Welsh Affairs Committee
Oral evidence: The First Minister of Wales, HC 1890
Wednesday 18 October 2023
Ordered by the House of Commons to be published on 18 October 2023.
Members present: Stephen Crabb (Chair); Simon Baynes; Ruth Jones; Ben Lake; Robin Millar; Mr Rob Roberts.
Questions 1-44
Witnesses
I: Rt Hon Mark Drakeford MS, First Minister of Wales, Des Clifford, Director of the Office of the First Minister, and Piers Bisson, Director of European Transition, Constitution and Justice, Welsh Government.
Witnesses: Mark Drakeford, Des Clifford and Piers Bisson.
Q1 Chair: Good morning. Welcome to this session of the Welsh Affairs Committee. We are delighted to be joined virtually from Cardiff by the First Minister of Wales, the right hon. Mark Drakeford MS; by Des Clifford, director of the Office of the First Minister; and by Piers Bisson, director of European transition, constitution and justice.
As ever, First Minister, we are very grateful to you for giving us your time. You are under no obligation to a House of Commons Committee, but as a courtesy you give us these sessions, and we find it very useful to talk to you about issues that intersect between the UK Government and the Welsh Government.
Perhaps I could start my line of questioning by asking about something you said last November, on the previous occasion you appeared in front of the Committee—this was following another change in Prime Minister at the Westminster end. You said that you were looking forward to “a return to normality” in your relationship with the UK Government. That was following the appointment of Rishi Sunak as Prime Minister. Has there been a return to normality?
Mark Drakeford: Well, in some ways I think that would be correct. We certainly no longer inhabit the world of active hostility to devolution, which I think was characteristic of both Mr Sunak’s predecessors. I have met the new Prime Minister twice, I think, in the last 10 months, and I would say that the conduct of relations is at least on a more respectful footing than would have been the case in the previous period.
In other ways, you probably could not quite say that things are back to normal, because the machinery set out in the IGR review is still really to operate in the way that was intended. To be frank, Chair, I have an impression of a Government that knows that it is coming towards the end of the current parliamentary term and whose energy to invest in reviving intergovernmental relations is at a relatively low ebb. Things are better than they were, but you could not describe intergovernmental relationships as characterised by a great deal of energetic determination to make the system work to its optimum.
Q2 Chair: When you have had these meetings with the Prime Minister, are they to discuss points of interest? Are there actual resolutions to be made and disagreements to resolve? Can you give us a flavour of what the business of a meeting between the First Minister of Wales and the Prime Minister consists of?
Mark Drakeford: There is usually an ostensible purpose for the meeting. The second meeting that I had with the Prime Minister was at Holyhead in north Wales. It was to mark the agreement on freeport arrangements in Wales, so there was a topic that we were both engaged in and therefore needed to discuss. The remainder of that meeting was probably more me raising with the Prime Minister a number of issues that I thought were important to draw to his attention. I did so because in the previous meeting that I had had with him, when I had raised issues, there was clear evidence that he had pursued them—that he had gone away and asked his officials to look into and do further work on some of the matters that I had raised with him. That gave me a bit of confidence that if I did the same again, those issues would be pursued in the same way.
Chair: That is helpful. It is probably consistent with how we see things—very business-like administration. I am going to move the questions on by bringing in Rob Roberts.
Q3 Mr Roberts: Thank you, Chair. Good morning, First Minister. We appreciate your time. You mentioned a lack of energy or will. In more general terms, do you feel that the structures that are in place for intergovernmental relations are working adequately? Are they the correct structures, regardless of the amount of energy that is being put into them, or does anything need to change?
Mark Drakeford: I should say first of all that a great deal of time and effort went into constructing the new arrangements. They were nearly four years in discussion. I was very glad when we managed to secure a four nations agreement to them.
It is difficult to answer Mr Roberts’s question, because I don’t think that the machinery has ever been fully tested. You know it has three tiers to it. The working tier is the tier in which individual Ministers meet with their counterparts at Westminster. My impression there is that where there have been reasonably good relations in the past, those relations have transferred into the new structure and that part of the machinery is working. Where there is less of a history or a more unhappy history, I don’t think you could say that there is a great deal of evidence that the new structure has managed to put that right.
Then there is a middle tier, which is a Finance Ministers meeting and an inter-ministerial group that is more general. The FISC—the Finance Ministers meeting—I think does work. Again, that was picking up an arrangement that had been in place for quite a long time, but it has continued and has come to be useful. The other meeting, the inter-ministerial group, has been more sporadic and harder to pin down. There is a meeting of it to happen this week, but I do not think you could say yet that it is working at full steam.
The top tier, the Council of Ministers, has never met, really. It met once when the new Prime Minister, Mr Sunak, took office, but it was a mixture of in-person and virtual, and it did not have anybody from Northern Ireland in the room because there was no Northern Ireland Executive to take part in that meeting, and it has not met since. So I don’t think you can say that that part of the intergovernmental machinery has been properly tested.
Q4 Mr Roberts: In May you advocated a “solidarity union” of the UK. What does that mean in practical terms? Would that solve any of the issues that you have just highlighted?
Mark Drakeford: I think it could well go some way to addressing them. I was trying to make the case for the United Kingdom. I am a believer in the United Kingdom, but I want a United Kingdom where people in all parts of the United Kingdom want to belong to it and do not feel that they are somehow obliged to belong to it even though they are not satisfied with it. I want a United Kingdom where people in Wales would say, “That’s a country that I want to belong to.” For me, the idea of a solidarity union captures that. It would explain to people the things that they get as a result of their membership of the United Kingdom—the rights that come as a result of citizenship. One of those rights would be to live in a country where people know that the things that apply only to the part of the United Kingdom that they live in are decided upon by people who live in that part, and then we would pool our sovereignty to discharge those things that we do better together—foreign affairs, defence, macroeconomic policy and so on.
Q5 Mr Roberts: Thank you. Those are very comprehensive answers. On a slightly different element of IGR, you told us last year that Sue Gray was leading work to improve the Sewel convention process. Do you have an update on what the outcome of that work was and how that has gone?
Mark Drakeford: I am afraid that is one of the least good parts of the picture. It is true that Sue Gray, when she headed up part of DLUHC, was working on an improvement to Sewel. I don’t think that work has been picked up by anybody else since her departure. I might have said in my original answer to the Chair’s question that one of the parts of intergovernmental activity that has been at a pretty low ebb in the last 12 months has been the part played by DLUHC. There was a time when Mr Gove took a very active, leading role in intergovernmental matters. That is why his Department ended up looking at the Sewel convention. I have only met Mr Gove once in this calendar year, which is pretty extraordinary and demonstrates, as I said originally, that energy has gone out of this agenda at the Whitehall end.
Unfortunately, where Sewel is concerned, I think it has now become a broken piece of the machinery. It is designed to make sure that the UK Parliament only legislates in devolved areas with the consent of devolved legislatures. That convention was observed without breach for 20 years—1999 to 2019. Now it is broken absolutely routinely. Routinely, when the Welsh Parliament votes not to give legislative consent, UK Ministers just go ahead anyway. I am afraid that Sewel is now completely unfit for its original purpose. I think that more radical solutions will be needed than the ones that Sue Gray might have been anticipating, and I believe that those solutions are best found in the Gordon Brown report: a report—commissioned, of course, by Keir Starmer—that deals directly with the Sewel convention and would solve these recent problems in a more radical way.
Q6 Mr Roberts: Would you happen to have any details to hand, First Minister, about how many times the Sewel convention has been disregarded?
Mark Drakeford: Seven times, I think, just recently. It is routine. The first time the Sewel convention was disregarded, the UK Government made a case that the circumstances were not normal because that is what the Sewel convention allows for. That was in Brexit legislation. Although I did not agree, I could at least see the case that the UK Government were making—that these were not ordinary circumstances and they were dealing with the UK’s fundamental relationships with our European neighbours. You could at least recognise the case that was made. Now the convention is broken in absolutely routine pieces of legislation, where I do not see how a “not normal” argument could possibly be justified.
Q7 Mr Roberts: In the latter half of my short time, I want to ask a few questions about the 20 mph speed limit. I appreciate that the issue is devolved, so I ask you whether you mind me asking such questions before I do; it is not an area that the Committee necessarily deals with.
Mark Drakeford: Chair, of course I want to be helpful to the Committee, but you said in opening that the invitation to give evidence was to deal with things where there is a genuine overlap between responsibilities held in Wales and responsibilities discharged in Westminster. I am not sure that I see where the 20 mph limit fits into the remit that you set out at the start of the meeting. I will do my best to answer, but I do not think this is quite in the spirit of the invitation to appear before you.
Q8 Mr Roberts: I will cut out a huge number in that case, but I will get one or two in, if I might. First Minister, what is your position on the petition that, as of 9 o’clock this morning, has 462,000 signatures—more than voted for the entire manifesto in 2021?
Mark Drakeford: We will take the petition seriously, of course. The petitioner has chosen, as is his right, to keep the petition open for the full six months, so the Senedd will not be able to make any response to the petition probably until March next year. But the petitioner can choose at any moment to close the petition, at which point it would get considered.
The way petitions are handled in the Welsh Parliament is that first of all they go to the Parliament—to the Petitions Committee. It decides the process by which it wishes to respond to the petition. The Welsh Government will take the petition seriously and look to respond to it when that happens, by which time we will have had six months or more of experience of the new regime. That will help us in responding to the points made.
Q9 Mr Roberts: This is my final question, First Minister. You mentioned recently when questioned—I think you were being interviewed at the conference—that it is up to local authorities to determine where they apply exemptions. Is that exactly correct? I asked our local authority and an officer came back to me to say that although it is correct that the powers to implement speed limits do sit within the individual local authority, local authorities do not have the ability to disregard specific criteria and can apply an exemption only if it fits within your quite narrow parameters of what would be allowed. It is not really up to them, is it?
Mark Drakeford: It is up to them. It is not an unfettered right to disregard the law; they have to act within the parameters set down, but within those parameters, it is local authorities that make decisions on whether to exempt individual roads from the default 20 mph position. One of the reasons why I think six months-worth of experience will be useful is that I think you can already see that different local authorities are taking different approaches to how they navigate their way through those criteria to a final decision. I think that in a sensible world, with experience, local authorities will want to look again to see whether they got those initial judgments right, and there may be some fine tuning and adjustments to the designations on individual roads in the light of experience and learning from how different local authorities have deployed the criteria that they must operate within in making what is, in the end, their decision.
Mr Roberts: My time is up.
Q10 Chair: Thank you very much. On this point, and very briefly, First Minister, I understand that some of the emergency services have expressed concerns about the new speed limits. May I ask how you are engaging with them in Wales and what your response is to them about whether the concerns about potential delays to responding to critical emergencies are real?
Mark Drakeford: Some individual voices in some services have expressed concern. The services themselves have not. Of course, we work very closely with them. The rules are no different on a 20 mph road than they are on a 30, 40, 50 or 60 mph road. Emergency services are able to travel above the speed limit where there is a case for them to do so. None of that has changed. I think a number of these concerns are concerns in advance of the facts. When it comes to operating the system on the ground, I don’t think that those fears will materialise.
Chair: Thank you very much. I am going to bring in Robin Millar.
Q11 Robin Millar: Good morning, First Minister. It is good to see you again; it has been a couple of years. I apologise: I missed our last opportunity to speak. It is good to see you again, and thank you for your time.
First Minister, one of the things I particularly enjoy is your interest in the constitution. I know that you are conducting a commission on the constitutional future of Wales, but given time constraints, may I jump straight to the matter of Senedd reform? In particular, how do you foresee that Senedd reform will affect the Welsh Government’s relationship with Westminster?
Mark Drakeford: I don’t think it will do in a fundamental way, because Senedd reform is just a matter of making sure that the Senedd itself is properly equipped to discharge the responsibilities that it discharges. So there will be more capacity in that sense, but I don’t think intergovernmental relations have been affected by capacity issues; those have not been the source of concerns in recent years. I doubt there will be any impact of the sort that you have identified.
Q12 Robin Millar: Thank you. Electoral reform was not in the manifesto, as I understand it, and not part of the plan, but that is part of the programme moving forward. When, back in 2011, the UK Government was formed as a coalition, one of its manifesto pledges was for electoral reform, so a referendum was brought before the people of the UK. Why do you feel that it is not a good idea to have a referendum on electoral reform in Wales?
Mark Drakeford: Senedd reform was in the manifestos of my party, Plaid Cymru and the Liberal Democrats. I don’t think anybody who looked at what was being promised in the 2021 election could have been unaware of that. We operate within the rules set down by the Conservative Government’s Wales Act 2017. That does not require a referendum. It does require us to secure a two-thirds majority on the Floor of the Senedd for reforms. That is the safeguard that that Act puts in place, and we operate within the rules created for us.
Q13 Robin Millar: You are absolutely correct to say that a referendum is not required, but there is also a cost to these reforms—over £100 million in the course of the next Senedd period. I am curious why that is the choice of the Administration when public services are struggling in Wales. You have the lowest educational attainment in the UK, the worst-performing health service and the highest unemployment rates—and you spent £100 million on electoral reform, First Minister.
Mark Drakeford: Chair, I am not going to litigate in front of this Committee all those matters for which the Committee has no responsibility, as it has no responsibility for Senedd reform. However, we will complete, I hope, the journey on which we set off 20 years ago, when the Richard review, carried out by Lord Ivor Richard, concluded that the then Assembly required more Members to discharge the responsibilities that were to be exercised in Wales. Over those 20 years, the scope and depth of the powers exercised in the Senedd has grown; those powers include new powers transferred to the Senedd under the leadership of the Chair of your Committee. I am confident that a new Senedd, properly equipped to do its job, will save money time after time, and far more than pay for itself. That is why democracy is important.
Q14 Robin Millar: I acknowledge the importance of that scrutiny; hence my interest in referenda. I will return to the issue of intergovernmental relations and the health service. As you are aware, I am in north Wales, and Betsi Cadwaladr has had significant challenges. The last time we spoke, we talked about the offer that the UK Government made to cut waiting lists during the pandemic. That offer was declined. As we both know, since then, the UK Government have made a further, supplementary offer to help reduce waiting lists in Wales. What progress has been made on that?
Mark Drakeford: I don’t think a great deal of progress has been made, but that is because waiting lists in England are growing far faster than waiting lists in Wales. The capacity of the English system to offer treatment to Welsh patients when you cannot satisfy the demand from English patients is inevitably constrained. That does not mean—as I think you, Mr Millar, will acknowledge—that there is not a great deal of cross-border treatment, with patients who live in England receiving treatment in Wales, and patients who live in Wales receiving treatment in England. I am a big supporter of that. I regularly defend the fact that patients who live in Wales get treated in England when that is the right thing for them. Is there scope to do more of that when every health service is under enormous pressure? I think the scope for that is inevitably limited.
Q15 Robin Millar: Thank you, Mr Drakeford. I understand, of course, that the English health service is outside your responsibilities, but the offer was made none the less. Before you make a decision on that, will you speak to any patients on waiting lists who are waiting to receive essential, life-changing treatment and would benefit from such an offer of help from the UK Government?
Mark Drakeford: It is not a matter of a decision for me. The offer was made by the English Secretary of State. If he is in a position to offer us not just, “We will help”, but “Here is capacity that could be made available for you, and Welsh patients could take advantage of it,” of course we will be open to that conversation, just as we in Wales provide for English patients—thousands of them—every day of the week.
Q16 Robin Millar: Thank you. I will take that as a cautious positive, and we will pursue that at this end of the line. Finally and briefly, I move to the very good news we had in north Wales recently of £1 billion of investment for the electrification of the north Wales main line. Of course, that follows more than £700 million in metro South Wales. I was disappointed, and I know that many residents were perplexed, by the response from the Welsh Government spokesperson, who said that this was not a priority for Wales.
Mark Drakeford: There are two answers there. First, the so-called promise unravelled very quickly indeed when the Secretary of State for Transport in the UK Government said that this was merely an illustrative list, and nobody was to take it as meaning that this was actual money for actual activity. I doubt whether a single penny will be spent on this scheme during the lifetime of the current Government. In fact, it will be a 10-year project, if it is to happen at all.
Our Minister here pointed to the joint committee made up of representatives of the Welsh and UK Governments that prioritises plans for rail investment in north Wales. That committee, with UK representatives on it, had not put electrification of the main line at the top of its list of investments. The announcement was made with no reference to the group that had been established between two Governments to draw up priority plans. There is a list of priorities currently agreed, but instead, in a conference announcement designed, I am afraid, for headlines rather than for real activity, something was pulled out of a hat. There is very little confidence among people in north Wales that the investment will ever happen, because they saw the experience in south Wales, where we were told twice that there would be electrification of the main line, and twice that plan was reversed.
Q17 Robin Millar: We won’t talk about promises on infrastructure projects while the M4 hangs over our heads, First Minister, but I will say that the Transport Secretary confirmed from the Dispatch Box on Monday that £1 billion has been allocated for north Wales. I am delighted by it. At the back of that, really, is the point that north Wales is tired of being left out or left behind, and the sense that decisions made in Cardiff extend only as far as Welshpool, perhaps.
Mark Drakeford: I am afraid that that is a tired old trope, and I am sorry to hear it rehearsed again this morning.
Q18 Chair: Thank you, Robin Millar. Before I bring in Ruth Jones, may I follow up on the issue of Senedd reform, First Minister? I will raise an aspect that touches on our role as Members of the Westminster Parliament. Across Wales, there are sets of constituencies, and Members of the UK Parliament or of the Welsh Senedd are elected as representatives of specific constituencies; you are the Member of the Senedd for Cardiff West, First Minister. The MP and the MS will often work together on constituency issues; even if they are of different parties, their offices will pass on information and cases. Often the two politicians will appear together at local events, and will work on projects together. If I am not mistaken, the proposal being taken forward for Senedd reform is to no longer have one Member for a Senedd constituency; instead, large constituencies will elect multiple Members of the Senedd, often from different parties. There will be no single MS to represent a particular constituency. Is that the correct perception?
Mark Drakeford: Yes, in one way, but let me be clear: I am not the only Senedd Member for Cardiff West.
Q19 Chair: But you are. You are the elected Member for Cardiff West.
Mark Drakeford: But there are also two Conservative Members of the Senedd who represent the region in which Cardiff West is to be found, and a Plaid Cymru Member as well. It is not the case that we simply have a Westminster system here in Wales.
Q20 Chair: I did not say that there is a Westminster system; I am saying that in both systems, an individual elected politician represents a constituency. Yes, there is the dynamic of the relationship with the Westminster MP, but there is also the visibility of the individual MS. There is accountability and scrutiny that comes from being the person for that community. When there were the Ely riots, you were approached for comments by the press, as the local Member of the Senedd. With the move to a larger Senedd with more Members, and a system in which there is no longer one Member for a constituency, is there not a danger that there will be less accountability, and instead just a noisier, fuzzier Senedd system?
Mark Drakeford: I do not agree with that, and I very much doubt that the Members in the Conservative group at the Senedd who are elected on the list system—more than half—would agree with it either. They would certainly argue that they are no less accountable than any other Member of the Senedd.
It is true that in future we will pair to Westminster constituencies. There will be six Members elected for that constituency. One of the great advantages of that is that constituents who might rather take their case to a Conservative Member of the Senedd, rather than a Labour Member, will be able to exercise that choice. There will be a greater plurality of representation, and through plurality will come a great sense of accountability as well.
Q21 Chair: One of the golden rules for Members of Parliament is that you treat every constituent as an equal, whether they voted for you or not. What you seem to be hinting at, First Minister, is a system where a Plaid Cymru MS or a Labour MS will deal with Labour voters or Plaid Cymru voters, and you get a segmentation of the constituency, which I think is really unhealthy.
Mark Drakeford: That is absolutely not what I said. I completely take the same principle as you do: anybody who comes to the door of my office gets the same service—I never want to know how people’s political preferences have been exercised—but individual voters will have choices, not Members of the Senedd. Individual citizens will have choices about who they think would be the most effective person to take up their case. I think that is a good thing.
Chair: Okay, but personally—to get this on record—I think it is a recipe for fuzziness, confusion and less accountability and scrutiny. I do not think it will lead to a more effective Senedd, but that is a personal view. Simon Baynes?
Q22 Simon Baynes: Thank you for your time, First Minister. To pick up on that point, particularly with casework, there will be a real problem with people knowing where to take their case, if they have six different people they can go to. The benefit of having a constituency representative is that you know where to go with your casework. For instance, in my constituency of Clwyd South, where I work very well with my opposite Labour Member, Ken Skates of the Senedd, I know where to send casework that might be applicable to him, and my constituents know whether to go to him or me, according to whether it is a Senedd matter or a Westminster matter. I hear what you are saying, but I think in practice it will be very confusing for them to know where to take casework.
Mark Drakeford: Mr Baynes, I am afraid that these questions, which are actually nothing to do with the responsibilities of a Westminster MP, are very much a view of Wales through the Westminster end of a telescope. We have 25 years’ experience of having regional Members who represent a range of different constituencies. In my constituency, people who are looking for help from a Senedd Member do not have to come to me. They have two Members from your party who also represent that area in the Senedd, and they have other Members as well. We are much more used to this system than you are, and we see that it is capable of working. In fact, far more Members of the Senedd from Opposition parties arrive through the list system than do Labour Members. I don’t think that they would share your point of view.
Q23 Ruth Jones: Good morning, First Minister. Thank you for your time this morning. It is good to see you. I will turn back to rail infrastructure, but given that my constituency is Newport West, I will concentrate on south Wales. I had a meeting with Transport for Wales last week. I declare an interest, as my son lives in Manchester, and he uses that train very often. We have had a few issues over the last couple of years. It will obviously be in the ownership of the Welsh Government, going forward. I am wondering about customer satisfaction and developments. Could you outline what will happen in the next year or so?
Mark Drakeford: The improvements, which we will hear about from Transport for Wales in the coming months, will be the accelerated delivery—we hope—of new rolling stock, which was expected to have arrived in Wales already. By today, we were expecting to have 77, I think, new trains that would run on that south Wales to Manchester line. For many complex reasons—the pandemic is certainly part of the picture—the manufacturer has been able to deliver only 33 of those trains to date. That means that Transport for Wales has had to keep running rolling stock that it had planned to retire and replace with new stock. I am sure you will have seen some of the new trains, Ruth Jones; they are of a very different calibre from the trains that are being retired.
The good news is that a new train is being delivered to Transport for Wales every seven to 10 days, so the ability of Transport for Wales to substitute the old rolling stock with the new will accelerate. The performance of Transport for Wales trains has improved through September and into this month, and Transport for Wales is confident that that improvement will continue through the rest of this calendar year and into 2024 as it becomes able to deploy the new trains that we expected to have been here and operating already.
Q24 Ruth Jones: We are looking forward to those improvements very much. We had the reports by Lord Hendy and Lord Burns on the M4 alternatives. Five new railway stations are planned between Cardiff and Newport—or maybe a bit further, if we include Magor. How do you see the calling-in of the Cardiff Parkway planning application? Obviously, we are a little bit anxious that that might stop developments along that line. How do you see the timescales for that calling-in?
Mark Drakeford: I must not get drawn into the call-in itself, because ultimately that decision could end up on the desk of Welsh Ministers, and anything I said about it would be material to any legal challenge to the call-in consideration, so forgive me if I do not get drawn directly into that.
There is a wider point, which the Member for Newport West made: the UK connectivity review—the Hendy review—has, as far as I can tell, completely disappeared out of sight. We did receive, and I was grateful for it, some relatively modest but important funding from the UK Government to further develop the Burns proposals for bringing the second main line back into more effective use through south Wales; that includes the five stations that Ruth referred to. However, there is a real radio silence on the outcome of that UK connectivity review.
As you represent Newport West, you will remember very well that Sir Peter Hendy said that this was one of the proposals that was closest to being able to be put into practical effect, and it would meet all the criteria of the review with regard to improving UK connectivity, but we have heard nothing since, and that is a big disappointment. A billion pounds for north Wales was plucked out of a hat. That leaves people in that part of Wales wondering when we will hear about the investment that we need to upgrade the line, and to improve connectivity from south Wales to England and beyond.
Q25 Ruth Jones: I share your disappointment with the lack of action on Lord Hendy’s report, but the electrification of the south Wales line is a grave disappointment as well, given the promises we were made. James Price, the chief exec of Transport for Wales, told us that he expects that Network Rail will be “eking out” existing rail infrastructure, rather than investing in enhancements. Do you agree with that evaluation, and what do you see as your priorities for national infrastructure projects?
Mark Drakeford: I’m afraid that is Network Rail’s own assessment as well. The arrangements for the next seven-year period have just been concluded. They put Wales at the bottom of the league table for investment, and it is a picture of managed decline. I think Network Rail have said that it will lead to longer delays and more breakdowns in infrastructure. It is not a good outlook when we depend so much for services in Wales on Network Rail’s ability to invest. This is not Network Rail’s fault; I am not criticising them. This is the remit that they have been given—the funding that they have been offered—but it puts Wales where we have been for far too long: at the foot of the league table of UK Government investment in rail infrastructure.
Ruth Jones: If my colleague from Swansea West were here, he would give you the figures. We have 10% of the rail and only 4% of the funding, so I agree with your assessment there. Thank you very much. I will hand back to the Chair.
Q26 Chair: Thank you very much. On the point that Ruth Jones raised about rail, you talked, First Minister, about infrastructure being a reason for breakdowns and delays. When James Price, the chief executive of Transport for Wales, appeared in front of this Committee, he was very frank in explaining why rail services in Wales have been so appalling in recent months. He talked about rolling stock, where there have been some problems, and also the issue of driver absence due to illness post covid and other reasons. Are you satisfied, First Minister, that since the Welsh Government took over running those rail services under Transport for Wales, you have put in place a plan to improve services not just for communities around Cardiff and the cities, but for places like Pembrokeshire in west Wales?
Mark Drakeford: Services are not as good as we want them to be, and Transport for Wales has a job to improve the services. James Price will have explained to you some of the reasons why the improvement in services that we had hoped for has not yet been realised, but there is a clear plan there to address that, and some of the reasons are beyond the control of Transport for Wales itself, particularly in the delivery of the new rolling stock on which it was planning that improvement. That is a separate issue from investment in the infrastructure itself, which is not the responsibility of Transport for Wales. It is the responsibility of Network Rail, which does have an impact on Transport for Wales’s ability to run a service of the sort that we would wish to see for people in Wales.
Q27 Chair: First Minister, in talking about rail infrastructure, you were very much pointing a finger of blame at the UK Government, and they do hold responsibility for decisions about rail infrastructure investment. Do you think there is an issue here with the Welsh Government always ducking taking responsibility for things that you are responsible for? If we are looking at the quality of rail services in the round, there is a large measure of responsibility for the Welsh Government right now, isn’t there?
Mark Drakeford: I think I answered your question about whether we were satisfied that Transport for Wales had delivered the service of the sort that we wish to see, and I have accepted the responsibility for that not being delivered in the way that we had intended. I am very determined to take responsibility for the things for which we are responsible. Decisions about Network Rail investment are not made by the Welsh Government, but they have a material impact on the responsibilities that we exercise.
Q28 Ben Lake: Diolch yn fawr i chi, Prif Weinidog. Mae’n dda iawn eich cael chi yma bore ’ma. (Translation: Thank you very much, First Minister. It’s very good to have you with us this morning.)
I would like to ask you a few questions on the fiscal framework, if I may. I understand that the Finance Minister, in detailing some of the plans for changes to the Welsh Government’s budget yesterday, referenced the way in which the existing fiscal framework makes a challenging situation even more challenging to navigate. The Scottish Government has recently updated its fiscal framework agreement and has increased its borrowing powers. Is this something that the Welsh Government is engaging with the Treasury on? Are there any discussions for similar changes for the Welsh fiscal framework?
Mark Drakeford: Diolch yn fawr am y cwestiwn. (Translation: Thank you very much for the question.)
I was the Finance Minister, at the time, who negotiated the fiscal framework with the then Chief Secretary to the Treasury. The problem with it is that the figures that we agreed back in 2016 have been frozen ever since. We agreed in 2016 that we needed a Welsh reserve of a certain quantum, that borrowing powers were necessary for the Welsh Government, up to a certain level, and other technical ways in which the fiscal framework operated.
Those figures have never been uprated, so their real-terms value today is about 20% lower than when they were struck originally. All we are asking for is a simple uprating of those figures so that they retain the value today that they had when they were first agreed. That would make a material difference to our ability to manage a budget of £20 billion—a budget that is considerably larger than it was in 2016. That case has been made by our Finance Minister to the current occupant of the Chief Secretary’s chair. I think that is the seventh person that has been the Chief Secretary to the Treasury since she became our Finance Minister, so we have to keep making this case afresh quite regularly. That is in essence what was agreed for Scotland, together with more flexibility about how we use our own funds.
Q29 Ben Lake: And so you would be looking for similar changes to the Welsh fiscal framework as the Scottish fiscal framework has seen. Is that right?
Mark Drakeford: The Scottish fiscal framework has been renegotiated in a more thoroughgoing way. I myself don’t see the case for taking long months to renegotiate a fiscal framework that, actually, for the most part, is working effectively. What we are looking for is something much simpler—something that the IFS has called for in a number of reports—and that is just an indexing of the figures within the fiscal framework so that they retain their real value. I don’t think that that requires us to have a root-and-branch review of the whole framework.
It was different in Scotland, where there were other things at play, because they agreed a fiscal framework that had some different components from ours, particularly in the way in which population was treated. That isn’t a problem in our framework, and I don’t think that there is a strong case for a wholesale review. There is a case for a simple keeping up to date of the framework, which would be helpful to us in the way that we manage our budget.
Q30 Ben Lake: Thank you, First Minister; that is very useful. The other aspect, of course—something that the Finance Minister outlined yesterday—is that the Welsh Government have made a request of the UK Treasury to allow some capital budget to be brought over to revenue in order to help navigate some of the fiscal challenges that we find ourselves having to deal with, particularly to meet inflationary pressures in-year. To what extent does the package and the changes detailed yesterday depend on a favourable response to that request of the UK Treasury?
Mark Drakeford: As you as the Member for Ceredigion will know, we have had to fill a gap of £900 million between what we have and what we were set to spend through the Welsh Government and the wider Welsh public service. A capital-to-revenue switch is an important part of that. It is over £100 million that we would look to switch. Just to be clear with members of the Committee, we are not asking for money here; this is our money now. We are just looking to be able to use it in a more flexible way. That is routinely done for UK Departments. It was done for the Department of Health in successive years in far greater quantums than the sum of money that we are looking for.
We continue to be in discussions with the Treasury about it. One of the real challenges that we face is that on some of the aspects of our plan that do depend on actions at the UK level, we are unlikely to know the outcome of that probably until February next year, which is perilously close to the end of the financial year to deal with the outcome of those discussions.
Q31 Ben Lake: Thank you, First Minister. It is clear that a speedy response from the Treasury would be very well received.
Mark Drakeford: It would be very gratefully received. It would help us a great deal in managing the in-year position. I was grateful yesterday that the Conservative spokesperson on this matter supported that part of the package and said that they would want to see that resolved in the way that we have asked. We will make sure that we continue to have those discussions.
Q32 Ben Lake: Finally, the Finance Minister made very clear yesterday the challenges facing the Welsh Government budget due to inflationary pressures and outlined some sound principles as to how to try and navigate them—protecting frontline services as best as possible, supporting households who are hardest hit by the cost of living crisis and prioritising jobs. She also detailed an increase to the Transport for Wales budget of £125 million this year. I beseech the Government to consider ways of allocating a portion of that funding for bus services. Sadly, in many rural areas we found services cut quite significantly due to inflationary pressures and of course it is having a serious impact on households who are trying to navigate the cost of living crisis.
Mark Drakeford: I thank you for those important points. You will know that the Welsh Government identified a sum of, I think, £48 million earlier in the financial year to go on supporting bus services now that the emergency funding post covid has run out. Buses, like trains, have not seen a return of passengers to pre-pandemic levels, so the problem is the farebox. Public subsidy in buses and trains is at an all-time high. What we do not have are paying passengers in the way that those industries saw them back in 2019. Investment in the bus services has not been reduced as part of this very painful exercise over the summer. That extra money was found and has been kept.
The £125 million is mostly to help with rail services because the fixed costs in rail are very, very hard indeed to reduce. It costs you what it costs you to run a railway whether there are trains on it or not. A period where the passenger, or the farebox, as it is called, simply has not recovered means that we are having to find extra money to sustain public transport in Wales—trains but buses as well.
Q33 Simon Baynes: Thank you again, First Minister. I want to ask you about the Commission on the Constitutional Future of Wales. This might be a question that you cannot answer at this stage, but could you give us some idea of what you expect to be the output of the commission? We had a meeting with them here and I was somewhat surprised to see that there was no business representative or north Wales representative on the commission. Can you address that as well?
Mark Drakeford: I am quite sure that Albert Owen, the former MP for Ynys Môn, would certainly take exception to the idea that there is no representation from north Wales on the commission. There are certainly people on the commission who have had wide experience of different aspects of Welsh life. What I expect in terms of the outcome will be a report that puts flesh on the three basic constitutional futures that the commission set out in their interim report. Members will remember that the commission at the end of its first year said that they thought there were three broad constitutional futures for Wales. There was entrenched devolution; there was a move to a more federalist United Kingdom; and there was independence in which Wales no longer was a member of the United Kingdom. I expect that its final report will rehearse in more detail the arguments for and against those three potential constitutional futures.
Q34 Simon Baynes: But it seemed to me to be quite a gap to have no business representative on the commission, given how important business is to the economy, and also that this is a cross-border issue to an extent, given that a large number of people from Wales go to work across the border in England. So, I was very surprised that you had no business representative on the commission.
Mark Drakeford: The membership of the commission was inevitably constrained. There are many, many interest groups who would make a claim for being represented on the commission. I think the commission has worked hard to make sure that, where it feels it needs to strengthen the evidence that it has, or the voice that it hears, from different aspects of Welsh life, it has taken that evidence and heard those concerns.
But I am meeting the joint chairs of the commission tomorrow, and I am certainly willing to put that point to them, as to whether they feel they have had an adequate opportunity to hear from business voices.
Q35 Simon Baynes: Moving on to the UK Government’s involvement with devolved policy areas, do you see any potential for further discussion with the UK Government on UK financial support for coal tip safety?
Mark Drakeford: I think it is very much an area where those conversations are needed. You will know that Wales has 40% of all the coal tips in the United Kingdom—40% of coal tips and 5% of the population—and in an era of climate change, some of those coal tips are not as secure as we would wish them to be, or as secure as they probably were when the arrangements were first put in place, 30 or 40 years ago. It is about trying to ensure that we respond to the changing nature of severe weather events and check the coal tips to make sure they are as safe as they need to be. That will involve, not in the short run but over the medium term, a significant need to invest in new drainage, and other more modern forms of protection, to make sure that these places are fit for the future; because those communities are very closely overhung by coal tips—they can see them from their own front doors. And to make sure of that, we look for some further support from the UK Government.
Q36 Simon Baynes: Obviously, the responsibility for safety lies with the Welsh Government, but that ought to be backed by extra funding from the UK Government. That is fair enough.
To go slightly off at a tangent, when you last came before us I asked a question about the Ffos-y-fran coal and its application for steam engines—a particular interest to me for the Llangollen steam railway. When I asked you the question, you said you would give it consideration. Now, obviously, the Government have come up with their decision not to extend the licence, which I understand. But do you not feel that that is possibly one of those areas where, if we did extend the licence, it would be better environmentally, because it would mean that railways did not have to import the coal to supply to the steam engines?
Mark Drakeford: I am sympathetic to the case for making sure that railways of that sort go on having a supply of coal, and preferably coal that isn’t imported. I am afraid that in the case of Ffos-y-fran, the need to bring coal mining to an end there, for a large number of reasons, in the end outweighed the call of that very particular sector for the coal that it needs. But the company has announced that coaling will end. I’m afraid that the decision is made. I am very happy that we go on having conversations with steam railways—there are a number of them in Wales, as you know—to try to find a way to attend to their needs in operating as they have so successfully in recent times.
Q37 Simon Baynes: That’s good. Of course, the coal that was mined there was suitable for the steam trains as well, so that makes it all the more important.
Moving on, a report on floating offshore wind called on the UK and Welsh Governments to work together to ensure that Natural Resources Wales had sufficient resources to deliver FLOW at pace, yet recent press reports suggest that NRW is unable to respond to existing planning consultations. How are you supporting NRW to deliver FLOW?
Mark Drakeford: Well, I think the record simply speaks for itself. There is only one commercial proposition for FLOW in the Celtic sea that has come forward for the necessary permissions that NRW provides. Those permissions were needed by the start of March, I think, this year, and the consents were all delivered by NRW within the timeframe required. I know that NRW has learnt a lot from that first experience, as have companies seeking those permissions as well. I think NRW did a very good job in what is a challenging area. These are novel technologies; there is not a bank of data you can pull up off a computer to tell you how environmental impacts will occur. I think it did very well to be able to provide those permissions, and I think it will be well placed to go on doing that when further applications come forward.
By far the larger problem, as Members will know, is that the reason why permissions were needed by the start of March was to allow the Erebus project to make a bid into the next round of contracts for difference funding for floating offshore wind. In the end, they did not feel that they were able to do that on the terms that the UK Government set for that auction. They weren’t the only one, because there wasn’t a single bid from any company in that auction. That is what is holding up floating offshore wind in the Celtic sea, not the NRW part of the bargain, which it delivered on.
Q38 Simon Baynes: Again, I’m going slightly off at a tangent on NRW, but do you think there is a case for reviewing the inclusion of the Forestry Commission in it, given that it can set up a conflict of interest? I see it locally: NRW being a regulator of Kronospan but Kronospan getting timber from the Forestry Commission. I am not knocking what NRW does in its regulating work, because it is actually doing a good job, but it is perhaps unfortunate that you have that potential conflict of interest in the structure of NRW.
Mark Drakeford: Let me recognise that that potential conflict of interest is a genuine issue. I think that the way NRW is constructed allows it to deal with those conflicts in a way that is visible and defensible. On the whole, during the time that I have been First Minister, I have resisted calls to deal with delivery issues by changing institutional arrangements. I am making a very wide and very broad point here: politicians are often tempted to believe that changing the way that institutions are organised is the way to improve delivery, and on the whole I am not sure that it is.
Q39 Simon Baynes: My last area is on cross-border road investment. You have announced, in effect, a moratorium on future investment in roads. I know that you will finish off what you were planning to do and so on, so it is not a total moratorium—I understand that—but it is of considerable significance in the area that I represent on the Welsh border, with regard to two projects specifically, and I want to draw a broader point on it as well. The potential widening of the A5/A483, which is badly needed, is obviously not in planning in any sense at the moment. More urgent is the Pant/Llanymynech bypass, for which the Welsh Government are contributing about 10% of the funding. I know that these are complex issues so I don’t want to go into that, but the broad point is: is there flexibility in your approach to road investment that would enable these projects to be expedited or to go ahead?
Mark Drakeford: I am less familiar with the first example that the Member outlined, but I am familiar with the Pant/Llanymynech example. That is not affected by the roads review; we continue to be a partner in that. The last time I saw a report of it, which was not that long ago, Highways England was still concluding its assessment of the many different options for improvements, and we continue to play our part in that work. I don’t think that there is a risk to that going ahead once those plans are agreed. It is not affected by the wider roads review work that was carried out here.
Q40 Simon Baynes: Okay; I will give you another example locally. I really want to try to get into the mindset that you have on road investment. A lot of development relies upon improvement of the A483 junction that goes into Wrexham—the main junction there. My understanding is that that is not in your plans of things to do, but correct me if I am wrong. I think that putting a moratorium on road investment affects an awful lot of other things. To be fair to you, I can understand where you are coming from on it, but the environmental effects of doing that work are not significant, while the economic benefits of doing it are massive. I think people find it difficult to understand why you would not want to do, for instance, a junction upgrade, which can bring so much benefit to people in terms of new housing, work and so on. I want to understand where you are coming from on this issue.
Mark Drakeford: To go back to the first principles, the road review is not a moratorium on all road building in Wales. It is a move away from a failed policy of the last 70 years, which is that the way to deal with traffic growth is to build more roads. We just know that that does not resolve the problem; it simply induces more traffic on the roads that you have built, and you end up having to repeat the same failing cycle. What we will do is improve the roads we currently have so that they work more effectively, and continue to invest in new roads that meet the criteria we have set out. So there will be new road building where there are clear safety reasons for doing so and where it is necessary to connect different places for economic growth reasons. In the Wrexham case, it is not that the Welsh Government have said we are not going to invest in a solution to some of the traffic challenges that anybody who travels on that road will have seen, but we are not going to do it simply by using the tools of the past. We will work with the local authority and others to find new, more effective ways of responding to those challenges. Unless we do that, all we do is repeat the cycles that we have seen in recent times—cycles that we know do not solve the problem and contribute materially to the increase in that other great problem that we have to tackle in our lifetimes, which is the impact of climate change.
Q41 Chair: On the point about climate change, before we finish, the Prime Minister recently announced that the UK Government would be reviewing and in fact delaying the timetable for bringing in a ban on sales of new diesel and petrol cars, and also a ban on sales of new gas-fired boilers. Was that a decision that you disagreed with?
Mark Drakeford: I regret it. It is not a decision for me to make; it is one for the Prime Minister. I regret it, because I think that it simply makes the hill steeper as we get to 2050. That is not my view alone, as you know; it is very much the view of the Climate Change Committee. I think it also has a chilling effect on the investment that manufacturers are making, including, for example, Toyota in north Wales. It is changing its plans for car production against the deadline that the UK Government had set out. It now finds that those investment plans have to be completely revisited because a new and extended deadline has been put in place.
Q42 Chair: But Wales is one of those parts of the UK where there is a massive amount of work to be done if people are to make the switch to electric vehicles, given that electric vehicles will even be affordable for people in Wales by then. I am surprised that you do not recognise it as just a pragmatic decision as we move towards decarbonisation.
Mark Drakeford: Well, as I say, you do not need to take my word for it; you can just read the advice that the UK Government themselves received from their most authoritative advisers, who said that this was a retrograde move. It will make the achievement of the Government’s ambition—the Prime Minister says that he has not moved away from this ambition—of net zero by 2050 harder. That hill has now gotten harder to climb as a result of the Prime Minister’s decision.
Q43 Chair: But—this will be my final question—your view does matter in this. We have spent a bit of time today talking about transport. You want that original, faster-paced move towards electric vehicles in Wales. You said in answer to Simon Baynes and reiterated your opposition to building new roads because you do not want to see more people driving cars, yet we have also talked today about cuts to rural bus services because of Welsh Government funding decisions. We have also talked about some of the massive problems going on with Transport for Wales services. We have not even mentioned cancelling the M4 upgrade project. How are people supposed to travel around Wales?
Mark Drakeford: People will be able to travel around Wales in the future in a variety of ways. The Prime Minister’s decision does not seem to be particularly material to your question, although it does elongate the time over which infrastructure can be put in place. We could move together towards the goals that previous UK Governments have espoused. Let us not forget that the dates were not set by the Welsh Government; they were set by your Government. They were set by your previous Prime Minister. I have no doubt at all that you were supportive of that when he said so. I continue to support the ambitions that the previous Conservative Government set out in this area.
Q44 Chair: With these issues that we have been touching on, right at the very start, one of the members of the Committee talked about the enormous reaction across Wales to the 20 mph decision. Do you not recognise that part of the reaction to that 20 mph decision is because it taps into a general sense that the Welsh Government are just not on the side of road users and people wanting to go about their lives and have mobility around Wales?
Mark Drakeford: The Welsh Government are absolutely on the side of people who need decent public services, including transport services, while at the same time recognising that there are modest changes we can make in our own lives that make a contribution to other very important outcomes. The 20 mph changes will save people’s lives. Ten people a year who would otherwise die will still be alive in Wales, and thousands of people who are injured in car accidents will not be injured in them. We achieve that by a very small adjustment in the way we go about our daily lives. In doing so, we contribute to all those other agendas. I think that is a proposition that people in Wales understand very well. Look at our recycling rates, for example: they are the product of those small things that individual citizens do every single week in their own lives, not for their own good, but because they recognise that the things that they do contribute to better outcomes for us all collectively. I think that is a spirit that is alive and well in Wales. We are lucky to have it, and the Welsh Government are very much aligned with that way of thinking.
Chair: First Minister, thank you very much for your clear answers to our questions. I will make the point again that we are very grateful for the time that you give us and for having an interesting and useful discussion with us this morning.