The Possible Effects of Brexit on Supply Chains

2. Questions to the Counsel General and Brexit Minister (in respect of his Brexit Minister responsibilities) – in the Senedd on 8 May 2019.

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Photo of Delyth Jewell Delyth Jewell Plaid Cymru

(Translated)

6. Will the Counsel General make a statement on whether the Welsh Government has undertaken an analysis of the possible effects of Brexit on supply chains in Wales? OAQ53805

Photo of Jeremy Miles Jeremy Miles Labour 2:52, 8 May 2019

Direct business engagement is ongoing with companies on supply chain issues. We have also commissioned research to further understand the complex European and global supply chains operated by businesses in Wales. 

Photo of Delyth Jewell Delyth Jewell Plaid Cymru 2:53, 8 May 2019

I thank the Minister for his answer. Since the 2016 referendum, the automotive sector in the UK has announced a number of closures. The debate about to what extent Brexit is to blame rages on, but, in the meantime, people have genuine concerns about their jobs. The closure of the Honda plant in Swindon worries me greatly, since one of its component suppliers is the Kasai plant in Merthyr Tydfil, in my region, which employs 200 people. It's one of 12 Welsh suppliers that face grave risks in the face of the closure of that one plant in Swindon, and follows on from the news that 400 voluntary redundancies are expected at Ford in Bridgend and 220 jobs are on the line due to the closure of the Schaeffler plant in Llanelli. What action is Welsh Government taking to support component suppliers to keep afloat during this difficult time for the automotive industry, and what assurances can the Minister give workers within the sector that your Government is doing everything in their power to protect their jobs?

Photo of Jeremy Miles Jeremy Miles Labour 2:54, 8 May 2019

Well, I thank the Member for that important question. Her question reflects the fact that, whereas decisions may be taken in other parts of the UK—she mentioned Honda; previously Nissan, of course—the impacts of that can be felt in Wales and indeed in other parts of the UK. We've absolutely, as a Government, made representations to the UK Government in the context of their UK-wide planning to ensure that dimension is not lost in the considerations and that economic decisions taken in England have consequences way beyond that. There are a number of businesses in Wales, and she mentioned one in her question, that have a significant exposure in terms of supply chain to production facilities based in other parts of the UK.

The Welsh Government is working with the Wales automotive forum to discuss and understand the impact of Brexit, and in particular the impact of a 'no deal' Brexit. It's clear that there are a number of pressures that are currently at play in decisions taken by automotive companies across Wales, but Brexit certainly is one of those, and a significant one, I would argue, and the Welsh Government is taking steps to ensure that those companies have access to Welsh Government support. Part of the work that has been put in place is a range of tiger teams on a rapid response basis, which enables the Welsh Government to provide support in a way that is both tailored and rapidly available to companies that face difficult circumstances. 

Photo of Nick Ramsay Nick Ramsay Conservative 2:55, 8 May 2019

Minister, this is a very important question. Tri-Wall Europe, a big employer in Monmouth in my constituency, a company that makes cardboard packaging for the motor industry and for many other industries as well, is headquartered in the far east but uses its base in Monmouth to supply all over Europe. In the previous Assembly, the then Minister for economy said after a visit to Tri-Wall that she was hoping to map and better understand the supply chains feeding that company, both in Wales and across Europe. I wonder has any work been done on that mapping process of supply and distribution chains, because this is clearly—. It's very important that we get this right in any Brexit deal and that those supply chains are at the heart of any deal. So, I'm just wondering what evidence, what information the Welsh Government currently has at its disposal to make sure that, in those negotiations, when you're making an input into the UK Government that's at the table, the interests of companies like Tri-Wall and other similar companies across Wales really are at the heart of these negotiations.   

Photo of Jeremy Miles Jeremy Miles Labour 2:56, 8 May 2019

Yes, I thank the Member for that question. I don't know, beyond the context of Brexit, the historical context of that, but he'll know of the work by Cardiff Business School that is being supplemented at the moment in relation to some of the issues identified in his question. We've also made available funding through the EU transition fund to support research projects, to understand with a greater degree of granularity some of the dimensions of supply chains, which are particularly complex. He mentions an international supply chain, I think, in his question, if I've understood correctly, but one of the significant issues that we face in Wales—one of the features, if you like, of our economy—is the intra-UK supply chains, which also require us to have an understanding with some granularity of the impact of Brexit on those, and that research will be eliciting some of that detail. 

Photo of Elin Jones Elin Jones Plaid Cymru 2:57, 8 May 2019

(Translated)

Question 7 [OAQ53802] has been withdrawn. So, question 8, Helen Mary Jones.