Questions now from the party leaders. Leader of the Welsh Conservatives, Andrew R.T. Davies.

Thank you, Presiding Officer. First Minister, the Circuit of Wales offers a huge potential to regenerate a very poor part of Wales, and offer opportunities, both in regeneration terms and job prospects for the Blaenau Gwent and south Wales area—in fact, the whole of Wales—transforming its image into being a high-value destination for tourists and the engineering industry. But, sadly, the Heads of the Valleys company that is promoting this project has been suffering really bad headlines of late, and there’s been a slow, slow drip effect—[Interruption.] There’s been a slow, slow drip effect of evidence to point that they really aren’t the best partners to actually deliver this project. Do you have confidence in the leadership of the company to deliver the Circuit of Wales project?

I have to say to the leader of the Welsh Conservatives that it’s a member of his party that has provided that drip, drip of criticism—not him, I accept, but certainly a member of his party. Do we have confidence in the company? That’s a matter for them, of course. We have to make sure that we are prudent in terms of public money being made accessible, and we’ve done just that, to make sure that any project is only financed if there’s a fair division of risk between the private and public sectors, and that is not the situation here.

First Minister, I noticed you didn’t say you had confidence. You talked at length that there is potential within the project, but freedom of information requests from your Government, which I hope you’re aware of, from the director general of the department for the economy, James Price, clearly show that civil servants raised concerns with Ministers over the plans for the Heads of the Valleys Development Company, owned by Michael Carrick, to pay Aventa Capital Partners Ltd—100 per cent owned by Michael Carrick—almost £1 million in consultancy fees, effectively paying themselves to advise themselves. Now, that clearly cannot be right especially if there hasn’t been a robust tendering process, and, indeed, when the civil servants themselves, the director general, is offering such advice to Ministers. Why would Ministers go against that advice and approve such a transaction?

Well, that’s a matter for the Minister who was in place at that time, who is no longer a Member of this Assembly. What I can say, as far as this Government is concerned, is that we will seek to ensure, as she did, that there is prudence in terms of money that’s accessed from the public purse. And that’s why, despite criticism from his party and others in this Chamber, we didn’t release the money for the project to proceed some months ago, on the basis that we were not convinced that the project was robust enough in terms of the sharing of risk for the project to proceed with public money.

Well, First Minister, public money has gone to this company, as I’ve highlighted—£1 million just on consultancy fees, £9 million in total, with bank loan guarantees paid by the Welsh Government. And we do know of other things that have been paid: there’s a loss-making race at Silverstone; £35,000 for gardening and also the purchasing of a motorbike company, FTR Moto, for £400,000, that has gone bankrupt. It’s hardly a success story, when the evidence is clearly pointing that civil servants were warning Ministers about making this money available and wanting more information. We saw last week that the governance chairman, Lord Kinnock, of the company, was lobbying excessively, I would suggest, with at least five or six calls to the leader of Blaenau Gwent council, as well as using House of Lords notepaper to actually write letters on to make the point that he wanted to make. That cannot be acceptable and now I have invoices here—[Interruption.]—invoices here—[Interruption.]—invoices here that show at least £750 paid for an event in north Wales to the Labour Party, £2,400 again to the Labour Party, and £960 paid to the Labour Party—three different invoices paid by Aventa and Michael Carrick, to have access to Welsh Government Ministers, I would suggest. Are you confident that there has been the proper transparency and, above all, the assurances when the initial £9 million was being handed over, because, as I said in my opening remarks this project does offer great opportunity but it is the execution—? [Interruption.] And the company that has been brought forward to promote this company clearly has evidence to the contrary of having the—[Inaudible.]

He can’t have his cake and eat it. He can’t say, on the one hand, ‘This is a good project’ and on the other hand say, ‘Well, this project shouldn’t have been financed in its initial stages.’ If he’s suggesting that, in some way, it was possible for the company to sponsor events in order to get the decision they wanted—well, they didn’t, did they? The whole point was that if it was the case that somehow influence could be bought, they would have had the funding for the Circuit of Wales by now, but that’s not the situation that occurred. We took the decision that we wished to—. I mean, he talks about £9 million. If he could only see the money that’s wasted by his Government in Westminster. The amount of money that’s hosed away—hosed away—on NHS reorganisations that don’t happen, hosed away on rail privatisation—we could go on. The reality is that we as a Government took the view that initial finance—[Interruption.] If he listened, he’d learn. As a Government we will provide amounts of money for businesses in order to take them to the next stage of business development and a project in terms of development. But there comes a point when it’s absolutely right to say to any business, ‘We will not finance the project unless you find enough private backing that will take the project ahead without there being 100 per cent guarantee from the public sector.’ That is something that we were not prepared to do and that represents value for money for the taxpayer.

Plaid Cymru leader, Leanne Wood.

Diolch, Lywydd. Will the First Minister make a statement on the proposed takeover of Dee Valley Water by Severn Trent Water?

This is a matter of concern. It’s been raised by Members. The concern is, of course, that it will reduce consumer choice. It will see increased prices, and this is something that, to my mind, would not be acceptable for the people of Wales. I do not believe that that people would accept higher prices for their water when they can see the reservoirs in their locality that provide that water.

Thank you for that answer, First Minister. There are fears that the company’s strong Welsh identity and interest in this country could be lost with this takeover. Dee Valley Water works with 80 local suppliers, and there are real concerns amongst the workforce about job security. The fear is that centralisation will lead to fewer local jobs. Can you tell us, First Minister, what contact you’ve had with the parties involved?

I know that the Minister is looking at this very carefully. She has received representations, I know, from constituency members and concern will be expressed from us as a Government along the lines that I’ve just mentioned.

First Minister, I’m surprised that you can’t even tell me that you’ve written a few letters about this, given the concerns. Perhaps today’s question will push you into some kind of action. This proposed takeover raises serious questions about the future of our natural resources. Those resources should be benefiting the people in this country, but they are being bought and sold as we speak. Has the First Minister considered what impact this takeover bid could have on the water industry in Wales, bearing in mind that the competitive model being pushed in England has been rejected here? And will you join me in making an absolutely clear statement today that Welsh water services should be run from Wales, and not from Coventry for a bunch of multinational shareholders?

We’ve been absolutely clear that we want to see powers over water devolved. That has been conceded by the UK Government. It was always a matter of great regret—and that’s probably saying it mildly—to me that the people of Wales did not have control over one of their major natural resources. That will change in 2018. I very much welcome that. That will give us the opportunity to look at how that resource can be developed as far as the people of Wales are concerned. But until that concession was made by the UK Government, we were still in a position where we did not have control over our water. That I welcome, and that gives us the opportunity to avoid situations like this occurring in the future.

The leader of the UKIP group, Neil Hamilton.

Diolch, Lywydd. In his evidence to the Assembly’s Committee for the Scrutiny of the First Minister last week, the First Minister asked the Chancellor of the Exchequer to do something about energy prices in the autumn statement in order to help the steel industry in Wales, something which I wholly support him in. He pointed out that energy prices in Britain are 46 per cent higher than in some other places in Europe. Does he not agree that one of the principal reasons for that is the Climate Change Act 2008, passed by the then Labour Government, which has committed Britain uniquely in the world to a legally binding obligation of cutting carbon emissions by 80 per cent by 2050, and as a result of which we are actually placing a millstone around the necks of people like British steelmakers, who are placed at a competitive disadvantage with countries like Germany?

No. The issues is this: energy prices in Germany, for example, are around 20 per cent cheaper; in Spain, they’re 37 per cent cheaper. It’s nothing to do with renewables, because the amount of renewables that feed into their national grids is roughly the same in percentage terms as ours, if not more. It’s simply to do with the obscurity of the market within Great Britain and the fact that discounts are not available for energy-intensive industries. We have to look at nuclear, yes, but we also have to look at harnessing the power of the tide that sits not far from this building, and will always be there, rather than rely on imported coal, which I know is something that he has suggested in weeks gone by.

But Germany has been opening new coal-fired power stations; in fact, 11 GW of capacity in the last five years, which is equivalent to 15 per cent of the entire electricity output of Germany. Sigmar Gabriel, who is the Vice-chancellor of Germany and is the chairman of the German social democratic party, and is their energy Minister, has said that Germany will not be phasing out brown coal-fired power stations before 2040, as the Government looks for ways to ensure minimisation of job losses in coal regions. So, the German Government is doing what it can to minimise job losses in its coal regions at the expense of British steelmakers.

I’m going to pause for a second at the irony of that, and at the fact that in the 1980s—again he returns to this point—

Oh, here we go again.

[Continues.]—he sat there while thousands upon thousands—30,000 jobs—were lost in the mining industry in Wales. And now he is saying that we’re not doing enough to protect coal jobs. The reality is that if we were to have more coal-fired power stations, we would have to import the coal. Germany is in a difficult position because it relies heavily on Russia for the gas that it has to import, and given the current state of world affairs, that is an uncomfortable situation for Germany to be in. I do not think, in terms of energy security for Britain, that importing more of our energy in the form of coal is the way forward.

We are proposing to close down existing coal-fired capacity in Britain, which is the cheapest form of power generation. That doesn’t seem to me to be an economically sensible or commercially sensible thing to do. We have another climate change conference in Marrakech coming up—[Interruption.]—well, it was last week—where a lot of hot air was expended.

Developing countries like India and China are not planning to reduce their carbon dioxide emissions at all. In fact, they’re increasing their coal-fired generating capacity. China proposes to double its coal-fired capacity within 15 years and India promises to treble its output of carbon dioxide emissions. Isn’t Britain, generally, and Wales in particular, placing itself at a vast competitive disadvantage by forcing up energy prices, which are the lifeblood of industries like the steelmakers of Wales?

There are plenty of other countries that do not rely on coal where energy prices are lower. Spain is one example of that, where coal is not a major factor in terms of energy production. What he’s suggesting—. He’s wrong about China. China is moving—. Coal is yesterday’s technology. Apart from in America, people are not looking to build more and more coal-fired power stations—

They’re building one a week.

[Continues.]—as a matter of energy policy. China has a problem with pollution. It knows it; it sees the smog in Beijing, it sees the smog in its major cities and it knows its population will not put up with that. What he’s suggesting, if he thinks about it, is, first of all, we should have more air pollution so that people find that that is a problem for their health. Secondly, we should import coal. That means (a) the price of coal is increasing and that means more cost, and (b) less energy security, as far as Britain is concerned, which I cannot agree with him on. And, of course, what he is saying, in effect, is that we should look to build more coal-fired power stations. Well, good luck to him on that. If he wants to see people being angry and annoyed, putting a coal-fired power station next to them is a sure-fire way—pardon the pun—of doing that. No, I can’t agree with him. I don’t accept that renewable energy—energy that is there; tidal energy that is there will always be there as long as the moon is there, and hasn’t yet been properly harnessed—that technology, should not be developed for the future energy needs of Wales, rather than relying on fossil fuels that have to be imported. I cannot see how that is a secure energy policy for the future.