– in the Senedd on 7 June 2017.
The next item is the Plaid Cymru debate on the economy and Brexit, and I call on Adam Price to move the motion.
Motion NDM6326 Rhun ap Iorwerth
To propose that the National Assembly for Wales:
1. Notes the result of last year’s EU referendum.
2. Recognises that Wales has unique needs and requirements throughout the Brexit process.
3. Notes the importance of Wales insulating itself from the economic uncertainty of Brexit, as well as grasping the new legislative and economic opportunities created beyond our departure from the EU.
4. Calls on the UK Government to ensure:
a) that the National Assembly for Wales has a veto over any foreign trade deal;
b) that fiscal powers over VAT and APD are devolved to the National Assembly for Wales at the earliest opportunity and that further consideration is given to a unique Welsh corporation tax rate;
c) that procurement powers are devolved to Wales to enable the Welsh Government to stipulate greater involvement of Welsh businesses in the procurement process to promote Welsh businesses; and
d) that Wales does not receive a penny less in funding (as promised during the EU referendum campaign) and that a new investment package is brought forward to insulate the Welsh economy throughout the economic uncertainty caused by Brexit.
5. Calls on the Welsh Government to bring forward plans for a Welsh migration service and work with the UK Government to bring forward UK legislation to allow regional visas to allow Wales to have an immigration policy that works for its public services and economy.
Diolch, Llywydd. It’s a pleasure to rise to move the motion in the name of my colleague Rhun ap Iorwerth. It certainly is the case that we have a cloud of confusion—a kind of inchoate mess—when it comes to the policy positions of the two main parties in terms of the shape of the Brexit deal that—[Interruption.] Well, if you don’t want to listen, you can leave the Chamber. You are; good. We have a lack of clarity because, of course, there is a White Paper produced by this Government—the Welsh Government—that does set out in very, very clear, definitive terms, actually, both the principles, but going beyond the principles, actually, and getting into some of the practical detail about the negotiations that are about to begin.
When we look at the UK Labour Party, we have Keir Starmer, just referred to as one of the most sensible ones, actually coming out against membership or participation in the single market, as currently constituted. So, I’m afraid even the amendment of the Government to this motion is actually out of kilter with their own policy position. So, we have confusion at the UK level. Well, we in Wales must do our best, therefore. Whatever comes out of whatever Westminster Government is foisted upon us, we have to do our best to protect the interests of the Welsh economy, and that is what we’re trying to set out in this motion. I give way.
I thank the Member. You just said about Keir Starmer’s comment; would you agree that one of the six points he identified was that we have the same benefits as if we were a member of the European single market and the customs union, and therefore it’s not necessarily being a member, but the benefits we get from it that’s important?
We’re in Boris Johnson having-our-cake-and-eating-it territory there, I’m afraid, aren’t we? The White Paper, actually, is clear and honest about this. If you want the benefits, then there are certain things that flow from that, and unfortunately, that isn’t reflected in the rather muddy thinking from the UK Labour Party.
But I want to talk about Plaid Cymru’s ideas and our post-Brexit plan, and I seek support across the Chamber for how we’re going to defend the Welsh economy, given the fact that we’re probably going to get poor leadership, going forward, whoever wins down in the Westminster political class. We’ve set out a number of ideas here. We’ve talked, I think, in the last debate, about the danger of cheap imports to our agricultural industry: equal dangers, of course, that the Member will know in terms of our steel industry—probably not so much in the trade agreement, but in trade policy. So, how is the UK Government going to use its defensive measures to protect against things like cheap Chinese steel or Korean steel et cetera? And how are we going to guard against the rise of protectionism overall, which also could cause significant damage to the interests of the Welsh steel industry? That’s why we think that, actually, there should be a seat at the table for the Welsh Government and, indeed, for all the devolved legislatures, because the economic interests of the different nations of the UK are qualitatively different because of the different economic composition.
As well as risks, there are opportunities—new opportunities, legal and economic—that will come as a result of leaving the European Union, and we’re clear about that. For instance, the ability to set regional rates of VAT, which could be of interest to us. Because of the latent potential of our tourism industry, we could do what many countries do and have a lower VAT rate for restaurants or hotel accommodation. We could follow the Holtham commission idea of having a discounted regional variable corporation tax rate for those parts of the UK, like Wales, that have lower income per capita. That could be a very effective arm of regional policy. That’s not actually a race to the bottom; that’s a way, actually, to lift those already at the bottom so that they can actually improve the level of their economy. We could actually devolve powers over procurement. Of course, we were removed from the prohibition, for instance, on having a Government-promoted campaign to buy local—the 1982 case against the Irish Government on Guaranteed Irish and the Irish Goods Council. We will now, outside the European Union, be able to use public money to support local procurement, not just within the public sector but among consumers and also within the private sector, talking to some of our anchor companies. So, these are some of the ideas. We’ve talked about structural funds; certainly, we need to have some security beyond 2020.
The UK Labour Party manifesto, again, says:
‘we will ensure that no region or nation of the UK is affected by the withdrawal of EU funding for the remainder of this Parliament.’
Well, that’s, quite frankly, not good enough. We need a long-term commitment. We need a marshalled plan for the Welsh economy, to be honest with you. We need a 20-year-long commitment to closing the economic gap that has actually arisen over successive governments of different political hues. And yes, we need a regional work visa system, because there are different migration and skill needs in the Welsh economy, again, because of the different structure of our economy to other parts of the UK. The City of London Corporation has made this argument in the context of its needs, but we in Wales also should be making the case as we move to a different way of managing the migration policy overall, whatever the relationship is with the EU and the single market. We should actually make a case for doing what they do in Canada, which is saying, ‘Different regions have different needs; let’s have that reflected in migration terms as well’. Thank you.
I have selected the two amendments to the motion. If amendment 1 is agreed, amendment 2 will be de-selected. I call on Mark Isherwood to move amendment 1 tabled in the name of Paul Davies.
Amendment 1—Paul Davies
Delete all after point 1 and replace with:
Notes the Prime Minister’s commitment to securing the best Brexit deal for Wales and the United Kingdom.
Welcomes the UK Conservative Government’s guarantee that there will be no roll-back of powers from the devolved administrations, and that decision-making powers in Wales will be increased.
Recognises the importance of Wales and the United Kingdom embracing the trade and economic opportunities presented by leaving the European Union.
Supports the UK Government’s plan to introduce a United Kingdom shared prosperity fund.
Diolch, Llywydd. The Prime Minister has made it clear that the current devolved settlement must be respected as funding schemes and initiatives are returned from the European Union, and that there will be no land grab on competencies. She’s also stated this means strengthening the devolution settlements,
‘But never allowing our Union to become looser and weaker, or our people to drift apart.’
This Plaid Cymru motion notes the result of last year’s referendum—a referendum in which the people of Wales voted to restore UK control over border, laws and money. I therefore move amendment 1, noting the Prime Minister’s commitment to securing the best Brexit deal for Wales and the United Kingdom; welcoming the UK Conservative Government’s guarantee that there will be no roll-back of powers from the devolved administrations, and that decision-making powers in Wales will be increased; recognising the importance of Wales and the United Kingdom, embracing the trade and economic opportunities presented by leaving the European Union; and supporting the UK Government’s plan to introduce a United Kingdom shared prosperity fund.
In terms of tax devolution, we must note that only 13 per cent of taxpayers in Wales fall into the higher top tax rates, compared to 30 per cent across the border, and be careful about how we incentivise accordingly.
Plaid Cymru, of course, exists to divide the British people and destroy our UK. We must instead embrace the opportunity for our United Kingdom to become an outward-looking global trading nation. As the Prime Minister has said,
‘I want us to be a truly Global—’
One intervention only, yes.
I’m grateful to the Member for giving way. It’s often repeated in this Chamber, by the Member in particular, that our membership of the European Union has restricted our ability to trade with the rest of the world. Can he acknowledge that, through our membership of the European Union, we have 53 trade deals with other economies outside the EU? And can he explain to me what the status of those 53 trade deals will be the day after he succeeds in having the glorious independence for this state?
Yes, there are, and the UK Government is working hard in consolidating the position broadly and broader beyond Brexit. But this debate hasn’t got time for me to answer that. I’ll probably answer it further in a different scenario.
You tease. You’re such a tease.
Plaid Cymru, of course, as I’ve said, exists to divide the British people. The Prime Minister said she wants us to be a truly global Britain, the best friend and neighbour to our European partners, but reaching beyond the borders of Europe too, building relationships with our old friends and new allies alike. Although the Labour-Plaid Cymru White Paper calls for full and unfettered access to the EU single market, EU rules make this impossible after border control is restored to the UK, something in fact your leader noted some months ago before your mood music on this changed.
The Prime Minister has been very clear that she wants a bespoke deal that works for the whole of the UK, embracing the most tariff and barrier-free trade possible with our European neighbours through a new, comprehensive, bold and ambitious free trade agreement. As the farming unions have said, they will need an agricultural framework that prevents unfair competition between devolved administrations, protects funding and is ambitious in reviewing EU-derived legislation that adds unnecessarily to the bureaucratic burden faced by farmers. The UK Government great repeal Bill White Paper states the UK Government will begin intensive discussions with the devolved administrations to identify where common frameworks need to be retained. And Welsh Conservatives support both the UK Government’s plan to introduce United Kingdom shared prosperity fund and the agreement of UK-wide frameworks underpinning issues such as agriculture, environment and fisheries, and futureproofing funding.
We welcome reports from the manufacturers’ organisation EEF that companies are increasingly positive, that demand from Europe is buoyant, and that it’s raised its 2017 and 2018 growth forecast, and from the PMI, that the UK construction sector expanded at its fastest rate in 17 months in May. We also note that 90 per cent of forecast world growth over the next decade is outside the EU. The Prime Minister this week said:
‘as we deliver on the will of the British people, we will forge a new deep and special partnership with Europe…but we will also reach out beyond Europe to strike new trade deals…with old allies and new friends around the world too.’
She said:
‘we have taken the time to develop the plan, to study the detail, to understand the negotiating positions and priorities of those on the other side of the table, to build the relationships and to be absolutely clear in our own minds—and in those of the 27 remaining member states—about the kind of future relationship we seek.’
Now compare that, she said, to the alternative. Jeremy Corbyn says he wants tariff-free access to the EU, but can’t say if he wants to remain a member the single market, subject to the rulings of the European Court of Justice and the European free movement rules. He Can’t say if it means remaining a full member of the customs union, which would deprive us of our ability to strike new trade agreements around the world. These, she said, are the most basic questions that need to be answered.
As for what Jeremy Corbyn would do to the UK, look at the only part of the UK governed by Labour: Wales, with the lowest employment, salaries, wages and prosperity in the UK, and the highest unemployment, child poverty and poverty in Britain. The legacy of Labour in Wales has been social injustice. Only by tackling the deep-rooted economic and social problems, making the tough decisions and genuinely planning for a sustainable future can we genuinely move forward and remedy the deficiencies they’ve created and bequeathed to the people of Wales.
I call on the Cabinet Secretary for Finance and Local Government to move formally amendment 2 tabled in the name of Jane Hutt.
Formally.
Can I thank Plaid Cymru, actually, for bringing forward this debate this afternoon, on the day before the general election and, as Simon Thomas said, on an issue on which the general election was called? However, I am very disappointed that they tried to jam so much into the motion, because each part of that motion and each sub-part actually deserves consideration in its own right and we won’t have time to debate those today, but perhaps that’s electioneering for you.
Last year’s referendum decided only one thing: the fact that we are to leave the European institutions. It did not determine the conditions on which we leave and it did not determine the future relationship with the EU-27 that remain. And it’s important to get our objectives and the processes right as the UK embarks on this critical set of negotiations. And I’m hugely disappointed that the current—and I hope that it’s the current and tomorrow will be the former—Westminster Government handling on this matter has not shown sufficient respect to the public and to the devolved nations in moving forward, unlike the EU-27, who’ve actually unanimously agreed their criteria for negotiations. They got together, and the UK Government has failed to even do that.
Following the Prime Minister's statement on 17 January, the publication of the White Paper, the invocation of article 50 and the White Paper on the great repeal Bill, it is critical that any future UK Government fully involves the devolved nations in developing its negotiating position. We should also have an agreed negotiating position. And Government interaction needs to actually improve beyond purely meeting at JMC and JMC(EN), which we believe actually is simply lip service being paid by the UK Government to these events. They are not talking shops; they should be something effective. Unfortunately, they're not, and I think we should ensure that, as we move forward, this changes.
Now, some may argue why we should have devolved institutions, because they claim the UK is the member state. Well, evidence has demonstrated that the complexities of the relationships between the EU and the devolved nations, as a consequence of the devolved competencies, together with the impact on devolved economies of any terms or any trade agreements that will be made with the UK, definitely require direct involvement of our elected Government. Llywydd, the Welsh Government's White Paper, produced in partnership with Plaid Cymru, has placed the economy at the top of the list of its priorities, and justifiably so. Our economy is the key to our prosperity across the nation, and the ability of Welsh businesses to trade without barriers, whether financial or regulatory, and it is critical to allow them to grow. It has already been highlighted by Adam Price in his opening point about the relationship with steel in my constituency and the impact it would have if we don't get this correct.
Now, a difficult divorce resulting in a WTO Brexit would mean crippling tariffs placed upon our exports, which would more than likely lead to job losses, the decline of our automotive and steel industries, the probable demise of major components of our manufacturing sector, the loss of a major export market for our food and drinks industry, and, undoubtedly, damage to the developing financial sector in Wales. And whilst we talk about trade, also reflect upon the R&D. Last night, we were proud to hold the science at the Assembly event here in the Senedd, and I hosted it alongside Simon Thomas and Nick Ramsay, and we were reminded by Simon about the recent paper published by the four societies across the UK and the impact of EU funding on research and development and innovation, here in Wales in particular and in the UK, based upon EU funding. Now, the EU research funding can help develop our economic future, and we should not lose sight of that, because no mention has been made about replacing that money, and yet, it's billions being lost—£9 billion between 2007 and 2013 into the UK not been talked about being replaced.
So, we can't also ignore the impact on non-tariff barriers, which would diverge from those of the EU once we leave—and they will diverge. Such barriers could actually equate to a cost equivalent to a tariff of 22 per cent on shipping or transport equipment. Now, in the White Paper, as has already been said, the priority was unfettered access to the single market, and I think it's one we should all embrace. Whether you want a free trade agreement, that is what we’re talking about. So, it does something that we should all embrace, and it doesn't stop us having free trade agreements with other nations, either. So, let's ensure that we are keen to ensure we protect Welsh businesses and the Welsh economy.
Now, we know that there’s uncertainty coming around, and we also know about the implications that have for businesses that may wish to consider investing in Wales. We're seeing that in parts of businesses already here, where they are taking investment out of Wales—I'll just mention Ford as one example—and 200,000 jobs in Wales are supported by our trade in the single market. And we need transitional arrangements as well. Now, I had thought the UK Government were coming around to our way of thinking, but I think that seems to be waning a little bit, unfortunately. Now, the UK Government may have a mandate for us to leave the European Union, but there's no mandate to use Brexit as an excuse for wrecking our economy, slashing the minimum wage, and sparking a bonfire of workers’ rights, environmental safeguards and hard-earned social protections. As they negotiate our exit under article 50—and then, remember, it's going to follow—and then the future relationship with the EU-27 under article 218, they must and should accept the constitutional structure of the UK has changed, and the interests and priorities of devolved nations cannot be ignored.
Thanks to Plaid for bringing today's motion. Some of the ideas that they have we do actually partially agree with. On the funding issue, UKIP has always stated that funding to Wales lost from EU funding should be replaced by funding from Westminster. We have consistently supported that demand. We were speaking earlier about the procurement rules. Adam Price was talking about it. Now, the procurement rules of the EU do inhibit contracts from being given to British companies. This will change with Brexit. We agree that power over procurement is a tool we should use in future to boost employment. I’m not convinced that that power should be devolved to the Assembly, though, because it may be more effectively wielded at the UK-wide level.
We don’t agree with the idea of a Welsh migration service. I’m not sure how it would be workable. Now, Adam did at least cite an example of a system where they do have it, apparently, in Canada. I confess I don’t know a lot about it, and I would have to research how it works there. But, unfortunately—[Interruption.] Yes, of course, Google. But he only mentioned it today. We will do Google, and we’ll do Wikipedia, too. It would have been useful—[Interruption.] It would have been useful if you could have actually articulated today, perhaps, how that system works. But given the time constraints of a 30-minute debate, perhaps that was difficult to achieve.
There will be public anxieties about how such a system would work. How will you stop people moving from Wales, where they would have a visa to work, into England, where they wouldn’t have a visa? The UK border agency is struggling to deal with illegal immigration as it is, and this scheme will just make their job much harder. It seems to me to be a back-door way of actually keeping freedom of movement, which to me would be a negation of the Brexit vote. And, of course, Wales did vote to leave, the same as England.
We also don’t agree with your proposal that the Welsh Assembly—
Will you take an intervention?
I can’t take interventions this week, Rhun, because it’s election week. Back to normal next week. [Laughter.]
That’s a new one.
It is. I like to come up with new ideas—
Just for clarity, that is a Gareth Bennett policy not a full Chamber policy. [Laughter.]
We don’t agree with your proposal that the Assembly should have veto power over any Brexit deal. I appreciate Dai Rees has just made some arguments to the contrary of what I’m going to say, but the Welsh Assembly doesn’t have any devolved powers to deal with immigration or international trade. What would actually happen if Theresa May did negotiate a Brexit deal and then the Welsh Assembly actually vetoed such a deal? You would simply provoke a constitutional crisis that could leave many people to question the very existence of the Welsh Assembly itself. So, my advice on the question of the Brexit veto is to tread very carefully. Thank you.
I call on the Cabinet Secretary for Finance and Local Government, Mark Drakeford.
Diolch yn fawr, Llywydd. There’s much in the motion before the Assembly this afternoon with which the Government would agree. Let me begin by agreeing with the fundamental importance of securing an outcome from Brexit that recognises and defends Welsh needs and circumstances. I want to put on record the additional effectiveness of our ability to do that because of the joint work that has gone on between the parties in Government and Plaid Cymru on this matter over recent months.
The Government will not be supporting the amendment from the Conservative Party. Our position is very different. It’s fundamentally different, in ways that Lesley Griffiths was able to set out. You heard Mark Isherwood say that powers are going to be returned from Brussels. Now, if any Member has an opportunity to do it, I recommend to you the speech made by Sir Emyr Jones-Parry to the Learned Society of Wales on 17 May this year, which deals with a wide range of issues to do with Brexit. What the former ambassador to the United Nations says there is very clear. ‘Personally’, he says, ‘I don’t believe that powers are being returned. They rest where they already lie’, and that is the position of the Welsh Government as well. It’s a fundamental difference that we have with the Conservative Party, and we won’t be voting for their amendment.
The motion, however, goes further as well than the position set out in ‘Securing Wales’ Future’, and it does that in some important respects. None of those additional propositions are ones that do not deserve careful attention, and some of them may, in the future, and in the different circumstances created by Brexit, be policies that will be adopted.
The problems with the motion, though, are twofold. The first is that some of the conclusions it comes to, as David Rees set out, are premature. Devolution of VAT powers is worth a proper examination in the circumstances post the EU, but it does deserve that examination, an examination of the serious sort that led to the Silk report, rather than being determined in a 30-minute debate in the Assembly.
I understand absolutely that Adam Price, in opening the debate, had a much more nuanced account of some of these aspects than is possible in a motion, but it’s the motion we will be voting on, not the speech, and a call for an immediate devolution of powers over VAT, I think, the Government thinks, is in advance of where the debate currently takes us and in advance of establishing some very important facts. It may be as well that some specific Welsh responsibilities in the field of migration will be part of the future UK landscape, but while that landscape remains so un-concluded, then part 5 of the motion, we believe, is premature as it is set out.
And that brings me to the second problem with the motion, Llywydd, and that is the one of timing. Tomorrow, a new UK Government will be elected, whatever the make-up of that Government, a strong and clear articulation of the Welsh position will be essential. I believe that we have established that clarity through ‘Securing Wales’ future’. It is known and understood in Whitehall and in Westminster, it is recognised and respected in Europe, and in the embassies of those who have been our partners and will go on being our closest neighbours in the future. Now is not the time, the Government believes, to confuse that core set of messages by elaborating on them in the way that the motion sets out to do.
We have our core messages from ‘Securing Wales’ Future’: full and unfettered access to the single market; a workable approach to migration; future funding to be guaranteed at at least EU levels; a new constitutional settlement inside the United Kingdom; the maintenance of core social, environmental and human rights; and the installation of transitional arrangements so that there is no cliff edge between the position we are in today and the position we will be in on the day that we leave the European Union.
That is what the Government amendment to today’s debate aims to secure. We believe that by remaining close to the arguments that we have been able to mobilise, and which have had some traction in those places where decisions will be made in the future, we have been able to make Wales’s voice effective in the debate so far. We don’t think now is the time to elaborate beyond that further. We’ll be opposing the motion as originally drafted and I ask Members to support the amendment the Government has set down.
I call on Adam Price to reply to the debate.
Diolch, Llywydd, and I thank Members for their response to the ideas that we’ve set out, albeit in outline terms, for the reasons of brevity that have been referred to.
I admire Mark Isherwood’s spirit of optimism, and indeed his global ambition, not least for Wales; though we may differ on some of the detail, I think that certainly we need to grasp new export opportunities. We are by our nature and by our history an export-intensive country, but we need to do better. I was reading some replies from the Cabinet Secretary for the economy given to Steffan Lewis, who was asking what new efforts we’ve been making since June 2016, since the vote, to gather new market opportunities, and in the answer it says that the First Minister’s announced the Welsh Government’s intention to commit additional resources to north America and establish a presence in Canada. Well, I don’t see yet the emergence of a new global strategy from the Welsh Government, I’m afraid to say. I mean, there is an export visit to Qatar in October, which we may need to revisit in the light of the earlier discussion.
I enjoyed the contribution, as ever, of David Rees. I think that one of his core points, the need, really, for close collaboration and a concerted effort between the four nations in the devolved legislatures in trade policy, I think, is consistent with the spirit of what we’re saying in this motion as well. In terms of Gareth Bennett, I’ll happily send you, Gareth, a print-out of the city of London’s detailed suggestion on a regional visa programme. Canada operates a provisional nomination scheme and there’s a regional sponsored migration scheme in Australia. So, there are many examples. Indeed, even Scotland, despite the fact that migration isn’t devolved, did have something similar in the fresh talent Scotland initiative back in 2005. So, I hope that whets your appetite, Gareth, to delve deeper into this subject area. I welcome the Cabinet Secretary’s acceptance that many of the ideas that we’ve set out here for the post-Brexit strategy actually are worthy of further consideration, and we’ll take that forward in discussion with him. I have to say—
The time for this debate is passed, I’m afraid. Thank you. The proposal is to agree the motion without amendment. Does any Member object? [Objection.] I will defer voting under this item until voting time.