Questions now from the party leaders. The leader of the UKIP group, Neil Hamilton.

Diolch, Lywydd. Whilst the First Minister was away last week, he may have seen that the Cabinet Secretary for finance wrote to the Chancellor of the Exchequer about proposed public spending cuts in two or three years’ time, which set to amount to £3.5 billion. The Government, this year, is running a budget deficit equivalent to £60 billion. George Osborne managed the singular achievement of borrowing twice as much money in six years as Gordon Brown and Alistair Darling. The national debt is now £1,800 billion, compared with £1,200 billion six years ago. That’s £28,000 for every person in Wales—indeed, the United Kingdom. It’s very easy to spend money we haven’t got, of course, and everybody would like to be able to borrow interminably and never to have to pay it back. By how much does he think the Government’s borrowing requirement should increase on a permanent basis?

That is a very strong case indeed for borrowing now to invest for the future. It’s never been cheaper to borrow money on the world markets. We know from the experience after the end of the second world war, when the UK was in a far worse position than it is now financially, that the Government of the day took the position that it would seek to borrow money in order to invest for the future. Then, we saw, of course, the economic growth of the 1950s and the 1960s. So, I am unashamedly Keynesian in this regard. I take the view that Government should be borrowing now in order to invest, in order to create the income that will pay back the cost of that borrowing and more in the future.

But the First Minister knows that never happens. He has only to look at the recent history of the UK Government’s debt position to see what the reality is. We have a well-being of future generations Act in Wales—a very good thing it is too—but what we’re doing by carrying on with this ‘rake’s progress’ of borrowing, of course, is to hand on to the next generation a massive debt, which they will have to repay. I don’t think that’s a terribly moral position for us to hold.

But, there’s a better solution to this. We don’t have to borrow that money at all. We can look at what the Government spends money on at the moment and cut without any risk to anybody in Britain being disadvantaged. Let’s just take the foreign aid budget, for example, on which we’re spending £12 billion this year. If we just knocked £3.5 billion off that £12 billion, that would amount to the same sort of saving that the Cabinet Secretary for finance wants the Chancellor of the Exchequer to avoid deducting from the Welsh Government’s budget. There are plenty of reasons why we should cut the foreign aid budget. So, is the First Minister putting the interests of people in foreign countries before the interests of the people of Wales?

I think the leader of UKIP is being naive in what he says. First of all, there is the obvious moral question of those countries that are rich helping those countries that are poor. The example of Norway is a prime example of that. The Norway Grants were set up by the Norwegian Government because they felt they’d done very well out of oil and gas and wanted to give something back to people who had less. So, that altruism and that desire to help humanity is hugely strong.

But also, if we look at it economically, aid buys friends and allies. If you don’t provide aid to countries in order to help them and they will remain your friend in the future, someone else will do it. So, yes, it’s right to say that there is a strong moral case for aid, but, in diplomatic terms, it’s also correct to say that, if you offer aid to countries that grow in the future, they will remain your friends and will trade with you in the future, increasing the wealth of their own people and of course buying the goods that you manufacture.

Of course there is a humanitarian case for aid and nobody is against that, but a lot of our aid budget actually goes to countries that are spending a huge amount of money upon projects that we wouldn’t regard for a moment as humanitarian. For example, we’re increasing our aid to Pakistan this year by £100 million to nearly £450 million a year. Pakistan, this year, is increasing its defence budget by £635 million to £6.7 billion. They spend far more per capita on defence than we do in the United Kingdom. They’ve also got a nuclear programme and a space programme. So, what we’re in effect doing by increasing the amount of aid that we’re giving to Pakistan is indirectly funding their military, space and nuclear budgets.

He uses one example. There are many, many other examples of countries where people have suffered greatly, a lot of it due to the ineptitude of European powers who left those countries with artificial boundaries and with economic incoherence, and who left those countries without a tradition of governance. They were left to struggle as a result of it. Many of those countries now have good governance. If we look at Ghana, for example, Ghana is a country where governance is robust, yet many of the people there are paying for the mistakes that were made in the 1960s after independence. I see nothing wrong in providing aid to people in order to enable them to survive, of course, but also in order to enable people to develop themselves economically and, of course, to enable those people then to provide for their families.

I was in Uganda two years ago. The one thing that struck me about Uganda was the sheer entrepreneurial spirit of the people. What they didn’t have was capital. Coffee was the main cash crop. They saved money from coffee in order to provide themselves with capital—they had no other way of doing it. The great thing that happened in Uganda was banking via mobile phones—people could transfer money around in a way that they couldn’t before.

For many, many people around the world, they just need a bit of help in order to prosper, and that’s why we give aid to people—in order to make sure that they can prosper in the future and that their communities can prosper in the future.

Leader of Plaid Cymru, Leanne Wood.

Diolch, Lywydd. First Minister, on 16 January, you introduced the Trade Union (Wales) Bill. The intention of that Bill is to disapply aspects of the UK Government’s Trade Union Act 2016. Plaid Cymru supports this—we believe that industrial relations should be decided upon here and not in Westminster. Your trade union Bill will be in competence under the Assembly’s current powers. Do you believe that it will be in competence under the reserved-powers model that we are moving to under the new Wales Act?

The competence will change, but our belief is this: we will pass this legislation and we will do what is right by the people of Wales. It is a matter then for the UK Parliament to decide whether it wishes to override an Act that was passed by the people of Wales in their Parliament. If they choose to do that, they will precipitate a constitutional crisis.

The Wales Act implements a heavy list of restrictions, and industrial relations is one of those restrictions. We heard from the Constitutional and Legislative Affairs Committee yesterday that the UK Government intends to legislate on industrial relations once the Wales Act 2017 is in force—they use the words ‘at the earliest opportunity’.

If you want to reduce strike action, the best way isn’t through legal restrictions but through negotiation, dialogue and a social partnership approach that is advocated by a majority of people in this Assembly. You’ve said that you still intend to take the trade union Bill through this Assembly. What is your plan to ensure that its provisions are not overruled by the UK Government?

We will do everything that we can to make sure that that doesn’t happen. We will take this legislation through the Assembly, and we believe it will pass with the support of not just the governing party, of course, but that of her own party as well, we trust. It is a matter then for the UK Parliament, and the House of Lords particularly, to decide whether it is constitutionally appropriate to seek to overturn legislation made in a devolved parliament by the elected Members of that devolved parliament acting within competence. That is a serious constitutional matter that the UK Parliament will embroil itself in if it goes down that line.

Thank you. I wonder if we’ll now see another Supreme Court case, and I’m sure that you’d agree that that would be a damning verdict on the Wales Act. Plaid Cymru voted against the legislative competence motion on the Wales Act because we were of the view that it could lead to a Westminster power grab. Would you agree that this now looks like a vindication of our position on that vote?

There is agreement across most of this Chamber that the Wales Act is not going to provide a lasting settlement, as the UK Government stated its objective was to achieve. Will you state today whether you believe that the Wales Act 2017 is unworkable? If you do think it’s unworkable, do you support Plaid Cymru’s call for a new Wales Bill immediately?

It’s not unworkable, but it is unsatisfactory. She and I are in exactly the same position on this. The current legislation was part of a package—there were parts of it we did not like and did not accept, but, nevertheless, it took this Assembly forward when it was viewed as a package. Does it mean there’s unfinished business? Of course. The issue of the jurisdiction is still unfinished; the issue of policing is still unfinished; as is the issue of the fact that air passenger duty is devolved in Scotland but not in Wales for no sensible, logical or rational reason. Yes, undoubtedly, there will be another Wales Bill that will improve on the one that we’ve had recently.

Leader of the Welsh Conservatives, Andrew R.T. Davies.

Thank you very much, Presiding Officer. First Minister, today there’s this startling news that five people a week are dying in Wales—five people a day, sorry, dying in Wales—because of air pollution. This is a frightening figure that my colleague David Melding has raised many times in this Chamber, and the Welsh Conservatives led a debate on this in July. Many communities will rightly be looking to the Welsh Government to try to understand what measures the Government will be taking to improve air quality through the lifetime of this Assembly? I’d be grateful if you could give us some understanding of the action that the Welsh Government is taking to make sure that communities such as those in Caerphilly county borough that are cited in the ‘Week In Week Out’ programme today can take comfort and see real improvement.

It is for local authorities to review local air quality. We do assist them in terms of doing that. We are considering responses to the recent consultation that was held on this subject. It did recognise the immediate and long-term health benefits to be gained by reducing pollution exposure across Wales. One area, of course, that has a beneficial effect on air quality is to encourage more people onto public transport, which is why of course we passed the Active Travel (Wales) Act 2013, in order for that to happen. We do need to see, of course, more investment in public transport in Wales. We’re doing our bit with the metro, and we do need to make sure now that we see electrification take place to Swansea, as was promised by the UK Government, in order to encourage more people onto the trains and out of cars. But the more we can reduce car use and provide an alternative to car use, the better it will be for air quality.

As I said, five people a week are dying because of air quality issues in Wales—that’s 2,000 people a year. That is a frightening figure, and as Public Health Wales have identified today, it is one of the biggest, if not the biggest issue that we do face. The programme ‘Week In Week Out’ today invited the Welsh Government to take part in that programme, and regrettably they chose not to and just issued a written statement. Can you understand why people are concerned that they’re not seeing real progress in their communities when they can’t see the lead coming from the Welsh Government to make these improvements? As I understand it, the figure of infringements is 18, and yet the community in Caerphilly county borough that is cited has had 57 different infringements of air quality in that particular area. They are still blighted day in, day out with the pollutants in the atmosphere of that particular area. We do need to get a sense of what we can calibrate at the end of this Assembly as looking like a success in this particular area. What would you deem as a successful outcome from the measures that you will be taking by 2021, First Minister?

Well, it would be a reduction in the amount of PM10s in the atmosphere, and potentially PM2.5s as well. If we look at reducing emissions—I mentioned the consultation earlier on and our response to that consultation is to be published shortly. What is our contribution? Looking at the south Wales metro, looking at the metro in the north-east of Wales to provide an alternative to car use—which means a reduction in the amount of exhaust fumes coming out of cars—to make sure people have that alternative, promoting the active travel Act so that more people are able to cycle as well—again, not using cars.

The problem is, of course, that with the new changes to vehicle excise duties that are going to be coming in, if I remember rightly, after the first year of a car’s existence, every car, regardless of its emissions, will pay the same road tax. Now, we’ve had a system for years where those cars that pollute the most pay the most. Now we’re going to a system where it’s a flat fee. I think that’s wrong. I can understand the UK Government having to change the system, otherwise eventually hardly anyone will pay road tax—I understand that. But I think it’s wrong to move to a system where, effectively, if you have a car that has a huge amount of emissions, you pay the same as somebody whose car is very very light in terms of emissions. That won’t help air quality in Wales.

Would you agree, as First Minister, to convene a summit on this particular issue of all the interested public bodies, so that there can be a joined-up approach to it, on the basis that we do, generally, across parties want to see improvements? When you have a public health issue that is taking 2,000 lives a year within Wales—let alone other parts of the United Kingdom—that, I would suggest, is rated as pressing the number one button in your list of priorities. There does seem to be an element of divergence when it’s delivered within communities the length of breadth of Wales, and it does need some centralising and co-ordination here. Will you agree to host a summit, to make sure that progress can be made on this agenda item, so that we can see genuine improvements across Wales, but importantly, improvements to make sure that we do not continue to see the number of people dying through poor air quality going up in Wales?

One of the issues that’s increasingly a problem as well, of course, is cars idling in traffic jams—leaving their engines on—and that does create particular areas of particularly low air quality. There are several ways of dealing with that. One is making sure that the blockages are removed. It also means, of course, that we look at ways of promoting more hybrids and electric cars in the future, and there are a number of ways in which that can be done. As part of the response to the consultation that’s taken place, we will look to be as inclusive as possible in our approach. We have to do that, of course, working with local government as well, as the main monitors of local air quality, in order to make sure that we continue to improve the air that the people of Wales breathe.