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

– in the Senedd at 3:36 pm on 17 July 2018.

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Photo of Ann Jones Ann Jones Labour 3:36, 17 July 2018

Item 4 on the agenda this afternoon is the statement by the Cabinet Secretary for Finance: update on European transition. I call on the Cabinet Secretary for Finance, Mark Drakeford. 

Photo of Mark Drakeford Mark Drakeford Labour

Diolch yn fawr, Dirprwy Lywydd. For more than two years now, the whole country has debated how to approach the circumstances created by the Brexit referendum. The Welsh Government, together with Plaid Cymru, took six months to produce our White Paper, 'Securing Wales' Future', based on a comprehensive economic analysis of Wales's interests. It has taken the UK Government fully two years to produce last week's White Paper on its negotiating position with the European Union. 

Dirprwy Lywydd, it is hard to begin a statement of this sort without commenting on the unparalleled chaos and mismanagement that has now been long apparent in the UK Government's approach and that has brought us to today's sorry position. The UK Government is in a state of disarray, its divisions exposed daily, if not by the hour. Serious questions are raised on all sides about its basic competence. At a time when the UK as a whole faces our most important challenge for a generation, we have a UK Government ill equipped for the work in hand.

It took two years for the Prime Minister to impose a collective Cabinet agreement, but only two days for the Secretary of State charged with delivering that policy to resign. The foreign Secretary—the person whose job it is to represent the UK abroad—swiftly followed, accusing his own Government of flying the white flag. And resignations continue, as we know, on almost every day. All of that, Dirprwy Lywydd, matters to us here in Wales. Important aspects of the UK White Paper, including transport and fisheries, are, of course, within our devolved competence. The UK position on our future economic relationship and mobility framework is of vital importance for Wales and the delivery of devolved services.

At every opportunity, Dirprwy Lywydd, the First Minister, Rebecca Evans through her role on the new ministerial forum and I have continually made the case for a Brexit that protects the interests of Wales. Our position remains as it has been from the outset: one that puts the future of jobs and our economy first. We say that the UK needs to remain in a customs union with full and unfettered participation in the single market. In its White Paper, the UK Government has taken some faltering steps towards the direction we have set out with such consistency. The UK Government now concedes the importance of participation in the single market for goods and agricultural products. We agree. They note the need for dynamic alignment with EU regulations as the European Union continues to evolve and develop a common rulebook. Again, Dirprwy Lywydd, we agree.

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.

Photo of Mark Isherwood Mark Isherwood Conservative 3:46, 17 July 2018

Well, diolch—thanks for your statement. I regret—very uncharacteristically for you—that I only got to read it when it came up on my screen a couple of moments ago. I understand, in the process of it being delivered down very, very late, it didn't find its way, sadly, to me. Although, having read it—or listened to it—I now understand why it might have been delayed, because its title was, 'Update on European Transition', but in reality, it's—dare I say it—an opportunistic reaction to developments over the last four days and media coverage thereof. I'm happy to respond to that, but not the title of the statement.

You refer, again, to the Welsh Government and Plaid Cymru White Paper, but from inception, contrary to the Welsh Government statement, it did not treat the referendum result with respect because it was Brexit in name only.

You say it took UK Government two years to produce its White Paper, by comparison with the Welsh Government White Paper, which disrespected the outcome of the referendum, using rhetoric regarding the Prime Minister almost identical to that used a year ago in the context of a stage 1 withdrawal agreement, which he delivered before Christmas; almost identical to the rhetoric used before she delivered, with Mr Barnier, the agreement on the transition period in March, which the Welsh Government promptly took credit for. I can assure you of many things, Cabinet Secretary, but I don't think the Welsh Government could take full credit for that, although clearly you did put the case, and I concede that.

Clearly also, the Prime Minister, being accused of doing nothing, delivered Cabinet agreements some months ago on extended customs union arrangements beyond transition, should the agreed solution not be in place in time, which is probably going to be the case. But it's the reality, is it not, as the UK international trade Secretary said this weekend, that the UK Government can't please everybody? There had to be compromises, but Brexit had been backed by 17.4 million, and legislation implementing that decision had been approved by Members of Parliament and—dare I add to that—Assembly Members also.

So, everything regarding developments over the last few days—robbing, perhaps, the terminology of someone far greater than myself and plagiarising it—is speculation wrapped in rhetoric inside a negotiation. Well, the developments over the last few days—and I hope you will agree—have been about establishing what the negotiating position is going to be, not what the outcome of that negotiation is, and to weaken or attempt to weaken negotiators at this stage by any party is, or would be, regrettable. Because the reality is that the UK will cease to be a member of the EU on 29 March 2019, and none of us want to fall off a cliff or have a hard Brexit—[Interruption.]—except for Plaid Cymru, of course, who would love to see this lead to the division and destruction of the British people—[Interruption.]. The British people who are the Welsh people. Welsh means British. It's the name the invader used to describe us: y Cymry Cymraeg Cymreig, the people of Britain, the Brythonic people, the British people, who belong together, never apart, while celebrating our culture—

Photo of Ann Jones Ann Jones Labour 3:49, 17 July 2018

The Member has had three and a half minutes, and I'm yet to hear a question to the Cabinet Secretary. Could we hear a question, please?

Photo of Mark Isherwood Mark Isherwood Conservative

Yes, certainly. Given the engagement the UK Government has had with the Welsh Government, through discussions with the First Minister and yourselves, the Joint Ministerial Committee European Negotiations meetings, ongoing correspondence, and, of course, ongoing official level engagement, what engagement, aside from all this fun and games, will you be having as matters move forward now, both in terms of internal discussions regarding UK single market frameworks and engagement, as we move forward with negotiations on exit from the union, particularly in relation to trade?

I will jump forward because time is short. We know that the new Brexit Secretary, Dominic Raab, will this week be having his first negotiations with Mr Barnier, but in the meantime, this week, his officials are holding ongoing preparatory talks. What, if any, role has the Welsh Government had, or will be having, in those preparatory talks, and potentially in the discussions as the week progresses?

Given the statement in the Italian national assembly yesterday that a 'no deal' Brexit would damage Italian farming, and of course recognition of the evidence given to the External Affairs and Additional Legislation Committee by Bremen that a 'no deal' agreement would hit 10 to 15 per cent of Germany's GDP, what outreach is the Welsh Government having, both in terms of supporting a strong UK free trade deal, given that that's the most likely outcome unless it's sabotaged, and how is it reaching out beyond the EU, much as that's critical, to other areas of the world? For example, the British Council published a report last week showing that the combined GDP of the Commonwealth is likely to reach £13 trillion by 2020, overtaking the eurozone, and that the results of research carried out by Ipsos Mori for the British Council into the perceptions of young people across the G20 found that levels of trust in the UK's peoples, Government and institutions are higher in the Commonwealth countries than any other regional grouping in the G20, and that the EU referendum result has had a significant net positive effect on the UK's perceived attractiveness in the G20 Commonwealth countries of India, South Africa, Australia and Canada?

Photo of Mark Isherwood Mark Isherwood Conservative

That was also positive in terms of trade. Finally, given Liam Fox's statements yesterday in his capacity as international trade Secretary in terms of post-Brexit trade arrangements, when he set out his intention to boost trade with old friends and new allies, expanding access to markets across the globe, but also said that he was working closely with the devolved administrations, of course Governments and the Northern Ireland administration, on an ongoing basis to deliver an approach that works, as part of this concluding a series of collaborative policy round tables with devolved Governments, recognising the close interaction between trade policy and devolved policy areas, could he tell us a little bit more, please, about what was stated in that paper yesterday? Thank you.

Photo of Mark Drakeford Mark Drakeford Labour 3:53, 17 July 2018

First of all, could I apologise to any Members who had a late sighting of the statement that I've made this afternoon? As Members will be aware, this is a very rapidly moving scenario, and the statement has been under active development right through the morning and into the early part of the afternoon.

Let me say that I entirely reject what the Member has said. We have been focused not on the fact of Brexit—that was settled in a referendum—but on the form of Brexit. In that, there are very many different ways in which the UK might leave the European Union, some of which will mitigate the harm that will be caused, some of which will exaggerate the harm that will be caused, and we have been relentlessly focused on trying to persuade the UK Government to adopt an approach that would minimise the harm that would be created to the Welsh economy and to the future the people in Wales can look forward to.

Trying to do that, we were prepared to offer a modest welcome to some parts of the Chequers White Paper. Unfortunately, our ability to do that has unravelled as the Prime Minister's ability to make that White Paper stick inside her own party has unravelled even faster. So we face a position today in which we saw the genuine absurdity of a UK Minister having to resign in order to support the position that his own Prime Minister had been in only half an hour earlier. That just tells you something about the complete chaos that reigns at the other end of the M4 and I didn't envy the Member's task in getting up to try to defend the position of the UK Government, because he couldn't be confident that by the time he sat down, the position he stood up to defend would still be the one that the UK Government was supporting.

In relation to his specific questions then, we will continue to engage wherever we have the opportunity, no matter how unsatisfactory the forum, no matter how unsatisfactory the nature of the engagement. There will be a meeting here in Cardiff on 1 August where UK Ministers will attend, where Ministers from Scotland will attend, where my colleague Rebecca Evans and I will both represent the Welsh Government, and we will, once again, take the opportunity to try to impress on the UK Government that their mandate as they approach the European Union should be one that puts the jobs and the livelihoods of people in the United Kingdom first.

I've listened again to Mark Isherwood offer us this nostalgic view of the world in which we can turn our backs on our European neighbours—the people we have worked with for 40 years—because there is a Commonwealth out there that remembers how things were in the good old days and are just waiting to recreate the past in the conditions of the future. It has no possible chance of being delivered in practice and as a prospectus for a modern Wales, trying to make its way in contemporary circumstances, it's an entirely false prospectus. Where there are opportunities, as I say, and where the Secretary of State for International Trade looks to work closely with the devolved administrations, then, of course, we will always be there to make sure that Welsh interests and Welsh priorities are known to the UK Government.

Photo of Steffan Lewis Steffan Lewis Plaid Cymru 3:57, 17 July 2018

Can I say I regret, to say the least, some of the comments made by the Conservative spokesperson? To say that we in Plaid Cymru seek the destruction of the British people, I think, goes beyond the bounds of usual political banter. I'm sure the Member will want to reflect on his comments and perhaps apologise once he's cooled down at some point. And to use terms such as 'fun and games' when it's his fantasy island politics that's going to cost people jobs in this country, I think is nothing short of shameful. 

But I thank the Cabinet Secretary for his statement today and for his observations on the continuing shambles that is our separation from the European Union, and we on these benches, of course, share his concerns that the growing instability at the other end of the M4 will result in the catastrophic 'no deal' Brexit, as described in the Cabinet Secretary's statement.

On that point, he will know I've asked him on a number of occasions in the past, and my party leader has also asked the First Minister, in terms of the contingency planning that can occur in the event of a 'no deal' Brexit. I entirely agree that there is no way of mitigating our withdrawal from the European Union economically, regardless of the form of the withdrawal, let alone a 'no deal' withdrawal. But, as we've alluded to previously, the head of the NHS in England has spoken about the contingency planning happening there in terms of the stockpiling of drugs and medical equipment in order to avoid undue damage to the services that patients and their families rely upon. Can he give us assurances that that kind of discussion is happening at Welsh Government level, and in areas related to health that are non-devolved, in particular, like drug control, that engagement is happening at a UK level between the devolved administrations and the UK Government in order to avoid a situation where we run out of medicines and equipment in our national health service?

In the statement, there's a mention of the need for flexibility in terms of the timetable for separation from the European Union. I agree with that. The statement doesn't appear to go as far as the First Minister himself went the other day when he said that he would welcome an extension to the article 50 process. And, given the fact that we might not have a UK Government in a matter of weeks, days or months, the need for an extension of the article 50 process might become a necessity. So, I wonder if he could clarify that it is the Welsh Government's position that an article 50 extension should be on the table, particularly in the event of a UK general election and the inevitable delay that that will cause to negotiations with the European Union.

Given his scathing appraisal—I think it's fair to describe it as a scathing appraisal—of the UK Government performance to date and the dreadful treatment of devolved Governments still that is occurring at JMC level—I understand the Welsh Government did not get full sight of the UK White Paper before it was published—I wonder, therefore, given that instability, given the continued lack of respect, even after the inter-governmental agreement has been signed and has had time to embed itself, will the Welsh Government reconsider repealing the continuity Act as hastily as it is? Because it sounds to me like we still perhaps should be wary of relying on the goodwill of the UK Government when it comes to future developments. 

In terms of future developments, the Welsh Government today has published one of its most significant publications to date, I think, on the whole Brexit process, that for the future fiscal arrangements for the UK post separation from the EU, in particular the question of future regional policy, and one of the passages in that report states that:

'A UK Government “shared prosperity fund” approach would be a direct attack on devolution and would risk depriving some of our most disadvantaged communities of the funds they need to develop economically.'

We agree, but, in the event of the UK Government moving forward and legislating irrespective of our wishes here, wouldn't it be prudent for us to have legislative contingencies in place to pursue our own regional policy?

Just a final couple of points, Dirprwy Lywydd. Now that we know that the European research group in the House of Commons has been given a full role in the legislative process as we leave the EU and has successfully changed the terms of the Trade Bill, can the Cabinet Secretary clarify Welsh Government's position on the Trade Bill? Will the Welsh Government be recommending that we withhold legislative consent from that Trade Bill, or is it yet to form an opinion? 

And, finally, will the Cabinet Secretary be able to offer a comment on the observations of the OBR yesterday that there will not be any Brexit dividend to spend on the national health service, or any other part of the public sector for that matter, and that the Prime Minister's assertion that one would be apparent was false? Could he therefore offer the Assembly an explanation as to where we could expect to find the additional promised money for the Welsh national health service, above and beyond of course the £350 million a week that we're all still very much looking forward to?

Photo of Mark Drakeford Mark Drakeford Labour 4:02, 17 July 2018

Can I thank Steffan Lewis for all those questions? He started off by making a very important point. The stakes here are absolutely real, and the impact on our nation if we do not get an agreement with the European Union will be felt in the lives of people right across this country. 

I'm grateful as well for a chance to take up his point about planning, because for all the noise that there is sometimes around this I don't think there is any difference between our two parties on this matter. We both agree that you cannot plan away the catastrophic consequences of a 'no deal' Brexit, that it is not just something that you can devise a way of mitigating such an outcome. Does that mean that we do not do contingency planning of the sort that he described? Well, of course it doesn't mean that, and events over the last week mean that the urgency of that contingency planning has to increase. 

It was discussed at the Brexit sub-committee of the Cabinet last week. It was rehearsed at the European advisory group that met on Thursday. I will meet officials on Thursday of this week. I will meet the Permanent Secretary on this matter this time next week. Because a catastrophic crash-out Brexit will have direct implications for responsibilities that we hold as a Welsh Government: whether we will be able to have access to nuclear medicine, how will we discharge our highways responsibilities if there is a queue from Holyhead to the English border. There are some practical issues that we have to think through, and that work has been going on for some time and it will now intensify over the summer, not because we think we can produce a plan that just means that, such a Brexit, its effects can be evaporated, but because, in that contingency sense, we have to make sure we're doing everything we can to protect Welsh interests.

I spoke about flexibility in the timetable because that is the point that the First Minister was making directly to EU leaders yesterday. We have long said that we don't think that we can conclude everything that needs to be done during the transition period by the end of December 2020. In that sense, an extension to the article 50 timetable seems to us to be inevitable. The point that the First Minister was making was one that I had been making when I was in Brussels last, that it is in nobody's interests to find ourselves in a straitjacket where, should everybody agree in the autumn of 2020 that an extension of time for the transition period would allow everybody to have outcomes that were preferable—why would we want to put ourselves in a position where that sensible course of action was denied to us all?

Steffan Lewis said that the Welsh Government had not had full sight of the White Paper before it was published. In any practical sense he was correct, because a version of it did not arrive here until 1.35 a.m.—a matter of a few hours' sleep before the White Paper actually was published.

We are proceeding with our plans in relation to the continuity Bill. We look carefully, of course, at everything that is happening around us. All our plans, inevitably, given the uncertainty of recent days, are always kept under review.

Steffan Lewis mentioned the shared prosperity fund. The paper that I have published today on future fiscal arrangements—the fifth in the series of papers that we have published since the original White Paper—does indeed make that point, Dirprwy Lywydd. We will not—we will not—sign up to a shared prosperity fund where what the UK Government really means is a chance for other parts of the United Kingdom to share in the money that has come to Wales because of the needs that we have here. We will not be removed from that position; I can give him that assurance.

Finally, the OBR has long been on record as demonstrating that Brexit will have a deleterious effect on the UK economy and on the tax revenues available to the Chancellor. Far from there being a Brexit dividend, there is a Brexit hole for the Chancellor to fill, and that hole is getting bigger, not smaller, as the chaos at London unfolds.

Photo of Mr Neil Hamilton Mr Neil Hamilton UKIP 4:07, 17 July 2018

Well, the Cabinet Secretary is a kindly soul and moderate in speech—it's hard to quarrel with his rhetorical condemnations of the Conservative Government. If anything, he erred very much on the side of understatement. I've said before that Theresa May is even worse as a Prime Minister than John Major. I'll go even further—I think she's the worst Prime Minister we've had since Lord North. At least the flipside of his incompetence was that he created a new nation across the other side of the Atlantic that has been a beacon of freedom, enterprise and success for 250 years. The flipside of Theresa May's incompetence is that she's going to keep us in subjection to a European Union that is fundamentally undemocratic and that is, in relative terms, a failing federal project, economically as well as politically.

It's not surprising that this is the outcome of two years of non-negotiation, I suppose, because Theresa May is a remainer Prime Minister who presides over an overwhelmingly pro-remain Cabinet and has for support in the House of Commons a party that, by a substantial majority, supported 'remain', and the House of Lords was overwhelmingly pro-remain. If the people who are actually charged with the responsibility of delivering on the Brexit referendum don't even believe in the project, it's not surprising that what the Cabinet Secretary described correctly as chaos and mismanagement is the consequence, because they are a collection of defeatists, pessimists, fainthearts and, indeed, some of them, saboteurs as well. For all the high-flown language about wanting to respect the result of the referendum, there are many members of the Government who see this, as the Cabinet Secretary does, as a disaster for Britain. Therefore, they want to try to do their best to undermine the process, and they have spectacularly succeeded. 

Of course, the fundamental problem is that there has never been any preparation for a 'no deal' outcome. If there had been, then we might have been able to make some progress in our negotiations with the EU. 'If you want peace, prepare for war', is the old Latin tag, and the same is true in negotiations as well. The idea that Britain, as the fifth largest economy in the world and the eighth largest manufacturing nation in the world, which has a massive deficit in trade with the EU and is prepared to pay £40 billion a year in budget contributions over the next five years, has no negotiating weapons in its hands is absolutely absurd. Donald Trump has threatened to impose tariffs on EU goods. The immediate effect of that was for German manufacturers of cars to call on the EU to scrap its auto tariffs against imports of cars from the United States, because they impose a 10 per cent tariff. As we know, the United States imposes only a 2.5 per cent tariff. The EU is a massive protectionist racket that operates to the disadvantage of the most disadvantaged people in society—the poor, those on the lowest incomes.

The outcome of this Chequers agreement, the only upside of which is to increase the support for UKIP from 3 per cent to 8 per cent in opinion polls in a week—there's that to be said for it, at least. But the outcome of this Chequers negotiation is a common rulebook that isn't a common rulebook at all—it's 'take it or leave it; accept the EU's rulebook'—and, if we're out of the EU, we won't even have the limited voice in the process of developing that rulebook that we have had up until now. We'll still be subject to the judgments of the European Court of Justice, so we won't get back control of our laws either. Then the so-called facilitated customs arrangement, which, as the Cabinet Secretary pointed out, David Davis has said is unworkable, and so it is too—it'll be vastly costly and bureaucratic—and then the so-called mobility framework, which is just an opaque cloud. We know nothing whatsoever about that so we can't, at this stage, form any judgment. What we, I think, can be pretty certain of is that the EU will insist upon free movement much as we have at the minute, and therefore we won't even have control over our borders either.  

Photo of Ann Jones Ann Jones Labour 4:12, 17 July 2018

The Member's had nearly four minutes, and I haven't heard a question. 

Photo of Mr Neil Hamilton Mr Neil Hamilton UKIP

Well, the questions are all implied, and I'm sure the Cabinet Secretary is sophisticated enough an audience to be able to answer them. 

Photo of Ann Jones Ann Jones Labour

No, no. This is a statement; you ask questions, please. 

Photo of Mr Neil Hamilton Mr Neil Hamilton UKIP

I can always end up by asking the Cabinet Secretary if he agrees with what I've said. But I will conclude, because I don't want to take up any more time than I have done.

There are massive opportunities, as well as transitional problems, in leaving the EU. I wonder why the Cabinet Secretary doesn't see at least some glimmer of light in the options that are available to us with the freedoms that we would have if we even had a 'no deal' scenario. As Mark Isherwood pointed out, the Commonwealth is a massive force in the world economically, and growing. The United States under President Trump is clearly very favourably disposed towards the United Kingdom, and he sees the EU as the enemy and, indeed, they have been a hostile power to us in these negotiations. There are massive opportunities there for us, and whatever the transitional problems of leaving—nobody denies that change of this magnitude is going to produce difficulties—nevertheless there are massive opportunities for Britain to connect properly with the rest of the world through free trade deals. The limited effect of tariffs within Europe are massively outweighed by the trade opportunities elsewhere in the world, and President Trump has, for all his imperfections, shown that, in the art of the deal, he is a past master, and he has got for America what the people who voted for him wanted in casting their ballots. What the Conservative Government at Westminster have done is actually to deny the British people, 17.5 million of them, what they voted for in the referendum two years ago. 

Photo of Mark Drakeford Mark Drakeford Labour 4:14, 17 July 2018

Well, Dirprwy Lywydd, I suppose that no afternoon in which the Napoleonic code and Lord North both make an appearance on the Assembly floor is entirely wasted, but I'm afraid it was very much downhill from there on. The Member makes his normal pitch for the Brexit that he has favoured and the Brexit that he has persuaded to vote for, and where he is quite wrong is to characterise the position of the Welsh Government as attempting to deny the outcome of the referendum. I say it again: we are focused on how we leave, not whether we leave. 

Here, though, are the three takeaway messages from the Member's contribution this afternoon: for our population, a future in which he says, 'Let them eat chlorinated chicken, that will be good for them'; for our economy, he invites them to accompany him to the end of a pier in Aberystwyth, hand them a rubber ring, point them in the direction of New York and say, 'There may be some transitional problems, but there'll be massive opportunities if you ever get there'; and for the rest of our democracy, he says the example of President Trump is there before you. Don't be dazzled by the light that surrounds him. 

Photo of Jenny Rathbone Jenny Rathbone Labour 4:16, 17 July 2018

It's hard to follow that. I think we'd all like to think that the Chequers deal is not dead in the water, but the idea that this is fun and games is obviously not the case. If people like Justine Greening are saying that the UK Parliament is incapable of making a decision, it's extremely scary.

The majority of my constituents are involved in a services business of one sort or another, whether they're working for universities, which involves collaboration with other universities across Europe in the Horizon programme, or whether they are involved in business services or insurance companies. I am struggling to understand how relinquishing the right to sell these services to the 500 million people living across the water in Europe, unfettered by tariffs, is going to be compensated for by some never-never land of future prospects that we might be able to look forward to, whether in the United States or elsewhere. So, this is of extreme concern to me.

In addition to that, I just wondered if we can now look at the possibility of crashing out of the European Union without a negotiated deal and the risks that that imposes for food security, because as most of our vegetables and fruit are imported from the EU, if our ports descend into chaos, how are we going to feed our population, which is the first task of government? Obviously, we want to avoid such a catastrophe, but the end of March is before the commencement of the growing season for fruit and vegetables. So, I just wondered what the Welsh Government contingency plans are to increase the availability of home-grown vegetables and fruit, which are such a vital component of the Welsh Government's aspirations for a healthier Wales. 

Photo of Mark Drakeford Mark Drakeford Labour 4:18, 17 July 2018

I think there were three points there. I'm afraid I agree with what Jenny Rathbone has said. I think the House of Commons is demonstrating that there is not a majority to be brought together for any form of Brexit. I think that is the message we are learning from the last few days. The First Minister has said that in those circumstances a general election is the democratic necessity, and I completely agree with him there.

Jenny makes a very important point about services, Dirprwy Lywydd. The Chequers White Paper offers regulatory alignment in relation to goods and agricultural products, and that is very important in having unfettered trade as far as those things are concerned. But this idea that you can have a simple separation between goods and services as though they are entirely separate categories is simply not the case. To take the most obvious example, most people who buy a car buy a good, but they buy a finance package with it in order to secure that good, so there's a good and a service in the same thing. In fact, some estimates suggest that 40 per cent of goods that are traded in the European Union have an element of service directly connected to them. So, she's absolutely right to point to the very significant difficulty that remains there in the White Paper as far as services are concerned.

And in relation to the important point that she makes about food security, just as I said to Steffan Lewis that the Welsh Government is engaged in contingency planning already, we'll be doing more of that, and more intensively, over the summer. So, food will be part of what we will be considering. And in a point allied to that made by Jenny Rathbone, nobody should believe that there is some simple solution to some of these things in which you simply advise people to stock up and that they'll be okay, because, these days, supply chains and just-in-time delivery of food as well as other services means that there are no big stockpiles of food waiting to be mobilised for the public in the way that might have been the case when these things were organised very differently.

Photo of Jane Hutt Jane Hutt Labour 4:21, 17 July 2018

Cabinet Secretary, can I thank you for your statement today on the White Paper and also welcome the paper you published on reforming UK funding and fiscal arrangements after Brexit? At the weekend, Cabinet Secretary, you warned that a hard Brexit could throw the UK to the wolves with the spectre of a chaotic Tory Brexit looming over Wales and a hard right Brexit amounting to an attack on workers as a result of deregulation. Can I ask whether you have any confidence that this can be resisted, and can you clarify whether you believe the Welsh Government will have influence or the levers to safeguard employment rights in Wales as a result of this White Paper?

In the First Minister's speech yesterday, he reminded us of the Welsh Government's position and the four priorities laid out in 'Securing Wales' Future', agreed with Plaid Cymru, which has stood the test of time, including, as he said, retaining the social, environmental, employment and consumer protections we enjoy. In their White Paper, the UK Government does state:

'Existing workers' rights enjoyed under EU law will continue to be available in UK law on the day of withdrawal.' 

But in your statement today you raise a number of questions, as well as giving the views at this point—difficult though it may be—of the Welsh Government. But one of your questions in your statement is:

'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?'

Can we be confident that we will have the influence to safeguard these rights?

The Women's Equality Network, which I've mentioned already to the First Minister today, is making representations to the UN Convention on the elimination of discrimination against women. They're making these representations in a report this week. It's calling on the UK Government to enshrine the rights of women currently protected in EU legislation in domestic law to guarantee that no women's rights or human rights will be lost post Brexit. But, Cabinet Secretary, how likely is it that this can be achieved, considering the UK Government's rejection of the EU charter of fundamental rights and their current state of political paralysis?

I thank you for your statement and would ask you to ensure that the valid points you made last weekend about threats to workers' and particularly women's rights, if there is a hard Brexit, can be included in your dialogue, including Rebecca Evans, when you meet with UK Ministers in Cardiff on 1 August.

Photo of Mark Drakeford Mark Drakeford Labour 4:23, 17 July 2018

Could I thank Jane Hutt for those very important points and give her an assurance that we will certainly be raising these points, as we have already and at every opportunity with the UK Government? I've said already this afternoon, Dirprwy Lywydd, that we would have been prepared to have offered a modest welcome to the Chequers White Paper, in some aspects of it, and one of the reasons we would have been willing to do that is because it does repeat a commitment that the Prime Minister has given previously not to undo the rights that Welsh and UK citizens have gained as a result of our membership of the European Union—workers' rights, citizenship rights, human rights, consumer rights, gender equality rights and so on. But the reason why it's not been possible to do that in the way we might have intended this afternoon is because the White Paper is unravelling in front of us. Yesterday, the Prime Minister agreed to amendments laid down by her hardline Brexiteers that directly contradict the content of her own White Paper, and the things that I said at the weekend were designed to demonstrate that if the UK Government, if the Prime Minister, is prepared to commit herself wholeheartedly to a sensible Brexit, to face down the people in her own party who are not of that view, then we would be willing to offer her some support in that. But if she thinks that the way to navigate ourselves to a sensible Brexit is by continually making concessions to those of a very different point of view, then that's where we have the risks that Jane Hutt has pointed to. That's when we will end up in a position where, in order to compete in the world, there will be people who think that the way to do that is to sacrifice every protection that working people have gained as a result of their membership of the European Union. That's what I meant when I said that working people in Wales and the United Kingdom would be thrown to the wolves in that set of circumstances. 

Photo of Ann Jones Ann Jones Labour 4:26, 17 July 2018

Thank you. I have two more speakers. If they can guarantee they will ask a brief question, I will call them both—and if the Minister can respond, as he always does, with brevity. Mick Antoniw. 

Photo of Mick Antoniw Mick Antoniw Labour

Cabinet Secretary, on the basis that UKIP have raised the issue of Donald Trump, do you agree with President Trump that Boris Johnson would make a good Tory Prime Minister and that he would certainly be better than Theresa May? Do you agree that, if that were to happen—or even if it doesn't happen—any possible trade deal with America is now a potential disaster zone, bearing in mind the tariff war? And do you also agree with me that the proposal by the Tory Government now to actually cut and run by scuttling Parliament, by calling Parliament short, is a direct undermining of parliamentary democracy and an abuse of the democratic system, and that this is a Government that really shows that there's only one option left for it, and that's to call a general election? 

Photo of Mark Drakeford Mark Drakeford Labour 4:27, 17 July 2018

I agree on the final point, definitely, Llywydd. The UKIP spokesperson suggested that Mrs May was the worst Prime Minister since Lord North. Surely there has never been a president of the United States in such disrepute as the current incumbent of that office, and we should take him at his word that if any trade deal were to be struck with the United States, it would be 'America first' that would be in his mind, and anything that we get will simply be the crumbs that fall from his table. 

Photo of Ann Jones Ann Jones Labour

Finally, David Rees. 

Photo of David Rees David Rees Labour

Diolch, Dirprwy Lywydd. Cabinet Secretary, I fully welcome your statement and I agree with everything you said in that statement and all the answers you've given. Can I also agree with comments from Steffan Lewis and agree with some of the point he was making? It's very important that we address those. It was poor of the Conservative representative to comment on 'fun and games' in this. These are people's lives, these are our constituents and it's their jobs that are going to be affected by the outcomes of this.

Just some quick questions, Dirprwy Llywydd. On the White Paper, in reading through it—and I'm sorry to say I didn't have time to read through it all—there are very serious elements in there that affect Welsh Government competencies. Now, you said you didn't get the paper until 01:35 in the morning. You, therefore, haven't been consulted on a contribution into that paper. It talks about a joint committee that may oversee work going on, but it doesn't reference the Welsh Government in terms of representation on that joint committee; it talks about other actions. Do you really have confidence that they're going to listen to us in the negotiations going on? We know that they should be in the trade deals, but we're still seeing whether they will or not. There's a huge gap here in confidence in the UK Government in being able to deliver—where our voices are heard, let alone acted upon. 

Photo of Mark Drakeford Mark Drakeford Labour 4:28, 17 July 2018

I thank David Rees for his support for the statement this afternoon and for associating himself with the remarks that others have made in the Chamber about the seriousness of the position that we are facing. He's right, of course; we were not consulted on core parts of the White Paper that directly impinge upon Welsh interests. Can I be confident that they will listen? Well, that isn't in my gift, Dirprwy Lywydd. What is in my gift is to make sure that wherever there is an opportunity to speak up for Wales and with our point of view, we will take those opportunities. Whether we are listened to is a different matter, but if we're not listened to, it's not because of any lack in our determination to make that case and to try our very best to make sure that the interests of Wales are articulated and heard. 

Photo of Ann Jones Ann Jones Labour 4:29, 17 July 2018

Thank you very much, Cabinet Secretary.