Part of the debate – in the Senedd at 3:45 pm on 11 October 2017.
I appreciate the Member’s concerns and I totally agree that there are opportunities as well that exist. The problem is that we have businesses that work to just-in-time delivery, and when it comes to food products, actually it’s very critical now, and that is therefore important. The delays that could be experienced would impact upon that.
Our first recommendation, therefore, stems from these concerns and calls upon the Welsh Government to continue to press the UK Government to ensure that no Welsh port is unfairly disadvantaged by future border arrangements. And I am pleased that the Welsh Government has accepted this recommendation.
The next key theme that emerged during our inquiry was a concern relating to the future of the UK’s customs arrangements after we leave the EU. Now, I appreciate that a position paper has been published since by the UK Government, and also the White Paper on the future of a possible customs Bill, but having read those, I received little comfort, actually, that they will address the issues.
Since 1993 and the completion of the European single market, the volume of freight between Holyhead and Dublin has increased by 694 per cent. As it stands, and as indicated in the Prime Minister’s Lancaster House speech, the UK will leave the customs union as part of the Brexit process. Most witnesses raised concerns about leaving the customs union and the effect that reintroducing customs checks would have in terms of delays—and as the Member for Mid and West Wales has already indicated, that has crucial elements for businesses in his area. Furthermore, the most recent HMRC estimate suggests that Brexit could see UK customs declarations increase from the current £55 million per year—that’s £55 million per year—to a maximum of £255 million per year. That’s a five-fold increase.
At the same time, we heard that the use of new technology could help to ameliorate some of the worst risks of delay. Technology comes to our rescue. Even the White Paper continually refers to technological solutions to help establish a frictionless border between the UK and the EU. But in order to do this, we need the IT solutions to be up and running by 2019, and everyone we spoke to said—and past history tells us—it’s unlikely to happen. Therefore, the solutions will not be in place by this time. I’m not saying it can’t happen, but time is a big factor.
Our second and third recommendations reflect these concerns and request that the Welsh Government keeps us updated on the progress of IT solutions and, perhaps, the UK’s future customs arrangements after discussions it will have, because the White Paper, again, talks about involvement with the devolved institutions and devolved Governments, and I would like to know exactly what involvement it’s had already with the publication of the White Paper on the customs Bill. However, simply waiting for the UK Government to bring about solutions, particularly in the context of the new powers over ports that will be devolved to Wales early next year, isn’t good enough. We need the Government to mitigate possible risks to Welsh businesses by ensuring that businesses have everything they need to make the most of opportunities provided by things such as the authorised economic operator and trusted trader schemes—and these, again, are focused upon in the White Paper, but we need to make sure our businesses are up and running as quickly as possible with those.
Another key concern centres on the physical capacity constraints faced by the ports themselves. We heard that the lack of space to accommodate new border and customs checks after Brexit could lead to lengthy delays at our ports—not just applicable to Wales, because Dover has the same problem, as has been highlighted very often. And whilst we’re talking about Dover, please remember Holyhead is the second-busiest roll-on, roll-off port in the UK behind Dover. So, our fifth recommendation calls for the Welsh Government to undertake urgent work in this area—and urgent work, by the way, does not mean some of the solutions we heard at the evidence session, where someone said, ‘Well, we’ll be out of the EU, the habitats directive won’t be operational any more, we can span even easier’. That’s not the intention that we seek.
Although we welcome the fact that the Cabinet Secretary has agreed to this recommendation in principle, the lack of detail, perhaps, in his response is a little bit disappointing and, perhaps, fails to address sufficiently the concerns we have highlighted. He may wish to expand upon that in his response. Crucially, it does not commit the Welsh Government to drawing up the highways management contingency plan that we asked for, and I would ask him to reconsider the need for this.
Moving on to the response to recommendation 6, we all recognise that many aspects of the UK’s withdrawal are not in the gift of the Welsh Government, nor, for that matter, in the gift of this institution. However, this does not preclude us from planning for each scenario. In shining a light on our ports, we had hoped to bring issues in need of consideration to the Welsh Government’s attention. And we hope the Cabinet Secretary, therefore, does further commit in his response to undertake the detailed scenario planning that we would like to see, particularly as I’m hearing more and more from the UK Government that they are now planning for a no-deal Brexit. I think, therefore, we need to be actively planning now.
When we set out to look at Welsh ports, it was clear to us that we would need to seek evidence from our nearest neighbour, and to that end I was delighted to go to Dublin on a rapporteur visit. The Irish representatives we met were delighted to meet with us, and I think that was an important aspect—they wanted to engage. It was clear, as somebody said in our inquiry, that all our ferry ports point towards Ireland. So, it was a matter of great concern to us that the Cabinet Secretary at that point had not actually sought meetings with his counterparts in Ireland, but we did hear when he visited us in the committee that he was making arrangements to do so. I would be grateful to hear if he has actually now done so.
The clock is ticking on these negotiations and if Welsh interests are to be safeguarded, there must be proactive engagement with our friends and allies all across Europe, by all Ministers, not just the First Minister and the Cabinet Secretary for Finance and Local Government. As I said, the Cabinet Secretary’s response indicated that he has had ministerial discussions with his counterpart in Ireland. I would be grateful for more details of that, and perhaps how he intends to take those further.
Looking at the future, our final recommendation centres on the idea of free ports, which are areas where import duties, VAT and other import charges may not apply, or where importers can defer such payments. They are an underexplored concept in Wales. We haven’t had to need them necessarily, but now may be an opportunity for us to look at the opportunities that Brexit will give as a consequence of that. Our recommendation 8 calls upon the Welsh Government to look at these opportunities of seeking whether free port designation in Wales can be effective and helpful. I’m pleased the Cabinet Secretary has committed himself to working with the sector to achieve this.
Chair, our report paints a sobering picture. It’s absolutely vital that we get this right and keep Wales and Welsh trade moving after Brexit. If our worst fears of lengthy delays at our ports disrupting the supply chains and tailbacks on our roads are not to become a reality, then we will need to see action being taken now and in the weeks and months ahead. We only have 15 months, approximately, before we leave the EU. Chair, I recommend this report to the National Assembly, and I look forward to hearing the Members’ contributions this afternoon.