3. What discussions has the First Minister had with the UK Prime Minister regarding the Shared Prosperity Fund? OAQ54889

I thank the Member for that. I take every opportunity to raise the shared prosperity fund with the Prime Minister, both orally and in writing, and have done so again since the outcome of the 2019 general election.

I thank the First Minister for that answer, and he's rightly stood very firmly on the principle of 'not a penny less, not a power lost' in respect of the shared prosperity fund. Yet, over the last year, there has been little if any real engagement by the UK Government with the Welsh Government, and little detail beyond that headline. Meanwhile, quietly but assiduously in the background, the regional investment Wales steering group, which I've got the privilege of chairing, has been scoping future funding proposals for Wales that would respect the distinct policy framework within Wales, respect the principles of devolution and subsidiarity to and beyond Cardiff Bay and this Senedd, and also respect the need to be responsive to local and regional priorities. But it also notes the need to work in a cross-border way on funding and initiatives across the UK and indeed across Europe in the future. So, the First Minister will not be surprised to hear that the steering group would welcome a much more open, transparent engagement from the newly elected UK Government, and the new Secretary of State for Wales, on the shared prosperity fund. Would he and the Brexit Minister now seek constructive and urgent engagement with the UK Government on these matters, but on the very clear terms as well of not a penny less, as was guaranteed to us, and not a power lost?

I thank Huw Irranca-Davies for that, and can I begin, Llywydd, by thanking him and Members of the steering group for the very engaged piece of work that they have been involved in over the whole of last year? I know the group intends to meet again in February, and that we will have a formal consultation drawing on its proposals again in March, because the can that is the shared prosperity fund cannot go on being kicked down the road by this Government in the way that it was continuously kicked down the road by its predecessor.

Now, I've had a conversation with the new Secretary of State for Wales, Llywydd. He assured me that he was committed to working in a consensual way with the devolved administration, that he will be looking for ways of agreeing practical ways forward on key policy issues, and I take those assurances at face value and look forward to meeting him to discuss the shared prosperity fund and other matters of mutual interest. But, when we come to those discussions, it will have to be, as Huw Irranca-Davies has said, on the basis of the principles that we have already articulated here.

People in Wales who voted to leave the European Union were promised that Wales would not be a penny worse off. That must be delivered through the shared prosperity fund. Regional economic policy has been devolved to the National Assembly for Wales since 1999. It is not a new addition to the repertoire of responsibilities that this National Assembly holds, and when the shared prosperity fund is brought into the daylight and we all have a chance to be able to look at it properly and to debate it, then it must deliver that as well. But, the responsibility for deploying that money should be as close as possible to the place where the difference can be made.

That's what all the literature tells us about regional economic development, it's what the OECD, which we are working with on this, tells us too, and it's why the work of the steering group that Huw Irranca-Davies has chaired has been supported by the FSB, the WLGA, Universities Wales, HEFCW, the WCVA, as well as think tanks outside Wales like the Joseph Rowntree Foundation and the all-party parliamentary group at Westminster. Our principles are principles that are widely shared beyond this Chamber and we look for them to be honoured in the shared prosperity fund.

EU structural funds are, of course, only available to certain parts of Wales, and given what you've just said in your previous answer in terms of being aware that money's being spent and being decided here in Wales, I wonder, First Minister, if you would agree with me that the shared prosperity fund provides a new opportunity to invest in parts of Wales outside of the Valleys and the west of Wales—indeed, available to spend in such areas of Wales such as mid Wales. 

Well, Llywydd, done properly, a shared prosperity fund would have the potential to offer new flexibilities in the way that regional economic funding could be spent in Wales, and maybe that is geographical—although those parts of Wales that benefit from those funds now would certainly have something to say if they thought that the future was one in which the help that they have had to date was to be diluted.

But, there are other ways in which flexibilities could be applied were the shared prosperity fund to be properly designed, so that money from Europe has been available for certain purposes. And then maybe there are other purposes that would have a bigger regional economic development impact that we could use funding for in a different sort of fund. It's been difficult under European funding sometimes to combine funds that are in the hands of the Welsh Government for other purposes with European Union funding, and a shared prosperity fund, properly designed, could be more flexible about the way in which different funding streams could be brought together to have the impact that we need.

So, I don't disagree with the basic premise of Russell George's question, but done properly, there are new flexibilities that we may be able to find. They would have to be carefully thought through and agreed with delivery partners here in Wales to make sure that they didn't have unintended negative consequences as well as potentially new positive impacts. 

If I could push you a little further on that, we are moving towards life outside the European Union now, and we do have to look at safeguarding Welsh interests in that new context, and we are all agreed that it's not just how much money comes to replace EU funding that's important, but how those funds are spent. You mention there that new flexibility that could emerge in certain areas, but what assurance have you received so far and what threats have you identified to date in terms of that principle that priorities should be set and decisions on expenditure should be made in Wales under this new fund?

Well, we haven't been given any assurances about any aspect of the new fund, and there are no details in the Conservative Party manifesto, and we haven't heard anything yet from the new Government. And that is why I said that it's crucial that the new Government publishes the details and talks to us about those details. We here in Wales—and not just in the Government, but with everybody that's been such an important part of the way in which we've spent the European funding—we will all have to be clear about the new Government's proposals, to give us an assurance about the principles that we've mentioned today, and also they must collaborate with us to plan an effective strategy for the future.