Questions now from the party leaders. The leader of Plaid Cymru, Leanne Wood.

Diolch, Lywydd. Leader of the house, although our economic potential is yet to be fulfilled, we can already see that Wales is a strong exporting nation. Last year, we had a £2.2 billion trade surplus with the EU. Our surplus was higher than in 2015, when it was £1.5 billion. With non-EU countries, we had a trade deficit of £2.3 billion, while the UK as a whole had trade deficits with both EU and non-EU markets. What future do you see for our EU trade surplus if we are taken out of the single market?

It is important that we recognise the value of exports for Wales for the year up to and including 2016—£12.3 billion, an increase of £725 million on the previous year. Of course, as the leader of Plaid Cymru says, Wales benefits hugely from current integration with the EU single market, with access to over 500 million customers. So, that could clearly be a huge impact in terms of the prospects in terms of how we exit and how we make sure that Wales’s interests are safeguarded.

Plaid Cymru predicts a difficult future for those exporters who rely upon the single market. We now have some in the UK Government talking about leaving the EU without any deal at all, which will effectively mean World Trade Organization rules. That would be the hardest possible type of Brexit. It could lead to future tariffs and other barriers. And on the social and environmental side, it could lead to deregulation and to lowering standards. The UK Government has now indicated that the article 50 letter will be sent later this month. That means there’s a window of opportunity, a window where there can be some influence. The Welsh Government has said that it wants to be consulted. I wonder if you can tell us: have you been consulted yet? And what are the implications of the UK Government issuing that article 50 letter without fully consulting Wales as to its content?

Clearly, we want an article 50 process that does reflect the interests of Wales within the wider UK negotiating framework and, in fact, we set out together with Plaid Cymru the Welsh Government position that is comprehensively set out in our White Paper, ‘Securing Wales’ Future’ around those six points, including continued participation in the single market and ensuring that Wales does not lose out on a penny of funding as a result of leaving the EU. So, we certainly want and expect to be consulted on any article 50 letter before it’s issued. The First Minister made it very clear to the UK Government that anything less would be totally incompatible with the approach that they agreed at the Joint Ministerial Committee after the referendum result. We have, as you know, together sent a copy of our White Paper to the European Commission.

It’s fairly clear what your Government wants What’s not clear is what you’ll do if you don’t get it. Yesterday, we saw how the mishandling of Brexit will lead to a new referendum on Scottish independence. That referendum could end the United Kingdom. The state, as we know it, could cease to exist, and that would be a radical change for Wales. But it would also create the opportunity to be bolder, more ambitious and more confident about our own future, and I suspect that there may even be people in this Chamber who supported the Scottish ‘No’ campaign last time who would now feel less comfortable doing so. Leader of the house, the First Minister’s statement yesterday on a Scottish independence referendum lacked detail. It said almost nothing about the future of Wales. Can you add more detail on where you see the Government taking Wales over the next two years? What is your vision? And what plans does your Government have to put in place for the constitutional and economic future of this country?

I do go back to your second question about engagement and influence in terms of the article 50 letter, and just to say that the point I would make and the First Minister would make is that we need to work together on this to make sure that securing Wales’s future and the delivery of that are as a result of support across this Chamber, particularly as the co-signatories of that White Paper, and that we use our clout to say what we expect in terms of engagement on that article 50 letter.

Of course, in terms of your third question, it’s right that the constitutional future of Scotland is decided by the people of Scotland. We’re clear that we believe that the UK remains better together, and last year, Welsh Labour was elected on a message of togetherness. That remains our watchword for this Government. But I think the important point for us today is that, as a party and as a Government, we remain committed both to the union and to the ongoing joint ministerial committee process relating to exiting the EU. Indeed, the Scots say that they’ve no intention of walking away from the JMC where we have common cause on many issues in terms of our negotiations on exiting the EU.

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

Thank you, Presiding Officer. Leader of the house, many of us would’ve seen in the media over the last week the shocking images of drug abuse, with people comatose in public places, and one can only feel a huge amount of sympathy for the individuals who have fallen so low as to be in that position, and equally want to make sure that as many safeguards as possible are put in place to try and rectify the problems that people have in their lives that have found them in this very, very tragic position. Regrettably, much of that media coverage has painted a very negative image of a certain town in Wales, an image that many of us in this Chamber won’t recognise from our visits to that town, but it is a fact that those images have been in the national media.

Today, we have the Police and Crime Commissioner for North Wales calling for the legalisation of drugs as a solution to this issue. On this side of the house, we certainly do not believe that that is the case, but I’d be grateful, in your role as leader of the house in responding for the First Minister today, if you could give us a Government response as to what action you are taking as a Welsh Government, given that you held a meeting last week between the police and crime commissioner, yourselves and other agencies to try and address some of the shortcomings in this particular area.

I think it’s important, if we look particularly at north Wales, the Welsh Government provides over £4.9 million of the substance misuse action fund to the north Wales area planning board. That’s about commissioning a range of needs-led services delivered by the providers in that region. I think, in terms of the issue of paraphernalia and the current visibility of individuals with substance misuse issues within the town centre, clearly, that has had to result, as it does, in a multi-agency approach. That includes, of course, North Wales Police, the police and crime commissioner, Wrexham local authority and voluntary sector organisations.

I had hoped that, with the time that’s lapsed since this initial story ran some 10 days ago, we might have got a fuller answer from the leader of the house, given the points that I raised. Because the Welsh Government, in 2008, brought forward a strategy, ‘Working Together to Reduce Harm’, and from what we see in these types of images, that strategy, from what I can see, clearly doesn’t seem to be working. What evaluation has the Welsh Government taken of this strategy and the support that is in place for local authorities, for the police forces here, the police and crime commissioners and support agencies in the health and social care areas, to actually address these issues that are happening day in, day out, week in, week out, on the streets in towns and villages across Wales, that are crying out for a solution and support from central Government here—the Welsh Government? In particular, you have had this 10-year strategy in place that is now starting to come to the end, and yet, we are seeing these horrific images that have been portrayed in the media as happening in public spaces as we speak.

Of course, I have identified our investment in the substance misuse action fund and that is available to those who are delivering on the ground—the north Wales area planning board. But I would like to say also that, when they have come together to look specifically at the most recent issues, they have developed a comprehensive town centre action plan. It’s got a number of actions. It has to be about the constantly changing needs and circumstances in terms of substance misuse, but there are a number of planned projects co-ordinated by Cais through the Champions’ House recovery hub and also the identification of hotspot areas. And, of course, clean-up has taken place. But it’s also important that we recognise that this is about the substance misuse that we need to look at in terms of best practice, and that’s where the new substance misuse delivery plan is so pertinent.

Leader of the house, Andrew Atkinson, who is the chair of the Wrexham town centre forum steering group, has identified that everyone seems to be blaming everyone else, rather than actually getting to grips with the problem. I heard from a sedentary position on the other side, from the Welsh nationalists, that they believe that legalising drugs is a sensible alternative here. From this side of the house, we definitely do not believe that legalising drugs is part of the solution. And, in particular, when you see that the deaths from drugs have doubled since 2012, and 114,000 died last year, that clearly is not a road to solving this problem. What you as the Welsh Government—[Interruption.] There’s lots of mumbling coming from the other side of the house. [Interruption.] From the Government here in Cardiff, there clearly does need now to be a working group set up by the Welsh Government to pull together the charities, the health bodies and the Police and Crime Commissioner for North Wales to make sure that we can get a co-ordinated approach to dealing with this issue, especially in Wrexham, where there does seem to be a blame culture developing, rather than the ability to get to grips with the very serious issue that many of these people are facing, and the tragedy that their lives have spiralled out of control. Ultimately, they need the support of Government working with sponsored bodies to put the measures in place. Can I confirm that you will do that?

I have identified not only our strategy, updating it, and the investment, but I would hope that also Andrew R.T. Davies is also speaking to the Conservative councillors in Wrexham, and indeed the independent councillors, who are at the sharp end of being responsible for this, but with our support and with the support of that multi-agency panel and the action plan that they’ve devised.

The leader of the house will have seen that last week’s budget was not an unqualified success for the Chancellor and for the Government. Does she and the Welsh Government draw any lessons from that experience, with a view to how they’re going to exercise the tax-varying powers we’re about to obtain under the Wales Act 2017?

Well, I do think that, in terms of last week’s—I think it’s been described as the ‘omNICshambles’ budget, certainly a budget that has hit self-employed people very hard with a £2 billion hike in national insurance contributions. And that is affecting many of the people we talk about, and the FSB talks about, in terms of self-employed people who are the risk-takers, spearheading growth and productivity in the economy. So, we need to have no lessons. The UK Government and ‘Spreadsheet Phil’ need lessons from us, and I would say from our Cabinet Secretary for Finance and Local Government, because, the additional funding—[Interruption.] Can I say, you’ve asked me the question, Neil Hamilton—?

Let’s listen to the leader of the house, please.

The additional funding doesn’t alter the magnitude of spending reductions we’re facing for future years. Despite the small additions, our capital budget in 2019-20 will still be 11 per cent lower in real terms than in 2010-11, and our revenue budget will still be 8 per cent lower.

With respect, the leader of the house didn’t answer my question. What I was keen to elicit was whether it makes it more or less likely that the Welsh Government will use its powers to vary rates of income tax, put them up rather than down, or vice versa. There is a lot of economic evidence to show that lower tax rates can actually produce higher tax revenues. In the 1980s, when Nigel Lawson reduced taxes, that was the effect. In 1979, the top 1 per cent of earners paid 11 per cent of all tax revenues. By 1997, they paid 21 per cent, despite the fact that the top rate of income tax had been reduced from 83 per cent in the pound to 40 per cent. So, is it not sensible for the Welsh Government to think in terms of making Wales into a kind of tax haven within the United Kingdom?

You know, I don’t think we’d expect anything different from the leader of UKIP. I would’ve hoped that the leader of UKIP would be considering the impact of the Chancellor’s budget last week, the impact on the people that we represent, the impact of the fact that the sting in the tail of that budget and forecast is there’s a £3.5 billion cut planned by the UK Government for 2019-20, which could mean another £175 million taken out of the Welsh Government budget. That’s what I am concerned with and, of course, we have to look at that in terms of the implications of this budget, not just for the self-employed, but some of the poorest people in Wales. What we’re spending per head of population will decline by 4 per cent in real terms over the Office for Budget Responsibility’s forecast period.

With respect, I’ll try again. I still haven’t had an answer to my question. Does the leader of the house accept that lower tax rates can produce higher tax revenues? In which case, everybody wins.

Well, as far as the UK Government is concerned, we take responsibility and, indeed, we have our responsibilities that we are now taking through in legislation in terms of the devolved taxes that are coming our way, and we look forward to a debate on this in the next couple of weeks. But I think we need to recognise, and I hope Neil Hamilton recognises, the adverse impact of the decisions that were made by ‘Spreadsheet Phil’ last week where he fumbled his first budget, and recognise as well that that’s bad, the fact that it is undermining their mission to promote the UK as a place to start a new business.

Question 3, Adam Price.