The next item is a statement by the Cabinet Secretary for Finance: update on European transition. I call on the Cabinet Secretary to make the statement—Mark Drakeford.

Diolch yn fawr, Llywydd. The Welsh Government last reported to the Assembly on matters related to the UK’s exit from the European Union at the end of the summer term. The purpose of today’s statement is to provide an update about the many developments that have taken place in the meantime.

The first matter I'll deal with this afternoon is the nature of the separation deal and the future relationship with the European Union sought by the UK Government, as set out in the Chequers White Paper. Our own preferences are unchanged since the publication of 'Securing Wales’ Future' with Plaid Cymru in January 2017. The Chequers White Paper moved the UK Government’s position incrementally towards our own, enabling us to offer some of its proposals a modest welcome.

Chequers concedes the principle of a customs union; it makes a commitment to ongoing regulatory alignment for goods and agricultural products. The nature of the Welsh economy, as we have said many times, means that barrier-free trade for the manufacturing industry and the rural economy is especially important. The Chequers proposals are an improvement from that perspective, as the Confederation of British Industry and the National Farmers Union have both acknowledged.

However, Llywydd, Chequers leaves unanswered a whole series of significant practical and political questions. In policy terms, it fails to resolve at least three fundamental issues. While it agrees that the end objective must be a form of customs union between the UK and the EU, it fails to set out the means by which this can be achieved. The Government's own practical proposals are convoluted, heap new costs onto businesses, rely on untested technologies and are straightforwardly unacceptable to the EU 27.

As both the Welsh and Scottish Governments said at the JMC last week, the policy answer is simple. Let the UK Government say it plainly: 'We are already in a customs union; let’s stay in it.' And rather than pretend that we can have a buccaneering trading policy while staying in the customs union, let’s commit to continued alignment of our trade policy with that of the European Union for the wider benefits that brings.

The second practical problem with Chequers lies in the attempt to separate regulatory alignment between goods, which are to be aligned, and services, which are not. That distinction, of course, strikes at the heart of the four freedoms, which the EU regards as indivisible. But this distinction simply won’t work in the real world. People who buy goods also buy services alongside them. You buy a car and a finance package to fund it. People who sell goods also sell services with them. In the aerospace sector, the servicing of an engine—a service contract—is an integral part of the sales package and is of greater value than the sale of the engine itself.

That distinction, of course, strikes at the heart of the four freedoms, which the EU regards as indivisible. But this distinction simply won’t work in the real world. People who buy goods also buy services alongside them. You buy a car and a finance package to fund it. People who sell goods also sell services with them. In the aerospace sector, the servicing of an engine—a service contract—is an integral part of the sales package and is of greater value than the sale of the engine itself.

And, finally and most intractably of all, Chequers does not yet resolve the Irish border question. This much, at least, is clear, Llywydd: you simply cannot have all three of the things on the UK Government’s wish list at the same time. You cannot have at one and the same time an independent trade policy, no border on the island of Ireland and no border in the Irish sea.

Llywydd, these policy problems are real, but they sometimes pale in comparison to the political challenges which the Chequers White Paper has posed for the Prime Minister. She is trapped between the Scylla and Charybdis of the Conservative Party. Every millimetre she edges towards the ground she needs to occupy to conclude a deal with the EU, she provokes a stream of abuse from the irreconcilables in the European reform group. Every time she makes a hopeless concession to the Europhobic wing of her party, it guarantees that she loses the support of those remainer Tories whose support she needs to get a Chequers-based deal through the House of Commons. Little wonder, then, that so much of her summer has been taken up in a debate about how to resolve a deadlocked House of Commons unwilling and unable to endorse any deal the Prime Minister might conclude.

The Welsh Government’s position was clearly set out by the First Minister in his lecture to the Institute of Government last week. If the UK Government cannot secure a vote in the House of Commons in favour of the deal it has negotiated, then the decision must pass to the people. Our preference as a Government is that this decision is resolved through a general election. If the current House of Commons cannot conclude matters, we need another one which can. If the current rules of Parliament are manipulated to prevent an election, then the case for a second referendum strengthens. Either way, the people must decide. And that decision, Llywydd, will take place against the background of the final great theme of the summer: preparation for a ‘no deal’ Brexit.

Let me say again: for Wales, ‘no deal’ is unthinkable and unworkable. The technical notices published so far demonstrate in starkest possible clarity what a crash-out Brexit would mean for Welsh citizens and businesses, even though some of the most difficult issues are yet to be addressed in those notices. For citizens, for example, it means driving licences that no longer work in Europe, baggage delays at every crossing point, the end of guaranteed surcharge-free mobile phone use in the EU, and passports that cannot be used six months before their expiry date. For Welsh firms, it means new, complex burdens whenever they want to export to the continent. Instead of a single rulebook covering all EU member states, Welsh businesses would have to find and navigate the rules that apply, separately and differently at each border.

There is nothing, Llywydd, in these technical notices that will make life better or easier for Welsh business. They show up instead the disruption and damage to our economy and jobs, which would be the result of the catastrophic failure to reach a negotiated deal with the European Union. In the longer term, such conditions would be a huge disincentive to multinationals with complex supply chains to invest here, and a ‘no deal’ could easily result in many smaller firms that currently export only to the European Union withdrawing from exporting entirely.

Now, Llywydd, because the clock is indeed ticking and because the UK Government is so mired in difficulties of its own making, we have stepped up contingency planning here in Wales over the summer period. We have made allocations from the £50 million EU transition fund, the launch of the Brexit business portal is imminent, we have sent supplementary advice on the technical notices to organisations, and we are in dialogue with the UK Government and partners in Wales on potential civil contingencies implications. I repeat what the First Minister has said so often here: there is no sense in which ‘no deal’ can be reduced to just another point on a Brexit spectrum, where good planning can turn it into a triumph of the fevered imagination of the Brexiteers. Whatever mitigation is possible, however, we will put that in place to respond to the disaster that a 'no deal' represents for Wales.

Finally and briefly, Llywydd, to the detail of the summer period. Ministerial engagement with the UK Government has continued and intensified. More than a dozen formal meetings have been held in London, Cardiff and Edinburgh of the ministerial forum, the Joint Ministerial Committee on European negotiations, and the inter-ministerial group attended by my colleague Lesley Griffiths.

At official level, inter-governmental work on common frameworks intensifies, with one of the first fruits being the announcement that freezing regulations under section 12 of the withdrawal Act will not now be needed at all in respect of funding of agriculture. Our engagement with stakeholders has continued throughout the summer. The European advisory group will meet again on Thursday of this week. Ministers have held face-to-face discussions with key representatives from businesses, higher education, the health service, the rural economy and others to go on ensuring that our approach best reflects the advice we get from those most directly affected by Brexit. The First Minister has opened our new office in Berlin, the latest of a series of new sources of support for Welsh businesses and Welsh public services, as we carry out our determination that Wales will remain open to the world.

Over the summer, we have also continued to publish Brexit policy papers, the most recent being about the financial impact of Brexit, which itself followed a major statement about our approach to the rural economy. And finally, Llywydd, a huge effort continues to identify deficiencies in the current statute book that will need correcting as a result of Brexit, involving hundreds of pieces of legislation.

I am very grateful to the chairs of the External Affairs and Additional Legislation Committee and the Constitutional and Legislative Affairs Committee and to the Assembly Commission for their close engagement with the Government over the summer on the practical arrangements we will need to achieve a coherent and workable statute book for Wales in a way that safeguards the scrutiny role of the National Assembly.

Llywydd, the coming weeks will bring to a head the consequences of the decision taken in the referendum of June 2016. Our future prosperity, security and influence in the world will be indelibly shaped by what takes place. I am grateful for the chance to have provided Members with this update, as our own new term begins.

Can I thank the Cabinet Secretary for the advance copy of his statement that I received this afternoon? But I have to say I'm absolutely none the wiser as to why he's actually made it, because, of course, it has simply been a repetition of the kind of diatribe that we've been used to expecting in recent months, particularly as the election for the leadership of the Labour party moves forward and we get closer to December. I think it's worth reminding everybody in this Chamber, particularly those who are heckling from sedentary positions, that Wales voted to leave the EU and leave the EU is precisely what we must do.

Now, I heard lots of prophecies of doom and gloom from the Cabinet Secretary in his statement: prophecies of doom and gloom around driving licences—driving licences that we can use outside of the EU now without any problems whatsoever; prophecies about problems with baggage delays—well, frankly, we have no problem with baggage delays coming in from outside the EU or going to countries outside of the EU now, so why would there be in the future? Mobile phone surcharges. I know what people are trying to do—it's another round of project fear about this project that the British people and Welsh people specifically voted on at the time of the last referendum. And, of course, we all remember, don't we, the prophecies of doom and gloom about immediate, tragic and serious consequences in the aftermath of the vote that the people of Wales and the rest of the UK took previously—so-called experts telling us that we'd have a collapse of the economy overnight and that we would already be paying a serious price for Brexit, but we've seen absolutely none of it. In fact, the economy is continuing, of course, to grow.

I was very surprised that you made no reference whatsoever, Cabinet Secretary, to the Joint Ministerial Committee meeting that was held last week, which you participated in. If you're going to update—. If you're going to provide an update—[Interruption.] No, he didn't. No, he didn't. I can hear people saying you did. No, you didn't, frankly. So, I think that you ought to, if you're going to bring a statement forward, make sure that it's actually meaningful and that there are things that you're updating us on.

Now, as you know, the mood music in Brussels around the opportunities in terms of a deal have been changing significantly in recent weeks. We're moving closer to an opportunity where a deal is much more likely. Michel Barnier and many others are confirming that we are now close to a deal. You made no reference to that in any way, shape or form whatsoever. The EU, of course, has been talking up the opportunities to put in place technological solutions around the UK border between the UK and the EU, including between Northern Ireland and Ireland. They've been talking these opportunities up, so quite why you're having to rehearse the old arguments and trying to belt out your greatest hits of doom and gloom, I really do not know.

Now, we also know—we also know—that it's in the interests of the EU to do a deal with the United Kingdom. The International Monetary Fund has warned the EU that, unless they do a deal with us, 0.7 per cent of the EU workforce could be put at risk and that economic growth across the remaining EU states could be affected by up to 1.5 per cent, with, of course, Ireland being the hardest hit.

That's why, on these benches, we will continue to support the UK Prime Minister as she seeks to get the best possible deal for Britain through the pragmatic approach that she has taken in setting out her stall with the Chequers agreement. That's the one that she and her team are pursuing, and, frankly, it's about time you got on board and started playing team UK, rather than trying to cause problems and to frustrate the will of the Welsh people. It's only a deal like the Chequers agreement that will continue to allow us to trade with the EU in as frictionless a way as possible while still having the opportunity to do bilateral trade agreements.

So, can I ask you, amidst all your doom and gloom, what on earth are you doing to prepare for the opportunities that Brexit presents for Wales and the Welsh economy? Why is it that we've heard nothing about the preparations that you're making to change the procurement processes to support small and medium-sized firms, which currently can't get a look-in, very often, in terms of public procurement processes? Why is it that you aren't talking up the opportunities for Wales in terms of the potential new trade deals that might be done in other parts of the world outside of the EU?

Now, to be fair to the Welsh Government, I've seen that you've been ramping up the ability of the Welsh Government offices in different parts of the world to be able to engage in those trade discussions, and I think that that's a very positive thing. You didn't speak about it specifically in your statement, because you wanted to concentrate on doom and gloom and everything that might possibly go wrong. However, I would be grateful if you could tell us what's the size of that workforce at the moment. In what ways are they currently involved in discussions with the Department for International Trade?

Can you also tell us—? You've got this £50 million transition fund. I would be grateful to know where you're intending to spend the rest of that money. You've only announced a very small slither of it to date, and I would be interested to know, and I'm sure the people of Wales would be interested to know, where else you're going to spend that in order that we can maximise these opportunities. So, instead of the doom and gloom, why can't we have someone who's more optimistic about the future, particularly given that you're wanting to become First Minister of this nation in the future?

Well, Llywydd, diolch yn fawr. The Member began by saying that he was no better informed about Brexit, and I think the rest of his contribution allowed us to see how true he was in how he opened. [Laughter.] It will come, I am sure, as good news to people in Wales that, when their driving licences don't work in the European Union, the Conservative Party doesn't mind, that, when they're left waiting, as they will be—. These are not my ideas, by the way; these are the documents published by your Government. That's what their documents last week said. They said, if there is no deal, your driving licence will not work. They said, if there is no deal, you will queue every time you cross a border in the European Union, where you do not queue today. They said that while now you are guaranteed to have no roaming charges, by legislation of the European Union you will not have that protection in the future. But we've heard this afternoon that that really will not matter.

The Member said that there had been no impact from Brexit on the UK economy so far. The UK economy is 2 per cent smaller, Llywydd, than it would have been had we not made the decision to leave the European Union. That costs every household in Wales £900. That's the impact already. It is nonsensical to say that the decision has been cost-free in economic terms, and, again, that is the advice that the UK Government publishes through the Chancellor of the Exchequer.

Now, the Member said that I hadn't mentioned the JMC that took place last week. In fact, it dealt with exactly the three issues that were covered in my statement. We talked about the deal that the Prime Minister wishes to take as a result of Chequers and the barriers that exist to successful delivery of it, we talked about preparations for 'no deal', and we talked about the legislative impact of leaving the European Union on the House of Commons, on the Scottish Parliament, on the National Assembly for Wales, and how we can work together to try to mitigate that impact. I'm certain that the Prime Minister of the United Kingdom will be very grateful for the fraction of the Conservative Party's support that she enjoys here in the National Assembly. It will come as a welcome change to her, no doubt, from the difficulties she faces on her own benches.

The Member asked me a small number of questions at the end. On procurement, he will know that I announced a review of our procurement policies last year precisely in order to take account of the impact of Brexit. I issued a number of written statements on progress in that review over the summer period, and we will look to see where there may be some opportunities that we can take in Wales to realign our procurement policies in the post-Brexit world.

The Member asked me how many members of the European transition team we now have working in the UK Government—in the Welsh Government, rather. There are 30 members of staff currently employed on those matters. The First Minister referred to the nearly 200 additional members of staff we will need to take on to work on these things, particularly in the field of agriculture and environment.

In relation to the EU transition fund, we have made one tranche of allocations already. A second tranche of allocations will be made very shortly indeed. It will reflect the same broad pattern. There will be allocations that will directly support the rural economy, there will be allocations that will directly support preparation by businesses in Wales, we will find additional help for the higher education sector, and we will invest in the capacity of our third sector to be prepared for the impact of Brexit on the work that they do.

I thank the Cabinet Secretary for his statement today and for updating the Assembly, but, despite the flurry of apparent activity over the summer in relation to our separation from the EU, we are no closer to answers to fundamental questions—questions so fundamental that they range from the future of an international peace treaty to food security. What is becoming very clear, however, is that we are being held hostage by a bunch of ideological separatists in Westminster. 

In terms of the specifics of his statement today, can the Cabinet Secretary clarify a few points—specifically the points he has made about the customs union or a customs union? He has stated in his statement that we should stay in—. Well, I believe he is saying that we should stay in the customs union. The text I have in front of me says that we should stay in a customs union. Is he able to clarify whether he wants to stay in the customs union or whether he wants to negotiate a new customs union?

That is linked to my second question, which is on the point he raises on the need for a UK general election in the event of the Prime Minister failing to get a deal on separation through the Westminster Parliament. Presumably, the Cabinet Secretary would want the outcome of that general election to be a majority Labour Government, but, if that is the outcome, then we will definitely be leaving the customs union and we will definitely be leaving the single market. So, I wonder if he can clarify why it is tactically in the interests of the people of Wales, and even the Welsh Government, for there to be a majority Labour Government taking us out of the customs union and the single market. How can he reconcile those apparently contradictory positions?

The other point I'd like to raise is the question—and I think this is something that is coming to a head; it will, certainly, in the coming weeks—of the border in Ireland. Given the impossibility—. Regardless of the utterances of the spokesperson for the Conservative group today, given the impossibility of having an open border on the island of Ireland as there is now if one part of Ireland is outside the customs union, is it not more likely that we will see therefore a hard border in the Irish sea, in which case, what mitigating steps—? Well, I say 'mitigating'; there are no mitigating steps there. What steps is the Welsh Government taking to avoid that outcome, that Northern Ireland—? The fallback position is that Northern Ireland will remain in the single market and customs union in order to maintain the Belfast agreement, and that means a hard border in the Irish sea, which would be a disaster for communities in Wales.

The other questions I'd like to ask relate to contingency planning on behalf of Welsh Government. I of course welcome the Brexit business portal—of course a Plaid Cymru policy and suggestion made quite soon after the referendum. Indeed, it's a great regret that the Brexit business portal couldn't have been introduced sooner, but I wonder—. I know he is going to formally announce and launch this soon, but can he tell us when he will be launching the Brexit business portal and how businesses will be able to engage in it? I think we would find it also very useful as Members of this Assembly if the Cabinet Secretary were in a position to publish, maybe in the Assembly Library, a comprehensive list of contingency plans that the Welsh Government is undertaking. He said in his statement that they have been enhanced during the summer period. I think a list, perhaps along the lines of the format of the UK Government publishing its papers in the event of a 'no deal'. We could have a similar system in Wales, where Welsh Government is publishing more detailed information on contingency planning, not just for no deal, but for a possible deal as well.

One aspect that I think is missing from the statement today is the question of contingency planning in the Welsh NHS. I have raised this on a couple of occasions because, of course, this is a very complicated situation, because we have drug control that is, of course, not devolved, but, of course, you can't run a national health service that is devolved without drugs and without treatments. I declare an interest as somebody who's currently benefiting from treatment on the national health service. And the treatment that I personally received through chemotherapy—I understand that those drugs at the moment come via Munich, are distributed across the European Union via Munich, and are sourced from around the world. Now, that's a very—. And this is something I would urge people to think seriously about. When people are flirting with the idea of no deal, a 'no deal' Brexit, that means no deal on cancer drugs that people in this country rely upon. This is not playing political games or political football—that's a serious issue. If we don't have a deal on the future of cancer drugs that make up the composition of chemotherapy, cancer patients in this country are going to suffer, and that is not something I think anybody in this Chamber wants. So, can I ask the Welsh Government what discussions are ongoing with the UK Government, who hold control over drug control, with Welsh Government, who are, of course, responsible for the Welsh NHS and for future drugs and treatments?

Finally, it would be amiss for a Plaid Cymru spokesperson not to raise constitutional matters, particularly when we have an opportunity to do so on the issue of separation from the European Union. I note, in his references to meetings of the JMC and the ministerial forum, that it continues to be the case—and we saw it yesterday in evidence given by the First Minister to the External Affairs and Additional Legislation Committee—I think, that Wales is treated as little more than a consultee rather than as a partner nation in the so-called United Kingdom. We have seen in this whole process that the United Kingdom is constitutionally flawed. Some of us believe that it's been constitutionally flawed since 1707, but this process has certainly underlined that. With developments in other parts of the UK—the prospect of a united Ireland, the prospect of a second referendum on independence in Scotland—what contingency planning is the Welsh Government undertaking at the moment for the very real, I suggest, possibility of there not being a United Kingdom at all at the end of this process?

Llywydd, can I thank the Member for his questions and say how good it is to be having today's opportunity to pick up conversations held with him earlier in the year? He began with a reference that echoes something that the director of the CBI, Carolyn Fairbairn, said recently when she described those who advocate a hard Brexit as the triumph of ideology over evidence, and I think he made that point very well in the outset. I'm not going to quarrel with him today over the difference between a definite or an indefinite article. If the text said 'a', then that's what I ought to have read out, so he can assume that the written word is more reliable than my rapid reading in the Chamber this afternoon. In a general election, of course, I hope there will be a majority Labour Government, and that would bring with it a whole series of advantages for Wales, including a sane approach to Brexit, but going much further than that, of course.

He makes a very important point on the Irish border. The Prime Minister herself said that it would be unthinkable for any Prime Minister to agree to a hard border in the Irish sea, and that is one of the things that she now has to deliver in finding a solution to the Irish border question. And from a Welsh perspective, while we say every time—and I'll say it again this afternoon—that nothing that we will say or do will ever be done in the knowledge that we are creating any difficulties for the very important ground that has been gained in Ireland in recent years, from a Welsh perspective, we are, nevertheless, entitled to point to the additional difficulties that we would face were the border to be down the Irish sea, because of the ports of Holyhead, Fishguard and Pembroke Dock and so on, and we make that point to the UK Government whenever we have a chance to do so. 

The Member mentioned the Brexit portal and it was, indeed, part of the two-year budget agreement between the Welsh Government and Plaid Cymru. It has been taken forward by a sub-group of the council for economic development because we were very keen that the portal would provide for businesses the things that businesses themselves tell us that they are most in need of when it comes to information and advice. And the portal will indeed provide the most up-to-date information that we can and provide advice on a range of relevant business topics. It has been difficult to settle on the content of the portal because of the significant uncertainty about the final form of Brexit and the implications that that has for Wales, but we're imminently hoping to be able to publish it. I'll think about what the Member said about us putting it in the library—the supplementary advice that we have provided over and above the technical notices when there are Welsh specific issues at stake.

Of course, he made a series of very important points about what a 'no deal' would mean, not just in some theoretical sense, but in the absolute day-in-day-out services that people in Wales rely upon. I can assure him that my colleague the Cabinet Secretary for health is discussing these matters very, very regularly with the advisers that he has in the pharmaceutical field, with the local health boards that provide services on the ground and with the NHS Confederation in Wales in relation to staffing matters, and we take a very close, direct and detailed interest in the way that Brexit could impact on the Welsh NHS. 

Briefly, in relation to constitutional matters, what we have to do, Llywydd, is we have to move on from a grace-and-favour approach to devolution, which too often characterises the attitude of Ministers in the UK Government, where they appear to regard devolution as something that they have been good enough to give to people in Wales and in Scotland, and that they could take away again at any point when they appear not to like what we do with the responsibilities that we have. We have to have, the other side of Brexit, a far more formal, a far more reliable and a far more impartial form of interaction between the constituent parts of the United Kingdom. Of course, I don't follow the Member down his path of the break-up of the United Kingdom—we think that a successful future for Wales is best secured through a successful future for the United Kingdom. But we will not have that successful future unless, the other side of Brexit, we are able to conduct business between the constituent parts of the United Kingdom in a way that is based on parity of participation and parity of esteem.

I welcome the statement from the Cabinet Secretary in some respects, and I can certainly agree with his evisceration of the Chequers agreement and its internal contradictions. It's quite clear that this is a political exercise not to seek the best outcome for the United Kingdom but to try to paper over the cracks of the warring factions within the Conservative Party, and the dog's breakfast that has emerged from this process in the Chequers agreement just shows what happens when you conduct a negotiation through people who don't really believe in what they're doing. The majority of Conservative MPs voted for remain, an even bigger majority of Members of the Cabinet were remainers. We have a collection of people who fundamentally don't really want to leave the EU, and the Chequers agreement is designed to achieve that particular objective. We will remain in the EU in all but name. So, I'm surprised, in many ways, that other parties aren't more cheerful about it, because it actually delivers for them what they want.

Steffan Lewis, in the course of his contribution this afternoon, talked about the country being held hostage, Wales being held hostage, by irreconcilable ideologues at Westminster. Actually, the people who are holding us all in the United Kingdom hostage in this process is the European Commission and their mouthpiece Monsieur Barnier. Nobody can promise an agreement because of course we can't control the reaction of the European Union to British proposals. So, the First Minister was quite wrong when he said earlier on that we all confidently promised a deal from the EU; I certainly didn't promise confidently any deal with the EU, knowing that actually we're speaking different languages in political terms. We've been talking the language of economics, the European Union negotiators were actually talking the language of politics. For them, the fundamental necessity is to maintain the political project of moving to greater unity politically, and that is one of the main reasons why I have always been opposed to Britain's membership of the EU. I do not want to be part of a federal superstate in the EU, and that is what the permanent bureaucracy of the European Union is determined to achieve. So, this negotiation was always doomed to fail if they had the upper hand, and the British Government's weakness in this regard has actually given them an even greater advantage than they enjoyed naturally.

The Cabinet Secretary very quickly lapsed from that analysis, in which I can agree with him, into his usual jeremiad. I always enjoy his classical illusions, although I wonder how many secondary school children today would understand who Scylla and Charybdis were. Sadly, I don't suppose they even know who the prophet Jeremiah was either. But if ever there's an updated version of the Book of Lamentations, I can think of nobody better to write it than the Cabinet Secretary himself. As Darren Millar pointed out in his contribution, the extravagant claims of project fear go beyond absurdity. The idea that we won't be able to use our passports or that aircraft will not be able to fly over European air space or land at European airports—and, of course, that the reverse would perhaps be true in those circumstances—I think is so ridiculous that we don't need to spend much time on that. I didn't regard it as a refutation of what Darren Millar said that it's in his own Government's documents, because the Government itself is actually part of project fear in this respect, because that helps them to achieve their political objectives as well.

We've heard from Monsieur Barnier himself in the last 48 hours that a solution to the Northern Irish problem is easily available. He doesn't say so directly, but what he did say just two days ago in relation to solving the problem of east-west trade from Ireland, which is equally applicable to north-south trading, is that whether technology could help east-west trade is a different question from north-south. His aim is to make checks as simple and dedramatised as possible, but that's a matter for the negotiating teams. Of course, he heads the negotiating teams, so he is actually working towards a solution that can easily be found. There's no reason to think that that wouldn't be available for north-south trade as well. After all, only about 1 per cent of Irish trade is conducted north-south, and there are well established mechanisms in other jurisdictions throughout the world that could make that as undramatic as possible—automatic customs clearing, electronic border checks and occasional physical checks away from the border areas. So, if there's a will there's a way, and that can easily be achieved. Ireland is actually being used a bargaining chip by the EU, as a means not only of undermining our negotiating position in this Brexit negotiation but also as a means of trying to break up the United Kingdom and, in particular, to create political unity in Ireland, which would, clearly, be a disastrous effect of the Brexit process. But, they're the ones playing with fire, not us. My solution to that would be to say, 'If you want border checks on the Irish border, you put them up'. Let's put the ball back into their court, and let's see what happens then. We could unilaterally decide to have no border and let them cope with the consequences.

The Cabinet Secretary, in the course of his statement, said that he couldn't see any advantages from a 'no deal' Brexit. It's inevitable that there would be costs of a 'no deal' Brexit—nobody's ever denied that there would be transitional costs of leaving the EU, in the same way as there were significant transitional costs of joining it in the first place. But the protectionist policies of the EU bear down most heavily upon those at the lower end of the income scale in this country, from a protectionist agricultural policy where tariffs are as high as 50 per cent on the one hand, to taxes on footwear and clothing, and even, through the VAT code, on things like sanitary products and many others that we've frequently referred to in the course of this debate. We will have the freedom, once we're out of the EU, to make our decisions for ourselves in all of these areas, and to get rid of the regressive elements in the trade and tax codes that the EU has forced upon us. I've no fear of the trade consequences of leaving the EU for the longer term.

He referred, as the First Minister did earlier on today—[Interruption.] I've asked several questions up until now and I'll ask a few more as well in the short time that remains to me. It's the EU that will be fundamentally the loser from cutting off trade flows or restricting trade flows, because we have a massive trade deficit with them. Eighty-eight per cent of the cars that are registered in Britain every year actually originate from the EU. We have a trade deficit in cars amounting to millions with Germany alone. Admittedly, there will be problems for certain agricultural sectors if there is no deal, particularly, as we know, for lamb producers, but the sums of money involved here in global terms are small, and can easily be dealt with by a Government that has the will to put in place a system that protects the interests of those who would be disadvantaged. After all, the figures are that we import from abroad £0.4 billion worth of lamb, and we export £0.3 billion, so there was a deficit on imports of lamb. There's massive opportunity for import substitution for British farmers generally if the EU is so stupid as to try to force us into a position where there is no deal, to which they are actually legally committed to find a way to achieve through the Lisbon treaty itself. So, they would be breaking their own laws if they were to carry on the road that they are on.

So, what I ask the Cabinet Secretary to do, with no confidence whatsoever that he'll take my advice, is to become a bit more cheerful and optimistic about the future. Whatever the short-term costs, the long-term gains in democracy for the British people are what this is all about. Why should we want to outsource the making of our laws to a collection of international technocrats who not only do we not elect and cannot dismiss, but we can't even name? This is the very reverse, I think, of what the Labour Party was set up to achieve—to use the forces of parliamentary democracy to benefit working people in this country. The idea that the sort of people who are in international business organisations, like Carolyn Fairbairn, representing the Confederation of British Industry, a body that has been absolutely wrong on every major issue economically in my lifetime, from incomes policy to the European monetary system—the idea that their advice is worth taking seems to me to be bizarre for a Corbynite. Perhaps these contradictions will be explained in another forum.

So, the last question I want to ask the Cabinet Secretary relates to the possibility of a second referendum, because it's quite clear now that the direction that the Labour Party is going in is actually to have a second referendum. Because, whatever deal is done, or if no deal is done, they hope that the British people will take a different decision next time from the one that they took last time. But how many times do we have to have a vote on this issue? They spent 40 years denying us one—since 1975. If we have a second referendum, the British people must be forced to keep on voting until they provide the Labour Party with the result that they want. If we have a second referendum, why not a third, why not a fourth, why don't we make it an annual event like Christmas, because then we will have something to look forward to as politicians every year, something to keep us all in business? So, where does it end? That's what I ask. The British people decided, including the Welsh people, by a majority—they rejected the policies of Plaid Cymru, they rejected the policies of the Labour Party, in the referendum in May 2016. And, therefore, will the Cabinet Secretary not take the votes of the Welsh people, and the British people, at face value, and give them what they want, which is freedom from the EU?

Well, Llywydd, I think I heard two questions in that. The first question was: why don't I cheer up? And I hope I set out for you all the reasons why a sensible person will not be approaching this autumn in a spirit of empty optimism.

The second question was about a second referendum. I've said plainly that my own belief is that, if you have a deadlocked House of Commons, you need a new House of Commons, through a general election. As I understand it, to talk of a second referendum is not about reversing the first referendum, although I think we can speculate—and it would not be unfair of us to speculate—that, had the Member found himself on the losing side of the last referendum, by a very narrow majority, he would not be sitting there, saying, 'Oh, well, the British people have spoken, I will never ask that question again.' But, of course, it's apparently impossible for people on the other side to ask the same question again. The question of a second referendum is not on whether to leave the European Union—it's whether the terms of the deal negotiated are satisfactory to people. I think that's a different question, and I think it's not improper for people to think that that is the right way to ask people, as to whether or not, having decided to leave the European Union—is this what you thought it would mean and is this what you thought you were voting for? That's not an unfair question to ask people. If I buy a vacuum cleaner in a shop today, I have 28 days to take it back to the shop if it doesn't do the job that I thought it was going to do when I bought it. And if I can do that for a vacuum cleaner, then asking people, 'Having made the decision to leave the European Union, is this particular deal what you think you were voting for?'—I don't think it's right simply just to dismiss that.

In amongst everything else, Llywydd, I think you hear two or three of the emerging narratives of those people who tried to persuade people in the United Kingdom to leave the European Union. When it all goes as badly wrong as some of us fear that it might, the accusations will be of betrayal at home and intransigence abroad. Everything would have been fine if it wasn't for the fact that those people in charge of it—David Davis, Boris Johnson, those well-known people, determined to stay in the European Union—. If it hadn't been for them, everything would have been fine. And if it isn't for them, it's all the fault of foreigners. We heard that emerging clear as you like this afternoon. Then we hear, on the one hand, of course it will be fine anyway. Apparently, driving licences will work, although we're told they won't if we have a no-Brexit. I wonder if the Member had spotted today, in his talk of German car manufacturers, that BMW has said that it will shut its main British manufacturing factory for several weeks immediately after 29 March next year. It's a decision they've already taken, because they fear that the channel tunnel will be blocked for two weeks—that they will not be able to move parts from one part of the European Union to another. Far from German car manufacturers being in favour of new free trade deals with the United Kingdom, they are taking steps now to deal with the consequences of the course of action that he and his party have advocated.

And then we hear, if it's not going to be fine straight away, then don't worry—in the longer run, it will all be fine. Well, I wonder whether people who heard messages during the referendum campaign, and saw busses going up and down their streets with large sums of money advertised on the side of them, realised that this wasn't going to happen as a result of leaving the European Union—it was as a result of of some long-distant future when a period of immiseration had been survived and everything would be fine for those who were left. Really, it doesn't stack up. The Member knows it doesn't stack up, but he makes his normal attempt to persuade us of it this afternoon. 

Cabinet Secretary, you'll have heard Frances O'Grady, general secretary of the Wales TUC, recently. She said: 

'I warned the prime minister that if her deal doesn’t protect jobs, rights at work and peace in Northern Ireland, the TUC will throw our weight behind the call for a vote on the terms of Brexit. We’re all trade unionists—when we do a deal, we go back to the members to get their approval. So whether it’s through a general election or a popular vote, Mrs May must put her Brexit deal back to the people so they can decide whether it’s good enough.'

Now, it seems to me, Cabinet Secretary, that is something that sounds and is very reasonable. I wonder whether you agree with that.

In terms of your statement, one further point is this: we've been hearing a lot about shared prosperity before the summer. There doesn't seem to be any talk of shared prosperity in the various discussions that have taken place. Now, we know that the Tories, when they talk about shared prosperity—the only prosperity they've ever shared is prosperity amongst themselves and those who support them. But I wonder, is there any prospect of any shared prosperity whatsoever heading its way towards Wales, as was promised before the referendum? 

Well, Llywydd, let me say at the beginning: I hope there will be a deal. I hope the Prime Minister will negotiate a deal that delivers what she says she wants to deliver and that she can bring it back and that she can persuade the House of Commons to support it. What Frances O'Grady was referring to, and what I've referred to this afternoon, is what happens if she can't do such a deal—and then the things that the TUC have said that were very largely reflected in what I've said this afternoon—in those circumstances, then it is right that people should have a chance to decide. 

On the shared prosperity issue, let's be clear: Wales benefits from our membership of the European Union to the tune of some £660 million a year. We qualify for that money by the rules, we get money because we have needs that need to be met and we get funding from the European Union to help us to do that. Those needs will not have disappeared the day after Brexit and the funding must therefore flow to Wales to allow us to continue to deal with the issues that have been identified here.

If the Conservative Party think that a shared prosperity fund is about taking money that comes to Wales today and sharing it out to other people, so that we are worse off as a result of our membership of the United Kingdom than we have been as a result of our membership of the European Union, then they are on a very foolish path indeed, and I make that point whenever I have the opportunity. 

Cabinet Secretary, thank you for your statement this afternoon. I had hoped to speak a bit longer but I think the 10 minutes taken up has damaged a lot of our opportunities.

Can I highlight also a couple of points of thinking? I think Steffan Lewis made a very clear argument and nothing could be more stark than what he said about the implications of a 'no deal' Brexit. I wish that the officials in Westminster and Whitehall would listen to that type of argument when they produce these technical papers, because technical papers, to be blunt, are very light on any solutions to the problems they've identified, and they're the only ones we've seen to date.

But can I ask you a couple of questions in relation to that? Obviously, 'no deal' is very much on the agenda now and we risk getting closer and closer to a point in time at which we have to either agree a deal or we end up automatically, by default, in a 'no deal' situation. You've had these technical papers from the UK Government: have you had a chance to ask your officials to look at those, particularly the ones produced perhaps on 28 August, which are the earlier ones—I know some were produced last week and there are more to come—to look at the implications for Wales and how Wales can tackle the issues and maybe respond with positive outcomes based upon what 'no deal' scenarios are likely, so we are prepared for that?

Can I also ask that perhaps—you mentioned in your statement how, I think, a dozen-plus meetings have been held, but they're not just the ministerial forum and not just the JMC(EN); they also have other ministerial meetings. Have you got a situation where we now have cross-portfolio look at all these things, so we can put them together? Very often, we get governments working in silos. It's a situation where we need to have a cross-portfolio picture as to what's happening for Welsh Government to ensure that what's been said in one forum is being replicated in another forum and so we have consistency in those discussion. 

Now, I will agree with Darren Millar in one sense, and I welcome him to his new role as spokesperson on this, and my sense would be that you had limited discussions of the JMC(EN) in your statement from last Thursday. Does this reflect the fact that there's very little going on in the JMC(EN). We have, in the past, commented upon how effective it is. Is it really effective? Did you have any detailed and successful discussions last Thursday or are we back to the world where JMC(EN) is actually producing nothing, we're not getting any further and we're only six to eight weeks away from a position where negotiations will be ending? 

Again, on the 'no deal' scenario, we're talking about frameworks—the officials are talking about frameworks. Are they actually looking at the situation of what happens if you have a 'no deal'? How are the frameworks going to progress? What will happen on 30 March 2019 if there is no deal with regard to those common frameworks?

And you haven't commented in your statement, perhaps, on the actions the Welsh Government is taking with the regions? I recognise the difficulties we have, sometimes, not being the member state in those discussions, but we are discussing with the regions our future relationships. Could you comment upon the future relationships Wales is having with other regions so we can see where we're going in that direction in the situation where we do leave?

Perhaps, finally, we can talk about where we are—Mick Antoniw mentioned the shared prosperity fund. I think that's a fantasy world at this moment. We haven't seen anything on it yet. But what actions are you putting into place to ensure that the regional policy and the regional funding—the First Minister mentioned that you'll be talking about that later—. Where are we with the regional funding to ensure that our regional policy and our regional funding can deliver for Wales? Because we are going to be losing that, as of Brexit, and we would have had transition funding, there's no doubt about that, in the next tranche. So, where are we on that matter?

I thank the Member for those questions. Much of what I have said this afternoon has been critical of the UK Government, and rightly so. So, let me try and make a small number of more positive points, and first of all to say that, with the technical notices, Welsh Government officials did have an opportunity to read and comment on those notices during the period of preparation. So, we didn't simply see them on the day that they were published. We were able to make sure that they were accurate from a Welsh perspective, and therefore we have had a greater level of involvement in their preparation than we have in some other examples of European Union negotiation matters.

As far as the JMC last week is concerned, I did spend the bulk of what I had to say reflecting the agenda of that meeting, because it dealt separately with developments in relation to the proposed deal for the Chequers White Paper. We had a discussion with the new Secretary of State at the Brexit department about the many meetings that he had held over the summer with the EU on that matter. We had a substantive discussion in relation to preparation for a 'no deal' and the technical notices and other preparations that the UK Government is conducting, and we had an opportunity to review the progress made in relation to framework discussions.

Does the forum provide a proper place where there is genuine engagement on a sense of parity participation? No, it doesn't, and I've said that this afternoon—it has to be reformed and improved—but was it a worthwhile encounter? Yes, it was, because it allowed me as the Welsh Government representative, and indeed my Scottish colleague Mike Russell, to make a series of important points representing the interests of our nations, and it was worth while from that point of view. And it is the first of a series of JMCs that are now timetabled through the autumn, and that's an improvement as well, where we have a series of agreed dates in advance that allow us to be more involved in prior preparation for those meetings. So, they are by no means perfect but they remain a place where we take every opportunity to advance Welsh interests.

Thanks to David Rees for pointing out an area that I wasn't able to cover in the statement, and that is the continuing work that we are doing to identify those regions in the European Union with whom we will want to have particular relationships the other side of the European Union. I was lucky enough to be able to welcome a delegation here from the Basque Country, returning visits that I had made and that Lesley Griffiths had made. The President of the Basque Country was here earlier in the summer, and that's a very important region for the future of us in Wales. The First Minister has visited a number of other regions over the summer period—part of that ongoing programme.

In relation to regional policy, let me underline a point that the First Minister made earlier, because I think sometimes the importance of it isn't emphasised enough. When we, as a Welsh Government, say that provided money comes to us through whatever mechanism is agreed for the purposes that European funding is used today, we are providing a guarantee, in advance, of two things. First of all, the money will be kept for those purposes. It will not simply just become absorbed in the wider Welsh Government budget. We get money for rural Wales, we get money for the reform of our economy. The money will be kept for those purposes, and we don't say that about other money that comes to the Welsh Government. We always say, quite rightly, that it comes through Barnett, but it goes into the pot and we decide. And we are prepared to offer a multi-annual guarantee. In other words, because the European Union money comes with seven years' worth of guarantee and allows people to plan ahead for their futures, we would provide the same guarantee here in Wales for money that came for those purposes from the UK Government. Neither of those things do we say in other contexts. The First Minister repeated some of that here this afternoon, and I'll be reflecting that, I hope, in a statement that I hope to be able to make in the next few weeks here on the floor of the Assembly on the future of regional policy.

I was pleased to hear Steffan Lewis, in his remarks, mention food security as one of the major issues that we need to consider in the possibility of a 'no deal' with the European Union situation because I, like you, would hope that Mrs May can come up with a deal that we can all sign up to, but the Parliamentary arithmetic in Westminster makes it very difficult to see how that's going to happen.

So, just going back to food security, I've had a quick look at the technical notices that the UK Government has issued about the implications for fruit and vegetables that we currently import, in the vast majority, from the European Union. I can find quite a lot about how I could import a ferret, but not very much on fruit and veg. I can import 2 kg of fruit and veg from outside the EU. Now, presumably, that would apply to all countries that are in the EU if we have a hard crash out of Brexit. There's nothing about what I really want to understand, which is the implication for the wholesalers, the retailers who currently supply the high street to enable us all to have the food we need on a daily basis, particularly the perishables. So, Cabinet Secretary, you may have had longer to look at these technical notices, and I wondered if you can tell us what they say about this matter and what we can do to mitigate some of the worst effects, i.e. planting now for spring crops, possibly using the LEADER programme within the EU programme, or other money that might be made available, to encourage citizens and companies, businesses, to start growing more fruit and veg now. 

Llywydd, I thank the Member for those very important points. The real way to mitigate the disasters that she points to is to have a deal that we can all sign up to as we leave the European Union. I think it was the former governor of the Bank of England, Mervyn King, only a couple of weeks ago, who pointed to the utter absurdity of the sixth richest nation on the face of the globe having to prepare for a situation where we have to stockpile food and medicines as though we were about to enter some sort of wartime period. He was ridiculing the idea that we have manoeuvred ourselves into that sort of position, and this by a man who advocated that we ought to leave the European Union. So, the real way of mitigating the difficulties that the Member points to is not to find ourselves in the position of a 'no deal' with all the difficulties that she describes.

I think she has probably looked in vain for advice from the UK Government on this matter because, from memory—and I will check it to make sure that I've got this right—this is one of the areas that is yet to be addressed in the technical notices. There are a series of other matters, many of them pointing to even greater areas of difficulty, I believe, on which the UK Government is yet to provide advice to businesses or to the public as to how those matters will be navigated on a 'no deal' footing, and I think the reason we haven't seen some of those things is because, in those areas, the messages will be even starker than those pointed to by Steffan Lewis earlier.

Finally, Jane Hutt.

Thank you for your statement, finance Secretary. As you know, I've consistently raised my concerns about the impact of Brexit on workers' rights and equality in terms of EU law, and backed the positive role of structural funds to widen equality of opportunity in the labour market, exemplified, for example, in your recent announcement of £17 million for young people in south-east Wales to help unlock their career potential. 

I've been studying the technical notices—very brief, they are, I have to say—in the event of a 'no deal'. The guidance on workplace rights if there is a Brexit 'no deal' reminds us of the range of EU law that has benefited workers' rights, including: working time regulations; family leave entitlement including maternity and paternity leave; legislation to prevent and remedy discrimination based on age, sex, disability, sexual orientation, religion or belief, race or ethnic origin in the workplace; legislation to protect part-time and young workers, and much more. The technical notice says that the UK Government will continue to work with the devolved administrations to ensure that workers' rights continue to operate across the UK. Again, can you confirm that this engagement is taking place and provide any reassurances on these rights and protections in the event of a 'no deal' outcome?

Reassurance is also needed in relation to the European social fund grants in the event of a 'no deal'. Again, the technical notice states that, 

'In the unlikely event of a no deal scenario, the UK’s departure from the EU would mean UK organisations would be unable to access EU funding for European Social Fund projects after exit day',

March 2019. Have you secured a guarantee from the UK Government that there will be no gap in funding for regional growth, and that EU projects would be guaranteed, including the European social fund, in the event of a 'no deal'?

Finally, I do want to ask a question about the £50 million EU transition fund provided by the Welsh Government. It was mentioned in scrutiny of the First Minister yesterday in the external affairs committee. Can you confirm that the consequential from the UK Government will not be enough to fund all the activity related to Brexit that we need to undertake, so we're having to meet these needs in terms of transition preparation out of a very constrained budget as a result of austerity and the UK Government is not providing the funds that we need in terms of that transition?

Thank you, Llywydd. I'll take the final question first. The Member is absolutely right: the £50 million EU transition fund is not simply a pass-on to Wales of money that comes from the UK Government in this regard; we are having to provide money from existing sources in our capital and revenue budgets. We do so willingly because the need is urgent. We are using money that comes from the UK Government, but that is certainly not the whole of it; money is being used from elsewhere in the Welsh Government because we know that the need to prepare for Brexit spans all of our public services and is of real importance to jobs and prosperity.

As far as the future of structural funds is concerned, I welcomed the Chancellor's original guarantee when he provided some assurances in the immediate aftermath of the referendum about structural funds, and I've welcomed his further decision to guarantee structural funds for the whole of this period. That has helped to give certainty to current participants and has given confidence that we will be able to make the best possible use of funds in the current round. It's what lies beyond the current round, in the way that Mick Antoniw asked about the shared prosperity fund where we now need—and urgently need, as time goes by—equal clarity that the money that Wales has enjoyed in the current round will be available to us for those purposes beyond Brexit.

Finally, on the question of workers' rights, of consumers' rights, of citizenship rights and of human rights—all those things that we have gained as a result of our membership of the European Union—the problem here, Llywydd, is this, isn't it: Mrs May says to us that in the event of a 'no deal', all those rights would be guaranteed, but if there is no deal, there will be no Mrs May, and the problem then is that the promises that she has provided will fall to those people on her backbenches who have promoted 'no deal' to deliver. Do we believe that they share those same beliefs? Do we think that a Boris Johnson-led Government would be equally committed to securing the rights that British workers and British citizens have enjoyed through the European Union? Well, of course not; of course we could not have that confidence. When Mrs May says so, I'm prepared to believe her. She said from the beginning that those rights would be guaranteed, and it is perfectly possible to pick those rights up and drop them into UK law so they go on being observed here instead of through EU law. But in the event of a 'no deal', the people making those promises are very unlikely indeed still to be in charge, and that's the danger that is posed for workers and others here in Wales.

I thank the Cabinet Secretary.