We move to the second short debate this afternoon, and I call on Neil Hamilton to speak on the topic he has chosen. Neil.

Thank you, Deputy Presiding Officer. I'm grateful to the Cabinet Secretary for Economy and Infrastructure for being here at the end of this day—fortunately, it's not too late in the day, on account of the business that we've already dispatched. But this is an important issue, obviously. Exports do matter greatly to Wales, and exports to the EU matter proportionately to a greater extent in Wales than other parts of the United Kingdom. The value of Welsh exports was £12.3 billion in 2016, and two thirds of that £12 billion were exported to the EU. So, of course the future trading relationship between the United Kingdom and the EU is of vital importance to the health of the Welsh economy.

I'm afraid that I think the Government takes far too gloomy a view of the prospects for Wales post Brexit. Whereas they see threats and dangers, I see opportunities. Of course, any change is bound to affect different industries in different ways and, after 40-odd years inside the EU, the process of transition is going to be a challenge for some industries, and that can't be denied. But I do think that, on balance, this is going to be good for the United Kingdom. And what's good for the United Kingdom generally will be good for Wales, although we must obviously ensure that those who have a more difficult time in coping with the process of transition are helped to do so.  

But, project fear is still alive and well in many parts of the country and many industries. All these fears hitherto that have been adumbrated have proved to be utterly false. We're now 18 months beyond the Brexit referendum and the cliff edge that we were supposed to fall off is still there and we haven't fallen over it. Agriculture has some particular problems to face if we don't do a deal with the EU on free trade, but even the NFU has said in the last few weeks,

'There can be no doubt that while Brexit has resulted in one of the biggest challenges to face our industry in generations, we must embrace the opportunity presented to us to further develop and grow our world-class Welsh agricultural industry. The Union firmly believes that we can make a success of Brexit if our collective focus is centred on supporting our industry to meet the challenge of feeding a growing world population with safe, quality, affordable food, alongside maintaining and enhancing our cherished environment and meeting our climate change obligations.'

So, the NFU are embracing the opportunity of Brexit, and I invite the Welsh Government to follow their example. The referendum has happened, we are leaving the EU, we have to get on with the job. Doom and gloom predictions, at this stage, benefit nobody; they only strengthen the arm of the EU in negotiations with the UK Government, which nobody in his right mind in the UK would want.

In the last few days, we've had another interesting reversal of project fear, because Siemens, Europe’s biggest manufacturing industry, which employs 15,000 people in the UK, has reversed its position on Brexit. Only two years ago, Joe Kaeser, the chief executive of Siemens said,

'Brexit would disrupt the economy in the short-term and we believe that uncertainty about the UK's future relationship with the EU could have more significant and negative long-term effects' which

'could make the UK a less attractive place to do business and may become a factor when Siemens is considering future investment here.'

Well, only a few days ago, Siemens announced the cutting of 3,000 jobs in Germany and 1,000 more across Europe and the cutting of 2,000 jobs in the United States, but at the same time they announced a €39 million investment in Britain to expand its largest UK plant, in Lincoln, which employs 1,500 people.

So, it's not all doom and gloom. Far from it. Michael Bloomberg, who's another massive remainer, although an American, also was in London only a few weeks ago to open a new European headquarters for Bloomberg in the City, which is 3.2 acres in size—it's an absolutely massive development.

'We are opening a brand new European headquarters in London—two big, expensive buildings. Would I have done it if I knew they were going to drop out? I’ve had some thoughts that maybe...but...we are going to be very happy.'

He says,

'Whatever London and the UK’s relationship to the EU proves to be, London’s language, timezone, talent, infrastructure and culture all position it to grow as a global capital for years to come. We are very optimistic about London’s future and we are really excited to be a part of it.'

So, although Wales is not big in financial services, the ripple effects of the financial services industry in London will percolate out to the rest of the country.

And obviously, amongst those who were pro Brexit, like Sir James Dyson, you would expect them to be optimistic about the future. He’s a massive manufacturing business who trades worldwide. He is making huge investments not that far from Cardiff—60 miles away, on the Wiltshire-Gloucestershire border—he's investing up to £3 billion in a new technology park to develop electric vehicles, fundamentally, and technology in which Britain leads the world. I just wish that he had moved slightly further west—as I have done, leading the way—to Wales, to put that manufacturing and research facility nearer to Cardiff. He says,

'There's always uncertainty in business, about exchange rates, conditions in markets, natural disasters...I think uncertainty is an opportunity, and the opportunity here is actually that the rest of the world is growing at a far greater rate than Europe, so the opportunity is to export to the rest of the world and to capitalise on that.'

So, I think there's every reason to think that the Welsh economy is going to benefit in the medium and longer term—and even in the short term—from Brexit. We have had one of the most ridiculous statements that I've seen from project fear in the last couple of years in relation to the chief executive of Aston Martin recently, who was predicting that car production would come to a complete halt at Aston Martin if we didn't do a deal with the EU. That was based upon a prediction that there might not be type approval for cars made in Britain in the EU and vice versa. Well, Aston Martin exported 600 cars to the EU last year, and if they couldn't sell their cars into Germany at £160,000 a time, the Germans would not be able to sell their 820,000 cars a year to Britain, which is 14 per cent of their entire manufacturing of passenger cars. Eighteen per cent of German passenger car exports come to Britain. Somehow or other, I don't think that this is going to come about. And so, we need to look at the realities here: the impact of the kind of predictions such as we had from Aston Martin would be so great and disastrous—even to a powerful economy the size of Germany—that it's inconceivable that this would be allowed to happen, particularly now that Chancellor Merkel has some more pressing problems at home trying to form a Government: something which has not obtained in Germany since the years of the Weimar Republic. So, things are very much changing. There are uncertainties in Germany as well as there are in Britain, and we should reflect upon that as being just a fact of life.

Now, obviously, agriculture is very important to Wales, and I want to spend a couple of minutes just talking about that because there are particular sectors of agriculture for which Brexit will be a challenge, because even if we do manage to do a comprehensive trade deal with the EU, there may be certain wrinkles in relation to agricultural products because of the protectionist nature of the common agricultural policy. This is something that we can't shy away from, and I've never denied that, particularly for exports of lamb, this is going to be a big challenge for us, but we've got to see this in perspective, you know? The market for these products is relatively small compared with the total market—. You know, we're talking about £120 million a year exports of sheep meat from Wales: £120 million is peanuts in the context of the economy of Wales and the United Kingdom. If there are temporary and transitional problems in the export of lamb, then we will have the resources to deal with them because of the £8 billion a year net contribution that we make to the EU that we will no longer be paying, and there is also, of course, the massive opportunity with import substitution: we're only 66 per cent self-sufficient in the production of lamb. So, a third of the market for lamb currently, a lot of it comes from New Zealand, true, but a lot of it comes from elsewhere as well. In relation to beef, we're only two thirds self-sufficient again. Imports of pork, we're only 40 per cent self-sufficient; and poultry, we're 73 per cent self-sufficient. So, there's a big home market that we've got, which we can continue to develop to take up whatever we can't export to the EU.

It's not a zero-sum game here: there are opportunities for us as well as the problems. And for European agriculture, of course, it's going to create massive difficulties as well, because we're—. And particularly in certain products, I mean, I don't think Danish farmers are going to be too keen to find that they can't any longer sell us pork and bacon, for example. And goodness knows what kind of deal we'll be able to do with the Irish Republic under the current intransigent attitude of Monsieur Barnier, but it's of massive importance to the Irish economy that we have some kind of a deal that frees up trade between us in agricultural products, because, overwhelmingly, the imports to this country of beef and dairy products come from the Irish Republic, and agriculture's a much, much higher proportion of the value of the Irish economy than it is of the British and even the Welsh economy.

So, I think that there is plenty of scope for us to be optimistic, but the Welsh Government, of course, has to play its part in this as well, and it should want to play a positive part in the development of future trade links. I know that the Cabinet Secretary goes frequently on trade missions around the world, and he will know that the rest of the world, which is 85 per cent or more of the global economy outside the EU, is a massive opportunity for Wales. But, we need to have the legislative infrastructure and the tax infrastructure, which we were debating earlier on this afternoon, that is going to maximise those opportunities.

If we use the new freedoms that we'll get by the repatriation of powers from Brussels to Cardiff, as well as from Brussels to Westminster—we'll obviously have control of agricultural policy here in Cardiff and environmental policy as well—we can revisit much of the legislation that has been imposed upon us in the last 40 years, which was never debated in any parliamentary institution. I was both a member of the Council of Ministers in the EU and also a Minister in the UK Government at Westminster, and I was a Member of Parliament for many years, presented with statutory instruments imposing regulations upon us, which we could debate but couldn't amend and certainly couldn't vote down. So, much of this legislation has never actually had any formal legislative scrutiny.

There must be scope, particularly where legislation has been on the statute book for such a long time unamended, for us to tweak the details in a way that will, without prejudicing the interests of the public and protection of the environment, et cetera, enable us to make life easier for small businesses in particular, which are very important in Wales, especially in agriculture, where the bulk of self-employment in Wales is in rural areas. It must give us the opportunity, I think, to make life easier, cheaper, and therefore to make these businesses more efficient and better able to cope with the challenges that are to come.

So, I say to the Welsh Government: let's embrace the future; let us rise to the challenge, but do it in an optimistic way. We created a great empire around the world in the nineteenth century, and we were the workshop of the world. Britain has been a fount of innovation and still is. If you look at the number of Nobel prizes that we've won, there are more Nobel prize winners in the common room of Trinity College Cambridge than in the whole of France. So, we are, as a nation, inventive, innovative and enterprising, and so I invite the Welsh Government to play its part in ensuring that Wales has a prosperous future.

Thank you very much. I call on the Cabinet Secretary for Economy and Transport to reply to the debate. Ken Skates.

Thank you, Deputy Presiding Officer. I'm pleased to have the chance to respond to this short debate and I'd like to thank Neil Hamilton for his contribution and to members of UKIP for remaining in the Chamber.

I've greatly valued the opportunity to listen to the Member outlining his optimistic vision of a post-Brexit Wales and a post-Brexit UK, but it's still our view that having full and unfettered access to the EU's single market for not only goods and services, but also capital, is a top priority in order to protect jobs and the Welsh economy, because it's vital that businesses in Wales are not disadvantaged through unnecessary tariff or non-tariff barriers to trade.

The prevailing economic analysis from most reliable independent commentators continues to be in line with the analysis contained within our White Paper, 'Securing Wales' Future'. We've also commissioned, though, Cardiff Business School to undertake research to extend our analysis, drawing on discussions with businesses from a range of sectors. The report considers the potential impacts of both World Trade Organization tariff and non-tariff barriers across 17 sectors, along with other risk factors, such as the susceptibility of different sectors to labour market risks and corporate investment cycles. And the findings of this work bring a Wales perspective to the range of reports and analysis currently being produced on EU exit. It also, I think, contains useful information that aligns well with reports produced by stakeholders, such as the Confederation of British Industry and the Federation of Small Businesses. 

We'll be publishing this work as soon as possible. Part of the task that we gave Cardiff Business School was to look at the opportunities, but I have to say that many businesses that we are speaking to have been finding it difficult to articulate what those opportunities might be. Businesses are often too busy focusing on how they can best manage the changes to come and how to plan in this continued period of deep uncertainty, with many telling us that they are currently forced to plan based on the worst-case scenario.

Much of the future deal, of course, is still unclear, and this presents us with some challenges when it comes to identifying the opportunities and being able to communicate them to businesses. The UK Government, unfortunately, has not yet shared with the Welsh Government the supposed set of 58 sectoral impact studies, and neither has it shared with us a post-referendum overall economic assessment of the impact of Brexit on Wales. We’ll continue to press for any relevant analysis to be shared with us.

We do continue to engage with businesses on EU transition through our established mechanisms, such as the council for economic development, and EU transition is a standing item on the agenda for the council. We’ve also established a sub-group concerned with this very subject. While we await further information from the UK Government on what the future deal might look like, we continue to engage extensively, not only with businesses throughout Wales, but with key organisations that will be incredibly important to future trading relationships, and one of those organisations, of course, is the World Trade Organization.

I visited the WTO at the end of October with the specific intention of building relationships between Wales and the organisation. As the UK leaves the EU, it’s essential that we can represent Welsh interests at the WTO level. The WTO is an extremely important trade organisation that facilitates trade relationships between countries, as well as providing a set of trade rules for countries to abide by and a place for them to settle trade disputes. The UK will need to re-establish itself as an independent member of the WTO when we leave the EU, so it’s absolutely vital that Welsh interests are considered as part of the process of leaving the EU and becoming a member in its own right again of the WTO.

In the absence of clear facts on the Brexit deal, I do believe that it’s important to focus some of our efforts on providing SMEs with advice on how to access support and how to begin to prepare for some of the changes, whether they be challenges or threats, that may lie ahead. So we’re looking at delivering a Brexit portal for businesses. This would provide SMEs with a digital diagnostic that will signpost access to support in key areas, and the actions that SMEs can take to mitigate the risk and to maximise the opportunity, wherever they may be. The diagnostic would be updated as further information becomes available.

Promoting Wales’s place in a globally competitive world is also at the core of our international strategy. We will aim to protect our share of European trade during the Brexit negotiations, and indeed beyond, while supporting businesses looking to enter new and expanding markets around the world. We are a world-facing country, and as we prepare for a future outside the European Union it’s more important than ever before to sell Wales to the world, and to meet with potential investors right around the globe. We embrace the world and its horizons, and when new trade opportunities open up, we will work with businesses to help our economy prosper.

The UK Government launched its trade White Paper preparing for our future UK trade policy document in October, and has since published the trade Bill and the taxation Bill this month. But at this stage of the EU-UK negotiations it’s still unclear whether the Welsh Government’s priority of maintaining full and unfettered access to the EU single market is fully compatible with the UK Government’s desire for an independent trade policy and the creation of new free trade agreements across the globe.

We are particularly concerned that an independent trade policy in all likelihood would mean leaving the customs union with the EU, and this would likely lead to trade barriers at the border, and issues with the border in Northern Ireland. So, we’ll continue to push the UK Government on these points. In addition, a soft border in Northern Ireland, as we all know, could create issues for Welsh ports as there may well be an incentive to route goods through Northern Ireland.

We're not convinced that leaving the customs union with the EU would be of benefit to Wales—at least not in the short term—and yet we are yet to see any evidence from the UK Government to suggest otherwise. More than 60 per cent of identifiable goods from Wales go to the EU, and that level of trade would not be easy to replace. So, Deputy Presiding Officer, our position is that trade with new markets should be in addition to trade with the EU and not an alternative. We continue to be clear, above all, that a 'no deal' scenario would not be acceptable to us. 

Thank you very much. That brings today's proceedings to a close. Thank you.

The meeting ended at 18:30.