Now we move to the next item on the agenda, which is a statement by the First Minister on EU transition. I call on Carwyn Jones.

Diolch, Lywydd. It has been nearly three months since the European referendum and, while many large questions remain unanswered, it is possible to see more clearly some of the challenges that must now be faced both by the Welsh Government and the UK as a whole. The day after the referendum, I identified six key priorities for Wales. They were: protecting jobs; full involvement for the Welsh Government in discussions on UK withdrawal; continuing access to the single market for goods and services; security of funding budgeted under EU programmes; long-term revision of the block grant; and a new post-Brexit relationship between devolved Governments and the UK Government. Three months on, these remain key priorities, and some important elements of progress have been made.

During the recess, I met the Prime Minister, and over the summer, there has been a wide range of ministerial contacts with key Whitehall figures, including the Chancellor of the Exchequer and the Secretary of State for Exiting the European Union. In July, I convened in Cardiff an extraordinary meeting of the British-Irish Council to create a wide-ranging discussion among the devolved Governments, the British and Irish Governments, and the islands’ Governments— all of which will be deeply affected in various ways by what happens next. The BIC will meet again in Cardiff in November for its next scheduled meeting.

Within the Welsh Government, we have established a European transition team, reporting directly to me, which has the task of leading and co-ordinating the Welsh Government’s approach. Our interests are complex and wide-ranging, and the Welsh Government has mobilised work across the substantial range of portfolio interests that are being impacted by the position. At a UK level, new arrangements are in development to enable specific dialogue between Welsh Ministers and our counterparts in Scotland, Northern Ireland and Whitehall, and I will say more about these as they are finalised.

A whole raft of working groups at official level, bringing together the Welsh Government with the UK and other devolved Governments, are also being established. The priorities that I have outlined are among the topics being discussed in these networks. I have also established a Cabinet sub-committee on European transition, which met yesterday for the first time. Cabinet as a whole will, of course, supervise the Welsh Government’s work, but the sub-committee provides the right format for the detailed consideration of policy that we need to drive forward our agenda.

During August, the Treasury announced a partial guarantee for EU funding. This means that the level of funding for Welsh farming under CAP pillar 1 will be guaranteed up to 2020, but not beyond—that’s the end of this European financial perspective. For the important research funding under Horizon 2020, universities and business can bid until we leave the EU, and the Treasury will work with the Commission to ensure payment even when projects continue beyond the UK’s exit. So far as CAP pillar 2 and structural funds are concerned, the Treasury will guarantee funding for projects that are, as they have put it, ‘signed off’—I’m not clear what that means—before the autumn statement.

I am particularly pleased that CAP pillar 1 funding has been settled until 2020. This means that we have some time to work with farmers and our rural communities and, in the period ahead, to allow a national debate on how best to secure a vibrant future for the Welsh countryside in the long term. The Treasury position goes some way towards meeting the Welsh Government’s demands, but not far enough, the question being, ‘What happens after 2020?’

The Treasury guarantee is not comprehensive and leaves holes, particularly in respect of structural and investment funds that have not been committed by the time of the autumn statement. We will continue to press for a full guarantee, with the aim of ensuring that communities across Wales don’t lose out on opportunities to improve their prospects as a result of the referendum outcome. Campaigners for Brexit said Wales should not lose a penny in European funding, and we will hold them to that promise.

I also announced during the summer the establishment of an EU advisory group. This will be chaired by Mark Drakeford and draws together a range of expertise from civil and political society in Wales, with a view to generating a wide sense of Wales’s interests as EU negotiations continue. We’re also establishing an additional liaison committee with Plaid Cymru focused on EU transition issues. The challenges facing us as a nation are wide and deep, and the Government has no monopoly on the answers. We need a national debate on these questions, in this Chamber and beyond, and voices who want to contribute constructively to that debate will find a Welsh Government that’s very ready to listen.

Nowhere, Llywydd, is the future challenge greater than in the economy. I chaired a meeting of the council for economic renewal on 25 July, and we are hoping to meet again in October. Last week, I visited three cities in the US to promote Wales as an investment and trade partner. We will do everything that we can to build confidence in Wales abroad, and I ask the whole political community to get behind this work and to support Welsh business. I will not—. I will ask those, rather, who attack our businesses as ‘fat and lazy’ to consider the impact of their remarks on the global stage and find ways to make immediate amends. Our business community is currently in need of clear leadership and solid relevant support, not base and unjustifiable attacks from Government.

Llywydd, let me be clear on the importance of continued full, unfettered access to the European single market for goods and services. It’s not enough to worry just about tariff barriers, though it would be absolutely disastrous for the Welsh economy if the EU were to impose import duties on UK goods and services as a result of botched negotiations over the UK’s withdrawal. It was successive UK Governments that pushed forward the single market precisely because it was recognised that non-tariff barriers, such as differing technical standards, could be used to impede genuinely free trade between ourselves and other member states and damage the competitiveness of Welsh and British businesses. We’ve heard about a Norwegian model, a Swiss model and others too. But, whatever the model, the Welsh Government’s top priority is continued and uninterrupted full access to the European market for goods and services. We can agree to nothing less.

Let me be clear, Llywydd, about the kind of country Wales has become through devolution and participation in the European Union. This is a country that aims to build prosperity while respecting values like inclusion, sustainability, equality and individual and collective rights. Surely, no one in this Assembly wants to live in a country defined by low wages, poor prospects, falling environmental standards, insecurity and diminishing public services. Anyone who sees departure from the EU as an opportunity to entrench privilege, to row back on the progress we’ve made towards living sustainably, to privatise public services, to undermine employment rights or to promote unfairness, will meet determined opposition from this Government and, I hope, from this Assembly. Let me say, without hesitation, that our position is that the UK Government should give unconditional guarantees to EU nationals already living in this country that they have nothing to fear in terms of their rights to live and work here in the future without any discrimination.

The Prime Minister is very clear that the UK will leave the European Union, and that is something, of course, we all accept, though it’s becoming increasingly urgent that they give greater clarity as to the basis on which they hope to achieve that goal. We as a Government are clear, equally, that leaving the European Union does not mean leaving Europe—still less does it mean turning Wales’s back on Europe. Wales is, and will remain, part of Europe. It’s a matter of commercial interest, certainly, but also a matter of shared values, vision, culture and ambition. Our friends and neighbours in Europe will continue to be our friends and neighbours in Europe and we will find other ways of working with them.

Llywydd, there are many complexities associated with a UK withdrawal from the EU. Among the issues that must be addressed are the Scottish Government’s ambition to remain in the EU and the border question on the island of Ireland. These are among the many questions to which, frankly, the answers aren’t yet known. Of one thing I am clear: the UK can’t turn the clock back to 1973. As we contemplate a changed relationship with our European neighbours, so we must also contemplate changed relationships here within the UK. This is a matter of necessity as well as choice. Devolution has operated thus far exclusively in an EU context. A UK exit from the EU implies a fundamentally different relationship between the devolved Governments and the UK. We need open minds and imagination to develop a new, dynamic and durable UK.

Llywydd, the EU referendum campaign was divisive, and the result traumatic for some. But the result cannot and should not be ignored, as I’ve acknowledged from day one. The Welsh Government is tasked with leading Wales’s interests as negotiations unfold. But we’re talking about the long-term future of our country, and the issues raised go far beyond the interests of any particular Government or, indeed, any particular political party. I hope that in the months and years ahead we will have an inclusive and wide debate about how best to protect Wales’s interests and what kind of country we want Wales to be.

From today’s statement, your keynote speech in Chicago, and the previous written statement issued during August, it seems that the machinery of Government has slowly moved into action over the summer. From the outset, in the eyes of many organisations, businesses and other stakeholders, the Welsh Government response to Brexit has been slow. My first question is: is it true that you called an emergency summit—? Sorry. It is true that you called an emergency summit of the British-Irish Council, and that is an important forum, but, following that summit, to those looking in from the outside, it seems that there were no specific interventions from you until last week’s speech in the United States. Now, on the technical side, there will now be a European advisory group, and Plaid Cymru will contribute to that through our MEP, Jill Evans, and this group will provide a vital technical role.

My first question is: is it true that this group is yet to meet, and why did this committee take so long to establish? On civil service capacity, the unit that you’ve established on transition, can I ask whether that unit will have the necessary resources to participate fully in the Brexit negotiations? Is it the case that much of the necessary expertise that you have is tied up with the Wales Bill, and that this is a problem, regardless of how effective or otherwise you’ve been in gaining the support of your MPs for that work?

Turning to the issue of EU funds, and your commitment to ensure that Wales doesn’t lose a single penny, the work that was carried out by the Wales Governance Centre on this was based on estimates, and their report from earlier this year made it clear that they didn’t have full data. So, have you asked your officials to calculate the full value of EU funds, so that we know the true scale of the vow that was made to our communities by the ‘leave’ campaign?

I’ve got to come back to my earlier question to you, First Minister, about Wales’s membership of the single market. Initially when you answered my question, you looked like you were removing the confusion, before then going on to add to it. Earlier, I asked you, First Minister, about the differences between access and membership of the single market. Now, in your answer, you agreed that you support membership, but then you went on to talk in terms of this unclear definition of access.

Now, your statement today again doesn’t commit to a specific model of European market access. We don’t know your view. We know that there are four possible models. Would it not be better for you to propose an actual trade model, such as EEA or EFTA membership, a model that you’d prefer, so that there at least can be some certainty about what option the Government is pursuing? That might be a good way to end the confusion as regards your position on this. You’ve made much about the need for certainty. Will you take the opportunity to provide that now?

In terms of the remarks you made on EU transition in your speech in Chicago, what will you do to gain support for your goal of a more federal UK within your own party? And can you tell us what possibilities you see for Wales in the new constitutional situation? And, if you have no vision for Brexit, can you tell us where you’d like to see Wales constitutionally—what is the endgame, from your perspective, for Wales in a federal UK?

Finally, will you now tell us how you will ensure that the UK takes a four-nations approach to the negotiations on EU withdrawal? Will you ensure that Wales participates directly in any such talks, and will you commit to us today to make sure that Wales isn’t relegated to the sidelines on this?

There are a number of questions there from the leader of the opposition. Yes, it was my demand that the BIC should meet before—I made this demand before the referendum itself, when the BIC met in Glasgow, that we should have an emergency BIC as soon as possible, as soon as practically possible, after the referendum result, and that’s exactly what happened. Different Governments are in different positions. The Isle of Man, for example, are in a position where they have a customs union with the UK, and, through that, a customs union with the EU. They will lose that customs union with the EU, but they cannot negotiate directly with the EU, so it means they’re reliant on the UK Government, potentially, to negotiate a different settlement for them compared to the UK. That’s one complexity that was identified at that point.

In terms of the advisory group, getting the invitation letters out and the people in place over the course of August is difficult—people are away. But the group itself will meet, as I say, this month. I’m confident we’ve got the right people in place. They’re not the same people as those dealing with the Wales Bill, many of whom are lawyers. We’ve a number of senior staff who have experience of working within Brussels, and the Permanent Secretary has been tasked with ensuring that we have a robust and experienced team in place.

The same challenge faces the UK Government. The UK Government has no experience of negotiating when it comes to free trade agreements or negotiating issues such as this with the EU. I know the UK Government itself is looking around to find people who can develop this expertise in the future.

In terms of what EU funds have been worth to us: roughly £650 million a year in total. We know that farming subsidies alone are £260 million. Now, it’s arguable, I suppose, that in the future that funding would have reduced if we hadn’t qualified for the highest level of structural funding, but, nevertheless, there is a substantial amount of money that we’re losing out on. If we look at farming subsidies, farming subsidies are not Barnettised. The worst imaginable outcome for Wales would be if farming subsidies were paid on the basis of Barnett. That would be a substantial cut in the amount of money that was available for farmers.

It’s issues like farming and fisheries that illustrate why we need a different approach to the constitutional architecture of the UK. We need agreement, for example, on animal health regimes. You can’t have four different animal health regimes. It makes no sense. That needs agreement. We need agreement on how farming subsidies might work across the UK. Is there ground for a certain amount of commonality of rules even though the systems are very different across the UK? When it comes to fisheries, would there be a common approach to fisheries management? That’s all devolved. And of course there’s the fundamental issue, which is that under no circumstances should an EU competence in a devolved area end up with the UK Government. It should transfer straight to the devolved Governments. We’ve made that point very, very clear.

The Scottish Government is in the same position as we are. Until we know the UK’s position it’s difficult to give absolute clarity on the way forward. But she asks the question ‘What is the difference between access to the single market and membership of the single market?’ In practical terms, I’m not sure there is much difference, but membership of the single market implies paying into it. It implies being bound by the rules of the single market and being bound by the directives of the European Union. That’s the EEA model, but that also involves free movement of people, and she will know, like I do, that that was a particularly controversial issue in the referendum campaign itself. At this moment in time, in theory, it points to a free trade agreement-style settlement, but again these things are not done within two years. Canada has an agreement with the EU that gives it access—pretty much 100 per cent access: 98 per cent access—to goods and services in terms of the European market. It’s not bound by European directives. It’s not bound by the rulings of the European court, but, of course, like anybody who wishes to export to the European Union, it is bound by the rules of the European Union if it wants to export there. There’s no avoiding that. So, for me, at this moment in time, it seems that the free trade agreement model, because of the issue of free movement of people, is the one that might provide a way forward, although that’s not easy to negotiate. Given the fact that there’s very little time to do this, and the UK doesn’t have the expertise, it’s easier in theory than it is in practice. In those circumstances we have to then consider issues like whether the EFTA model is more appropriate for us rather than the EEA model, which I suspect would fall foul of the views of many voters within Wales.

In terms of what this means for Wales and its relationship with other Governments in the UK, I’ve given examples in farming and fisheries of where there needs to be a new architecture, but, at the end of the day, we will lose out to the tune of £650 million. That money sits with the Treasury. The Treasury is not known for its generosity as far as Wales is concerned. They have refused for 37 years to reform the Barnett formula, which we know does not do Wales any favours. My concern is two things: firstly, that they’ll try and give us a sum of money, for example for farming subsidies, that reflects Barnett—that’s not good enough—and also they might try and interfere in the way in which funds are spent in Wales in the future, neither of which would be acceptable. Why is it still the case in the UK, for example, that the Treasury is judge and jury when there is a financial dispute between a devolved administration and the UK Government? The dispute resolution process—. If there’s a dispute between us and the Treasury, there’s a resolution process that ultimately ends up with the Treasury taking the decision. Now, the Australians have a grants commission, which gets around this problem. We need to look at ways where there’s greater fairness and consensus when it comes to financing the constituent nations of the UK and not ‘whatever the Treasury says goes’. That has to go in the future—particularly acute, of course, with Brexit.

From my perspective, I’m more than happy with the civil service team that’s in place, with the architecture that’s in place, and also with the views that we have already put forward about what is hugely important for Wales in any future negotiations. But we do have to have an understanding now on where the UK Government stands. Is the UK Government relaxed about tariffs, as David Davis is? He said it didn’t matter about tariffs because £2 billion would be raised in taxes—paid for by the consumer of course, because it’s the consumer that pays the tariff, not the business—and didn’t seem to be particularly worried about what that would mean. There are some, on the extreme end of economics, who take the view that we should simply have no tariff barriers at all, regardless of what any other market does, which, again, I don’t think would find favour with most of our people.

So these are all issues that will need to be explored over the course of the next months and years, but it’s clear to me that, before Christmas, we need to have an understanding from the UK Government on where it stands on the issue of funding, and particularly on the issue of market access. What is absolutely crucial for us is—call it membership or access—that our businesses can sell freely, without tariffs, their goods and services in the European single market. That, for us, is very much the bottom line.

Thank you for your statement. My party, the Welsh Conservatives, do believe that Wales must benefit from at least as much funding as we go forward and we’ll continue to make those representations in our discussions here and elsewhere.

You refer to your being pleased that the Treasury has announced that the common agricultural policy pillar 1 funding for farmers has been settled until 2020 but add that, so far as CAP pillar 2 and structural funds are concerned, the Treasury will only guarantee funding for projects formally agreed before the autumn statement. However, the briefing provided to external affairs committee members for the meeting you attended yesterday did include additional information that the Treasury will also put in place arrangements for assessing whether to guarantee funding for specific structural and investment fund projects that might be signed after the autumn statement but while we remain a member of the EU, with further details to be provided ahead of the autumn statement. Given the importance of that statement and the repeated reference to the situation by yourself here and elsewhere, can you reassure us and provide evidence of what discussions you’re having with the Treasury ahead of the autumn statement regarding that commitment made?

Yesterday, again, you were questioned in the external affairs committee about the external advisory group. I think you told my colleague, Suzy Davies, that you would be seeking to involve all parties and various other agencies in that. Could you provide more detail of when that’s going to happen and the basis on which you intend that to go forward? You’ve referred to your visit to the United States and said you’ll do everything to build confidence in Wales and abroad. Clearly, in your speech last Friday, you talked about Wales being open for business, but you did also talk about the risk of needless economic harm to our country and citizens. Correct me if I’m wrong, but, my understanding is that you were on a sales mission. I know from my previous career that people on sales missions—salespeople—sell the benefits, explaining in a confident, can-do way why a post-Brexit Wales will continue to be a great place to do business. I know you had some business experience before, maybe less sales experience before, but do you grasp that fundamental principle of sales and marketing and bear that in mind as you go forward in discussions in the future?

You rightly talk about the importance of continued, unfettered access to a single market and free trade for goods and services. Yesterday, when I questioned you about engagement in pre-trade discussions—given that we know that exploratory discussions with the Australian Prime Minister and the UK Government took place last week and countries such as India, Mexico, South Korea and Singapore have told the UK Government that they want to engage in trade talks with the Government—is it not a little bit too late to wait for the UK Government, after Brexit, to begin formal trade negotiations? Should you not be directly seeking to be involved in those discussions, given the importance to Wales of matters, as we discussed yesterday, such as New Zealand lamb tariffs?

You referred yesterday, and you’ve done it again today, to trade negotiators. My understanding is the UK has somewhere around 120 trade negotiators, as part of the EU Commission team working in Brussels currently, who are returning—I think an agreement’s been reached that they will be working on this with the UK Government. Of course, the UK Government has announced it is recruiting several hundred more internally within the civil service with relevant experience and added training. What effort have you made, or will you make, to seek the appointment of some of those negotiators to have a position to advise, engage and represent the Welsh Government as part of a UK team? Hopefully, the UK Government might respond positively to the suggestion that such a negotiator in that position might be to everybody’s mutual benefit.

You are right, and we agree, that no-one in this Assembly wants to live in a country defined by low wages or poor prospects. When you say that leaving the European Union does not mean leaving Europe and still less does it mean turning Wales’s back on Europe—Wales is and will remain part of Europe—that, of course, tallies with comments made by, I think, the Foreign Secretary, when meeting the Commission in Brussels not so long ago. So, we welcome that. We also place, like you, high value on access to the EU single market, but we recognise that access to markets is a two-way process and that many EU nations, particularly the larger ones, depend heavily on both the Welsh and UK marketplace. Do you therefore recognise that it is a two-way process, and that this is, at present, an early game, with both sides positioning themselves and that what we must play to are our strengths, as will our friends and partners in Europe, towards a situation that will do hopefully no harm to either and act to the benefit of all? If we keep talking about this as mere supplicants at the emperor’s table, that will become a self-fulfilling prophecy.

Clearly, ultimately, our aim must also be to close the prosperity gap between Wales and European countries. It is ironic that access for Wales to some of the EU funding streams, particularly structural funding, is consequent upon Wales’s prosperity gap with the EU and the rest of the UK actually widening since the receipt of funds. So, how will you seek to use both the negotiations and the reconfiguration of polices after the negotiations to maximise the opportunities to turn that widened GVA or prosperity gap into a narrowed gap that reached the communities that, in large part, voted actually for a Brexit? Again, that was something referred to in committee yesterday.

You referred briefly to the Scottish Government and your view that the likelihood of an independent deal was remote because of the sensitivities in Spain and elsewhere. Do you agree with me that, were Scotland to negotiate as an independent nation, they would be required to enter the eurozone as a eurozone nation, which is part of the rules of membership of the club currently?

Finally, I’ll just refer to agriculture—something that’s vitally important but that I haven’t thus far referred to. At the Denbigh and Flint show, the Farmers Union of Wales panel were unanimous in their decision that the decision to leave the EU should be seen as an opportunity to shape a future that suits Welsh farmers, not just those across the English channel. After the discussions, their managing director said ‘There’s no point in looking back, we must now focus on the future and recognise the excellent opportunity for us to shape our own future, one that suits Welsh agriculture and the people of Britain.’ They also said that, if we don’t change our policy in relation to the management of bovine TB in wildlife, our exports to the European Union in a post-Brexit world are under considerable threat. So, what discussions have you or your Government had, or will you have, with the FUW and NFU over approaching discussions on that positive basis and reflecting the real concerns and barriers they’ve identified?

There were a number of questions there from the Member. First of all, in relation to the Treasury’s announcement, what they have said is they will fund any projects signed off before the statement. There is a debate going on at the moment as to what ‘signed off’ actually means. So, it’s not hugely clear what the cut-off date is, although it’s clear what the commitment is. When he talks about pillar 2 and projects that are signed off after the autumn statement being assessed, that is Treasury speak for, ‘You will have to beg us for the money.’ What it means is we’ll receive no guarantees at all that money that previously would have come to Wales as of right will come to Wales at all, because the Treasury will act as a break on it, according to rules that the Treasury itself sets, and without any kind of explanation. That’s what they mean by that. So, we can give no guarantee at all that we will get a single penny after that sign-off period has gone. It will be, as the Treasury see it, on a case-by-case basis, and they’ll decide whether money that automatically came at one time will come in the future at all.

In terms of the European advisory group, I am aware that it cannot be composed entirely of people who were on the same side in the referendum campaign. So, there will be a need to ensure that people on there do reflect the divergence of views, not just one singular view as to the future. In terms of building confidence, well, he talks to me of ‘salesmanship’ as he put it, not mentioning that Brexit would have been the equivalent of somebody asking me ‘Well, how much is you product?’ and me saying ‘I can’t tell you that’ because every single business wanted to know what was happening after Brexit. Every single business wanted to know what my view was on single market access and for me to say ‘Well, I can’t say that, l’m not telling you’ would’ve looked—well, you can imagine what it would’ve looked like. So, it was hugely important to say to a US audience that the Welsh Government believes that unfettered access to the single market is hugely important. Every business I spoke to said that, because, as I’ve said before, their businesses are European operations not UK operations. If there’s a barrier between the UK and the much bigger operations they have in Europe it’s the UK that will suffer as a result. We need to avoid that at all costs.

In terms of the other issues that he raised, on pre-trade discussions, there’ve been lots of reports in the papers about countries approaching the UK. Iceland was the first. I’ve seen many, many others. The reality is nothing has happened yet and we would expect, of course, to be part of any discussions on free trade agreements. They take years to negotiate—10 years, usually, to negotiate. The suggestion that the UK could renegotiate 50-odd free trade agreements in two years—I can’t imagine that that would be possible, especially against countries that are experienced trade negotiators. So, we have to make sure that we balance what’s necessary with what’s actually possible. At the moment, the UK is still very much in the throes of putting together a negotiating team. It’s a long, long way from being in the position of being able to negotiate a free trade agreement with another trading bloc or country, which is why the theory of what I mentioned earlier on to the leader of the opposition is fine, but the practice is far more difficult at this moment in time.

In terms of the single market, yes, it has to be both ways and it depends who you are. If you are Aston Martin or Jaguar Land Rover, actually tariffs may not make that much of a difference to you. If you are BMW, actually—people will still buy BMWs tariff or not, if they come from Germany. But, if you are a commodity car maker like Nissan or Ford, it makes a big difference because that potentially adds hugely to the cost of the cars you sell, and you sell in bulk. So, the bulk commodity producers would suffer the most with tariffs, whereas prestige marks—bluntly, if you can afford to buy an Aston Martin, maybe 10 per cent on top isn’t going to be that difficult for you. But, it would make a big difference if you’re looking to buy a Ford in the UK compared to a Ford on continental Europe. So, we don’t need tariffs. We need to make sure that tariffs are not in place and I don’t think anyone argues proactively for tariffs in any event. Bear in mind that for the UK’s 60 million, the EU at that point will be 440 million. We’re not talking about two equal blocs here. We’re talking about ensuring that we get as much parity as possible, but it’s not as if we’re the same size.

In terms of the other issues that he mentioned, yes, market access is hugely important for farmers and, yes, there is the opportunity to reshape agricultural policy, but we need the money. If we haven’t got a brass farthing to pay farmers after 2020 we can have the best agricultural support system in the world but no money to pay for it. So, that has to be resolved across the UK by the four UK Governments. The last thing our farmers want—our lamb producers particularly—is a 15 per cent tariff on lamb being sold into the European Union. Yes, it is a prestige product but still it’ll have an effect on the sales within what is our biggest market for lamb. So, the future of farming depends on avoiding tariffs, as it does with manufacturing and any other sector of the economy and that has to be the bottom line. If we get to a position where the UK finds itself subject to WTO rules, it will make it more difficult to attract investment. Why would investors look at the European market and invest there in the UK rather than within the European Union where they can move their goods and services around without any kind of tariff barriers? That’s what we have to avoid in the future and, as I say, I don’t believe there’s anybody who has proactively argued for tariffs in any event. Let’s avoid them.

I welcome the statement and I welcome even more the First Minister’s answers, which I thought were very thoughtful, to the leader of the opposition, in particular his indication that it’s a free trade model that offers the best scope for Wales’s prosperity in the future. I also welcome his statement that the result of the referendum cannot and should not be ignored, which I infer means that there’s no going back on the referendum result, which marks him out, at any rate, from the leader of Plaid Cymru, who has been talking about having a rerun of this, and, indeed, a putative leader of his own party, in the form of Owen Smith, who is constantly talking about rerunning the referendum. So, I hope that he’s going to vote for the right man in the leadership contest in the Labour Party, Jeremy Corbyn, who we all in my party support to the hilt, because he at any rate—. [Interruption.] He at any rate has accepted that the result of the referendum is binding.

I agree also with the First Minister when he says that we will do everything we can to build confidence in Wales, but I’m afraid the jeremiads that we hear all too often from the First Minister, such as the way in which his speech in Chicago was reported, don’t actually do anything to help build confidence in Wales. As Mark Isherwood was saying, when you’re a salesman you go out there and sell your product—you don’t talk it down or talk up the difficulties. Yes, of course there are challenges in Brexit—life is full of uncertainties whether we stay inside the EU or whether we’re outside it—but there are also opportunities. Why not focus on the opportunities as well? There is so much European legislation that we’re obliged to implement and adhere to, like the renewables directive, the landfill directive, on business rates and state aid regulations, and so on. We have so much more flexibility outside the EU to reduce business costs and reduce the impediments that there are to wealth creation within Wales. So, why not talk about the opportunities rather more and the challenges rather less?

As regards the EU advisory group, the First Minister ended on a high note in his statement, where he says

‘the issues raised go far beyond the interests of any particular government and any particular political party.’

He’s absolutely right in that. And it’s surprising, therefore, that although he’s come to some cosy little deal with Plaid Cymru to give them favoured access to this particular market in ideas, the leader of the Conservative party and myself who actually believe in the outcome that the Welsh people voted for in this referendum, of course have been excluded. I don’t say this out of any desire on my part to add further committee burdens to my life, but it is vitally important that this EU advisory group does have within it people who are effective advocates for the outcome that the people of Wales voted for, and want to make the best of the opportunities that are available to us. So, I would like to say, and I’m sure I speak for Andrew Davies as well, that we place ourselves at the First Minister’s disposal, in this respect if no other.

As regards the various models—

I think I should intervene. [Laughter.]

As regards the various models of the future that the First Minister referred to, it’s always dangerous when middle-aged men, of course, get involved with models—it usually ends in a rather bad way. [Interruption.]

You were doing so well. [Laughter.]

But I was encouraged by what the First Minister said in his reply to the leader of the opposition, because there is no need for us to adopt any models that are already in existence. What we want is a British-designed solution to the future.

No, we want a Welsh one.

Or a Welsh one for that matter, yes, except that your own party doesn’t even believe in independence anymore, so that’s not on offer. So, the opportunity that this gives us is not just, of course, to do a free trade deal with the EU but also free trade deals with the rest of the world, and they are queuing up to do these deals with us. I can’t understand the First Minister’s pessimism about the time this is going to take. So, what I’m asking him to do is to get further behind this idea of a free trade solution to the negotiations that are now ongoing.

As regards other negative things he said, why is he still giving house room to the idea that it’s possible for us to discriminate against EU nationals post Brexit, when he knows that the rights of EU nationals are fully protected under the 1969 Vienna treaty on the rights of nationals of signatory members? There’s no going back on that and the UK Government, I believe, has already made that position clear.

And as regards the future of tariffs within the EU, I can’t understand why he can think that it is actually a serious threat to us that there will be tariffs on imports and exports between Britain and the EU. If we just take Germany as an example, we export £29 billion-worth of goods to them every year, but they export to us twice that—£57 billion. So, he’s been talking about his negotiations with the UK Government, what about setting up some arrangements to talk to the German Government and other Governments that are sympathetic to a free trade solution for themselves as well as for the UK within and beyond the EU? What moves has he made to enter into discussions with the German Government, because next year there is an election in Germany and I don’t think that the German Chancellor will want to go into that election saying that there’s a possibility there’ll be a 10 per cent or 15 per cent tariff on BMW, Mercedes, Volkswagen et cetera exports to the EU. So, what I’m asking the First Minister is to become more positive, concentrate on the opportunities that lie ahead so that we can make the best of the outcome of the referendum.

Well, yes, I accept the point about looking at the opportunities. There are opportunities with regard to state aid, potentially, for example. If we’re not part of the current structure then, of course, the constraints that are there now are no longer there—that much is true—but we can’t ignore the risks and think that they’ll happily go away. He mentioned some of the directives that are coming to us, and the landfill directive would have been the one I would’ve chosen probably last, because the landfill directive has made sure that we haven’t seen our country covered with landfill sites. I mean, if he wants to see more of them and he’s willing and more than happy to make that case for the people of Wales—. It’s not a pain-free option. One of the issues that troubled me in the referendum campaign was the suggestion that, somehow, this is all pain free and it’ll all be fine at the end of the day and we don’t have to worry. Well, there’s a lot of work to do in the meantime. Yes, there are countries queuing up, perhaps, to look for free trade agreements with the UK, and naturally they would do, because the UK will be outside the EU; it’s hardly a surprise that they would. We also know the UK is vulnerable, because it has no experience of negotiating free trade agreements at the moment, so we must protect ourselves against others perhaps taking advantage of the UK itself.

He talks about Germany. The reality is that Germany’s export market is huge. Its EU exports, it is true, is more in terms of volume to the UK than the other way around, but a greater percentage of the UK’s exports go to the EU than the other way around, so it is absolutely crucial for us to make sure that we have access to that export market. The Germans will not speak to the UK alone; the Germans will only speak to the European Union—they are part of it. Any deal has to be agreed by the 27 remaining member states, as well as the European Parliament, so let’s not underestimate how difficult this might be.

Now, it seems to me that nobody wants tariffs any more than anybody wants to see a hard border in place between Northern Ireland and the Republic, but, actually, nobody knows how to avoid it coming back, because there would be two parts of an island with different immigration policies—one with free movement and one without, probably. There will be different regulations on both sides of the border. Fisheries access would be restricted. There would be different customs dues. People said to me on the doorstep, ‘We want control of our borders.’ You can’t have that unless you control the border with the Republic. So, there are a number of issues that have to be resolved in Ireland, even though nobody wants to see the border come back. What I want to avoid is that, whilst nobody wants to see the tariffs come back, they happen anyway, because nobody’s put in the work to avoid them coming back. That means there’s a huge amount of work yet to be done; it’s not quite that easy. There’s a huge amount of work yet to be done in order to avoid any kind of imposition of tariffs in the future.

All opposition spokespeople have now spoken and we’ve had quite lengthy contributions from most. I have many people who still want to ask questions in this statement. We’re already almost out of time, so if I can have very short, sharp succinct questions from some of you, I’ll call you, and short responses from the First Minister as well, but I will not be able to call all of you who’ve expressed an interest in this statement this afternoon. Huw Irranca-Davies.

Diolch, Lywydd. I will indeed keep it very short. One particular moment in the statement made my ears and those of others on the Constitutional and Legislative Affairs Committee prick up, and it was towards the end of the statement, when the First Minister said:

‘As we contemplate a changed relationship with our European neighbours, so we must also contemplate changed relationships here within the UK.’

He goes on at the end of that paragraph to say:

‘We need open-minds and imagination to develop a new, dynamic and durable UK.’

Does he feel those open minds are there, and if not, how do we open them?

I’m not sure they are deliberately open. I think they’re being kept open because of the situation in Scotland, but I certainly hope that they remain open for as long as possible.

I was hoping that the position of the Welsh Government would be clarified, but I’m more confused than ever now. The First Minister seemed to be adopting the policy of UKIP wholesale, leapfrogging the Conservatives and coming out in favour of a free trade agreement, because membership of the European Economic Area would require freedom of movement. That doesn’t sound like leadership; that sounds like capitulation to me. So, if I’m wrong, maybe the First Minister can actually put the record straight.

Specifically on the four-nation approach, is he ruling out the possibility of an asymmetric Brexit, if you like? We heard for many years of opt-outs from European rules. Could we have a position where, if the national interest of Wales, Scotland and Northern Ireland was different, that we had opt-ins to environmental regulations, to workers’ rights, and a different relationship with the European institutions than possibly might be chosen for England? And finally, in order to allow a full and free-ranging debate, where those divergent national interests can be expressed in the run-up to article 50 being triggered, but also most importantly in the negotiations thereafter, is it now time to revise the concordat on EU matters between the devolved legislatures and the UK Government so that, actually, those different opinions can be expressed publicly but also in discussions with EU institutions?

There’s no barrier to expressing different opinions; I’ve already done that on many, many occasions, so I can assure the Member that is the case. In terms of the four nations, what isn’t possible—certainly the indications show it—is that there is any way in which, for example, Scotland can have a different relationship with the EU whilst being outside it compared to the UK as a whole. The Scottish Government’s view is that independence is still in play. There is an argument for saying, if Scotland were to vote for independence within the two-year period following the triggering of article 50, that Scotland would simply continue with the UK’s membership. It wouldn’t have to reapply nor join the eurozone. I’ll leave that to constitutional lawyers, whose company I’ve enjoyed greatly over the past few years. But as soon as Scotland leaves, the re-entry into the EU, were Scotland to be an independent state, would be on the basis of joining the eurozone—there have been no exceptions.

In terms of where we go next, like me he has to accept the result of the referendum. There’s no point pretending that the vote went a different way, and I’m fully aware, as he is, that many people said on the doorstep, ‘We don’t like the free movement of people’, and so we have to accept that that is the way people feel at the moment. In the same way, I don’t think it would be useful for us to be in a position where we had to implement EU directives without any kind of say over them, which makes it difficult, looking at the EEA model. There are a number of models that we need to explore. We have to bear in mind what people actually said, not what he and I would have hoped that they had said, in order to make sure that we get to a position that’s to the benefit of Welsh business.

I’ll keep it pretty brief, seeing as we’re short on time. First Minister, do you agree with your party’s leadership candidate and MP for Pontypridd, Owen Smith, that we should reject the democratic will of the people of Wales and the United Kingdom and rejoin the EU, adopt the euro and have open borders through the Schengen zone?

No, not any more than I think there should be another referendum on devolution.

First Minister, thank you for your statement this afternoon. Could I seek clarity, please, on one key area? You are signed up to, and I think we’re all signed up to as free a movement of goods and services as possible, because trade is good for any country, and the more barriers you put in place, the less job opportunities and the less prosperity you create. In the wake of the referendum, you gave a very clear statement—in fact, it was in the third point of six that you said that it was vital that we also retain the free movement of people within the condition. That was given on 24 June in your six points that you said was the Welsh Government’s position. I have to say, since then, and in particular after your press conference at the end of August, you’ve said that not making the same demands of the European system of the freedom of movement was now the Welsh Government’s position. It was keen to retain goods and services, but the free movement of people was no longer, and I quote this from the article, of the same demands that you were expecting out of the renegotiation. So, there is a material change in the Welsh Government’s position from what you stated in your six critical points that you outlined at the outset, at the end of June/beginning of July, to where the Government is at the moment. Can you confirm that is the case, please?

I think it’s inevitable that free movement of people is controversial. I think it would be difficult to suggest that people voted in favour of free movement of people—seeing as I heard it so many times on the doorstep—as they voted to leave the EU. Part of the problem is we can’t have an exhaustive list of why people decided to leave the EU. I hear what Plaid Cymru say, but you have to accept what the referendum said, and we have to try to understand what the people of Wales want and to try and find a way forward that the majority of people of Wales will actually want to support. For me, what is hugely important is free movement of goods and services and access to the single market. It is a given that, without that, Welsh business and the Welsh economy cannot thrive. Beyond that, of course, there are a number of points of negotiation that cannot be resolved this week or next month, or the month after that, but will need to be resolved in the two-year period following the triggering of article 50.

I would agree with the First Minister that Wales needs an impact on the Brexit negotiations—it shouldn’t all be left to the Government in Westminster—but sending any of the Europhiles that pack the Welsh Government to represent Wales in the Brexit talks is merely setting the fox to guard the hen house. You wouldn’t send a salesman who had no faith in his product into a negotiation with a key customer; you wouldn’t let a salesman who had spent the previous few months talking down your product and focusing on its weakness to discuss pricing with a key customer; neither would you send a salesman who is convinced that that customer was the only customer in the world.

The Welsh Government has shown time and time again in this Chamber that you have no faith in Wales outside the EU and that you’re totally dependent on the EU to make your laws so that you can run yourselves as a management committee. We don’t need representatives who can sing a song of dependency on the EU in their sleep and who have no belief in their own ability to govern in the interest of the Welsh people or in the entrepreneurial spirit of the Welsh people.

We need people who understand our bargaining power as the fifth biggest economy in the world and one of the EU’s biggest customers. We’re not going to find those people in the Welsh Government.

I think the Member has to accept her party did not win the election. They’ve already lost one Member in record time. Frankly, I’m not going to be lectured by a party not all of whose Members actually live in Wales—talk about commitment to our country. There are people who don’t live in our country, and yet still want, apparently, to have to be paid to do so. That’s just totally ridiculous.

From our perspective, we have to respect what the Welsh people said. We have to try to interpret, as best we can, what they said, because there’s no clarity, apart from the fact that they voted to leave the European Union. But, what they don’t want is to be in a position where they find themselves worse off economically. I know, as far as UKIP are concerned, the world’s a simple place where simple things can be done in a short space of time. That’s not the way that the world actually is. So, from our perspective, we want to respect the views of the people of Wales. For years, her party didn’t want this place to exist. Now, they’re here; okay, they accepted the reality of democracy. We’ve done the same and, as her party claims to have done, we’ll do the same.

Finally, Mark Reckless.

To date, though, agriculture has been devolved legally to Wales, but, in practice, most of what happens in that area has been set at EU level. The First Minister rightly observes there will be a massive difference between a Barnett formula share of agriculture spending and what we’ve received under the CAP. Given that, is it wise for him to set himself against a CAP-type policy on a UK level, simply because it would involve interference with that area that’s been legally devolved?

He’s now saying he doesn’t want interference from Brussels, but that there should be interference from London. I mean, where does that leave Welsh farmers? The reality is that we have an entirely different system of payment and a different computer system. Trying to bring four systems together—good luck with that one. We, for a long time, have said that we will tailor our policies for the good of Welsh farmers. What we need is the guarantee of the money—that money that was coming to Welsh farmers from Europe: £260 million of farming subsidies. He said, and his party said, not a penny of that would be lost. If we have that money, we could implement a farming policy that commands the support of those who live in the Welsh countryside, rather than trying to use this as an excuse to take powers away from the elected body of the people of Wales. I say now to him and to others in this Chamber: if this is going to be used as an excuse to centralise power in the UK away from the people of Scotland, Wales and Northern Ireland, he will find strong opposition in this Chamber and outside it.

Thank you, First Minister.