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.