Questions now from party spokespeople. The Plaid Cymru spokesperson, Rhun ap Iorwerth. 

Thank you very much. Cabinet Secretary, what import or value should be placed on the views and comments of the Future Generations Commissioner for Wales when the Government comes to major decisions on expenditure policies?

Of course, we listen to what the commissioner says. I spoke with her more than once when the budget was being prepared during the spring and summer. She has been very constructive, I think, during the process, and we appreciate the work that she does and the support that she provides to us as a Government.

I’m sure you will have guessed that I’m going to be referring my questions to the M4. The commissioner has made some very strong comments over some time now about your proposals for the M4 black route. She mentioned last year that the M4 scheme could put in place a dangerous precedent for the future. More recently, she has made her view expressly clear that she doesn’t believe this proposal would meet the needs of future generations. Should such strong comments, from a commissioner that we have entrusted a great deal in, be enough to put a stop to this proposal?

Well, of course, the commissioner has put forward her own comments as part of the inquiry and research that’s been undertaken—independent research for an independent report that has emanated from the work over the past year.

Llywydd, I have to simply repeat what my colleague the leader of the house said yesterday. There is a legal process under way in relation to decision making on the M4. As finance Minister, I have a part to play in that process, and I'm not going to be drawn on any aspect of the decision making that would draw me outside the legal parameters within which I have to operate. 

There is quite rightly a lot of weight of expectation on what the commissioner can do for Wales. Surely, in this first major test case of the influence that the  commissioner has, Government should be showing that they are taking her role extremely seriously. She raises some serious and fundamental questions about value for money and what that means for finances available for future generations.

As the holder of the public purse in Wales and somebody who is charged with ensuring that we get maximum value for money, and get maximum bangs for the Welsh buck, can you give an undertaking that, whilst we still await decisions by Government on the next steps for the black route, you will investigate every possibility of spending that substantial amount of money—up to £2 billion or more even—in a more sensible way, either by spending less for the same results through strengthening the road network and investing in public transport, or even spending the same amount of money and getting vastly greater results, which would please not only future generations, but future health Secretaries, future transport Secretaries and, indeed, future finance Ministers too?

Llywydd, I understand all the points that Rhun ap Iorwerth has made. All of them are serious points and all of them were rehearsed in front of the independent, local public inquiry. No doubt, they will all be reflected in the inspector's report, produced as a result of the inquiry. I am yet to see that inspector's report and I have to reserve any comments that I might make on this matter until I'm able to do that and to see the advice that is provided alongside it.

Conservative spokesperson, Darren Millar.

Cabinet Secretary, what provision have you made in your budget for next year in respect of the north Wales growth deal?

Llywydd, I am on the point of being able to make provision for the north Wales growth deal. I hope to be able to do that within a short number of days. I have not been able to do so up until this point because, unlike the Cardiff and Swansea city deals, where the amounts of money to be provided by the Welsh Government and the UK Government were agreed in advance of a UK Government announcement, the Chancellor of the Exchequer chose to announce the sum of money from the UK Government unilaterally and without agreement with us.

You're very slow off the starting blocks in respect of this deal, aren't you, Cabinet Secretary? Because, as you will know, this bid was put together and submitted by the north Wales economic ambition board on 23 October. The UK Government managed to consider it and put its hand in its pocket and place £120 million on the table within a matter of just a few weeks. Why have you spent so long dithering about this?

I'm sure the Member would rather that we had a constructive and cross-party approach to the north Wales growth deal. I understand that it is supported by Members across this Chamber. The Welsh Government certainly will play our part and I will make a decision on the amount of money that we are able to contribute to the deal. I would rather have been able to do that in the way we did in relation to Swansea and Cardiff—by prior agreement with the UK Government. The UK Government, having decided to put its hand in its pocket, but not all that far, I must say, given that it was £170 million that was asked for by north Wales authorities, not the £120 million they ended up with—. But I will make certain that there is a contribution from the Welsh Government and then I look forward to the cross-party consensus that has existed in this Chamber, on the importance of that growth deal, continuing.

I noted your criticism of the £120 million, but it's £120 million more than you've managed to put your hands in your pocket for so far. You're quite right to say that there is cross-party agreement on this matter. I noted that, in advance of the UK Government's budget, there were Members of Parliament on a cross-party basis, including Labour Members of Parliament, who were writing to the UK Government, asking it to make an announcement in the budget on the north Wales growth deal. I would anticipate that you've also received similar letters. Perhaps you can tell us whether you have, from either Labour Assembly Members or MPs in respect of the role that you might play.

I think what people in north Wales are looking for is some rapid decision making on this. We know that the Welsh Government, quite rightly, was very eager to get things signed off for the Cardiff capital region city deal and the Swansea bay city deal, but for some reason, you appear to have been a little bit more lethargic than you have been in respect of both of those deals in terms of engaging on the north Wales growth deal with the economic ambition board and in terms of putting some money on the table. You say now that you are going to make an announcement in the coming days; I welcome the fact that you've revealed that to us today. Can you tell us, in advance of that announcement, whether you will be providing sufficient moneys for the bid to be completely fulfilled?

Well, Llywydd, I, of course, received correspondence in relation to the north Wales growth deal. By and large, it urged me to put pressure on the UK Government to make its mind up in relation to the deal. This was the third budget. I notice the Member talks about decision making being made rapidly. This was the third annual occasion in which the Chancellor of the Exchequer mentioned the north Wales growth deal. Two years ago, he told us he was thinking about it; a year ago, he told us he'd thought about it a bit more; and this year, I was very glad to see that he had come to a funding conclusion. I will make an announcement, as I say, as soon as I'm able to. It will be a significant investment from the Welsh Government. I think we're much better off focusing on making sure that we work together, the UK Government, the Welsh Government, local authorities, private sector partners and others, to make the best possible success of the deal, rather than worrying too much about whether a decision was made one week or two weeks later than somebody else did.

UKIP spokesperson, Neil Hamilton.

Diolch yn fawr iawn, Llywydd. Can I commend the chief economist to the Welsh Government for the document that was published this week, summarising the economic analyses that have been made by the UK Government of the effects of Brexit under different scenarios? But the document contains some of the more ludicrous projections, including the ones that have been published by the Bank of England this week—in the continuation of project fear—that claimed that by the end of 2023, on the worst case scenario, gross domestic product in the UK could be between 7.75 per cent and 10 per cent lower than it was in May 2016, which would be quite remarkable, because not only is that a much more severe contraction than we experienced in the recession of 2008, it is actually greater than the fall in output that occurred during the great depression in the 1930s, and is only seen in countries like Venezuela, which have been given a full dose of Corbynite economic policies, and where a 16 per cent contraction in GDP in one year is now the norm. So, would the Cabinet Secretary agree with me that the kinds of worst case scenarios produced by official organisations like the Bank of England are actually grossly irresponsible in the current climate of uncertainty over Brexit, because they just magnify fears unnecessarily and, therefore, make that uncertainty even worse, and that has a real impact upon businesses and the lives and livelihoods of ordinary people?

Well, Llywydd, can I thank the Member, first of all, for drawing attention to the document that the chief economist published yesterday? He is independent of Government in the judgments that he makes, and I know he was anxious to publish his assessment alongside the debate that we had yesterday, and I hope other Members will have a chance to read what he said.

I think his analysis is sober. I think it is deliberately couched in language intended to be non-alarmist, and where I can't agree with the Member, as he will know, is in dismissing projections that are made by absolutely mainstream and respectable forecasters, not simply the Bank of England, but also the Treasury itself, and also analysts outside Government, all of whom share a broad consensus on the potential impact on our economy of a hardline slash-and-burn Brexit. And I can't afford to dismiss those projections in the way that he does, because in Government, I'm afraid that you have to prepare for the worst, even when you are working as hard as you can to avoid it.

I'm afraid the Cabinet Secretary, in disagreeing with me, is also disagreeing with the former governor of the Bank of England, Mervyn King, and indeed with Nobel prize winner Paul Krugman, whose political views are very far from mine and are actually not too far from the Cabinet Secretary's, because Mervyn King has said that he is saddened to see the Bank of England unnecessarily drawn into this project fear type of exercise. And Paul Krugman—no friend of Brexit—describes the bank's estimates as 'black box numbers' that are 'dubious' and 'questionable'. So, when such a broad range of economic analysts of world renown are able to dismiss these kinds of hysterical prophecy, I can't understand why the Cabinet Secretary himself, in the interests of a sober analysis and debate—which I agree with him the chief economist has added to our deliberations yesterday—can't calm things down by agreeing with me that it does us no good whatsoever to have forecasts for the future that are wildly, alarmingly out of kilter with reality.

Well, Llywydd, I would seek to calm things down in this way by saying that two things happened yesterday that make the prospects of a 'no deal' Brexit recede, and I'm very glad of that. The very best way to calm down anxiety will be for the UK Government to take the advice set out in 'Securing Wales' Future' and negotiate a form of Brexit that authentically supports the Welsh economy and jobs, and then we wouldn't have to be trading expert against expert, dealing with the hypothetical but catastrophic possibility that we could leave the European Union on terms that do the maximum damage.

I would refer back to the chief economist's report, because he does say in it that there is a strong consensus amongst economists about the key principles of forecasting, one of which is that distance itself is a barrier and trade is generally more intensive with partners who are approximate, both geographically and in terms of their stage of economic development. The Treasury model and most of the other models that are referred to in this document use what is called a gravity model of forecasting, and the fundamental principle of that is that the amount of trade done between two countries diminishes with the square of the distance between them. But, all the data upon which this rather dubious forecasting model is based were compiled in the 1980s and before—a world in which there was no internet, no FaceTime, no e-mail, no Google Translate, no standardised containerisation, no opening up of former Marxist states, like China, for example, no World Trade Organization, even—and therefore, given that trade in services is now vastly more important to our economy and, indeed, the economy of our European neighbours than it was then, and global mobility is so much greater and the digital revolution has taken place, the assumptions upon which these forecasting models are made are wildly out of date, and that is why they produce these alarmingly out-of-kilter predictions, which are always proved to be totally wrong after the event.

Llywydd, the gravity analysis is, as the Member said, summed up generally as 'trade halves as distance doubles', and that does tell you a relatively commonsensical thing: that you are more likely to have intense economic relationships with those who are closest to you, and the further away your market is from your own, the less likely it is that you will have the same intensity of trade. The real difficulty for the Member is that all the things that he points to in trying to discredit gravity analysis apply whether we are in the European Union or not. And, leaving the European Union is not a material fact in the analysis that he just attempted to set out.