Pwyllgor yr Economi, Masnach a Materion Gwledig

Economy, Trade, and Rural Affairs Committee

13/06/2024

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Cefin Campbell Yn dirprwyo ar ran Luke Fletcher
Substitute for Luke Fletcher
Hefin David
Paul Davies Cadeirydd y Pwyllgor
Committee Chair
Samuel Kurtz

Y rhai eraill a oedd yn bresennol

Others in Attendance

David Jones Blue Gem Wind
Blue Gem Wind
Gian Marco Currado Llywodraeth Cymru
Welsh Government
Huw Irranca-Davies Ysgrifennydd y Cabinet dros Newid Hinsawdd a Materion Gwledig
Cabinet Secretary for Climate Change and Rural Affairs
Jane Lancastle Prospect
Prospect
Nisreen Mansour TUC Cymru
Wales TUC
Richard Irvine Prif Swyddog Milfeddygol, Llywodraeth Cymru
Chief Veterinary Officer, Welsh Government
Wendy Weber Coleg Sir Benfro
Pembrokeshire College

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Evan Jones Dirprwy Glerc
Deputy Clerk
Gareth David Thomas Ymchwilydd
Researcher
Katy Orford Ymchwilydd
Researcher
Lara Date Ail Glerc
Second Clerk
Lucy Morgan Ymchwilydd
Researcher
Robert Donovan Clerc
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.

Cyfarfu’r pwyllgor yn y Senedd a thrwy gynhadledd fideo.

Dechreuodd y cyfarfod am 09:34.

The committee met in the Senedd and by video-conference.

The meeting began at 09:34.

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

Croeso, bawb, i'r cyfarfod hwn o Bwyllgor yr Economi, Masnach a Materion Gwledig. Mae Vikki Howells, Jenny Rathbone a Luke Fletcher wedi anfon eu hymddiheuriadau, ac mae Cefin Campbell yn bresennol fel dirprwy i Luke. Felly, croeso cynnes, Cefin, ac rŷn ni'n falch iawn i gael eich cwmni chi heddiw.

Welcome, everyone, to this meeting of the Economy, Trade and Rural Affairs Committee. Vikki Howells, Jenny Rathbone and Luke Fletcher have sent their apologies, and Cefin Campbell is present as a substitute for Luke. So, a warm welcome to you, Cefin, and we are very pleased to have your company today.

09:35

A oes unrhyw fuddiannau yr hoffai Aelodau eu datgan o gwbl?

Are there any declarations of interest from Members at all?

I am an honorary member of the British Veterinary Association.

Diolch yn fawr iawn. Unrhyw un arall? Na.

Thank you very much. Anyone else? No.

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

Fe symudwn ni ymlaen, felly, at eitem 2, sef papurau i'w nodi. Mae yna nifer o bapurau i'w nodi heddiw, ond oes yna unrhyw faterion yr hoffai Aelodau eu codi o'r papurau yma o gwbl? Na.

We will move on, therefore, to item 2, which is papers to note. There are a number of papers to note today, but are there any issues arising from these papers at all? No.

3. Ymchwiliad i'r Economi Werdd - Panel 7 - Astudiaeth Achos 2 - Sir Benfro
3. Green Economy inquiry - Panel 7 - Case Study 2 - Pembrokeshire

Fe symudwn ni ymlaen, felly, at eitem 3 ar ein hagenda. Dyma'r seithfed sesiwn dystiolaeth ar gyfer ein hymchwiliad i'r economi werdd, ac rŷn ni'n siarad â thystion o sir Benfro, ac, fel rhywun sy'n cynrychioli dwy ran o dair o sir Benfro, dwi'n hynod o falch i estyn croeso cynnes i'r tystion. Cyn inni symud yn syth i gwestiynau, gaf i ofyn iddyn nhw gyflwyno eu hunain i'r record? Efallai gallaf i ddechrau gyda Wendy Weber.

We will move on, therefore, to item 3 on our agenda. This is the seventh evidence session for our inquiry into the green economy, and we are speaking to witnesses from Pembrokeshire, and, as someone who represents two thirds of Pembrokeshire, I am very pleased to be able to welcome the witnesses. Before we do move straight into questions, could I ask them to introduce themselves for the record, please? Perhaps I can start with Wendy Weber.

Good morning, everybody. Wendy Weber from Pembrokeshire College. I'm head of the built environment, one of the faculties in the college.

Thank you. Bore da, pawb. My name is David Jones. I'm a stakeholder director for Simply Blue Group, who are an Irish offshore wind developer, in a joint venture to develop Erebus, Wales's first floating offshore windfarm, Blue Gem Wind. I also sit on the board of the regional skills panel for the region, as well.

Thank you very much indeed for those introductions. Perhaps I can just kick off this session with a few questions. Can I first of all ask you both what is your assessment of the progress being made in developing the green economy in Pembrokeshire? And what are your key asks from the Welsh Government to support this, going forward? Who'd like to go first on that? David.

Shall I? Yes, okay. Overall, I believe there's positive progress being made. If you look at the Marine Energy Wales 'State of the Sector 2023' report, that states that there's been over £90 million invested into renewables in 2023 alone, just in Pembrokeshire. So, I believe that that's a positive step forward. I think things like Pembroke Dock marine, part of the Swansea bay city deal coming online and some of the infrastructure improvements there are really positive, and the free port announcement, again, is really positive. For us, as a developer, gaining all the necessary consents for Erebus was really, really positive. I think round 5 that's coming up, which suggests over £1.4 billion and 5,000 jobs for the region, again, is a generational opportunity. And whilst that one is very, very future focused, I think it's also just important to state that there are over 280 full-time equivalents working in renewables in Pembrokeshire right now. So, I think, overall, it's positive, and, as someone who's worked in the sector for over 15 years now, it does feel like we're making progress.

And then, in terms of key asks, I would say that political leadership is critical, and I would thank the previous First Minister for taking a role in this space. I would just say to the committee to not underestimate the impact of messaging at a ministerial level to particular international private investors—it's important. Other key asks: we can't overstate the importance of ports and grid; also supply chain; also a focus on training and skills just to make sure that we have a just transition for future generations as well; consents and leasing; and also the importance of inter-governmental relationships. I think they would be generally our key asks at a very high level. I'm sure we'll get to the detail, as we move forward. Thank you.

Well, from my perspective, I'm looking at it from a training and skills focus, and, yes, I agree with David, we're very lucky to be working very closely with a lot of the investors and a lot of the businesses around Pembrokeshire, around the haven. Generally, there does tend to be still a lack of understanding generally as to what green, a green economy and green skills means. The perception isn't clear. We are very, very keen to be able to ensure that there is a skilled workforce ready for the jobs when they do arrive, and it is quite a big ask when we have the general public, our parents, our stakeholders, our learners not quite understanding what the green economy is all about. So, for us, it would be about clearing those misconceptions or providing a very clear understanding of what the future holds for our local workforce, so that we can help train everybody, ready for the green revolution.

And, can you tell us, from your experiences, how organisations in Pembrokeshire and beyond work in partnership to help develop the green economy? Are there any lessons, in your view, from the approach taken in Pembrokeshire that you think other parts of Wales could actually learn from? David.

09:40

I'll perhaps leave the skills piece to Wendy, but just to say, as someone who works in the industry, we have a really good partnership with Pembrokeshire College. I'm sure Wendy can talk about Destination Renewables and SPARC as real examples. Then, if I think broader than that, I think the Marine Energy Wales organisation, which started out as Marine Energy Pembrokeshire, is a real positive example of private sector and public sector coming together to work towards a common vision. I think the Celtic Sea Developers Alliance, which is run by Marine Energy Wales, where all of the offshore wind developers who are interested in the Celtic sea again come together and again interact with the public sector, is a really positive example of industry working together in Pembrokeshire. Albeit a little bit broader, there's the Celtic Sea Cluster, there's the Milford Haven Waterway Future Energy Cluster as well, and then a bit broader you've got the South Wales Industrial Cluster, and Net Zero Industry Wales. Again, speaking from personal experience in the regional skills partnership as well, that's probably another example, albeit at a regional level. So, I do think we're good at that. There is a whole plethora of clusters, which is sometimes quite a confusing landscape, but at least it demonstrates the ambition to work together.

As David has alluded to, yes, we are very proud of our partnerships with local industry, one of which is the very recently launched SPARC initiative, which is a tri-partnership between industry, the local education authority and further education. It's intended to inspire young females into careers in sustainable power, renewables and construction, specifically. It is not exclusive to females, but this is the take that we're making. The alliance partners have been carefully selected to represent the renewable and low-carbon industry development in Pembrokeshire. Hopefully, this will ultimately transform the career landscape. These partners are Blue Gem Wind, Floventis, Ledwood Mechanical Engineering, Milford Haven Port Authority and RWE. We are launching the programme officially within schools in July, and then from September this will be part of the curriculum programme. It is a very exciting initiative and quite unique to the UK.

Destination Renewables is another programme that has been running now for two years, it's coming to the end of the second year, and that was a project supported by Swansea Bay city deal. Again, it brought together 12 or 14 different industries and they were trained to come into groups within our environment, within the college, and deliver a very specific destination programme for the renewables sector, which is quite a big task in itself. Every week, there would be different industries coming in and delivering an agreed programme. So, those are just two examples of where this is actually working really effectively at the moment.

You've mentioned there are a number of different Welsh and UK Government initiatives to support the development of the green economy. To what extent have these different policy interventions allowed stakeholders in Pembrokeshire to develop a coherent and joined-up approach, and what should be done to address any problems that have emerged?

Shall I go again? You're right, there are a number of them. We've probably just touched on one of them in terms of a good example of collaboration. I would say Marine Energy Wales, as someone who's worked in that organsiaton before, is a Welsh Government initiative that has allowed that cluster to come forward. I think Swansea Bay city deal, which has already been mentioned, and Pembroke Dock Marine were really good examples of Welsh and UK Governments working together, with local authorities as well, right across the region. We're just getting to the tail end of at least the infrastructure improvements at the port being delivered. Again, that's another practical, positive example of types of Government initiatives. The free ports, as well, are really quite exciting as a UK Government and Welsh Government initiative involving local authorities. It remains to be seen, I guess—we're very, very early in that process still. But I think that's another practical example of good initiatives that have been stimulated at a UK Government and Welsh Government level.

No, I don't have anything else to add. I think David's covered everything there. Thank you.

Thank you very much indeed. I'll now bring in Samuel Kurtz.

Diolch, Cadeirydd. Good morning, both. I'm looking to ask a couple of questions around supporting renewable energy projects in Pembrokeshire. Actually, I've got a material interest in this as a representative of roughly half of the county. But based on your differently roles specifically, and your experiences, I was just wondering what aspects of energy policy from a Welsh Government perspective are working well, and are not working well. Where are there improvements that can be made? I can see, David, you nodding there, so we'll start with you.

09:45

I'm not going to nod any more. [Laughter.] Thanks, Sam. There are a couple of things there, really. I guess we don't control all of the policy levers in Wales. When I talk about the contracts for difference scheme, which is very important, the leasing process, consenting larger projects, all of those are carried out at a UK Government level. But if we think about, perhaps, our devolved powers, the planning consents do fall to Wales, so that's important. Skills development is another one. I think that we really need to focus on those areas that we do have, and then seek to influence the UK Government to the benefit of Wales on what we do not control—about the leasing process and the contract for difference, from that perspective.

But also, just from the private sector, I can't overstate the importance of supportive, stable and clear policy. I think that's really important. And again, most of the ports do come under the jurisdiction of the Welsh Government and its policy, and we can't overstate the importance of the ports, as well as gateways, to maximise at least the floating wind opportunity. So, any changes that speed up planning consenting would be welcome, anything that focuses more on skills development would be welcome, and anything we can do at Welsh Government level to support the ports I think would be really important. 

Education and training is a very small cog in that massive wheel, but, as David has said, without clear policy we can't plan, and to have a workforce is absolutely crucial. There's no point developing major projects if we haven't got the workforce to support them at the time they're needed. So, it is very important that the communication—. I've been at various events lately where employers and stakeholders probably shout the loudest about the lack of communication—whether it's the lack of communication, or the lack of communication that works for them, I don't know. But it's about communication, and timely communication. It is very much about a clear route plan, so that we can be there to support the projects and the employers when they are ready to rock and roll, as it were.

Thank you. Previously, RenewableUK Cymru said that Wales is being left behind on renewable energy when compared to other parts of the UK, and not enough work is being done to develop a consistent pipeline of projects. I was wondering if you shared this view of RenewableUK Cymru, and, if so, what can be done to improve that? Since I started with Dave last time, we'll start with Wendy this time. Wendy.

Oh, sorry, I misunderstood. I'm sort of carrying on from what I've just said, really. There is a lot of positive messaging around renewable energy. There is a lot of positive messaging about the Celtic free port and the potential there, and we're very lucky that Luciana is a patron of our SPARC Alliance, so we know that that input is going to be absolutely pivotal going forward. But it's the actions behind the words. We need to be telling people exactly what jobs, what these industries are going to look like. We need to know where the upskilling needs to be coming. We're all struggling. All our industries are currently struggling with recruitment for various reasons. So, it's how we are going to be making Pembrokeshire an attractive place to live and work, and that depends on the housing, on the transport, the infrastructure, the schooling. There's so much more that needs to be in place before this can be really, really successful. 

Just to add to Wendy's point about the criticality of the pipeline, I can understand where RUK Cymru are coming from, certainly in terms of renewables deployed in Wales over the recent times, particularly with onshore and offshore. So, yes, I completely understand that point of view. I also completely align with the 'pipeline is critical' piece, not just for developers. Wendy's just talked about the importance of the pipeline for skills development, so we can work out how many people do we need and when do we need them, and what does that look like. But also the pipeline is critical for developers, it's critical to attract global multinationals to the region. It's critical for port investment. We're developing Erebus, which is a very, very small project compared to what's coming. To ask the port to make the kind of investment they need to make on these smaller projects is very, very challenging. So, port and investment in the grid, all of those kind of things, all depends on the pipeline.

Just a couple of comparisons: via the ScotWind process and INTOG, Scotland have leased around about 18 GW of floating wind, and we're just beginning on our 4.5 GW, so you can see the difference in scale of ambition there in terms of leasing. And, again, a practical example of what that means: Sumitomo Electric, a Japanese company, just this year announced a 350 million subsea cable factory. It's going to be based in Scotland, and that will be driven by the pipeline. They know that there's some significant pipeline of projects coming along. So, that's a practical example of where it can make a difference. We know the Crown Estate and UK Government have plans for the additional 12 GW beyond round 5, but I think investors need to have a timeline for that pipeline, just to add to Wendy's points around skills and the people development as well.

09:50

Thank you. And staying with you, David, and the answer to the earlier question around planning and consenting processes, I know with the Erebus project, it's a trailblazing project, the first of its kind, and there was that specific dialogue with the previous First Minister on getting the project green lit. From your experiences on that project, and pipeline of projects, what lessons can be learned from that around planning and consenting to speed up and ease the process? Is there anything specific that we as a committee should be looking at?

That's a good question, actually, Sam. Just for committee members, we received the consent without any public or community objections, I may add, in just over 12 months, from Welsh Ministers and Natural Resources Wales. That was really positive, and almost matched the timeline in Scotland, and should be applauded. I think that should be the benchmark for future projects, but that will need adequate resourcing, policy support and also an enabling approach from the consenting authorities as well.

To answer your question directly, we've literally just completed a lessons-learned workshop with NRW on the consenting process for Erebus, and we'll be absolutely happy to share the findings of that with the committee. We've just captured them in a two-pager, so they'll be pretty high level. We'll send those over to you after this meeting, if that's helpful. One of the challenges we found as a developer was the lack of statutory time frame. The reason that's really difficult is you're going to your investment boards to understand the risk of the consent, and we were saying, ‘Look, we feel like we will get consent, but we just cannot say when’, but that's really difficult for investment boards to get their heads around. We got there in 12 months or thereabouts, but it could have been two or three years. So again, that uncertainty around the timeline is, I think, something that we should work to. I think that that's really important.

I think also just one more important point, and probably just based on previous experience of working in offshore energy in Wales, is that I feel like we've had a cycle of recommendations as a sector that's probably been about 15 years in the making now. We’ve just fairly recently had the deep-dive into the consenting process. So, it's important not to let those recommendations become another set of recommendations in five years' time where we all end up saying the same thing. So that's just a point as well to add.

Thank you, David. Thank you, Wendy, as well. Back to you, Chair.

Can I ask where you think the Welsh Government should focus its limited spending power on green and renewable energy projects?

Shall I take that one? It's a good question. We talked briefly before about the policy support and the delivery of the current powers, which is around consenting and planning, and if we think about that at the moment, it's not just about the projects, but it's also about the port redevelopments, and developments of the grid, and all of those kind of things. So, that policy support and delivery of current powers within the planning system, I think, is really important. Again, we don't have all the policy levers in Wales, and where we don't have them, they're at a UK level. I think we should use our convening and lobbying powers to ensure those policy levers at a UK Government level benefit Wales, and that doesn't, in my opinion, cost money—that's just time and a willingness to do that. I think, from a private sector perspective, it's really important that there's a good relationship between the next UK Government and Welsh Government, whoever that may be. And again, in terms of—. With a limited budget, I still think we can make Wales attractive to inward investment, again by pushing that pipeline visibility, trying to get—. If there's going to be future subsidy, cable factories in the UK, 'Why aren't they in Wales?' would be my question. So, just, again, it's about making Wales really attractive to come and do business.  

09:55

Just to comment on the fact that we are concerned about the reduction in personal learning accounts funding, which allows a lot of the current niche green skills training to happen across the FE sector. We are concerned as to how we are going to be able to do that going forward if the funding isn't there, and also the reduction in the number of apprenticeships, the apprenticeship funding. So, it's really, really important that we keep that on the agenda to make sure that we are able to fulfil this future workforce.  

Okay. I might come back to that in a second. Can I ask David about those UK Government schemes that you've mentioned? Are they going to need changing? We could see a change of Government. Are the schemes themselves going to need changing or refocusing to meet the needs of floating offshore wind?

Yes, good question. I think if you think about the last auction round—the contracts for difference rounds, the auction rounds that get renewables onto the grid and into the water—there were no bids at all in the last auction round, AR5, and I feel like, from a UK level, that was a significant step backwards. It was a real blow for us in terms of Erebus and, obviously, it delayed targets being delivered, but it also dented investor confidence, I think it's fair to say. So, I think what's really important is that, for future rounds, they understand the market forces and the challenges of the private sector and react to those appropriately. So, I think that's really important. And also just the appreciation that floating offshore wind is an emerging technology, and just to make sure there's enough budget to bring forward all of the early projects—perhaps you'd expect me to say that, as someone who's involved with developing an early project, but that's important, I think—versus the absolute focus on competition and price, which is what the current contracts for difference system is focused on; it's delivering the cheapest renewable electron, and not necessarily thinking about an industrial strategy that's considered to increase local content. So, I feel that that's important moving forward. 

And then, leasing round 5 is on the horizon and the process has begun, but again it's—and future rounds as well—just to appreciate the current risks that developers have in developing a new technology in a new region that doesn't necessarily have the necessary infrastructure in place yet, if you think about ports and those kinds of things, and just to consider it as a global market, with other countries looking to develop FLOW as well. So, just don't be complacent, I think, is the one thing, and just appreciate that need again for more information on what happens after round 5. Back to that pipeline—I think it's really important.  

Okay. And the Welsh Government has talked about clean growth hubs. Have you had discussions with the Welsh Government on that, and what should they do?

Good question. Not necessarily directly with the Welsh Government on clean growth hubs; that may have happened at a local authority level and with other stakeholders. But, yes, I'd be supportive in general, for sure, and I think, very quickly, anything that focuses on skills development would be really important just to make sure we've got the right people in the right place at the right time, which Wendy has been talking about. So, I think, yes, clean growth hubs and a focus on skills development would be really important, and also attracting international inward investment. 

I think David has taken the words out of my mouth there, really. Yes, anything that we can do. It's the upskilling part, isn't it? Clean growth is about utilising what we already have and the transition into green energy. So, anything that we can do there can only be a good thing.  

Okay. Wendy, can I ask about—? You've mentioned skills. How do you gain a degree of vertical integration across the skills, training and education you need to deliver the kinds of skills we need for the future? If you're going to be in school—you're nine and you decide you want a career in the renewable sector—what kind of education pathway should be available to you right up to Master's level? What should the pathway look like? 

That's a really good question, because it's about reality and the future. Young people, you'd like to think, are forward thinking, but, in reality, the parents are very influential, at a very young age, as to which pathway and what their young offspring then do study. So, it is quite hard to encourage young people to think about the jobs that may be available in five years' time, because they can't see them, they can't think—you know, there's nothing tangible there at this point in time. So, at the end of the day, the qualifications that are currently on offer, whether that's your mechanical engineer, whether that's your plumber, or your electrician, those skills are still going to be needed, and they're still very valuable. So, we need to be encouraging young people to understand the jobs that involve the skills that are on the table now, and that there are opportunities to upskill and provide additionalities.

But that's where I think we need to go, is to look at the development of green skills within all our qualifications, because they don't exist at this point in time; we don't have these additionalities. And we should be offering them across a wide range of skills, not just engineering and maybe the construction sector—leadership and management in particular, finance. This is something that we've got to be able to do. But, until people can see a reality, that it's going to be something that they can actually take part in, it's going to be very, very hard to upskill. At the moment, we have no renewable qualification as such; it would be really important to be able to develop a renewable apprenticeship, leading on to higher education. There are very limited degree apprenticeships at this point in time, and that's something we definitely need to focus on, going forward.

10:00

Yes, and I think the fragmentation of the sector doesn't help—so, you've got Qualifications Wales, the Commission for Tertiary Education and Research, or Medr as it's going to be called, schools. And the landscape is so fragmented, getting that integration—. It's almost as if the landscape is working against that.

Yes, very much so. And it's very slow; it's very slow to get qualifications moving. In the last year, I've spent a lot of time in Europe, looking at the apprenticeship programmes there, and recently in Canada. And it is so wonderful to see, where the industry partners are so heavily involved, that these qualifications can be designed, developed and delivered in less than 12 months. And that's something I'd really like us to be able to aim for.

That's really helpful. I think that that's something that is really important for Welsh Government to get to grips with. Perhaps, David, I can ask you: my daughter's seven years old; in five years' time, when she's thinking about her educational future, do you think it's realistic to expect her to have a pathway into a career in renewables, and will the education pathway be able to deliver for her? How would you make that happen for her?

I would like to say 'yes', I really would. But, just back to your previous point, actually, about the landscape being quite confusing, I guess we feel that as developers; we're not educational delivery experts at all. And, as a developer, you want to have a positive impact and you want to inspire future generations, but you do think, 'Okay, how do I best spend my resources?', be they human resources or cash. So, it's quite a confusing landscape of where you go and what you do, so I think anything that can, I guess, clear that will be really, really helpful.

I think Wendy touched on it, really: it's the importance of just visibility, getting young people to appreciate the whole range of careers. As Wendy said, it's not just engineers; it's almost, whatever you're interested in, you can, almost, have a career in offshore wind. And also I would just make the point, actually, that, albeit we're talking about quite a lot of future jobs, particularly when you think about the larger numbers, if you just think about offshore wind on a UK level, it's about 30,000 people working in offshore wind at the moment, but we'd need 104,000 by 2030, which is mind blowing. Where do these 10,000 new people come from every year to deliver the current UK Government target? So, there is also that appreciation that our young people, if they're ready right now, could go and work in this sector, just in another part of the UK, if you like, and have that ability to come back and learn those skills. So, I would love that, for your daughter to have a clear pathway of how we get there—we're just not there yet.

And I suppose—. Just finally, Cadeirydd, I think you would need people perhaps from the industry, with that industry experience, to be moving into education to deliver the education programmes. Is that happening? Is that desirable, given the limited number of people available already in this area? It's a bit of a catch-22 there, isn't it?

It is. It is. And, again, as a developer, you want to, obviously, have a positive impact, particularly as someone who lives in the region. Also, I'm really conscious of the fact that we can't, sometimes—. We don't have all of these policy levers—and we've talked about that already—in Wales, but one of the policy levers we do have is education and skills and training, and all of those kinds of things. So, if we can't—and I just feel this, I guess, as a person living in Wales as well—if we can't say that the ports are going to be developed to the right level so we can bring all of the kit in, and we can't control the contracts for difference rounds and auction rounds and all of those kinds of things, we can, in Wales, at least control the upskilling of our people. So, I think it's such an important piece.

10:05

Okay. Unless Wendy wants to come in, I'm done with my questions.

No, I'm good, thank you.

Diolch, Hefin. Dwi'n mynd i ofyn nawr i Cefin Campbell ddod mewn i ofyn rhai cwestiynau. Cefin.

Thank you, Hefin. I'm going to ask Cefin Campbell to come in now to ask some questions. Cefin.

Diolch, Paul. Bore da, David and Wendy. So, I represent Mid and West Wales, so obviously I have a keen interest in the south-west part of that region. I'm very excited about the possibility of growing the economy around Pembrokeshire and even further than that. So, clearly, Welsh Government has a role to play in supporting Welsh-based supply chains, and we know as well that our coastal areas have some of the highest levels of poverty and deprivation in Wales, so, clearly, there's a big opportunity here. So, what specifically do you think Welsh Government can do to support indigenous, local-based businesses in Pembrokeshire and further afield?

Shall I go first?

Yes, okay. It's a good question. I think—. We've talked about the pipeline so much now I hope that one's landed. But I think Welsh Government, in terms of its convening powers, and also influencing, could lobby the Crown Estate to define this pipeline and the timing of it. That's really important, and we've talked about that: it's important for skills development, it's important for investor confidence, but it's also really important for the supply chain companies as well. They need to know what do we need, when do we need it and how many people we need. So, the defining of the pipeline and the timing of it, I think, is really critical, and I think that's something that the Welsh Government could have a role to play in, which won't, actually—. If we're talking about constricted budgets, there's not really a budget requirement for that; it's just that convening power.

But also, then, if we have a bit more detail about the pipeline—so, it's the how many and when—I think then we need to define the capacity and the capability of our current Welsh supply chain. And in particular, if we think about our region, we have really, really high-skilled engineering services and things like that that have supported traditional energy, I think it's fair to say that. But we haven't had the skills yet and also the experience of working in offshore wind, because it's brand new to our part of the world. So, we need to identify the gaps and also produce some kind of delivery action plan, if you like, that identifies the pipeline, makes it clear and consistent: what skills we have, what capability we have, what capacity we have, where are the gaps in that and then how do we fill those gaps—I think that's really, really important. And also—I think I've mentioned it before, actually; it's quite policy related—push the UK Government for a focus on an industrial strategy, if you like, at a UK level that helps developers to use local suppliers and local content to deliver their project versus just delivering it at the cheapest cost. Hopefully, that's helpful.

Yes. For me, it would be very much about—. Well, a point I've already mentioned in terms of the communication and the collaboration. At the moment, this isn't a tangible concept. Anything that's going to be happening, our local, indigenous population might not to be able to relate to. And this is something I saw working very well in the Canada trip, where they're planning to introduce onshore windfarms; they're probably four or five years away from it, but the collaboration is ongoing. It's a constant, and that seems to be bringing the indigenous population on board to understand that, actually, without them, these plans and these projects are unlikely to be successful, and it's just breaking down those barriers bit by bit. And I think communication is something we all think we're very good at but we very often get very wrong, and that's where things thrive and fall. If we get this right, I think that can have huge, huge benefits, going forward: bringing the information to the people on a regular basis and not just one-off meetings in town halls that some people may attend and others not, but just some sort of constant presence. I'm not quite sure what that would look like, but I think that collaboration and communication is absolutely key.

10:10

Clearly, communication is important, I agree, but also, maybe, local procurement policies as well. So, just following on from that, what's your view on introducing local content requirements to ensure that the domestic supply chains are fully utilised to support the transition to a greener economy? David to start.

Good question. Perhaps I began to answer that in the last response, actually. Look, I think positive, as someone again who lives in the area and has worked in this industry for a while, but, again, it's very UK policy driven, and it has to be linked to the CFD. And just to be very, very clear again, the current model is that the lowest cost wins. So, from a UK Government level, we have to deliver the renewable energy at the lowest cost, and if that means using non-local supply chains, then, at the moment, 'so be it' is the very, very simple policy ask, if you like. So, again, that's really important: influencing those future CFD rounds and whatever that looks like that does actually value local domestic supply chains, I think, is really, really critical.

And then I would also say that our supply chains, if they are really skilled up and if they are experienced in this sector and they become cost competitive, actually, in an ideal world, you perhaps wouldn't even need a local content policy, because our domestic local supply chains would just be the most cost-effective.

Just a very small point to make: it’s about the policing and the monitoring of that local content requirement as well. An example is where local building contractors come into the area and they're required to take on a number of apprentices. It's not actually monitored and policed in a way that we would welcome. So, I think it has to be a realistic proposition. That's it, really. That's the point I wanted to make.

Okay. You've said many times this morning about the importance of getting people skilled to take advantage of these huge opportunities that will come on board. But also companies, we are told, and local businesses need to know in advance about the pipeline of projects that may be coming on board as well. So, what's your view on that? Is that a good idea, and how far in advance do you think they should be told about the pipeline of projects?

Yes, I think it's critically important. I think we've talked about it from a skills development perspective and we've talked about the importance for ports and investment in port redevelopment. They need to know when these projects are happening, how big the projects are going to be and when they're going to happen. All of that is so critically important. So, yes, I would say the same applies to supply-chain companies as well: they need to know the when and the how much, and then they can have the confidence in that pipeline to invest. So, hopefully, we can't overstate the importance of that visibility of the pipeline of projects.

We have been hearing that the Crown Estate are close to an announcement on life after 4.5 GW, so, round 5, and what the 12 GW may look like. I don't know whether the current election will perhaps halt those plans for a public announcement, I'm not sure, but we believe, we're hearing at least, that they're very close, and that's really, really important.

And also, back to that point about the importance of ports, and them being a gateway to maximising this opportunity, again, that's really relevant to Pembrokeshire supply chain companies as well. If the port of Milford Haven is not geared up to support the sector in the most impactful way, then it's difficult for all the supply chain companies around to capitalise on it.

Well, in terms of a skills drain from Pembrokeshire, we all know that that's been a problem for some time, and we have employers who are becoming more reluctant to take on young apprentices quite simply because they cannot guarantee that they will be able to have that work within Pembrokeshire over the period of the apprenticeship, which can be up to four years. So, yes, if you're looking at timeline, five years in advance, four to five years is realistic, from a skills perspective. It would be sad to think that our young people haven't got those opportunities quite simply because we can't tell them when the jobs are going to be available.

10:15

Diolch, Cefin. I'll now bring back Samuel Kurtz. Sam.

Thank you very much, Chair. I'm just looking now at community benefit, and Ynys Môn stakeholders have said that more strategic thinking is required on delivering a more effective community benefit scheme. Do you agree with this viewpoint, and, in designing a scheme for projects off the Pembrokeshire coast, for example, what would you see the requirements for a successful community benefit scheme being? David.

So, yes, I would agree with that high-level response from Ynys Môn that more strategic thinking is required to deliver that. If I talk a little bit about Erebus first, and then perhaps what comes next. So, the plans for Erebus that lead us to follow best practice guidelines in terms of the community benefit fund, we were always very conscious of the precedent we could set as one of the early projects. So, even at the test and demonstration-scale project, we were committed to having a community benefit fund, and what's really important as well is that we were committed to building that with the community. So, the question there then, I think, for future projects is, 'Who is the host community?', if you like. The projects are so far offshore, who is the host community that would stand to benefit from the community benefit fund? So, I think that's where your strategic thinking and a strategic plan needs to come into place. 

For us at Erebus, it was, I guess, quite simple in the fact that we have a host community that will host a sub-station, and we have a host community along the cable route and where landfall is. So, conversations with that community have been around what a community benefit could look like, what's important to them. We also discussed a little bit more broadly that you may be able to see the windfarm from certain parts of Pembrokeshire on really clear days—that's definitely not today—so we could consider a wider Pembrokeshire focus on things like skills development and things like net zero. So, we talked about those. And, also, we talked about the fact that the project is offshore and it would be good to have a focus also on marine conservation and similar projects like that. 

So, from an Erebus level perspective, I think we've made some good progress on what all of that could look like, with the community, which is really, really important, rather than us as a developer coming in and telling the community what the community benefit fund should look like, and when it should start and all those kinds of things. 

Just to come back on your point there, David, who is the strategic partner delivering on that community benefit then? Is it the project lead? Should the local authority take a role in this? Should there be some separate body that just delivers the community benefit? I'm thinking of all the potential projects on the production line. Is there a need for something specific to deliver community benefit, that does look at a high-level strategic element, rather than just funding for a village football team or something? As good as that is, how about the broader, more impactful community benefit? How is that going to be—? What mechanism delivers that?

Yes, so, at the moment, for round 5, there is a section of that where developers have to deliver a social value model. Within that, there are targets for skills development, there are targets for those not in education, employment or training, and there are targets for community benefit. They're quite high-level targets at the moment, and whether the Crown Estate leaves that to developers to put the meat on the bones, so to speak, that may be the case. But I do agree—and I don't believe there's a model for it yet, certainly—that perhaps a more strategic view of the community around the Celtic sea, and what the community of the Celtic sea needs, I think, is not there yet and it is important to have. 

Okay. Thank you, David. Wendy, your thoughts on community benefits.

Well, I've nothing to add, I think David's covered most of it off, but I do very much like the idea of an overarching strategic group to deliver the community benefits. That's all I'd like to add. 

Okay. So, from your perspective, then, Wendy, in the community benefit—and David made the point around skills development potentially being seen as that—would you see the college, or the local authority, or the local education model—? What delivers that from your perspective in looking at skills?

Yes, this has to be a joint approach. We are very well aware that the skills needed cannot be delivered by one individual alone. So, it's very much about the partnership working. And that is the reason why we have the SPARC Alliance, and that is the beginning of, hopefully, a much wider range of projects based around the renewable sector. We've got all the schools in Pembrokeshire involved in that alliance, and that is the way forward. It has to be a joint initiative. 

Okay, thank you. And just one final point on this then, and it might be more for David, knowing your experience with other projects dotted around, or your relationship with other projects. Would it be a Wales-wide body delivering on community benefit or would it be localised to specific areas? I'm thinking, would a Wales-wide body exist and community benefit from Pembrokeshire projects go towards that, or would it be county-specific or area-specific, in your mind?

10:20

Yes, that's a really good question, Sam, and I don't know the answer, if I'm honest, because if you—. I'm thinking to myself, the communities around Gwynt y Môr, if you like, on the north Wales coast, are quite reasonably well-defined, because you could argue that they are the host community for that offshore wind farm, and if you went to ask that community around Llandudno whether they could share that community benefits fund with communities in the south-west, they won't have an answer to that response. So, I feel like it needs to be a mixture of a number of different approaches. There is that local where—. We, certainly from our perspective, we have a host community for the sub-station; we have a host community that will have temporary impacts from the cable route and the landfall. Less clear is the host community for a project that's 50 km offshore. And again, Sam, maybe that's something that the Welsh Government can do in terms of conversations with the Crown Estate to actually influence the social value model and ask about or suggest some scenarios to that at the moment, because it's not really that well-defined.

Okay. That's a really helpful point there, David, thank you. Thank you, Chair.

Any other questions at all? No. Our session has therefore come to an end. Thank you both for being with us this morning. Your evidence will be very important to our inquiry. A copy of today's transcript will be sent to you in due course. So, if there are any issues with that, then please let us know. But once again, thank you for being with us today. 

Thank you. Thanks for the opportunity to contribute and also for your and the committee's support for renewables as well—it's really appreciated.

Thank you very much. We'll now take a short break to prepare for the next session.

Gohiriwyd y cyfarfod rhwng 10:22 a 10:40.

The meeting adjourned between 10:22 and 10:40.

10:40
4. Ymchwiliad i’r Economi Werdd - Panel 8 - Undebau Llafur
4. Green Economy inquiry - Panel 8 - Trade Unions

Croeso yn ôl i gyfarfod Pwyllgor yr Economi, Masnach a Materion Gwledig. Fe symudwn ni ymlaen nawr i eitem 4 ar ein hagenda. Dyma’r wythfed sesiwn dystiolaeth ar gyfer ein hymchwiliad i’r economi werdd. Ac rŷn ni'n siarad â chynrychiolwyr undebau llafur. Gaf i groesawu'r tystion i'r sesiwn yma? Cyn ein bod ni'n symud yn syth i gwestiynau, gaf i ofyn iddyn nhw i gyflwyno eu hunain i'r record?

Welcome back to this meeting of the Economy, Trade and Rural Affairs Committee. We will now move on to item 4 on our agenda. This is the eighth evidence session for our inquiry into the green economy. We are speaking to trade union representatives. Could I welcome the witnesses to the session? Before we do move straight into questions, could I ask them to introduce themselves for the record, please?

Jane Lancastle, assistant secretary, Prospect trade union.

And I'm Nisreen Mansour, policy officer at Wales TUC.

Thank you very much indeed for those introductions and perhaps I can just kick-off the session with a few questions. Now, the First Minister has pledged to prioritise supporting the green economy in his manifesto. Taking into account the budget constraints the Welsh Government is facing, what, in your view, should be his top investment priorities to start this work off, and why do you think that? Jane.

Would you like me to start?

Thank you, Paul. I think it would be easy for me to provide examples of priority investments, such as the consent we've already got from Welsh Government and Natural Resources Wales to Morlais, the Menter Môn tidal energy project. It's an example of which I think we could probably encourage more examples, perhaps in the Swansea bay area, but I feel, at this stage, it is a trap to our long-term joined-up success for the green economy. What I think the priority is and should be is to identify a Wales transition strategy and what represents a green economy for Wales; the focus on a strategy to give confidence for the business community to invest in the long term. The geopolitical issues that we see make business cautious at this time. I think we do need to prioritise strategic leadership and decision making about how we will achieve net zero, rather than a market-led model. Once we have that—the retraining, research and development, infrastructure—decisions become easier and clearer.

We also need political will from all parties to co-operate beyond the four to five-year cycle and get behind a strategy similar to the US and the EU; I'll make some references to them as we go through. But if I can continue, in Prospect we have a high membership in the energy sector, so, obviously, I would be looking to push in that direction, and we've undertaken considerable work in looking at the future of green energy. The UK Government has failed to respond to the pivot to active industrial strategy that we've seen in the US and EU and elsewhere. In this country, we need a plan to create clean energy jobs. Prospect would seek that this includes ensuring the clean energy economy provides opportunities for those presently in high-carbon jobs, and we think it would make sense to accelerate public and private investment in renewables.

Prospect recommends a public energy generation company should directly invest in renewable projects, prioritising technologies struggling to attract private investment—whether newer or riskier technologies, like floating offshore wind and tidal, or more established ones; clear road maps for deployment of each technology; and a review of low-carbon investment incentives can help unlock private capital alongside this. I identify this as a project, because Wales's natural resources—wind and tidal range, as well as its existing nuclear sites—lends itself to being preferred choices for future investment.

But in summary, too little has been done to ensure clean energies are accessible to a diverse workforce. Industry data shows that one in five offshore wind workers are women, and fewer than one in 10 are people of colour. But I'll circle back round to us having a strategy that clearly identifies all these issues and a road map and a way forward to encourage confidence and investment going forward. Thank you.

Thank you. So, my priority would be to take stock of what work is actually happening now in this space. I think quite a lot of work is taking place in different parts of Government and also in different parts of the wider public sector, particularly local authorities, but to some extent, that part of the public sector that's a grey area, almost—housing associations are leading a lot of this work. And I'd want to understand, if we're trying to create a green economy that is driven by a notion of fair work, what are the labour outcomes of the investment that's happening now, and make sure that we've got one coherent set of policies and priorities that are driving those labour outcomes from the green investment.

I would also want to bring as much of that work into the public sector as possible. I think there would be a real long-term benefit of creating a skilled public sector workforce that can deliver on this agenda in the longer term, and I think that links to some of the work that we put out a few years ago now in terms of a green recovery, and the sorts of projects that can feed into long-term job creation.

I think Wales also needs an industrial strategy—that's something that came through very strongly from our congress that we held last month. So, that's a cross-union priority. We need investment in manufacturing, as Jane has mentioned, investment in the energy sector. Sectors like that provide well-paid jobs for communities, where well-paid work is often missing. And then I think I would want to come up with that wish list for if we do see a turn-up in our budget. So, what can we do if the budget improves and what can we do, particularly working with local authorities, as a national Government, to harness opportunities to actually really create that green economy that I think we envision when we see that headline term that has very much been out of reach given the extremely pressured budget situation?

10:45

Nisreen, in 2020 TUC Cymru commissioned a report from Transition Economics that called for green infrastructure investment across a range of sectors to actually be prioritised. Now, four years on, how much progress do you think has been made towards delivering this particular investment, and are there any particular areas the Welsh Government needs to focus on?

Thank you, Paul. It's a very good question, and it's a nice challenge for policy officers that should probably have been keeping very detailed track of what was happening in relation to those asks. We know that some work is happening in the nature of that work that was recommended, so things like the optimised retrofit programme have seen quite considerable investment in terms of decarbonising and retrofitting large parts of public and housing association stock, for example. So, I think the last round saw around 5,000 homes being retrofitted. What we don't have a good sense of, though, and what that work was really trying to get at, was about the job creation resulting from that spend, and I think that's very much our priority in this area. What are the work outcomes from any investment in the green economy?

So, obviously, I think, we were talking about very considerable spend, and at no point did Welsh Government ever get that funding capability in the time period since that report was published to invest at the scale that report was talking about. But it has had some ability to invest in areas related to that report, we're just not clear on whether the job creation figures look like what was in the report, and, particularly, whether they created full-time, long-term employment for people, or whether it has been a more casualised employment relationship relating from that spend.

In your view, which green economy sectors do you think Wales has a competitive advantage in, and to what extent are we making the most of potential opportunities in these particular sectors?

I think, as Jane has already mentioned, our energy sector, and you'll probably want to talk more about that. Also, I think, our manufacturing skills base. What we're seeing happening at Port Talbot is something I'm sure we'll touch on, but that manufacturing base to support a green economy is something that we should always have at the forefront of our mind in terms of trying to protect, because that is a unique skills base that can be transitioned. I think unions have been very passionate about trying to transition that, and we need to make sure that that is protected, to make sure that we are in that best position to take advantage of opportunities in the future. 

Long term, yes, I'm in agreement with Nisreen. Obviously, our natural resources with regard to energy are there, but I think that's long term, as well as the nuclear opportunities we have. I think science-based manufacturing—I was at QuidelOrtho in Pencoed yesterday, and they're looking at further expansion, and you can see that's happening already. There are great opportunities there that we could encourage.

I think there's also consideration of early adoption. Wales has recently been named the second in the world for recycling. Green Economy Wales has quoted AWD Group this week as an example of the work they do. They recycle 300 tonnes of mixed rigid plastic a week, and it's good to see they're soon to introduce a second shift, in particular, because that's located next to Tata, or near to Tata. What are we looking at here? Are we looking at short term or long term in order to answer that question in more detail?

Okay. Thank you very much. I'll now bring in Hefin David. Hefin.

Diolch, Cadeirydd. You've already touched on it, but can you give us more information about how the Welsh Government will need to work with other levels of government and other partners in the sector to create a consistent approach to transition?

Morning, Hefin. Hi. I don't know if I have the answer ready to give today. We've had a long period of two very different political policy approaches from Westminster and Welsh Government, and there are structural obstacles when it comes to progress, because the funding stream may sit in a department that doesn't align with the interests and aims of a devolved Government in Wales. What I would like to see is, and pose the question: can Wales be a one-stop shop and have a single point of contact to journey through the opportunities to attract and retain investment in Wales? How we get there is a very meaty subject and I don't have any simple answers, I'm afraid. 

10:50

Definitely stronger trust-based working with the UK Government for a Welsh Government I think is very important. I think, as a union side, but this might extend further than that into levels of devolved Government, what's happened with Port Talbot has very much broken trust between different levels of government—that sense that a deal can be made that affects thousands of workers here in Wales and brokered, excluding both the voices of those workers and the Welsh Government and the local authorities that are going to have to deal with the consequences of that decision, is the opposite of any idea of subsidiarity, let alone the idea of social partnership working. So, I think rebuilding that confidence in that way of working that all levels of government are trying to seek the best interests for their citizens, let alone classing them as workers, I think is really essential at this point on this agenda.

I think, also, a vision of a just transition that goes beyond ways of working now, but with a clear sense of what the expectations are for communities that are affected by it. We're looking at the risks facing Port Talbot now, and potentially other steel communities in Wales, as potentially akin to deindustrialisation and trying to understand, 'Well, what can you do, then? What interventions can you make to mitigate that?', but at the same time having a sense of ambition for those communities that doesn't just accept that we're trying to, sort of, maybe even like level them down to Wales averages, but sustain them as high-paid areas. And I think that has to become this cross-cutting theme of any inter-governmental working, as well as the idea that you should never, ever strike a deal that will massively affect workers and not have those workers represented around the table.

So, with that in mind, how would a social partnership approach need to be developed and changed from where it is now, both in order to provide a just transition, but also to have the voices of social partners included in government at all levels?

At the moment, we don't have any dedicated space for social partnership working on this agenda. it's something we've been talking about, because the Social Partnership Council has had only its second meeting last week, but we are looking at the idea of a sub-group on a just transition for that. I think there are perhaps links with other challenges and opportunities facing the Welsh labour market that are cross-cutting areas, so artificial intelligence is perhaps a similar challenge facing the Welsh workforce. So, I think we do need some centralised social partnership approach that particularly brings together public sector leadership and private sector leadership on that, to think about how investment and business investment is playing out. 

I think, perhaps, there needs to be a different approach in terms of how information is gathered, though. There are regular calls for evidence from Government, but I think that doesn't necessarily capture a general picture of private sector investment and the direction that that's heading in. And I think what's particularly of interest to the union side can be, 'Well, how will jobs transition as a result of that? What skills do those workers need? How can we maximise the sustainability of work and the quality of that work?', and if we don't have that general sense of the direction that investment is going in, particularly private sector investment, which is very much out of—. It's not publicly supported private sector investment. Basically, we need to understand where businesses are putting their money to know how Government should be responding and how unions need to be responding. So, I think that Wales-wide survey work, rather than those call-for-evidence approaches, would be perhaps more informative and could help inform social partnership working on this agenda more.

10:55

Okay, and to think about transition specifically, are there, perhaps, international examples or examples in other sectors of how a just transition could be modelled, or best practice? Are there opportunities for the Welsh Government and the sector and the UK Government to learn from good practice?

I think any example whereby workers and employers are determining it together and negotiating that future is good practice. I'm always reluctant to say, 'Can we borrow from a particular model?', because I think that misses the point of social partnership and trade unionism, in a way, because it's not the case that you can pick from somewhere else and say, 'That will work for that particular groups of workers.' It has to work for the group of workers we're talking about, and that can only happen if their voice is around the table. So, I think it's that principle. Something that we've talked about quite a bit is the role the transition agreement should play, where there is public investment, to make sure that, if the Government is investing in a particular employer, there is also a co-signed agreement when it comes to the skills, the training offer for the workforce and the sustainability of those jobs, to make sure that public money at least is driving forward that change. But, again, it's about the model rather than a particular outcome that we've seen somewhere else that can be adopted and put in.

I'm thinking about the Scottish Government's just transition—. Sorry, did—.

Yes. Hefin, that's okay, thank you. I think good practice is really helpful. We're not in a place of maturity at the moment to be able to provide that. What I think is that looking at good practice is useful to explain and show that it can work and the benefits of working in that way. What we do tend to fall into then is, if you lift and shift that model, it becomes an add-on then, it becomes rather clunky, and it can almost be a tick-box exercise and it's not fit for purpose in the organisation. So, I'm reticent as well of picking up good practice, but good practice is there and useful to encourage the way forward. I think we need to build in stronger accountability for social partnership working. Hopefully, we will get to that stage and potentially look to perhaps have an evaluation process or an annual report of completing it jointly. But, recognition in workplaces that bargaining agreements specify negotiation on green economy matters would be very helpful for us as negotiators out in the field.

Okay. I've been spending a bit of time today just looking around the Scottish Government's Just Transition Commission website. They've set up this commission. For example, there's Richard Hardy on that body, and he's the national secretary for Scotland and Ireland at Prospect, but there are also people from the private sector, from energy companies, and the public sector on that commission. Do you think something like that would be useful to be mirrored, or do you think that there's an alternative for Wales in the approach it wants to take?

You've name checked my colleague Richard there, and he'll be very pleased that he's got his name in Wales now, being a Yorkshireman, actually. I think the potential is more limited than they have in Scotland. Scotland has many levers to assist their industrial change. They've got the reserved areas such as energy and employment law, which are different to our devolved matters. So, it's a little bit of comparing apples and pears here. In Scotland, they have a Cabinet Secretary for Well-being, Economy, Fair Work and Energy. Obviously, that brings together everything we're talking about under one portfolio and the core policy areas for planning and delivery of just transition. It does work. Richard is a strong advocate for it. All the areas that you're looking for answers for are examined by Just Transition Scotland. I think they have a good web page there. As you mentioned, Hefin, they have a really broad membership that takes in the needs across all the stakeholders to develop it for their country as an independent advisory body providing scrutiny and advice on how to deliver a just transition to low carbon in Scotland. Because it is made up of a broad representation of stakeholders' interest, I think it is a very good model that we should use, even if our scope would be more limited.

11:00

Okay. Nisreen, do you want to say anything about that?

Yes. I think we would be very keen to see something like the commission model adopted here, but it's absolutely crucial that there is clarity on what levers that commission can influence. So, I think that one outcome could be further contribution to policy work, but if that policy work is not then driving the direction of something like the Development Bank of Wales, for example, and the Development Bank of Wales continues to operate in a way where, from our point of view, we're not clear if it does take into account the quality of work outcomes, the notion of fair work, in what it does, then we're just operating within too narrow a space. It's absolutely essential that, if social partners are being brought together, that we have that full ability to influence all levers that are driving this agenda. And so I think 'yes', but with the right levers attached to it and the right purpose attached to it, because I think it's only at that level that we can start to shape this agenda in that idea of it being a just transition. But I think that it would need quite a considerable commitment to bring together all those levers.

Just one last question, Cadeirydd. We've got in Wales—I don't know if they've got anything similar in Scotland—a future generations commissioner, and I'm always surprised that more reference isn't made to the office of the future generations commissioner in this kind of area. So, I just wonder, perhaps we don't need a commission. We've already got the future generation commissioner who could bring together a group who could run this more effectively in the policy that we've already got in Wales. Do you think that's fair? Are you equally surprised that the future generations commissioner isn't mentioned more often in this area?

I hadn't thought about it before in that context, I'll be honest with you, Hefin. But, no, it's a good call that you make, and I think it is something that we should look to progress.

I think we would view that in terms of the future generations Act, and the Social Partnership Council's role in advising on the well-being objectives, as, in a way, having that role, but I think there is a challenge for unions to engage with the kind of policy depths of the future generations Act, and it's a very live one, because the social partnership duty has just come into effect in public bodies, and it's something that public sector unions are obviously having to really get to grips with now, and it is a challenge. I think that limitations in the private sector are difficult, but also, in terms of the future generations Act, there is an open-endedness to some extent, and it's refining that into very clear policy outcomes that you do need, I think, that social partnership structure to inform. We don't work with the future generations commissioner in that way, but I'm sure that's something that I think all sides would be really open to doing. 

Also, I think—this sounds a strange way to put it—it's not just a future generations challenge in a way; it's almost the current generation in five to 10 years that we're thinking about. If I think about the workforce at Tata and Llanwern, it's what's going to happen in that next decade that I think is also driving the panic, and that's where I think we look very much to the Welsh Government and the UK Government, and their responsibility there.

Diolch, Hefin. I'll now bring in Cefin Campbell. Cefin.

Diolch yn fawr iawn. I'm going to be asking my question in Welsh, so you'll need your headsets.

Rŷn ni wedi clywed tipyn yn barod am drawsnewid cyfiawn, ac mae hynny, wrth gwrs, yn mynd i effeithio ar gwmnïau a chymunedau mewn gwahanol ffordd—hynny yw, y trawsnewid yna i fod yn sero net. Felly, beth yn benodol ydych chi'n meddwl y dylai Llywodraeth Cymru ei wneud i gefnogi cwmnïau carbon uchel a'r cymunedau lle mae'r cwmnïau yna wedi eu lleoli ynddyn nhw? Rŷch chi wedi sôn am Bort Talbot, ac mae hwnna'n dod i'r meddwl, yn amlwg, ond mae yna lefydd eraill lle mae cynhyrchu dur hefyd o dan fygythiad, fel Llanwern, Trostre yn Llanelli, ac yn y blaen. Felly, beth yn benodol y gall Lywodraeth Cymru ei wneud i gefnogi'r cwmnïau carbon uchel yma i drawsnewid?

We have heard a great deal already about a just transition, and that, of course, is going to have an impact on companies and communities in different ways, in terms of that transition to net zero. So, what specifically do you think that the Welsh Government should do to support high-carbon companies, and those communities where those companies are located? You've talked about Port Talbot, and that, obviously, comes to mind, but there are other places where steel production is also under threat, such as Llanwern, Trostre in Llanelli, and so on. So, what specifically can the Welsh Government do to support those high-carbon companies to transition and transform?

11:05

Diolch. I can briefly answer. 

Esgusodwch fi—dwi ddim yn siarad Cymraeg yn dda iawn.

Excuse me—I don't speak Welsh very well. 

The Welsh Government cannot leave communities behind. We saw this in an unjust transition from the coal industry, and we can see, in areas like Ebbw Vale, they are still left behind, generations following. So, we have got to learn from the past and think about the future. We know too well the effects this has had.

Communication, I think, and engagement are the cornerstone. We need to consult and listen to these communities and not try and attempt to have any sort of one-size-fits-all. We talk about going from Port Talbot to Llanwern to others in north Wales, and each community will be different. Llanwern and Port Talbot would have, probably, better access to the M4 and transport links. So, we need to be a bit more joined up, a 360-degree approach to how we help those transition and bring in those opportunities.

As the UK, we are moving towards a low-carbon economy. We’re still yet to have—and I'm sorry I keep repeating this, but we don't have it—a coherent plan that puts workers and communities at the heart of the future policy. And whether that comes to energy in the future, which is my area, I cannot state strongly enough the urgency to have a plan that lays out the investment in skills and infrastructure for employment opportunities. Communities and industry need to know that jobs can be protected, and what new jobs will be created. So, we need to be able to identify those jobs that we are able to protect, and be honest and straight, and as soon as possible, with people, and then also about the creation of new jobs, but to have that engagement with each community to move forward.

Yes, I think that the Welsh Government needs to assess the risk of other Tata-style crises. You mentioned Trostre, Llanwern and other communities where energy-intensive industries are providing above-average paid work, which should, I think, get some additional attention from the Welsh Government so that they have the relationships with both the employers and the unions in that space to make sure that they are aware of what investment asks might be coming down the road, what those industries need to remain sustainable, and providing that investment in the communities they're based in.

I think, as we can see from what's happening now in industry in Wales, it depends at what point the Welsh Government is able to intervene and the scale of intervention they're capable of making. The Port Talbot situation has really shone a light on the scale of intervention some energy-intensive industries need and where those levers sit. So, I think the ideal position is for the Welsh Government, industry and the unions to be on the same page when they're going to the UK Government with an ask.

But then, of course, where we are seeing job loss, closures, there does need to be that approach that looks at business survival, and the sort of interventions we saw during the pandemic in terms of business survival support. That kind of thing is vital in retaining jobs and it really showed its value over that period—so, that kind of crisis funding as well as the very responsive approach the Welsh Government takes to periods of mass redundancy. ReAct funding is something that we've used multiple times to support the workforce, as well as other types of training packages and that type of thing. And I think, like with what's happening in south Wales at the moment, bringing in agencies like Public Health Wales to think about that wider impact of these sorts of issues I think is really crucial as well. So, a whole-government approach, really, to manage transition, even when the Welsh Government doesn't have any significant influence over the direction that transition is taking, is important.

You mentioned the coal-mining communities earlier on. I grew up in a coal-mining community and I experienced the devastating effect that that had on my community, because there was no just transition. It's taken years, generations, for that community to recover, and I don't think it's fully recovered even today.

But just moving on from that, there was an equal and just transition report published by Cardiff University, and it showed that there was an energy diversity gap in new and existing renewable jobs. So, again, what should the Welsh Government do to address this diversity gap in the renewable energy sector?

11:10

I haven't been able to access the reference that's been made there, but I think we should look deeper and identify the key factors that contribute to the gap. An example would be do women have the equal opportunity to access upskilling and training opportunities that can provide a pathway to renewable jobs, such as are there digital classroom opportunities to be more accessible to a range of people. We could look at opportunities to improve transport links as well, as I referenced in answer to an earlier question, about being able to access and think ahead of how they would get from one place to another. 

Some of the other areas that we would look at as a trade union are around forward looking in terms of whether somebody's going to make a conscious decision of a career going forward, but to think about what are the working conditions in that career, and can the Welsh Government put together some required standards that we want going forward. For example, perhaps in the energy sector there's some requirement to be on standby. That can lead to a long-hours culture. That might be something that wouldn't be attractive for somebody making those conscious choices. 

Many of the jobs that have shift working have unsocial hours, so they're not attracting the roles and there are barriers to work. They need to have access to a vehicle and relying on transport isn't possible. You mentioned the ReAct funding as well. If we've identified those jobs, we need to engage now with those education providers to make sure that that training is available, it's accessible and can be delivered on time.

I'm going to skip through to some of my notes, because I know the WJEC have a new course that they're starting to roll out, and I believe it's the first of its kind in the UK. If you can bear with me just one moment, I'm just going to find my reference to that course, because when I saw that I thought that was a really good staging point for people, because there are different stages to it. What we've learnt from our surveys in some of our groups is that people don't understand what green jobs are. They don't recognise what it would mean and they don't see how they could fit into that, what are the skills available. The course that I would love to be able to—

If you can't find it, Jane, then perhaps you can send it on to us. 

I've got it. It's a sustainability in action qualification that they've unveiled, and it's designed to support net-zero jobs, in which the next generation of workers at many levels can gain qualifications. So, whilst net-zero jobs is still a novel concept for some people, as I said—they don't understand it—qualifications such as these can be a lever for moving towards encouraging interest and understanding of those opportunities, and perhaps other nations then would follow us.

I think this does come down to what I've mentioned in terms of having that sense of what are the labour outcomes. At the moment, I can't see any obvious intervention that we could make as social partners around the equality, diversity and inclusion outcomes of public investment to increase the diversity, because we just don't have that influence over public spend yet. Even though that's something that we're really passionate about as a union side, we're not seeing public investment shaping labour outcomes yet in that way, and we need that to address issues of diversity, but also, like Jane's mentioned, issues that relate to the barriers to diversity—so, the nature of shift work, for example. 

I think that also is where it becomes desirable to try to take some of this work into the public sector. We can obviously have far more influence over recruitment practices if the construction work being done under this remit were being done by people directly employed by the public sector, because they have negotiated recruitment practices through the unions that organise in that sector. So, I think there are lots of benefits to try to bring as much of this type of work into the public sector as possible. 

But something I do want to touch on is this: we've talked about energy-intensive industries, you've mentioned coal mining, we've talked about steel, and they are relatively high-paid jobs, and were relatively high-paid jobs, because they were unionised sectors. Something that I am worried about is that that transition will happen in low-paid, precarious work too. They might be mass employment sites, it could be small microbusinesses. I'm thinking of sectors like food processing. And that just isn't anywhere near as prominent in this kind of agenda as it should be, because they don't have that same level of collective voice yet. And so I think that's something that I would like to see the Welsh Government paying extra attention to—so, trying to find out more about what is happening in those industries that aren't so organised. Because I think that's where we might see some extreme vulnerability of the workforce, who we already know are in a relatively more precarious state, at greater risk of things like low pay.

11:15

Diolch. Mae'r cwestiwn nesaf yn Gymraeg. Er mwyn symud tuag at mwy o swyddi gwyrdd, beth allai Llywodraeth Cymru ei wneud yn y broses honno i gwrdd â'r ymrwymiadau ar gyfer gwaith teg?

Thank you. The next question is in Welsh. In order to make that shift towards additional greener jobs, what could the Welsh Government do as part of that process to meet fair work commitments?

This is my absolute favourite subject to talk about. I think that it should be about a mixture of setting red lines—. And I think that's something that we haven't talked much about. We've had the economic contract model in Wales for quite a while, and I think that talks about that you've got a business in one place, and you want to take them a little bit further along progressive employment, and other criteria, but I think we do need some very clear red lines around ideas of if you're not allowing trade union access, for example, you absolutely should not get public funding. And that just has to be a commitment to saying, 'If a union wants to organise my workforce, I won't be a barrier to that'—it's not a burden, it's not anything hostile. I think red lines like that are crucial to then saying our stretching criteria has to go that bit further. I know there's been work to support companies to pay the real living wage, for example. But again, we'd like to see it go much further than that. So, it's thinking about the fact that we've got a statutory minimum when it comes to things like maternity, paternity, and other forms of parental leave; how do we stretch that much further, so that we've got conditions far closer to the public sector playing out in publicly invested private sector work?

I think there is also a case for, when you've got something like, say—. Something we tried to get involved in unsuccessfully was the optimised retrofit programme, for example—so, quite a big pot of funding, looking at retrofitting social housing. At the moment, we have no sense of what the job outcomes of that are like at all. We know it's construction, so there are lots of risks associated with construction, from low pay, precarity. I had a quick Google this morning; there was a company advertising that they work for local authorities, and it said, 'full-time work', but it was being paid at a day rate, so that made me very suspicious. So, we have no control, when it goes out like that, in terms of a Welsh Government pot of funding, which then goes to maybe a local authority or a housing association; it just fritters away, and you have no sense of what the job outcomes of that are.

My dream outcome is that it becomes much more like if you look at what we see in the nuclear construction industry, where we've got sector agreements. So, you've got a pot of funding, and then you've got a union-negotiated sector agreement, so you know the jobs that are going to result from that spend, you know the pay rates for those jobs, the other terms and conditions. I would want to see public spend like that, where it's a pot of investment aligned to particular negotiated employment outcomes. We are very far away from that, but that's the dream I've got for that.

No. I think you've covered this, Nisreen.

My last question is particularly to Prospect: last year, you published a report on delivering good clean energy jobs. How could the Welsh Government contribute to achieving the five goals you set out in that report?

Some of what Nisreen has just mentioned, actually, goes to some of those pillars in there. What we've already talked about is social partnership and having that engagement, and knowing what good work looks like, and there being a required standard. I'll move away from a minimum standard—that there is a required standard for that. Many of these roles will be in the private sector, but I think you have a central role to play in shaping the quantity and quality of those roles.

For several years, Prospect, and I know other unions, have been raising concerns about health and safety, pay, staffing levels and other issues, and that goes across the emerging clean energy industries as well. But in the paper you've referenced, we've looked, in those recommendations, to address those challenges. I'll stick with the energy market for a moment, and looking at the contribution to that in the skills, because the Welsh Government have a clear opportunity to improve our position in energy markets now in relation to skills. We've been engaging with industry and learning from them. We've spoken to a company called Ørsted, and they're the world leader in offshore wind. In the UK, which is their biggest market, they have 14 operational windfarms, including the world's largest. They also have, in their pipeline projects, the floating project in the Celtic sea.

If you think of an organisation like Ørsted, who've invested £14 billion so far in the UK, we should be looking to these sorts of organisations and think, 'How can we make sure that, as a nation, we've got those skills that would attract that organisation to us?' They're looking to do another £16 billion in the next five to six years, which, I think, makes it one of the largest investors in infrastructure in the UK—that's not including the supply chains in their investments. But what Ørsted are calling for, in recognising the challenges that we've identified—there are also real opportunities, and that's key—is skills programmes that are tailored to workers and local communities, so going back round to talking about local communities. Ørsted have experience of doing this, but there's only so much one company can do. It's something touched upon by a different report, which I'll share with the committee, and that's on the delivery of clean power and what's being done.

In August, we commissioned some research by More in Common on public attitudes to green jobs. Participants had a clear view of what makes good jobs, highlighting good pay, stability, decent working hours, enjoyment and a sense of purpose. And most participants were familiar with green jobs, but many had concerns that those green jobs wouldn't be accessible and would be poorly paid. These discussions reinforced our view that we must deliver these high-quality jobs, but we must do them from an opportunity of having those skills in place—and I've already mentioned some of the softer level of skills that are available. But we've got to be engaging with our education providers, and they need to be alive to the opportunities that are available to them. So, that's what I would call on the Welsh Government to do now, as a first start: to make sure that we have a workforce that's fit for the future, for these jobs that would be available, because there are huge opportunities here that we could miss out on.

11:20

Diolch yn fawr, Cadeirydd. Good morning to you both. Thanks for joining. My questions are around skills and the supply chain. One set of questions that I've raised with the Minister, and the previous Minister before, is around the auditing of what skills currently exist in the workforce and, when we're looking to transition toward a net-zero economy, what needs to be done to ensure we're forward planning and knowing how many skills we currently have, and where investment is needed in skills development, to maximise the opportunities that are available for us. So, Jane, your thoughts on that, please.

I think we've both already touched on some of our thoughts on this. There is a skills shortage. It's not just what we probably would tag as green skills, but software skills are in high demand; employers are paying a premium to recruit and retain those.

I'll switch away from the energy sector for a short while and I'll pick up on industries such as the aircraft industry, which we know is a major contributor to carbon emissions. This industry isn't going to diminish, it's not going to go away, but what we have to do is think about the fact that aircraft may change, so what will we need as a long-term focus for this type of industry. Because we do have these industries in Wales already, so how do we help them transition? Again, are we teaching what is required and fit for the future?

Talk to industry.

So, for Prospect and the TUC, is that discussion being had where we are—and I use the term auditing, but other terms are available—fully understanding where the trajectory is going in terms of workforce skills, from developers, from industry, from educational establishments as well, saying, 'Look, this is what we're seeing in terms of demand as well'? Is anybody collating that information? Is there a policy formulating, somewhere from the centre or from the periphery, of saying, 'This is where we need to go with skills development', and numbers, bare numbers? It could be, 'We need 10,000 welders', or is it more generalised, as saying, 'We need to develop those with skills in a certain area'? How does that look?

11:25

Speaking from Prospect, and I know Nisreen has already mentioned the nuclear industry as well, we have identified that sort of granular detail in those industries. Similarly to the energy industry, we've got a number of reports on what is required in our conversations and forward looking. What we don't do is we don't have that direct conversation with those education providers, but we have conversations between industry and the Government.

So, it should be up to the Government then to be able to determine, 'Look, this is where we need to be going, in terms of numbers on skills development', and then for the policy to follow subsequently from those discussions that you have with developers, et cetera?

I think it would be useful if we were all in the room at the same time having these conversations, a bit like when we talked about the Scotland model. That's something that, potentially, we're missing out on. Nisreen, I don't know whether you've got experience of this.

It's a tricky question. So, I think we're aware—. We've seen bits of work that have been done by industry bodies. Work the Construction Industry Training Board did a few years ago was very much in this nature of identifying what skills were available. But there isn't that space. As a union side, we don't meet with Industry Wales, for example, in that collective way. I think part of the challenge is, when we don't have that leverage over all that scale of public investment, there isn't the appetite to work together in the same way, because we're not shaping the outcomes of a huge pot of funding, for example. So, the budget situation is overhanging.

But I think that when we were contributing to the call for evidence that the Welsh Government did—I think it was last year—we asked these questions, and we know that, in a lot of unionised workplaces, these conversations are happening, and there is a sense of, 'This is where the jobs are going, this is where the investment's going, these are the skills that are needed.' But it's not happening in that general economy sense, from what we can gather. And it might be happening between the Government and industry bodies, but it's not happening in that social partnership way, which is very much why we want that just-transition-commission-type approach or something through the Social Partnership Council.

Some industries are probably doing this already themselves. I'm thinking of the Royal Mint in Llantrisant. I know they've partnered with the University of South Wales on things like national cyber security technical apprenticeships to be able to have that pipeline coming through, because they know what they need in the future, so they're already doing it themselves. So, there is practice there. Where do we need the Government to intervene?

That's where I'm coming at it. That Llantrisant model there seems to be private sector or a sector with higher education developing that link, and the Government is somewhat excluded from that discussion. So, is it up to those private businesses—I'm thinking of those on the Haven waterway cluster in Pembrokeshire—having a meeting with them and saying, 'Look, we need more skills. Let's not put a finite figure on it—we need 1,001—let's just focus on getting 1,000', because there will always be jobs in those spheres because of where, naturally, skills are going and where industry is going. So, where the Government sits in this discussion is where I'm trying to pinpoint this. Should they be the overarching one in saying, 'Right, we have audited the skills that are required, and it is now a centralised policy that we are rolling out'? Or is it more businesses picking up that discussion with local education providers, like the Llantrisant model?

I think also, the Government has a role to play in thinking about the finite use of the budget. We talked about ReAct, Student Finance Wales, and those sorts of things. Actually, if we are giving money out, are we targeting the right skills, going forward, and can we use those as levers to help target? But in that, it does require that conversation of what is required for the future.

Okay. Thank you. Moving on that then, in terms of reskilling and retraining, and the Wales union learning fund, supporting workers to reskill and upskill to adapt, any additional steps that could be taken to deliver further on the Wales union learning fund?

Do you want me to start on this?

There is lots of investment in general decarbonisation training through the Wales union learning fund. It's worker driven, so the topics, the subjects, the type of training they're doing, the appetite has come from workers to do that, and decarbonisation and other areas related to the just transition agenda have been something there's been a real appetite for. So, it's really encouraging. There are also pockets of work happening within workplaces that are far more advanced on that. So, not just thinking about how we transition this person's skills and role to fit where investment has gone, but how it can be maximised. So, there is an example from Swansea Council, for example, of workers learning how to repair electric vehicles. So, I think that's the kind of ideal just transition model, isn't it. It's not just a case of no worker left behind, but, actually, it's a case of a worker really benefiting from the transition. I think we would be interested in having discussions about how that type of model can be quickly scaled up, whether that's across local authorities or other transport providers. And I think, also, it would be good to have that longer term information that you're talking about, and also a sense of—and I think this is where the Government, and, perhaps, the Commission for Tertiary Education and Research should be playing a role; I know it's very much in its infancy—how one particular, more traditional skill set can be transitioned for the green economy would be really helpful to kind of guide both sides of WULF projects—so, the employer side and the union side—in the workplace.

11:30

Yes, and I'd just like to add to it, because we have a WULF project in Wales, but that's in our creative industry sector. In England, we don't have union learning funding, so Prospect have organised bespoke training sessions themselves. In the carbon-heavy industries, we know that we do have an ageing workforce, and I think that's something that we haven't mentioned here today, which we need to consider as well as future generations. But the sorts of training sessions that we've had were on the soft skills, which I think really lend themselves to the WULF.

We also organised information and question sessions in the energy sector, with RWE and EDF. What we identified is three key themes in that. People wanted to understand more about employment terms, as to what happens to their pension or pay equivalency if they moved into renewables—job security, relocation, working from home opportunities. They wanted to know about skills, transferrable skills, developing new skills and accessing training. And they also wanted to understand about the culture as well. Members wanted to know if they would be fit for a job and how ways of working differ and what happens. So, there's the soft skills side of it, which our members are telling us is required.

Okay, thank you. And just a final point, then, on the reskilling stuff. Tata has been mentioned, and this committee has done a fair amount of work around Tata following their announcement. On reskilling, there's concern around the licences only being valid on Tata property and not being transferrable between other industries, organisations or employers. And, obviously, an example is fork-lift training, which has specifically received funding from the Welsh Government. So, should the Welsh Government be putting greater caveats on funding support around skills and retraining to ensure transferability of skills?

Yes, but skills should be portable, shouldn't they. Having a training qualification or certification should be portable.

Yes, fab. Thank you. That's really helpful. Thank you, Chair. 

Diolch, Sam. I'm afraid time has beaten us, so our session has come to an end. Thank you, both, for being with us today. Your evidence will be very important to our inquiry. A copy of today's transcript will be sent to you in due course, so if there are any issues with that, then please let us know. But, once again, thank you for being with us.

Thank you. 

Diolch yn fawr. 

Diolch. We'll now take a short break to prepare for the next session. 

Gohiriwyd y cyfarfod rhwng 11:34 ac 11:46.

The meeting adjourned between 11:34 and 11:46.

11:45
5. Craffu cyffredinol ar waith Ysgrifennydd y Cabinet dros Newid Hinsawdd a Materion Gwledig
5. General Ministerial scrutiny - Cabinet Secretary for Climate Change and Rural Affairs

Croeso yn ôl i gyfarfod o Bwyllgor yr Economi, Masnach a Materion Gwledig, ac fe symudwn ni ymlaen nawr i eitem 5 ar ein hagenda. Dyma sesiwn graffu gyffredinol gyntaf y pwyllgor gydag Ysgrifennydd newydd y Cabinet dros newid hinsawdd a materion gwledig. A gaf fi felly estyn croeso cynnes iddo fe a'i swyddogion? Cyn inni symud yn syth i gwestiynau, a gaf i ofyn iddyn nhw i gyflwyno eu hunain i'r record? Ysgrifennydd y Cabinet.

Welcome back to this meeting of the Economy, Trade and Rural Affairs Committee, and we will move on now to item 5 on our agenda. This is the general scrutiny session, and the first one with the new Cabinet Secretary for Climate Change and Rural Affairs. Could I therefore welcome him and his officials? Before we move straight into questions, could I ask them to introduce themselves for the record? Cabinet Secretary.

Would you like to introduce yourselves, just for the record?

Diolch, Cadeirydd. Yes. Huw Irranca-Davies, Cabinet Secretary for Climate Change and Rural Affairs, and this large portfolio that I have that has been put together after the reshuffle. Gian Marco, if you'd like to introduce yourself.

Thank you, Cabinet Secretary. Bore da. Gian Marco Currado. I'm the rural affairs director at the Welsh Government.

Bore da. Richard Irvine, Chief Veterinary Officer for Wales.

Thank you for those introductions. Cabinet Secretary, you've been in your role now for a few months, but if there was one thing you would want to achieve in your first 12 months as the Cabinet Secretary for rural affairs, what would that be?

There's no single one thing, Chair. Unfortunately, I can't give you one thing, because the portfolio I have is so vast, and so many are of key, critical importance not just for the future of our rural economy and of farming, but also for facing those climate change and nature emergencies that we collectively face as well. I could pick more than one.

So, I think the main areas that I'm hoping to land and trying to work very hard to land are first of all the future of farming and the economy, and that is, yes, the sustainable farming scheme, without a doubt, but it's the wider landscape of that. Beyond the SFS, if you like, as well, how do we create a thriving rural economy, of which farming is an integral part, and the diversity of farming that we have in Wales?

The second aspect—and it's related to that, but this shows how it's very much a cross-cutting agenda within my new portfolio—it's how we do deal with those issues of good soil, clean rivers, good air quality, all of those aspects that actually do come together in the rural piece as well. And that means probably—if I could close on this in response to your opening statement—there is no one thing, but there is one way, and that way is actually collaborative working. It's what I've repeatedly described with no apology for as a Welsh way of doing things. We face the challenges together; we identify the opportunities together and then we bring forward the solutions to these big challenges. And I'm convinced, by the way, as well, Cadeirydd, that there are real opportunities here for the rural economy, for the rural society, and for farming, and to deal with those wider nature imperatives as well. So, not one simple answer; it's actually a basket of things that we need to move forward at pace together on.

Okay, thank you for that. I'll now bring in Cefin Campbell. Cefin.

Diolch. I suppose I should declare an interest because, in my previous role as a designated member, I worked closely with Huw's predecessor, and very briefly with Huw, on two aspects of this report, which are agricultural pollution, and I'm hoping to achieve a more targeted approach to the issue, and also the development of the sustainable farming scheme. Although we didn't always agree on what was in the sustainable farming scheme, it certainly was an opportunity for the sector to respond and, by gosh, they did respond. In terms of the agricultural pollution aspect in particular, Huw, you've agreed to a review of the regulations and you have identified specific areas, the SSC areas, as being priority areas, I guess, because that's where the river quality is poorer than in other parts of Wales. Does that suggest a more geographically targeted approach? I don't want you to commit, obviously, to what the group will propose, but is that the way that you're thinking at the moment?

11:50

I genuinely, Cefin, don't want to pre-empt what might be the outcomes of this opportunity we have for a four-yearly review, and as I've mentioned before on the floor of the Senedd, we're hoping to shortly make the appointment of the independent chair of that, who will take forward this review. It should be what I would encourage the chair to do, although not direct them, which is to make full use of this review opportunity to see what has succeeded and what has failed. Just to be clear as well, because, often, we have a slight schizophrenia about our rivers, in some respects, we are doing well, although you wouldn't always understand that from what you hear out there. So, it is worth reflecting on the fact, Chair, that, overall, 44 per cent of our rivers in Wales, in terms of ecological status, have been ranked as 'good' or 'better'. That, by the way—and this isn't a ranking table or whatever, but just of interest to the committee—compares with 14 per cent on the other side of Offa's Dyke. However, and it's a big 'however', we know the extent of pollution effects, including on some of our special areas of conservation rivers, but also wider in the landscape of Wales as well. We know that it's not only agricultural pollution, that there is house building and development pollution, there is the old Victorian, antiquated CSO infrastructure that we have, combined sewage and water overflows. All of that is part of the piece as well.

But we do know that agriculture will have to play its part in this as well. Now, you and I—thank you for recognising the fact that we had a previous, brief relationship as the designated Member and so on within the co-operation agreement. But even before that, you and I engaged on this issue, as I did with other members of this committee on the challenges ahead, and we took a visit out to parts of west Wales and we looked at where it goes badly wrong. We looked at where it goes badly wrong. When we drove down there into an area to see the despoliation of our rivers and the soil—soil that wasn't soil, it was mud. So, we know what we have to do, but we have to also work with farmers to do it.

So, this four-yearly review with an independent chair gives us a real opportunity, actually, now, to say, 'Well, what is working in areas? What is not working in others?' It's not only to do with where we put public support, it's also to do with regulatory baselines, as well, of how we look at farms, as well. It's not all to do with penalties and so on, it's also to do with working with farmers to get best practice happening out there, but it needs to be a proper portfolio of ways forward.

I don't know, Gian Marco, whether you want to touch on some of the areas that we'd be interested in taking forward, both with the SFS, but also outside of that, in order to deal with it, because it's undoubtedly the case that we have a significant issue to deal with with agricultural pollution. We cannot shy away from it, and before I bring Gian Marco in, the reason we can't is because, everywhere I go in this role, and previously, people have told me in the food and drink industry the reason we are doing so well, for example, on exports, as well as domestically, of Welsh produce is based on that this is a green and pleasant land, that our animal welfare standards are the highest and that the way that we look after the environment is the best. So, every headline that suggests that we're not doing that is to the detriment of it. Our export markets in places like the middle east and the far east are based on that, that's what people are asking us for and asking of our food supply chain, so we need to get this right. Gian Marco.

Thank you, Cabinet Secretary. Just to add, really, obviously, the purpose of the review in terms of the legislation is to look at the effectiveness of the regulation, so how well are the regulations doing in delivering those objectives that we want to deliver. I think, clearly, the chair, once appointed, will have a view as to how to take that forward. But we've started initial discussions with our stakeholder group, with the Wales land management forum, on the kinds of issues we need to look at. One of the key things, really, is how—. One of the difficulties, I think, is because the regulations have had a staggered implementation, so the different measures within the regulations have been coming into force over time. We've got the enhanced nutrient management approach that was agreed as part of the co-operation agreement that's in force at the moment in relation to the 170 kg of nitrogen per hectare limit. There is some difficulty, I think, in looking at the regulations as a whole and their effectiveness when some of the measures haven't had time to bed in, but that is what the purpose of the review is. We're hoping that that will—. You know, in the end, what that will need to do is gather the evidence and then make proposals for the Cabinet Secretary to consider as to whether any changes are needed.

Another point, just finally, to say is that I know there's been a lot of conversation around the impact of the regulations, and as part of that review, we'd want to do a revised impact assessment to make sure that we fully understand. But as the Cabinet Secretary said, there are clear objectives that the regulations need to deliver, and we'd want that review to assess how effective the current sets of regulations are in delivering those objectives.

11:55

And to be clear, Cefin, as well, any decisions that come forward as a result of that review will be based on the evidence, and part of that will include that assessment of whether the 170 kg nitrogen per hectare limit previously committed to is right, or is right overall et cetera, et cetera. So, let's let them—. But meanwhile, I have to say, we don't have to wait for that review, either; we need to get on with things. So, we have already announced previously—I know it's very recently—the £20 million of funding to support farms in taking forward measures on farm, which is very important itself, and even prior to that, we'd offered over £31 million of direct support towards on-farm infrastructure to help farmers meet the investment. And we know that that's part of it as well, because farmers will rightly challenge us and say, 'Well, how are you going to work with us to help us to make the right interventions?'

By the way, this afternoon, there are several points that I'll be raising in a meeting this afternoon—we're meeting with the agricultural banking sector. It's something that came out of the recent extreme weather summit that we held, and one of the things, amongst many issues that I'll be raising with them, is also how they can actually help the farming community in a number of ways, including the right type of investment so that the business models of farms are lined up to do the right thing in terms of agricultural pollution as well. This is not simply an enforcement, it's not simply a regulation; every player within this needs to be trying to do the right thing, including the supply chain with retailers. We've seen some great innovations now with retailers who want corporately to be seen to be doing the right thing, but I think they're genuine about it, so I'm also looking forward, in fairly short order, to meeting with the big retailers, the supply chain as well, to say, 'Right, now, what can you do, as well, to help the farming community do the right thing for the environment?' No farmer wants to do something bad for rivers. Sometimes, they end up in that situation, either through accident or because, sometimes, the business models are taking them in a direction that doesn't allow them to look at, 'Well, we need to change a lot of things in the system', and I know you and I have discussed this before. 

Diolch, Cadeirydd. Thank you, Cabinet Secretary. Just picking up a point there that you mentioned around what you called the recently announced £20 million—that was announced initially back in 2022, and then the technical advisory group around TB was also announced back in 2022, but appointments were only made at the beginning of this year. There's a long time, there's a lag time between an announcement and this Government actually delivering something within agricultural policy. And I used to enjoy my back-and-forths with your predecessor on this point, as someone who is just passionate about this, and for me it's not political, it's for the industry, it's representative of the industry and wanting the best for that. How are you building those bridges that were burnt, previously? Those protests that took place on the steps of the Senedd, Carmarthen mart, Welshpool mart—there was a breakdown in the relationship between the policy makers and those who enact the policy, the farmers themselves, the industry. How is that relationship being rebuilt?

Two things to pull out of your question, and the question is the right question, because sometimes it can certainly appear that the wheels of Government, particularly, move very slowly. Sometimes, there are good reasons. So, if you're doing, for example, issues to do with appointments of members to the TB advisory board, the programme board et cetera, there has to be a process that you go through and sometimes that takes quite a bit of time. I'm pleased that I've come in just at the time when I can say, 'Right, we can move ahead now. Is there any reason we can't move ahead? Let's go. Let's do it', and on we go. I think that sometimes there's a lesson in that in the speed of saying, 'Let's just get on with this now. Has everything been done correctly? Now, let's proceed.' And whether that's in terms of the TB advisory board, or the putting in place of funding—we've had issues, I have to say, over the squaring off of funding decisions. The challenges that we've had over the last 18 months, two years particularly, in endless reconfigurations of budget decisions, some of which we've been involved with—in what was then the co-operation agreement; partners with—in order to crunch through, 'Well, where do we make really difficult decisions?' Sometimes, the sign-off means that's been delayed on small items, because they've all been in the mix.

12:00

So, why are they announced, then, if they're not ready? If that £20 million is announced in October 2022, for me, that should be available money. That shouldn't be money and then saying, 'Yes, we've announced it, but you won't be able to access it until 18 months later in 2024, when there's a change of Minister.'

I think the hard reality of the last 18 months has been—. My predecessor in this post has had no easy time of making budgetary decisions, not just on the grand scale of the hundreds of millions of pounds within their budget, main expenditure groups and so on, but actually on the small individual ones, because they've all been in the mix. So, when this was originally announced, I think there was a genuine intention to move ahead very rapidly with it, but then it became caught up in that maelstrom of cutbacks in overall budget, lack of budget availability into Wales generally—decisions across portfolios. However, I think the—. I genuinely now pay tribute to the predecessors and the work that officials had done on this, because when I came in, I was in the fortunate position and was able to say, 'Can we now go on this? Let's do it. Let's get ahead with it.'

But you raise the other issue of what you described as burning bridges. The only way we take this forward, what I described, Cadeirydd, in my opening response to yours, is the Welsh way of doing things. There are major challenges here, right across the piece, whether it's with agricultural pollution, whether it's with SFS and so on, and I don't underestimate the challenge with that for individual farm businesses. Part of this is to do with saying, 'Can we be frank and honest and agree with each other that those are the challenges, and the right challenges?', but then can we also agree that we're going to, in transitioning to where we need to be, have to take some really interesting decisions here, challenging decisions, which will make a difference to the way that you farm, the way that you have a livelihood—not that it will make it worse, by the way, but it'll be change, and that change is always difficult. So, part of my role now is that rebuilding of confidence and trust. I signalled very early on on some of these things, and not only have I moved ahead quickly with some decisions, but also it's the question of saying not just the flippant comment of, 'We are listening', but genuinely and meaningfully engaging both with the farming unions, but being out there on farms as well. And this is not new to me, Sam, as you know.

I believe in having those farm-based conversations, because that's the way you rebuild the trust and the confidence going forward, without shying away from the challenges that we have. 

Okay. One thing—. And not to dwell on your predecessor, but in her final couple of scrutiny sessions here, we talked around the rural development programme and the delivery of that. Are you planning any sort of review of how the RDP was done? Are you looking at replacing it with anything? Or is the RDP gone with our membership of the European Union?

Well, we've certainly faced—. I talk about challenges—that's been one of the biggest ones of all. Sam, this is not a criticism of you or a party political point—it genuinely isn't—but one of my deep sadnesses from the aftermath of withdrawing from the EU is where it left us in terms of funding overall particularly. Even with all the criticisms that were there previously about rural development programmes, and the criticisms around bureaucracy, complexity and so on, and so forth, which were there to drive the accountability and so on, at least there was a programme of activity, and there was a quantum of funding that was within it. You and I will remember the promises and the pledges that were made—and I realise this is not you—by those who said, 'Don't you worry, when we come out, that'll still be there' and so on. Actually, when we came out, we are significantly worse off, and it's to the tune of £243 million. Now, there's the context—

How long is that going to be an excuse? How long? Eight years—

I understand the reality here, and there are differing arguments from His Majesty's Treasury as to the quantum of money being sent down the M4 for delivery of projects, and everything like that. You've spent two minutes there now explaining something that was discussed in 2016. We're in 2024. RDP had successes, but, under previous Welsh Government Ministers, there were some failures in it as well in terms of its delivery. Are you looking at replicating it, or are you looking at saying, 'Right, actually there is no replication of that. Our funding or our priority will be in other areas of delivery of funding'?

12:05

So, rather than seeing that as an excuse, it's a general reflection of the reality we are currently in. We've been at pains to make sure that the rural development programmes that we've put in place as a result, pressured by the budget situation that we have, have actually delivered in some significant areas. So, we've, for example, made the decision to actually continue with the basic payment scheme, unlike over the border, at the rate of £238 million, so keeping it at that level. Now, that's significant, because when we have farmers pressured with uncertainty about where we go forward generally, and the pressures of what's been done with international trade agreements, and the pressures of Ukraine, and the pressures that are inherent within farming day by day, I think that decision there to actually give certainty on that was key.

We've also, within that, said that we've made sure that the organic part of that is made available in 2024. The existing commitments that we had through the rural schemes were honoured, although we had to make reductions, some reductions, to Farming Connect and the sustainable innovation scheme. They were unavoidable and inevitable. And we protected the animal health and welfare budget. People often say to us, ‘Well, why is that important? Surely that's something that you can shave a little bit off.’ But if we compromise on biosecurity and phytosanitary issues and so on, then we expose ourselves to those risks, and our trade issues then are exposed to it as well.

So, we've actually done our very best. I'm not trying to cite where we are as an excuse. I'm trying to say where we are is a reflection of the reality. Now, we'll keep on making those arguments and, hopefully, the committee will join us in this in saying that—. We've failed to succeed in those arguments over successive years to the UK Government to say, ‘Can you just make good on that promise you did? Because we could do so much more.’ But what we have done—

HM Treasury would say that the accounting would show that the Welsh Government has received what was a manifesto commitment in 2019.

Except they haven't. And everybody in the farming community and everybody in the farming unions recognises this. We're just shy of £0.25 billion short of what we should have, and that's a lot of money in the Welsh budget. Overall we're shy, when you look at other structural funds and so on, of in excess of £1 billion. Now that's significant in Wales, but from the point of this committee it's especially significant in terms of what we can do in rural development as well.

Now, where we go forward, well, that becomes quite interesting. Because if we can—if we can—get to a situation where we know we have greater certainty going forward, not simply in terms of quantum of budget, but also in terms of the ability to move to multi-annual settlements rather than year by year, we're in a different ball game. And that's critical to us as we take forward the sustainable farming scheme as well. Because at the moment we've been able to say, going forward with the SFS, we're guaranteeing the BPS for the year ahead. We're committed to doing that so we can get into this preparatory phase. But we also need certainty going forward so that we can move ahead with a good, well-crafted, well-funded SFS scheme, and everything else we want to do as well.

Okay. Just one final point on the RDP. The previous commitment for an RDP advisory board to advise on future delivery of funding; is that still a commitment?

It is still a commitment, and I just wonder, Gian Marco, if you want to add anything to that on that commitment. But, yes, we're still committed to doing that.

Gian Marco Currado 12:08:44