7. Debate on the External Affairs and Additional Legislation Committee Report: 'Wales' future relationship with Europe. Part one: a view from Wales'

Part of the debate – in the Senedd at 6:12 pm on 23 May 2018.

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Photo of David Rees David Rees Labour 6:12, 23 May 2018

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.]