5. What discussions has the Minister had with the Treasury regarding the reallocation of any money from or to the EU upon the UK leaving the EU? OAQ53310

Together with my officials, I am in regular contact with UK Treasury Ministers about a range of financial issues, including discussing the implications of the current position regarding the impact of Brexit on public spending and our budget.

Thank you for that answer, Minister. Obviously, many of us have often mentioned the shared prosperity fund, because we don't know what it is and where it comes from, but that focuses on European structural funds and regional development fund money. The question I have is: are there other funds in Europe that are coming to institutions in this country? I'll give an example—it was raised with the cross-party group on steel last week—the research fund for coal and steel, which actually funds research into steel areas to ensure that we have a sustainable steel industry for the future, something critical to the Welsh economy. When they raised this question with the Treasury, they were basically told, 'It will go back into the pot', and it will not be ring-fenced for anything, so we may not get a ring-fenced research fund for steel and coal. When you meet the Chief Secretary to the Treasury, can you please raise the issue of any funds that come back from Europe, or that would have been allocated to Europe for particular topics in particular areas—remain in those so that we can benefit from that? Because the loss of something like £200 million to £400 million of accessible funding for research into steel is a huge loss to this country.

Absolutely, and the Member is well aware that we were promised that Wales wouldn’t be a single penny worse off as a result of Brexit, and it is absolutely imperative that we hold the UK Government to that commitment. David Rees is right: there's a huge amount of focus on the shared prosperity fund because of the importance of it to our communities, and the investment that it makes, but there are so many other programmes and funds that we do benefit from—so, the steel research programme, which has been referred to, is one of them, but also a number of smaller programmes. And we really do need to ensure that we continue to have access to a wide range of programmes, a wide range of networks, and the wide range of innovation funds that we have at the moment. I will certainly be pressing that case, as I know my colleague the Brexit Minister will be in the meetings that he attends very regularly, and the First Minister's very regular, now, meetings with the Prime Minister.

Finance Secretary, what use have you made of the £31 million that the Treasury have made available to the Welsh Government for Brexit preparedness? This money has arrived with your good self, but when I've questioned various Ministers at question time, there's a look of bemusement that this money is slushing around the Welsh Government. So, can you be specific what that £31 million has achieved, please?

Thank you very much for the question on the Brexit preparedness funding. Of course, we have introduced the £50 million fund for preparedness for Brexit and a number of statements have been made by portfolio Ministers as to how that's been spent. For example, the police partnership resilience scheme has recently been announced, the Association of Directors of Social Services Cymru Brexit support scheme, and preparations for the successor arrangements for those EU schemes, such as what will become the shared prosperity fund and so on.

There is another £10 million within the funding of that £31 million, which is yet to be allocated. I'm having discussions currently with the First Minister and with officials across Government with a view to coming forward with a further announcement as to how that money will be spent, but that discussion is very active at the moment.

I draw Members' attention to my register of interests, as chair of the programme monitoring committee dealing with European funding. Could I concur with the comments that have been made by David Rees, my neighbour in the Aberavon constituency and also Chair of the External Affairs and Additional Legislation Committee, on the red lines that the Government have drawn, both in terms of the whole funding, which we understand could, actually, be greater, based on the current EU calculations, than the current £680 million that should come to Wales, but also the levers in order to make the decisions on how we allocate and distribute that funding, perhaps in a different way, post Brexit as well? It seems all the more urgent after last night's vote, once again.

The Treasury typically tends to be—at the moment, certainly—fiscally conservative, but with a small 'c' conservative in their approach as well towards devolution. So, could I re-emphasise the point that David made, which is: what discussions is she and her officials having with Treasury officials, who, ultimately, will be the ones sitting around the Cabinet table, that not only help influence but will make the determination on whether the Welsh Government's red lines are respected, and that the money is passed back to Wales and also the levers of power to do as we want with it?  

Thank you very much for raising the important point that it's not simply the quantum of money that is important, although that clearly is—it's actually how that money is made available to us to allocate to our Welsh Government priorities. We can't see a rolling back of 20 years of devolution through attempts by the UK Government to power grab in this area. Proposals such as a city deal kind of scenario for using that money are completely inappropriate.

There is no role here for the Secretary of State for Wales. This is very much funding that the Welsh Government needs to be allocating to meet our priorities in our communities, because we have the local knowledge, the understanding and the necessary networks to ensure that we make effective use of such funding here in Wales.

We're very, very clear that the baseline of the Welsh Government's block grant must be increased every year in line with the level of funding that we currently receive from the EU every year, without any clawback or top-slicing of that funding as well. I would just put on record again that we're extremely frustrated at the lack of detail from the UK Government with regard to the shared prosperity fund.