5. What assessment has the Welsh Government made of the economic impact of Brexit on Wales? OQ58339

The Welsh economy broadly tracks that of the UK quite closely. The UK Government's Office for Budget Responsibility's current estimate is that Brexit has so far reduced UK gross domestic product by about 1.5 per cent, with a further reduction of 2.5 per cent still to come. The European Union will continue to be the UK's closest and most important trading partner, and our ambition should be to have the closest possible, frictionless trade with the EU.

Diolch yn fawr, Gweinidog. Brexit is not working for Wales. It has cost us and the UK billions in lost trade and lost tax revenue; GDP is down, investment is down and goods trade is down. With the highest inflation since the mid 1970s, with the cost-of-living crisis biting the people in our communities, the current position of the Welsh Government and Labour in Westminster is not tenable. Gweinidog, we're in the season of leadership contests now. There will be one soon here. Will you make an early pitch, Gweinidog, that Wales will be rejoining the single market?

There is no vacancy in the First Minister's office, and there won't be for the foreseeable future. Look, when it comes to the reality of our position, I have indicated there's been a reduction in trade, and Wales has a greater amount of trade compared to other nations within Britain with the EU, so it's a bigger challenge for us. And I am engaged in some of the contradictory and unhelpful policy agendas within the UK Government on borders and our continued trade, and it's important. I want to see our current position work as well as possible. I would have preferred it—and it's a matter of public record—if we had not left the European Union, but people in Wales, as within the rest of the UK, voted to leave, and we have to try to address that with the least amount of harm possible, and where there are opportunities to try to take those, it will require some honesty from us about what that would mean. Whilst we have articles of faith at a UK Government level on what we can't do, that does create a real challenge for us, but I hope that there will be an attack of common sense and economic common sense around what sort of relationship we should have with the European Union, because that in itself would unlock some of the challenges that we know that we face today.

Minister, the Welsh Centre for Public Policy report 'Brexit and Wales'

'recommends that the Welsh Government guides businesses through the new regulations; encourages retraining and job creation in the customs sector to meet increased demand; maintains emergency funding for sectors affected by border delays; and continually monitors the impacts on Welsh ports.'

Does the Minister accept these recommendations' function, and if so, what progress can he report? Thank you.

We've always recognised that having left the European Union, the ability to trade would still be there, but there would be additional barriers to it. The challenge in the form of having left the European Union is that there are more barriers than would otherwise have needed to be the case. What we're still trying to do is to encourage businesses to continue that trade, to continue to want to be exporters. That's why we have a £4 million programme to support exports in the economy. I was delighted to see BBC Wales recently reporting on exporting success stories, including one within my own constituency. The challenge, though, is that it has put off a number of businesses from exporting.

I recently met with small businesses within my own constituency and the Federation of Small Businesses, and there was very direct and honest engagement around some of the challenges they are facing in both bringing goods in and in exporting as well. I had a similar position explained to me by both Chambers Wales and the Confederation of British Industry Wales as well, so there are definitely additional costs that have been introduced. Our challenge is how we'll continue to support businesses, both to raise awareness of what they will need to do and the extra costs that may bring, but still to encourage them to want to be successful exporting businesses, because that should still help to grow the Welsh economy and good-quality jobs.

Good afternoon, Minister. Can I continue the theme of leaving the European Union? Just looking at the Conservatives' undercooked Brexit of a meal, I wanted to focus on the UK Government-introduced controls around the high-risk imports of animals, animal products, plants and plant products. Some industry representatives have warned that these controls would significantly increase costs on UK food companies, possibly to the tune of hundreds of millions of pounds. Those costs will obviously be passed on to the consumers. Could you provide an update for us, please,  Minister, on what representations you have been making to the UK Government about militating against those costs to businesses, to prevent the cost being passed on to our already hard-pressed households? Diolch yn fawr iawn.

Well, the First Minister has indicated several times in this Chamber the recent evidence on the direct impact that Brexit has had on food costs in any event, the challenges for both import and export for food and drink businesses in the UK in particular, and it's been a regular feature in the conversations around borders and trade that I have had most recently in a rather frustrating conversation with Michael Ellis, the Cabinet Office Minister, and that's about the reality of where we're going with the programme. It means that businesses who want to export from Wales to the island of Ireland, for example, have checks in place on the goods, whereas, actually, goods coming the other way don't at present. That may mean that those goods are cheaper, but it puts our own businesses at a disadvantage.

And one of the challenges that we have is that, having left the European Union, we no longer get the advantage we previously had of having early sight of risks to biosecurity. That means we're more vulnerable, particularly as the destination checks currently taking place are taking place in less than 5 per cent of those goods that are coming in. That means that there is a risk for us in any event. And when we were within the European Union, we still had the ability to introduce additional checks as members as well. So, we're carrying a number of risks, both to biosecurity and, indeed, there's a competitive disadvantage for food and drink businesses in particular in the current arrangements. And I would hope, as I say, that common sense will ultimately prevail to make sure that Welsh businesses are able to export and import on a much more level playing field with colleagues in European countries.

Minister, I agree very much with the premise of the question that Brexit has been enormously damaging to the Welsh economy. I also agree, for the record, and I presume the Minister does, although I won't put him in the situation of asking him this, that he disagrees with leaving the single market and the current position of the UK Labour Party. But it's important, I think, that we recognise, we understand and we describe the economic damage being wrought on this country, our communities and our people by Brexit and by decisions being taken by the United Kingdom Government. Will the Minister give an undertaking that the Welsh Government will publish, at least twice a year, but I'd prefer every term, an analysis of the damage being wrought on the Welsh economy by Brexit, and how the Welsh Government is responding to that damage? Because we need to understand the dimensions of the problems we are facing at the moment if we are to articulate ways of addressing them.

I don't think I could agree with the way in which the point is phrased, because it comes at it from a certain point of view. But I think something about how regularly we update the Chamber and members of the wider public on the realities of our changed trading position is a fair one. It's why I referenced, in responding to Rhys ab Owen at the start, the OBR's own assessment—so, not a Welsh Government body, but a body created by the UK Government. It's their assessment that us leaving the European Union on the terms on which we left have shrunk the UK economy, with more to come. And I think, as well as presenting that, we'd also want to try to explain what we are doing to try to support the economy in that. I'll happily give some thought to how we do that, because it comes up on a relatively regular basis in a range of different forms: the statements I've had to give on borders, the work we're having to do on that; there's more about the challenges and the changed funding arrangements, and how likely it is we'll be able to be associated with Horizon as well, which will have a significant impact. So, I will give some thought to how we can usefully do that, and that may well help not just the Chamber, but Members in their relevant scrutiny committees as well.