4. 4. Statement: ‘Securing Wales' Future’: Transition from the European Union to a New Relationship with Europe

Part of the debate – in the Senedd at 3:45 pm on 24 January 2017.

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Photo of Carwyn Jones Carwyn Jones Labour 3:45, 24 January 2017

I listened carefully to the comments of the leader of the Welsh Conservatives. Can I say that it didn’t strike me that there was much in terms of common ground between us? I don’t know what his view is in terms of the future of the UK, apart from the fact that he says that the UK should look outwards. We all agree with that, but beyond that, we’ve no idea what his view is on transitional arrangements, what his view is in terms of access to the single market, and what his view is on what kind of relationship we should have with the EU. I’m interested in those views, but I’ve not heard them. It is unfortunate, given the constructive tone that he’s adopted today, that he described on Twitter the publication of the White Paper as the publication of the latest copy of ‘The Beano’. Now, he can’t, on the one hand, say that and then, on the other hand, suggest that this is a serious discussion—[Interruption.] They didn’t know that on his backbench. I can see that—that’s what he said. [Interruption.] Now, let’s have a mature debate about this because I don’t—[Interruption.] I don’t think it’s compatible with a genuine desire to work together when that kind of use of phrase is in place, but, you know, I’ll give him the benefit of the doubt to see what ideas, indeed, he comes up with over the course of the next few weeks.

With the single market—[Interruption.] No. With the single market, one thing he has said, which troubled me, is that he implied, or he said in the article that he wrote for ‘The Sunday Times’ that we are over-reliant on the European market. Now, I’ve never known anybody to say, ‘We need to sell less in a market.’ Far from it—we want to make sure we sell more into the European market, and, indeed, other markets around the world. So, I cannot agree with him that we are over-reliant on a market that we sell 67 per cent of our products into, and 90 per cent of our food and drink as exports. We should be looking to increase our share of that market, not decrease it.

He has talked about freedom of movement. I believe that the model that Norway has adopted provides an interesting model, as far as we are concerned. That is a freedom of movement to work—we are already have it—and they are participants in the single market. So, it is possible to have that model of freedom of movement and yet still be part of the single market.

He also talks, as others have done, about access to the single market and how important that is. His own Prime Minister said that she was looking for the fullest possible access to the single market. I agree. That is hugely important. So, she’s left herself enough room there to develop an argument on both sides of the fence. The one thing I have to say to her—and Members fall into this trap every time about people being allowed into the UK—the UK will not have a border. How many times have we got to investigate this? When I raise this with Whitehall Ministers, they have no answer. The reality is that if you wish to enter the UK, get into Ireland, and then you can get in without any check at all. So, the idea that the UK can introduce borders, which was suggested at the time of the campaign last year—I don’t want to re-fight that; that’s finished—is not true. It’s just not going to happen, because unless you have the co-operation of the Republic of Ireland, and the Republic of Ireland having the same immigration policy, which it will not do because it will be part of the EU and will have freedom of movement, then, actually, it’s not possible to monitor who comes into the UK and who doesn’t. So, there needs to be co-operation with other countries. There needs to be co-operation with the EU, ironically, for the UK to control its own borders; otherwise it can’t control its own borders. So, that will be an important consideration as we go forward.

In terms of resources, it is important that the resources that we currently have are retained. It is also important that those resources are controlled by the people of Wales, through their Assembly and their Government, and not controlled elsewhere. It is a fair point to say that, in some areas, a UK-wide framework would make sense. Animal health is one area, and state aid is another. If there are no state aid rules, it’s a free-for-all. There would be nothing to stop us throwing money at Cardiff Airport to try and shut Bristol down. I have no doubt that Bristol would complain about that, and, from their position, quite rightly so. So, there will still need to be some kind of framework across the UK when it comes to dealing with issues like state aid. But the key issue is this: those frameworks are not there to be imposed by Whitehall; they are there to be agreed by the four Governments. If we look at agriculture, DEFRA will look after the interests of farmers in England. They always have done because they have the biggest voice—that means the cereal farmers, it means arable, it means large-scale dairy. They aren’t as interested, in the main, in hill farmers, and I say that as somebody who has dealt with DEFRA for many years under both parties. I’m not making a party-political point. I think that is a mindset in Whitehall that is difficult to avoid. I would not trust DEFRA to produce an agricultural policy for the whole of Britain. So one, possibly, that could be agreed as a framework: yes. One that is imposed: absolutely not.

So, the next question is: how, then, do we create such a mechanism constitutionally to get that agreement? Well, actually, it has already existed in the past. When I was in my first tenure as agriculture Minister, we would meet every month, in London, the four Ministers, to agree the UK's line at the forthcoming European Council of Ministers. We were not all of the same party, and yet we were still able to actually agree what the position should be, and that model has continued. Now, that worked for agriculture. With a mature approach and with sense on all sides, there is no reason why that can't be used as a model for the machinery of the UK.

The JMC doesn't work. It's not going to be fit for purpose in the future. We cannot have a situation where, for example, if there is a dispute between a devolved Government and the UK Government, the UK Government is the ultimate arbiter. That can't be right. If we have a dispute with the Treasury, it's the Treasury that decides that dispute. There must be an independent process of dispute resolution. Now, to me, that means not having a JMC, but a council of Ministers, a British council of Ministers, where the four Governments look at common areas of interest and policy and look to get agreement. That is the way to ensure that we conserve the internal single market in the UK and yet protect the position of the three smaller nations within the UK itself, and ultimately protect the union, because let's not pretend that the UK itself is not under pressure as a result of Brexit, because it is. We've seen what's happened in Northern Ireland. It's not unrelated to the Brexit issue, I can assure him of that. We're seeing what's happening in Scotland. We must be careful to make sure that old ghosts of the past do not come back to haunt us as the UK leaves the EU.

On his final point, on transitional arrangements, I entirely agree. I've spoken to people who’ve been involved in trade negotiations, and they all say to me that it takes two years to agree to start the negotiations, let alone get to a position where they are agreed. And those transitional arrangements will be hugely important to enable our exporters, not just to access the European market, but the 50 countries that the EU has free trade agreements with, all of which would fall if we have no transitional arrangements, leaving us, effectively, on our own.

Ultimately, my great fear is this: that as the UK talks about free trade and globalisation, the rest of the world is going in the other direction, America particularly, and these are issues that we have to consider very, very carefully. I'm echoing the point that was made by David Melding, and I think it's absolutely right; this will require very, very skilful handling, given the fact that what was correct in June last year is no longer correct as far as some of the world's biggest economies are concerned.