7. 7. Plaid Cymru Debate: The Economy and Brexit

Part of the debate – in the Senedd at 4:19 pm on 7 June 2017.

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Photo of David Rees David Rees Labour 4:19, 7 June 2017

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.