5. Will the First Minister provide an update on discussions with the UK Government regarding the shared prosperity fund? OAQ52934

I think it's fair to say that it's fairly vague at the moment, and fairly incoherent in terms of how it might operate or how much money might be available. I raised it, certainly, last week with David Lidington. It's not clear how it would work, how much money would be available and, of course, how it would work in terms of meshing with the devolved settlement. We simply have to wait and see.

I thank the First Minister for that response, and I'm aware that there have been pre-consultation meetings taking place in Wales, and the most recent one, I think, was last Friday, with representatives of the third sector. So, I don't know if the First Minister has got any feedback from those meetings, but doesn't he agree that it is absolutely crucial that the future of regional policy lies in the hands of the Welsh Government, and that the focus should be on tackling inequality as a means of improving prosperity and productivity?

Absolutely, because that is a devolved responsibility. It would be wholly inappropriate for a shared prosperity fund to be administered entirely from Whitehall, bypassing the Government and the Assembly completely. That would cut across what the UK Government has said about devolved responsibilities in a very serious way.

There was indeed a stakeholder event in Cardiff that took place on Thursday and Friday last week regarding the shared prosperity fund. In fairness, our officials were invited the day before. So, we didn't get much notice of that event taking place, but it does give you an example of the incoherent approach that's being taken where the Wales Office arranges something, doesn't tell anybody, appears to cut across devolved responsibility even though it has no powers of its own, and then all that does is confuse businesses. Well, I think it would be far better if the UK Government were clearer and followed the approach that we've suggested, where in effect you have a fund that closely mirrors the operation of the current European funds, and, of course, with maximum—a common set of rules, of course, but maximum flexibility for the devolved Governments. 

First Minister, the Member for Cardiff North makes a very good point when she says that future regional policy should be controlled by the Welsh Government, by this Assembly—a point that you've echoed yourself. Whilst I appreciate that there are still details, a large number of details, about the shared prosperity fund to be effectively ironed out, it's important that when the current European funding ends and the shared prosperity fund, whatever final form that takes, kicks in—it's important at that point that the Welsh Government is best placed to access that funding. What are you doing to make sure that Welsh Government departments across portfolios are fit for purpose and are ready to be at the front of the queue to access that shared prosperity funding as soon as we do leave the EU? Because it's important that there isn't a gap in funding.

Well, the structure is there, of course. We've had years of dealing with European funds. The Wales European Funding Office and other departments are well used to dealing with this kind of funding structure. The shared prosperity fund is not of itself a bad idea. It's how much money will be available and how it is administered that we are troubled by. It's hugely important, as the Member himself, in fairness, has said, that this in effect replaces European funds in terms of the actual quantum available but that the responsibilities and rights of this Chamber and the Government are protected as the shared prosperity fund is developed. We'd prefer to be part of that conversation to make sure that the fund operates not just as far as Wales is concerned but works properly across the whole of the UK.

Of course, we still have questions about the existing arrangements before moving to the so-called shared prosperity fund. The First Minister will be aware of the audit office report on the impact of a 'no deal' separation on structural and regional funding as they stand. At the time of the report's publication in August, it noted that WEFO had exceeded its spending targets in three out of four of its operational programmes and underspent in one, which was west Wales and the Valleys. In the first instance, is the First Minister able to reassure us that overspends will be covered by the UK Government in the event of a 'no deal' separation, and can he update the Assembly further on whether all spending targets in all operational programmes are now being met or exceeded?

It's very unusual for spending programmes to spend 100 per cent of the money in any financial year, because some projects are kept over to the other financial year. I can't offer him comfort in terms of how overspends might be dealt with; the UK Government have given us no comfort on that or any other issue regarding European funding post 2022. There's no doubt that a 'no deal' Brexit would be hugely costly. We can try to mitigate against it but the reality is we can't prevent the economic disaster that would occur if there was a 'no deal' Brexit, which is why I hope that there is a satisfactory deal on the table. We wait to see. I hope that those who at the moment see a 'no deal' Brexit as no problem will come to their senses when that deal is considered in the UK Parliament.