Jeremy Miles MS, Counsel General and Minister for European Transition
This was published under the 2016 to 2021 administration of the Welsh Government
On 11 November 2020 I published the Welsh Government’s End of EU Transition Action Plan. Our plan set out the Welsh Government’s strategic priorities in preparation for the end of the transition period and Welsh Government actions, both independently and jointly with the UK Government and partners in Wales, to ensure that the public, private and third sectors, individuals and communities were as prepared as possible for inevitable change. As a responsible Government we planned for the worst case scenario – a no negotiated outcome. In publishing the Action Plan I also committed to review our priorities in the event a deal was agreed between the UK and the EU.
On 24 December 2020, seven days before the end of the transition period, the negotiations concluded, a deal between the EU and UK was agreed, and the UK/EU Trade and Cooperation Agreement (TCA) was subsequently published. The Written Statement from the First Minister on 24 December 2020 set out the Welsh Government’s immediate response to the deal. While welcoming the fact the UK had avoided a chaotic no-deal outcome, the deal is a very thin one with considerable new barriers to trade and significantly reduced levels of cooperation with the EU across a number of important areas, including security.
Following publication, the Welsh Government has scrutinised the content of the Agreement to better understand the impact for the citizens of Wales, and will publish the outcome of that overall analysis shortly.
Our priority has been and will continue to be focused on supporting Welsh citizens and the Welsh economy in its efforts to react to the inevitable change and challenges the TCA has delivered. We have deployed as necessary the actions as set out in the End of Transition plan, continuing to work closely with partners in doing so. I would like to thank all our partners for their efforts and spirit of partnership that has been so important as we prepared for, and worked to adapt to, the end of the transition period.
An important part of this was to rapidly update our Preparing Wales website – which provides advice to businesses, other stakeholders and the public, and signposts to further sources of information. We urge anyone with questions about the impact of the end of transition and the TCA to make use of this resource. We have also ensured that our advice services had sufficient capacity to respond to requests for advice.
We have been paying close attention to potential compound impacts and interactions between the end of the transition period, the implications of Covid-19, and other risks such as severe weather events and avian influenza. Our civil contingencies arrangements have been in full operation over this period, and have supported effective coordination and communication of activity.
My initial assessment is that the strategic priorities set out within our Action Plan remain relevant and the TCA has changed relatively little in terms of the key actions we set out. We will continue to focus on the actions within the five strategic priorities:
Supply of critical goods – including the supply of food, medicines and medical supplies and other critical items.
An agreement was important to ensure the continued flow of goods between the UK and the EU following the end of the transition period. However, we have still seen some disruption at the borders as businesses and operators adjust to new process associated with the movement of goods. Moreover, the number of freight movements across the short straits and, even more markedly, the Wales-Ireland routes were initially well below normal for the time of year.
While there remains a risk to the supply of goods, the Welsh Government will continue to prioritise actions that seek to ensure the continued supply of critical goods and will continue with mitigation measures as set out in the Action Plan.
Business readiness and support – providing detailed guidance for businesses and industry, cross-border trading advice and free-flow of data, and support for specific sectors, assuming extra funding is provided by HM Treasury.
Most of the actions in this theme remain highly relevant as even with a deal there are very significant changes that businesses need to adapt to, both now and over the coming months. Many businesses were waiting for an agreement to understand the implications and the measures required as a result. We will continue to work with businesses to provide information and support including through our online resources such as the EU Transition Portal. In addition to this we have been running trader readiness seminars with HMRC and the Irish Government to support businesses to manage their continued trade with Ireland.
Some of the sector specific interventions we had prepared for are not required to the same extent, given the agreement in place. Support for the red meat sector is no longer required at the levels considered necessary in a no deal scenario as the deal at least provides for zero tariffs. However, we know the deal has introduced a significant non-tariff barriers and work continues to analyse the full implications of the deal on all sectors of the economy.
Already, seafood exporters from Wales are experiencing issues exporting products to the EU and some of these difficulties have resulted in consignments of fresh and live product becoming stranded or delayed. These are highly perishable products and any significant delays can seriously impact their value. We have been liaising with exporters and making the case to the UK Government for compensation to the export sector and the whole supply chain. The UK Government recently announced a £23m compensation fund for seafood support without any real detail of the scheme nor the eligibility criteria and of which has not been co-designed by the devolved governments. We will continue to work with the UK Government to determine the detail of the support and the impact of this support for the Welsh seafood industry.
On data flows there has been agreement for a ‘bridging mechanism’ to be in place while the EU considers the issue of data adequacy. This removes the immediate threat to the flow of data between the UK and the EU, but risks remain which all sectors of the economy need to mitigate against and we continue to communicate best practice guidance on this issue.
Public services and communities – including EU citizens, public service data resilience, citizens’ advice and transport and travel
The actions in this area remain broadly unchanged as a result of the deal. The Welsh Government will continue to support services which provide advice to all citizens including on EU Settled Status, whilst recognising that the design and operation of the settlement scheme is the responsibility of the UK Government.
The deal has also provided some important safeguards for the transport sector, including aviation and haulage, however there may still be some severe impacts. Particularly on niche markets, as an outcome of the new cabotage rules, as well as the problems of new visa requirements for some professionals e.g. musicians.
Operational activities – including ports and traffic management, energy and climate change, future of EU programmes.
As these actions focussed on the new operational activities the Welsh Government need to undertake as a result of leaving the EU, these actions remain unchanged and remain a high priority. Areas of ongoing concern include implementing new border requirements and our actions in response to the UK Government’s deeply regrettable decision to not participate in EU educational scheme, Erasmus+.
We have been operating our traffic management contingency plan in north Wales, and working with Pembrokeshire County Council to make sure there is space for unready traffic at Pembroke Dock and Fishguard. These have been effective in managing the unready traffic we have seen so far and we will keep the traffic situation at our ports under review over the coming weeks.
Whilst the level of unready traffic has been decreasing over the course of the month, we are continuing to see low levels of traffic through Welsh ports. We have been driving forward conversations with the UK and Irish Governments, as well as the port and ferry operators, local authorities, traders and hauliers, to explore what options are available to help businesses navigate and become confident with new border processes, which should in turn help attract traffic back to quicker routes through Welsh ports.
The Minister for Economy, Transport and North Wales has written this week to the UK Government to ask how they plan to reverse this consistent reduction in traffic at Welsh ports. These are not just teething problems. As a result of the UK Government’s policy choices on trade with the EU, businesses are paying more and taking longer to ship goods around the UK rather than taking the quicker and more efficient routes through Welsh ports, with serious consequences for our port communities. The systems involved are the responsibility of the UK Government and we need to see detailed support and training to make sure businesses and hauliers are confident using new border processes and to ensure we get trade flowing back through the quickest routes to market.
Conversations with industry suggest that a significant amount of unready traffic is also choosing to remain in warehouses or depots rather than heading to ports. We absolutely need to get that trade moving again, but we will continue to assess and manage the knock-on traffic risks if it does so without being fully ready and is turned away from the port.
In addition, we are also hearing that the new processes are deterring traffic between Wales and Northern Ireland, and that it is either rerouting via English or Scottish ports or simply not travelling. This represents a major concern that the transit processes which the UK Government have put in place are not sufficient to prevent disruption to traffic between Northern Ireland and Wales.
We have urgently escalated these concerns to the UK Government, and will be pressing for every possible facilitation to be made available to traffic travelling between Wales and Northern Ireland and to make sure businesses aren’t forced to choose between burdensome transit requirements, taking longer and therefore costlier routes through England or Scotland, or simply not travelling altogether.
The Welsh Government is committed to doing everything we can to achieve this, but the bulk of the systems involved are the responsibility of the UK Government, and we need to see detailed support and training to make sure businesses and hauliers are confident using new border processes to keep goods moving as efficiently and effectively as possible.
Welsh Government resourcing and responsibilities – including negotiations with HM Treasury on funding, the UK Shared Prosperity Fund (SPF) and implications on Legislation and New Functions.
The actions in this theme all remain relevant. The damaging implications of the UK Spending Review and the UK Government’s decisions around the Shared Prosperity Fund are well known, and the Welsh Government will continue to press the UK Government for a fair outcome for the citizens of Wales.
On leaving the EU the Welsh Government has acquired a number of additional functions which were previously delivered by the EU Commission. With these additional functions come additional resource requirements which the Welsh Government cannot meet with the poor level of financial support the UK Government has announced. I have raised my concerns with the UK Government.
In addition to this there is and has been a substantive legislative programme to implement our exit from the EU. The EU Exit Statutory Instruments (SIs) identified as being required by the end of transition, to make further corrections to retained EU law to ensure an operable statute book and to implement the Withdrawal Agreement and related agreements, were delivered on schedule. The Welsh Ministers consented to over 50 UK SIs and made 20 Welsh SIs during the transition period and we continue to work on non-time critical EU Exit SIs and any further SIs to be made under the Future Relationship Act.
We are all in the early stages of understanding, and experiencing the implications and challenges of our departure from the EU, but the Welsh Government will continue to work with our partners and stakeholders, engaging with businesses, communities and the people of Wales to identify the practical implications of the TCA and to review the support we may provide.