The next item is a statement by the Counsel General and Brexit Minister, an update on regional investment in Wales, and I call on the Minister to make the statement.

Thank you, Llywydd. I make this statement in order to update Members on the progress the Welsh Government is making with stakeholders to develop successor arrangements for replacement of EU funds post Brexit. The timing of this statement is very relevant. We now face leaving the European Union by the end of this month. But also, we have less than 12 months before we reach the point where we would expect successor EU programmes to be in place. The funding provided currently by the European Union will start to gradually tail off at that point, putting investment in our businesses, people and communities at risk.

Over a period of 20 years, Wales has benefited significantly from EU structural and investment funds—funding worth £375 million per annum. Where damaging austerity policies have had a severe impact on our communities, EU funds have helped bring new and better jobs and given people the skills they need to do those jobs. Businesses have been supported, including through the financial crisis. The boost was given to our infrastructure and we were assisted in narrowing the gaps in terms of economic inactivity and research capacity in Wales and as compared to the rest of the UK. It is vital that Wales has an ongoing source of investment in order to avoid taking retrograde steps. We must secure funding to help reduce inequalities within the UK and to support economically vulnerable regions, and we know that it's those regions that will be hit hardest by Brexit.

After setting out repeatedly our principles of 'not a penny less, not a power lost', the new UK Government has indicated that its proposed shared prosperity fund will, at a minimum, match the size of the funds received by each nation within the UK at present. Crucially, however, we still await details on how this funding will come to Wales and confirmation of whether devolution, voted for twice by the people of Wales, will be respected.

If the Prime Minister is genuine about upholding and strengthening the union, then respecting the devolution settlement will be one of the UK Government's first tests.

The First Minister informed the Senedd last week that, in their discussion, the new Secretary of State for Wales indicated that the new Government will work with us in a consensual way and will seek practical ways forward on key policy issues. That will work best if each Government is mindful of the distinction between what is reserved and what is devolved.

Regional economic development and decision making on related EU funds in Wales have been devolved to Wales for 20 years. We are seeking urgent discussions with them to ensure existing policy making and funding decisions remain in Wales. This is not just the view of the Welsh Government; our positions for replacement funding set out in 2017 in 'Securing Wales' Future' and in our 'Regional Investment in Wales after Brexit' paper have been backed by this Senedd, an all-party parliamentary group, the Welsh Local Government Association, the Federation of Small Businesses, the Confederation of British Industry, Universities Wales, the Welsh Council for Voluntary Action and think tanks including the Joseph Rowntree Foundation and the Institute for Public Policy Research.

Since the predecessor Government proposed a shared prosperity fund over two and a half years ago, their actions have fallen way short of promises to engage and consult on it. We are now keen to find a way to work with the new UK Government on a solution that involves real participation and genuine agreement across all four Governments, not a one-size-fits-all solution that is imposed by the UK Government. Our policies and regional model in Wales are distinctive. This is why we have been working at pace and closely with our partners to prepare a flexible regional model that will be ready for delivery in 2021.

The regional investment for Wales steering group chaired by Huw Irranca-Davies and comprising business, local government, academic institutions and the third sector, has advised Ministers on issues covering policy scope, outcomes, delivery models and wider engagement plans. Technical sub-groups, well represented by a range of people with expertise, have also met regularly to help inform thinking. The steering group met five times last year and will meet again next month to consider a consultation document before it's presented to Cabinet for agreement and is launched in March.

We are also drawing on international best practice in our work. A two-year partnership with the Organisation for Economic Co-operation and Development is under way to test our thinking and provide rigorous challenge and advice where there are improvements to make, to share what works in other regions and to provide us with the tools to assess capacity and capability at all levels of Government. During their visits in June and November last year, the OECD met a range of stakeholders across Wales to gather feedback. This included a seminar in November that brought together stakeholders and international peers in multilevel governance and public investment, and I look forward to the OECD's report recommendations by the end of this year.

I'm grateful to the OECD, to the steering group and to all stakeholders for their commitment and their work so far. The extensive engagement and the broad consensus on how we want to see things work in future have led to a number of key commitments agreed by Ministers. They include: regional investment to support growth and inclusiveness throughout Wales, with four broad investment priority areas, covering healthier and more sustainable communities, the zero-carbon economy, business productivity and reducing income inequalities for people; the Well-being of Future Generations (Wales) Act 2015 to be at the heart of our plans; greater delegation to regions and local areas, including the principle of some funding being allocated regionally; an approach more focused on outcomes; better opportunities to integrate funding and projects with wider investment and policy areas; a strong, cross-cutting approach to equality and sustainability; a single fund delivered on a multi-annual funding basis; and a more simplified process.

These commitments, together with our emerging regional working proposals being developed through our Local Government and Elections (Wales) Bill and the economic action plan, have provided a solid basis for our detailed work with stakeholders to prepare our consultation proposals. A lot of work remains for us to develop new arrangements for delivery in 2021, and I am keen that Members shall have the opportunity to feed back on our proposals so that we can build on the detailed and thoughtful contributions we've already received from the External Affairs and Additional Legislation Committee, and from the Finance Committee as well.

We do not underestimate the huge challenge of cultural and governance changes and new ways of working that Brexit will bring. I take confidence in the wide-ranging support and expertise we have from partners, which will help us to consider what and how we will deliver as Welsh Government over the coming years, including a new regional investment model that can work for all parts of Wales.

Can I thank you, Minister, for your statement today? I'm not going to be long, you'll be pleased to know, Llywydd, in response to this statement, because, of course, there's not a great deal that's new in it. In fact, you could have been fooled into thinking that we were still in the pre-election period that we saw prior to the landslide election result that saw your numbers reduced significantly here in Wales in terms of Labour MPs. What we do know, of course, is that, in advance of that particular election, there was a very, very clear commitment from the Conservative Party and from Boris Johnson which said—and I'll refer you to page 41 on the UK Conservative Party manifesto—it says,

'Wales will receive at least the same level of financial support as it currently receives from the EU'.

It's there in black and white; it's a clear commitment that the UK Government is absolutely signed up to and will deliver. Indeed, the new Secretary of State for Wales, who I very much welcome to his post, Simon Hart, has categorically said that Wales will continue to receive not a penny less from the UK Government when compared to the finances it currently receives from the EU. And of course, you've already, I know, as a Government, had some positive engagement with the new Secretary of State, and there is very much a respect agenda. I was just watching media reports yesterday where the new Secretary of State was making it absolutely clear that the UK Government has no intention of parking its tanks on the lawn of the Welsh Government in respect of overstepping the devolution boundaries and settlement. It wants to work with the Welsh Government to deliver the benefits that can arise from Brexit as we leave the EU.

Now, we all know that the reality, the sad reality, the sad fact of the matter, is that when it comes to EU structural funds, they have not worked here in Wales. Unfortunately, the gap between our GDP here in Wales versus the average GDP across the whole of the European Union has not narrowed, and that's the whole purpose of the structural funds that were made available. We've seen round after round of those structural funds and yes, of course we've seen some improvements in our transport infrastructure and we've seen some investment, particularly capital investment, in different parts of Wales, but they haven't delivered the sea change that those funds were designed to deliver. So we've got to do something differently, and the reality is that the shared prosperity fund gives us an opportunity to do something differently, and it gives us an opportunity to better target that assistance to those parts of Wales that currently completely miss out on any prospect of receiving EU structural funds because they're not in west Wales and the Valleys.

So will you agree with me—just a few questions, now, if I may—that it's equally important that the Welsh Government also subscribes to this very clear respect agenda that the UK Government has set out? I welcome the fact that you refer to greater decision making to be made at local levels in the statement—I think that's very welcome indeed. Can you tell us how and why you're not getting on with that anyway? It doesn't take the fact that you don't know enough information about the shared prosperity fund to act as a Welsh Government and devolve more decision making down to a more local level. Perhaps you could tell us what the road block to just getting on with that is in any case. And can you tell us also how you're going to ensure that, when you do have a seat at the table in terms of making and shaping the way that the prosperity fund works, particularly in terms of the way that the cash is distributed across Wales, can you assure us that when you're making the case for investment in certain places, you will not overlook those parts of Wales that, unfortunately, I think, feel as though they’ve had a rough deal from the Welsh Government in the past in terms of the way that you've carved up cash, particularly north Wales, mid Wales and west Wales? Thank you.

I thank Darren Millar for that series of questions. In his closing remarks, he talked about a seat at the table, and I think that encapsulates it to me in many, many ways. I think what we need to see in relation to this policy agenda in Wales is a sense that the arrangements are agreed between the Governments of the UK operating in parity, rather than imposed by the UK Government on other parts of the UK. I think he's hit the nail on the head in using that particular image, and he will acknowledge, I think, that I made a reference in my statement to the indication that the UK Government has made about the replacement of quantum, but we don't yet know what they regard that figure as being. And crucially, even if that principle is accepted, what we have not had is any detail about how the devolution boundary is going to be respected in the deployment and the setting of those frameworks in Wales. Again, this is not something that we can have imposed on Wales, and I hope he would agree with that.

I will give him the reassurance, categorically, that we will always seek to be collaborative with the UK Government in relation to this policy area. We have throughout sought to do that and, bluntly, it hasn't been reciprocated. I hope that with a new Government that will be the case. It will best happen if the devolution boundary, for which people in Wales have voted on two occasions, is respected. I think that then provides the platform for that engagement, and we will seek to be collaborative in relation to that.

He mentioned, as he is so fond of doing, his analysis of why the funds have not been effective in Wales as he describes it, and yet, ignoring the tens of thousands of new jobs created, the tens of thousands of businesses supported, the tens of thousands of people helped into employment, the increasing levels of employment, the falling levels of unemployment, the falling levels of economic inactivity and higher skills levels. [Interruption.] I'm not sure if he's completed his question—I rather thought that he had. [Interruption.] The challenge that we face in Wales is that—

The Minister is answering your question, Darren Millar. Please allow him to continue.

The challenge that we face in Wales is that however effectively those funds are deployed, when we have a UK-wide economic policy that is based on austerity and the continued maintenance, on a UK-wide basis, of the most unequal regional economy in any part of Europe, those funds cannot do the heavy lifting for that failure in fiscal and macro-economic policy across the UK, which is punishing so many of our communities. But they have been effective, and we have a good track record, and that compares very, very favourably to the failure of the local enterprise partnerships and the local growth fund in England, which the public accounts committee in Parliament has analysed in some detail.

I will make the commitment to him that we are very keen to make sure that the replacement funds respect the regionalisation agenda that flows throughout the whole of our policy in Welsh Government, and I will make the commitment to him that all parts of Wales will benefit from these funds. There is a potential in the replacement funds—which we've worked together with stakeholders to design and to map out—to look at this more flexibly than perhaps has been possible in the past. So, I hope he will engage constructively with the consultation when it comes forward.

I must say in opening my remarks that I very much regret the flippancy of the Conservative spokesman. He either is very naive in accepting the, to date, meaningless promises made by UK Government, or he really does care more about heaping praise on his London masters than he does about the interests of the Welsh economy. And in terms of wanting Welsh Government to have a seat at the table, I think he did very much betray what he actually thinks on this. We want the table—we want to decide in Wales how money is spent, and that is exactly what devolution is all about.

And you say that European funding has been a failure and that it hasn't closed the GDP gap. You know what, I agree with you in that it hasn't been spent as well as it should have, but at least European funding is aimed at closing that wealth gap. UK funding is not. You forever, Darren Millar, praise the additional funding coming to Wales. It is all about locking Wales in poverty. That is what additional money coming to Wales is about.

Minister, could I agree with your assessment of the value of the funding that has come from the EU over the years? I don't agree every time with the way in which that money has been spent, but that funding has definitely brought benefit and there was potential, of course, to continue with that. I do agree also that there are several principles that are vital as we move forward—first of all, that we have to ensure that not a penny is lost, and it's not just the shared prosperity fund that we're talking about here. We've already heard mention about Erasmus today and that is a separate pot. Well, we have to ensure that that comes as well. So, No. 1—not a penny less. And, secondly, this principle that we have to respect the devolution settlement.

We haven't yet heard what we need to hear from the UK Government. Yes, there are a number of warm words that have emanated and promising signs from the new Secretary of State for Wales. But as we are now within a year of losing that EU funding, warm words are not enough. They weren't enough a year ago, but by now I do agree with the Minister that we should be in a much stronger place, and we will support the Government as you move towards having the kind of assurance that you're asking for.

There's not much in this statement today beyond those statements, that is I agree with them. You're talking about the announcements that will be made in the next few months about thinking about different ways of targeting funding on a regional basis. So, just two questions suddenly on that. What kind of targets do you want to put in place to ensure that that funding does bring results? That is, we as a part, have supported having growth targets and prosperity targets on a regional basis for many years and we would wish to see that kind of target driving Welsh Government policy.

And, secondly, how flexible are you willing to be as a Government in terms of what kind of regions we're talking about? For example, I was talking to a member of the leadership team in Gwynedd Council a few days ago who was talking about the benefit that could come to Gwynedd through working regionally across north Wales in some contexts; in working with Ceredigion and Powys when it comes to issues relating to south Gwynedd; and then working across west Wales, on the map that we've come to know as Arfor, in other contexts. So, how flexible are you willing to be in terms of the regions that you're going to create, if the creation of regions is the intention?

Thank you to Rhun ap Iorwerth for those questions. I would like to be in a position to share more details with him about what the UK Government has in mind in terms of this fund. We have asked for input into any reference to Wales in the proposed consultation, but we haven't received that confirmation from them as of yet. As I mentioned earlier to Darren Millar, we do need far more detail in terms of securing that devolved border.

In terms of measuring success within this new funding system that we've been discussing with our stakeholders and the work that Huw Irranca-Davies's committee has been doing, they do have a sub-committee of that group that has been looking at this question of how to evaluate success and performance within the new system, drawing on best practice in doing so.

In terms of that regional question that Rhun ap Iorwerth mentioned, that is hugely important. The vision in terms of principle for us is that there are some things that are better done at a national Welsh level but that there are others that would work best regionally, and then another element that would work best at a very local level, and that reflects, to a certain extent, the current plans. But we see that there are opportunities within that to be flexible and to ensure that appropriate decisions are taken at a sub-national Welsh level when that is appropriate, and that would include providing some of that funding at the regional level, rather than everything being at the national level.

I thank the Minister for his statement this afternoon. Whilst we welcome all those initiatives outlined in the Minister's statement, including the setting up of the regional investment for Wales steering group, and your extensive engagement with the OECD, it does however beg the question what the Welsh Government has achieved with the billions of pounds received in EU regional funding over the past 20 years. Perhaps you can explain to us and the people in the south Wales Valleys why they are still classed as some of the poorest in Europe.

Surely, Minister, your continued scepticism with regard to the UK Government replacement funding does little to foster good relations with Westminster. Perhaps you can explain to us how you feel that this is the best way forward. And, as Darren Millar pointed out, you have had many assurances in statements from the UK Government that Wales will not receive a penny less. Indeed, it could receive a great deal more once the shared prosperity fund is administered. And perhaps I should point out that Wales, Scotland and Northern Ireland are not alone in awaiting this allocation. Many of the regions of England are similarly placed.

You point out that we will lose out on EU structural funding to the tune of £375 million per year, but fail to point out that we had to comply with restrictive EU rules in its application, whilst the £14 billion allocated by the UK Parliament through the Barnett formula, which, although flawed, comes with no such restrictions and which the Welsh Government is free to administer as it sees fit. May I also say, Minister, that one cannot ignore the irony in your call to respect the devolution referendum, given you and your party's deliberate attempts over the last three years to thwart the decision by the Welsh people to leave the EU in that referendum.

Much of this statement contains reference to initiatives and actions being put in place to create a prosperous and inclusive Wales. Minister, one has to ask, irrespective of Brexit, when will the rhetoric stop and the delivery begin?

Well, I hope I'm not striking a tone of scepticism, as I have indicated to Darren Millar previously. We stand ready as a Government to engage constructively with the UK Government on this, and I've outlined what that means from our point of view, and part of that involves the crucial aspect of respecting the roles that different Governments in the UK have, the different powers and responsibilities the different Governments in the UK have, and I look forward to having that confirmed by the UK Government in detail. As I say, we've had positive indications but now, I think, we would all see as the time to move beyond those broad positive indications to a detailed discussion of what the UK Government are proposing and a commitment to that basic principle.

He invites me, I think, once again, to enumerate the ways in which these funds have benefited the people of Wales. We have significant growth in employment and drops in unemployment, increases in skills levels, and drops in economic inactivity in those regions that have been able to benefit from European Union funding. We've created thousands of new jobs through that, supported thousands of businesses, helped tens of thousands of people into employment. He may not know who those people are, but I have plenty of people in my constituency who will come to my surgeries and tell me that they have benefited from apprenticeships and other skills programmes, all of which have been funded by the European Union.

I'll resist the temptation to re-fight the referendum, which he seems to want to do. All I will say is that we think there are imaginative and constructive ways of ensuring that regional funding in Wales into the future continues to deliver the benefits that Wales has accrued from this for the last 20 years. We have an imaginative and creative approach to designing those schemes. I think what we would like to see now is the confirmation that the plans that the UK Government have for the shared prosperity fund will enable us, effectively, to make those proposals real. I think that is in the best interests of the people of Wales.

Can I thank the Minister for his statement this afternoon on the update on the regional investment plan for Wales? I think it's important to remind ourselves that it is an update—we're not there yet. Can I also express my disappointment at the contributions from the Conservative spokesperson and the Brexit Party spokesperson, who have attempted to deride the benefits we've had from European funding. If they want to come to my communities and see what benefits they have given, they are welcome to do so, because that has been some of the help that those communities have needed at times of difficulty that they have faced because of the agenda of austerity that has been in place since 2010.

Minister, in relation to the statement, you mentioned one aspect there—a multi-annual funding basis. Clearly that was a European programme and it should be multi-annual-funded, but we don't seem to have a multi-annual-funded replacement in place at this point. All we know about the shared prosperity fund is its name. We know nothing else. Darren Millar may have more detail on that than we have, because we know nothing about it. We don't even know how it's going to be administered, what type of contributions and what type of limitations will be placed upon it, will there be any frameworks that we have to abide by? We just don't know anything yet. But have you had any indication that it would be multi-annual, so that we will have this guaranteed not just for one year but that these figures will be there for continual years so that we can put a multi-annual programme together, because it is important to help those communities that have been using that fund for that purpose to be assured that they will have that funding coming in, not just for one year but for several years, so that they can put something together carefully?

You also commented upon the regional investment for Wales steering group, and that you will be expecting a consultation document to be launched. Can you confirm that that's a consultation document and therefore it is not a final document given to the Government, but there's a process that will continue beyond that? Because you highlighted that the OECD will not report until the end of the year. I'm assuming from those bits of information that the Government will not be putting together its final plan—its final regional investment plan—until the end of the year or early 2021. When will, then, that be kicking in to ensure that our communities will have an idea of what the regional investment plan of the Welsh Government is for the future direction? 

I thank David Rees for those questions. He's right to say at the start of his questions that, effective though the use of these funds has been, the broader context of austerity is one within which we are all operating. One can't expect any level of intervention of this kind to make up for the impact, the adverse impact, that that will have on the communities that many of us represent.

It's exactly the kind of detail around multi-annual funding and the central availability of that that we are still uncertain about. I think his question goes to the heart of it. The programmes that we have currently are, obviously, available on a multi-annual basis. So, being able to continue providing support on that basis is essential.

I will also say that there will be programmes that one would expect to qualify under the existing programmes and future programmes, and, typically, there's an overlap in those programme years so that there can be smooth transition from one programme to the next. So, that's another concern—that we make sure that replacement arrangements and replacement funding are in place in good time for that to be possible in relation to some of these programmes as well.

In relation to the consultation in March, that will be a public consultation. It will describe the output of the steering group and it will describe the principles and the broad frameworks and so on, but that will be available for public consultation. He is right to mention the fact that the final report of the OECD won't be available until the end of the year. This is a programme that the OECD has been working with us on for two years, and there have been some interim outputs from the work of the OECD, including visits to Wales during the last year and a stakeholder meeting, as I said, in November of last year. That has given a sense of some of the direction of travel from their reflections on best practice as well.

There are a number of questions involved here. One is around the frameworks, the priorities, the governance and then the delivery mechanisms. Some of that will be available only at the end of the year from the OECD, but, in relation to the frameworks, the governance, the principles and so on, we will want those to be consulted upon sooner than that.

It's important for us to be in a position to have replacement funding arrangements in place as soon as possible next year so that we can maximise that smooth transition between one set of EU-funded programmes and the UK-wide funded programmes after that.

Thank you, Minister.