4. Statement by the Cabinet Secretary for Finance: Update on European Transition

Part of the debate – in the Senedd at 3:40 pm on 17 July 2018.

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Photo of Mark Drakeford Mark Drakeford Labour 3:40, 17 July 2018

The UK Government has also been persuaded to support the continued free circulation of goods within a new combined customs territory. In plain English, this surely equals participation in a customs union, and insofar as it does that, we agree that these could be steps in the right direction. But for every answer the White Paper attempts, a further set of questions arises. How might the UK's convoluted customs proposals work in practice? The departing and hitherto unquenchably optimistic David Davis said that the proposition was unworkable. What evidence is there that supports the service sector being left outside the common rulebook? And how will the UK Government provide sufficient guarantees to the EU-27 on environmental and labour market standards, to ensure that there is a genuine level playing field?

Dirprwy Lywydd, let me draw out some other aspects of the White Paper that are important to Wales. On the so-called mobility framework, we have argued strongly for a system that is compatible with the principle of free movement of people, but where migration is clearly linked to employment. We take a positive view of the contribution of EU citizens to life in Wales, and the White Paper is a missed opportunity to provide clarity to businesses, to public services and to those EU citizens that we have been lucky enough to attract to be part of our community here in Wales. Once again, faced with intractable difficulties in its own ranks, the UK Government seeks refuge in obfuscation and delay. In reality, issues around the freedom of movement need to be addressed urgently and with clarity. 

Dirprwy Lywydd, the White Paper sets out the UK's aspirations for continued participation in some, but not all, EU programmes such as Horizon and Erasmus+, for which we have made a powerful case ourselves. Yet, there is no mention of interterritorial co-operation programmes, which would enable Wales, for example, to continue joint working with Ireland and other neighbours—work that we say will be more important, not less so, after Brexit. And the UK commitment in the White Paper has committed to some, but again, not all, of the crucial European agencies that support the delivery of devolved services such as the European Medicines Agency. In these hesitations and compromises, what we see is the Prime Minister still trying to manage the internal politics of her ever-changing Cabinet. Her focus is on the future of her political party rather than where it should be—on the future of our country and the livelihoods of the people we represent.

Serious negotiations now need to proceed with urgency, so that a credible agreement can be reached in October. Any slippage from this timetable simply increases the risk of a chaotic Brexit and the UK leaving the European Union without agreement. The UK Government needs to be clear and unambiguous. Instead of inventing new ways to stretch words—'economic partnership', 'common rulebook', 'customs', 'combined territories'—the Prime Minister needs to state straightforwardly that the UK aims to stay in the single market for goods and agricultural products, and remain in a customs union. The time for appeasing the unappeasable on her own side has gone. It is now time to focus on the real negotiations, those with the EU-27. And it is true that we need some flexibility from the European Union too. We need open space for dialogue, not cordons defined by red lines. When the First Minister met Michel Barnier yesterday, he set out the case for the EU to show generosity and flexibility, especially on timings. Clearly, there is a mutual interest at stake for both the UK and the EU, and we should not maintain unrealistic deadlines for transition if that risks pushing us unnecessarily over a false cliff edge.

In summary then, Dirprwy Lywydd, the UK White Paper is a late but potentially significant step. It recognises several of the key points that the Welsh Government and Plaid Cymru have been making for the last 18 months, but further steps are now needed to secure a Brexit that protects jobs and the livelihoods of people in Wales and the UK as a whole. To achieve this we need a UK Government focus, not on itself but on the long-term economic interests of the whole country.