Cynulliad Cenedlaethol Cymru

Yn ôl i Chwilio

Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol

External Affairs and Additional Legislation Committee

11/10/2018

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

David Melding AC
David Rees AC Cadeirydd y Pwyllgor
Committee Chair
Jane Hutt AC
Jenny Rathbone AC Yn dirprwyo ar ran Joyce Watson
Substitute for Joyce Watson
Mark Reckless AC
Vikki Howells AC

Y rhai eraill a oedd yn bresennol

Others in Attendance

Alastair Paton Yr Adran Ymadael â'r Undeb Ewropeaidd
Department for Exiting the European Union
Jeff Lloyd Swyddfa Ysgrifennydd Gwladol Cymru
Office of the Secretary of State for Wales
Robin Walker MP Yr Is-ysgrifennydd Gwladol Seneddol dros Ymadael â'r UE
Parliamentary Under-Secretary of State for Exiting the EU

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Alun Davidson Clerc
Clerk
Gareth David Thomas Ymchwilydd
Researcher
Yan Thomas Dirprwy Glerc
Deputy Clerk

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 13:30.

The meeting began at 13:30.

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

Good afternoon, and can I welcome Members to this afternoon's session of the External Affairs and Additional Legislation Committee? We have one item on the agenda this afternoon, but before we go into that matter, can I remind Members, first of all, to please turn your mobile phones off or put them on silent, or any other equipment that may interfere with the broadcasting equipment? There's no scheduled fire alarm this afternoon, so, please, if one does take place, follow the directions of the ushers to a safe place.

We have received apologies from Joyce Watson, and I welcome Jenny Rathbone as a substitute, and we've received apologies from Michelle Brown—no substitute there. Can I also remind you that if you have simultaneous translation requirements, then the headphones are available: channel 1 for the translation and channel 0 if you require amplification.

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

We go into the evidence session this afternoon, and can I welcome Robin Walker MP, the Parliamentary Under Secretary of State at the Department for Exiting the European Union? Would you like to introduce your officials for the record, please?

Sure. I'm joined by Alastair Paton from the DExEU and Jeff Lloyd from the Wales Office [correction: Office of the Secretary of State for Wales].

Thank you very much. Can I thank you on the record for coming again today, because I know you've been before this committee on another couple of occasions beforehand? It is important that we have an opportunity to seek answers and questions from the UK Government, so it is appreciated that you are able to attend. Please, before I say anything else, take back a simple message: we'd welcome the Secretary of State as well at some point in the future.

We'll go straight into questions then and clearly, there's a nice, easy one for you to start with: fluctuation occurs, and has over the time since we met; I think actually fluctuation is occuring nearly on a daily basis now. Yesterday, we saw Michel Barnier respond to the European Parliament, and other events. We have the Chequers agreement still on the table. Perhaps you'd like to give us an update on the current state of play, particularly following the Salzburg meeting.

Sure, and I think that's probably the right place to start. So, since we last spoke, the Prime Minister went to Salzburg and presented the EU with our proposals from the White Paper, which we see as a bold and ambitious offer from the UK. What we're proposing, we recognise, is challenging for the European Union, but we believe that if we stick together and hold our nerve, we can get a deal that delivers for the whole of the United Kingdom. These negotiations are tough, and we always recognised that they would be particularly tough in the final straight, but we remain confident of achieving a deal this autumn, as we think we've put forward credible proposals that we expect the EU to engage seriously with. Both negotiating teams are engaging at pace to reach a substantive agreement on the future framework as well as the withdrawal agreement this autumn.

It's been interesting to note Michel Barnier saying that he feels a deal is in sight in that respect. Clearly, there are two big issues that remain under discussion in the negotiations: the future economic relationship, a so-called 'future framework', and the border between Northern Ireland and Ireland. On the future economic relationship, the options that the EU have offered have been unacceptable to us so far. Instead, we are seeking a future economic relationship based on frictionless trade in goods at the border—something that, I think, echoes some of the key concerns that we've heard from the Welsh Assembly and the Welsh Government. We see that as the best option to protect jobs here and in the EU, and to avoid a hard border between Ireland and Northern Ireland, whilst respecting the referendum result and the integrity of the United Kingdom.

On the Northern Ireland protocol, we remain committed to all the undertakings we made in the joint report in December to agree a backstop in case of a delay between the end of the implementation period and the entry into force of a treaty on the future relationship. That was agreed to avoid any risk of a return to a hard border in the intervening period. But we won't accept anything that threatens the constitutional or economic integrity of the United Kingdom. Creating any from of customs border between Northern Ireland and the rest of the UK, which is what the EU initially proposed, would put that at risk. We've been clear that that is unacceptable. 

We're engaging with the EU on our alternative proposals that will preserve the integrity of the United Kingdom, and we will shortly set out an alterative that preserves the integrity of the UK. It will be in line with all the commitments we made back in December, and we do very much understand the importance of the border for the people of Northern Ireland and Ireland, but in the withdrawal agreement, there will be a backstop to ensure that there's no delay in implementing that.

If I may, Chairman, because I think it is pertinent to our conversations today, I might just update on engagement with the Welsh Government on these issues, because, particularly today, whilst I am here, my Secretary of State and fellow Minister Suella Braverman have been meeting at the Joint Ministerial Committee (EU negotiations), and my other ministerial colleague Martin Callanan will be meeting with Mark Drakeford at the JMC (Europe) to discuss both negotiations and ongoing European business with colleagues in the Welsh Government and the other devolved administrations.

As you know, we also established the ministerial forum on EU negotiations over the summer, which I co-chair along with Chloe Smith, the Minister for the Constitution, and the Welsh Government has been represented at a number of meetings of that by Rebecca Evans AM, the Minister for Housing and Regeneration, as well as other Ministers, depending on the agenda. To date, we've had four meetings of that forum held. I think the first one, I'm right in saying, was in Cardiff, but also in Edinburgh [correction: was in Edinburgh, but also in Cardiff] and London. We've had some very useful discussions, including the last session, which was a discussion on agri-food and fisheries, at which Lesley Griffiths was also present. I was pleased to note that this was a very constructive meeting where we made significant progress in preparing the UK position for detailed negations on the future economic partnership in that area, once we exit the EU and become a third country. Minister Evans has been positive about this engagement.

I'm looking forward to the next meeting of the forum later this month where we'll be discussing options on co-operative accords with the EU, which I know is of particular interest to this committee in its current inquiries, including those covering science and innovation, culture, education and space. So, there is regular, intensive and ongoing engagement between the administrations at an official level to support these and to support the exchanges of slides we've been able to have so far with the Commission on the future relationship.

13:35

Thank you for that. It's important we get an up-to-date picture of what's happening. Clearly, we'll have some more questions. You've raised some points that we wish to explore in depth a little bit further in this afternoon's session. I suppose the biggest question is—. Michel Barnier, as you say, seems to be giving an indication that if we work night and day, he sees the possibility of a deal. Donald Tusk is saying the same thing, he sees a possibility of a deal this autumn. As far as the UK Government is concerned—Simon Coveney said we're 90 per cent there, so we're almost there—are we almost there, or is there, in the UK Government's eyes, something that you see the EU having real intransigency on?

I think I've already touched on the key issues where we feel that there is further distance to travel to reach a full agreement, and those are on the Northern Ireland protocol, where what was put forward by the EU, we clearly don't think we can sign up to. It has to be something different to that, and we are putting forward our own proposals. And on the future relationship, we are clear that we need to have a framework for the future relationship alongside the withdrawal agreement that gives a clear indication of the frictionless trade in goods that both sides have said that they want to see. So, on that, we are pressing forward and we've presented proposals on the facilitated customs arrangement and a common rulebook to underpin that.

The EU has raised some concerns with those, and we've tried to respond to those concerns in detail, both in meetings with the Commission and with member states, but we see those as being the best way of underpinning that frictionless arrangement in goods that both sides want to see. We've also put forward, as you know, in our White Paper, a broad set of proposals on arrangements for accessing services, which we would like to see more engagement with from the other side. I think it's really to move forward on those two areas.

With regard to the rest of the negotiations, I have to say, on citizens' rights, the financial settlement and a number of areas of separation issues, we have reached agreement earlier in the year. We've continued to work on some of those separation issues and close more of those down. So, I think Mr Barnier yesterday said that 85 per cent of the text of the agreement is agreed in those respects. We want to obviously push that to a conclusion. We recognise that the October council is a key opportunity to reach a full agreement in that respect. We also recognise some of the suggestions that have been raised about a possible November council. We're ambitious about moving forward as quickly as we can.

I appreciate the October council is next week, so it's a very tight schedule for next week, but as you have said, we are aware that there's a possibility of a November council being put into place. Just to highlight, you talked about—we all want frictionless transfer of goods between the nations, but I will highlight, of course, that the Welsh Government has consistently said that it would see that as part of a customs union approach and I know the UK Government does not have the same approach. So, it's not quite the same but the end goal is the same, shall we say?

13:40

The end goal of frictionless trade is there, and I think it's right to say—and we've recognised this in our discussions in the ministerial forum—that the UK and the Welsh Government have different positions on a customs union. The UK believes that we need to be outside of the customs union in order to be outside of the common external tariff and to be able to pursue an independent trade policy, but we do want to have customs arrangements in place between the UK and the EU that facilitate the frictionless movement of goods. That's why we've put forward the proposals that we have on the facilitated customs arrangement. 

Yesterday, it was also made clear that the Democratic Unionist Party do not agree with some of the points being made and the backstop in particular. Is that now a problem that will be added to possible delays in coming to an agreement because you will now have to negotiate with the DUP? 

Well, my reading of what they have said is actually that it's consistent with what is in the joint report, and what we set out in the joint report was that the arrangements have to respect the economic and constitutional integrity of the United Kingdom and that we would not, therefore, be able to envisage a border down the Irish sea. This is the consistent objection that the Government has been raising with the EU's proposal of effectively putting a border in the Irish sea between Great Britain and Northern Ireland. We don't feel that's an appropriate solution, it's not one that would be within the terms of the principle of consent within the Good Friday agreement, and so we think that alternatives to that do need to be explored. So, I think from what I saw of the DUP statements yesterday, which admittedly came out relatively late last night, so I've read them in the press rather than heard them directly, but from what I saw of their statements, I think they were simply saying, 'You have to stick to that position', and that has consistently been our position.  

And can you confirm—? You say you've said no customs border, but I again heard Michel Barnier say yesterday a more sort of regulatory border rather than a customs border. 

So, I think there are two slightly separate issues. I think, as I've discussed with this committee before, there are some areas where, for instance, in the single epidemiological area for the island of Ireland, there are distinctions already between aspects of regulation in Northern Ireland and the rest of the UK. We manage those without friction at the border, without inspections and so on and so forth. We don't envisage removing those distinctions, but what we have said is that we would not envisage creating new distinctions that could result in any friction at the border. Clearly, it is a key priority with these negotiations to protect the economic and constitutional integrity of the United Kingdom, including Northern Ireland. 

And if you do so, is there a possibility that there'll be a differentiated border, basically, in the Irish sea, different between Northern Ireland and the ports it serves, which are Liverpool and Scotland, effectively, and Ireland and the ports in Wales? 

I think this is one of the reasons why we think it is better to—and we have again consistently advocated reaching an arrangement that is between the UK and the EU, because it would remove that potential for friction. It would remove that not only in terms of the north-south trade between Northern Ireland and the Republic of Ireland, which is important, but the more significant trade for both Northern Ireland and the Republic of Ireland, which is east-west, and which is also very beneficial to the Welsh economy. We recognise the ambition in the European Council's guidelines of having frictionless trade with the UK and we think that is the best way of achieving the absence of checks at the border, which is envisaged by both parties in these negotiations. 

But at the moment, it is a possibility, still, that there might be different arrangements between the Welsh and Irish ports. 

Well, I can't really speculate on arrangements for the backstop that have not yet been presented. I think the position that the UK has taken to date has been to look at this on a UK-EU basis and the position that the Commission has taken, which we've been clear is unacceptable to us, is to treat Northern Ireland differently. So, we accept that there are some areas where, with a Northern Irish Executive with power sharing in it, they have agreed to some degree of divergence, which has been managed under the north-south arrangements under the Good Friday agreement, and of course we're happy to maintain those because they've got the support of both communities in Northern Ireland, but what we don't want to see is the emergence of any new barriers between the UK and part of the UK, which is Northern Ireland. 

Thank you, Chair. I'd just like to look at the role of the devolved Governments in the Brexit negotiations, and the future of inter-governmental relations, because it brings that into play as well. I think it's fair to say that when we were—we're still a member of the EU, but when we were not about to leave, then, and preparations were being made for participation in the various European councils, the JMC(E) had a really good reputation for agreeing the speaking note by appropriate negotiation with the devolved administrations and there seemed to be a remarkably sophisticated, actually, way of ensuring that all the interests within the UK were represented in the UK's position, then, in the European Council.

I sense, certainly from what our First Minister had said, and some of the other key Ministers here in Cardiff, that they feel that the consultation and the involvement they have is much more limited and late in the process. It would be interesting to get your evaluation of what progress will be made today in the JMC(EN) and how much will there be a discussion about the negotiating position, because it seems to me this is categorically different for various reasons—I suppose around confidentiality and the progress of the negotiations and the quick-moving nature. I think you used the phrase, 'holding your nerve', and I think, in fairness, anyone watching this process realises it's highly dynamic. But it does create a bit of a barrier, doesn't it, for the devolved Governments, in that they're not involved in anything like an analogous way to how they were previously?

13:45

Well, I think we recognise some of the challenges that arose early in the life of the JMC(EN) in this respect, and I think it's right to say that some of those early meetings were quite difficult, and I think they were dominated by the political disagreements between the parties, rather than necessarily the objective of moving forward together.

I do think that has improved, and I think it's been recognised that there has been an improvement there by all parties, including the Welsh Government. In fact, Mark Drakeford made some comments about that today, after coming out of the JMC(EN). But I think we've also recognised, therefore, that there needs to be additional machinery to support this process, and the ministerial forum on EU negotiations, which I co-chair with Chloe Smith, has been set up with the specific aim of reporting back to JMC(EN) on upcoming negotiations on the future relationship and being able to have frank discussions about the interests of the parties with regard to those. We've been able to share information at an early stage on the proposed UK positions on that. And, as I say, after our last meeting, actually, we did have agreement from all parties that there was some good discussion had on, particularly, aspects affecting agriculture and fishing, and the arrangements between the Governments there. So, I'll always accept that there's more that we need to do on this process, but I think it is heading in the right direction, in terms of really involving the devolved administrations, and, obviously, you'll want to take evidence directly from them on these issues.

The other point—and you're right to raise the issue of confidentiality, because at times that has been difficult to get, and we have had to work quite hard with the Cabinet Office to get other Government departments to share information early enough that so that it can get the input from the devolved administrations, which it should have, before it's exchanged with European counterparts. And, again, I think there has been some improvement in that process. And where I would draw the committee's attention on that front is with the EU (Withdrawal Agreement) Bill White Paper, and I'm sure we'll come to discuss that in a bit more detail later in today's proceedings, but we were able to share that very early. We were able to get good input from the devolved administrations before publication, and that, I think, has again been publicly welcomed by the Welsh Government.

So, we definitely want to ensure that the devolved administrations have their say in this process, are involved, and can input into the decision-making process. What we've tried to do is to build on the existing mechanism of the JMC(EN) there with a new ministerial forum to deliver on that. But, of course, there is this wider issue of inter-governmental relations, and I know that the JMC(P) has commissioned a review on inter-governmental relations to take that forward and to look into it. That is more in the realm of the Cabinet Office and their work than it is my area of responsibility. 

It's something I will certainly contribute to, and encourage them to look into the lessons perhaps to be learned during this process.

13:50

Let's take a specific area, then, and it's been raised by the First Minister here, and that's the common rulebook for goods and how that's shaped, and the influence that the devolved administrations have. I think he's very frustrated, and he's started to speak in terms of, 'Unless the Assembly and the Scottish Parliament sign off this, it shouldn't really stand.' Now, that, to me, indicates that he does not feel he's been a full participant in these very crucial discussions. So, taking the common rulebook, how do you think the involvement has been facilitated with the devolved administrations?

Well, we've had a discussion on that and on the principles that underlie it. Clearly, I think the specific area of interest was within the agriculture space—the Department for Environment, Food and Rural Affairs discussion, which we did touch on at the last ministerial forum. I think we've been able to take on board some of the views of the devolved administrations in that respect, but, of course, there are fundamental political differences there, in the approach of the Welsh Government, which is effectively to say that we should be part of the European Economic Area and therefore be subject to all goods, and the approach that is set out for the common rulebook in the UK Government's White Paper, which is that this should be a common rulebook in those areas that might otherwise result in friction at the border. And so, we will not necessarily reach full agreement on those important distinctions, but we are certainly aware and taking into account the position of the respective devolved administrations.

And that will be true of regulatory alignment and divergence in our future relations with the EU, that it's something of a secondary involvement that the devolved Governments have, or—.

I wouldn't describe it as a secondary involvement. They are absolutely part of the discussion, but, clearly, the UK does have to define the future relationship between the UK and the EU. We want to ensure that we've taken on board the views of the devolved administrations, and particularly their expertise, which they have a huge amount of, in areas of environment, of agriculture and that side of things. But it's not a situation in which, politically, they can necessarily drive the UK position on these issues more broadly, and that's the nature of the discussions we sometimes have to have in these forums: to explain where we agree, where we disagree, where there is important information we can take on board, but also where we may not reach agreement. I think what we've seen is that there's very good official-level working between the Governments. There's a very good understanding of some of those distinctions, but inevitably there will be political challenges as we go through a process in which the Governments have different positions.

And will there ever be enough flexibility to allow different approaches to divergence, for example, within the different parts of the UK? For instance, to take a practical example, we may want to remain very closely aligned with the EU regulatory framework on lamb, for instance, because it's by far our largest export market for lamb, and in terms of animal welfare and labouring and movement and all sorts of things—we might want to remain closely aligned to the EU and the rest of the UK. England and Scotland may take a different view. Would that type of flexibility ever be possible on divergence?

I think it's been useful to see, in that space, the agreement that has been reached and announced between DEFRA and the Welsh Government on agriculture to look at common frameworks on a non-legislative basis, and, actually, a public announcement by both Governments together that they would work together on this and have an approach on many of the issues you've just touched on, which is shared. I think there is a fundamental view throughout this process—we've had this discussion during the passage of the withdrawal Bill around the need for common frameworks, which all the Governments have accepted, and the inter-governmental agreement between the UK and the Welsh Government that accepts the need to work together on this to protect a UK internal market, first and foremost, and then also to support us in our negotiations with the EU.

I would say, in our approach to the common rulebook, particularly as it affects agricultural products, we've taken on board, very strongly, the strong views that we had from the Welsh and the Scottish Governments about the benefits of convergence in agriculture. Now, some of the debate in Westminster is obviously not too delighted about that, but we have taken the view that actually meeting the EU requirements on product safety and food safety is a good thing, per se, and therefore something that we ought to pursue, and that's a key element of the common rulebook in that respect. So, I think this is an area where we've certainly been informed by the position of the devolved administrations. I think we've taken a position that is very similar to theirs. Of course, in some areas, such as animal welfare, that you've mentioned, the UK goes substantially, and Wales goes substantially beyond the EU minimum requirements, and we wouldn't necessarily want to see any situation that could lead to any regression in that respect. So, we feel it would be better to maintain our high standards rather than have any commitment to follow rules in the future over which we would have no say, and which might actually be of lower standards than ours.

But I think, also, within this food debate, there's something I've often observed, perhaps, more politically than speaking as a Government Minister: I think there's sometimes a slightly artificial argument that as if by leaving the EU we would suddenly have a wonderful opportunity to scrap all our food rules, which ignores the fact that there is no appetite from our constituents to do that. And, actually, what we saw with the transatlantic trade and investment partnership negotiations and so on, and so forth, one of the most sensitive issues is actually food policy, and generally people will only want to see high standards being met. And so I think that also underpins the sense to me of the approach that we've taken to a common rulebook on agricultural products of saying, 'We will maintain a common approach here because these are standards that we value, that we've helped to set, and that I think are valuable to Wales, to Scotland and to Northern Ireland and England, too.' So, from my perspective, that is one of the justifications of that policy.

13:55

But it is also true that it's the preservation of the UK single market—which is hugely important, I don't doubt—that will drive these decisions ultimately. So, any divergence or flexibility below that would have to be based on that principle not being undermined.

I think the arrangements that we have today, effectively, reflect that, in that Wales does have the potential to set slightly divergent standards, higher standards, where it chooses to, but it doesn't have the ability to go below a minimum level, and that will continue to be in place. We wouldn't have a problem with that, but what we don't want to do is create barriers within the UK internal market, or, indeed, to create friction in trade with the EU.

So, we could set higher—. I talked about lamb—we could set our standards so that we get access, we hope, to the EU market, and, at some point, that may mean the standards are higher than for the UK single market. But at the minute, you wouldn't accept— 

But as I say, I think our objective in the common rulebook is to actually say, 'We will meet those same standards anyway, and we will be able to maintain frictionless access to the EU market for meat and animal products.' 

But we would still have that flexibility to go higher, as long as we didn't keep out English and Scottish lamb, presumably, at the same time. You know, we would still have to allow that in, even if it didn't accord to those standards.

You mentioned the common frameworks. This is obviously an area that has led to a lot of discussion, and I think it's very much linked into the updating, modernising, whatever you want to call it, of inter-governmental structures, because it seems to me that the common frameworks—perhaps if we just keep going on agriculture to be specific—are very significant, they're going to be the foundation for the UK approach where that is in everyone's interest, but those rules have to be agreed and also any changes to them in terms of how those frameworks are governed in the future. It needs to be very much a partnership approach between all the administrations, and I just wonder how you feel those arrangements are developing, because it sometimes seems that it's very much driven by the UK Government for England, and the pace we need—. I can understand the realities of that. I don't think—. The capacity in Wales and Scotland for some of this administrative workload is limited; I'm not being a perfectionist here or trying to absolutely defend every possible notional right we might want. There are practical considerations. But it does seem to me that the governance arrangements around the common frameworks still leave quite a lot to be desired, and there are frequent references anyway in the Assembly here to that from our Government saying that they're not satisfied, even if in some areas they do feel that there is some progress. We've still not got that culture change to accept shared governance, basically, over the shared frameworks.

14:00

Well, I mean that's a very interesting point because I think what we have seen on the common frameworks discussion—and again this is an area that touches on the work of my department, but is also very much engaged with the Cabinet Office and their cross-departmental co-ordination—. But what we have seen there, actually, is quite a significant improvement in the working together, and particularly—and DEFRA is probably the example I would give where there were some challenges earlier on in the process and some friction, if you like, between the administrations, where actually we've seen a joint announcement between DEFRA and the equivalent Welsh Government ministry on wanting to work together and wanting to work together on common frameworks in a non-legislative way, which therefore is more flexible in the way that it can take on board the views of both administrations. And I think that builds on the inter-governmental agreement that the UK reached with the Welsh Government.

Now, obviously, we would much rather that was an inter-governmental agreement that was also signed up to by the Scottish Government, and we have left it open for them to sign up to. My understanding is that, actually, on official level, those discussions on common frameworks, including with the Scottish Government, have been making some good progress and there has been a good level of agreement on how we move forward. And I think that's also reflected in the fact that you haven't seen UK Government departments to date using the section 12 power—what used to be clause 11 is now section 12. These things move around and even I find that quite confusing sometimes. Actually, you haven't seen them using that to step in because they've been able to have constructive enough discussions with the devolved administrations to find other solutions. So, that's something that I'd be very happy to see continue.

I think it's also relevant, and, again, when we come to the WAB, the withdrawal agreement Bill, in our discussions, we looked very carefully at whether, when we extend other sunsets we would need to extend the sunset on section 12, and we decided not to. So, I think that's also an indication of the way in which the common frameworks discussion has been able to move forward in quite a constructive way.

Okay. Then, finally, you mentioned that the JMC review doesn't rest with you, but I'm just wondering whether you can provide any update on where they are in looking at these structures, because I think the work started in March, didn't it?

That's right. I think this is something that was commissioned by the JMC plenary, and that was from the last meeting of the JMC(P), and it is something that the Cabinet Office will be leading on for the UK Government. I know that the work is ongoing. What I can't give you at this stage is a sort of date to report back. We will certainly be contributing from our perspective, as a department, our views on that and the feedback that we've had from the devolved administrations on the engagement to date, so it is something that we will certainly be feeding into.

Would you be able to perhaps write to the committee and give a date to go back and ask the question? Because we have six months until we leave the European Union, and I would have thought that the review would want to come to a conclusion well before that period, so that things could be discussed and possibly put in place before we leave the European Union, so I'd be grateful—

I'd be happy to take that question back, but I think it will probably be my colleagues at the Cabinet Office who will be writing to you rather than me, but that's—

I'm happy—I don't care who writes to me, as long as we get an answer.

Also, a couple of points—. It is important—you mentioned that you were coming to agreements on common frameworks, which is one of the important questions we had when we discussed and debated the EU withdrawal Bill here in the Assembly. So, at this point, can you confirm, therefore, that there are agreements, that there's been no situation where things have been imposed at this point in time?

You talked very much about the fact that good discussions were taking place with the Welsh Government, and that seems to be happening well. I would like to have an example, because we want to explore the Welsh Government's influence, of how is it actually undertaking its responsibilities on behalf of the people of Wales. Do you have any examples of where you have actually not had good discussions, but listened and acted and changed something because of the Welsh Government?

Well, I can't necessarily give you an example of where something was one way and then completely the other, but I gave the example already that I think the approach we've taken to the common rulebook on agricultural products very much reflects the views that we've had expressed by both the Welsh and Scottish Governments about the importance of frictionless trade in that place. 

Also, another area I know your committee's taking a particular interest in is agencies and programmes. We very much take on board the strong views that we've had from the Welsh Government on the value, for instance, of membership of the European Chemicals Agency, and that is reflected in our UK position. That's not to say that, without the views of the Welsh Government, it wouldn't have been the position that we've got to, but I think they are examples of where specific points have been raised by the Welsh Government and they've been reflected. 

The nature of the policy process is not one where I could say that without the input we would have taken a completely different view, but it's certainly one where we've taken on board the views that have been raised. And many of these views are shared. When it comes to the benefits of access to European research networks and Horizon and its successors, we hear the same things from Welsh and Scottish and Northern Irish universities as we do from English universities. So, these are shared aspirations where all parts of the UK are telling us the same thing and we can move forward.

I do think that I perhaps give those two examples, particularly on the common rulebook for agricultural products and on the European Chemicals Agency, as places where the Welsh Government has been particularly vocal and the UK has certainly taken that on board.

14:05

Thank you for that. I will perhaps want to remind you—you might expect this—that frictionless trade in goods was actually put in the White Paper by the Welsh Government back in January 2017. 

Over 18 months ago. So, I hope it doesn't take 18 months to accept all the things the Welsh Government say. Mark.

Minister, what's the likelihood of reaching an agreement on the Irish backstop by the summit next week?

Clearly, negotiations are still under way. We haven't reached that agreement yet, but we are confident that, with both sides paying attention to the key concerns of the other side, we can get there. I think that's the point I was making previously about it being very important that the EU understands that we're not going to be creating borders within the United Kingdom in this respect. So long as that is understood from their part, we can get to an agreement on this. Clearly, their public position to date has not accepted that yet. So, we do need to see movement.

To me, and I think I said this to your committee before, this process in some ways has been artificially made more difficult because of the separation of withdrawal and future framework. I think it's always been the aspiration of the UK Government, the Republic of Ireland and the EU to ensure that we don't have friction at the Irish border. It's always been a shared aspiration in that respect. We've always taken the view that that is best achieved through a future relationship and through a future relationship that is frictionless in terms of goods and recognises the common travel area.

One of the really good things about the progress we've made on the withdrawal agreement to date is that specific recognition of the common travel area that locks in those unique UK-Irish arrangements for travel, which is of benefit to the Welsh ports in terms of the movement of people. But we clearly need to go further than that and we need to have arrangements for goods, for phytosanitary arrangements as well, and that's why we've put forward the proposals that we have on the future relationship. But it's also where we recognise that we made a commitment back in last December that there would be a backstop and we will put forward proposals for that.

And if that backstop is agreed and is then within a withdrawal agreement, is there any possibility of Parliament ever determining that that would need to be changed in future, perhaps in light of—will there be any provision in the treaty for revision of that in future?

The Prime Minister has been clear that the backstop should only be temporary and should be about being in place until the future relationship falls into a place that can deal with these issues at the border. So, from that perspective, it's not something that we would see being available indefinitely in any case. Also, I think we have to look at the legal nature of the agreement. Once the withdrawal agreement is reached between the EU and the UK, neither our Parliament nor the European Parliament can amend that. It's something that will be agreed between the parties and then presented to the Parliaments for ratification. So, the choice that our Parliament has, as does the European Parliament, is to accept or reject the agreement that has been reached, rather than to try and put amendments.

Now, of course, it is the case that the withdrawal agreement Bill will be in front of Parliament and it's not possible to present a Bill without it being amendable, but the withdrawal agreement Bill is only there to implement a legally binding international agreement. So, what I don't think would be possible—which I think is what you're suggesting might be—is that the legislation in the UK Parliament could fundamentally alter one of the commitments in a legally binding international agreement between the UK and the EU. Effectively, the choice for the UK Parliament will be: here is the agreement, do you accept it or reject it?

14:10

So, when Michael Gove says that we need to get past 29 March with an agreement on leaving the EU and then it can be changed in future, is that not right?

I think he's focusing on the detail of the future relationship rather than on the withdrawal agreement itself. I think the withdrawal agreement itself is something that we need to finalise before we leave the EU and once that is ratified by the two parties it will be legally binding. I guess the key question here, and of course what is absolutely true, is that no Parliament can bind its successors. So, one of the points that we've made about, for instance, the common rulebook, is that we will set out an approach to the common rulebook that we're prepared to agree, but if at some stage down the line a UK Parliament decided to diverge from that, it would be able to because that is the nature of parliamentary sovereignty—

So, it could diverge from the common rulebook but not from the Irish backstop. 

It would just have to do so with the knowledge that that would have an impact on the trading arrangements and the agreements between us. I think, the Irish backstop, as I say, I think the key point there is that we see it as a backstop—it is there to be temporary, in between the time at which the implementation period might come to an end and the future framework comes into force. We do and have always believed that the real solution to the issues with friction at the Irish border is in the future relationship between the UK and the EU as a whole. 

So, when on page 36 of the Conservative manifesto, where it says:

'As we leave the European Union, we will no longer be members of the single market or customs union',

is that strictly going to be true? 

Yes, that is the case. We've been clear we will leave the single market, we will leave the customs union and that's why we will not be subject to the common external tariff. I think it's one of the key areas of political disagreement at the moment between the Conservative Party and the Labour Party. The Labour Party have advocated a position of being in the customs union and we have said that we will be outside the customs union. But what we have also accepted is that there need to be customs arrangements in place to avoid friction at the border between Ireland and Northern Ireland. 

So, can you guarantee that at the time of the next election we will not be in a customs union with the EU? 

What has been proposed as a potential backstop, the early stages of the backstop—which has not been accepted by the EU—was a temporary customs arrangement not 'a' or 'the' customs union. The proposal that that had would have come to an end before the time of the next election in 2022. 

Well because it is strictly temporary, fixed in time—

But it is not the same as being a member of the customs union. And I think that is—you know, the customs union is part of the European Union and has been extended in part to certain third countries, like Turkey, but not in full to any third country. This is something that would be distinct from that. But even that is designed to come to an end before the putative date of the next general election. 

So, it's designed to come to an end, but will it come to an end? 

Well, as I say, I can't pre-empt negotiations on a backstop that haven't yet taken place, but that is the proposal that the UK Government has previously put forward. 

But you have said it's important to protect the integrity of the UK's constitution and Northern Ireland. Is it also important to ensure the integrity of what was promised in the Conservative manifesto that we wouldn't be in a customs union?

Yes. And that is why, when we leave the EU in March next year, whatever arrangements might be put in place—such as the implementation period, which would effectively enable things to continue on a fixed basis—it would not be the same as being a member of the single market and the customs union. We would no longer be—

The manifesto doesn't say 'the' customs union; there's no article there. It says we won't be customs union members. But it seems, at least for the transition period, we will be members of a customs union with the European Union, and are you now saying there will be a further period of customs union membership after that? 

Well, I'm not saying that, because we haven't reached any agreement on the backstop here. Clearly, what the backstop needs to deal with in terms of its arrangement is some form of customs arrangement, some form of agreement on issues that might otherwise deliver friction at the border, such as sanitary and phytosanitary measures used, and some form of agreement on the movement of people. Now, that movement of people issue is covered by the common travel area, so that needn't result in any friction at the border. The other two will need to be dealt with in the backstop, but we would much prefer, and have always taken the view, that the backstop need never come into force so long as we have an agreement that deals with these issues properly in the future relationship.

14:15

So, where in the manifesto it says we're not going to be customs union members, is there somewhere else where it says, 'But we're going to enter into a customs union with the European Union, which we could leave in future if 27 other countries unanimously agree to let us'?

I'm pretty certain that the manifesto also makes clear our commitments to the Good Friday agreement in all its parts and the frictionless arrangements on the island of Ireland, and this is what both the backstop and our approach to the future relationship are designed to deliver on.

But that may mean we never leave a customs union unless all 27 EU countries in a trade agreement unanimously agree to let us.

I don't think that's the case.

I think the Parliamentary Under-Secretary of State is saying, and has actually told us several times, that it's dependent upon whatever arrangements are finally agreed.

But I think, to be clear, the position of the UK Government is that we will leave the customs union when we leave the European Union, and that remains the case.

We would like to have customs arrangements between us that facilitate the frictionless movement of goods. That is not the same thing as a customs union. I think we've been very clear about our plans for an independent trade policy that mean coming out of the common external tariff.

I think, Minister, that remains to be seen.

In terms of the Welsh ports, what preparation should they be making at the moment?

So, there have been a number of useful meetings and discussions. I know Wales Office Ministers [correction: Office of the Secretary of State for Wales Ministers] and my colleague Chris Heaton-Harris, who's a Minister responsible for contingency planning, have visited Holyhead, amongst other Welsh ports. I've had meetings with the Welsh ports to discuss some of these matters.

Clearly, there are technical notes that we have published on the movement of goods and arrangements in that respect, but we think that the best outcome for UK ports in general is one that sees us reach an agreement on frictionless trade in goods between the UK and the EU, and allows us to take the wider opportunities of international trade, and there are significant long-term opportunities for the ports. But the approach that we've taken on the technical notes is very much one that is designed to minimise disruption and to focus on the smooth operation of our ports and a continuity approach wherever possible.

On the Welsh ports, we had the ports body in to a committee on Monday, and they were indicating that clearly there were discussions but there were non-disclosure agreements being placed as part of those discussions. Is there any specific reason as to why they should have a non-disclosure agreement when they're in discussions about the future of the ports and the operations of them?

That's not something, I have to say, I'm aware of. As I say, within the department, my colleague Chris Heaton-Harris leads on these issues, and it may be that those NDAs are to do with commercial reasons. But I'm not sighted, I'm afraid, on that myself. So, I'm happy to ask the question and perhaps write back to you on that one.

That would be helpful for us, because it will also be important to understand how that links into the Welsh ports, clearly because there's now an element of responsibility for the Welsh Government for Welsh ports, and if there are NDAs being discussed, we'd like to have an understanding of the purpose of those NDAs.

Just moving on to other issues around Brexit preparedness, the technical notices, the 'no deal' technical notices—a couple of questions about this—are there likely to be more published?

There will be. So, obviously, we've been concerned and asking the questions about Welsh Government's involvement in the drafting of those notices. Are they going to be expanded upon if a 'no deal' scenario becomes more likely? Because some of them are quite thin in terms of what they're predicting, although very daunting in terms of disruption to the economy—

We've now published more than 70 technical notices and, with those, we have got a sharing process in place with the Welsh Government where they have been able to comment on and input into the content of those, which I think is one of those things that has improved over time, to ensure that we can take on board more feedback there. 

There will be a further tranche of technical notices to come, and we will continue to work closely with all the devolved administrations in terms of their preparation, because we recognise that, in many areas, these touch on devolved responsibilities. So we have been keen to be able to check in and have that discussion. As you'll appreciate, there's an awful lot of internal, inter-departmental co-ordination that needs to go on on these as well, and so Chris in his work on this is very much holding the ring, if you like, between UK Government departments in how they work together and then ensuring that we can have a process of coming to the devolved administrations for their input into these technical notices as well.

There is a good official-level working group that has been looking at these issues as well, which I think is important, because we need officials to be able to work together, and I think there's broad agreement from all the Governments, whatever their political views and, I think, the shared understanding that no deal is not our preferred outcome, of the need to prepare for contingencies.

14:20

Can I ask, on that particular point, how much notice is the Welsh Government given on those technical notices? You said it's shared, but when is it shared? How much time do they have? Because if you are talking about communication between your own departments, that's going to take quite a bit of time, and then if you go to the Welsh Government, when does the Welsh Government come in? After that takes place? When? So, again, will it have to go back to the departments and the Welsh Government has no say? So, it's all about a timing issue. Is it just a paper exercise to say, 'Oh, by the way, have a look at this, but you haven't got time to do anything about it', or is it proper involvement and so the timescales are set up so that there's proper involvement?

As I say, I think this is something where there has been, with the first batch of technical notices, some concern about them being quite late in the day. I think we've been able to improve that with the subsequent batches, and exactly the issues you've just touched on, in terms of the inter-departmental co-ordination of these things, have been some of the challenges that we've had to address in this. But I think there's a recognition that the devolved administrations have a very important part to play in these, and so, as we have gone through the process, we have tried to ensure that they've been shared, with more time for engagement and feedback in that, and that's certainly something that's been touched on in my discussions at the ministerial forum as well—how we can improve that process.

For my sins, I've read some of those technical papers, quite a few of them. Some of them, to be honest, are very light on as to what you would do based upon the scenario you've identified. Are they being reviewed with consideration as to, 'Well, these are the challenges ahead of us and this is what we intend to do about those challenges'?

I think that sort of review is taking place in terms of discussions within Government, but also in terms of the engagement we've had with business and with industry. I have to say I have found, particularly recently, in meeting with, for instance, the pharmaceuticals industry, that they have been quite pleased with the level of detail that has been provided in the technical notices in relation to their area, and have welcomed some of the key clarifications that the Government has offered, particularly in terms of unilateral recognition in the event of no deal in that respect. But, of course, it's something that we will continue to look at. We don't expect to remove any of the existing technical notices, but, as I say, there are more to come and, as more of those get published, we will want to ensure that the quality remains consistently high in addressing the issues that people are concerned about.

Of course, this is about the eventuality of a 'no deal'—technical notices have been developed for the eventuality of a 'no deal'. You say that you're preparing for all eventualities. You say that you're also confident that there will be a deal, but if we look at things like border checks, customs arrangements and those administrative systems, if there was a 'no deal', are we ready for that on 29 March?

There is a huge amount of work that goes on across Government with the border delivery group co-ordinating the approach to that, and I know that they've also been in touch with the Welsh ports in terms of the preparation there. My understanding is that HMRC believe that they are ready, and that the approach that's set out in the technical notices will be designed to facilitate readiness in that respect. But I'm also clear that this would be a significant challenge, and therefore it is a much better outcome to ensure that we have the implementation period in place and a negotiated arrangement between us. That is the approach that we're taking, and I think it's important to stress that the decision to publish technical notices at this stage would have been the case whatever the state of negotiations. It's not a view that's been taken that no deal is more likely. It is a view that's been taken that it is responsible at this stage to inform citizens and businesses of the steps that might need to be taken in the event of no deal, and would be in any case.

So, we are still confident of achieving a deal, we still think that's the best outcome, and it will be the right approach when it comes to bringing a deal to Parliament and the meaningful vote. But of course, we do recognise the need for preparedness there. Somewhere in here—I'm afraid I don't have them in front of me—I have the figures around how many people have been recruited to help with the border and the arrangements in place there. I think it is important that there has been specific money laid down by the Treasury and given to organisations such as HMRC and Border Force to be ready in the event of no deal, and there has been a degree of recruitment to meet those challenges.

14:25

In terms of the manufacturing sector, you recognise that this industry is very concerned. BMW said they'd halt production for a month in April 2019 if there was a 'no deal' outcome—a huge impact, a disastrous impact on supply chains as well. So, what actions are you taking to avoid disruptions to manufacturing operations in the event of a 'no deal'?

I think there are two things there. First of all, there are some approaches set out in terms of the technical notices with regard to supporting the movement of goods at borders and addressing, particularly at the roll-on, roll-off ports, the continued movement of goods in that respect. But secondly, we have been meeting with all sectors of the economy throughout this process. We've been talking to the automotive and the aerospace industries and taking on board their key concerns, and those are reflected both in the Government's approach to the implementation period and in the approach to a common rulebook on industrial products, which we think would be very important for avoiding the non-tariff barriers that might otherwise arise and that would interfere with complex supply chains. We've been making the case to the EU and our counterparts about why, actually, the benefits of that frictionless movement flow in both directions. So, that's why we've taken the approach to negotiations that we have, that's why we've taken the approach to the implementation period, but I think within our own gift, and within the approach that's set out in the technical notices, is to take the most positive approach to continuing movement of goods within the UK and at the UK border. Clearly, though, this is one of the areas where getting a deal in place would be a much better outcome.

And just looking at the situation in terms of the manufacturing sector in Wales, a change from EU rules to the rules of the World Trade Organization—the practical implications of that—what support are you offering to the manufacturing sector to prepare for such a change?

First of all, I think it's important to remember that, given the approach that we've taken in the European Union (Withdrawal) Act 2018 as it is now, there is no overnight change in the rules under which businesses operate or that apply to specific industries. We are writing the existing rules and regulations into UK law so that they are there and we have that continuity approach in terms of law and rules. But, of course, were we to be trading on WTO terms, then there would be additional friction in the system, and that is something we would then have to look to mitigate. But I think what we are focused on doing is avoiding that scenario, making sure that we have both the implementation period as the bridge to the future in place, and then a frictionless agreement on goods—very much something that is in tune, I think, with the approach that was set out by the Welsh Government in that respect—in place for after December 2020.

So, the technical notices will go so far in showing how we would mitigate in some cases and what steps we feel businesses and individuals would need to take in a 'no deal' scenario, but I would come back to the fact that we think the best approach to this is one that is a shared endeavour by the UK and the EU to protect the strong supply chains that exist between us.

You'll be aware of the fact that the Welsh Government has provided funding through our EU transition fund to both Ford and Airbus. This is a demonstration of our preparedness in terms of Welsh Government's preparedness. Was the UK Government involved in that decision to offer financial support? And to what extent are UK and Welsh Governments co-ordinating support for the manufacturing sector to help it prepare for Brexit?

14:30

So, the UK Government clearly has a degree of support for the manufacturing sector through the industrial strategy and through the approach going on in that space. I'm not aware specifically of the points you've raised there, so I will have to ask BEIS colleagues, I think, to come back on that, because I think that would be within their particular area of responsibility. But I'm happy to look into that and perhaps to come back to you on that point, because I would suspect the UK Government involvement in that—to the extent that there is UK Government involvement—would be through BEIS and would be through that approach.

On that point—I mean, none of us want a 'no deal'; let's make that clear, but, obviously, the uncertainty and the possibility has increased in recent months, because that's the interpretation that we're all receiving. Jane has just highlighted the support for small businesses, particularly supply chains, in manufacturing and motor manufacturing, in particular, many of which do exist within Wales. If there comes a situation where we do leave without a deal, and, as a consequence, some of our motor manufacturing industries struggle—we know BMW's already said it will stop production for a month; Toyota has already indicated deep concerns—will the UK Government fund, basically, help for those supply chain industries that could be facing very, very difficult times just to survive, whilst we await that, shall we say, settlement beyond that?

Well, I think the UK Government has made it clear that we will take whatever steps are necessary to ensure that the UK remains highly competitive in this space. I can't make pledges on behalf of the Treasury, particularly with a budget coming up, but I think there is obviously a recognition that the UK is offering the EU, in our negotiations, a level playing field on issues like state aid in exchange for a good agreement on market access. Obviously, in the circumstances, where that wasn't necessarily the case, we may have to take other steps. But our focus is on maintaining the UK as the most competitive place to own and start and grow a manufacturing business. And, in that respect, we have other key levers in terms of the support we provide for research and development, in terms of the current low tax regime, and in terms of increasing UK productivity through investment in skills, which I think are also a key part of the component, and, obviously, a lot of those are delivered through the industrial strategy and handled by my colleagues at BEIS. So, I think we obviously need to look at all the levers to support business in the UK in all circumstances.

We've come to the conclusion, informed by business, and with the feedback of businesses large and small, that the most straightforward way of doing that is to secure the frictionless access for goods and to maintain those complex supply chains that we have today. In terms of future fiscal approach, I'm going to resist the temptation to tread into the territory of my colleagues at the Treasury.

Let me ask you one other question. We know the Chancellor actually allocated £3 billion to European transition funding, basically. Has your department been involved in setting priorities for that spend to ensure that it can be in a situation where you know there's money—you haven't got to go and ask for that; there's money there? Have you been involved as a department in those priorities?

So, to the extent that we would be involved, it would be my colleague Chris Heaton-Harris who's focused on the contingency planning side of things, but this is primarily money that has been allocated for Treasury for other Government departments in their responsibilities in this regard. So, it's not that our department has a big pot of money; it is money that is, for instance, going to BEIS and the Home Office with regard to Border Force and HMRC for preparations for arrangements that might be needed in the contingency scenario.

And was your department involved in the, shall we say, balancing of those allocations? Because, clearly, somebody needed to co-ordinate it.

I think the prime role for co-ordinating these allocations will sit with the Treasury, but our department would have input into it—that would certainly be my understanding.

14:35

Could you just tell us whether any further technical notice on food has been published since the end of August, in case I've missed it? Because you said 70 technical notices.

I may have to ask for inspiration on this front, because I know that there have been a number of technical notices on the agricultural front. I think, in the most recent batch, there were some, actually, so it may be that, therefore, we have moved on since the end of August, but I couldn't be—

The one at the end of August, obviously, it caused quite a lot of anxiety amongst the food producers, exporters and, presumably, also importers. We learnt in July that the Government plans to stockpile processed food to guard against a complete breakdown in the negotiations, but how long do you think that that would last, as the UK only produces half of what it eats?

So, I think the agreements on both food and pharmaceuticals around working with the industry to ensure that there is a sufficiency of supplies—specifically looking at the issue of disruption, if there were disruption in the ports, what we might need to do in order to facilitate that—. It's not saying that we want to—and I think where there's potentially the opportunity for misunderstanding—

No, but it's not saying that, even in that scenario, we would feel that we had to stockpile food in order to keep the nation fed. We have a diverse supply of food in this country. Around, I think, 30 per cent of our food needs come in via the EU—a substantial amount of our imports are from beyond the EU—and, of course, we have substantial amounts of domestic production, a lot of which currently is exported. And so I think we need to look at the issue more holistically than perhaps some of the readings of that technical note imply. But we are confident that we have the arrangements in place that can allow for continued supply of food.

I think one or two other issues have arisen with regard to technical notices where I think there may be some misunderstanding. I think there's been an article recently in the Welsh press suggesting that lambs could be slaughtered as a result of some of these arrangements. We don't see that as being the case.

Well, there's definitely no shortage of meat, certainly not in Wales, but 40 per cent of our fresh produce comes from the EU, and I'm particularly focusing on fruit and vegetables, because that is what keeps us alive.

So, what's going to happen there in the case of a 'no deal'? You can't stockpile fresh produce, by definition.

And that's why much of our focus on the arrangements at the port is about keeping things moving and about an approach that is designed to have the minimum disruption in that respect.

Well, in the event of a 'no deal' also, it means that you would have to be able to focus on prioritising the most important supplies in that situation, in which I think medicines, and potentially elements of the food chain, would be have to be prioritised. But I think that is something that is getting into the details of the technical notes, on which, I have to say, I am not the expert, because it is another ministerial colleague who leads on this.

Okay, but you can see, for our constituents, being able to count on food security is probably the most important issue.

And it is recognised as being important, and I think, in the interministerial discussions that go on around this in the preparation work, DEFRA has an important role to play alongside other key departments, such as the Department of Health and Social Care.

But you're not, at the moment, taking a precautionary approach to planting new vegetables for—

No, that is not something that I think is covered by any of the technical notes.

Okay. The British Retail Consortium is talking about food rotting in the ports, so, clearly, this is something that the industry is taking very seriously. You're hopeful of striking a deal, but, without a single market, without a customs union, how are you going to come up with the frictionless arrangements between now and the end of March?

Well, I think the approach that we set out to frictionless arrangements is based on two things: a facilitated customs arrangement, which is not the same thing as a customs union, but it is a frictionless approach when it comes to customs, and a common rulebook for agricultural products and industrial products, which would not be the same as the single market, but is saying that, in those areas that would otherwise result in friction at the border, we will follow the same rules. That would allow for the frictionless movement of key goods, including food, and that would be mutually beneficial, we think, to the UK and the EU. We think, particularly, some of the—. I've recently been in France, talking to Ministers there. A huge amount of the French food industry exports directly into the UK. In fact, I think I'm right in saying, from memory, the reason why France is a net exporter of food is the UK market. If it wasn't for the UK market, it would actually be a net importer. So, I think, from these perspectives—

14:40

Absolutely, but I think, in that respect, there is a huge amount of mutual interest in achieving an outcome here that allows for the frictionless movement of goods, and that is something from which we've all benefited over a long period of time. I think it's reflected in the fact that both the Council's guidelines and the UK negotiating guidelines set the frictionless movement and tariff-free movement of goods as objectives for the negotiations. 

The other element of this, of course, is the implementation period, and that is securing the fixed period of time in which arrangements don't change, and that is doubly beneficial, partly because it allows those arrangements to remain in place for a fixed period of time, but also because it gives you time to prepare for any future arrangement. 

I think just the last thing I'll say, because I think this is important, is that we shouldn't forget that we do also buy food from a large number of countries and territories outside the customs union or the single market. And it is possible—

Absolutely, and so it's important, and it's an important thing for us to manage. But it is—. Equally, we will continue to have a diverse food supply as a country, and it's important we focus on all of that and how we can maximise it in terms of our food security. 

Okay. Well, I can well envisage the circumstances where you might wave through the lettuces and cabbages and relax any controls in order to be able to feed the population, but, turning to medicines, that's a rather more difficult matter, because nobody wants to relax any regulations around medicines. We have 45 million patient packs of medicines moving from the UK to the EU 27, and 37 million packs moving in the other direction. How would we not prevent crucial medicines that come from abroad simplying dry up?  

I think it's a very important question and it reflects, again, the fact—as we've set out in our White paper on the future partnership—that we think by far the best way of maintaining co-operation in that respect is to have UK membership of the European Medicines Agency to continue.  

Well, I think we have not yet had that full negotiation on the future partnership that we think they ought to be part of, and we think it's certainly not been ruled out by the key European pharmaceutical bodies, who've actually been calling for it very clearly and loudly. And it is something that I think is reflected in the figures you just gave, which show that there is a huge interchange of medicines in both directions but that, actually, the UK contribution to the EU 27 is even larger than the EU contribution to the UK in terms of medicine. So, I think there are good reasons to explore a broad deal on that. But I think in the absence of that—and this is the subject of one of the earlier technical notes, and one that's been strongly welcomed by the UK pharmaceuticals industry—we've recognised that the existing approval system for European medicines is one that is currently recognised in the UK, that we work with and that we understand, that we understand the evidence base for. And so we have taken the view—and it's set out in one of our technical notices—that, in the event of no deal, we would temporarily continue to unilaterally recognise those European medicines requirements and arrangements so that we would be able to import European medicines that are certified in the correct way without having to introduce new checks or disruption at the border. Now, that's something that is a UK sovereign decision that we would do that. It's something that I know, having spoken to the UK pharmaceuticals industry and some of their key representative bodies, they have strongly welcomed and feel is important and would—

That's fine. You're able to waive the regulations around imports, but what would happen to all the medicines that we export? 

Well, I think, as I say, first and foremost, getting a deal that provides for mutual recognition would be by far the best approach for both the UK and the EU, and that allows continued input into the work of the European Medicines Agency; that is our policy. But, secondly, in that situation where we were recognising their bodies, we would clearly take the approach of saying that they should also recognise ours. Now, obviously, in the absence of a deal, that is something that you would have to do directly to the institutions at that time, but we think it's eminently sensible and reasonable to proceed on the basis that, because there has been joint work between these organisations, because we've had access to all the data that underpins all the key approval decisions, et cetera, et cetera, it would make sense for a full, mutual agreement to be in place.

14:45

It's something that, clearly—.

It's a sensible proposal, and I think it's something that the industry has recognised is the right approach to take, and that includes the European pharmaceuticals industry. They have been speaking up about this, and I've been encouraging my European counterparts to engage with that.

Okay. Lastly, what is your contingency plan for the supply of medicines in the event of customs and regulatory delays at borders?

So, I think there is a recognition—and this is, again, in the technical notes; I couldn't necessarily tell you exactly which one. But there is a recognition that this is an area that would have to be given priority, and that, in the event of there being disruption at the border, you would have to have a system for prioritising essential supplies in this respect. Of course, part of it is also the issue of asking pharmaceutical companies to increase their stockpiles, and this is something that we routinely do—it's not a new thing for pharmaceutical companies to have some stockpiles of medicines, but we have agreed with the sector that those should be stepped up, specifically to address that issue of potential disruption. Clearly, our preference is not to have that disruption, and to avoid that altogether, but it is right that, if you make preparations for contingencies, you have to look at issues like this. And so, whilst it might have created a few bad headlines—and I understand that, and nobody likes that particularly, in Government—I think it is the right thing to do, to work with the industry to make sure we're properly prepared.

Okay. So, the biggest headache remains, on this section, fresh fruit and vegetables.

Sorry, I'll bring David in in a second. But we were told that that request to the pharmaceutical industries would be at their cost, so they were being asked to store the extra materials, and to have the storage space, but they would be expected to pay for that. Is that correct?

My understanding is that the Department for Business, Energy and Industrial Strategy have said that they will be happy to speak to the industries about those costs, and to get an understanding of that. So, I think there is a willingness to listen and to lean in on that.

Some things can't be stored—or at least not for very long: insulin, radioisotopes, for instance. And we've been told that that's a very critical part of what needs to be planned for in the event of no deal. I realise this is contingency planning in the worst scenario, but have you given any thought to how some things will have to get through without any delay? Because the current arrangements are just-in-time, anyway, or we're reliant on—I don't think we produce insulin in the UK at the moment, for instance.

And I think this is something that has been given thought. Again, I'm sorry if I can't give you chapter and verse on which technical note and where, because this is not necessarily my key area. But it is something that I know has come up in the discussions, and I think this also comes under the point of things that might need to be prioritised in a scenario where there was any disruption. But, of course, the point about radioisotopes also touches on the arrangements that we have in place for nuclear co-operation, in the event of no deal, and that is something that is subject to a separate technical note. I think the key issue that's been raised there by the industry is a customs one rather than necessarily arrangements in relation to Euratom and other issues—it is specifically to do with customs. And, again, that's an area where having a customs arrangement in place, between the UK and the EU, would be enormously helpful, in avoiding any potential barriers in that space.

But I think there's another point I'd make here, and this is a point that the pharmaceuticals industry are very clear in making, and I think we also should make in our conversations with European counterparts in member states—that we've all said, throughout this process, that we should put citizens first. And actually being able to meet the respective health needs of our citizens, including many EU citizens living here in the UK, is something that we should all prioritise, whatever the arrangements, and whatever the deal that might be in place between us. And that is an approach that I think we should remind each other of, from time to time.

I certainly agree there would be a reputational risk that the EU would suffer if they were seen to be so obdurate that it was leading to really adverse health outcomes.

Thank you, Chair. I've got some questions around the withdrawal agreement. Firstly, could you set out for us the UK Government's current timetable for ratification of the withdrawal agreement by the UK Parliament?

Sure. So, as soon as we have agreement on the withdrawal agreement between the parties, we will want to bring it back, and have a debate—which will be for a number of days—in the UK Parliament, ahead of a meaningful vote. And that would be a vote to say 'yes' or 'no' to the withdrawal agreement with regard also to the future framework, which I think is very important. We are very clear with our EU counterparts that article 50 is clear that the withdrawal agreement must have regard to the future framework and, therefore, we need to have a detailed future framework alongside the withdrawal agreement and that that will likely be an important driver of the parliamentary debate and the meaningful vote. And then, immediately after that meaningful vote, we will be prepared to bring forward the withdrawal agreement Bill, which would be the means by which, legally, we write the UK's obligations under that withdrawal agreement into UK law and so that would have to follow the normal process for a Bill passing through the Commons and the Lords. We recognise that the timetable for that is quite tight, but we do think that this is something that will be in the interest of all parties to work together to deliver through the House of Commons and the House of Lords in order to secure the withdrawal agreement and the implementation period and all the areas of citizens' rights that we've already reached agreement on. We think that, as a package, it's important that Parliament is prepared to work hard in order to deliver that.

14:50

So, what would be the latest possible date for introducing the withdrawal agreement Bill?

I don't think we set a latest possible date, but, realistically, this is one of the reasons why we are very keen to press on in the coming weeks to be clear that reaching an agreement at October council would be ideal. Clearly, if there were a need to go into November, that is still possible, but I think, given the time period that it takes for a Bill to pass through the Commons and the Lords, we really do want to see this debate happening before the end of this year, and the sooner, the better.

Okay, thank you. Could you provide us with any assurances that the UK Government will work closely with the devolved institutions on the development of the Bill?

Yes, and we already have, I think it's fair to say. I think with the White Paper that we published in the summer, we were able to give good sight of that some weeks, I believe, in advance of publication to the devolved administrations, which has been publicly recognised, I think. We will continue to work closely on that. I believe that in today's JMC(EN), my colleague Suella Braverman, who will be leading that Bill in Parliament, was updating the respective administrations and the Northern Ireland civil service on that Bill. And, again, my understanding is that that's been well received and actually commented on quite positively by Mark Drakeford. So, I think this is something on which we are keen to proceed on that basis. 

We also recognise that there are areas of the withdrawal agreement Bill, particularly within the citizens' rights arrangement and the functioning of the implementation period, where it will intersect with devolved competence. And, therefore, in those areas, we recognise our responsibilities under the Sewel convention and that it is likely that we will be seeking legislative consent in those areas. What I can't give you yet is chapter and verse as to which clauses, because, clearly, until an agreement is reached, we don't have the exact shape of the Bill, but it is, as set out in the White Paper—there are areas where we understand it does have that intersection with devolved competence and we will, therefore, want to work very closely with the devolved administrations and, indeed, legislatures, to reflect that.

Can I ask one question—you said that you think it likely that you will seek consent. Will you seek consent if it's a devolved area, or not?

Yes, we will seek consent.

And would that be the case even if there is an extremely tight deadline for the passing of the legislation as well?

Yes, but I think, again, we want to make sure—and recognising all the considerations around proper parliamentary scrutiny on this—. Suella and I were giving evidence to our Procedure Committee on this only yesterday—we do want to make sure that there is a proper timeline for debate. And that comes back to your point about it being urgent now that we do reach agreement so that we can bring this through Parliament.

Exactly, and would the UK Government be in a position to share draft clauses with the devolved institutions to ensure that there's sufficient time to scrutinise the legislation?

That is something we absolutely have to consider, but, again, we do have this challenge, clearly, that the Bill itself, and the clauses of the Bill, will depend on the withdrawal agreement, and we then have a very short window between reaching that agreement and trying to bring, first of all, the meaningful vote and then the withdrawal agreement Bill to Parliament. so, I can't commit at this stage to which clauses might be able to be shared and so on and so forth. But what I would point to is the White Paper, the fact that we published a detailed White Paper on this Bill early and we made sure that the devolved administrations had early sight of that. And I think that was improved with the input of the devolved administrations before it was published and before it was shared with the UK Parliament.

14:55

One final question from me: could you set out what other Brexit legislation is expected between now and exit day and whether those Bills will be subject to legislative consent?

Yes, I can do some of that. Let me just have a look, I've got a list of legislation somewhere here, I think. Actually, there are a number of Bills, obviously, going forward. We've had the Agricultural Bill, we had the Second Reading of it just the other day, which will intersect with devolved competence and other areas, and the fisheries Bill is coming. I don't have the list in front of me, actually, I've got more general terms about sharing, but that's something that—I would be very happy to write to the committee with the list of the key primary legislation before Parliament. 

There's also an issue, of course, here around secondary legislation. We are committed to working with the devolved administrations on the pipeline of secondary legislation so that we can make sure that that's properly managed over the coming months, because there is plenty of that to progress with as well. I think the estimate, last time I saw it, was about 800 statutory instruments overall that the UK Parliament will need to look at, and around a quarter of those are going to be relevant for the devolved administrations in one form or another. Clearly, what we want to do and where we have officials working already is to understand which ones of those the devolved legislatures will want to take responsibillilty for and move forward with, and where there might be some where we move forward on a UK basis and the UK legislates.

I think, with regard to the Agriculture Bill, there have been some discussions specifically on those aspects of that as regards the interrelationship, and some areas where the Welsh Government asked the UK to legislate for powers for Welsh Ministers within the Agriculture Bill. So, that's an example of the type of co-ordination that we'd want to see going forward.

You've set out what the Government would do if somehow you win the meaningful vote. What will you do if you lose it?

I think the wording on the withdrawal Act then commits the Government to come forward with a statement within a certain number of days—I can't necessarily remember what number of days it is—as to its next steps and there would then be a vote and a debate on that statement. That's the approach that is set out. But, clearly, also, that is one of the reasons why we've been publishing the technical notes, to set out what steps would be taken by Government and what steps we think should be taken by businesses and citizens in the event that we are not heading towards a deal.

We do think that the best outcome less click is to get a deal and for Parliament to approve that, but obviously it will be, at the end of the day, a decision for Parliament. They will need to look, in that meaningful vote, at the deal that is on offer, the deal that has been negotiated, and at the alternative. So, I think it's important that Parliament should be properly informed for that, which is why these technical notes have been provided. Also, there will be analysis provided at the time of the vote on the comparison between the Government's analysis of the deal on offer and the Government's analysis of what being on WTO terms would look like.

This would be cross-departmental, and my department will have been involved in producing it. It won't be the Treasury's analysis, it will be a cross-departmental effort on behalf of Government. 

Mark Reckless stole my thunder, that was my question too. [Laughter.] So, this statement that would be produced after a failure to get a majority on whatever deal it'll be, what does that constitute? It's like a motion of confidence, is it?

I think all that has been set out in the legislation at this point is that the Government would have to come forward with a statement and there would then be a debate on that statement. I don't think it goes beyond that at this stage. Clearly, this is a situation that I personally hope never arises. I want to ensure that we have a good deal that Parliament will want to approve.

We all do. Trading on WTO rules is pretty horrendous. Thank you.

Thank you. We've come to the end of our allotted session. We still have some questions so we'll write to you, if that's okay with yourself, to seek some answers—they're effectively on process as much as anything else. Can I just ask one question to finish off? Clearly, we all hope for a deal, and if a deal is achieved there will also be a future relationship with the EU as an outline framework establishes. Can you give us us assurances that, in the following processes, the Welsh Government and other devolved nations will have full involvement in those future relationship agreements and, in particular, trade, because international trade, although it might be a reserved matter, may have serious implications for devolved areas? What we're asking is: can you give us some form of assurance that Welsh Government and other devolved nations will be able to participate fully in the discussions on the future relationship post an agreement?

15:00

I think this is a very important area, where we look at how we work with the devolved governments on the future relationship with the EU, but also on our broader trading relationships. I know that you're going to be taking evidence from my colleague George Hollingbery in the coming days. I think he will be better placed than I to answer on aspects of Department for International Trade policy. But I know that an important part of the consultations that they're launching is to engage with the devolved administrations and devolved legislatures on the approach to trade, and that's welcome.

I think, from the perspective of the EU negotiations, we have set up the ministerial forum on the EU negotiations, particularly so that we can have that conversation with the devolved administrations ahead of negotiations on the future economic partnership. As I say, some of the conversations that we've been able to have, particularly on agri-food and fish, I think have helped to set a good shared UK approach on these things and have been quite productive. Certainly, going forward, we'll be looking very carefully at how the devolved administrations can be involved in that process and it's something that we've undertaken to discuss further with the Welsh Government and with the other devolved administrations. I do think we've seen during this process, and we've seen it in the inter-governmental agreement between the UK and Welsh Government, the ability to work together constructively and that's something that we want to build on in the next stage of negotiations.

You clearly see the ministerial forum as working well. I would, therefore, assume that you would have no objections to some formalisation of the process or more constitutional change to establish it on a stronger basis in that sense. 

Well, I think the ministerial forum clearly reports back to the JMC(EN), and it's not for me to interfere with the constitutional process, but I think this comes to the point that David was also raising earlier about inter-governmental relations and how those evolve going forward, and it's clearly something that does need to be kept under review.  

Thank you for your time and the evidence. You will receive a copy of the transcript. If there are any factual inaccuracies you identify, please let the clerking team know as soon as possible. Thank you for your attendance today. 

Thank you, and there is a number of things I know we've taken a note of to write to you on, so we will try and do that as soon as possible as well. 

3. Cynnig o dan Reol Sefydlog 17.42 (vi) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
3. 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.

Members of the committee, we now move, under Standing Order 17.42(vi), to exclude the public for the remainder of this meeting. Are Members content to move into private session? They are, so let's move into private session.  

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 15:03. 

Motion agreed.

The public part of the meeting ended at 15:03. 

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