6. Statement by the Minister for Economy: Wales and Europe — Managing a new relationship

Part of the debate – in the Senedd at 4:51 pm on 1 February 2022.

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Photo of Vaughan Gething Vaughan Gething Labour 4:51, 1 February 2022

I also recently met with a group of stakeholders last week, discussing some of the changes following the change in trading relationships. I've previously met Stena as well, to discuss some of the impacts on the port of Holyhead in particular. It's estimated that we could see—and this is direct from stakeholders involved in running ports and the logistics industry—. There could be 100,000 fewer lorry movements per year if the change in trade is permanent, with the loss in volumes. Now, that's a significant amount of trade that isn't coming through Wales, and that will have an impact on the activity, including the jobs, around ports. So, it's not a trivial matter to see 30 per cent of trade being lost at present. Holyhead is likely to survive, of course, because it's such a significant port for the UK as well as for the European Union, but it is more challenging still for our Pembrokeshire ports, and in particular the arrangement the Member touched on for border control posts, and whether or not there is a charging regime and how that would actually be fixed, because a charging regime designed for very large ports with very high volumes of traffic may not work for smaller volume ports in any part of the UK. So, there are real challenges about any regime that's designed.

That does go into the points the Member made about conversations with the UK Government about funding. We had a wholly unsatisfactory response from the UK Treasury on the running costs of border control posts, which are likely to be in the millions, and actually those are costs that should not be shifted directly on to Welsh Government responsibilities. We'd have to find the money in the budget, money that can't be spent in other areas to support the economy or public services. I'd welcome it if there was genuine cross-party support for further movement on that, including from Conservative Members, who will recognise the damage that would potentially otherwise do to various parts of the economy, not just Holyhead and our Pembrokeshire ports.

It isn't, though, clear if the reduction in trade will recover. We've already seen a number of direct routes from the island of Ireland direct into continental Europe, and it's something that's come up in our engagement with Irish Ministers as well, that some businesses will prefer certainty, even with a higher cost, compared to the uncertainty of what will happen to the traditional land routes through Wales as well. So, I can't give an assurance on whether that trade will recover, or a direct assessment, because that still isn't certain.

On site selection for border control posts and border control posts more generally, I think it would be most helpful if I provide an update to Members on this issue generally, because of the progress we are making, and our desire, with some support from the UK Government, which has been welcome, and constructive progress, on the construction costs for a border control post around the port of Holyhead.

I should just say, on your broader point about export action, it's been interesting that, with the barriers and tariffs, actually the biggest challenges for trade are the non-tariff barriers, the additional paperwork, the additional cost. You'll have seen the pictures of lorries queuing outside the ports and the narrow straits in England, and actually that's been a really big factor in those businesses that are no longer trading with businesses based in the UK, including here in Wales, but also for those businesses that are looking to withdraw from being export businesses as well. It's worth while noting that actually the UK's trade with the EU has fallen, but also with the rest of the world outside the European Union as well, and I think that is a product of uncertainty and the lack of clarity about where the UK is.

On envoys for Wales, again, I'd be more than happy when updating people about the export action plan to provide an update on the work our envoys are doing. I've met each of our envoys in different parts of the world. They're very proud to be part of the Welsh diaspora, to be fighting Wales's corner for future investment in other parts of the world, and I hope, once I'm over my own COVID-enforced isolation, to meet envoys in those countries where we recognise we have real opportunities for further success for Welsh businesses, and I certainly would appreciate the opportunity to work constructively with Members across the Chamber to do just that for Welsh businesses and, of course, Welsh jobs.