6. 5. Debate on the External Affairs and Additional Legislation Committee Report on the Implications for Wales of Leaving the European Union

Part of the debate – in the Senedd at 4:04 pm on 22 March 2017.

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Photo of David Rees David Rees Labour 4:04, 22 March 2017

Regardless of how we voted in the referendum, regardless of our political affiliations, we must be united in representing Welsh interests as the Brexit process begins in earnest. It is clear to me that our voice is in danger of being lost amongst the many voices calling for attention under the issues today. As an Assembly, we cannot let that happen. The process of leaving the EU is rapidly evolving, and we only need to highlight the announcement on Monday that article 50 will be triggered next Wednesday to demonstrate that fact. The task given to the committee of seeking how we can protect the interests of Wales has never been more important as we move into negotiations and beyond.

Llywydd—Dirprwy Lywydd—the report we are debating today has already played a significant role in representing the issues of importance to Wales alongside the Welsh Government’s White Paper. It also started the task of sketching out the tasks ahead of us as an Assembly. Our work has not been to rerun the referendum debate; it has been to focus on identifying the issues that are important to Wales as we leave the EU. It has not been an exercise in trying to identify the pros and cons of leaving the EU; it’s been an inquiry into the implications for Wales of leaving the EU. Its strength rests on the fact that it was agreed by all eight members of the committee, representing each of the political parties in the Assembly, and Members who were, actually, on both sides of the referendum debate. I pay tribute to their work and their ability to find a consensus.

I wish to place on record also my appreciation for the work and support provided by the clerk and his team. I’ll also take this opportunity to give a special thanks to Gregg Jones, the former head of the Assembly’s Brussels office, whose knowledge and understanding of the EU has been invaluable to the committee. We have an excellent successor to Gregg in Nia Moss, who continues that excellent relationship.

If there was any doubt to begin with, the evidence we gathered confirmed that Brexit raises broad and complex issues in Wales. It cuts across many areas of policy, as well as raising fundamental constitutional questions about devolution and the power dynamic between the UK Government, Parliament, and the devolved administrations and legislatures. The first part of our report identifies the emerging sectoral issues for Wales, with the aim of advancing understanding of the complex challenges faced by Wales as the UK exits the EU.

On the Welsh economy, the report finds that the imposition of barriers when trading with the EU would pose significant risks to the Welsh economy. The relative prominence of the manufacturing and agricultural sectors, compared with the rest of the UK, heightens the Welsh economy’s vulnerability to trade barriers. The vast majority of the evidence we received showed that ensuring free trade for the single market with no tariffs and no barriers is of crucial importance to the Welsh economy. The risk to the Welsh economy of an exit that moves to World Trade Organization arrangements is such that the committee calls for a focus on transitional arrangements after we leave the EU, something I am aware that is also called for by the Welsh Government. Even a relatively short period of time spent under World Trade Organization rules will damage our manufacturing and agricultural sectors, and I’m not afraid of reiterating that this could have serious consequences for the Welsh economy. Transitional arrangements must be an important consideration of the negotiations.

The second part of the report focuses on constitutional issues and draws a number of conclusions that are aimed at strengthening the Welsh role in the process, at both Welsh Government and Assembly level. We are in discussion with the Welsh Government about the scrutiny arrangements we wish to see applied to inter-governmental relations, and we are working with colleagues from each of the UK’s legislatures to explore working together to strengthen our collective approach to this task.

Now, I thank the Government for its response and its willingness to engage with the committee’s work. I hope that this level of engagement continues. Before talking to the recommendations, I want to emphasise that, whilst we made six recommendations, we drew many further conclusions—actually, around 60. I do not intend to explain all 60, Dirprwy Lywydd; I am sure you appreciate that. But we hope the Government and Members take the time to look at those.

Our first recommendation calls on the Welsh Government to publish all evidence on which it bases its position. This has been accepted in principle, but I hope that the Welsh Government will reconsider this and actually act upon the recommendation to offer greater transparency. I am grateful for the information that has been provided by the Government in its White Paper. However, we’ll press for more detailed evidence, and this will be a feature, I think, of the ongoing scrutiny of the Welsh Government, to actually see where they’re coming from and the evidence they are using.

Our second and third recommendations call on the Welsh Government to outline the administrative changes that it’s made in response to the referendum vote and the future role of its Brussels office—again, these have been accepted and, again, the information provided to date is appreciated. But I would like to press for further information and perhaps something we could look at in more detail when it comes to budget scrutiny in the autumn.

Our fourth recommendation calls for the Government to provide us with a Brexit risk register—again, accepted in principle, and we look forward to receiving the outputs from the fresh risk assessment exercise that is due to commence after article 50 is triggered. Perhaps the Cabinet Secretary could elaborate a little on this during his contribution this afternoon.

Recommendation 5 sought information on the steps taken by the Welsh Government to ensure the maximum amount of European funding is secured and utilised before Brexit occurs. The figures provided suggest a good level of progress in this regard, though some funds are in a better position than others. We will reflect upon this information and will continue to monitor progress. Additionally, we are currently undertaking an inquiry into regional policy, and hoping to report before the end of May on that.

Our sixth and final recommendation relates to the role of Welsh Government in the negotiations, an area where our position aligns with that of the Welsh Government. It is essential that the Welsh Government has a full role in shaping the UK’s negotiating position, and direct participation when those relate to devolved powers or affect devolved powers. Whilst the Welsh Government is making these representations to the UK Government, we are also exploring the level of engagement that there is between the Welsh Government and Whitehall. We have written to a range of UK Government departments, as well as the Welsh Government, and we are grateful to those that have actually already provided responses, and we intend to assess these as part of our scrutiny work, and we will be reporting upon this in the future.

Dirprwy Lywydd, it is vital that our voice is heard and listened to. Whilst obviously in the interests of Wales, I believe also it is in the interests of the wider UK that it is done. Our colleagues in Scotland have also expressed the same view, that it’s important that their voice is listened to. We are no different. I commend this report, Dirprwy Lywydd, and I look forward to hearing Members’ contributions this afternoon.