on the website. 

Thank you, Minister. Thank you, Chair. 

Thank you, Buffy. I'll now bring in Llyr Gruffydd. Llyr. 

Diolch. Much has been made of the economic impact assessment that's been published, clearly, and you've explained that it reflects, maybe, a previous iteration of the scheme as proposed, although it does, obviously, suggest a 5,500 potential job loss in direct jobs within the sector, and a £200 million loss to the rural economy, et cetera. You've also said that you would undertake another assessment in light of whatever the new finalised potential scheme would look like. What does an acceptable economic impact assessment look like to you?

Well, I've always said I don't want to see one job loss. What we want to see are more jobs, and, obviously, more benefits coming forward that will require further jobs in the sector, in the rural communities as well. I think it is really important to say that the economic analysis is based on the scheme outline that was published back in 2022.

You've said that.

It was used to develop the proposals to minimise the economic impact, but we have made significant changes since the 2022 scheme outline, not least the fact that we're now proposing to pay for maintenance of all existing habitat and woodland, for instance. So, there will be new economic analysis, as you say. But, for me, I don't want to see any job losses, but we'll have to see what comes out in the economic analysis.

Yes. So, we can take it as read then that any future modelling done around what you propose to be a final scheme, if that shows a level of job losses, then it will not proceed on that basis?

Well, that will certainly have to be looked at, yes.

Have to be looked at, or is that—?

Well, you know, again, it's part of—

What does 'looked at' mean?

Well, 'looked at' means it will have to be looked at, because we don't want to see a loss of jobs. The whole point of the sustainable farming scheme was to keep our farmers farming, to keep our family farms particularly, not to see what happened in New Zealand, when I know they had absolutely that cliff edge. We've always said we wanted to avoid that, so this is all part of the development of the scheme.

If I may add, obviously, modelling is modelling. It is based on a number of assumptions, and the model that we published alongside the SFS, as the Minister said, which reflected the scheme outline from the summer of 2022, made some very generic assumptions. For instance, it assumed that everybody, 100 per cent of farmers, would join the scheme, even where it was economically unviable for them to do so. Now, in reality, as we all know with these schemes, each individual farm business, based on the final scheme that is published, will have to take a decision as to whether it economically makes sense for them to join or not join. So, the reality is that, for the vast majority, if—. Sorry. For those for whom it is unviable to join the scheme, they're unlikely to come in. So, that's one example.

Can I just—? Sorry to interrupt—

But I think that's an important point that—

Yes, of course.

—obviously, the modelling will help us to shape the proposals and to advise Ministers, but it is modelling and has some caveats. It will not necessarily reflect what will happen in real life.

So, what was the value in publishing it, then, if you're saying that much of the data was based on a very unlikely scenario? Because, obviously, it's caused a great deal of consternation and concern. We've seen the 5,500 wellingtons on the steps on the Senedd today. And now you're saying that, 'Well, you know, it included people who'd never go in because it wouldn't work for them.' Well, what was the value of publishing it, then?

To be transparent. Because I can tell you now, if I hadn't published it, there would have been a freedom of information request in, and it would have been published, and I didn't want that. I really wanted to be transparent. And if you asked the farming unions, I'm sure they'd tell you that, if I hadn't have published it, they would have put a FOI in. So, I thought it was really important to publish it. But you need the caveats around it, don't you? And I think that's really important. So, social value wasn't part of it, for instance. We did have discussions with stakeholders ahead of publication, because I knew exactly what would happen. Because, you know, why wouldn't it? You look at those figures and you knew what would happen.

Sure, but you set the parameters for that modelling work, for whoever undertakes the work. So, why did you not ask them to carry something out that was a bit more meaningful in terms of what it was targeting—

I'm going to hand over to Gian Marco here. This is very technical.

—and including other aspects that maybe should have been included?

So, the simple answer is that we knew we would use that as a bit of evidence input into our own policy work. So, it was designed to give us, I guess, a worst case scenario, in many ways, and it was based on the assumptions that we made 18 months ago. A lot of policy work has happened since then, including as a response to the modelling. So, one of the things that, for me, is a very obvious cause and effect is, based on the modelling, we looked at the—. Because a lot of the modelling numbers are based, basically, on a reduction of livestock. That's where the numbers come from. And one of the things we looked at, which we've now introduced in the scheme, is we've moved away from fixed stocking-rate grazing restrictions for habitat, which we've got, for instance, under Glastir, and we've now said in the consultation that we're not going to have those restrictions. So, we're going to set, in effect, an outcome that we want achieved, but we're going to let farmers decide how to do that, including what an appropriate stocking rate is. So, those sorts of things, when we re-run the economic modelling, I think will show that the economic impact will be less negative, if I can put it that way.

Yes, but you were asking for the most negative, weren't you? You said you wanted to see the worst case scenario. Should there not have been a range, where you could have said, 'Well, this is the best possible scenario, this is the worst, and it's likely to come in, maybe, here, if we go there, or there if we go somewhere else'? 

If I may, Minister, I think if we'd done the economic modelling later, when some of the more detailed policy workings had been done, it would be a different set of assumptions and would be a different set of results. But there are things, for instance, that, even now, we couldn't plug into an economic model, even if we ran it today. So, things like the payment rates, we've always said, 'We can't develop the payment rates until we finalise the proposal, and we can't finalise the proposal until we've heard everybody's views through the consultation.' So, even if we ran an economic model today, it would have to be based on some assumptions, particularly around payments rates, which may not be true, or may not be right, once Ministers take a final decision. So, the problem with it, if I can be brutally candid, is that it was a tool that we've used to try and inform our policy development. We wanted to be honest and transparent and show what our workings were, but I appreciate that it has led to concerns, because, again, people maybe have focused on the numbers, and it's—.

So, the next modelling work, you will need all those pieces of the jigsaw in place, effectively, or as many as possible, in order to get the most meaningful outcome. So, if we're looking at changes to the scheme, if we're looking at eventually finding out what the payment rates are, further down the line, then you will be in a position to propose a broadly final scheme, then you will do the modelling on the impact. If that comes back and tells you a disappointing story, then, clearly, you will need to revisit. Is all that going to be done by 2025?

Well, as I say, that is still the plan, but you've got to be pragmatic about it. And I'm sure we will take as long as we need to do it—you've had that commitment. I wouldn't see that commitment changing with a new Government; I think we have to get it right, and the modelling and the economic analysis and the economic impact is really important as part of that. So, we'll have to see what comes through. I think I was right—I am right—in saying that the economic analysis that we're referring to, that was done on the assumption of 100 per cent take-up. Now, that's never going to happen in real life, so—

Well, again, it questions the value of the exercise, doesn't it, but there we are.

But I think, maybe, next time—that's what I was thinking—it might need to be a bit more targeted, to perhaps not make so many assumptions, to get it—.

Sure. Okay. But we can at least gather from all of this that, if a future impact assessment tells a story that is very negative in terms of job losses, then, clearly, the Government would not wish to pursue that as an option.

Well, I think it would be foolish to chuck out seven years of work that has been really carefully considered, built up. Nobody can accuse me of rushing this, you know; we've really taken our time. But, ultimately, BPS—there are not many farmers who say BPS has been good for Welsh agriculture. It's a very blunt instrument. And we've got to get it absolutely right for, probably, the next two or three decades, isn't it, so it's really important, I think, that we take our time and get it right.

Okay. Thank you. If I tell you 'free-range eggs', I think you know what I'm going to ask you.

I do. I do. I do.

It does strike me as quite odd, frankly, that the whole of the EU is moving in a certain direction in relation to the 16-week limit for describing eggs as free range, if they have to be housed because of avian influenza—Northern Ireland is doing the same, Scotland and England are consulting on that as well—but, for some reason, you're not seeing Wales moving in that direction. Can you explain why, because, surely, that'll disadvantage us severely?

So, the consultation that England and Scotland—I was going to say 'are undertaking'—did undertake, because it finished yesterday, I'm very interested to see the responses that come from that consultation. At the moment, no, I certainly don't think we need to change our policy. It's not that long ago that we moved from 12 weeks to 16 weeks, so I do think we have helped the sector. Obviously, we had that unprecedented two years of incredible outbreaks of AI; it's not like that this year, and that's with great thanks to poultry keepers for really looking after their flocks. So, I think that move from 12 weeks to 16 weeks was very beneficial for the sector. The current law does provide, as I say, for that 16 weeks. At the moment, I think that gives them the flexibility they needed.

One of the things that did concern me was that there was no consumer voice ahead of that consultation. Now, I've had correspondence telling me that consumers' views have been sought—they certainly hadn't been by the Department for Environment, Food and Rural Affairs, ahead of the consultation. But I do accept that, if changes are made—. And we don't know, do we? We don't know if changes are going to be made in England and Scotland, because the consultation only closed yesterday. I do accept that, if they do, then obviously it will be a more complex situation if we're different in Wales. But, at the moment, I don't see the need to change the policy.

But it would annihilate the sector in Wales if they could no longer offer themselves as free range under those circumstances, when England, Scotland, Northern Ireland and the rest of Europe can.

But I disagree. For me, people will know that, if they buy Welsh eggs, it will say exactly what it says on the packet.

But they won't be able to buy them, because Tesco won't stock them any more if they can't describe them as free range.

Well, that's a discussion to be had with the retailers. But, as I say, I want to see what—. We don't know that England and Scotland are going to do this, do we? So, let's see what comes out of their consultation. I wasn't part—. I didn't want to be part of the consultation.

I find that strange as well, because why not? Because you're saying, 'Well, I'm interested to know what their consultation says.' Well, wouldn't it have been easier if Wales was just part of that consultation?

Well, you may think that.

Because, as you say, you don't pre-empt consultations, do you, Minister?

No, you don't pre-empt consultations. So, as I say, it might not happen, and it would have been a lot of work for our Welsh poultry sector, at a time when we already had a major consultation being undertaken here. There was no—. I didn't know about it; they didn't bother telling me about it.

You didn't know about it.

No, we didn't know about it. It hadn't been discussed with me at all. I haven't had—

Scotland knew about it.

Well, I haven't had an inter-ministerial group meeting since Thérèse Coffey was the Minister—was the Secretary of State.

So, how did Scotland know about it, then, if you—

I don't know. But the first I knew about it, I think I'm right in saying—I don't know if officials knew about it; I'm trying to think, Gian Marco—was I think I got a letter asking did we want to be part of the consultation. I'll have to check up on that, but I think that that was—

You did get a letter asking if you wanted to be part of the consultation.

Well, yes, but that was the first thing, do you know what I mean? There had been no discussions with me about it, or anything.

What about the impact of the United Kingdom Internal Market Act 2020, then? Because, if you choose to plough your own furrow, then maybe UKIMA would mean something very different on the ground.

Yes, it would apply, and the reality would be that eggs fit for sale in one part of the UK would be fit for sale in another part, even if the marketing regulations were different.

So, no matter what you say, you'd have to comply.

If UKIMA came in, yes.

Okay. Thank you.

Okay. Diolch, Llyr. I'll now bring back Samuel Kurtz. Sam.

Diolch, Cadeirydd. Just one quick point on the economic modelling that Llyr was questioning on. Has any economic modelling been done on or any thought or time given to the inclusion of a universal payment, similar to what the Scottish Government are suggesting for their farmers—not, potentially, at the same funding rate as the Scottish Government, but a single payment for farmers, regardless of whatever additional measures there are that they can apply to?

I'm going to hand over to Gian Marco.

The scheme design that we've been working on for a long time now is one in which there is a universal baseline payment that is a payment for actions undertaken by farmers. So, what we—

So, those are the 17 universal actions.

Yes.

I'm talking about a payment that does not require 17 universal actions, but is similar to what the BPS was—

No, we've not gone down that route, because Ministers, based on feedback, including from the farming unions, have decided to go down the route of a universal payment for a set of actions. So, that's what we've been working on, and that's the data that we've been gathering to inform our policy development, to decide what those actions should be and how they should be targeted et cetera.

Okay. Thank you. Changes to the school year: obviously, a potential £1 million impact to the Royal Welsh Show. I was just wondering what update you could provide us on your discussions with the Royal Welsh Agricultural Society, and, potentially, the education Minister, on where that's been. I believe the consultation has closed.

I think the consultation closed—

About 10 days ago.

I was going to say, it was about two weeks ago, wasn't it? It was two weeks ago. There have been a significant number of responses to it. It's a very big consultation response, which you wouldn't not expect, really, because it affects, obviously, a huge amount of people and families. So, I've obviously met with the chief executive and members of the board of the Royal Welsh Agricultural Show. The Minister for education and Siân Gwenllian, as the designated Member, met with the same people—I think it was the three same people—back in January to hear their concerns. I know education officials and my officials are working with the Royal Welsh Show as well. But, again, let's see what comes out of the consultation. But I think it's fair to say that the show, or the chief executive, made it very clear, the concerns. The show in 2026 would be held in term time, as it currently stands. So, those concerns have obviously been heard, and the consultation is being looked at.

Do you know where the idea originated for school term reform? I know it's not your portfolio, and forgive me—it's not your department. 

Yes, I'm trying to think whether it was in my manifesto, but, obviously, it's part of the co-operation agreement. 

Okay, thank you. And just one final point on TB. We've talked in this committee and in the Chamber a lot about TB and TB eradication. I'm just wondering if you've had an opportunity to look at the Birch peer-reviewed report on the impact of removal of infected wildlife on TB incidences in England, and your analysis of that.

No, I don't think I've looked at that. Have you looked at that? 

So, there's the paper by Colin Birch and colleagues that, as you say, is a peer-reviewed article. So, that is known to us, from the point of view that it's part of published scientific journal content. So, yes, it's part of an evidence base. There are many other papers and sources of evidence that relate to bovine TB. 

Yes, I just think the evidence in it is quite stark. The herd incidence rate of TB reduced by 56 per cent. We would be falling over ourselves if we were able to achieve those targets here in Wales, so I'm just wondering, Minister, given where your manifesto and your programme for government sat in terms of removal of infected wildlife, if evidence such as this was able to change your mind on the removal of infected wildlife, and if this can't, is there anything that could?

Well, you know the programme for government commitment is that we will not cull badgers, if that's what you're referring to, and that is a programme for government commitment from our manifesto on which we were elected, which will obviously cover this five-year term of Government. 

So, regardless of any evidence—

But I'm very happy to read it. 

So, regardless of any evidence, your programme for government is—

But I need to see it. 

Yes, of course, and I know Dr Richard Irvine has mentioned that it's known to you and your department. But given that it's so stark, surely that must open up a few doors of thinking, actually, is there another opportunity for us to look at this again, and if not, that just shows it's a political decision rather than a scientific decision, TB eradication policy in Wales, does it not? 

Well, what I will—. I'll ask Richard to perhaps do me a note on that paper. It may be that—. When was it published? 

Gosh, within the last few weeks. 

Okay. No, I definitely haven't read that. 

It's very recent. 

Yes, it is very recent. 

Okay. Well, I will certainly read it and have a look at it. 

Okay, thank you. 

If I may add very briefly as well, this is part of why—. If we can return briefly to the technical advisory group, so as part of the partnership working that was set out as the principle in the five-year delivery plan, we have a public appointments process that we know about from the point of view of the technical advisory group and the programme board. But this is why we need to bring those pieces of the puzzle together from the point of view of looking at TB eradication in Wales. There are many pieces of peer-reviewed evidence and other sources of evidence relating to TB eradication in this country, in England, in other parts of the world. So, we have to look at a balanced view across evidence sources, and that's why the technical advisory group and programme board are so important also to help with that—to bring experts together, to bring world-renowned experts together. And, as I say, the Birch paper that you referred to is part of a broad evidence base. 

And the final point I would make, if you'll allow me, Chair, is that we have to consider, when we look at TB eradication programmes on the ground, that there will be multiple measures happening simultaneously; it's not just one variable or one measure that is taking place at one time. So, when we look at the 'practical' implementation of TB eradication, then you have to consider the evidence in concert with what measures are being taken at what time, and typically those are being combined. So, you may have different factors, and so you have to be really clear about teasing out what is the specific contribution of one measure in concert with other measures that will be happening alongside. 

I think it's well documented from our side of the Chamber that we perceive targeted removal of infected wildlife not as a silver bullet, but part of a suite of measures—a holistic approach of removing and eradicating bovine TB. My question would be, though: if the technical advisory group does come up with a decision that, actually, we do need the targeted removal of infected wildlife, doesn't it then just come up against a political block? So, the technical advisory group doesn't have teeth in that sense. If it's recommending to Government, 'We think that there should be a targeted removal of wildlife', your political manifesto states otherwise and, therefore, the technical advisory group has no teeth. 

Well, you're making a big assumption there, but of course we would have to look at it, and of course that has teeth. But as Richard said, you have to look at things—. So, for instance, in the previous term of Government, we did have some pilots where we did—I'm trying to think what we did. We captured the—

It was the intensive action area.

The intensive action area—where we did capture badgers, test them to see if they were infected et cetera. So, it's not that we've ignored it. We have done things, and then obviously you come forward with a programme that includes all those things. But to say it hasn't got teeth is really unfair, I think. 

Okay. And then just one final point on the technical advisory group—

Very, very quickly.

Forgive me, Chair. On the policy around on-farm slaughter, why are you delegating that decision to TAG when you are able to make that decision to change it now, given that there are other policies available on the islands of the United Kingdom?

I think it's really important that we get it right, because, as I say, we had pilots before and the uptake wasn't great. The trouble is, as a Minister you hear lots of different things, and you're not quite sure which of those would be the best thing. So, I think give it to the experts to come up with a plan, or a plan for a policy, to make sure that it works this time. Because if you look at what they're doing in England around their on-farm slaughter, I think it's 40 per cent, 60 per cent—

Broadly.

Yes, broadly 40 per cent. I know you're never going to get 100 per cent, but I would like that as near to 100 per cent as possible. So, I think it's really important—

Sorry, when you're talking about the percentages, what do they refer to? Sorry. How many are taking up—?

Yes, the uptake of it. And when we tried to have the pilot scheme in 2019 here, it didn't work, and I want to know why it didn't work. We need to look at making sure it does work the next time, so I think give it to the technical advisory group. I think the information is ready to give to them as soon as it's set up.

There'll be information provided, and as the Minister alludes to, it's making sure that we've got a balanced perspective that is being looked at in the round from the point of view of different sources, so that then recommendations in regard to policy can then be made.

Okay. Diolch, Sam. I'll now bring in Hefin David. Hefin.

Diolch, Gadeirydd. I'd like to ask about the discussions the Minister has had with regard to fisheries and particularly access to water. I understand the UK Government is negotiating access to water with the EU from 2026. Can I understand, then, the Welsh Government's role in that negotiation, and how the Minister would ensure that the Welsh Government's interests, and Welsh agriculture and fisheries' interests, would be considered in those negotiations?

To go back to my earlier answer to Llyr, we haven't had an inter-ministerial group meeting since—I think it must be approaching nine months now. Certainly, Thérèse Coffey—we've had two DEFRA Secretaries of State since then, and that's not through my lack of trying, and the Minister for Climate Change and also the Scottish Ministers trying—we're just being met with a brick wall, unfortunately. And that would be the main area for me as a Minister to have discussions with my counterparts from DEFRA. I think it's fair to say the UK Government negotiated the last trade and co-operation agreement. It didn't really bring much back of value, I don't think, for Welsh fishers. So, it is incredibly difficult to influence. I should say officials do have a good working relationship, so my officials are certainly part of discussions with their counterparts, but the last TCA fell very, very short of expectations for the quota tonnage that moved from the EU to the UK, so it is really important that we do try to get the message through to the UK Government as best we can. 

[Inaudible.]—as best we can. Would the committee perhaps writing to the UK agriculture Minister be helpful? What else can be done to improve this position?

You keep trying to push with the Minister. December council we used to go to every year in Brussels when we were part of the EU. You did feel that you were part of those discussions, because you sat round the table, quite often through the night, but you were part of those discussions. But, unfortunately, I don't feel we are, since we came out of the European Union, which is very unfortunate, and it would pay for the DEFRA Ministers to listen to us. But what can you do? You can keep trying to push for bilateral meetings, you can keep trying to push for inter-ministerial groups. I know officials keep pushing. You put it in writing, you can write to Ministers to make sure that you can have a bit of influence over it, but I think it's fair to say this is one area where—. You've heard me say that leaving the European Union wasn't kind for agriculture; well, it certainly wasn't kind for fisheries. 

You have concerns, then, about the 35 per cent negotiated total level of catches that have been decided by the UK Government, and you would have made representations on that?

Yes. As I say, it's a continual piece of work, really. I know officials do it, but I think it's really important, as Ministers, that you have those discussions. We'll keep trying, ahead of the negotiations, because additional quota opportunities, or what was promised—that sea of opportunities. I can't remember, was it Michael Gove? Somebody used the expression 'sea of opportunities', if we left the European Union, for our fishers—they just haven't materialised. I've taken the distribution of the additional quota out of the established UK process and made it available to our Welsh vessels, for instance, if they're able to use it. I've got obligations, under the Fisheries Act 2020, to consider the environmental aspects as well, and the socioeconomic factors in relation to the distribution of that quota. We will have a detailed policy on these matters, to be developed later this year as well, which will, obviously, have input into the negotiations, ahead of 2026.

Okay. Can you provide an update on your work to introduce remote electronic monitoring?

Well, we just had the King scallop fisheries management plan—I published that in the middle of December last year. The group that was advising us on that are going to continue to have a look at the remote electronic monitoring, and whether it should form part of a new framework of management measures for King scallops in the Welsh zone. So, that's an ongoing piece of work now.

Diolch, Cadeirydd.

Diolch, Hefin. I'll now bring back Vikki Howells. Vikki.

Thank you, Chair. Just to finish with a question on marine and fisheries grants, Minister. You've previously told us as a committee that there had been poor take-up of the marine and fisheries scheme, and that budget had been reallocated from that scheme as a result. So, would you be able to provide an update on work to adapt the marine and fisheries scheme, or to develop new schemes for that area?

Certainly. You may have picked up a statement I made last week announcing a new application window for a funding round for the Welsh marine and fisheries scheme. That was opened, as I say, last week—I think it was 29 February, it was the leap year day, and that will close on 10 May. We've made £1 million of funding available to boost the marine, fisheries and aquaculture industry in Wales. What we've done is go back to our stakeholders, to ask them to identify what they need, what they want from that funding, what their requirements are. They've been very instrumental in doing that. You know we've got a dedicated stakeholder group that helps us with these things, and they've been very involved in the development, not just of round 4, but in the previous three rounds also. I'm really grateful for their input, because I think it helps us get it right, but, of course, it helps them going forward. Again, I think we've asked for an independent evaluation of it, to make sure that we are getting absolutely maximum benefit for every pound that we spend, not just for the public purse, but also for our coastal communities and our fishers.

One thing I would add, Chair, if I may, just on that—and we talked about this during budget scrutiny—is that one of the things we've done is we've extended the scheme to capital as well. So, one of the bits of feedback we had from stakeholders on the previous scheme, which was revenue only, was that, actually, capital would be more useful, so that's part of what we've done with this latest announcement.

Thank you, Minister. I've already shared your statement with the award-winning international aquaculture business that's actually based on an industrial estate in my constituency. Just to conclude on that, then, will there be further opportunities for stakeholders to continue that dialogue about what's needed through the marine and fisheries scheme?

Yes, absolutely. I mentioned we've got the stakeholder group, but, of course, for any individual business, like the one you referred to, or for a fisher, it's really important we understand what they require. And it's been really pleasing to see, as we've gone through the rounds—. So, the first round, I think there were half a dozen applications, but none of them were successful, but as we've gone through the rounds, that's increased. In round 3, we had 27 applications, and 19 were successful. So, you can see, working together, and I go back to collaboration—. It's really important you work in partnership, because it's no good us saying, 'Well, this is what the money is for,' and them saying, 'Well, that's not what we want.' But I've been really pleased to see the improvement in those three rounds, so, hopefully, round 4 will be even more successful.

Thank you, Minister. Thank you, Chair.

Thank you, Vikki. And our session has come to an end. So, 'thank you' to you and your officials for being with us this morning. Your evidence, as usual, will be very important to us as a committee in scrutinising the Welsh Government's policies going forward. A copy of today's transcript will be sent to you in due course, so if there are any issues with that, then please let us know. But, once again, thanks for being with us.

Diolch.

We'll now take a short break to prepare for the next session.

Tom Smithson, deputy director of economic strategy and regulation.

Helen John, deputy director of border controls.

Jo Salway, director of social partnership, employability and fair work.

Thank you very much indeed for those introductions. Minister, this could well be your last scrutiny session with the Economy, Trade and Rural Affairs Committee, so we would like just to take the opportunity to thank you and your officials for your engagement with us as a committee over the last couple of years.

Perhaps I can just kick off this session by asking you to reflect on your time as the Minister for Economy and tell us what you believe has been one of your biggest achievements during your time in this portfolio.

I didn't realise this was going to be a valedictory session. I think one of the things that we have done, when you think about the last couple of years, is manage all of the incredible change that's taken place. If we go back to May 2021, when we were coming out of the pandemic, looking to support businesses, and then the omicron wave came, we still had all that challenge of not having an agreed way of working with the UK Government on how UK financial support could be provided. We were still navigating our way through an extraordinary time in public health terms and the direct impact it had upon the economy. We'll later today talk about a range of other things, not just the budget, but a range of other UK policy initiatives. It's been a genuinely extraordinary time, even in less than three years as the economy Minister, with the number of different partners we've had to deal with in the UK Government. I think there have been six different science Ministers I've dealt with, although George Freeman has come back more than once. That's meant that we've not been able to make choices. I think George Freeman was a good science Minister, actually. If we'd had the stability of working with a person like him through that time, I think we'd have made more choices in a whole range of areas that this committee is interested in.

I think in terms of positively not just managing and coping with that change, we have identified areas where we know there are real strengths and opportunities for Wales in the future. That is building and working in partnership with businesses, trade unions and others. If we think about cyber and semiconductors as those opportunities where the Welsh Government has been active in securing significant investment for the future, we've only been able to do that because of the relationships we have with those people in those sectors, but also the credibility that I think we have from being a stable Government that has set out what we want to do and is then able broadly to do it.

I think those things really do matter and it gives us a platform to look at growth for the future. It doesn't mean there aren't challenges, but I'm very keen that we do talk about growth in the future, because from my perspective as a Welsh Labour Minister, I want to see more people in better jobs, because that's essential to addressing poverty and inequality in the country. To do that, you've got to grow the economy, and grow the economy in areas where you can be clear that there is a good future with good work ahead.

There will of course be challenges, as there always are, whether it's the steel sector or whether it's the recession that we're into across the UK now. But I think we can have room for proper optimism about our future. More stability at a UK level will give us more stability here and a platform, I think, to do what we would want to do despite our different politics in the committee. Who wouldn't want to see a Wales that is fairer, greener and more prosperous?

Thank you very much indeed for that. You mentioned you want to see more people in well-paid work. In your very first scrutiny session with this committee, you said that your priorities for the portfolio included needing more people to work and to be in good work and well-paid work. Do you believe that the Government has actually met that challenge?

I think we've done as much as we can do with the resources we have. When you look at the opportunities that exist, we do have really strong relationships with all of our partners here in Wales. Actually, some of that was stronger than it had been before because of the way we'd had to work through the pandemic. The challenge is, as we have come out of the pandemic, look at the real challenge the economy has faced: that is both part pandemic, part the invasion of Ukraine and the direct consequences of that. There's more uncertainty in the world, when you think of what's happening in the middle east, not just the war in Gaza, but the challenges of actually getting through the Red sea and what that does to shipping times and all that uncertainty. I think that is a big challenging context. Our ability to carry on working with partners who trust us is really important to navigate those challenges, as well as not to lose sight of those opportunities. So, in some sectors you really have seen an increase in growth, and the tech sector, in its wider sense, from fintech to cyber and others, has seen real growth. 

I think we could have done more if we'd had more stability and certainty, and the undeniable and unvarnished truth is that when you have fewer resources you can do fewer things. So, we've gone through budget scrutiny and the undeniable reality that the value of our budget in global terms is less, and that means the economy department has had less to do, because of the well-advertised priorities of the NHS and local government. And, to be fair, in the Chamber, no-one says, 'Don't put more money into health or local government.' There's normally a demand to do more and also do more in other areas. And in every scrutiny committee I've been in, including your comrade committee looking at cultural matters, there has regularly been a demand to find more money to put into those areas of interest, which is understandable. That's part of scrutiny, isn't it? People say, 'Why can't you do more when this is really important? You recognise this is important, why can't you put more funds into it?' Then, I have to be able to step back and say, 'The honest truth is that we have less money available, so here's how we're trying to meet our priorities and not capsize or walk away from opportunities in the future.' That's been one of the really difficult balancing acts, actually. There is a range of projects that we want to see where we're confident we can see significant economic growth in the future, and the challenge is how you maintain those opportunities even if you're able to do less than you'd want to. We could go through a number of those, but—. 

All of the uncertainty I've talked about from a UK level doesn't mean that there aren't opportunities in some of that as well. I think free ports and investment zones are a good example of where they're not our policy initiatives, but they require devolved and reserved levers to be used for them to have a chance of being successful. And on free ports, for example, noting that there are two here who have a direct constituency interest, as well as a regional interest, in the Celtic free port, the opportunities from floating offshore wind are significant from a decarbonisation point of view, but also from a future economy point of view as well. The two are indivisible. So, we would always have wanted to see greater investment come in to make floating offshore wind not just a 'possible', but, actually, something that is going to happen with real economic benefit here.

So, the work we've done across the Government, with the Crown Estate, for example, and others, and investors around ports, would have taken place. The fact that there is a free port around that too is a possible opportunity to accelerate that, but we still need to work through what that means in detail, and that, again, takes away resources. So, we haven't been given extra resources to man it as a free-port programme. We've had to divert our own resources and that's an undeniable compromise. So, Tom is now doing lots of that work alongside me. Were there not a free-ports initiative, we would have been doing work on floating offshore wind economic opportunities, but Tom would have engaged in a different way with different a capacity. So, in all of this it's never an entirely straight line of, 'There is a good initiative with no difficulty around it', and 'There are real challenges over here with no difficulty or opportunities around those.' So, it's a balanced picture, which is not always easy to communicate in a leaflet.

Sure. Obviously, you've mentioned the pressure on financial resources. Now, you've announced in the final budget that the apprenticeship allocation for 2024-25 will be restored to the level set out in the indicative budget, at over £143 million. But do you accept that there will still be significant cuts to the apprenticeship budget, given that, in October of last year, the Welsh Government announced a cut of £17.5 million to apprenticeship funding? Do you still recognise there's still going to be a significant cut to the funding of apprenticeships? 

I think, in October, we recognised that we were going to move money that was unlikely to be used in year. So, that was part of the in-year challenge that we had, rather than deliberately cutting the budget. We have got real challenges now, and I recognise that—

So, it's about take-up then? Is that what you're saying? 

At that point, that was about take-up. 

Right. 

The undeniable truth is though that the ending of European run-off means that there is a real reduction in terms of what our providers will have to use, and that's undeniable. I think I've been entirely upfront about that. In fact, previously, we've been clear that because of the likely end of those, because of the way the UK had advertised that money was not going to be available, I've come to this committee on more than one occasion to indicate we would not meet our target of having 125,000 apprenticeship starts within this Senedd term. We will see a growth in the number of apprenticeship starts. We expect it to be at least a 10 per cent growth within this term compared with the last one, but we wanted to do more. So, there is a reduction in terms of the amount of money that providers will have; the Welsh Government direct investment will remain the same though. That is one of the outcomes of the budget process; it's partly about the scrutiny, it's also partly about the fact that we had some money that we weren't expecting in UK terms, as the finance Minister set out in the Chamber. It's not a satisfactory way to have to run a budget.

Does this mean, therefore, that you will actually reach your 125,000 apprenticeships target over six years, rather than within this Senedd term? Is that what you're saying?

We may still be able to do that. That depends on take-up, and it depends on whether there is more funding uncertainty. We—

So, you don't know at this stage.

Well, I can never give you a cast-iron guarantee about the future, but it's our ambition to be able to do that. But within this Senedd term, we think we'll get to a 10 per cent increase. I'd like us to do more, but a 10 per cent increase compared with the last Senedd term, so from 100,000 to 110,000, which is—. If we'd set that out at the start of the Senedd term, a 10 per cent increase in apprenticeships, that sounds quite impressive, but we wanted to be able to do more.

That comes alongside, of course, other interventions about work-based learning as well, whether it's personal learning accounts that are shifting as well. Actually, that's quite important in terms of reskilling the workforce. So, not everyone can acquire the skills they'll need for the future by changing their jobs or by starting an apprenticeship. Some people will need to have investment in their skills whilst they're still at work, so work-based learning in its widest sense is really important to achieve the opportunities we started discussing to grow the economy and to generate better paid work.

I'll now bring in Hefin David. Hefin.

Diolch, Gadeirydd. The apprenticeship strategy that you launched on 27 February in the Chamber made much of the importance of connectivity across apprenticeships at all levels, which was really very good to see. Of course, you've launched the rail engineering degree apprenticeship, which started in January. You've launched the construction apprenticeship. We need to see more of that. How are you monitoring the success of those two schemes and how can you further then engage with employers to build more of these connected apprenticeships at degree and lower levels, to make the most of the investment that you have increased?

I'll pass you on to Jo to talk about how we monitor, but the ambition in the statement, I think, is important. Regardless of the resource that we have, and it should surprise no-one that we would like to be able to put more resources into apprenticeships, having a clear strategic statement really matters. It's one of the choices that we made—well, that I made—in terms of the budget reductions, whether we changed the mix of those apprenticeships to go for more numbers. So, we kept the point around the quality, and you're right about the progression through different stages and different levels of apprenticeships as well. But, Jo, do you want to come through and just talk about how that'll be monitored, particularly the arrangements that are going to change with the Commission for Tertiary Education and Research coming into place?

The key point around that, in the first instance, is going to be the take-up and reading right that we're responding to employers' needs and producing schemes of study that are attractive to people taking them up. So, that, in the first instance, will be the main thing. At the moment, they're delivered through the Higher Education Funding Council for Wales, which also has its monitoring of where people go when they finish their courses. So, there'll be that angle as well, but, obviously, from August, this is going to be handed over to the Commission for Tertiary Education and Research, who will have the role in bringing that together and taking the view across all apprenticeships. But it's that combination of working with employers to get the right frameworks in the first instance, working with universities to put the provision in and monitoring the success of the people who take up those opportunities.

Can I ask, then, on the early indications of success? What are the early indications of take-up of the January programmes?

I don't have that information at my fingertips right now, but I can certainly get back to the committee with that.

It would be very helpful to have a look at that.

Hefin, do you have any other questions on this? No.

Can you just highlight as well with regard to apprenticeships the specific actions the Welsh Government will actually take to address gender segregation within apprenticeships? How will you actually improve representation of disabled people and people from ethnic minority communities for those undertaking apprenticeships?

On gender, there's a recognition from a range of employers and providers about what they need to do to make sure that there is a greater take-up of apprenticeships in a range of areas. We talked earlier about areas of tech as well as engineering, the broader challenges about STEM in terms of the take-up of the subject matter, as well as what that does in terms of career choices. When I met FE principals in Merthyr college, it was quite heartening to meet a number of women on the way through who were taking up STEM subjects and looking at STEM-related apprenticeships. So, some of that is work that is already in train. We have specific programmes around women in STEM, and particular programmes with employers around looking to get more women and girls into apprenticeships in their industry as well.

When it comes to disability, we've got an inclusive apprenticeship disability action plan, which has seen real improvements in the number of disabled learners and apprenticeship holders. We're continuing to protect the employer incentive scheme to encourage employers to take on a disabled apprentice. That includes a financial incentive as part of that. And we've also got some specific support around the learning needs for disabled people as well.

In terms of ethnic minorities, we regularly monitor the work we're doing and there is good news on that. If you look at quarter 4 from 2021-22, ethnic minority backgrounds accounted for about 8 per cent of total starts. In the same quarter in 2022-23, that was 14 per cent, so we've seen a real increase that is being sustained in take-up of starts. And it will be interesting, I think, to see not just the overall percentage, but where those people are, and to see if there's a choice being made in terms of some careers being more attractive than others, or not. I don't think we can just go on anecdotes, because the people you see are just the people you see when you go to an event, but the overall picture is a good one.

I think when you look at what we do across a whole range of areas, it isn't just, if you like, at my level, and when people are thinking about post-16 choices; it's much earlier as well. So, it's the work that the education Minister is doing with employers going into schools, being part of the work experience offer, but in particular the top end of primary school as well, where lots of people are already making choices. I've regularly made this point before. Often that is not a conscious choice, but if people don't think a career is for them, they don't sit down and write down, 'I am no longer considering careers in this area'. It's why we're working with primary schools, but also parental and carer groups as well, because there's a real challenge about how people see themselves and their community, and that is often transmitted by people who are not familiar with future careers. That goes into schools, it goes into communities. We have this regular challenge of wanting your child to do something you're familiar with, rather than a potential career you may not be familiar with. That matters for a whole range of different areas of the economy.

It's a challenge, though, that employers recognise. I've sat down and worked with the Confederation of British Industry, where they themselves have recognised that businesses have made a proactive effort to want to recruit more women and girls, and they'd found that they'd not been able to have a sustained increase in areas where they'd said there are good careers, so there is still something about how early you can get in to persuade people to keep their horizons open, and then how real the opportunities are. That gets difficult, because you need employers to engage with learning institutions, and also how they engage with Careers Wales, and at a time when we have fewer resources to manage and improve that relationship.

But I'm optimistic that we can still build on things that we think have shown that they can be successful in opening and keeping horizons open. And if you think about—again, your part of the world—west Wales, where you can see that there will be offshore energy opportunities, it's easier to talk about something when people are already saying that these things will be created in the next five to 10 years, and you will see them. I've been talking to someone in an entirely different part of the country where that may not be a visible opportunity within the region where they live. So, some of this is about how we think through scale of opportunities and volume, but also how we use some of the advantages that come in different parts of Wales, where new industries will be created. The challenge is how much of that we create and generate ourselves and how much is simply, if you like, installed and maintained.

Thank you for that. I'll now bring in Vikki Howells.

Thanks, Chair, and good morning, Minister. I've got some questions for you on the green skills agenda. Firstly, can you share with us any initial insights or findings from the net zero sector skills consultation? When would you anticipate that the consultation responses will be published?

I'll see if Jo wants to tell you some of the early insights, but in terms of publication, I'm expecting to publish the outcome of the consultation at the end of March in terms of the summary of the responses and what we've got from that. That's a standard thing that we do. That will be published by the end of March. Regardless of the change in Government, I think that will happen. The Minister with responsibility for skills in this area will then provide a statement later in the spring about how to take it forward, or on the Government's initial response to the consultation. 

One of the things that I would highlight that's led us to having the consultation, before I hand over to Jo again, is that I was really struck by some of the early evidence about what people thought green skills were and how limiting that view was. So, I think one of the things we need to do is to stop talking about green skills, but to talk about skills to take us to a net-zero economy or to meet the climate challenge in a way that doesn't get us into just talking about green skills, because so much of the early evidence from sectors was that they thought that green skills were about working with the environment or recycling projects. And that's such a limiting view, because, actually, these are skills we're going to need in mainstream parts of the economy as well as newer developing parts of the economy. We'll need these skills right across public services as well.

The imperative to decarbonise isn't just in one narrower section of the economy. You'll need green skills in the future of steel production. You'll need green skills in the future of manufacturing. There's a huge amount of work that is being done, and so how we describe this, I think, will be important. And that goes back, if you like, to the Chair's previous questions around, and my responses on, how you keep horizons open so that people think about these things in a way that is meaningful for them and so that they understand that this is an indivisible part of the economy of the future, both for people who have not yet joined the world of work and for those who already are in the world of work as well. Jo, do you want go through some of the emerging themes?

We were really pleased that we got over 100 responses from a wide range of industry bodies, skills providers—really getting quite a discussion around it. As the Minister says, it's that key point about being clear about what the definition is, getting below the surface of net-zero skills to make it meaningful and capturing that point a lot of the respondents were talking about, which was that this means a lot of different things to different people, but it's unlikely that any sector or any individual is going to be unaffected by that. Whether that means massive overhaul in how a sector is operating, or just the acquisition of new skills within the same sector—plumbing being a prime example that everyone would pull on—it's going to be here, and I think the really important thing is bringing to a head the definition of what the net-zero skills are that we can actually all coalesce around. And then, it's actually about the sector-specific road maps so that we can start putting that detail in there. I think it's one where the conversation with providers and with industry is actually as important, because the role of Government isn't in predicting what the skills needs are going to be in 20 years' time; it's actually in helping everyone to identify them and then make sure that the provision is there to actually fill in those gaps. So, those sector road maps will be the really important next stage in the process.

I did warn against using anecdotes to try to set policy, but I think they can be useful in highlighting one of those things, and plumbing is a good example. I met people at a European skills homecoming where, in a range of those, one of the winners was a plumber. He was a very funny young man, and with his dad, and it was a wonderful interaction with him, his brother, his dad and his mum. He was saying, 'I regularly tell my dad that I'm the best plumber in Europe'. But he's doing a lot more than, if you like, what is the traditional image of plumbing: fixing leaks, installing u-bends. Actually, lots of what they're doing are things around heating systems as well. So, he needs to have a working understanding of how and why a heating system will work, how to install it, so that he understands it and he can then tell his customer after he's installed something. So, it's about a great deal more than, 'I can fix a u-bend', which is still useful, because I certainly can't. So, those traditional skills are still of real value, but actually seeing the way in which the job will have progressed significantly from his father running the business and the skills he had to learn to the skills that he and his brother are acquiring now and what will be entirely standard for people who become plumbers in the future. And yet when we talk about green skills, lots of people in the wider public don't think about that at all, and yet it's essential, because that means that they are delivering much more efficient systems, which are better for the consumer, better for your bills and better for the environment as well.

Thank you, Minister. And building on that anecdotal evidence, what else can you tell us about what skills challenges exist currently in relation to transitioning to a net-zero economy? And what else needs to be done to ensure that those skills are there to meet those changing demands?

The challenge is for all of our partners: for businesses themselves, trade unions and workers, education and training providers and, indeed, for Governments and the wider public. We talked a bit more about the wider public understanding, or not getting drawn into a narrow view of what these skills are, but these are skills to go across the economy and into public services as well. How to deliver those is about the understanding from businesses about the sort of skills they'll need or anticipating the development of their workforce to acquire those skills. There's the point around the flexibility of the workforce and how you invest in that workforce. That's one of our challenges. The purpose of having the consultation is to give us a better line of sight that helps us both to deal with large emission sectors with the challenges that provides as well as what we can then do in terms of unlocking the skills those people will need. That's about reviewing the framework to make sure that we're giving people appropriate skills. Businesses need to know what they want, what they think the future will be, education and training providers then need to be able to deliver those skills in a way that makes sense for the worker, whether they're an apprentice or otherwise.

And then, for the Government—Governments, plural—I think there is a challenge about how we're able to provide the stability and the resources to enable that to take place. Local government will always have a view, because they have a relationship with the providers and businesses and, of course, they're a significant employer themselves. Some of this will be about the workforce that they have themselves, as well as key partners. If you think about housing, again, as an example, well, we are going to deliver more housing. Lots of it will be social housing, whether that's a housing association or direct council housing, and you're going to need to think about the skills we will need to deliver the quality of housing with the environmental footprint we want it to have in the future as well. So, it's a direct choice with local authorities' strategic interests individually within their regions and, of course, the stakeholders they work with. And for the Welsh and UK Governments, regardless of the outcome of the next general election, having some stability around decision making and also, hopefully, having more resource to go into that will be a key challenge for us, because otherwise we'll make progress in the future but not at the rate we could do, and we won't see the take-up in those opportunities. So, having the skills map is really important, but there are quite a number of other things that need to happen to deliver it in practice. 

I've a clear idea of what I think we could do, but of course I'm not in control of all of those other elements. I think in Wales, though, we do have a good record of being able to work with stakeholders to do that. If we get the stability and the resource piece right, then I think we can have some confidence we'll make really important progress in economic terms as well as meeting the challenges of the climate. 

Thank you, Minister. And finally on this theme, the Wales Centre for Public Policy has highlighted that pathways to net zero are clearer in some sectors than others. So, what work is the Welsh Government doing to support employers and workers in sectors where there is that greater level of uncertainty?

The headline that the pathway is clearer in some than others is not a surprise. In transport, we talk about having zero emissions from the tailpipe. So, that's easier to understand. There's a challenge there about the net zero mandate changes made by the UK Government, and that's upset some investment choices. So, understanding where you need to get to is one thing, but then you need that stability in investment choices. So, it isn't just about direct money that the Government or Governments put in, it is also that stability and clarity and policy expectation. 

In other areas, there are people who know they need to do something, but they haven't really understood what it is. And, so, that's part of the thing that's come out in the consultation, actually, that some sectors have a much clearer idea about what they need to do, how they want to do it, than others. So, that's why the consultation really matters, because it has been able to flush out some of those areas where people don't really understand what they need to do and how, actually, they're able to work alongside some of the more enlightened parts of those sectors to try to understand what that skills map will look like for the future.

So, the Welsh Government doesn't need to be the single controlling mind in every choice that's made, but we do need to have a strategic view that is informed by evidence from those sectors, and that's one of the things the consultation will allow us to do, to then be clear about where, you know, 'the power of the pulpit' that matters, about, 'Here's where we see the opportunities for Wales and here's what we think the sectors could look like', and, then, other people need to make their own choices alongside the Government as well. I don't believe in the state control of every sector of the economy, but I do believe we've got responsibilities to set that ambition and the agenda, moving forward, and this consultation should allow us to do that.

Thank you, Minister. Diolch, Chair.

Diolch, Vikki. I'll now bring in Luke Fletcher. Luke.

Diolch, Cadeirydd. And I probably should declare for the record that I'm a member of one of the sub-groups of the transition board in Port Talbot, which I think indicates what set of questions I'm likely to be asking you, Minister, around steel. I think a number of members of this committee and Members of the Senedd were quite concerned with some of the statements that came out of Tata Steel UK's evidence session with us a couple of weeks ago, and that was echoed a bit by the unions last week—the unions saying that Tata isn't considering alternative proposals; they're concerned that the consultation is a sham. I'm just wondering how you would respond to that, and have you had an opportunity to raise some of those concerns with Tata?

So, the First Minister and I will meet the chief exec of Tata global in Wales again next week—and you'll know that Eluned Morgan raised our view, our consistent view, directly with Tata when she was in Mumbai for the recent engagement around Wales in India, which was a good opportunity, around St David's Day.

When it comes to the consultation, our view has always been, and I've said it several times in this committee, that the consultation must be meaningful. And, actually, the challenge, I think, for Tata, is if they say, 'We are going to do what we've announced regardless', that doesn't look or sound like a meaningful consultation. Externally, and, understandably, trade unions, when they hear those public statements, they will wonder, quite reasonably, I think, whether the conversations they are then having in the industrial negotiation, actually, are real or whether the public statements are real. So, I think that's easy to understand. And there are legal obligations around this as well in terms of whether a consultation is generally meaningful. So, I'm not surprised that the recognised steel unions—Community, the GMB and Unite—have taken positions on industrial action being a real option. I know that Community and GMB stewards have said that they've given authorisation for an industrial action ballot to take place if there isn't progress made, and I think Unite are going to open a ballot, but with a very long window. I don't think that's due to close until 11 April, as I understand, which means that, actually, there's quite a long time to go in the negotiation process before any industrial action ballot takes place or concludes.

So, I think the real issue and the challenge is, having set out their headline proposals and shared some of the detail with the trade union side, what conversations are taking place, what movement is possible, how does that relate to what they currently see as their financial envelope and is there more that is possible with a different financial envelope? It takes us back to the headline question of, 'Does a different level of investment unlock different choices?' And I'm still clear that it does, but you've got to have that different level of investment for a choice to be made. So, having a plan based on the current level of investment is one thing, but the scheduling of that really matters, because if a blast furnace is still running by the time there's a general election, then there is, I think, a very different conversation to be had. But, actually, the conversations now are really important to get there, because if there is no acceptance of any alternative at the end of the consultation, then, you know, trade unions will have to make choices about what they are prepared to do, not just the leadership but also the individual members, and all of those things could change.

Again, I just want to reiterate not just the Welsh Government's consistent view that the consultation must be meaningful, but that the 45 days is a minimum not a maximum. Tata have been clear with us and in public statements, and indeed with the trade unions, that the consultation will take as long as it needs to take to work through any options. I'm aware that some people on the cross-party group on steel have had conversations with some of the Syndex experts advising Community and the GMB, and it remains my view that any credible plan should be properly considered by the company, and that should also lead to a proper consideration of alternative proposals by the UK Government, because different capital investment could unlock different choices. I think it's helpful that the Senedd, at least, is in the same position.

One of those alternative proposals that would require significant investment would be a plate steel mill. I think we can understand some of the frustrations that some people have around the idea of a free port, and I've made my view clear on free ports over the months, but the free-port proposal—we heard it again this morning—unlocks a lot of that ability around offshore wind. Now, wouldn't it be a real shame if those wind turbines for offshore wind were manufactured and constructed elsewhere and brought into Port Talbot simply just to be floated off. The point I'm getting at here is that Tata have looked at those proposals around a plate steel mill. They've argued that, even with financial investment, the sustainability isn't really there because of steel usage within the UK dropping significantly over the years, and I'm thinking here—and I'm probably going on a bit of a ramble here—back to 2016, when Welsh Government put together a document around certain infrastructure projects that they had in sight and where they would be then using steel made at Port Talbot for those infrastructure projects to try and drive up steel usage within the UK. Is that something that you have looked at potentially doing, identifying infrastructure projects for the future? I think it's important here, because we talk about that additional financial investment, but Tata's view is if that financial investment comes and the project is still not sustainable in the long term, then it means absolutely nothing.

So, there are two points I'd make. The first is that the floating offshore wind pipeline is significant here. Understanding the first signal for the Celtic sea—about 4.5 GW—is important, but, actually, to unlock the significant investment we'd want, we need greater clarity in the future pipeline beyond that. Now, the Crown Estate being able to provide that means that a range of investors then look and make different choices. So, whether that's ABP or whether it's individual energy companies, what they're prepared to do would matter, and that goes alongside what I hope will be good news later today on the floating offshore wind manufacturing investment scheme, for example, where Welsh ports haven't got any of the money out of FLOWMIS. I would expect that Welsh ports would do, and not just ones in south-west Wales, but there are cases across north Wales—the ports of Mostyn and Holyhead in particular as well—to understand what those could look like. And the investment signal matters, because in some cases it's the money itself. In other cases, when the Government, whether it's the Welsh or the UK Government, are prepared to put some money into it, it does provide an important signal and it can lever in private investment to help deliver that project. So, there's the point around FLOW around port investment, and then the bigger signal on the scale of the opportunity in the Celtic sea and how close that's coming, because that then means that if you're looking to invest in new steel production, that's one of the things you would then look for. And if you understand that's there, together with the wider UK pipeline, then actually your investment choice has a different perspective about the number of years you'd potentially be doing that for. So, that in itself matters.

The second point is on not just infrastructure projects. Of course, our budget window in 2016 was different to the one we have now. Paul Davies has been here through that time, scrutinising Welsh Government budgets. The real-terms value of the budget is different now, but, nevertheless, we have a budget that I think does make a difference, and some of those infrastructure projects that we talk about are a mix of public and private investment. Again, we take the free-port opportunity as part of that. To unlock all of the jobs that could happen, knowing what Tata will do and the metal that they will make will make a difference around the value of the proposition from the free port as well. So, actually there is—. Tata's choice and the free port—. The two need to be talking properly to each other now, not Tata saying in the future, 'We've decided not to invest in a plate steel mill, but we think that the metal that we produce could be bolted together and still do the same job.' Well, we need to know that now because, as I said before, those supply chains will get firmed up, and if you're committed to taking steel, for the sake of argument, from the Netherlands or from India, you're unlikely to throw that into the air in another two years' time.

And the bigger point about infrastructure projects is that we will have a general election at some point in the not too distant future. It has to be, I think, by January 2025, but I certainly hope it isn't January 2025; that would be a terrible time of the year to be asking people to vote, and all of us who'd be knocking doors in the dark and disturbing people would recognise that too. I certainly wouldn't want to be putting leaflets through people's doors at Christmas. But the reason why I talk about the general election is that I'm confident that every party will have an offer in the general election that talks about infrastructure, whether it's economic or transport infrastructure, or whether it's housing. And in a range of those things, you're going to need steel. If you want to have a new future for the automotive sector, you've got to think about where that metal comes from. And are you saying, 'We can have a new auto sector, and we're going to do something around the future of transport, whether it's battery powered, whether it's electric powered, or whether it's hydrogen fuel cell, or hydrogen as a combustion source as well, which some people are looking at'? But, actually, you're still going to need to have metal in those products, whether it's individual, personal transport, whether they're buses, or whether they're trains, or, indeed, whether they're commercial vehicles too. So, actually clarity on the plans for the future would make a difference as well. So, the general election matters not just in terms of what a UK Government is prepared to invest in capital terms, but the broader view on, 'Here's what we want to do in the future of the economy', and this will all matter.

And just thinking about one aspect of this, we know that we have the opportunity to generate much more electricity than we need in Wales, even if we can attract more of the power-hungry industries of today in the future—semiconductor being a good example, and there are more. If we attract a large number of those and we're generating lots of our electricity, that would be really good news for Wales, and a way to try and generate those jobs close to where the power is being generated. That should be good news, particularly in communities that don't have large employers in them now, but where power would be generated. In any event, though, we know that, with the opportunities for green hydrogen and that electricity production, we'll need to get that power to other parts of Wales. That means there's got to be investment in the grid. There's also got to be investment in the pipelines around what can happen with hydrogen as well. And, actually, for the rest of the UK, it will matter. So, actually, that doesn't come for free; someone's got to create a pipeline, someone's got to create the grid, and the grid will need lots of metal in it. So, it's understanding what that metal is and where it's produced. And we have people that make cables for the grid as well; they're Unite and GMB workplaces in north and south Wales at present, but Europe is having to do that too. And we could also be an exporter in energy terms to Europe as well, such is the potential that we have. So, in all of those, having a plan matters, and then, to be clear about the metal you need for that, where you want that to come and what procurement rules are going to be in place, the choices that we make and that local authorities make will matter. The choices the UK Government makes—whatever that future UK Government is—will also be hugely important around what other businesses are prepared to invest in, including people who produce things that are metal, the steel itself, and others, as well as those people who then use that.

Of course, to be fair, the Welsh Government doesn't have to wait for a general election to set out its plans for infrastructure projects. The key thing I'm looking for here is to identify whether or not the work is being done in the same way it was done in 2016 by the then Welsh Government, just to identify those infrastructure projects that could benefit from Welsh steel.

Yes, we already have a range of infrastructure projects that are part of the infrastructure investment plan that we have, where you would need more steel to deliver those. Our challenge will be—. And you might be aware there's likely to be a reset and renewal mode for the Government, with a new First Minister in the coming weeks, and there will no doubt be an opportunity for whoever is the First Minister to want to look again at what the future looks like.

So, some of that will matter, regardless of when the general election comes, but I don't think we should underplay the importance of an election when there's likely to be a different offer that I think will make a big difference to jobs here in Wales, including in the direct steel sector. So, I think it's both, not one or the other. 

I'm conscious of time, Chair, but if I could just ask one question—

Yes. Very quickly.

—one more question on the transition board, specifically. Last week, we took evidence from two academic panels. One of them had Dr Dean Stroud on that panel, and we asked about the remit of the transition board, and he had some, I think, pretty interesting things to say about it. So, just looking at some of those comments now: the immediate plans seem to him to be a bit problematic; they remind him of some of the initiatives from the past; and that the focus on people starting businesses seems wrong-headed and the wrong focus. How would you respond to those comments? He was very particular in saying that there needed to be a greater focus on people's health as well. So, mental health and well-being as a result of potentially being made redundant. But how would you respond to those specific points from Dr Dean Stroud?

On the health issues, I've raised those proactively and repeatedly, both with the company as well as in the transition board, and it's why we're engaged, working not just with the health board, but also the meetings I've had in particular with the Deputy Minister for Mental Health. So, the academic may not have seen, but that is a significant concern of ours, and it isn't just me saying, 'I'm worried about it', there is some proactive work being done about it as well. But that does rely on choices that are made. So, if there is a path to the future that is a longer run course rather than a determination to shed jobs by September this year, well, those have really different consequences in health terms.

When it comes to plans of the past, part of my concern with the board is that it's a UK Government construct, and the job's been given to the Secretary of State for Wales to chair it. For the board to be successful, it's got to work alongside devolved bodies and devolved responsibilities, and some of that will be about where is there alternative work if the worst-case scenario goes ahead, as well as there being some opportunities for people to start businesses, but that won't deal with all of the potential loss of employment. You're talking about 10,000-plus jobs going and they won't all start their own business, and there's a challenge there about the advice and support infrastructure to support people. Now, we have a pretty good track record of supporting people to start businesses, young entrepreneurs and old entrepreneurs as well, and people who get support through the variety of means that Business Wales can provide are more likely to still be in business in a year or two years' time than people who don't have that support. So, what we have works.

Our challenge is the scale at which that might happen, and that still doesn't take account of all those jobs that could be lost. Some of those will need to reskill, some will need to think about other opportunities in the economy. My concern is that you could see a significant loss of employment, and you can't then shift the economy as rapidly as you need to to give people decent work. And there's a long run of examples of where this happens, where if you don't have that ready, then you have a significant and long-term challenge for that community. Other steel and coal communities, particularly given today's date, understand what that looks like, and I'm very keen that that does not happen in Port Talbot. Part of my concern is both the reality of that and what it could mean, as well as people in Llanwern, as well as people being worried in Trostre about what it might mean for them in the medium-term future, as well as seeing the opportunities for a different future for the steel sector in Wales in any event.

Okay, diolch, Luke. I'll now bring in Sam Kurtz. Sam.

Diolch, Cadeirydd. Good morning, Minister.

Bore da, Sam.

Free ports. Where are we on the business rates discussion?

We're still going through the business rates discussion on the level of relief. That's also part of what we're talking about with each of the bidders. So, I'm hoping to confirm where we're going to be on our overall support as well as the particulars of business rates retention, and I'm hoping to conclude those whilst still in post.

Fab. So, in terms of the outline business cases that were being currently assessed, I believe, for both Anglesey and the Celtic free port, what information do you intend to publish alongside the decision, when you mentioned 'in post'? Are you giving a clear commitment? Or are you giving overall support or specifics? What will the announcement look like?

So, the decision on outline business cases, I'm keen to be able to say something about that whilst in post, and to confirm what is happening with that. My officials, including Tom, are leading on some of this work, together with UK Government officials, looking at the proposals that have come in and is there a need to receive some final advice, and then to make a decision on proceeding or otherwise from outline business case to full business case. And part of that will be the indications we've given that we want to be in a position to make. I'm not sure what we've put in public about the four years, as well as when I get to confirm the level of business rate retention that'll be available. Because it's also about—. When this starts, you see, is when you start the trigger, the period of time that they're available. So, if you trigger that early and you're not generating activity, you're losing the benefit of the relief as well, so the timing of this matters as well. But whenever we get to that, from the outline business case to the full business case, it should provide clarity on what the offer is from the Government. Tom, do you want to indicate where we are in public? Because I'm expecting to make some choices on this. There'll be a conversation at Cabinet, but I'm keen that we do this and don't leave it so that you introduce an extra period of delay, with a new Minister coming in.

Yes, of course. So, we are now reaching the decision point on the outline business cases; the assessments at official level have been concluded, advice is now going up in parallel to the Minister, and UK Government are doing the same. So, that decision on outline business case will—. Once the outline business case has been formally agreed, that is the point at which tax sites can be designated. Of course, there's another process to go through with Treasury, to put that in legislation, but once that decision on outline business case is made, they can designate the tax sites and they can start benefiting from that tax site designation, and then they'll be invited to submit a full business case, which will take additional time.

In terms of what we'll publish, we will publish jointly with the UK Government. So, once the Minister's made a decision, we'll publish as much as we can on the summary of that decision: what it means for next steps, what it means in terms of exactly what's been agreed, and the timeline we expect the designation to happen, and the full business case process.

Fab. Just coming back to the work that you will have undertaken with the two free ports in supporting them through the outline business case, which is something we touched on last time, how involved have you been, given the timescales and the opportunities, in helping to suggest or craft or give feedback, more importantly, on the outline business case, to ensure that it is as strong as possible? Have the free ports been left to their own devices? Has there been regular engagement with yourself and officials? Where would the dial lie on that?

So, officials do engage with both free port groups, giving clarity around where we are with what the expectation is that they'll need to meet. So, it will not be a surprise to free ports bidding in to get the outline business case agreed about roughly where we are. I have deliberately not engaged, because I need to make a decision, and I can't be actively engaged in saying, 'Here's what I'd write if I were you' if I'm then the decision maker. Officials need to provide advice, and that advice will look objectively at where each of the free ports are, with a joint assessment on how robust each of the cases is, and then the full business case should take us to greater clarity on, for example, some of the points around job numbers and scale of opportunity. But I'm expecting the outline business case work to give a clearer indication of the sectors and how they'll go about identifying and taking advantage of the tax sites they have, as well as its wider impact on the economy.

So, to give you an example, I met Swansea bay area leaders this week, and I made clear that, whilst I'm not in a position to tell them, because I haven't made a decision on the free port, I expect not just the authorities that will be directly affected by having ports in them, but its wider impact on the regional economy. And so wanting to understand how the free port will work alongside what they're looking to do across that area will be important, because, obviously, there'll be skills and labour challenges, and opportunities, across the wider area too, for them to take account of. There may be an overrun in, for example, the port of Swansea—there might be an impact if the free port goes ahead and is successful as well. So, it is seeing this as an intervention within a region of Wales, and wanting it to be successful. So, other partners need to understand how they can be part of that as well. But I can't go beyond that because I haven't made a decision yet.

Okay. Thank you. And just one final question, then, in terms of free ports and investment zones: the Welsh Government and the UK Government are working on the extension of their life, from five years to 10 years. I was just wondering if there's any progress being made on those discussions.

We have had further discussions. We need to be clear about whether we'll get agreement. And that may well be one of the lines in today's budget. I'm fully expecting that the Chancellor will want to announce it today at some point. And I'm sure he'll give full credit to the current constituency Members. The Welsh Government may not get a positive mention, although that work is being done. But everyone understands the reality of life, do we not?

Yes. Politics is a funny old game. Thank you, Minister.

Thank you, Sam. I'll now bring in Hefin David. Hefin.

Diolch, Cadeirydd. Can I ask what the trade implications are for Wales of the 'Safeguarding the Union' plans that were published by the UK Government at the end of January?

'Safeguarding the Union' plans, to try to resolve some of the challenges around Northern Ireland, which we know have been fairly intractable, in overall terms, are good news in restoring devolution. That's a good thing for Northern Ireland, and a good thing for us, to provide some stability, so we now have a team of Ministers that we can work with in Northern Ireland again, and that in itself is definitely good news. The challenge is in the detail of them.

We weren't sighted on the negotiations, so we knew about them when they were published. To be fair, there are a number of Ministers in departments, for example, one of the DEFRA Ministers we have to work with, who became aware when it was published too. I know you saw Lucy Neville-Rolfe—Baroness Neville-Rolfe—and I met her when she was in Cardiff as well, before she had the pleasure of meeting you in the committee. And as I've said before, I think she's being quite pragmatic and wanting to be can-do. The challenge is that there are many different moving pieces within the UK Government.

So, I don't think there is any pretence that the 'Safeguarding the Union' proposals have a clearly worked out plan and route—we're still trying to work through what some of those mean. For example, the statement that there would be no border control post in Cairnryan was a surprise to us and the Scottish Government. Now, that has implications. What does that actually mean, given the obligations we've agreed with a range of people around the need to check some goods that come in that are not qualifying Northern Irish goods? That's a practical challenge that we need to understand how it's going to be met. Because if it isn't, then the difficulty is that you could see trade diversion, from Belfast in particular, going to Cairnryan. Now, you might say, 'Well, that's great for Scotland, if they're going to get more trade.' The difficulty is that, actually, if that means that it's potentially a weak link in biosecurity, that's a problem for Scotland, not an unalloyed opportunity to generate more trade. So, we need to be able to work through and understand what those are.

We were due to meet last week, I think, but, sadly, the UK Government have had to rearrange that meeting, which means that, still, we haven't had a joint ministerial meeting to work through the reality of those proposals and what they mean. I'd much rather be in a position to give you more clarity, but the truth is that I can't.

Just to say, before I ask my last question, the agriculture Minister was with us in the previous session, and she was saying how difficult it was to meet with DEFRA Ministers. But you've had recent meetings with DEFRA Ministers.

He's a relatively new DEFRA Minister—another one. So, Lord Benyon was the previous DEFRA Minister; it's now Lord—

Robbie Douglas-Miller.

Robbie Douglas-Miller. I knew he had a double-barrelled surname, but I didn't want to guess it. And, look, on the initial meeting on a screen, I'm not saying he looks like a bad man who isn't capable—that wouldn't be fair at all—but he was new, and this had landed on him, essentially, straight after being appointed. So, you can't expect him to be all over the detail, particularly when there's a significant pebble in the pond. So, it's the willingness of being able to sit down with DEFRA Ministers, with Lucy Neville-Rolfe, and to make sure that we then have wider ministerial engagement, including the relevant Northern Irish Ministers, as well as Scotland and Wales, to understand what this means. Because our interest is in making it work.

That's what we want, because I don't want to see disruptions in trade. We've seen enough redirection in trade with the realities of the Brexit deal that's been agreed. I don't want to see further disruption that means that people are incentivised to go to a different part of Great Britain. I definitely don't want to see trade diversion to Cairnryan, both on biosecurity grounds as well as loss of trade, and I don't want to see more people simply making a choice to avoid coming through GB at all and rerouting themselves directly into continental Europe. 

Yes. The only thing I've noted was the fact that the previous Minister was telling us that she was struggling to have any contact with DEFRA, but you seem to have managed it. Finally, my last question, given we're pushed for time—the UK-EU future trade relationship, how do you see that developing, and what role will and should Welsh Government play in that development? 

I'd like to see our trading relationships with the European Union stabilised and improved to an extent where there's more trust and more understanding about how goods will move. We've got a number of things that we still need to resolve in that. If you think about the rules of origin, it's a really big deal for lots of manufacturing business, auto manufacturing being one of the biggest and most obvious areas, but understanding what those rules will mean and how people comply is really important for direct jobs here in Wales. I do think that the UK Government of whatever shade it is should look again at the way that devolved Governments are and aren't involved.

And again, drawing on the Chair's previous experience of being a Member here for a long time, when we were a member state within the European Union it was not uncommon for devolved Government Ministers to be engaged by whoever the UK Government lead Minister was for an issue in the Council of Ministers, to have a conversation about what the position would be. And on some issues, a devolved Minister would be the lead voice for the UK because of the specific nature of the item. That isn't the approach that's being taken. If you want to have chapter and verse on it, then you can always speak to Alun Davies, because he was engaged in some of those conversations when he was a Minister at the time; he probably hasn't mentioned it. 

But that experience and that understanding is within the recent past, and it shows that it's possible to do even with different political administrations across the UK. That's the model we want to see take place, because it will lead to not just better engagement—. It's not about status; it's about better engagement leading to better choices to understand the impact of those choices that are to be made with the European Union and the UK. Stability in our trading relationship is so important because, of course, as you'll know, this is the biggest trading bloc for Wales and it's a more important part of our trade than other parts of the UK as well. 

Diolch, Hefin. I'll now bring in Buffy Williams. Buffy. 

Thank you, Chair, and thanks for joining us this morning, Minister. I have just the one question on border control posts. It's been five weeks since the introduction of some checks and customs controls under the new border target operating model. Could you update us on how that’s gone, please?

Pretty well is the truth. So, since the first milestone was introduced—. This is the pre-notification and health certification from the end of January, and we had stood up arrangements in case there were problems, and they were stood down within a couple of days on both sides, actually—the island of Ireland as well as us. So, they've gone pretty well. I think that does show that the work that was needed and we said was needed really was, but traders having the time to get ready for it has been helpful. 

Actually, I can give you some figures from the DEFRA central hub that's been checking documents. Traders are generally meeting the rules. Ninety per cent of cases checked have an export health certificate attached, and, of those, 87 per cent were correct. So, there's both a high level of getting things ready, but also a high level of getting things right. But the fact that some of those are not right does show that there is certainly a need to run the checks. So, it's not just about a paper exercise, because, in some of these areas, there can be a real issue in terms of biosecurity both for the UK as well as the island of Ireland, which is keen to keep its own high status on these issues as well. But you can't rely on that for the future.  

Thank you. Thank you, Chair. 

Thank you for that, Buffy, and I'm afraid our session has come to an end. So, thank you very much indeed to you and your officials for being with us this morning. Obviously, your evidence will be very important to us as a committee in scrutinising the Welsh Government's policies going forward. As usual, a copy of today's transcript will be sent to you in due course, so, if there are any issues with that, then please let us know. But, once again, thanks very much for being with us.