Item 7 on our agenda this afternoon is the debate on the External Affairs and Additional Legislation Committee report, 'Wales' future relationship with Europe. Part one: a view from Wales', and I call on the Chair of the committee to move the motion—David Rees.

Motion NDM6728 David Rees

To propose that the National Assembly for Wales:

Notes the report of the External Affairs and Additional Legislation Committee on Wales' Future relationship with Europe. Part 1: a view from Wales, which was laid in the Table Office on 27 March 2018.

Motion moved.

Diolch, Dirprwy Lywydd. It's with great pleasure that I move today's motion in my name and open today's debate on the External Affairs and Additional Legislation Committee's report on Wales's future relationship with Europe. As you highlighted, it is part one, and there's more work to be done.

Before I begin discussing the content of the report I would like to place on record our thanks to all those who gave evidence to this inquiry. In particular, our thanks go to those who submitted written evidence, to Aston Martin and Toyota for hosting our visits to see their business operations and to understand the concerns that they have about their future relationship for the automotive sector, and also to all those who came to our stakeholder conference, where 28 different organisations were represented. I also wish to put on record our thanks to the clerking team and all the support staff to the committee whose work always allows us to undertake and produce the reports to the levels we hope to do. Without them we would be in deep trouble, and I'm sure that every committee Chair would agree with me on that point. I'm grateful, too, to the Welsh Government for the way in which it has engaged with us on this subject.

I would, however, like to place on record my disappointment at the failure of the Secretary of State for Wales to respond to my letter enclosing the report, which identified a number of areas where we would welcome more detail from him. As we move forward, it is vital that the UK Government engages meaningfully with this Assembly to ensure an outcome that is to the benefit of all four nations of the United Kingdom.  

Dirprwy Lywydd, Wales has always been an outward-looking, internationally engaged nation. It is fair to say that some had feared that the decision to leave the European Union was a rejection of this proud tradition. However, as this report highlights, these fears were unfounded. We are clear that whilst Wales is leaving the EU, it is not leaving Europe.

Dirprwy Lywydd, whatever the eventual outcome of the negotiations between the UK and the EU may be, the last 45 years of co-operation and integration is an exemplar of how, working together, we can benefit from a strong partnership. Our report looks at Wales’s future relationship with Europe and reaffirms the view that Brexit should be seen as a realignment of old relationships together with the beginning of new ones.

Turning now to the report itself, Members will see that it is an extensive and authoritative contribution to the debate on what this nation's future relationship with Europe should look like. I know that many of my colleagues on the committee will have particular themes and issues that they will wish to pursue in their contributions. I therefore intend to keep my remarks to some of the broader themes within the report.

We make a total of 18 recommendations to the Welsh Government about where it should focus its influence when it comes to shaping the UK’s negotiating position, and Wales's future relationship with the EU after Brexit. I am grateful to the Welsh Government for accepting all 18 recommendations—12 directly accepted and six in principle—and I look forward to hearing the contribution from the Cabinet Secretary this afternoon when he rises to speak.

Our first set of views and recommendations look at access to the single market and arrangements for the UK’s future customs arrangements. Irrespective of events in the Houses of Parliament or the UK Government on these matters, our report is based upon the evidence we received and the views of Welsh stakeholders. There was a clear sense from the evidence that the most important aspect of the relationship between Wales and the EU concerns trade. It is therefore vital that the future relationship provides frictionless—yes, frictionless—trade, free from tariff and non-tariff barriers.

Furthermore, we note in our report that the evidence overwhelmingly prioritises the maintenance of equivalent regulatory standards over regulatory divergence from Europe after Brexit. In particular we heard specific concerns from the farming, fisheries and food sectors in relation to our future trading relationships. The challenges posed to those sectors by the imposition of new non-tariff barriers after Brexit, such as plant and animal health checks, could jeopardise the export of Welsh lamb, beef, shellfish—something that I am certain nobody here wishes to see.

Turning to customs, we note in our report that a new customs arrangement with the EU, which broadly mirrors the current arrangements, could help to reduce the risks of customs delays at our borders and ports. As time passes, and the need for urgency becomes all the more acute, it is imperative that the UK Government brings forward credible proposals on the UK’s future customs arrangements with the EU. It is vital that this issue is resolved in a way that gives certainty to businesses on both sides of the Irish sea and both sides of the English channel. Unfortunately, we are still seeing a Government in Westminster that cannot agree on a way forward on this matter and it is only creating more concern amongst Welsh stakeholders with regard to the nature of our future relationship with the EU.

Our report also covers immigration and the issue of free movement of people. We recognise in our report that this was an important issue for many during the referendum campaign. But we also identified the role that EU citizens play in delivering our public services and working in our private businesses. We welcome the importance pleased on securing an early agreement on the future of citizens' rights by the Brexit taskforce, the European Parliament and the UK negotiating team, and welcome the phase 1 agreement in that regard.

Looking ahead, we want to see clarity from the UK Government on the timescales for moving to a future immigration system at the earliest opportunity. I personally hope that we don't see this delayed beyond a time when the decisions are made on a final deal reached between the UK and the EU. 

Dirprwy Lywydd, as I say in the foreword to the report, the last 45 years of co-operation and integration cannot be lightly discarded. And a key theme to our inquiry was the need to ensure continued co-operation and involvement in certain EU agencies and programmes after Brexit. We consider it important that the Welsh Government maps out which European agencies it has identified as important in terms of continued involvement after Brexit, and I look forward to hearing from the Cabinet Secretary when we may get that detail of that mapping exercise. We have also identified some agencies ourselves, particularly the European Medicines Agency and the European Centre for Disease Prevention and Control, which the Welsh Government did respond to in its response to the report. To that end, it is critically important that the UK Government seeks clarity now on whether the EU is prepared to offer associate membership of these bodies to the UK, or a type of relationship that can exist afterwards.

We also note the important and valuable role that co-operation in the fields of education has played, most notably through the Horizon 2020 and Erasmus+ programme. We believe that it would be mutually beneficial for Wales and the EU to continue to collaborate in these areas post Brexit. Moreover, we welcome the references made to potential co-operation in the areas of research and innovation by the UK Government, the European Parliament and European Council—all are saying that this should be prioritised in the negotiations.

The final theme of the report looked at Wales's future relationship with both formal and informal networks after the UK leaves the EU. Many of our stakeholders raised the importance of continued participation in these networks after Brexit. In evidence, they highlighted to us the unique and valuable role in terms of policy learning and collaboration that involvement in European networks can have across all those sectors. As a committee, we are proud of the positive impact, in both directions, that such engagement has had in the past and we hope to see these links grow from strength to strength in the future.

However, we also recognise that as a consequence of Brexit, Wales may have a diminished role in many of these networks in the future. This is not something we want to see and we hope that both the Welsh and UK Governments, and wider civil society, will take steps to mitigate the risks of this diminution where possible in the future. In our report, we heard about the important role assigned in the Conference of Peripheral Maritime Regions Cardiff declaration to the development of relationships not only through networks but directly with individual nations, regions and cities in Europe. We fully acknowledge the important role these relationships will play in future and hope to explore the issue further as we go into part two of our work.

When looking to the future, we cannot ignore Wales's relationship with our nearest EU neighbour, Ireland. Having considered the impact of Brexit on trade between Wales and Ireland during our report on ports, we also recognised the importance of this relationship with a call, in this report, for the Welsh Government to ensure it continues to strengthen and grow that relationship after Brexit.

It's also important to us as a committee that equalities and human rights are safeguarded in any future relationship. To that end, we call upon the Welsh and UK Governments to ensure this as we leave the EU. I am pleased to note the House of Lords agreed an amendment to the EU withdrawal Bill that sought to enshrine the European charter of fundamental rights in UK laws. I hope the House of Commons accepts that amendment.

Finally, Dirprwy Lywydd, we have one overarching message to our friends and partners across Europe: Wales has a proud tradition as a nation that looks outwards to the world, and our report is intended as a helpful contribution to the discussions that are beginning in earnest on our future relationship. We also look forward to exploring how the Welsh Government, civil society and we as a National Assembly can build these links and grow these relationships in the future. I look forward to updating Members about that work in due course. Diolch yn fawr.

In accepting our report’s recommendations 1 and 4, the Welsh Government reiterates its position:

'that we must maintain full and unfettered access to the Single Market and we remain to be convinced that being outside a Customs Union with the EU is in our interests, at least for the foreseeable future.'

However, as we heard from policy think tank Open Europe in Brussels, it would be strange if the UK was in the customs union. Like Turkey, the EU would negotiate trade agreements with third parties without the UK at the table. They also said that if the UK is in the single market, it would have to accept all the rules without being able to vote on them. And, as the UK’s deputy permanent representative to the EU told us, the EU 27 Governments now have a better understanding of where their own economic interests, and those of their own sectors, lie, regarding access to the UK market.

We therefore need a special and different solution, rather than simply something done before. It is in our mutual interest to get this right. For instance, the representation of the German state of Bremen told us that 10 per cent to 15 per cent of the GDP of all of Germany’s 16 states is exposed to the UK market.

The Canadian embassy told us that 70 per cent of their cross-border trade with the USA is carried by trucks, with security clearance programmes for trucks and drivers and an eManifest programme for goods, delivering, quote,

'a very efficient and speedy system'.

Turkey has a customs union agreement with the EU, whilst remaining outside the EU. Switzerland is neither in the single market nor the customs union, yet Turkey’s frontier is far more heavily policed than the Swiss one. In fact, 10 times as many people travel between Switzerland and the EU as do between the island of Ireland and the UK. Switzerland’s border is crossed by around 2.4 million people every day. Switzerland sells more than five times as much per head to the EU than Britain.

The European Parliament’s constitutional affairs committee commissioned a report, ‘Smart Border 2.0—Avoiding a Hard Border on the Island of Ireland for Customs Control and the Free Movement of Persons’, from the former director of the World Customs Organization, Lars Karlsson, who has visited 169 countries, worked in more than 120 of them and seen more than 700 borders. Published last November, this proposes a customs co-operation model, combining advanced data exchange and new technical components, including a new trusted trader programme, a new trusted traveller scheme and a different approach to security and safety. He said that

‘delivering almost frictionless borders is real, not science-fiction for the future,’ and that

‘we are not talking of massive infrastructure, like houses and border crossings.’

He also said that

‘a new generation of smart borders after Brexit would give Britain an extra advantage’ on the world stage and make the UK a ‘very attractive trading partner'.

Will the Member give way?

Of course.

Is he aware that this would be far easier to implement on the Republic of Ireland and Northern Ireland border than it is in Switzerland? The Member mentioned that 10 times the volume of people cross the Swiss border, but, in terms of goods, the figure is around one hundredth of the amount of goods crossing the Northern Ireland border as crosses that Swiss border.

Yes, and I think it's essential that we work with the whole of the population on both sides of that border to give them the assurances they need, where some people are trying to, I think, make them more concerned than they need be.

In accepting our recommendation 2, the Welsh Government states that it is

'working with the UK Government to protect Wales’ international reputation for high animal welfare, environmental and food standards which must not be sacrificed through allowing cheap imports.'

As the UK Brexit Secretary clearly stated in February, the UK will not seek to lower legal and regulatory standards in order to compete with the European market, and he proposed a system of mutual recognition. Further, the UK Government has said that it will match the current EU budget that supports farming and rural economies, but we do need to see more of the annual £350 million currently coming to Wales under the EU’s common agricultural policy going to the front line.

Whilst welcoming the phase 1 agreement in respect of rights for EU citizens in the UK and UK nationals living and working in the EU, our report noted concerns that uncertainty may be having an effect on the number of EU and EEA nationals leaving the UK, referring, for example, to evidence from the British Veterinary Association and the Royal College of Nursing Wales. The UK Government has made clear its continued commitment to meeting the workforce needs of our economy and society, and a post-Brexit White Paper is now expected before the summer recess in July on this matter.

Like Senna the Soothsayer in Up Pompeii!, this place sometimes seems to be full of prophets of gloom preaching, 'The end is nigh'. Well, contrary to the predictions of the doomsayers, it’s time to make Brexit work for a Wales in Europe, but not the EU, as part of an outward-looking and global UK.

May I thank the Chair, David Rees, for his wonderful opening, which gives a great summary of this report, which is also a wonderful report?

I am speaking on behalf of Plaid Cymru today as Steffan Lewis isn’t here, and he, of course, was a member of the committee as the report was being drawn up. As I wasn’t a committee member—I was just a weak substitute for Steffan, having attended just one meeting—I want to use my contribution to discuss the recommendations specifically, and the Welsh Government’s role from here on in in delivering these recommendations, and also how the Government can realise the will of this Assembly in terms of our views on what Wales’s relationship should be with the European Union in future.

Recommendations 1 and 4, without giving the exact wording, of course, call for full membership of the single market and the customs union, because that’s the only way we can deliver what these recommendations call for. I’m pleased to see that the Government, in its response to these recommendations, has made a strong case for remaining in the customs union. The UK Government is tearing itself to shreds on the question of the membership of the customs union, and, although the Labour Party in London have offered a solution, namely the creation of a new customs union, what the Labour Party seeks to deliver as part of the new customs union, namely that the UK Government should have its say on any new trade deals and that Britain should also be exempt from state-aid and public procurement rules, is unprecedented. There’s no precedent for that because, as we’ve already heard, Turkey is in a customs union with the European Union, but they are not represented in any trade negotiations and neither are they exempt from EU competition rules. So, we’re yet to see any reasonable proposals either from the Government or the opposition in Westminster.

Recommendation 10 notes that:

'If no agreement on Horizon 2020 and any successor programmes is reached between the UK Government and the EU, we recommend that the Welsh Government explores ways in which it could provide continued support for Welsh institutions to collaborate with European

counterparts after Brexit.'

This is one of the main points that the Welsh Government should focus on in order to ensure that businesses and universities in Wales have access to some of the main research and development projects on a global level. It’s uncertain as yet what the UK‘s relationship would be with Horizon Europe, which is the successor programme to Horizon 2020, which will be far greater in scale and will be worth €96 billion compared to the €77 billion being spent on Horizon 2020. It’s possible that we will have full access to all streams of the programme, but we have to pay a high price for that.

I'll go now to revert back to recommendation 2, and I quote directly from the report:

'We recommend that the Welsh Government in its engagement with the UK Government calls on them to ensure that the interests of the farming, fishing and food industries are safeguarded during the withdrawal process.'

Well, good luck with that I say, because that recommendation is going to be a challenge for Welsh Government now, because, following the legislative consent vote on clause 11 amendments, Welsh Government has conceded control of that agenda, conceded leverage, as powers in these devolved fields will be frozen for seven years and can be changed without our consent here in Wales. As the Assembly's own legal advice states, and I quote directly, the EU withdrawal Bill

'as amended will still allow the Assembly’s competence to be restricted without its consent, and the inter-governmental agreement does not provide watertight assurance that this will not happen.'

As the agricultural expert Professor Tim Lang stated in this week's external affairs committee in response to a question from Jenny Rathbone, referring to the legislative consent vote here on 15 May, whilst Scotland stood firm Wales is now, and I quote, 'assumed to be steamrollable', end of quote—steamrollable indeed, and marginalised.  

I'm really pleased to take part in this debate today and welcome the support from the Welsh Government for this report, evident in the very positive responses to the recommendations. I particularly welcome the Welsh Government response to recommendations relating to our participation in EU networks, both formal and informal, to ensure there's continued access to these networks for the benefit of civil society and non-governmental organisations.

I'm sure Members will have noted the evidence from Cardiff University and Mudiad Meithrin about Welsh civil society's engagement on the EU civil society landscape, and this opens up access not only to transnational working policy development of mutual benefit to Wales and the EU, but also access to important funding streams. 

I was pleased to engage a team of who I called 'EU funding ambassadors' in a former ministerial role—Hywel Ceri Jones, Grahame Guilford and Gaynor Richards—who identified a wide range of centrally-managed EU funds and other funding streams and networks available to Welsh organisations. I hope that their work and their report and recommendations are still a valid source of intelligence and guidance, informing and supporting those networks as we transition from the EU. 

There is deep concern about the adverse impact of the loss of funding streams, particularly, which have enabled our partners in the public, private and third sectors to engage in transnational networks. In response to recommendation 14, it's helpful to learn that Welsh civil society will be able to access the European transition fund as indicated in the Welsh Government's response to the report. lt's also welcome to see that there'll be longer term support arrangements indicated in the response, and I hope we as a committee can engage and contribute to the shaping of those arrangements after the transition period. 

Like David Rees, I'd like to commend to the Assembly today the importance of recommendation 18 in our report, which asks the Welsh Government to call upon the UK Government to protect the human rights and equality standards that Welsh citizens have benefited from as citizens of the EU. In the evidence, we took account of a range of Wales-EU bilateral relationships, including not only environmental but equality networks and interests. The report cites evidence from Chwarae Teg, when Natasha Davies highlighted the role of EU membership in safeguarding and advancing equalities and human rights, and told us there should be 'no rolling back' of these rights post Brexit. Stonewall Cymru backed these concerns, reminding us that EU law has guaranteed rights that could be undermined with a potential risk to LGBT people in the future.

It's important, Dirprwy Llywydd, that we recognise we have a responsibility and an opportunity to safeguard and develop our role as an outward-looking, internationally-engaged nation. We must not be a bystander as phase 2 negotiations proceed. It's vital that we work together and that the Welsh Government backs our efforts in the committee to encourage the EU and its institutions to engage with governmental and non-governmental organisations in Wales as we transition to Brexit. 

Much of civil society in Wales is engaged in innovation through social action, very often backed by EU funds, empowering the most vulnerable members of our society, strengthening and promoting equalities and protecting our environment. So, in conclusion, I hope this report does justice to all those who are at the forefront of civil society upholding human rights as well as those who inform and guide us on the crucial evidence we have received as a committee as we seek to represent them and give them a voice in this crucial stage of EU negotiations and future transitional periods. 

I think it's a credit to the external affairs committee that, despite the very strong feelings that there are on the issues involved in relation to the European Union, it consistently produces fair, balanced and authoritative reports. I'd like to commend, in particular, David Rees on his chairmanship of this committee and the way that he has directed its work. I particularly agree with the point that he made right at the start of his speech this afternoon, that Wales is leaving the EU but it's not leaving Europe. We're often, on this side of the argument, characterised as Little Englanders or Little Wales-ers or whatever and wont to have a kind of laager mentality, concentrating purely upon Britain, but of course Brexit gives us an opportunity to concentrate on the wider world as well as on maintaining our links with the European Union.

One of the problems that we have, I think, in producing reports of this kind is that the evidence that is received, generally speaking, tends to be from producer interests, and producer interests generally tend to favour the status quo because, of course, they're dealing with what they know and what they've experienced and they want to maintain that in order to continue the regime under which they currently operate. The future is unknown, it is uncertain—even though there may be bigger opportunities under a different regime—but those are not known at the moment and therefore there is a certain amount of speculation involved. But I personally believe that Wales has nothing to fear from even a 'no deal' situation, should that turn out to be the result of the current negotiations. I do think that the UK Government has made it very, very difficult to get the best deal for Britain by its constant flirtation with this idea of some kind of a customs union. That plays right into the EU's hands, because if the EU thinks that we're desperate to maintain existing institutions and existing ways of trading with one another, then they have no incentive at all to enter into a different kind of trading relationship, which would be better for us on all grounds. 

The EU policy of negotiation of sequencing, as was described by Yanis Varoufakis, who's the Greek finance Minister with huge experience of dealing with the EU Commission over the attempted solution to Greece's debt problems—. He pointed out the danger of not taking the future trading relationship into account at the same time as all the other aspects of our relationship with the EU and the need to negotiate it. That has maximised the amount of uncertainty that has been caused and is merely a continuation of the project fear campaign that we enjoyed throughout the referendum campaign and which is still in full spate.

It's very important, I believe, that we don't make a fetish of the customs union advantages. I think we ought to keep in perspective what exactly is the nature of the trade that we do with the EU. If we didn't have a trade agreement, how much difficulty would Welsh firms have in selling into EU markets? We start, of course, from the position where we have not just regulatory alignment with the EU, but we are actually under the same regime. So, if, in future, there is going to be any regulatory divergence, that is a discrete issue that will be discussed, with all its pros and cons, at that time.

But as regards the tariff regime of the EU, I think it's important to point out that, if we weren't able to enter into a free-trade agreement with the EU, the tariffs that would apply to Welsh producers in general would be very small. Agriculture is a different case altogether, but in the case of manufactured goods in particular, these are very small. The document produced by the Welsh Government, 'Trade Policy: the issues for Wales' is very explicit on this. If we look at Annex A on page 23 of this document, the areas of trade that are of greatest interest and importance to Wales are things like electrical goods and telecoms, miscellaneous manufactured products, miscellaneous base metal products, miscellaneous chemical products. All of those have potential tariffs of less than 5 per cent. Vehicles are a different case again. That's in general about 10 per cent, but we have to remember that, if we are subject to tariffs on our exports to the EU, they of course are subject to the reverse, and as we have a significant trade deficit in the United Kingdom with the European Union they would be the ones who would end up worse off. If we were to leave the EU without a trade deal, the tariff income to the United Kingdom from the EU would be something like £13 billion a year, whereas the tariff income to the EU would be only £5 billion a year. So, we would be very much better off.

Nobody who has any common sense wants to see trade barriers or tariff barriers between Wales and the European Union, and it's in everybody's interest that we continue to trade as frictionlessly as possible, but the ball is in the EU's court. They're the ones who are actually imposing the impediments and making the difficulties in coming to a sensible deal. I regret that the continuation of the project fear campaign is making it much more difficult to get the commonsense deal that absolutely everybody who has the interests of Wales at heart wants.

Thank you. Can I now call the Cabinet Secretary for Finance, Mark Drakeford?

Thank you very much, Deputy Presiding Officer. I'd like to start by thanking the committee for all its work in helping to consider this very important discussion, namely the relationship that the UK will have with the European Union in the future after Brexit. Many of the Members from different parts of the Chamber generally have the same opinion. As David Rees said when he spoke at the outset, Wales is leaving the European Union but we shouldn't leave Europe. But, in practice, this principle will be developed by the broader context in this report. In the brief time that I have left today, Deputy Presiding Officer, I can't present the Government's answer to all of the committee's recommendations, but that response is available to Members in our written response, which was published on 21 May.

I will start, however, with the first series of recommendations, because they go to the core of our call for securing a Brexit that puts the needs of jobs and the economy first.

Essential to that, Dirprwy Lywydd, are discussions over the UK's future customs relationships with the EU, and we continue to push for full and unfettered participation in the single market, simply because it is vital to Welsh interests. Sixty per cent of identifiable Welsh goods exports go to the EU, and this figure in 2017 rose to over 77 per cent for food and drink exports and 90 per cent for exported lambs. The imposition of any tariffs on non-tariff barriers would be very disadvantageous to Welsh businesses, placing them at a competitive disadvantage to EU-based competitors.

The EAAL report asks us to press the UK Government for preferential market access to safeguard the interests of farming, fishing and food. So excited was Dr Lloyd at that prospect that he repeated a series of canards to go along with it. We know that we have to continue to make the case for the interests of Welsh farming, fishing and food and for credible proposals for future customs arrangements in every available forum, and the report adds weight to the case for a positive evidence-based approach to our future economic partnership with the European Union. Customs arrangements are central to that prospectus. The UK Government's claims that future customs partnerships or maximum facilitations or innovative solutions will minimise disruption to the UK's economy simply do not stand up to scrutiny. It's not to say that they don't have a contribution to make, but the idea that they will solve the problem and solve the problem, most crucially, on the island of Ireland simply is not credible. We will continue to urge the UK Government for those more credible customs proposals, both formally through the existing Joint Ministerial Committee architecture and in bilateral discussions to protect the Welsh economy, because Wales needs to stay in a customs union. The evidence, as David Rees said, points unambiguously in that direction.

Dirprwy Lywydd, the report makes a series of recommendations that revolve around future practical arrangements between the UK and the EU. In line with recommendation 6, for example, we continue to make the case that Welsh businesses, Welsh public services and Welsh universities rely on our ability to attract people from beyond our own borders to make their future here in Wales. To cite just two examples: all meat inspection occupational vets in Wales—every single one of them—are non-UK, EU graduates, while more than a quarter, 27 per cent, of those employed in Wales's food and drink production sectors were born in the European Union. 

The committee's report highlights the emphasis being placed upon citizenship rights by the European Parliament Brexit taskforce, and rightly points out that agreement on this issue is in everyone's interests. The Welsh Government will continue to engage with the UK Government on timescales for the publication of its long-awaited immigration White Paper, in the hope that it will present a credible proposal, allowing businesses and others time to respond and adapt to any future unwelcome restrictions. The UK Government's performance in this area has been especially uncertain. The immigration White Paper was originally scheduled to be published in the summer of last year. That was delayed to the late autumn of last year and then put off even further to the end of this year. The migration advisory committee was commissioned to produce a report by September of this year. That at least held out the possibility that policy would be informed by evidence. I now see reports that the new Home Secretary intends to publish a White Paper in August, making a mockery of all the efforts that so many businesses and others have made to provide information to the migration advisory committee exercise.

Dirprwy Lywydd, I turn now to what the report says about the essential issues of public protection and public health arrangements after Brexit. As the committee recognised, pan-EU co-operation is vital to Welsh security and prosperity. In health, disease does not recognise national borders. The report highlights the unequivocal benefit that the UK's continued membership of, or involvement in, agencies relating to the field of disease prevention and public health in Europe brings for all concerned. If any future deal reduces the scope for Welsh NHS collaboration with the European Centre for Disease Prevention and Control, for example, it could cause delays in reporting and disease tracking, hamper outbreak response, reduce the effectiveness of pandemic preparedness planning and response, and lead to significant intelligence gaps for infectious diseases. 

Of course, our interest in continuing co-operation with the EU goes well beyond health matters. Innovation services, for example, also hugely benefit from access to EU agencies and programmes, allowing cross-border collaborative research and partnerships that enable Welsh research institutions to play their part on the world stage. The report makes a number of recommendations in support of continued Welsh investment in key EU programmes and networks. But Government support of these recommendations in principle simply reflects the unknown nature of some of the important technicalities that surround membership eligibility. We just do not yet know, for example, if sub-national state investment in some future EU programmes will be allowable post membership. That's why, in our response, we emphasise the advantages to the whole of the UK of a UK Government effort to secure participation in the successor programmes to Horizon 2020, Erasmus+ and so on.

In the meantime, and in order to support the participation of Welsh organisations in European programmes and networks, the Welsh Government has established the European transition fund. This resource, supported by an initial input of £50 million by the Welsh Government, will allow us to support future engagement following the conclusion of the transition period. The fund will be developed in partnership with Welsh businesses, public services and other key organisations, of the sort identified by Jane Hutt, for example, in civil society in order to provide support that is targeted and tailored to the needs of beneficiaries. I hope, Dirprwy Lywydd, that we will announce very shortly the first tranche of projects with more to follow in coming months.

Let me say this very clearly: the Welsh Government will continue to work to protect jobs and businesses in Wales during the negotiations on leaving and during the transitional period, and beyond that in any trade relationship with our international partners.

This picture is moving quickly, and this will continue over the rest of the calendar year and beyond. I have no doubt that the committee will maintain its interest in this area and I look forward to continuing to collaborate with the committee in the important work that they do. 

Thank you very much. Can I now call the Chair of the committee, David Rees, to reply to the debate?

Diolch, Dirprwy Lywydd. I thank Members who took part in today's debate for their contributions, and particularly the Cabinet Secretary in his response. Perhaps I'll deal with his responses first. I'm very pleased that he has basically supported all that we're saying in the report and recognises what we are saying as important issues that we need to address as a nation, both here in Wales but also as a UK as well.

I agree with the point about principles. I understand the unknown technicalities that may arise because there's still so much uncertainty that exists until we know more detail on a final agreement. I appreciate that, but we still need to make sure those issues are pursued in our pursuance of, actually, a final agreement that works for Wales, and I think that's what we would want you to do for us, Cabinet Secretary. I also very much appreciate the European transition fund you highlighted and the allowance of funding towards the organisations that Jane Hutt raised to allow that future engagement with Europe. That's critical because so many organisations have opened up those relationships, and we want to make sure they continue with those and benefit from them in the future. It's very important for that.

I'll go on to a few of the Members, and I'll deal with Jane's first because it's the easiest one. Jane clearly highlighted the loss of the funding streams, and I think the Cabinet Secretary has said that it will give us some comfort to know there are opportunities there for that to come through. But it's for the longer term picture, because that's only, as we know, a transition fund and not necessarily the long term, so we need to look at that. And we still don't know what the UK is going to do about replacing European funds and to allow that type of engagement. So, that's something that we still have, and it is important. I know Jane will continue to highlight the agenda for equalities within Wales, and wider, to ensure that what we have gained under EU we do not lose.

Dai Lloyd—and can I point out that Steffan has made a huge impact on our committee, and I know his enthusiasm for looking at the relationship of Wales not just with the EU but the wider world as well, and I look forward to his return as soon as possible to the committee? Can I just correct you? You actually said that recommendations 1 and 4 were full membership of the customs union and single market. No, they didn't say that; they actually said we wanted, basically, a customs arrangement that would allow us similar agreements, and where we would have, again, unfettered access to the market. So, it's not the quite the same as the terminology you used. I just wanted to make that clear. On your issues, we do need to ensure that we do some collaborative programmes. Framework programme 9, which is a Horizon 2020 follow-on—that money needs to be utilised in Wales; we need to have access to it, our universities need to have access to it and our research industries need to have access to it, so it is important that we continue to explore that. And whilst the Cabinet Secretary talked about UK issues, it is still important that Wales looks at every opportunity we can to get engaged in that type of programme.

Neil Hamilton, can I say thank you for your kind words, first of all? It might be the nicest thing I'll say today. But, yes, you are right; producer interests are given in evidence and they are concerned about change, because they're concerned about their profitability, they're concerned about their future, they're concerned about their workers' livelihoods. There are issues that worry them when they don't know what's happening—understandable. So, that is important. We can't hide that. I don't believe it's project fear; I think it's just simply reality. Where are we going? What is happening? I think that is the issue. You say they don't think too much about customs arrangements. I'm sorry, but businesses are telling us quite the reverse. They do want to know about customs arrangements, they do want to know about the tariffs and they want to know about the non-tariff barriers. They need to know where they're going.

We were talking on Monday in our committee and people were saying that farmers in particular are not talking about what's happening next year; they're talking about what's happening in five or six years' time about what they are planning, how they're going to diversify their arrangements, their businesses, in five or six years—they need to do it now. So, that uncertainty is a problem for them. You say that no-one wants barriers—I totally agree—and that the ball's in the EU's court. Can I remind everybody in this Chamber that the EU are more concerned, at this point in time, about the multiannual financial framework and the next seven-year period than they actually are with Brexit? They're looking at their budgets, which they know are within a limited scope without UK funding, and they are deeply concerned about that. We have probably, with Brexit, gone down the list dramatically in the last six months. So, you might say that it's in the EU's court, but don't think that they're worried about us; they have other issues that they're really dealing with, and they need to look at that. I always try and produce balanced reports as well.

Mark highlighted customs, as you might've expected him to, and a special solution that suits the UK. I understand that. He talked about trucks and technology between the USA and Canada. Can I just highlight and remind him of what the chief executive of HMRC said today in the Brexit committee in Westminster? The 'max fac' solution being proposed by the UK Government will cost £20 billion a year to businesses and take, probably, five years to fully work. That is what the chief executive of HMRC has said today. So, this idea that we can have a technology solution tomorrow is not realistic, and that is being said not by me, not by business, but by the person who's actually talking about collecting it—[Interruption.]

No. No interventions, because the Member is out of time. He's going to wind up now.

I'm going to wind up. So, Dirprwy Lywydd, we will continue to scrutinise the actions of the Welsh and UK Governments in the months ahead. As the Cabinet Secretary said, this is something that is flowing; it is continually moving. We've enjoyed today's debate. We are able to make significant contributions to the national conversation on this and we will continue to do that.

Thank you very much. The proposal is to note the committee's report. Does any Member object? No. Therefore the motion is agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.