2. Will the First Minister make a statement on the impact on Wales of the recent transition to the new UK subsidy control regime? OQ58972

Llywydd, the UK subsidy regime is not the regime the Welsh Government would have designed, nor was it one supported by this Senedd. We will work, however, with public authorities to equip staff to understand and utilise the new regime, mitigating its many imperfections.

Thank you, First Minister. I recently met with a business within my region who are developing technologies that will have a profound impact on helping to reverse the effects of climate change and are in the process of applying for Welsh Government funding, but it seems like the whole process is taking considerable time and much longer than previous applications, which is having a detrimental impact on their forward planning. I'm conscious that you cannot discuss individual applications, but I'm wondering if the delay in the application process is due to a cut in funding, and, in which case, what levels of funding are now available and what will be the ratio of grant to loan in those settlements? Or, if the delay is due to the transition to the new UK subsidy control regime and single-year settlements, what is the Welsh Government doing to smooth the transition to the new system? Thank you.

Llywydd, the new subsidy regime is already in force; it came into force on 5 January. I'm obviously not aware of the details of the individual case that Joel James mentions, but I would not be surprised to find that the new complexities of the subsidy regime are playing their part in any delays because, for the very first time, the system, by introducing intra-UK subsidies within the focus of the law, introduced new legal risks into the subsidy process. Two rival companies on the same high street can, for the first time, ask for a judicial review of every single subsidy that their neighbours may have negotiated. Inevitably, that makes those organisations responsible for providing subsidies more cautious in making those decisions, because the legal risks involved in making any award have been increased by the new subsidy control regime. So, if that does lie near the heart of the delay that Joel James mentioned, it doesn't surprise me, and it is inevitable that those members of staff in public authorities responsible for making those decisions will be having to become familiar with the new regime and, in the early days, are likely to take longer in making those decisions. But, in the longer run, there are new risks in the subsidy control arrangements, and they will be risks that will particularly fall hard on us here in Wales.

That's no surprise, is it, First Minister, that something created by this UK Government will adversely affect Wales? The Scots have learnt this week about the UK Government's disregard for democracy. What we have understood is that we have a chaotic subsidy control regime introduced post Brexit, when the reality of taking back control was not to give control to the people of Wales, to the communities of Wales, to enable the businesses of Wales to flourish, but to take back control to a few Ministers in London, their cronies in the House of Lords and all their party donors. That's the reality of 'take back control', and the people of Wales and Joel's constituents are suffering as a consequence of it.

Alun Davies makes a number of very powerful points there. I should remind Members of the Senedd that, of course, this Senedd denied legislative consent to the UK Bill on 1 March last year, and then the Sewel convention was disregarded and the lack of consent from this Parliament was simply ignored by the UK Government that went ahead and imposed this solution on us anyway. Here are just two ways, Llywydd, in which the new system acts against the interest of Wales. First of all, it removes any sense of assisted areas from the subsidy regime. Indeed, the first draft of the Bill referred to the levelling-up principles of the UK Government. That was abandoned by the time the Bill reached the statute book. So, as my colleague Rebecca Evans said in her letter to the UK Government before our consent motion was debated, the Bill puts Mayfair and Merthyr on exactly the same basis when it comes to providing subsidies. That simply means that those with the deepest pockets will use that advantage to make themselves even more advantaged, while those with the least will end up with the greatest struggle.

And here is just a second example, Llywydd. The UK Government insisted that agriculture and fisheries should be brought within the scope of this Bill. They never were, while we were members of the European Union; they were dealt with separately. We asked the UK Government what the evidence was for bringing agriculture and fisheries within scope. They said to us that it was to be found in the responses to consultation. We asked them where the responses to consultation were to be found. We were told that they hadn't been published. We asked if we could see the responses that justified this inclusion, and we were told that, no, we couldn't. So, here we are. We have a major change, which has, I think, real implications for Welsh agriculture, because the system is based on seven principles, the third of those is that any subsidy must be designed to bring about a change of economic behaviour of the beneficiary. Where single farm payments fit into that, I really do not know. But we can't know, because the whole basis on which the UK Government decided to make this major change was unexplained by them, and the evidence that they pointed to was never made available to us.