Cynulliad Cenedlaethol Cymru

Yn ôl i Chwilio

Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol

External Affairs and Additional Legislation Committee

30/04/2018

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Dai Lloyd AC Yn dirprwyo ar ran Steffan Lewis
Substitute for Steffan Lewis
David Rees AC Cadeirydd y Pwyllgor
Committee Chair
Jane Hutt AC
Jenny Rathbone AC
Mark Isherwood AC
Michelle Brown AC
Suzy Davies AC

Y rhai eraill a oedd yn bresennol

Others in Attendance

Chloe Smith MP Y Gweinidog dros y Cyfansoddiad, Llywodraeth y DU
Minister for the Constitution, UK Government
David Thompson Yr Adran Ymadael â'r Undeb Ewropeaidd, Llywodraeth y DU
Department for Exiting the European Union, UK Government
Geth Williams Swyddfa Ysgrifennydd Gwladol Cymru
Office of the Secretary of State for Wales
Robin Walker MP Yr Is-ysgrifennydd Seneddol yn yr Adran Ymadael â'r Undeb Ewropeaidd, Llywodraeth y DU
Parliamentary Under Secretary of State at the Department for Exiting the European Union , UK Government

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Alun Davidson Clerc
Clerk
Elisabeth Jones Cynghorydd Cyfreithiol
Legal Adviser
Gemma Gifford Dirprwy Glerc
Deputy Clerk
Nia Moss Ymchwilydd
Researcher

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Dechreuodd y cyfarfod am 11:15.

The meeting began at 11:15.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Good morning, and can I welcome Members and the public to this morning's session of the External Affairs and Additional Legislation Committee?

Before we go into our business for the day, can I remind Members, please, that the meeting is bilingual and, therefore, if you require the use of headphones for simultaneous translation, that is on channel 1; if you require the headphones for amplification, that is on channel 0? Can I also remind people to turn their mobile phones either onto 'silent' or 'off'—and other equipment—so that the broadcasting is not interfered with? There are no scheduled fire alarms this morning, so if one occurs, please follow the directions of the ushers to ensure that we leave the building safely. We've received apologies this morning from Steffan Lewis, and I'm pleased to welcome Dai Lloyd, who is substituting for Steffan this morning.

2. Sesiwn graffu gyda Llywodraeth y DU
2. Scrutiny session with the UK Government

Moving to our next item on the agenda, which is a scrutiny session with Ministers from the UK Government, can I welcome the Parliamentary Under-Secretary of State at the Department for Exiting the European Union, Robin Walker, and the Minister for Political and Constitutional Reform, Chloe Smith?

Would you like to introduce the officials you have with you today, please, for the Record?

This is Geth Williams. 

David Thompson from DExEU devolution team.

Chair, if I may, just to put on the record that my job title is Minister for the Constitution, rather than Minister for Political and Constitutional Reform. I used to be that, and I'm now the former.

Minister for the Constitution.

Oh right. Not even reform. [Laughter.] Thank you for correcting that and we'll ensure that it's on the Record corrected. But still, the issues that you're responsible for will have some importance for our consideration.

If I can start the questions in that case, because we'll go straight in. I appreciate that we have a timescale; you have to leave because of your return to London. If I start off asking about the agreement—I want to talk about the European Union (Withdrawal) Bill and agreement later in the session, but I suppose, in a sense, I don't want to neglect the agreement or discussions you'll be having on phase 2 of the negotiations—because we haven't yet concluded phase 1 but we're getting there, but phase 2 has obviously started and we have some sessions under way I understand very shortly before the June Council.

We just want to know perhaps how far we've got in the negotiations in relation to the role of devolved nations in those phase 2 discussions, because we had heard that you were keen to get that involvement. We've heard from our Cabinet Secretary for Finance that a paper was going to JMC (European negotiations) for that purpose. He hadn't seen the paper when we had him before the committee two weeks ago. We are unaware of any papers, so what are the formal processes in place for those negotiations so that the devolved nations can get involved and actually ensure that their voices are being heard as part of that phase 2 stage?

Sure. Thank you. As you say, we've made some progress in the negotiations on withdrawal. We've agreed 75 per cent of the withdrawal agreement text and we are working to finalise that over the run-up to the June Council and have a final agreement on withdrawal by October. We obviously agreed in the March Council, and the EU agreed in the March Council, that the discussions on the future relationship could get under way, and we are very keen that we can have the broadest possible discussion on the future relationship. We've always been clear that we want to make sure that devolved administrations are involved in that and are able to press the interests of their particular areas. And, as you say, we've agreed to bring forward an approach for the next JMC. That is going to be this week, and so I think, as is usually the course with the JMC(EN), it will then be for the Governments to agree the way forward and to come back to their respective legislatures to be held to account for that.

Can I confirm then that the respective Governments have received that paper before the JMC(EN), because one of the concerns we've always had is that Governments have not received those papers in sufficient time for consideration prior to the JMC(EN)? That's been reported back to various committees, not just in this institution but in Scotland as well. Have they received those papers?

I am afraid that I'm not personally responsible for the JMC(EN) in this space and so I can't confirm that, but I believe that papers are being submitted ahead of the JMC(EN), and I think it's important that they should be discussed at this week's JMC(EN), and the conclusions, obviously, will be reported back on.

And will those papers be published at some point in time so that we can look at them?

11:20

That would be for the Governments to decide or agree at the JMC(EN). I think, as you know, at the end of each JMC(EN) there's usually a statement by agreement from the Governments, and that's all to take place, and I know that the devolved Governments will be keen to be able to come back to their legislatures and to provide information on the arrangements that are being put in place. But I think we are very clear on the need to engage with the concerns of the devolved administrations, and that we've tried to do, both through ministerial-level meetings but also through a huge amount of official-level engagement. I know that Chloe has been leading on the frameworks discussions where there has been a lot of very good official-level engagement between the UK Government and the Governments of the devolved administrations.

We appreciate that, and it's been reported back to this committee and the Assembly about that official co-operation level, but I suppose what we are seeking is the ability to scrutinise the Welsh Government on its position and the thinking behind its decision making, and the publication of these papers would help us do that. I suppose, in a sense, that also reflects perhaps the need for a more formalised JMC(EN) or JMC approach where papers are published and we can scrutinise clearly. Is there any movement towards a more formalised JMC consideration? Because, as you are aware, the First Minister's often called for a council of Ministers. And it has been recognised also, and has been made clear at the inter-parliamentary forum that was recently held in Scotland, that the JMC was not fit for purpose. Therefore, what moves are being made to create a JMC that's fit for purpose?

Thank you for that, and it's a pleasure to appear before your committee, Chair. There is already a piece of work within the JMC process to ensure that it is improved. This was on the agenda between the Prime Minister and the First Ministers at the last meeting of the plenary session, and therefore work is being done to try to address the ways in which I think we'd all like to see that structure really fulfil its best potential in the time to come. I'm aware of the argument that suggested it ought to be placed on a statutory footing, and I think the UK Government is still a little sceptical of the need to do that, because we think it's quite important that the structure does retain flexibility. And, actually, one of the ways in which that flexibility is important is in terms of timing. The meetings of the various JMC components are intended to be able to dovetail with, for example, the negotiations process. So, we think it's important to be able ensure that not only are they flexible around that, but actually—also in an extremely practical manner—flexible around busy people's diaries so that, actually, the best can be got out of the whole process.

Yn dilyn hynny—diolch am eich cwestiwn agoriadol, Gadeirydd—yn un o'r pwyllgorau eraill yr wyf i'n eistedd arno fo, rydym ni wedi gwneud adolygiad o sut y mae Cyd-bwyllgor y Gweinidogion yn gweithio, a sut y mae'r gwahanol berthnasau rhwng y gwahanol Lywodraethau yn yr ynysoedd hyn yn gweithio hefyd. Y canlyniad o'r adroddiad hwnnw, ychydig fisoedd yn ôl, ydy y gallai pethau fod yn sylfaenol lawer yn well. Wedyn, yn deillio o hynny, pa sicrwydd sydd gyda ni? Achos fe wnaethom ni gymryd cryn dipyn o dystiolaeth a oedd yn dweud bod Cyd-bwyllgor y Gweinidogion ddim yn gweithio hanner cystal ag y gallai weithio. Ac, wrth gwrs, yn y gyfundrefn newydd hon, rŵan, wrth adael Ewrop, rydym ni'n gofyn am lawer gwell cysylltiadau a llawer gwell perthynas, a pherthynas o gydraddoldeb, yn wir, rhwng San Steffan, yr Alban—Caeredin, Caerdydd a Belfast. Pa sicrwydd a allwch chi ei roi inni fod y gyfundrefn henffasiwn, braidd, o Gyd-bwyllgor y Gweinidogion, hynny yw a oedd yn arfer, braidd, ddim cyfarfod o gwbl, neu leiaf yn flynyddol, ar fympwy San Steffan—? Rydw i'n gwybod ei fod e wedi bod yn cyfarfod yn fwy rheolaidd yn ddiweddar o achos yr amgylchiadau, ond yn y tymor hir, pa sicrwydd a allwch chi ei roi inni, yn y bôn, fod y berthynas yn mynd i newid rhwng ddim jest San Steffan yn dweud wrth y Llywodraethau eraill beth i'w wneud, ond ein bod ni'n rhan o wir bartneriaeth yn yr ynysoedd hyn?

Following that—and thank you for your opening question, Chair—one of the other committees that I sit on has undertaken a review of how the Joint Ministerial Committee operates, and how the different relationships between the different Governments of these islands operate also. The outcome of that report a few months ago, or the conclusion we came to, was that things could be fundamentally much better. So, following on from that, what assurance do we have? Because we did take quite a bit of evidence that said that the JMC was not working half as well as it could work. And, of course, under the new arrangements, after exiting the EU, we will be asking for much better connections and a much better relationship, and, indeed, a relationship of equals between Westminster, Scotland—Edinburgh, Cardiff and Belfast. So, what assurance can you give us that this rather old-fashioned system of the JMC that we have, which used to meet very rarely, or at least annually—and that was according to Westminster's timetable—? I know it has been meeting more regularly because of the circumstances, butin the long term, what assurance can you give us that, fundamentally, the relationship will change from just Westminster telling the other Governments what to do, but that we can be part of a true partnership in these islands?

Thank you for your question, Mr Lloyd. Again, I'd actually very much like to welcome that question because this is exactly what has been discussed as part of the recent JMC plenary discussion that I just referred to. I think you will find some of the assurances that you're looking for in the outcome of that work, and you'll find it in black and white on a page, which, I acknowledge, is very helpful, of course, to scrutiny committees in all of the institutions.

We do very much want to have that close working relationship and for it to be closer. One of the themes that I know we'll come on to, when we come on to talking about clause 11 of the withdrawal Bill and those matters, is the way in which the UK Government and the Welsh Government have recently been able to work together, which I very strongly welcome and I would like to see setting the tone for continued collaboration on the range of issues that we have in front of us. I think members of the committee will be well aware of the contents of the letters that have recently been written between the Welsh Government and the UK Government, in which some of those reassurances are put down, and which I hope, really, create the space for the quality of that relationship going forward. And I would emphasise that I think we all agree that this is not a matter between only the Governments and each other, but also the Assembly, the Parliament, the institutions and each other as well.

11:25

Good morning. Just developing that, last week, when Mark Drakeford made a statement in relation to that agreement over the amendment to clause 11, I raised the question of what happens next. Once we have exited, once the new regulatory temporary restriction on devolved competencies under the new arrangements have served their purpose and the two to five-year terms have ended, we will need an adjudication system to replace the current EU adjudicating system with regard to the management and conflict resolution of the new UK single market arrangements. What considerations have been given to what UK-wide structure will be agreed or will be required to meet that need?

And recognising that that's possibly separate from a JMC-type formalised structure, which is what we were talking about.

Shall I answer it in the context of frameworks and then let's see where the discussion takes us, if that is agreeable to you, Chair? The frameworks piece of work, actually, Mr Isherwood, is entirely about the breadth of detail that is needed to do as you say: to ensure that we have a functioning and thriving UK internal market as well as the kind of certainty that citizens and businesses will be looking for. And I think the committee will be aware that, within the piece of work known as frameworks, we have, of course, all been thinking very carefully about those things that require a legislative framework, all the way through to those things that won't and that could be managed much more informally.

Now, I do see that, in the course of that piece of work, we will continue to come to a shared and fuller understanding of what, if any, future institutions are required. Such a thing isn't designed yet, because we are, I think, still at the early stages of the frameworks work. And what we are making sure we do at this point is agree the areas, the headings, the policy areas. Obviously, as part of that, as I say, I very much welcome the agreement that has been reached between the Welsh Government and the UK Government that helps us take that frameworks endeavour forward.

Of course, also, actually, the logic does go a little the other way around as well. I think it is only because of that extent of the work that we've been doing with each other and with the other devolved administrations with regard to frameworks that, as well, has allowed us, actually, to get forward to the position we're now in in respect of the way clause 11 functions and what we want it to do in the future. But I do want to continue to give the space to ensuring that that frameworks detail can be completed and then, as you referred to in your question, the way that clause 11 powers will work in the future with the sunsets, where relevant, gives enough time, I hope, to be able to ensure that we've got the right design of things, in the right amount of time, to be able to have a really flourishing UK internal market protected.

Chair, if I may—I should apologise for not having the information to hand earlier, but, when you asked in terms of had the paper been sent to the Welsh Government, I'm informed it has, and that paper was shared on 19 April. So, they will have plenty of opportunity ahead of the JMC(EN) to have considered it.

11:30

Okay. Thank you for that, and for the clarification; we can ask our own Ministers the same questions on that later on. Thank you.

So, just to close this one little session down, on the JMC, the formality process, there are still discussions to be had on that. Just to highlight, 'statutory' doesn't mean 'inflexible', either. It just means you have a regular, fixed time; flexibility can still be built into that. So, one is not exclusive to the other.

If I move on to the questions in relation to perhaps the discussions both on the withdrawal agreement with the EU, but also, as a consequence, the implications for the future relationship, and that's obviously, clearly, around the Northern Ireland-southern Ireland issue at this point. I'm sure you're aware, because we've discussed this before when we did our report on the ports—we highlighted our concerns relating to the implications for Wales in particular of that. But perhaps you can clarify the situation on the customs union agenda—a big topic at the moment, I understand that. The Lords has passed an amendment that requires that to be discussed, and also, clearly, there was a debate last week—there was no vote on it, but there was a debate on the customs union issue in Parliament, so it is an important aspect. What discussions are you having with your position on the customs union with the EU, and has the EU accepted the UK Government's position on this, or any issues of the UK Government, or is there still, shall we say, some disagreement on the customs union agenda?

Well, I think you raise two separate questions. One is in relation to the Irish border, the Ireland-Northern Ireland issue, which we are of course discussing as part of the withdrawal agreement, and on which we seek to reach agreement with the EU as soon as possible. Obviously, the hard deadline for that is October, but we'd like to reach further agreement by the June council. There are ongoing negotiations on that at a very detailed technical level as to how that can be achieved.

Of course, a slightly separate but connected issue is the customs union, the future customs arrangements, and the position of the UK Government is very clear, that we are leaving the EU customs union. We do then of course seek to negotiate a new arrangement between the UK and the EU that will allow for frictionless and tariff-free market access, and I think it's welcome that the EU's negotiating guidelines include that aspiration of no tariff barriers and frictionless arrangements with regard to the border.

Clearly, we set out in our customs paper last summer two potential approaches to the customs issues: a maximum facilitation approach, which we further said in our Northern Ireland paper would need to be expanded on in the context of Northern Ireland and the Republic, with a local trade exemption for small businesses and agriculture—the alternative being a hybrid new customs partnership model. Both of those are still on the table being discussed, both within Government and with the EU, and we're looking forward to the future partnership talks getting under way so that we can get into the detail of how those can provide the frictionless market access, which I think will be in the interests of both parties to the negotiation recognise that the Welsh Assembly and the Welsh Government have set out clearly the demands of businesses with complex supply chains in this respect. We absolutely want to make sure that we deliver for those.

So, just to make it clear, you're reiterating the UK Government's position that, when we leave the EU on 29 March, we will also be leaving the existing customs union as we know it.

Yes, and I think it's important to recognise that there is only one country outside of the EU that is a party to the customs union, and that only partially, which is Turkey. That is as a result of being in an accession process. There is no precedent for a third country playing a part in the EU customs union and also it is the UK Government's position, and was very clearly one of the aspirations of the referendum, that the UK should have an independent trade policy. It wouldn't be possible to have an independent trade policy whilst being subject to the common external tariff of the European Union.

Thank you. But, as I also highlight, there's no precedent for any country leaving the EU, so we have to look at new things, and different ways of dealing with it. Michelle.

Thank you, and good morning. Are you—this is a question to you, Mr Walker—confident that Parliament will back a withdrawal agreement that doesn't include our membership of the customs union?

11:35

Yes. I think Parliament has voted by a clear majority for article 50. We've had a number of votes in Parliament already on the issue of the customs union. I think the crucial thing is to actually be able to bring before Parliament a deal as a whole between the UK and the EU that meets the objectives that we've set out in terms of providing for barrier-free and frictionless market access. I think that can be done, as we set out in our customs paper, in a way that brings the UK out of the customs union and is based on a new arrangement between the UK and the EU. And I think that is something that Parliament would strongly support at the time that that would be brought forward, at the time of a meaningful vote.    

That's good. Thank you. Can you explain in practical terms what you mean by

'full alignment with those rules of the internal market and the customs union which, now or in the future, support North-South cooperation'?

What does that mean in practice? 

So, there are a number of areas. There are a number of areas where, under devolved power-sharing Government in Northern Ireland, the Executive has signed up to north-south co-operation and the alignment of rules between Northern Ireland and the south—for instance, in the single area for animal disease control that exists between the north and the south—where it would make sense for all sides, I think, to maintain that alignment and to maintain agreement on those. That would be one example where we think arrangements would be able to continue. Another one would be the single electricity market for the island of Ireland, where it would make sense to maintain those arrangements.

What we've been discussing with the EU is a wide range of areas where there is existing north-south co-operation. Some of those do not require EU rules to be in place in order to underpin them. Others, such as the single electricity market, do require that. What we then need to agree is a way of allowing for those arrangements to remain in place, whilst also ensuring that no barriers are put up between Northern Ireland and the rest of GB. So, the solution that some people have put forward that suggests that Northern Ireland should simply stay part of the single market and the customs union doesn't work, because that would then put barriers up with GB and the rest of the UK. What we need to ensure is that we are looking area by area at where north-south co-operation exists and can be maintained, but where also we can protect the integrity of the single market of the European Union, and the single market of the UK. 

So, that's the careful balance we've put in place through the joint report, which we're very determined to stick to. At the end of the day, I've always said this with regard to the arrangements that we need to reach on the island of Ireland: I think it is a matter of the political will on both sides to deliver for that. What I have seen consistently whenever I've been in Belfast, Dublin, London or Brussels is that determination to avoid putting up barriers and erecting a hard border. And I think as long as we keep that determination in mind—it will take some careful decision making and some difficult compromises, but we can get to a solution that delivers for this. I think that's something that, rightly, the UK Government has put at the forefront of its approach to Brexit. This is a very complex issue. it has always required a degree of compromise, as we saw in the Good Friday agreement itself, from all parties, but I think, with the right political will, we can achieve what needs to be achieved in this circumstance.  

Okay, thank you for that answer. In terms of any agreement with the EU for full alignment between Northern Ireland and the EU, do you forsee—? Is it proposed that that be set in stone or will the UK Parliament, or—whichever UK Parliament has control over that issue at the time, would the UK Parliament be able to change that in the future, or will it be set in stone? Will we be bound into full alignment with the EU ad infinitum? 

So, as you'll appreciate, no Parliament can bind its successors in terms of future legislation. What we would seek to do is reach a withdrawal agreement between the UK and the EU, which would then stand in international law as a treaty. So, it would be protected to that extent, and I think it is also something where, when it comes to not erecting a border, that is a firm commitment of successive UK Governments. It's not something that we would ever want to see changed in that respect. So, I think physical infrastructure at the border is not something that would be to the benefit, and I very much doubt that there would be any future UK Government that will be arguing for it.

11:40

I just want to probe a little bit further on the practicalities of having a border between Northern Ireland and Ireland, given that the border zig-zags in and out of individual properties, and how on earth you could possibly avoid a border, either between Ireland and Northern Ireland or between the island of Ireland and the rest of Britain, unless you're a member of the customs union and the single market—simply because, if you're not, there are going to be tariffs and tariffs then require inspection and collection.

I think, again, coming back to the EU's own guidelines, they talk about a tariff-free arrangement existing between us. So, I don't think we should assume that there should be tariffs, but I think we also need to recognise that there is a legal border between the Republic of Ireland and Northern Ireland. There is currently an excise border. The way in which the authorities on both sides choose to exercise their rules means that there is no stopping and no checks at the border, despite the fact that theoretically there could be.

I think we need to reach a series of agreements between the UK and the Republic of Ireland and the UK and the EU that allow for that approach to continue, and allow for co-operation that keeps any checks, any inspections, any need for sharing information—as information, of course, has to be shared when goods cross the border both in excise terms and in customs terms—to be done away from the border.

So, that's what the emphasis—and if you look at the maximum facilitation approach that we set out—would be all about. It's how do you keep things away from the border, how do you make sure that there's the most frictionless approach possible for large businesses, who hold that type of information already, and then some form of local trade exemption for small businesses to make sure that they don't have to have paperwork that needs to get handed over. So, that's one approach.

The other, the hybrid approach, is effectively both using each other's external tariffs and then sorting out between the Governments how the money is recouped to the recipient, and using labelling potentially to ensure that goods coming into one territory destined for the other were appropriately treated. Again, both approaches rely on co-operation between the parties and agreement of where you will not put things at the border. But I think there should be the political will on both sides to do that, and, of course, unique arrangements for the island of Ireland have existed for many decades, indeed long before we joined the European Union, as the example of the common travel area shows. I think the common travel area is an unique arrangement. It's one that is actually recognised in European treaties, in the Treaty of Amsterdam, as a unique arrangement between the UK and the EU.

One of the things early in this process is there were some concerns that the EU would object to the continuation of the common travel area. Actually, what we've seen, I think, is the recognition from all parties, and very strongly pressed by the Republic of Ireland Government, that the common travel area should continue, and that's very welcome, that that's part of the joint of report that we've already agreed. That's where we've already accepted that we're going to maintain some unique and special circumstances for the island of Ireland. I think what we need to do through this process and through the rest of the negotiation on the withdrawal agreement is to accept that we need to continue to look for those.

Obviously, the common travel area goes back to our agreement with Éire at the beginning of 1917, 1918. So, it would be pretty disastrous if that collapses. Clearly, our main focus, though, is on the impact that this can potentially have on Welsh businesses. If you come to a satisfactory agreement between Northern Ireland and—you know, for the island of Ireland, I heard you say tax concessions for small businesses in Northern Ireland. What about tax concessions for small businesses in Wales?

I don't think I said tax concessions, I think what I was talking about—

Yes, exactly, a local trade exemption to allow for people not to have to make declerations at the border.

But I think with regard to—

So, you can see, though, the anxiety that Welsh businesses will have that Northern Irish businesses will have a competitive advantage, and, clearly, the impact on our ports, which currently have huge numbers of trade coming from the island of Ireland, if we've got some sort of border in the middle of the Irish sea.

And that's where I would really put the emphasis on the benefit to both parties, both the UK and the EU, of having frictionless arrangements for trade between us. I think we've seen how, and I think your committee has heard evidence of how, for Irish businesses going through the Welsh ports and going through the UK on the way to continental Europe can save something like 18 hours of journey time and complication. So, there is strong economic interests in keeping that channel open. I think both of the customs approaches we've set out in our paper would address keeping those channels open, and membership of the common transit convention would ensure that people could continue to move goods from the Republic of Ireland to another EU member state without having to necessarily have stops and checks at the border through the UK. So, we've set out, again, that we would be keen to continue membership of the common transit  convention, which we think would be beneficial for both the UK and Irish haulage industries in being able to continue to cross one and other's territory. I think again, these are areas where we need to reach agreement between the UK and the EU, but, by having the right approach to reaching that agreement, I think we can provide solutions.

11:45

So, are you committed to an agreement that doesn't disadvantage Welsh businesses over Northern Irish businesses?

We want the best outcome for the whole of the UK. As I pointed out earlier, there are some areas where there are already differences between the way we work in Northern Ireland and the rest of the UK—the phytosanitary arrangements would be one, for instance, where, when we had foot and mouth, there were specific arrangements to protect the security of the island of Ireland in that respect. But I think we absolutely want to see the best deal for the whole of the UK and we are, as part of our broader customs and border planning work, engaging with the Welsh ports. I've met with representatives of Holyhead and Fishguard as part of that, and I know that a number of colleagues across Government have been to visit those ports in recent months. So, it is very important that they are part of the overall UK economic offer, which we want to make as strong as possible. 

The Irish maritime development agency told us that that 18-hour time advantage would continue to give the UK land bridge an advantage, no matter what the outcome might be. You mentioned the common travel area and, to a large extent, its operability since the introduction of Schengen has depended upon Ireland, like us, being outside Schengen. What assurances have you obtained or are seeking from the Irish Government that they will stay outside Schengen as we move forward to support this smooth continuation? And secondly, I'm just wondering what, if any, consideration you have given to the European Parliament's constitutional affairs committee report on the north-south Irish border with a proposal for a frictionless solution, which they also said could provide a model for UK-EU borders more broadly.

I think, to your first point, the Irish Government have always been very clear with us that they value the common travel area enormously and that they have no intention—. I think they have done a very good job of explaining to other EU member states how important it is for both our economies. And, so, I think we welcome the fact that there is broad agreement on that. They've also said that they don't have any intention to change their relationship with Schengen, so I don't see any particular concern on that front.

But I think, with regard to your second point—it's a very good one—we see an all sides a political interest in making sure that we don't create any form of hard border here. I think the European Parliament has been very clear in its determination in that regard, and it's useful to have committees putting forward these suggestions. There may be some areas where the unique circumstances of Northern Ireland do require specific solutions, and, as Mr Barnier has said, where there are those specific solutions, they shouldn't necessarily set a precedent for anywhere else. But, of course, more broadly, we do want to have the most frictionless approach possible for our trading goods with the European Union. And so, if there are read-acrosses that we can make, that's very welcome. I think it's about recognising where you're dealing with specific circumstances, specific elements covered by the Good Friday agreement, those need specific solutions, and, more broadly, where we can ensure that we have the frictionless movement of goods that benefits all our economies, we should be seeking to get that for the whole of the UK.

Can I take you back to some points? Obviously your answers to the questions earlier in relation to tariffs were understandable. But as we've been informed on many occasions, the non-tariff barriers are often the more crucial barriers. And, I suppose, it's about regulatory standards. We'll come back to that in a minute, but have you had discussions on the non-tariff agenda to ensure that the alignment across the north-south border in the island of Ireland doesn't impact upon changes in the relationship between the island of Ireland and the UK, but also the rest of Europe and the UK, so that we ensure that situation? And, as a consequence of that, are you confident that, by the June meeting—as Michel Barnier wants, actually, hopefully, for the June meeting of the council—you'll be in a position where there will be an agreement on the situation in Ireland for the withdrawal agreement?

11:50

I think we have had a number of conversations on those areas. As I've said, we've been working through all the areas of north-south co-operation and making sure that we understand those areas that are covered by current EU rules—which, of course, the withdrawal Bill will make sure remain in place in the UK, in any case—but also those areas that are not. I think it's important that we're able to have a shared understanding of that as part of the negotiations.

I think it's also very important to recognise that any arrangements that are reached with regard to Northern Ireland within the context of the UK will need to be supported with cross-community support, and I think there is a concern that the approach that would say, 'Treat Northern Ireland differently and put a border in the Irish sea' would be totally unacceptable to one community in Northern Ireland, just as creating a hard border would be totally unacceptable to the other. So, we have to make sure that we reach an agreement that deals with non-tariff barriers in a way that avoids the creation of a hard border either in the Irish sea or at the border between Northern Ireland and the Republic. That is the objective and that is what we're absolutely engaging in in earnest in order to achieve.

I think it does need that respect on both sides that the integrity of the European Union single market will need to be maintained, and therefore we have to have regard to some of those non-tariff barriers that protect it, but also that the integrity of the UK internal market and the UK's constitutional set-up need to be respected, and that's where we are seeking some shift from the Commission's earlier text. As the Prime Minister said, we don't think that that's a text that any UK Government could have signed up to. So, we are seeking movement in this area. We will absolutely engage in good faith to get that, and I am confident that we can reach agreement by June, but I think it requires the political goodwill and the ability to explore creative solutions that we've been calling for throughout the process.

I assume you're referring to goodwill on both sides, in that sense—

—because the Taoiseach has also indicated that if there is no agreement on the issue of the border, there could be no agreement on the withdrawal agreement, so it's clearly imperative to resolve that to ensure that the withdrawal agreement can be accepted.

And we all think it's in the interests of everybody to reach agreement not only on the withdrawal agreement, but on an ambitious future partnership between the UK and the EU. I think it's welcome that we've been able to agree on many potentially thorny issues—issues that, when we last met, seemed very, very difficult, such as the money and citizens' rights, where I think we've been able to provide some useful reassurance. Clearly, we want to have an agreement that protects the absence of a hard border in the island of Ireland. I think that's very strongly in the interests of the UK, as it is to the Republic of Ireland and the rest of the EU.

I'm sure the issue of the money is still thorny in certain areas as well. Suzy.

Thank you. Could I just take you back to tariffs for a second? Have you any evidence that Ireland might have indicated that it may be of advantage to them to have tariff barriers for certain of their products? I'm thinking agricultural products; it might be easier for them to trade within the internal market, of course, if UK agriculture products weren't there. Or, is it the fact that because Ireland's got to trade across the land barrier, that's the effective way to do it, and that those two interests balance each other out?

I would go further than that, actually, to say I if you look at the balance of Irish agricultural trade, Ireland is a significant net exporter to the UK. We're a very, very major market for them, and so I actually think their interests are strongly aligned with getting a deal that means there are no tariffs in place. The same could be said of northern France, Holland—a number of our near neighbours. But I think that's why I point to the text in the EU's guidelines, which actually talks about having a tariff-free arrangement between the UK and the EU. That's a good starting point. It's one that we think will be in the interests of all parties to pursue, and I certainly have not come across any suggestion that the Irish would welcome or relish tariffs between the UK and Ireland.

11:55

No perverse incentives is what I was getting to. Thank you. Thank you, Chair. 

Thank you. Clearly, questions on Northern Ireland will be resolved in time, and they are critical to the whole process but also to Wales and the position of Wales. 

They are. And one thing, perhaps, I could just add on that is that one thing I really welcome—and I think Chloe would, particularly with her previous role as well—is the extension of the commitment we made very early on in the process to exploring the PEACE funding, and how that could be continued, both during the process of our withdrawal and afterwards. The fact that that has also been extended in the joint report to the INTERREG funding, some of which I know affects Wales, I think is a welcome step and a clear sign that we are able to agree between the UK and the EU on things of importance in this space.

And just to the last question on the Northern Ireland-southern Ireland issue—whilst we may come back to it in other ones—I think that we've seen Irish Ferries launch a brand-new large container ferry-type ship, which is now directly dedicated to the Cherbourg list route. Does that actually, therefore, change the dynamics, because if we're seeing a company now looking at actually transporting more to the EU directly from Ireland, then their reliance upon the Welsh ports in particular would be less in one sense? 

Well, I think we've already discussed the very clear evidence that there's a huge benefit to Irish businesses in being able to trade through Wales and the UK. I don't think the economics of that have changed, and I think, of course, there will be investment in infrastructure and trading arrangements in all areas. That tends to be additive rather than to replace existing routes, and I would expect to see the trade that passes through Wales continue and continue to grow.

Yes. Looking at the prospects for a withdrawal agreement, what do you think it would mean for the welcome transition period arrangements if there wasn't an agreement reached on withdrawal—the dreaded no-deal scenario—because the transition period, from comments that have been made recently, could be at risk?

Well, I think, clearly, the implementation period, transition period—whatever you want to call it—needs a basis in law. It needs a basis in an agreement between the two parties. I think the fact that, in March, the European Council agreed to that being a key part of the deal is extremely welcome. I think some people were perhaps surprised that we originally entered those negotiations pushing for two years and that the EU position was for only 18 months, but I think it was more important to reach an agreement that provided that stability and certainty than to fight over a three month difference—21 months, rather.

I think the agreement we've reached will provide certainty to people. Clearly, it is contingent on getting the withdrawal agreement finalised and ratified, which both parties want to do by October so that there's time for the Parliaments on both sides to do that. I think, given the sequence of events that we've seen with the broad political agreement on citizens' rights in December, the agreement in March on 75 per cent of the withdrawal text and the implementation period, and now moving towards a June Council where I would hope we'd see further progress, I think there is increasing confidence—and certainly this has been reflected from the business voices I've been engaging with—that the implementation period will be there and that we will have a withdrawal agreement in place.

As I said earlier, some of the thorniest issues, really, with regard to money and so on and so forth, people thought it might be very, very difficult to ever reach agreement on, we now have, and I think that's very welcome. Clearly, we do want to finalise the exact text when it comes to the very important issues of the Irish border and the last few outstanding separation issues. But good progress is being made on that front, and I think we are seeing a real step-up in the engagement at the official level between the parties. So, I'm confident that we are moving forward and we are moving towards that certainty. It will then be for the various Parliaments to write that into law and, of course, what we are not doing with the withdrawal Bill is legislating for the implementation period. The withdrawal Bill legislates for making sure our statute book works whatever happens at the point of withdrawal. It will then be for further legislation set out in the withdrawal agreement and implementation Bill to actually legislate for the implementation period itself.

Obviously, you're feeling optimistic—cautiously optimistic—about reaching agreement and it being ratified. Last week, our Cabinet Secretary for Finance said that no deal—we've asked the question from this committee in terms of our recent report—no deal would be disastrous for Wales, but still, we have said we need to look at what the impact of that—a no deal, and not reaching agreement on withdrawal—could mean for people and businesses. What is the UK Government doing in terms of preparing and paving the way for that—the implications—to just let people and businesses, particularly, be aware of what the implications could be?

12:00

Well, clearly, any responsible Government does have to look at all the potential sort of contingencies, and it's right that the UK Government is working and, indeed, is having dialogue with the devolved administrations on a 'no deal' scenario. It's not what we are working towards, as our main aim, and I think we have increasing confidence that it won't be the outcome of this process. But, of course, until it was impossible, it would be wrong to stop work on it completely, and that work does need to continue. That involves both discussions with different sectors of the economy, and understanding that, and understanding what might need to be done to help with their specific circumstances, and a certain amount of administrative work and preparation. So, there is investment from the Treasury to support different Government departments from which Wales and the Welsh Government will receive Barnett consequentials on 'no deal' planning. I think there's a figure of about £21 million—from memory—that will be coming to the Welsh Government specifically for 'no deal' planning. It is also an issue that we will want to discuss at JMC, but I don't think it should—. The fact that work is going on in this space I don't think should lead people to believe that this is the most likely outcome, or indeed a likely outcome. We absolutely want to ensure that we do reach a comprehensive deal between the UK and the EU, both with regard to withdrawal and our future relationship, and I think it will be in the interests of both parties to achieve that.

It's interesting to know that there is resource, and there is planning. That must include, in terms of administrative systems, impact on border checks and customers' arrangements as well, because 29 March isn't that far away in terms of a 'no deal' scenario.

Indeed, and some of the money that has been provided from Government has gone to HMRC to look at their preparations in that regard, but I think it is certainly something that we feel that will be in the interests of both parties to reach an agreement. I think the EU guidelines provide assurance that they don't expect to be putting up tariff barriers. As your Chair has said, non-tariff barriers are also important, and that's why a comprehensive agreement on goods and services should be in the interests of both parties. But we will continue the work on contingency. As long as there's any possibility that a deal wouldn't be in place, I think that is the responsible thing to do, and we will continue to work with the devolved administrations on that. 

That takes us on nicely to regulatory divergence, and I'll ask Jenny to ask questions on regulatory divergence.

I think one of the most important things is that most trade bodies are calling for regulatory alignment and harmonisation. I had a meeting this morning with the Institution of Civil Engineers. One of the complications they point out is that we've only just moved away from British Standards to Eurocodes for the way we design our buildings and bridges, and everything that we might manufacture that we want to export to Europe. So, I just wondered what consideration you've given to these important matters, given that there are costs involved in having change from the old standards to the new ones. The nightmare scenario is having to change back. And there would be implications—huge implications—for any trade we want to have.

I think you make a fair point, and I think many of the businesses and business organisations with whom I've met have made similar points. They make the argument that once you've gone through the process of aligning to a set of regulations, the last thing you want to do, necessarily, is move away from those, and that's why we've taken the approach in the withdrawal Bill that our starting point should be the exact same rules and regulations as we have now, and that, where EU law exists, we should make sure that that is written into the UK and—where appropriate—the devolved statute books and the arrangements, because we want to ensure that the starting point is one of maximum stability. Now, of course, it would then be for future Parliaments and future legislatures to determine if they saw an advantage in moving away from that. But, as the Prime Minister set out in her Mansion House speech, one of the factors they would have to take into account is the market access we had agreed with the EU and the basis for that. So, it could be that, in a particular area, they might decide that, actually, some divergences might be beneficial and the debate would be held in Parliament around that. One of the factors to take into account in that debate would be whether it would affect the access in that particular market to the EU and how that mattered. I think this is something where we have to tread carefully in binding the hands of future Parliaments, but the decision we've already taken is that the jumping off point—and this helps, I think, in reaching a good trade deal with the EU—should be keeping the exact same rules and regulations as we have now. So, that's what the mechanisms in the withdrawal Bill allow us to do. And that's also where making sure that those work in every part of the UK is why it's so important that we've actually reached this agreement between the UK and the Welsh Government about how those mechanisms can be maintained.

12:05

Okay. So, for now, you have no plans for diverging on regulations in your negotiations.

The whole approach we've taken to the withdrawal Bill is about continuity, and so there is no exemption from that where we are saying, 'We won't diverge in this respect.' What we are saying, of course, is that the UK will have control of its laws; we will no longer be under the jurisdiction of the Court of Justice of the European Union. But we are saying, within that, that the laws at the point of exit will be exactly the same as they are now.

Okay, because, obviously, you'll be aware that some of the major concerns—certainly amongst my constituents—would be the guarantees of clean food, not adulterated in the way that some other countries that you appear to be wanting to do new trade deals with—you know, that they'd be wanting to sell their food into Britain, which comes at a very much lower standard than what we enjoy within the EU.

What I would observe is that the UK Government is committed to improving the environment, it's committed to high food standards, and I think, actually, within the EU we have some of the highest food standards around. I think it's arguable whether some other EU member states necessarily maintain as strong food standards as the UK has, but I think what we would see is that there's very little appetite on the part of UK consumers to see those standards in any way eroded. So, I think this will be a factor when it comes to future trade deals where we will want to maintain very high standards for the UK consumer, and I doubt there will be great public support for any great diminution of those. From what I've seen and from what Michael Gove has been saying on this front, I think he'd be very much in agreement.

No, no, I agree on that, but the danger is that you trade off quality food standards against other interests—for example, financial services—in your enthusiasm for doing other trade deals.

With respect, I don't think that's really the way trade deals work. Trade deals tend to work in specific chapters for each area, and so we would want to reach agreement on different areas that reflected the priorities for those areas. So, I think that, with regard to food—as we have previously in advocating for New Zealand food to be accepted in the EU, for instance—we've always maintained that it should be food of a high standard that should be able to enter the market. Therefore, I think that's the approach we would be likely to take in future trade negotiations.

No, I am conscious of the time and I need to move on a little bit, but I have one question to ask on this particular area, because, clearly, if there are going to be changes in standards or divergence from the regulatory harmony that exists at the moment, will the UK Government be actually consulting with and asking the devolved legislatures for their views on this?

Yes. I think we can be very clear on that. I think the UK Government is absolutely committed to the Sewel convention, and I think also part of the frameworks discussions we've been having, and I think where I've been quite struck by the tone of the conversation with Welsh stakeholders has been very much that they recognise the benefit of the two Governments that serve Wales being able to work together on these areas. And so, as you will know, we've agreed some areas where we believe that powers returning from the EU will go directly to the devolved Governments and other areas where we believe there may need to be a common framework that doesn't require legislation and other areas still—the 24—where legislation may be required. In each of those there will be discussions between the UK and the Welsh Government as to how things work, and I think particularly where those common frameworks are in place, we would want to reach those by agreement wherever possible.

12:10

May I just add a point to that? Your concern about food standards is a good example, because actually in the list of 24 areas where legislation might be required, we find three that are about food issues, which I'm sure are part of the topic you have in your mind. We wouldn't want to see lowering of food standards in the UK as a whole, and nor would we particularly wish to see it in the component parts of the UK. Actually, that's one of the good reasons for why we would want frameworks to be in operation, of which there are three areas we think are likely to need a legislative solution to ensure that we have high food-related standards.

I want to move on to the EU agencies quickly, because I also want to spend some time on our withdrawal Bill questions. So, Jenny on the agencies.

In a written answer to Heidi Alexander on 13 March, you said that your UK Government's interest in EU agencies wasn't confined to the medicines agency, the chemicals agency and the aviation safety agency. I wondered if you have now submitted a list of the agencies that you would like the UK to be part of after we've exited the EU.

Well, I think the three you give are the ones that, publicly, the Prime Minister has been very clear that we would like to have a very close relationship with. We've also set out that we'd like a close association with the Euratom agreement. The Euratom agreement obviously is a very important nuclear agreement that stands alongside the other EU treaties, and we do want to negotiate an association there, which is something for which there currently isn't a precedent outside the EU.

I think with regard to other areas, a lot of it depends on the nature of the conversation we're able to have about the future relationship and the way that that works. So, we certainly aren't in the process, at this stage, of saying 'Definitely not' to any particular agencies.

What is slightly separate but alongside this, of course, is the relationship to programmes, and future programmes, and we've been very clear in our ambitions when it comes to scientific and cultural co-operation to be able to maintain relationships with some key programmes, such as Horizon and its successor, framework programme 9, and the Erasmus set-up.

So, I think we need to look at these as the negotiations progress, but I think the three that we've highlighted of course are very important with regard to key Welsh industries.

Can I ask one question before Jenny comes back? You've said there's no precedent, and I understand that, and you've talked about a close association. Have you got a definition for 'close association'?

Well, 'close association' is what it says on the tin in terms of a close relationship working in association with, let's face it, a body of which we were a founding member, and which has benefited enormously from UK participation over a long period of time. I think the specific challenge with Euratom is that it shares exactly the same institutions as the European Union. It works through the Commission and decisions are taken in the European Council, so therefore we do need to forge a new relationship there, but of course colleagues at the Department for Business, Energy and Industrial Strategy are working on the detail of how we can put the right arrangements into place with regard to that. And with regard to the negotiation, we've already set out that clear ambition to have a close association.

Sticking with agencies rather than programmes, and sticking with the three agencies that have been highlighted, we had a meeting with Stanislav Todorov, the head of the delegation for Bulgaria, which at the moment is holding the presidency of the EU, and he was refreshingly frank in highlighting that, unless you're a member of the customs union and the single market, you can't be a member of these agencies, because these agencies are all about strengthening the single market. So, I wonder how you're going to get round that problem, if that's the position of the presidency at the moment.

I think it is something for us to negotiate on. I think it's something where there are some precedents: in the case of the European Aviation Safety Agency, for instance, there is an agreement with Switzerland that allows them to participate in the arrangements very closely. We need to look at those, but I think also we need to look at the contribution that the UK is able to make to some of these organisations. I think it's interesting that, in the wording we've reached in the withdrawal agreement with regard to the implementation period, the EU has already acknowledged that UK expertise may be of value to the union in some of these areas and that they may invite the UK to continue to contribute to some of the agencies during the implementation period. We would hope that when we have an agreement on the future relationship covering some of these areas—and recognising that it will be in the interest of the EU to maintain co-operation, for instance, on complex supply chains in the aerospace sector, or in medicines—that then there might be a willingness to go further in terms of the relationship with these agencies. Each of them has benefited enormously from UK input over the years: the Civil Aviation Authority feeding into the European Aviation Safety Agency, for instance, and the MHRC—is that the right initials? Anyway, the UK medicines and healthcare body contributing to the work of the European Medicines Agency. So, we think we have a lot of value to add in this space, and—

12:15

Well, clearly, as one of the largest countries in Europe, we're bound to have a lot to add, but the problem we seem to have is that these agencies are to strengthen the single market, when your Government is consistent in saying it doesn't want to be part of the single market. So, how is that going to happen?

Wwe have recognised the position of the European Union on the four freedoms being inseparable and that you cannot maintain the 'remain' part of the single market if you are taking control of borders and laws and other issues of this nature. Therefore, we are clear that we are going to be leaving the single market, but I don't think that means we can't contribute to it as a close friend and neighbour. And, as I say, there are precedents in some areas, such as the agreements with Switzerland, which allow for the participation of other countries—

Okay. Clearly, we can have observer status, but in terms of the European Medicines Agency, we'll simply be locked out of being early adopters of new medicines that are adopted by the European Medicines Agency if we're not part of it. So, this is a serious matter. 

I think we need to look at the interests here: that the European Medicines Agency benefits enormously from access to the scale of the NHS and the data that it can help to produce. I think we should be focussed on a partnership between the UK and EU that is serving the interests of both parties, and as part of that, I think we should explore going beyond some of the existing precedents for co-operation with the agencies. 

Okay, but you recognise that there is a position held, at least by Bulgaria—. Currently, the President of the EU is absolutely at odds with your aspirations. 

And there will be, throughout the negotiations, issues on which the two sides will take different positions. That's why you have to have the negotiations, that's why you then have to reach agreement. I think we saw this earlier on with the issue of the finances when we had figures ranging from £100 billion to £0, and what you then have to do is thrash that out and work out a settlement that is in everybody's interests. I think that's what we will see throughout this process.

I want to move on, because I want to cover the EU withdrawal Bill questions that we have and I'm conscious that you have to leave to catch the train back to London. So, if I can move on to the EU withdrawal Bill. Obviously, we have an opportunity in a fortnight to scrutinise the First Minister on the Welsh Government's perspective, but clearly there are some points that you, or the UK Government, are involved in with negotiations. I'll start off with the sunset clause. This committee's made it quite clear in this report that we didn't agree with the sunset clause. The Welsh Government had said that previously to us, and now we have a sunset clause that is five years. Now, as I'm sure you're aware, it's five years after the end of the two-year period, which will cover the transition, which we understand. That means that that five years will cover a period beyond this current UK Government, beyond this current Assembly term, which means you're going into the next ones. So, what legal effect will the sunset clauses actually have on future governments? Because it also causes difficulties for any party wishing to become a Government when it puts a manifesto forward—particularly in the devolved nations, because we're more limited than the UK Government on this—to put ideas forward as to how we wish to take certain policy areas forward. So, what legal effect would it have?

To be clear, do you mean the new sunset clause in the new amendments we put forward to clause 11?

Okay. We are talking about that.

Absolutely, yes. Because, of course, there are a number of sunsets throughout the rest of the Bill, and actually one of the points I might make in passing is that actually the two-year sunset clause that we've now placed on the use of the clause 11 power is also helpful in that it comes into line with some of the others, which are also two years long, elsewhere in the Bill. But turning to the—

That bit of it I can understand, but then it's the five-year period beyond that. 

Yes. I mean, really, this is in part a response to, I think, some of the debate that was had in the House of Lords. Sunsets were an open part of the discussion there, a little like Robin has just been saying that when there are different positions you have to have negotiations to try to close them and find the thing that's in everyone's interests. This is perhaps an example, actually, of where certainly the UK Government and the Welsh Government—and obviously we would have liked it if the Scottish Government were also there—are able to continue on the path of agreement. We have had to have that discussion about what is in everyone's interests, and we hope it's the case that a five-year sunset clause allows for that certainty and stability, which is what we're looking for in the first instance. That's why we have the clause 11-type powers in the Bill at all. It's to be able to create a starting point of some stability for citizens and businesses. I think five years actually then gives the ability for the detail to be sorted out underneath that, and that's really what we certainly expect to see happening if these clauses are passed in the House of Lords and then form part of the Bill. 

12:20

So, the legal effect, I assume, therefore, will be to bind any future Government in the National Assembly to that five-year period.

I don't think that's quite right, because I think what we're talking about is arrangements for the preservation of arrangements. So, this is why the withdrawal Bill as a whole is focused on continuity, and so it would mean you're preserving those arrangements until a future Parliament or devolved legislature chooses to take action on them. 

Does it freeze—? We've got the analogy, often, of the freezer. Does it actually freeze the abilities of Welsh Government Ministers to actually take any policy decisions until they have been released by the UK Government? And that could be a five-year period. 

The two things work together. So, to start with—. The two sunsets work together, I mean. The  regulation-making power has two years to be applied, and then each regulation under clause 11 powers, once it is made—or each area of regulation, rather, because some do come together in areas, and I'm talking there about the list of the 24—each of those would then have a five-year sunset on it. So, that is the legal effect that I think you're asking after. Now, the whole point here is that we are looking to be able to increase the sum total of devolved powers. That has, of course, been our starting point, and what we're trying to do with clause 11 is simply do that in an orderly way. So, the whole point is that actually once those two sunsets are used—or used up, if you like—the future then will see these powers, we hope, go to where they may be with devolved administrations. 

Let me clarify. I'm sure it will be highlighted again, but you say 'increase the powers', but actually many people believe those powers should always reside here as part of the devolution settlement, but they have been given to the EU, because we are part of the EU, and therefore the belief was always that they should have returned here. So, that's one argument. I'm just putting that point. I'm sure it will be reiterated later on.

But the question I'm asking is this—and I think you've answered it: with the inter-governmental agreement that is being made, what are the implications of that upon future governments? You particularly highlighted the regulations within two years. Those regulations may freeze the ability to undertake new policies or new implementations for five years, which would therefore mean that a future Government—and in those five years there will be a future Government—may not be able to take action until the UK Government releases. So, what is the legal effect on governments of that inter-governmental agreement? Does it bind a future Government of the Welsh Assembly?

I think it is as you've just described it there. 

Thank you, Chair. Following on from that—I'll come back to your point in a minute—let me just dwell on the issue of—. We're still on the EU withdrawal Bill and the clause 11 amendments. Can I ask you in what circumstances has the UK Government envisaged the UK Parliament might legislate without the devolved legislatures' consent in those 24 areas? They might expand in number over time, but we'll call them 24 for the time being. It might be 36 by the end of the seven or eight years. But in what circumstances do you envisage UK Parliament legislating without the consent here or in Edinburgh or Belfast? 

Well, I think you'll find this in the inter-governmental agreement and the memo, where we are very clear that the UK Government will not normally ask the UK Parliament to approve clause 11 regulations in the absence of devolved legislature consent. Now, it will have been a matter to fill very many textbooks of constitutional lawyers quite what the Sewel wording covers—

12:25

—and the circumstances of 'not normally', but that is what we are committing to. 

Well, I shan't go too much into the 'not normally' business, but what is on the face of the Bill in terms of consent is that the consent decision by the National Assembly here is defined as

'a decision to agree a motion consenting'.

That's fine. My definition of us consenting would be that we actually agree a motion. But paragraph (b) of this consent decision by the National Assembly is that

'a decision not to agree a motion consenting to the laying of the draft'

is also consent. Furthermore, paragraph (c) is

'a decision to agree a motion refusing consent'

—i.e. we refuse consent on a draft motion. That is also interpreted as giving consent. How can that be?

I'm tempted to offer to be sure to write to you so that you have this absolutely fully, and the reason I say that is because I'm conscious that there will be the debate on these clauses in the House of Lords only this Wednesday, of course, as well. So, it's also actually not technically correct yet to say that they are on the face of the Bill—obviously, we hope that they will be and we hope that the House of Lords will pass them. So, I would be extremely willing to do that for the committee, Mr Rees, once that has been done.

But what I think really you see in the agreement that I think aids the understanding of what's there on the page is that, if it has not been possible for a devolved legislature to give their consent, those reasons, that discourse, that narrative will have its chance to be heard in the UK Parliament as well. And that scenario could entail combinations such as you've just been reading out there, because what we're talking about is for the UK Government to be able to use the clause 11 power, subject to UK Ministers making a statement to Parliament should that consent not be forthcoming, and that statement would include the reasons from the Assembly concerned.

The fundamental point is that our consent here as a National Assembly actually can be overridden. If we withhold that consent, that is still defined as giving consent. That's why I read out the three bits. Giving consent means, 'Yes, we agree the motion', but also, in the other paragraphs, if we don't agree, that is still interpreted as giving our consent. And also, if we refuse to give our consent, that is also defined as giving our consent. You can see where I'm troubled here by the notion of the National Assembly's consent or devolved administrations' consent, particularly if the deep-freeze bit is going to carry on for seven years in 24 devolved areas, like agriculture, fisheries, public procurement—things that we might and future Governments here might want to change but cannot because it's in a deep freeze, and that's despite any number of deep dives as regards the frameworks. We were discussing beforehand how you perform a deep dive in a deep freeze, but I shall let that one be by the by— 

It's for the fish fingers that are at the bottom.

—but I'm more vexed by the issue of consent in terms of us being interpreted here as having consented when we actually haven't consented. And that's my problem, particularly when we discuss England-only legislation also in devolved areas, where—. It's a UK Parliament; there isn't an English Parliament. It's not my line as a Plaid Cymru Assembly Member to make the argument for an English Parliament, but the fact is that that's the reality of the current situation. So, when we have devolved legislation affecting England, my understanding is that that agreement that the UK—that bit about 'not normally' is voluntary there, whereas our consent here and in Edinburgh would have been overridden because our consent means effectively no consent. Can you see where I'm coming from? In other words, it's a voluntary agreement for England, but it's a statutory agreement for the other devolved institutions for seven years, which means unequal treatment.

I will come back to you, Mr Lloyd, on the paragraphs around consent, which is your main question. I will want to make sure that the committee has an answer to its satisfaction on that, given that the debate is due to be on those amendments in a couple of days' time. On the point around England, you raise a very well-known point, of course—of course, it is the case that this is a known constitutional characteristic—but what you also see in the agreement that has been reached between the UK Government and the Welsh Government is a commitment from the UK Government not to bring forward legislation for England whilst the freeze is in place on others, and we see that as a point of fairness, and we hope that that is reassuring to have that in the agreement.

12:30

I'm conscious of time, but, just for clarification, the wording says 'a consent decision' and it doesn't define 'a consent decision'. I think the way the wording is—[Inaudible.]

Yes, it does. Those are the bits I've read out. Anyway, the issue is also that we are supposed to be—. My original question at the start of this meeting was that we're supposed to be entering a new era of governance in these islands whereby it's not just back to the traditional 'Westminster says', and everybody else rolls over. Devolution has happened. Okay, there's a rollback of powers, but devolution is still here and we need to operate in a system whereby there's at least some sort of attempt at parity of esteem between the various Governments in the various capitals in these islands, rather than the usual sort of diktat scenario. So, can I press you further in terms of how I would interpret the consent decision is how I read it out? In other words, if we don't like it, tough. It's 'what Westminster says goes'. How are we going to be reassured in the whole shared governance situation as regards frameworks going forward in these 24 devolved areas—possibly more—for the next seven—? Well, actually, because it takes a year to kick in, another eight years—2026. We'll be in a deep freeze here as regards any new policy or change in policy. How can we be assured that actually what Government says here, and what this legislature, indeed, says, carries any weight whatsoever in Westminster?

Just on a brief point of fact, around what you're beginning to describe there as eight years, I should be absolutely clear, of course, the seven, which is five plus two, is a maximum. In all practicality, it need not be the case that every area is subject to the same.

My eight comes from the fact that the seven doesn't kick in until a year's time.

Which is connected, I think, to some of the broader issues, of course, of negotiation and our trajectory anyway. But, to be clear, the seven is a maximum. I suppose, really—I think, to answer this, Mr Lloyd, I do have to go to the point of principle, which actually has been at the heart of the discussion on clause 11, and which has, I think, unfortunately still been the source of the disappointing decision by the Scottish Government not to be able to form this agreement. And it is this, that, really, from the UK Government's perspective—and, indeed, I should say, from many members of the House of Lords' perspective as well, which is where this legislation currently is—we think it isn't right for one part of the United Kingdom to be able to have a veto over what arrangements are made for the rest. Unfortunately, to follow the logic of the position that I think you're advocating through, there is the possibility that, without the provisions we're bringing forward, one part of the United Kingdom might be able to have a veto over the wishes of others, and that does bite. That could have a negative effect on things where there is value in a UK-wide agreement, or indeed things that can only be done at a UK-wide level. And, of course, that's what the frameworks analysis is about: it's trying to identify those things where there is interest at a UK-wide level for some sensible arrangements. So, the UK Government position really is fundamentally quite clear. We think that there are certain decisions that only the UK Government can take for the whole of the country, and so, therefore, we have still put in, in our amended proposal of clause 11, the ability to be able to proceed should consent not be forthcoming from a devolved legislature.

Can I ask—? The Welsh Government did talk about the possible approach of a qualified majority situation but there doesn't seem to be any reference to that. You just highlighted that you didn't want a single veto, but, if there was a qualified majority type approach, where you might get three of the four nations, for example, agreeing, that would have given you more perhaps legitmacy in relation to this overriding consent issue.

Well, Mr Rees, I think Mr Drakeford's conclusion on what was acceptable was very helpfully laid out in his letter to David Lidington, where he accepted that the proposal that had been put forward was a practical one that would wear the challenges put to it, and we're very grateful for his agreement to that.

12:35

We'll have an opportunity to question Welsh Government before the legislative consent motion is discussed in the Assembly. Mark. 

Just two brief points. I think my understanding is correct, that, effectively, if the Assembly was to withhold consent, it wouldn't be considered by Westminster as nonetheless consent, but rather, as you indicated, the reasons for withholding consent would be presented to the UK Parliament and the UK Parliament, including Welsh MPs, would then vote and would have the power, should they choose so to do, to vote against whatever recommendation the UK Government might make at that point in time, whether that's now or in the future.

My second point was: after items are taken out of the freezer and defrosted in our constitutional microwaves and returned to the devolved Governments and Parliaments, the concept of a UK framework, as with EU frameworks, means that divergence could not occur without framework agreement between the four Governments.

Your first point is absolutely right, and I'm grateful to you for how you put that. On your second point, I suppose the whole idea of the defrosting is that, actually, in the future, in due course, once these powers are where we would all wish them to go and in their devolved position, divergence would be possible—in the future, in the long term. That is the point, of course, of wishing to place things in their place in a devolved framework. Really, what clause 11 is all about, and what the freeze idea is all about, is being able to do this in an orderly fashion to begin with so that businesses and consumers and citizens have the greatest amount of confidence in the starting arrangements, and then, in the future, can ask what they think fit of their Governments in those areas.

The point I was trying to make is, if a UK nation decided to unilaterally change its water standards, and that impacted on one or more of the other UK nations—going back to my earlier point, I suppose—there would be mechanisms, presumably, as there are at an EU level, to address that divergence in the mutual interest of all.

Yes, that's right, and that will be, I think, part of the legislative work of putting flesh on the frameworks, putting detail onto the frameworks topics. So, to return to this list of 24, there are the areas where we think it's most necessary to have sensible agreements between the nations. I would anticipate that the legislation and the debate that will take place on that legislation to create those frameworks will certainly cover the kind of mechanisms that you rightly have in mind.

Can I just at that point remind—? You talk about the 24, but, of the 24—. Agricultural support, for example, is one of those 24. It's a huge area. Environment and equality are huge areas. So, they're not just 24, they actually are large portions of the devolved responsibilities.

You're absolutely right, Mr Rees, and, actually, that is, of course, why also we return to this idea of there being time enough to deal with them. If you look at a sunset idea from the other end of the microscope, it's time enough to get through the detail.

Well, we're perhaps going to have some more debate on the five-year period—whether that's time enough or whether it's actually too long is a question. But when will the work on the common frameworks conclude, do you think?

On the most expansive definition, you could almost say the seven years, actually, really covers the fullest sense of that word. I can't give you a date answer to that question, I'm afraid to say, but I think I would say that it's in all of our interests to make sure that that work is done well and done to the right level of detail and done to meet your satisfaction. I think it really has, actually, been a good feature of the common work done to date across all the devolved nations. In that, I also include the northern Ireland civil service, who have been engaged throughout, of course. It really has, actually, been a good feature of the common working there to be able to do that work together. That work has to continue to be able to make sure that we can then embark on the legislative arrangements that are detailed in the—we hope—amended clause 11.

12:40

And, in the document, there clearly is consultation with the Welsh Government in certain areas, but not necessarily the Assembly. I just wondered why you don't consider consulting with the legislatures rather than the Governments, so that, when we give consent, there is detailed information available to Members for that consent.

I think the views of legislatures compared to administrations will come in in that process of the laying of the statement that I've referred to. Admittedly, it will be a statement from the relevant devolved administration, but, of course, the consent that we would be discussing at that moment would be that of the legislature. More broadly, I do very much understand and welcome that your committee rightly wants to ensure that, actually, you have—you and your colleagues in the Assembly have—the right scrutiny powers over Welsh Ministers just as much as that would be true in any legislature and administration response. And, actually, one thing that the Government has done in the course of this Bill's movement through the UK Parliament is limit the scope of delegated powers for UK Ministers, and, most recently, we've been reflecting that in the limit of the equivalent powers, the delegated powers, for Welsh Ministers. I hope that actually serves as some reassurance to one of the six objectives that I know this committee has given thought to over this Bill. 

We will be consulting on that amongst the committee later on today to receive our position in relation to this matter. I suppose, whilst we will scrutinise the Welsh Government, the UK Government has obviously taken a long time coming to the position where it is now, which, maybe, in some views, is still not close enough to where we want to be. That's a matter for us to consult and discuss. What confidence can we have, therefore, that you will actually get the things done quickly, because, to date, it hasn't been evident that speed is an important aspect? This, as has been often said, is a debate and an argument that was unnecessary and could have been avoided. So, can we be confident that future debates and arguments can be avoided?

Yes, I certainly hope you can. I would answer that, I suppose, in general reference to the fact that we have been able to get to a point of agreement, certainly with the Welsh Government, and I hope also that yourselves as Assembly Members can also give your support to that, to what has been achieved. I would also note in passing to this question that, as I've said before, we are disappointed that the Scottish Government haven't felt able to join in that agreement, but it's open to them to do so, and, indeed, to any incoming Northern Ireland Executive as well, which is really very important and would certainly, I hope, help provide a fuller debate on some of the other important issues that we've gone over this morning in reference to the border.

I do hope that what we've achieved here in terms of the proposed legislation and what we've also spoken about a little earlier on in terms of the JMC structure and process and the ways that, I think, actually, an objective observer would say that has improved—the meetings have become more frequent, the secretariat arrangements behind it I think are now operating to everyone's satisfaction—those two pieces together I hope do give you the confidence that there will be a good-quality relationship going forward that can get this work done as quickly as possible and, of course, the whole point of doing that is, as we often say, for the people of Wales, for the people of the United Kingdom, who need to be able to use these arrangements in their everyday lives.

Can I confirm, therefore, that also, as the Houses of Parliament will be making these regulations, you will be consulting with stakeholders in all devolved nations as part of your process in developing these? So, it's not just stakeholders within England—

Yes, as we usually do.

Absolutely. As we usually do, and I know, as part of that, obviously, the Secretary of State for Wales has invited me and, indeed, David Lidington to come and give evidence and hear from his expert stakeholder panel. That's something that we absolutely want to make sure that we keep up, that engagement.

Thank you. In terms of trade negotiations with non-EU countries, how do you foresee the negotiation working for devolved matters? Because, obviously, there are a number of matters that are going to cross all four of the nations, so how's that going to—? How do you foresee that working?

I think, actually, with the arrangement we're putting in place for the future economic relationship between the UK and the EU, we are setting up a means of engaging with the devolved administrations on these issues, which we're going to be discussing at the JMC(EN) this week. I'm sure you'll be hearing back more on that. I think that can set a useful precedent for some of those further third-country trade agreements that we're going to be seeking to reach, because they are going to be trade negotiations across a wide range of areas. They're going to be important to each of the devolved administrations, and I think it's going to be important that we have a proper consultation mechanism.

Obviously, this is beyond both Chloe's and my briefs, in terms of this being an area of policy that is in the hands of the Department for International Trade, but I know that they have already set out their ambition to work very closely with the devolved administrations, and it's certainly something where, when it has been brought up at JMC as to whether this will be the case, we've always been assured that there will be that very strong interest from DIT to come and engage. So, I think we have a useful opportunity to set out an approach here that will work with regard to this very, very significant trade negotiation that could then also be used for future ones.

12:45

Thank you. Anyone else, because I'm conscious now that we've come to the end of our time? Before we finish, if I can ask, perhaps, if we send you further questions whether you'd be prepared to write to us so that we can have some information. I ask this urgently, because we will be having the LCM debate scheduled, I think, for 15 May. So, we haven't got a lot of time—just over a fortnight—so I hope you'll be able to help us with that.

Yes, of course. Absolutely.

As a final point from me, perhaps to you, Mr Walker, the Committee of the Regions is clearly an important area for Wales and devolved institutions. We understand that the nomination of Mick Antoniw AM to replace Vikki Howells was submitted approximately in November, and we don't believe that confirmation has been given yet. Though we may only have 11 months left as a member of the Committee of the Regions, that connection for Wales is very important. Perhaps I can ask you if, in your department—because I believe it's been held up in your department—you could have a look at that for us and see if you can expedite the process so that we can get our member onto the Committee of the Regions as quickly as possible.

Certainly. I'm very happy to take that away and look into it. It's not something that I'm aware that our department has played any role in holding up, but certainly I would be very keen to assist you in that respect.

Thank you. Can I thank you, therefore, for your attendance this morning? It's been very interesting, and you will receive a copy of the transcript to check for any factual inaccuracies, as per normal. We're very appreciative, and you're very welcome to invite your Secretaries of State to repeat the same exercise before the committee, because that would also be interesting for us, because we do have a deep interest in what's happening for the interests of Wales. We are monitoring it very closely, as I'm sure you appreciate, and we hope the work we do also helps you.

It's a pleasure to be back before your committee, particularly on such a sunny day in Cardiff.

Thank you very much from my department, as well, Mr Chairman.

3. Papurau i'w nodi
3. Papers to note

For the members of the committee, we move on to the next item on the agenda whilst our witnesses leave, and that is papers to note. Can we note the paper from the Hansard Society 'Brexit: Parliament's Five Transition Tasks'? We can discuss this, perhaps, later today.

Paper 2 is correspondence from the Cabinet Secretary for Economy and Transport regarding dates of the EU exit working group, which is dated 16 April, and I can only express my slight disappointment that this was asked for in February, or promised in February, and we've had it now, and there's been one meeting since that time, which we were unaware of.

Paper 3 is correspondence from the First Minister regarding the slot cancellation of the next—actually, today—dated 18 April, but we have now rescheduled for the First Minister to come on 14 May.

Paper 4 is correspondence from the First Minister regarding scrutiny arrangements for the EU withdrawal Bill, and paper 5 is correspondence from the Cabinet Secretary for Finance regarding the deep-dive exercises. Again, we may be required to look at that in our future work programme.

Are Members content to note all those papers? I see they are. Therefore, they are noted.

4. Cynnig o dan Reol Sefydlog 17.42(vi) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
4. Motion under Standing Order 17.42(vi) to resolve to exclude the public from the remainder of the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

Item 4 on the agenda is the motion to resolve to exclude the public from the remainder of today's meeting under Standing Order 17.42. Are Members content? They are. Therefore, we will now move into private session for the remainder of the day's meeting.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 12:49.

Motion agreed.

The public part of the meeting ended at 12:49.

Archwilio Cynulliad Cenedlaethol Cymru