Questions now from the party spokespeople. The Conservative spokesperson, Nick Ramsay.

Diolch, Llywydd. Cabinet Secretary, I'd like to ask you about the proposed use of the mutual investment model, and specifically with regard to twenty-first century schools. You will be aware that the Public Accounts Committee has been investigating the use of the mutual investment model for financing capital projects, specifically band B of the twenty-first century schools programme.

There have been concerns from the WLGA about the affordability of the model, based on their previous experience with PFI. There are also some wider concerns about locking local authorities and schools into 25-year contracts. Amongst them was the changing nature of the school curriculum over this period, which will inevitably lead to changing needs for school buildings in the long term. So, all these issues pose some concerns, which, as I say, the Public Accounts Committee has been looking at. I wonder if you could give us your insight into the development of the MIM and where you think we can go from here in terms of addressing some of these concerns? 

Well, I thank Nick Ramsay for that and I thank the PAC for the work that they're doing in looking at the model. I'm sure there will be things that we will want to learn from the work that the committee is undertaking. Llywydd, I hope to make a statement very shortly, updating Members on the latest developments in relation to the mutual investment model, including some close interest which has been taken in it at the United Nations in looking at ways in which the ground that we have been able to break in creating that model might be of interest to other countries who are also involved in looking for innovative ways to expand capital investment programmes.

Specifically in relation to band B of the twenty-first century schools programme, I think the correct analogy for local authorities to be looking at is not PFI, where we have very little use of it, but the way in which using ideas developed by my predecessor, Jane Hutt, we have been able to use local authorities' ability to make things happen, and then to fund the revenue consequences of that to allow them to use the capacity that they have to invest in the capital field, and that's what we would look to do in the twenty-first century schools programme. 

As to the argument about locking in local authorities to assets that they may not need in the long run, that's an important point. Local authorities need to think carefully about that in the way in which they bring forward proposals to use the mutual investment model in the twenty-first century schools area. For example, I think it is unlikely that special schools would be suitable for this model, because the nature of special education changes, and the intensity of use of a special school in terms of the physical fabric, inevitably, given the nature of the pupil population that they serve, is intense as well, and so the model will be suitable for some aspects of the school estate but not necessarily for all.  

Thank you, Cabinet Secretary. You spoke about the way that the mutual investment model differs from PFI; I think this has been an area of some confusion. There is a lack of clarity out there as to the nature of the differences with traditional PFI. If I can just give some examples: in a conventional PFI—a PF1 or PF2 deal—soft services are usually considered to include catering and cleaning provisions. What services do you envisage being, either included or excluded, if that's easier, from the mutual investment model within the twenty-first century schools programme? I say this in the light of the fact that there have been concerning stories of PFI hospitals faced with significant charges to deal with minor maintenance issues, such as one PFI hospital that was billed £333 to have a new lightbulb installed—an extreme example, but nonetheless, these are some of the concerns that have surrounded PFI, and which currently concern the MIM as well.

Llywydd, I'll do my best in the statement that I hope to publish shortly to restate some of the key components of the model, so that people can be clear about them. Let me just mention three in relation to the question that Nick Ramsay has asked: it's a key feature of the model that it allows the private sector to share in any profits of the private partner and to take up to 20 per cent equity in such schemes in order to do so. The model removes soft services from contracts—soft services such as cleaning and catering—and it removes equipment from the model as well, because of the experience that Nick Ramsay pointed to, and because equipment can be funded more efficiently from public capital. So, we have looked to learn the lessons of models elsewhere, particularly Scotland's not-for-profit distributing model, and to make sure that the model that we invent here in Wales learns those lessons and removes from it those components that have been particularly unsatisfactory in previous ways of working.

I'm getting the message that my questions have pre-empted a statement that can be expected from the Welsh Government in the near future. Maybe I'm ahead of the game.

Thank you for that, Cabinet Secretary. Certainly in terms of the work that we've done in the Public Accounts Committee, there has been a message coming across that there's been a concern about a lack of communication between the Welsh Government and local authorities about the exact nature of the mutual investment model, but clearly with your statement coming forward, you obviously hope to address some of these concerns.

In evidence provided to the committee by the Vale of Glamorgan Council, it was explained that it's been thought that to pay back their liabilities under the model, local authorities could use the funding they allocate to individual schools for maintenance. However, the Vale of Glamorgan's representative went further to explain that the amount of funding that schools actually receive in maintenance wouldn’t necessarily be sufficient to cover that annual payment. So, that’s been a source of concern. Given the need of councils to rely on their revenue budgets to finance repayments to the model, and the need to balance that finely with the financing of other services, is it the case that there is an argument here for clearer guidance to local authorities so that, certainly in planning ahead with their budgets, they’re able to manage those budgets more effectively and also to find match funding where necessary to fill gaps that might emerge?

Llywydd, I look forward to reading the evidence that's been presented to the PAC and where there are areas where we need further discussions with local authorities to make sure that there is clear advice, we'd certainly wish to do that. I have been encouraged by the number of local authorities in Wales that have come forward with proposals to use the mutual investment model in order, as they wish to do—including the Vale of Glamorgan—to have an ambitious programme of investment in our schools estate. We will work with those local authorities, and where there are technical matters that need to be addressed to make sure that the model can deliver on the ground, of course we'd want to have those conversations with them.

Plaid Cymru spokesperson, Simon Thomas.

Thank you very much, Llywydd. And as we’ve just heard during this session, structural funds have been extremely important for Wales and for the Welsh economy. As part of the preparations for withdrawing from the European Union, the Finance Committee has started an inquiry into the structural funds, for example, what will replace them: the shared prosperity fund, Horizon 2020, which has just been mentioned.

In that process, we’ve asked the Secretary of State to appear before the committee to provide evidence and it didn’t come as much of a surprise to me, but it was a shock, in a way, to receive a letter from the Secretary of State for Wales saying that he didn’t think that an appearance before the committee was necessary. And, more than that, he hasn’t prepared any evidence for the committee. I don’t think that this demonstrates that the Secretary of State is dealing with the committees of this Assembly in a way that is appropriate and respectful, but could you tell us from your point of view as to whether you trust in the role of the Secretary of State for Wales in preparing the ground for structural funds for each nation within the UK, as we see the structural funds disappear?

Well, it’s not acceptable to me, and I’m certain it’s not acceptable to the Finance Committee either when they request that the Secretary of State attends, the person in Westminster—so they say—who is accountable to us in Wales, and he is not willing to come to give evidence to the committee.

I have read a number of submissions made to the committee by others, and a great deal of interesting evidence has been submitted. I saw Julie Morgan and others come before the committee, and I look forward to my attendance, too. This is not the first time for the Secretary of State to be offered the opportunity to attend the Finance Committee, and he is not willing to do it. I take every opportunity I have to raise the future of the structural funds with the United Kingdom Government, but that is not the only way of doing it. 

I thank the Cabinet Secretary for his reply. The difficulty, I think, is that I can see this as part of a pattern of behaviour by several Conservative Ministers now, which, I'm afraid, I think that the Welsh Government is facilitating rather than preventing—inadvertently, perhaps.

I'll give you another example of this that's emerged in the last couple of weeks. As you know, you have an inter-governmental agreement on the European Union (Withdrawal) Bill, and that makes it very clear that the UK Government will commit not to bring forward legislation that would alter areas of policy insofar as the devolved legislatures are prevented from doing so by virtue of the clause 11 regulations. So, what you've told this Assembly is a double deal, if you like, on that.

However, there is the amendment passed in the Lords—the Letwin amendment, as it's called—that requires the Secretary of State to publish a draft Bill containing environmental regulations in England, but doesn't specifically say only for the public authorities in England. And, of course, environmental regulations are one of the 24 policy areas that make up your inter-governmental agreement.

Already this inter-governmental agreement has been described by Tim Lang from City, University of London, as showing that Wales is steamrollable by Whitehall. Are you still convinced that the agreement is robust enough to protect the interests of Wales? And are you still convinced that the Letwin amendment, and the response of the UK Government to that, does not in fact show that the agreement that the ink is barely dry on is already being undermined by the Westminster Government?

Well, Llywydd, Professor Lang is quite wrong, and he has no evidence for the assertion that he made because there has been no action under the inter-governmental agreement. So, he would have nothing at all on which to rely for the assertion that he has offered.

As to the Letwin amendment, the Member is aware, because the First Minister reported it yesterday, that there were explicit assurances given in the House of Lords that the amendment refers to England only; that it does not trespass into devolved competencies. There was a discussion, as I understand it, at the Business Committee yesterday as to whether or not an LCM needed to be brought forward. The Government would have brought one forward had the Business Committee concluded that there were changes to the Bill that had a material impact on the responsibilities that we hold here. The Business Committee concluded that was not the case, and I think that is a reflection of the strength of the assurances that we have received.

I think this one will run and run, and we'll see the reality of the agreement as other things emerge. One of the things that will be emerging today in Westminster, of course, is the final vote, in my view, to uphold parliamentary sovereignty and to make sure that Parliament, not Government, has the final meaningful say on the Brexit deal agreed and negotiated with the European Union.

In March this year, when asked on whether or not the National Assembly should be provided with such a meaningful vote, also on the final treaty with the European Union, the First Minister responded by saying, and I quote,

'It wouldn’t be right in principle for us to be bound by something that we had no role in negotiating nor agreeing.'

So, what do you now propose should take place to ensure that Wales, and therefore this Parliament, is equally given the vote to have our say on the final Brexit deal?

Can I begin just by agreeing with what Simon Thomas said, but not quite in the spirit that he said it? He's right to say that the impact of the agreement will now be lived out in the actual experience that we will have over the coming months, and it is our belief that the agreement secures the position of this Assembly. Any powers that we agree should be held temporarily, to be operated against the EU rule book until we agree something different, will come in front of this Assembly for approval. And there will be repeated opportunities for the Assembly to see whether or not the agreement that we have reached is actually measuring up to that.

As to the meaningful vote, there is a second decision point coming in the whole Brexit business, because there will come a point when there will be a deal struck between the UK Government and the European Union and that will set the terms for our departure. The meaningful vote in Parliament is designed to make sure that Parliament has proper oversight of that. Whenever I've heard the First Minister talk about this, he refers to the Parliaments of the United Kingdom having oversight of that, and that says to me that the views that he expressed to the Assembly earlier have not altered.

UKIP spokesperson, Neil Hamilton.

Diolch yn fawr, Llywydd. Labour now believes, according to their proposed amendment last week to the EU withdrawal Bill, that we should have full access to the internal market of the European Union, underpinned by shared institutions and regulations, with no new impediments to trade and common rights standards and protections as a minimum. It's perfectly clear from the conduct of the negotiations by Monsieur Barnier up until now that he regards the single market as indivisible and it must include free movement of labour. The main aim of Monsieur Barnier's negotiation has been to discourage other EU member states from following Britain's example, rather than to reach a deal that's in the interests of ordinary people in Europe, still less in Britain. 

Jeremy Corbyn said, in the days when he was a Eurosceptic just under a year ago, that under Labour there would be no wholesale importation of underpaid workers from central Europe in order to destroy conditions, particularly in the construction industries. Given that full membership of the single market involves free movement of labour, how can those two statements be reconciled?

I refer the Member to the documents that the Welsh Government has published: originally, the White Paper that we published jointly with Plaid Cymru and then the subsequent paper that we published on fair movement of people, which I think gives him exactly the answer to the question that he has raised, because we set out in that paper a series of proposals that we think could be brought within the broad umbrella of free movement.

It's one of the myths of the whole EU debate that there are some sort of single standards about what all these freedoms—the four freedoms—actually mean. The way in which freedom of movement is interpreted in different member states varies very considerably from one part of the European Union to another. We set out a series of suggestions that we think would allow us to remain under that broad umbrella, but would have, also, the impact that Jeremy Corbyn pointed to—that freedom of movement must not become freedom to exploit. And there is no doubt that some of those people who voted to leave the European Union did so because they feared that freedom of movement had become a device through which wages were held down and the legal rights that people had were undermined by people being brought across the European continent to be exploited here. We set out a series of proposals to make sure that that doesn't happen and, together, they provide all the answers that the Member needs to the question that he's raised.

Of course, asking for something that's not on offer is not an answer to the question. He knows as well as I do—someone as well-informed and sophisticated as the finance Secretary must know—that the European Commission could never actually grant to the United Kingdom the kind of deviations from EU regulations on free movement that the Labour Party has been talking about. In fact, this is called 'cakeism' by the European Commission—having your cake and eating it. A source close to Guy Verhofstadt, the lead negotiator of the European Parliament on these issues, now says that 

'Labour are as bad as the Tories, selling a unicorn to paste over their internal divisions.'

Is it not clear that Labour policy now is that we'll be a rule taker on goods and European court rulings? That means not taking back control of our laws. Belief in full alignment means no free trade deals with the rest of the world, which means we don't take back control of our trade policy, and a compromise on free movement means that we don't take back control of our borders. This will all be at a price, as well; just like Norway, we'll be obliged to pay into the European budget, which means not taking back control of our money.

Well, Llywydd, I've never shared the Member's view of the Commission as some sort of malign force, forever out to do us down. In my experience of going to Brussels and talking to people there, I think we are fortunate to have a group of people on the other side of the negotiating table who recognise that it is in their interests and ours to agree a Brexit deal that does the least possible harm to their economies and to the economy of the United Kingdom. I think that's the spirit in which those negotiations have been entered into. The Labour Party's policy in Wales is the policy set out in our original White Paper, and that is an approach to Brexit that insists that it is the needs of our economy, it is the needs of jobs, it is the needs of working people, that should be at the very top of the negotiating list of the United Kingdom Government, and that all the talk of taking back control, of being in charge of our laws, all that sort of thing, leads us to a series of red lines that, in the end, will mean that the UK Government has managed something really remarkable—it will have managed both to damage our economy and to see to it that our political voice in decision making has been diminished. There is a different way, a better way, and the Labour Party has set it out.

I know the Labour Party doesn't believe in red lines; it believes in raising white flags on these issues—the white flag of surrender to the EU on all matters of major importance. Labour is an internationalist party, and constantly virtue signalling on the interests of poor countries in other parts of the world for reasons that I, to a great extent, share. The customs union of the European Union is a protectionist racket that disrupts our trade with the rest of the world, holds back the poorest overseas, whilst increasing prices and costs for the poorest at home. That, therefore, makes a nonsense of the statement that the Cabinet Secretary has just said of putting the interests of working people, whether at home or abroad, at the top of the agenda.

Well, Llywydd, it's absolutely in the interests of working people throughout Wales, whether they are in manufacturing industries, where goods pass across the border of the United Kingdom and other parts of the European Union every single day, or whether in our food and agriculture sectors, where exporters rely on their goods arriving fresh at the point where they are to be consumed—it's absolutely in the interests of Welsh businesses and Welsh working people that we have free and frictionless trade. That's what the customs union delivers, and, when we have barriers at the border, and we have businesses in Wales that can no longer trade as a result of the prospectus that he sets out, we'll be diverting them to the Member so that he can explain to them just the position that he has led us to.