7. Debate on the External Affairs and Additional Legislation Committee report: 'How is the Welsh Government preparing for Brexit?'

Part of the debate – in the Senedd at 4:20 pm on 18 April 2018.

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Photo of David Rees David Rees Labour 4:20, 18 April 2018

Dirprwy Lywydd, the report makes a total of seven recommendations, and I am pleased to see that the Welsh Government has accepted, or accepted in principle, all seven. Normally, I don't go through all seven, but this time I will.

Our first recommendation relates to the need for the Welsh Government to urgently examine the likely parameters of various Brexit scenarios, including a 'no deal' scenario, and to report to our committee within six months. Now, in preparing this report, we have worked in the sincere hope that the article 50 negotiations will conclude with a successful outcome for all parties, and progress has undoubtedly been made, particularly since we published our report. But it is important that we do not shy away from addressing a 'no deal' outcome still occurring. Whilst we are clear that this is not an outcome that we consider desirable in any way, we do believe that there's a need for the Welsh Government to be doing more in terms of scenario planning to prepare Wales. In its response, I am pleased to see that the Welsh Government has accepted the need for this, and we are being frequently told that this is under way.

Our second recommendation called on the Welsh Government to publish its research on the impact of various Brexit scenarios on the Welsh economy, and we are pleased to read the Cardiff Business School's analysis of the impacts on larger businesses in Wales. In the Welsh Government's response, I note that further research is currently under way. I'd like to place on the record the fact that the committee looks forward to seeing the outcome of that research in due course. It is vital that we have access to information and evidence that informs both the Government and the wider public debate about the shape of an outcome of exit. That allows us to scrutinise the Government's actions and decision making in more detail.

The third recommendation concerns a key aspect to our inquiry, which is the issue of communications. During the inquiry, we heard concerns from some stakeholders that public services in Wales simply lack the information they need to adequately prepare for Brexit. Furthermore, we heard that the lack of clarity from the UK Government and the potentially broad range of scenarios that may still arise are inhibiting the ability of public services, third sector and others to sufficiently plan and prepare for Brexit. Although we heard that Welsh Government is engaging with stakeholders at a representative level, we also heard that there are challenges in relation to cascading that information down to individual organisations and bodies and to front-line staff. To help combat this, recommendation 3 calls on the Welsh Government to improve its communications with individual organisations through encouraging representative bodies to cascade information downwards and, furthermore, for individual organisations to look at two-way engagement, because there's information coming upwards from the floor that should be considered important.

In our report, we also acknowledged that we have our own role to play in ensuring that public and civil society in Wales have access to reliable and authoritative information on Brexit. I take this opportunity—and Members, I'm sure, will indulge me—to remind everyone of the regular Brexit updates and monitoring reports produced by the Assembly's impartial Research Service, which are available on the Assembly's website and particularly, also, on our committee's website. So, please use the opportunity to keep an eye on all the information updated. The monitoring reports are excellent, and I, again, commend the staff who produce those reports.

Similarly, recommendation 4 relates to the issue of information and communication and, in particular, we call on the Welsh Government to issue clear and accessible guidelines and guidance to businesses, public sector organisations and third sector on what the implications of various scenarios will be, including a 'no deal' scenario. In its response, the Welsh Government states that it agrees with our recommendation to an extent, but argues that the timing is not right. Furthermore, the Government's response raises the important issue of a transition period and what that may mean for stakeholders in Wales. I accept all that, and I agree with it. We'll keep a close eye on how those discussions progress on transition, but we, as a committee, did not come to a firm view on precisely when this guidance should be issued. I acknowledge the arguments made by the Welsh Government on the need to avoid fuelling further uncertainty. But uncertainty exists, and we must address that uncertainty as best we can. As such, I would welcome an update from the Cabinet Secretary during today's debate on how he envisages the timescales for this guidance unfolding, particularly in light of the most recent European Council meeting, which took place towards the end of March.

Turning to recommendation 5, we heard concerns from stakeholders about the loss of future European funding and the challenge that this would present to services and organisations in Wales. That's why we've called on Welsh Government to seek greater clarity from the UK Government on how the proposed shared prosperity fund would be allocated and administered. I know this could be challenging because at the moment I don't think anyone has a clue what it even means beyond the three words 'shared prosperity fund', but it is important that you continue to press the UK Government for further detail on that. As we have previously expressed in earlier work on regional policy in Wales, it's vitally important that Wales is no worse off in terms of equivalent funding as a consequence of the UK leaving the EU than it would have been if we'd remained in the EU. Not having that information is causing difficulty for many public bodies in particular.

Our sixth recommendation calls on the Welsh Government, in conjunction with the higher education working group, to publish any work that it has undertaken in relation to research and innovation in the higher education sector and to take into account the implications of Brexit in that sector. I know that has been set up, but we have not seen any publications from that. 

We heard directly from students and the university sector about the critically important role that European funding for research, collaboration and innovation has played in the past, and the need to ensure that the university sector plays a role in preparing Wales for potential opportunities after Brexit. Since the report's publication, the Prime Minister has indicated the UK wishes to continue participation in areas of research and innovation across the EU, and we welcome that, but early preparation in Wales should ensure that we are at the forefront of this issue.

Our seventh and final recommendation concerns the anticipated Barnett funding consequential that the Welsh Government is set to receive as a result of the additional moneys being spent at the UK level to prepare for Brexit. We very much welcome the announcement of the £15 million transition fund used to prepare businesses and organisations for Brexit that Welsh Government has identified. It's critically important that the Welsh Government ensures that public services and others in Wales have the resources they need to adequately prepare for Brexit. The Welsh Government must keep the situation under review and, as a committee, we look forward to scrutinising how the deployment of the funding will be undertaken.

But it's also recognising that, in the November statement by the Chancellor, he identified £3 billion would be set aside for Brexit. We look forward to learning what consequential will be coming to Wales and how that will be spent to support businesses and public bodies that will be impacted upon by the preparations for Brexit and its effects, but also perhaps how those businesses and organisations will be supported to pursue any opportunities that may arise as a consequence of Brexit to ensure that funding is actually allocated to the purpose.

Dirprwy Lywydd, in bringing my remarks to a close, I'd like to remind the Chamber that Brexit will have important ramifications for many aspects of life in Wales and, as the process continues at pace—and it does continue at pace; it's changing almost every week—it is incumbent upon this Chamber to ensure that, in areas for which Wales has its own powers and responsibilities, we are ready for what lies ahead, not only to minimise any negative impacts, but also to grasp the opportunities that will arise following Brexit.