4. Statement by the Minister for Economy and Transport: Preparing the economy in Wales for a 'no deal' Brexit

– in the Senedd at 3:18 pm on 1 October 2019.

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Photo of Ann Jones Ann Jones Labour 3:18, 1 October 2019

Item 4 is a statement by the Minister for Economy and Transport on preparing the economy in Wales for a 'no deal' Brexit. I call on the Minister for Economy and Transport, Ken Skates. 

Photo of Ken Skates Ken Skates Labour

Diolch yn fawr iawn, Dirprwy Lywydd. Since the imminent risk of a catastrophic 'no deal' Brexit remains, the Welsh Government continues to prepare for all eventualities. As a responsible Government, we have stepped up to address both the real impacts of Brexit uncertainty already being felt and, of course, the challenges of a possible 'no deal' Brexit still to come.

We have already suffered the consequences of three years of uncertainty, which has translated into outcomes such as delayed investments and a steady reduction in inward investment—all an avoidable consequence of the tragic mishandling of Brexit.

Businesses that I speak to tell me about the crippling impact that uncertainty has on their operations. Rather than bringing clarity, a 'no deal' prolongs this uncertainty as we will have no basis from which to negotiate a new trade deal, and the EU are unlikely to be a willing negotiating partner as relationships with the UK Government reach a new low.

The decision to shut the Ford engine plant at Bridgend, with 1,700 job losses; the closure of Schaeffler in Llanelli, with more than 200 job losses; and the insolvency of the two construction companies—Dawnus, 700 jobs lost, and Jiscourt, 60 jobs lost—can all, at least in part, be attributed to the uncertainty generated by the Brexit negotiations, or lack of.

Our published 'no deal' action plan sets out a range of interventions and actions that support Wales's response, addressing impacts already being felt and those that we anticipate will be realised in the event of a 'no deal' Brexit. These measures encompass our contribution to actions needed to keep transport moving through our ports as well as the essential support and advice we are providing to businesses across Wales.

Photo of Ken Skates Ken Skates Labour 3:20, 1 October 2019

Almost immediately a 'no deal' Brexit could cause severe disruption to the transport network and connected services within Wales. We are already seeing this impact as we have to make decisions on the assumption that we will crash out of the EU without a deal at the end of October. Whilst emergency works cannot be discounted if necessary, there will be no planned daytime lane-closure roadworks on the westbound A55 between 31 October and the end of the year. This will ensure that any disruption as a result of customs checks at Holyhead will not be compounded by any works on the A55. However, it will have an impact on our programme of roadworks, which could easily have been avoided without a devastating cliff-edge Brexit.

We cannot address all the causes of this disruption, with border arrangements and customs processes the responsibility of the UK Government. However, we are working closely with ports in Wales, the ferry operators and local partners to manage any knock-on traffic disruption safely. We are aiming to minimise the impact of disruption at the port on local traffic around Holyhead and ensure that local people can continue to travel. For Pembroke Dock and Fishguard, our analysis suggests that delayed vehicles could be managed within the port. We are also keeping this under constant review in case extra contingency measures are required.

It is vital to ensure the flow of traffic at the border is as smooth as possible, and that hauliers have the right documentation upon arrival at ports to allow them to travel. We've been working with ferry operators to ensure that their customers are aware of the documentation they will need and we are encouraging all hauliers arriving at Welsh ferry ports to have the right documentation ready, and not risk being turned away.

I have outlined our ambitious plans for the transport network many times in this Chamber and I do not want to see them derailed by a 'no deal' by default. However, despite the challenges a 'no deal' Brexit would pose, it will remain crucial to invest in our transport infrastructure and press our vision for an integrated public transport network providing vital stimulus to the Welsh economy at a time of economic turmoil.

Turning to the economy and business preparedness, Brexit effects have been felt for some time now, and will continue to impact business confidence after the point of departure. This is not just a day 1 issue. But in terms of day 1 preparedness, I am assured that our front-line services for businesses and individuals are ready to respond, with, for example, Business Wales and the Development Bank of Wales both now positioned to mobilise human and financial resource flexibly and at pace.

Leading up to exit day, we continue to highlight 'low-cost, no-regret' actions for business. We are cascading information through business networks and have also written directly to over 18,500 businesses. I take this opportunity to urge all businesses to register to receive regular communications through Business Wales, to utilise our Brexit portal and diagnostic tool, and to engage with their trade bodies and representative organisations.

I recognise how vital it is that we orchestrate a co-ordinated, sustainable approach where businesses and their employees face downsizing and or redundancy events. Drawing on lessons learned from past and present interventions, going forward our response will be led on a regional basis, aligning with the regional economic development model set out in the economic action plan.

This Government is clear that continuing to support, and indeed strengthen, our employability and skills interventions will be critical in our response to Brexit. We want to ensure that Wales has the skilled workforce to meet our economic ambition as set out in the economic action plan and 'A brighter future for Wales'. Our approach builds on the proven and respected mechanisms to support businesses, individuals and communities. We will be responsive and supportive to the needs of people who lose their jobs and employers, indeed, who have opportunities, so the people and skills are matched up as quickly as possible, and provide support, of course, to employers who need to develop their workforce.

Working Wales is our new single entry point and will ensure that individuals are directed to the right place at the right time. In addition, I have established regional response teams, working with regional skills partnerships and partners such as local health boards, the Department for Work and Pensions and local government, to take a cross-government, collaborative approach to ensure access to a regional response at community level.

The support we are giving to business continues to be well received and I am grateful to all those business leaders and their representative organisations who continue to inform and bring constructive challenge to our approach. A suite of actions using European transition funding have been approved to support business resilience, £9.2 million has been made available across six projects providing support and advice around trade and exports, enabling capacity building and communications activities, as well as offering financial support via the business resilience grants to eligible businesses.

Furthermore, as I engage with businesses across Wales, it gives me great assurance that more and more SMEs are discovering how working with the Development Bank of Wales can help them realise their ambitions and overcome their challenges. The Development Bank of Wales now has over £0.5 billion across various funds accessible to small and medium-sized businesses and is now positioned to play a key role in our Brexit response.

The overall resource available to us in Wales to address Brexit challenges is dependent on funding released by the UK Government. I am impatient for progress on the now long-overdue quadrilateral with the Secretary of State for Business, Energy and Industrial Strategy, Andrea Leadsom. It is imperative that the UK Government takes into full account the views of the devolved administrations and can only do this through structured engagement. I am therefore disappointed that the meeting that was scheduled for next Monday, so long in the planning, has now been postponed. When we do meet, I will be pressing for clarity and funding support in the event of a significant economic shock, and to object in the strongest terms against the UK Government’s proposals for a proposed shared prosperity fund.

My commitment is to do all within my powers to nurture inclusive growth for Wales, creating an environment where businesses thrive and where communities across Wales benefit.

Photo of Russell George Russell George Conservative 3:27, 1 October 2019

I'd like to thank the Minister for his statement this afternoon. We have heard a lot of negativity about the potential impact of Brexit on the Welsh economy, but I hope the Minister will agree with me that it's now time we did deliver on the result of the Brexit referendum, to give businesses the certainty that they want and that the Minister wants to see. I do think that the British public are rightly frustrated that we as politicians have not yet delivered Brexit three years on.

I do agree with one of the Minister's opening lines where the Minister stated that we have already suffered the consequences of three years of uncertainty. I would ask whether the Minister agrees with me that, after three long years, the most damaging impact on the Welsh economy would be drifting through more Brexit uncertainty. I want to see us leave on 31 October and I want to see us leave with a deal in place. That's what I want to see, so we can then move forward with a new positive economic relationship with our friends and colleagues in Europe, and also strike new deals around the globe.

I am concerned that we have so much talk about the negative consequences on our Welsh economy. If we talk the Welsh economy down, it will go down. We've got to look for the opportunities that Brexit will also bring. I'm somebody who voted remain. I wanted us to remain in the European Union, but we've got to respect the result of the referendum. I became a Brexiteer on the day of the referendum, because on that day we had to respect the result of the British people.

Photo of Joyce Watson Joyce Watson Labour 3:29, 1 October 2019

Are you in danger of being deselected?

Photo of Russell George Russell George Conservative

No.

So, let's be positive about some of the opportunities that we have before us. The 2019 spending round will see Wales benefit from a £600 million boost from the UK Government. Despite the Brexit uncertainty, we're also seeing that the exports of goods have risen by 4.2 per cent. The Minister did list a whole number of recent and sad decisions of businesses closing and job losses, but these are not, as the Minister has indicated, a result of Brexit, according to those statements provided by the businesses. We also see that Snowdonia Aerospace Centre have received almost £500,000 funding from the UK Government to create a centre for space research and development. And despite Brexit, we've also seen other companies choosing to invest in Wales, such as Ineos in Bridgend. And despite Brexit, we've also seen the number of people employed in Wales rise by 10,000, and the number of people employed in the information and communications industry rise from 34,000 to 58,000. So, I would plead to the Government, in all its statements on Brexit, that we do see more balanced statements that are brought forward. [Interruption.] The Confederation of British Industry—I'll come on to the CBI, Deputy Minister, don't worry.

Also, Minister, you did talk about, in your statement this afternoon, the fact that you've written to 18,000 businesses, and you're urging them as well, as I would do, to receive communications through the Business Wales website, to utilise the Brexit portal. And I wonder if you do have any statistics or data on how many businesses have actually accessed the business portal. Now, the Deputy Minister, shouting from the back, was keen that I talk about the CBI. Well, Deputy Presiding Officer, the CBI has recently made an assessment of Labour's post-Brexit renationalisation plans. [Interruption.] I thought you wouldn't like that bit. So, they said, and I quote:

'Loose talk of renationalisation will be toxic to investors already reeling from existing uncertainty…Without private sector investment and innovation, efforts to tackle climate change or upgrade infrastructure will falter, with serious knock-on effects.'

I know the Deputy Minister, shouting at the back, doesn't want me to talk about this bit, but I would be interested to hear the Minister's reaction to this assessment of the CBI, and hear whether or not the Welsh Government endorses Jeremy Corbyn's approach to managing the UK economy, and whether or not you will look to replicate that approach, as I've outlined, here in Wales. I was pleased with some of the comments that the Minister made about transport infrastructure, which will, I think, be centre stage in ensuring that Wales remains open for business post Brexit—

Photo of Russell George Russell George Conservative

I will do, Deputy Presiding Officer. And I wonder if the Minister would welcome the announcement yesterday by the Chancellor, in terms of paving the way for more money for infrastructure revolution, to build more roads, to revive our bus services as well, and how will the Welsh Government prioritise these budget consequences to support economic growth across Wales?

And my last question, Deputy Presiding Officer, would be: does the Minister welcome the Chancellor's announcement that he will guarantee £4.3 billion of funding for EU programmes in the event of no deal, and a total of £16.6 billion up to 2020? And how will the Welsh Government look to amend its approach following this guarantee of funding support to Welsh business from the UK Government?

Photo of Ken Skates Ken Skates Labour 3:33, 1 October 2019

Can I thank Russell George for his contribution and his questions? I think, first of all, let's just reflect on the fact that the only certainty that would be generated through crashing out of the EU is the certainty of economic catastrophe, with widespread job losses, the value of the economy shrinking rapidly, and deep uncertainty, not just for months, but for many years to come. The best solution is the solution that has been articulated through 'A brighter future for Wales'. And in terms of those exciting new trade deals that we've been promised by chief Brexiteers, well, there's been a huge amount of speculation this week over what might happen if the World Trade Organization rules against the EU, and businesses within the EU, and how President Trump may respond. And the speculation is that if the decision is taken against us in Europe, then President Trump will seek to impose massive tariffs on goods and services from the UK. Can we really trust somebody, who is willing and wanting to do that, to establish the best possible trade deal for the United Kingdom? I believe not. And therefore, our best interests remain in staying in the EU.

In terms of where the Welsh economy is right now, and Russell George did reflect on the fact that we have record employment, record low inactivity, that we've got a record number of businesses now established in Wales, that we have a record number of headquarters of businesses in Wales—well, we should not sacrifice this achievement in order to, as they put it, 'Get Brexit done'. There is a huge amount to be lost if negotiations go wrong, if we crash out of the EU, or indeed if the wrong deal were to be implemented. And that is why I am firmly of the belief that the solution contained within 'A brighter future for Wales' is the only solution that should now be considered for the United Kingdom.

In terms of job losses, well, if we look at some of the decisions that have been taken recently, Brexit has been a constant part of the problem in terms of the operating environment that businesses find themselves in—deep uncertainty, a lack of clarity as to what the future may hold. And Members will not be surprised that a number of businesses in Wales, and just across the border of Wales, have said that, if a 'no deal' Brexit occurs, then they will be seeking to move their operations out of the United Kingdom. A lot has been said about Vauxhall—and I know that it's not in Wales, but Members will be interested to know that Vauxhall in Ellesmere Port employs around about 400 people—400 people—who live within Wales. And Vauxhall, which of course is now part of the PSA Group, is regularly referenced as a place where a new model decision for the Ellesmere Port plant will be directly linked to the outcome of Brexit negotiations. Here in south Wales we have the food business OP Chocolate, who have gone on record as saying that they are fearful of a 'no deal' Brexit, because, in a worse-case scenario, they could lose up to £5 million of business due to tariffs. Not far away, in Blaenau Gwent, Continental Teves UK Ltd have expressed their concern over potential flight or closure. Again, issues that relate directly to Brexit, the uncertainty of negotiations that we believe are not yet taking place fully, and the ongoing potential crashing out of the EU.

In terms of managing the UK economy, and the approach that has been outlined by Jeremy Corbyn and John McDonnell, I think there are some exceptionally interesting proposals that have been introduced, which I would fully support. We know from France that productivity improvements have been directly linked to reducing the length of the working week, because people are able to give more, and contribute more, in the time that they are in work. In terms of the approach to inclusive growth, I would warmly welcome it, because, as we have managed the Welsh economy in recent years—and it's performed exceptionally well—we have seen that the economic contract is driving inclusive growth, and that the calls to action are driving responsible, sustainable business growth—both of these initiatives designed to deliver for the greater good.

We don't know what outcome there may be for Wales in the announcement made by the Chancellor just this week—indeed, whether we will get a penny of the rehashed announcement that was made at the party conference. But I do note that only £250 million of that £25 billion announcement is attributed to bus services across the UK. And right across the length and breadth of the country, bus services are in a very fragile position, and, based on my assessment, require far more than £250 million in order to get through the uncertainties of Brexit and the problems associated with deregulation.

What I would say, regarding business support—in response to Russell George's question about business engagement—is that, to date, we estimate that almost 40,000 businesses have accessed the Busines Wales Brexit portal, and around 1,000 businesses have undergone the full self-assessment process.

Photo of Rhun ap Iorwerth Rhun ap Iorwerth Plaid Cymru 3:39, 1 October 2019

We know that uncertainty is bad for business, which in itself is a condemnation of the way the referendum was held, without homework having been done, because it was inevitable that it was going to take years to resolve Brexit. Yes, there has been a slippage to the original timetable, but there was going to be a period of years anyway, so it was inevitable that that period of uncertainty, as the Minister has said, would lead to the kind of delayed investments that we've seen harming the Welsh economy—a reduction in inward investment and so on. And I think, as we look to the potential of a 'no deal' Brexit, and, certainly, changes then to an acute period of potential disaster for some businesses in Wales—. I've spoken in this Chamber many times about the mussels exporters exporting 97 per cent of their produce live and needing to get it through to continental Europe within 17 hours of getting them out of the sea. That's the kind of sector that just can't cope with any delay, however limited, at ports. And I'm thinking of other businesses in my constituency that are exporters to the European Union who will become less competitive, because of either practical issues of the ability of getting their products to market or tariff issues that perhaps makes them uncompetitive, and these are very real problems that my constituents face.

The Minister referred to the funding—£0.5 billion available through the Development Bank of Wales across various funds accessible to small and medium-sized businesses. I wonder if you could explain what measures are being put in place to allow emergency access as a safety net to businesses that really do find themselves hitting the buffers, in terms of lost sales, and lost exports perhaps, if we do leave without a deal.

We sometimes forget, and it's worth reminding ourselves, that Wales is a net exporter to the European Union, and it's a reminder that we need to bear in mind Wales's specific circumstances when we discuss Brexit. I fear that the debate that was had in those brief months in 2016 was largely an English question. Other areas that were asked the question considered, 'What does it mean for us?' Gibraltar were asked exactly the same question as Wales, and they voted 95 per cent to remain, because they could see, 'Hold on, this is clearly, clearly, bad for Gibraltar.' Unfortunately, I think the Welsh issue got mixed up with English questions, but I digress somewhat.

On transport, I am pleased to hear that preparations have been made to ensure ease of passage for vehicles across the A55 after 31 October, and that roadworks will be cleared to make sure that there aren't any additional obstacles for increased traffic volumes or for the problems that the traffic will encounter on the way to Holyhead. Perhaps you could give us a little bit more detail on the steps that are being taken, though, in your words, to minimise the impact of disruption at the port of Holyhead on local traffic specifically. Because we know capacity in Holyhead is around 600 lorries; there are plans that have been explained to us, previously, to have a couple of extra places available to increase that to around 1,000 heavy goods vehicles, but there is potential of problems within the locality of the port that has traffic problems as it is. So, I would be grateful for some more detail on that.

Also, although Downing Street's latest proposals on the Irish border question have been described as a non-starter by most people involved in those discussions, what consideration has Welsh Government given to the effect on movement of trade of those latest ideas on how to deal with the border on the island of Ireland, and how that could have an impact on us in Wales?

Photo of Ken Skates Ken Skates Labour 3:44, 1 October 2019

Well, can I thank Rhun ap Iorwerth for his questions and his contribution. Dealing with that last quote first, clearly, the UK Government is already in something of a mess over its proposals, or speculated proposals for dealing with the Irish border. And anybody looking at the news today will be questioning how on earth border checks could not constitute a return to having a hard border on the island of Ireland. Therefore, I'm afraid it would appear that the proposals being put forward by the Prime Minister will be met with complete disregard by the EU-27, given the clear and consistent position that our European partners have taken in this regard. And, therefore, all of our assessments concerning the likely impact of such a programme of border control being implemented from earlier in the year stand today.

Photo of Ken Skates Ken Skates Labour 3:45, 1 October 2019

Rhun ap Iorwerth is right to say that the uncertainty of the divorce from the European Union will, in all likelihood, last for years. Many eminent academics were saying during the referendum campaign—of course, their voices were not heard by many, unfortunately, but they were saying consistently and powerfully, in my view, that it would take years for the divorce to take place and then for subsequent arrangements for new trading agreements to be reached, and, during that period, the Welsh and UK economy could only shrink because of the uncertainty and the disruption caused by this.

And Rhun ap Iorwerth is absolutely right: the problems that we now face today are owed directly to the binary choice that was offered to voters in the referendum between the certainty of status quo and nothing more than an idea, without any detail. These are two options that people were presented with without any regard to the option of reforming further the EU. And I think also, if the Government of the day had been able to at least propose some form of a deal with the EU and to give that option to the people of the UK, there would have been a better-informed decision by the people. I also think that that would have led to a remain vote being successful.

We are where we are, though, and the Welsh Government is making great strides in preparing for a 'no deal' Brexit—we must do; it’s our responsibility. And, in terms of the funding that may be made available, to date, the Kingfisher project, which identifies those businesses at risk of closing, those businesses that could be moving away from our shores, has only gathered and shared intelligence. We've been saying to the UK Government that, to back up project Kingfisher, money has to be made available. It's our estimate that, in order to deal with the calls on Welsh Government for emergency support, we would need to see the economy futures fund increased from the current £10 million to £35 million as a minimum. And I hope that the UK Government will respect that when it considers what sort of funding is to be made available.

But this would only be a small part of the response and the financial support that this Government would be required to give to businesses across Wales. In addition, we have the development bank, and, as I’ve already said, they have at their disposal over £0.5 billion of various funds that could be utilised to support businesses. At the moment, the development bank is looking at how it is able to ensure that staff are redeployed to the front line in the event of a 'no deal' Brexit. They're looking at around about 200 members of staff being moved to front-line services. In addition, Business Wales have confirmed that they’re ready to divert 20 members of staff there, in addition to the 74 who are already operational, and the Welsh Government, in addition, within my department alone, is looking at redeploying 100 members of staff—more than 500 people being deployed to an area of activity that could have been avoided.

In terms of the A55, I can tell Members today that I recently made a very difficult decision to postpone a project of enhancing the road surface along one particular stretch of the A55 because the work was programmed to take place in the week that we could crash out of the EU. I did not wish to see disruption on the A55 whilst there is also disruption at the port of Holyhead as a consequence of crashing out of the EU. There are real implications in postponing roadworks. It means that the backlog only increases. It means that, at a later date, there will be more disruption as a consequence of vital roadworks having to be undertaken. That particular work that was going to be programmed for late October would have led to a reduction in road noise for properties adjoining the A55. It’s work that I wish we could have progressed with, but, as a consequence of where we are on Brexit, we had to take the responsible decision and pause that particular intervention.  

Over at the port of Holyhead, Rhun ap Iorwerth is absolutely right that onsite, and with another area that we have been able to secure, there will be room for just under 1,000 heavy goods vehicles. In the event that additional space is required, our proposals are to utilise the westbound carriageway of the A55 and to have contraflow traffic on the eastbound A55 at the port. We wish to minimise disruption at the port of Holyhead, but we cannot guarantee that, in the event of hauliers not obtaining appropriate documentation, they won't be turned back and that they won't be stacked, but we wish to avoid this if at all possible. Indeed, we are working with the ferry operators, who, in turn, are working with haulage businesses, and I'm pleased to say that there are now signs across the border on key arteries in England for haulage firms to take good notice of, on the M6 and other motorways in England, urging haulage firms to ensure that they have the right documentation at the end of October when they arrive at Holyhead port.

Photo of Mick Antoniw Mick Antoniw Labour 3:51, 1 October 2019

Minister, there are a few questions I'd like to ask with regard to the issue of trade, not just Welsh trade but UK trade, and the relationship with international trade. Now, during the unlawful prorogation of Parliament—and, for those who doubt it, the Supreme Court is the supreme legal body; if they determine it was unlawful, then that is the law of the land, that is what the rule of law determines—. So, during the unlawful prorogation of Parliament, of course, a lot of legislation fell, including the Trade Bill and a number of other pieces of legislation that we've been looking at in our various committees, but the Trade Bill being a particularly important one, and particularly relevant to your portfolio and also to the economic interests that we have within Wales. 

Now if, as Lady Justice Hale said, the prorogation Order was as a blank sheet of paper then, presumably, the Trade Bill still exists. But the problem is we have a Government that has no intention at the moment of actually proceeding with that Bill. Now, of course, we have major concerns ourselves over the content of that Bill, particularly with the way in which it might seek to override devolved powers within Wales, particularly issues around trade, environmental issues and, in fact, the national health service. Those points have been made during the Joint Ministerial Council meetings and have been the subject of much, much discussion. But, of course, the fact of the matter is that there is no Trade Bill proceeding at the moment, and, of course, the real concern is that, if we were to crash out without a deal, and we suddenly crash out of the European Union, what we are left with is the exercise of Government by royal prerogative, which means trade deals can be agreed with very little parliamentary scrutiny whatsoever, but can completely bypass this Chamber, can bypass the Assembly and the devolved Governments of the UK.

Now, I remember, during the referendum—I remember UKIP campaigners standing up with placards saying, 'No TTIP'. Of course, we were very concerned about the issue of the transatlantic trade and investment partnership within this Chamber, and, of course, the EU was as well—all 28 nations were—because, at the moment, negotiations are still going on with the US, but are certainly very slow because of the insistence in terms of environmental and food standards. But, of course, what we are now being told by Nigel Farage and by the Brexit Party, and by the far right generally, is that the way forward, of course, is going to be this incredible trade deal with the United States. Well, of course, at the moment, the issue of the United States is that we have been given absolutely no guarantees by the UK Government that, for example, our national health service in Wales will actually be protected. There is no exemption for the NHS, and we will all recall that Theresa May actually refused to give anything in writing of such an exemption.

So, we need to look at what are the US negotiating objectives. Well, just look at a few of them: on pharmaceuticals, provide full market access for US products; on state-owned enterprises—for example, the national health service—accord non-discriminatory treatment with respect to the purchase and sale of goods and services; increase opportunities for US firms to sell US products and services to the UK; and establish a dispute settlement mechanism—which will almost certainly be based on US legislative sovereignty. Effectively, not only does our NHS within Wales suddenly become subject to—by royal prerogative—trade agreements by Boris Johnson with the US, which enables direct intervention into our own Welsh health service and the UK health service—. And what we all fear happening is the actual sell-off and the privatisation of the health service, which is a key jewel that the US industries have been aiming for. And that's why, when we had the recent Labour Party conference, this was the comment—which I agree with—that Jeremy Corbyn made. He said:

'That’s why a no-deal Brexit is really a Trump-deal Brexit. That would be the opposite of taking back control. It would be handing our country’s future to the US president and his America First policy. Of course, Trump is delighted to have a compliant British prime minister in his back pocket. A Trump-deal Brexit would mean US corporations getting the green light for a comprehensive takeover of our public services.'

So, I just have a couple of questions to you, Minister, on this: what is the current state of the trade deal? What negotiations, what contacts, have you had with the UK Government with regard to Welsh interests? Secondly, if the Trade Bill is, in fact, live, what are the consequences of leaving the EU without a deal for international trade? Thirdly, without legislation, would the UK Government be able to trample over the interests of Wales? Fourthly, what would be the level of parliamentary scrutiny in the current climate? And, fifthly, what guarantees has the Welsh Government had to protect the national health service in Wales from a Boris Johnson UK-US trade deal?

Photo of Ken Skates Ken Skates Labour 3:56, 1 October 2019

Well, I'm always happy to take lectures on the law from Mick Antoniw, given his expertise in this field, and I think today he has articulated the terrible likely consequences of a bad deal with the United States under the current soon-to-be impeached President of that land. In terms of the Trade Bill, I'm sure that the Minister for International Affairs and the Welsh Language will be able to give an update on the status of that particular Bill, but it's my understanding that it currently is on ice, with not much likelihood of it being progressed any time soon.

In terms of what a trade deal with the United States could do to Wales, well, it's my view that a trade deal would essentially be a plundering operation for US interests of our most valued assets, principally the national health service, and this is something that we should absolutely rule out entirely. There would also be consequences in terms of our food and drink sector, which have been very well explored within the media, as well as for many other parts of public services and the public sector.

In terms of the consequences of crashing out of the EU with no significant trade deals in place, well, of course, we would then revert to WTO rules, which could lead to the Welsh economy shrinking significantly, and the figure of 9 per cent has already been presented to the Chamber today, but there would be certain sectors that would be particularly hard hit, and those certain sectors are very, very significant within Wales. We estimate that the consequence of crashing out of the EU without a deal could lead to as many as 30 per cent of the jobs in one particular local authority area of Wales, that being Flintshire, being at medium to high risk of going. Now, if it's 30 per cent there, it's probably 30 per cent just over the border, and I've already outlined the position that Vauxhall are in, and, right across the England-Wales border, we could see significant jobs being lost that would affect our economy as well. Within Wales, after Flintshire, the next highest local authority area to be classed as having medium to high-risk job losses would see around about 20 to 25 per cent of jobs potentially going. This is catastrophic for the Welsh economy and for our communities.

Photo of David Rowlands David Rowlands UKIP 3:59, 1 October 2019

Well, I thank the Minister for his statement and acknowledge the prudence of forward-planning, but I have to say that, sitting in this Chamber today, listening to Ministers of the Labour Government informing us as to how they're preparing for a 'no deal' Brexit has been exasperating. Why do I say this? Because it is the Labour Party who are partly to blame for the scenario that now exists. A 'no deal' Brexit should never have been on the cards.

By voting on a number of occasions against Brexit, which, on each occasion, was a denial of the will of millions of Labour supporters who voted to leave the European Union, it could be said that the Labour Party has precipitated these events. They have, in fact, themselves been the architects of a 'no deal' exit, if and when that happens. They called for an election at the height of Corbyn's popularity and then voted against it because the party is now in such a parlous state. They say they believe in democracy—[Interruption.]

Photo of Ann Jones Ann Jones Labour 4:00, 1 October 2019

You carry on—[Inaudible.]—because we're running out of time.

Photo of David Rowlands David Rowlands UKIP

Thank you. They say they believe in democracy, but deny the largest democratic exercise in British political history, and continue to call for a people's vote so that people who voted 'leave' are left asking themselves, 'Are we not people?' Does the Minister not agree with me that the Labour Party at Westminster has now become a party of vacillation, calling for one thing on one day and something entirely different the next? No wonder Nigel Farage says the Labour Party are now a party more akin to Islington than Islwyn.

When they had the opportunity for a general election, quite frankly, they bottled out. Why? Because they now find their stance on Europe and the denial of the legitimacy of the referendum vote has made them deeply unpopular with many of their hitherto loyal supporters. If, as Labour continually contends, the referendum was flawed, what better way to really test the will of the people than a general election? Is it not true, Minister, that ludicrous predictions about the potential disasters inherent in a 'no deal' scenario, and for which this debate on preparedness now focuses, simply reiterate the dire predictions following the referendum result itself? The banking sector would leave en masse, large manufacturing companies would relocate to the continent, inward investment would fall dramatically, and employment would rise—all of which have proved to be completely fallacious.

You yourself, Minister, mentioned the Ford plant in Bridgend, though Ford were adamant that Brexit did not influence their decision. Perhaps we ought to recall that Ford took its Transit production to Turkey from Southampton. Turkey itself is, of course, not in the EU. And you forgot to mention the loss of 900 jobs at Bosch in Miskin—a direct result of our being in the European Union. The UK has received more inward investment in 2018 than France and Germany combined. Job-creation industrial output has been at an all-time high whilst the economies of Europe have stagnated, and employment has risen in all continental countries. Those who wish to deny the result of the referendum ignore the fact that, historically, the UK is an outward-looking, entrepreneurial, liberal country. But in recent decades, this liberal dynamism has been compromised by our membership of the European Union, where a system of over-regulation and state intervention is endemic.

Brexit provides the UK with a once-in-a-generation opportunity to set free our trade, commerce and people. And I have to say that as someone who's spent 40 years in trade myself, which is something that almost all the Members of this establishment have not engaged in, I know the pragmatic ability of business to overcome difficulties. Once again, I applaud the efforts of the Minister for Economy and Transport but can't help thinking this is an unnecessary, time-consuming and costly exercise. There is much to reflect well on your preparedness in this document, Minister. I feel you are doing all that you can to make sure that Wales is ready, if we do—I would like to say 'a clean break', not 'crash out' of the European Union. Would it not be more prudent for the Welsh Government to concentrate on creating markets outside the EU for Welsh businesses? Thank you.

Photo of Ann Jones Ann Jones Labour 4:04, 1 October 2019

Minister, as I'm sure you've noted, we are out of time, so perhaps be brief.

Photo of Ken Skates Ken Skates Labour

Apologies, Dirprwy Lywydd—

Photo of Ann Jones Ann Jones Labour

No, no. Just be brief.

Photo of Ken Skates Ken Skates Labour

I'll be brief. In terms of who's to blame for the risk of a 'no deal' Brexit, well, clearly, Nigel Farage has been saying for some time now that we need a clean break, i.e. a 'no deal' Brexit. He's been promoting the prospect of a 'no deal' Brexit and I would not agree that 'no deal' has come as a consequence of us fighting for the best deal. The risk of 'no deal' is due to the fact that the current Prime Minister and the previous Prime Minister refused to rule out a 'no deal' Brexit. In terms of testing the will of the people, well, there would be no better way of testing the will of the people over this issue than having a meaningful referendum over the way forward. And in terms of those businesses that have sadly and tragically lost jobs, Brexit uncertainty, by their own admission, has been a constant issue that they've had to grapple with, Ford included.

If I can offer a very, very real risk to public well-being concerning Brexit, let's just choose buses for the moment. We know that oil is priced in dollars and as a consequence of the pound slipping in value, the cost of fuel has been increasing. Now, we believe that the industry within Wales—and there are more than 80 bus companies in Wales in receipt of the bus services support grant or reimbursement for concessionary fares—we know that they could absorb something in the order of a 2 per cent increase in the price of fuel. Two per cent. If it increased by more than that, then the real consequences to communities in Wales could be a loss of bus services or an increase—[Interruption.] Well, you know, bus services—the Member shouts from a sedentary position about bus services—

Photo of Ann Jones Ann Jones Labour 4:06, 1 October 2019

Yes, and the Member is down to speak—

Photo of Ken Skates Ken Skates Labour

The reason that bus services are so fragile is because of his own party's deregulation of the sector in 1986—[Interruption.] 

Photo of Ann Jones Ann Jones Labour

And the Member—[Interruption.] Excuse me. Andrew R.T. Davies. Excuse me. 

Photo of Ken Skates Ken Skates Labour

That's the reason why. And more bus services could suffer as a consequence of us crashing out of the EU and the pound plummeting in value as fuel prices increase. 

But, Dirprwy Lywydd, in the words of Darren Millar, we are doing all we can to brace Wales for a 'no deal' Brexit. And it was interesting that he chose to use that term, 'brace Wales'. You brace yourself when a plane is about to crash, when a car is about to crash, and a 'no deal' Brexit will be a car crash for our economy. Be in no doubt of that whatsoever.