The following amendments have been selected: amendment 1 in the name of Paul Davies and amendment 2 in the name of Rhun ap Iorwerth. If amendment 1 is agreed, amendment 2 will be deselected.

The next item on the agenda is the United Kingdom Independence Party debate and I call on Neil Hamilton to move the motion.

Motion NDM6197 Neil Hamilton

To propose that the National Assembly for Wales:

1. Welcomes the First Minister’s fact-finding trip to Norway to see for himself the regulatory burdens and costs imposed on Norway by full membership of the EU’s Single Market.

2. Notes that these burdens and costs fall on all Norway’s businesses, whether they export to the EU or not.

3. Believes that:

a) it is in Wales’s best interests for laws and regulations to be made by Britain’s democratically-elected representatives in Westminster and Cardiff, not remote and unaccountable officials in Brussels; and

b) Single Market membership would preclude effective control of immigration of EU citizens into the UK, thus undermining the referendum result and frustrating the wishes of a majority of Wales’s voters.

4. Notes that the EU currently exports £8 billion more in goods to the UK every month than the UK exports to the EU.

5. Supports the UK Government’s general negotiating position of seeking the maximum degree of free trade with the EU consistent with firm immigration control.

Motion moved.

Diolch yn fawr iawn, Lywydd. I beg to move the motion standing in my name on the agenda. I’m delighted to see that the First Minister has come to attend the debate today. We had a bit of a curtain-raiser yesterday at First Minister’s questions, because I hadn’t anticipated that he would be participating in this debate, but I very much welcome his presence. But yesterday I pointed out that, perhaps, Norway is not the best model that we could follow in the arrangements that we will be trying to enter into with the EU post Brexit. Although Norway and its people have been stalwartly against membership of the EU, right from the first referendum back in 1972, the Norwegian political establishment takes a radically different view. To that extent, I suppose, there are some similarities to the political establishment in Wales, because the people of Wales voted pretty decisively to leave the EU, but, unfortunately, Plaid Cymru and the Labour Party seem not to represent that view in any shape or form.

The Norwegian arrangement, of course, would be, in many ways, even worse than what we’ve got now because Norway accepts the obligations of being part of Schengen, which means, in effect, there is totally unfettered access to Norway in terms of migration. Under EU law, there is free movement; that is one of the four key fundamental freedoms that the EU has brought about. When EU members were, broadly speaking, on the same level of economic prosperity, that didn’t really cause much of a problem, but significant problems have been caused by the widening of the EU to include economies that are very significantly poorer than the western European economies. It would be foolish, I think, of us to deny that this has created widespread public concern and, therefore, the desire to recover control of the UK’s international borders lies at the very heart of the referendum decision. To seek to move back towards the situation that we now have by membership of the EEA would, in effect, be to frustrate and deny the expressed will of the British people.

At least in this respect, Plaid Cymru is honest and open. They reject the effect of the referendum result. They are in favour of not just being in the EEA but actually, even worse, being part of the EU customs union. As far as the Labour Party is concerned, we have no idea what their immigration policy is, and we have the deputy leader of the Labour Party’s own words on that. He expressed on Sunday that he didn’t know what Labour’s policy is. It seems to be: ‘Left leg in, left leg out, and shake it all about’. They have a kind of hokey cokey policy on this. Jeremy Corbyn has said that they are not wedded to free movement but they don’t rule it out. That is the Labour Party’s current policy as I understand it. But that is certainly not what the majority of Labour voters and previous Labour voters in Wales want.

Norway is, of course, a very peculiar case economically because it is a heavily oil-dominated economy. They pay into the EU as part of the EEA arrangements—£400 million a year. One of the advantages of leaving altogether is that we will cease, once and for all, to make contributions to the EU budget and that money will be available to spend on other things in Britain. We have just had a debate on higher education. One of the things that we could spend a portion of that money on is higher education. Norway, of course, has a much higher dependence on EU trade than Britain has; 80 per cent of its exports go to the EU. They enjoy a £10 billion a year surplus with the EU. Britain, by contrast, suffers a very significant trade deficit with the EU—of £60 billion a year, currently. This means that, because we sell a much smaller proportion of our exports, now much less than 50 per cent, to the EU—and it has been declining quite rapidly in recent years—and because we have a massive trade deficit with the EU, we have a much bigger and much better negotiating position than Norway, a very small economy of 5 million people, could possibly have.

The alternative is the arrangement that has been negotiated with the EU by South Korea: a free-trade agreement that was entered into five years ago. South Korea is the eleventh largest economy in the world, and it is an expanding economy, unlike the EU, which is a contracting economy. As a result of Brexit, we have already entered into discussions with Australia, China, India, New Zealand, Norway, and the six members of the Council for the Arab States of the Gulf, which is one of Wales’s major export destinations. Wilbur Ross, a member of the Trump administration, has said that the US-UK deal will be one of their top priorities. The United States is a very important export market for Britain. We export to them £36 billion-worth of goods a year. We don’t require to be part of the single market with the United States in order to export that colossal amount to them. Outside the EU, we will continue to be a major export market for EU countries, and they would be foolish to want to place any inhibitions on their ability to export to us, not least Germany. We export to Germany about £35 billion-worth of goods a year. They export to us £77 billion-worth a year. So, we have a very significant trade deficit with Germany. I am not a protectionist, and I am certainly not a mercantilist. I don’t believe that we should aim to have an absolute trade balance with all countries with whom we do business. We should trade to our maximum mutual advantage, and trade goes two ways. Nevertheless, in terms of negotiations as to the future trading relationships that we are going to have with the EU, certainly countries like Germany will have a very significant voice. The benefits of continued unfettered trade with Britain will be plain for all to see. Indeed, Cecilia Malmström, the EU trade commissioner in the context of the South Korean trade deal, has said that the evidence of the success of that agreement should help convince the unconvinced that Europe benefits greatly from more free trade. It spurs European growth, and it safeguards and creates jobs.

That’s the spirit in which we approach the changing relationship between Britain—and Wales, within Britain, of course—and the European Union. Hence, we end up in our motion by saying that we support the UK Government’s general negotiating position in seeking the maximum degree of free trade with the EU, but consistent with firm immigration control. As the UK is the fifth largest economy in the world, and we have a £60 billion a year deficit in our trade with the EU, surely, common sense as well as political strength on our part dictates that we should be able to negotiate a pretty good outcome for all concerned. It really would be a case of cutting off the nose to spite the face if the bureaucrats in Brussels were to try to frustrate the wishes of the British people to continue to have unfettered access to the single market, although not be a member of it.

But we should remember that 85 per cent of the world economy is outside the EU, and whereas our trade with the EU is stagnating, it is growing very rapidly with other parts of the world. The single market is not necessarily the greatest gift to mankind. I remember when I was the internal market Minister in the Major Government that the approach that I always had to take to negotiating positions was fundamentally to try and stop them doing things that were going to damage the British economy and the European economy as well. Jacques Delors changed the whole emphasis of the EU back in the 1980s when the single market process, which was set in train by the Thatcher Government, was being worked out. Our view was that we should have the maximum possible freedom of exchange of trade, but not develop some kind of overarching regulatory code of laws imposed upon everybody from the centre. That wasn’t necessary, and it’s because the EU has gone down that road that it has been stagnating in the world, relative to other countries, in the last 20 years.

So, what the British people voted for, and the Welsh people voted for, last June in the referendum was to continue the maximum freedom of trade with the EU. It is an important trade destination for Wales—that is undeniable—but at the cost of free movement of peoples, without any form of meaningful restriction, that was a price that the Welsh people decided was too great to pay. So, our motion reconciles these two important elements in the debate, and we wait to hear from the First Minister and from Labour as a party quite how they are going to respect the result of the referendum, which they’re always saying they’re keen to do, on the one hand, but on the other hand to reconcile that with their failure to state to us what kind of immigration controls they’re prepared to see as a result of the changes that will now fall to be made. I very much look forward to hearing from the First Minister today, perhaps, some clarification of that.

I have selected the two amendments to the motion. If amendment 1 is agreed, amendment 2 will be deselected. I call on Mark Isherwood to move amendment 1 tabled in the name of Paul Davies. Mark Isherwood.

Amendment 1—Paul Davies

Delete all and replace with:

1. Welcomes the Prime Minister’s intention to build a powerful new relationship with the European Union that works for the United Kingdom and Wales.

2. Recognises the importance of trade with Europe and the rest of the world, which is vital to the future of the Welsh economy.

3. Welcomes the UK Government’s commitment to secure a strong trading relationship which provides British companies with the freedom to trade and operate in the Single Market and that reciprocal arrangements should be extended to EU businesses trading and operating in the UK.

Amendment 1 moved.

Diolch, Lywydd. From its inception, Theresa May’s Government has made it clear that its vision for the UK outside the EU is for a fully independent sovereign state and that the right deal for the UK as we leave the EU will be one that is unique and not an off-the-shelf solution. As our amendment states, we propose that the National Assembly for Wales welcomes the Prime Minister’s intention to build a powerful new relationship with the European Union that works for the UK and Wales, recognises the importance of trade with Europe and the rest of the world, which is vital to the future of the Welsh economy, and welcomes the UK Government commitment to secure a strong trading relationship that provides UK companies with the freedom to trade and operate in the single market and that reciprocal arrangements should be extended to EU businesses trading and operating in the UK.

As he visited Norway, the First Minister said that Wales needs full and unfettered access to the European single market, whilst also claiming to accept the need for the repatriation of border controls, knowing full well the questions this raises. Labour’s shadow Brexit Secretary, Keir Starmer, has proposed reasonable controls on numbers entering the UK, and former Liberal Democrat Minister Vince Cable has argued that it is politically necessary to limit immigration from the EU as part of the UK’s Brexit deal. As Theresa May states,

We will decide for ourselves how we control immigration. And we will be free to pass our own laws.’

We want to give UK companies the maximum freedom to trade with and operate in the single market, and let European businesses do the same here. As she also emphasises, getting the best outcome for the UK means not putting all our cards on the table. Some might suggest that only those seeking to undermine Brexit may say otherwise, but I couldn’t possibly comment.

Some warned of dire consequences and instant recession for the UK economy if the people voted to leave the EU last June. Instead, the UK was the fastest-growing G7 economy in 2016. Global businesses like Google and Nissan have said they’ll be creating new jobs in the UK. UK employment is at a record high. The UK’s manufacturing—[Interruption.]—one second. The UK’s manufacturing sector grew at its fastest rate for over two and a half years, the UK construction sector grew at its fastest rate in almost a year and the UK services sector grew at its fastest rate in 17 months. I give way.

Would you accept that the pound has been devalued by between 18 and 20 per cent and that devaluation has given the economy a push, or do you expect us to devalue the pound by 18 per cent each year?

Of course, currency movements are one of the effects of that. It’s funny that it wasn’t factored in by those predicting doom and gloom. Perhaps you could tell us which Jeremy Corbyn was right yesterday, the one who said he wants managed migration or the one who said he was wedded to freedom of movement continuing?

Countries around the world like China and Australia are exploring how to do more trade with us after we leave the EU. Yesterday, we heard from the US Senate foreign relations committee chair that a US/UK trade deal would be a priority.

The Chancellor’s autumn statement showed an £11.6 billion saving in net contribution in 2019-20, once we were out of the EU. A new Civitas study has found that although the UK Government would need to provide almost £9 billion in support for businesses to cope with the impact of failing to strike a post-Brexit trade deal with the EU, the cost would be covered by tariffs on corresponding exports from the remaining 27 EU members to the UK. This is a stark reminder to EU leaders of the need to enter Brexit negotiations with the aim of achieving an outcome that benefits everyone.

As the NFU vice-president said on Anglesey last Thursday:

We’re going to leave the EU and we must unite and move on—we must see this as an opportunity rather than a threat.’

And, as the Prime Minister said on Sunday:

We’re leaving. We’re coming out. We’re not going to be a member of the EU any longer…So the question is what is the right relationship for the UK to have with the European Union when we’re outside.’

Will the Member give way?

When I’m finished with this paragraph, yes.

We will have control of our borders, control of our laws, but we still want the best possible deal for UK companies to trade with and operate within the European Union and also European companies to trade with and operate within the UK.’

If you’re quick.

Could he clarify that we’ll also be coming out of the customs union?

That’s subject to negotiation. I know no more about that than you do.

When people voted in the referendum on 23 June, yes, they voted to leave the EU, but they also voted for change, and this year, 2017, is the year when we start to make that happen.

I call on Adam Price to move amendment 2 tabled in the name of Rhun ap Iorwerth.

Amendment 2—Rhun ap Iorwerth

Delete all and replace with:

1. Welcomes the First Minister’s visit to Norway.

2. Notes that Norway is a member of the EEA and EFTA.

3. Calls on the Welsh Government to support full and unfettered access to the European Single Market, through membership of the EEA and/or EFTA.

Amendment 2 moved.

Diolch, Lywydd. I’m moving the amendment, obviously, in our name, which sets out our consistent position that, of the models currently on the table, the EEA/EFTA option is the one that best meets the Welsh economic national interest.

I have a philosophical and an emotional attachment to the idea of being a Welsh European, but I’d like to have the debate today a little bit at not quite the emotional fever pitch that sometimes these debates are held, because it’s exhausting and it’s not particularly illuminating, and just to look at the economic facts, because I think forecasting in this very, very turbulent context is almost impossible. It’s certainly not a science. I can quite understand the degree of scepticism, particularly on the benches opposite, in terms of the forecasts, which uniformly, of course, have been in a negative direction, and if you move in the spectrum towards a harder Brexit, they become even more negative. But I’m prepared to accept that, over the long run, the UK economy will ride out any rollercoaster. In the long run, of course, as Keynes said, we are all dead. I think the particular problem that we face is that it will not be evenly distributed—that ability to flex in response to the challenges and, maybe, the new opportunities post Brexit will not be evenly distributed across the UK. And there are particular sectors and particular territories that face particular challenges: Northern Ireland, clearly, because of its high level of integration with the economy of the Republic. Ironically, in this context, the City of London faces particular challenges in terms of whether it’ll have access through passporting rights et cetera. And then I would say there are a collection of manufacturing-based economies, old manufacturing economies, which particularly have large multinational companies involved in sectors that have very global supply chains, particularly automotive, and aerospace would be another example; electronics is not as relevant to the Welsh economy, but those two other sectors are very, very important. And that’s why I would say that, whatever you think about the macroeconomic prospects across the UK as a whole, Wales faces some very severe challenges if we are not within the single market.

In terms of the actual position, Wales has the highest proportion of its exports going to the European Union, by a long margin: 67 per cent in 2015. Over two thirds of our exports go to the EU—of goods. The average for the UK is 48 per cent. The next one is the north-east of England, with 58 per cent. We are the most EU-intensive, in terms of our exports, of all the economies of the United Kingdom, and so I would appeal to the Members opposite: Wales is a special case. It has a unique set of factors that lead Plaid Cymru, the Party of Wales—[Interruption.] Yes, I’ll happily give way.

Just on that point, would you accept that, last year, Wales actually had a smaller share than the UK average, quite significantly, and that much of the shift has been a growth in the EU offset by a collapse in other international trade, where we need to be looking at Europe and the world as we go forward?

Well, I’m all for growing our exports in all directions, and there’s nothing wrong with a bit of optimism, but I’m just stating the facts as they currently stand. I accept that these figures change in response to this very, very uncertain economic environment that we’re in, but the fact of the matter is we are, as things currently stand—given where we are in terms of the economic cycle, then we’re talking about two thirds of our entire export base. And unfortunately, we’re not a nation state; if we had all the levers, then maybe we could be more agile in responding to this new environment, but we don’t. We have at least one arm tied behind our back, probably both. So, we’re not able to flex and respond with the degree of agility that, under other circumstances, we might like to see. And so I would appeal: let’s look at the facts, let’s actually have a Wales-based debate. I remain fully convinced, as things currently stand, that it is absolutely imperative for the Welsh economy that we remain a full participant within the single market.

I’d like to thank my colleague Neil Hamilton for proposing this debate today. Those who opposed the UK leaving the EU are determined to find any possible way of keeping us shackled to an unelected, undemocratic bureaucracy, overburdened by restrictive regulations and unable to control our own borders—all for the sake of access to the so-called single market. The First Minister visited Norway last week to explore ways that Wales could emulate the Norwegian model. The problem is, First Minister, the people of Wales did not vote on the 23 June last year to leave the EU and then immediately become an affiliate member. We voted to free ourselves of the millstone that EU membership places around our necks. We voted to free ourselves from an increasingly insular and shrinking trading block, and we voted overwhelmingly to reject freedom of movement. We buy more from the single market than we sell and the deficit is growing. Why then should we be overburdened with the regulations and restrictions that membership of the single market would impose upon us? In the run-up to the vote last year, the then President of the United States tried to influence the vote by claiming the UK would not get a trade deal with the US. Thankfully, the people of the UK ignored him and we will soon have a different occupant of the White House who is keen to increase trading links with the UK. The Republican Party is now in charge in the US and they want to see a US-UK trade deal. They want to trade with us, they want to trade with us and I’m all for trade. I’m all for trade. I’m all for the benefit of Wales trading with other countries.

When we finally throw off the shackles of the EU membership we will be free to pursue beneficial trade agreements with the wider world. Wales’s exports to the EU only account for 41 per cent of our world exports and that has been declining over the past four years. Our trade deals need to be ambitious, looking at a global market. We don’t need to overburden ourselves with red tape just to maintain access to the single market. We have to embrace free trade with the whole world, rather than solely focusing on an increasingly insular trading block.

As well as pursuing closer trading ties with the US we have to be ambitiously forging closer links with countries in Latin America and Asia.The economies of the countries in Asia have seen exponential expansion over the last half a century, yet the UK’s economy, and that of the EU, has seen lacklustre growth over the same period. As soon as we are free from EU control we should be tapping into these markets.

Wales is the country I was born in and have lived in all my life. I respect the vote of the people of Wales and I will fight for every penny to make Wales prosperous. I am optimistic about our future outside the EU. I would suggest that the First Minister would find his time much better spent if he were to pursue trading links with the likes of China, India and Brazil, rather than seeking ways of maintaining our ties to the EU. Thank you.

It’s maybe appropriate that we are here today standing a few 100 yards from the Norwegian church in Cardiff Bay, which was built in the nineteenth century when Norway had an enormous merchant fleet and had great a trading relationship with Wales. It was then a place of respite for Norwegian sailors in the second world war when they couldn’t return home to their country, which had been engulfed by fascism. So, to look to Norway for inspiration, it’s a very different society but in truth we see there the best available access you can get to the European single market without being a member and we see some greater control over immigration. We’ve heard, and we’ve talked in this Chamber before, about the version of freedom of movement in Norway being a slightly stricter version than we have had in the UK. There is one crucial difference that I think has been underexplored in the relationship between Norway and the EU and that’s this: the European Economic Area agreement doesn’t recognise EU citizenship in the same way, and it’s EU citizenship that gives rise to a number of those rights that people have had many concerns about in the course of the referendum debate. Some of those are social security rights and some of them are around the obligation to support students in the same way, whether they’re EU citizens or UK citizens. So, I think there is an opportunity to explore some of the differences there. We look to Norway for guidance, but we don’t in truth know, at this stage, what the ultimate settlement is going to look like. We may end up with more control over some aspects of immigration than Norway has.

But please let’s not fall into the trap of believing that the current version of freedom of movement is the only way that we can express and continue to express our internationalism as a country. We can look at countries like Canada, which has an open-minded liberal internationalist approach to the world, but has immigration controls that we don’t have for EU citizens. I believe passionately and campaigned passionately on the basis that EU membership is in the long-term interests of Wales and of the UK, and I still believe that, but that is not the same as equating the current freedom of movement rules with being internationalist or being compassionate or even being European.

We look in this Chamber at the process of leaving the EU—article 50, Supreme Court decisions and so on—all of them are vitally important to ensure that Wales has its voice heard in the process of leaving the EU. But, I feel that 2017 is the year that we need to move beyond the mechanics of Brexit and start to articulate the country we want Wales to be after we have left the EU.

The campaign for the referendum and the campaign to leave was run by very wealthy, right-wing businesspeople. It’s not the last word, it’s the first step in a much bigger project to change Wales and change the UK in a way that I do not want us to see happening. We saw that on the weekend with Theresa May talking about a vote for fundamental change. I fear that, as we are to some extent distracted by what are very important issues around the leaving of the EU, those who ran those campaigns are already planning the sorts of changes they want to bring in across the UK. We see that in the great repeal Bill. We have decided that actually most of the Bill is about preserving existing legislation, but the truth of it is, it’s the beginning of a political narrative about repealing a bedrock of protections and rights that we have obviously taken far too much for granted in Wales and in the UK.

I think one of the least inspiring aspects of the referendum debate was the almost total absence of the civic voice in the discussions, so we’ve ended up with a view of post-Brexit Wales as being economistic and partial. It was politicians arguing over money, so the distrusted arguing over the disbelieved, and as a result I think we now have to articulate the kind of vision we want to see for Wales after Brexit, to make alliances and to fight for that vision.

Many people would agree that a major factor in the Brexit vote was public anxiety over immigration. That is not just the conclusion of me and my colleagues in UKIP, it is also the view of Theresa May, previously a ‘remainer’ of course, and the Conservative Government at Westminster. It is also the view of the First Minister here in Cardiff Bay, who has told the Chamber on myriad occasions that immigration was a major issue on the doorstep during the referendum campaign. It seems that only Plaid Cymru is unwilling to accept this reality, or at least they don’t want to do anything in practical terms to confront that reality by trying to restrict immigration. So, Plaid’s oft-stated desire to keep freedom of movement needs to be kicked into touch. Labour don’t seem to know where they are on this. No point expecting a sensible or even consistent line from Jeremy Corbyn. He changes his opinions sometimes by the hour, and is obviously clueless on this issue, as on many others.

The problem for the First Minister, who seems slightly more coherent, relatively speaking, is this: does he think that access to the single market is more important as an issue than freedom of movement, and will his view in any event carry any weight at all with the Labour frontbench at Westminster?

UKIP’s position remains that an end to uncontrolled immigration into the UK from the EU is the paramount objective. That is because we believe that this issue was the paramount concern of those who voted to leave.

I call on the First Minister, Carwyn Jones.

Diolch, Lywydd. I listened carefully to the views that were expressed around the Chamber. Could I echo what Adam Price said, that we do need a debate that is based around fact and not so much around the hot air that has been generated by this debate over the past few months?

I’m asked to outline what I think is a way forward for Wales and the UK. I’m happy to give it—I thought I’d been saying that. I don’t believe you can have access to the single market and, at the same time, say that you want full control over immigration. You choose one or the other. I have made the choice to say that I think prioritising access to the single market is the most important issue for us in Wales. Why? The European Union is by far our biggest market, by far our biggest export market. We play fast and loose with that market at our peril. It’s a much, much bigger market for us than the US, a much, much bigger market for us than some of the developing countries, and it’s important that we maintain access to that market.

Our farmers, our hill farmers, would not exist, frankly, if they weren’t able to export. A huge tariff placed on Welsh lamb going into southern Europe would wreck Welsh farming. I know that one of the issues that’s often raised is that we can control farming policy ourselves: yes, but we won’t have the money. From 2020 onwards, not a brass farthing will be available for Welsh farming—nothing. Two hundred and sixty million pounds-worth of subsidy would no longer be available. We hear noises from within DEFRA that they do not see subsidies for farming as part of farming’s future. I know, as somebody who has spent 17 years as a Minister—longer than anybody else on these islands now—that DEFRA have no love for hill farming. Their idea of farming is lowland dairy farming and lowland arable farming. They have no interest in hill farming at all. I have far more confidence, currently, in Brussels than Whitehall when it comes to agriculture, because I know that, in Whitehall, there is no sympathy for Welsh farming and there is no sympathy for Welsh hill farming. And the Tories are silent on this. They say nothing about the money that would be lost to Welsh farming post 2020. Where is their passion? For a group of people who voted for them for many, many years, they’ve been let down by the Conservative Party.

There are two issues that we have to deal with: firstly, I think some reality needs to be injected into this debate. If, in March 2019, there is no deal of any kind, World Trade Organization rules will apply. They will apply; there’s no doubt about that. Tariffs will come into force and we will face tariffs as we seek to export to our biggest market. That means not that this is something that is a boon to the UK exchequer, because what happens with tariffs, which is never mentioned by those who say they’re not a problem, is that tariffs are imposed on goods as they enter the UK, and those tariffs are simply passed on to the consumer; it’s a tax on people. Tariffs are paid by the consumer, not by European businesses. So, the Treasury might benefit, but it means that members of the public in the UK will be paying extra tax to pay for tariffs. That’s what tariffs are all about at the end of the day. It’s not some kind of free money for the UK Treasury; it’s Joe Public who will pay for that.

Secondly, businesses are afraid of different regulatory regimes in different parts of Europe and, of course, the sheer nuisance of customs paperwork. Add that up for every transaction and it creates a barrier between the UK and the EU that we could do without.

What, then, about immigration? I don’t accept that people voted—

Neil Hamilton rose—

Yes.

The First Minister makes a point about the bureaucracy that might be imposed as a result of leaving the EU on firms trading with the EU, but the reality is that 95 per cent of firms don’t trade with the EU and exports to the EU cover less than 15 per cent of our GDP. Eighty five per cent of the value of Britain’s trade will not be affected by this at all.

More than 40 per cent of our trade goes to the EU; it is our biggest market. As I say, we play fast and loose with that at our peril. It may be that some SMEs don’t trade directly with the EU, but they trade with bigger companies that do trade with the EU, and any effect on those bigger companies, like Tata, for example, like Ford, has an effect on the entire supply chain. If you look at the Ford engine plan in my constituency, every single engine is exported—every single one. There is no domestic market for those engines. We must be careful that we don’t lose the advantages, economically, that we have now.

With immigration, I’ve said it before and I’ll keep on saying it, the UK will not control its own borders. You cannot control the UK’s borders unless you’re prepared to see a hard border in Ireland—there is no other way of doing it—and accept the conflict and turmoil that will happen as a result. If you want to get into the UK, you simply have to get into Ireland. They can walk into the UK; there’ll be no immigration control, no border control at all. So, the reality is that the UK cannot control its border in the way that some would want to see.

Now, it’s right to say—and I believe this is correct—that people were concerned about the current system of freedom of movement. I concede that point. People offered me many views on the doorstep: some people didn’t want to see immigration at all; some people wanted to kick immigrants out—I accept that they are a small minority of people; but a lot of people were concerned for different reasons about freedom of movement. My proposal is that we look to do what Norway does already. In other words, there is limited freedom of movement: freedom of movement to a job and some flexibility around that, but there comes a point, if somebody doesn’t have a job, when they can’t work or remain in the UK. The reality is that the UK went beyond what the rules required. If they’re interpreted in the same way as Norway interprets the rules, even though Norway has freedom of movement, you do introduce what I think is a sensible system, which most people would accept. Nobody’s said to me, ‘What we need to do, you see, is prevent all these doctors, nurses and students from coming into Britain.’ We must make sure that we are still able to draw on the best expertise from around the world. Freedom of movement to work, I believe, is a hugely sensible and rational way of dealing with people’s concerns while at the same time not cutting us off from the rest of the world.

We’ve got to be careful as well of free trade agreements; they’re not what they’re cracked up to be. A free trade agreement in China would make it potentially impossible to impose tariffs on Chinese steel, and that means the end of Tata and steel production in Wales. A free trade agreement with New Zealand runs the risk of having more New Zealand lamb into Wales, and that ends up, of course, in a situation where, again, Welsh farmers are hit by a double whammy of no subsidy and having to compete against lamb that will always be cheaper. No matter what we do, New Zealand lamb will always be cheaper than lamb in Wales because of the geography and topography and climate of New Zealand. Our farmers can’t afford for that to happen. [Interruption.] Of course.

Just while he’s on the point of agricultural exports, would he agree with me that we need to look at the example of where we tried to expand our dairy industry to Russia, and then Russian incursions into the Ukraine and the Crimea meant that sanctions were imposed on Russia. If we make strategic deals with our potential enemies, or at least our opponents in trade deals, we will cut off our nose to spite our face.

And I fear what’s being said in the US. I don’t believe for one moment that the US will strike a deal with the UK that is anything other than advantageous to the US. The US President was elected on a platform of protectionism. He is not going to give the UK any favours. It is naïve to think that that is what the US will do.

I also think we need to approach these negotiations in a spirit of co-operation—not a spirit of what I call imperial arrogance, thinking that the world will fall at our feet. Of course the EU exports more in terms of cash to the UK. It would be odd if it didn’t: it’s eight times bigger than the UK. But the reality is that more than 40 per cent of UK exports go into the EU, and it’s only 8 per cent the other way. So, actually, the EU market is far more important to the UK in terms of the percentage of exports than the UK is to the European market. Many European producers know they’ll still be able to sell into the UK, even with tariffs, because people don’t have an alternative. If you want to buy a car, you’ve got little alternative than to buy a car that is at least partially manufactured abroad. It’s not as if there is an alternative in terms of a British-manufactured car. So, this idea that this is the nineteenth century and the world will fall at Britain’s feet is the wrong approach as far as Britain is concerned. Britain is a big economy, but it’s not a big market. We have to bear that in mind as we work out what our position should be.

Timescale: now, it’s been suggested that free trade agreements are one potential way forward. I’m not convinced of that. The leader of UKIP himself said it took five years to negotiate a deal with South Korea. We only have two years. It’s impossible to negotiate a free trade agreement with anybody within two years. I’ve spoken to officials from other Governments who’ve done this, and they all say to me it takes two years to agree to have the discussions in the first place. To have a free trade agreement in two years makes the UK look laughable, when people actually suggest that. Seven years, 10 years—that is the timescale for free trade agreements. So, the transitional arrangements post March 2019 are hugely important. We can’t go off the edge of a cliff and then try and climb back up it. There has to be a bridge between the final outcome and March 2019. Thought hasn’t been given to that.

I listened carefully to what Mark Isherwood has said. I have to say, in all the years I’ve been in Government I’ve never seen a more rudderless UK Government. I have no idea what the UK Government’s position is. I hear different views from different Ministers. The currency market reacts every time Theresa May says something because they don’t know what she—. The leader of the Conservatives has just walked back into the Chamber. If you wanted to play a part in the debate, you’d have been here from the very start rather than walking in right at the end. He talks about chuntering on from these benches; he is the master of that art. If he’d listened to the arguments, perhaps he would have learned more rather than coming in at the end with a closed mind.

But the UK Government has given us no leadership at all. I hear some in the UK Government talk about tariffs as if they are of no consequence. I hear David Davis move his position, which I welcome, actually. He’s moved his position to what I think is a more pragmatic position. I hope that the pragmatists in the UK Government are more dominant than the dogmatists, who spout nationalist waffle, frankly. It’s the only way I can describe it—as being a nationalism for the UK. If you shout at foreigners enough they’ll give you what you want. That’s basically what some of the Conservative Party want, and this issue must be resolved for the good of the British people, not for what is politically convenient because of the rifts within the Conservative Party. That is, I’m afraid, what’s happening at the moment.

Plaid Cymru’s amendment—we will support that amendment. I’m glad they welcome the visit to Norway. I was asked today whether it was a jolly. I knew I’d be asked that as I stood in a temperature of -16 degrees C in the snow. I can guarantee you that it didn’t seem like that at the time. European Free Trade Area membership I raised with them. There’s certainly some concern among the EFTA members about the UK joining, because of its size. Norway is the biggest country in EFTA, of course, at the moment. Even though it’s only got 5 million people, it’s a massive oil exporter. Half the UK’s oil comes from Norway. There are only 5 million people, but there’s £700 billion of a sovereign wealth fund that it built up as the UK spent all its oil money. So, it is quite a major player, despite its size. There needs to be some discussion with Norway and the other EFTA members as to whether the UK would be welcome within EFTA because of its sheer size. But I’m glad to see that the third point that’s put forward in the amendment is, using the phrase that I’ve used, ‘full and unfettered access’ to the single market. EFTA membership is certainly a possibility. EEA membership is, again, something to look at. Customs union is perhaps less attractive at this stage, because of what that would do. I think EFTA membership and/or EEA is actually a better option at this stage, having examined the evidence. But I have to say that, the more you look at this, the more complicated it gets. The one thing we should avoid is thinking, ‘This is all very easy, it’ll all be sorted out in two years.’ It won’t. This’ll take hard slog, hard work, and I’m determined that we get this right for the people of Wales.

I call on Mark Reckless to respond to the debate. Mark Reckless.

Diolch, Lywydd. I congratulate my party leader on his opening of this debate; thank Mark Isherwood for his amendment; Adam Price for his; and thank Caroline Jones, Jeremy Miles, Gareth Bennett and the First Minister for their contributions to this debate. There’s also one sedentary contribution I’d like to reply to, which I think came from Lee Waters, who at one point—if I heard him correctly—said, ‘Why do we keep having these debates?’ My answer is, ‘Because the position of all the other parties in this Chamber keeps on changing.’

We have the amendment from the Conservatives today, and I’m reasonably happy with both the Plaid and the Conservative amendments; the only bit I object to is the ‘Delete all’ at the beginning. But talking to Mark Isherwood, he seems to expect me to know better than he would what the latest Conservative UK position is. I mean, they’ve set up Liam Fox’s Department for International Trade, yet now we have this briefing and certainly from the Chancellor, Philip Hammond, suggestions that we stay in the customs union. So we leave the single market, but stay in the customs union, and waste huge amounts of time and energy having a Department for International Trade that will never be able to do anything. That doesn’t make sense, and I hope that is not going to be the situation we see ourselves coming to.

I’m really grateful for the First Minister being at this debate. When I first heard, when I was first elected, that he was going to be taking charge of this Brexit portfolio after the referendum, I was a little sceptical. I thought, given all his tasks and commitments in leading the Government and everything he had to do, that the level of attention he could give to the Brexit portfolio wouldn’t be great. I have to say that, First Minister, you have shown attention to it, and I think you have kept oversight of this portfolio. You’ve been in the Chamber for all the key things, but I do feel that your position keeps changing. You did say immediately after the referendum that the absolutely key thing was keeping freedom of movement. Within 24 hours you had retracted that, and that apparently wasn’t the case. There then seemed to be a gradual movement, we felt, in the right direction. Plaid Cymru had this great motion that they wanted to be in the single market, but you, with us, knocked down that motion and said very clearly in that debate that what mattered wasn’t membership of the single market, but access to the single market. Unfortunately, I now detect this week, in questions yesterday and, to a degree, in the debate today, that you’ve gone away from that position again, and what you want is to be in the single market, and that’s worth having in return for freedom of movement. You want both those things, having come from a position where you wanted neither. That’s why I think we need to continue having these debates, to try and clarify our understanding of these issues. I mean, we have complied—

The First Minister rose—

Wonderful.

I wouldn’t normally intervene, but—I’m grateful to the Member for letting me intervene—firstly, it is right to say the position changes, because it’s such a fluid situation we find ourselves in. There are always new complications that arise and, as Keynes said, ‘When the facts change, I change my mind’, and that’s one of the things I think you have to be open to.

One point I wanted to clarify: he talked about the Plaid amendment, and said he had no difficulty with the Plaid amendment. The Plaid amendment talks about EFTA membership and EEA membership as being possibilities for Wales. Are either of those scenarios something that he’s prepared to consider?

This isn’t quite correct. It doesn’t talk about EFTA and EEA membership, it says EFTA and/or EEA membership. I think my party would be very happy, indeed enthusiastic, for EFTA membership, but not for EEA membership. The amendment is confusing. Every other part of it, I don’t think we have any problems with. And/or EEA membership, yes, we’re happy with EFTA membership. But what support of the amendment does is allow the First Minister to continue the confusion of his party as, ‘Do they want membership of the single market?’ i.e. the EEA—possibly with the confusion of the Conservatives that you might be outside or inside the customs union—or is he saying, with us, that we should have a free trade relationship, trying to maximise our access to the single market from outside? That really is the matter he needs to decide.

I don’t think the facts have changed. The people voted to leave the EU. Certainly, UK Government policy is changing, but I think people learn more about the complexities of the EU and consider the matter and, yes, perhaps change their view over time, but I’m not so sure that the facts have changed to that degree.

The difficulty with the Plaid issue is they talk about full and unfettered access to the European single market, but I’m not sure there is any such thing. We don’t have full and unfettered access at the moment. In many areas services aren’t liberalised. In goods they got rid of—. Basically the Cassis de Dijon principle of mutual recognition that the EU used to have has been supplanted by, ‘Well, let’s agree politically one, single, top-down standard everyone has to meet in order to be able to sell at all.’ I don’t call that full and unfettered access. And, in the same way, they actually used the applicability of EU law to try and prevent our access when they looked at, say, banning euro clearing—if you weren’t in the eurozone, it was EU law they were trying to do. In the same way with the port services regulation—they would sort of split up and have internal markets in every port in the UK and it would be completely ridiculous and would fetter our access to the single market as well as other markets. That would, again, be done by EU law. We want the maximum possible access, consistent with restricting free movement, and deciding who comes to our country. We’re not going to have a hard border, we’re not going to want to check every lorry that comes across the Irish market, we’re not trying to stop people from the EU visiting the UK; we’re trying to stop them working in the UK on a completely unfettered basis to drive down wages for people at the lower end of our labour market who compete with them. That’s what our motion is saying, and I wish the First Minister would come and bring some clarity by supporting our motion, rather than supporting the Plaid thing, which continues the ambiguity and uncertainty that’s been a feature of other parties’ positions in this Chamber. Thank you.

The proposal is to agree the motion without amendment. Does any Member object? [Objection.] I will defer voting under this item until voting time.

Voting deferred until voting time.

And that brings us to voting time. Unless three Members wish for the bell to be rung, I will proceed directly to voting time.