:00:14. > :00:23.And, in a new series, there will be no seed for Wales and the Brexit
:00:24. > :00:27.negotiating table so how will Welsh interest to be protected in the
:00:28. > :00:29.years ahead? I will ask the First Minister for his plans for Welsh
:00:30. > :00:47.life outside the EU. Stay with us. Welcome to a new series of the Wales
:00:48. > :00:52.Report and it could not be happening at a more important time in the
:00:53. > :00:56.political life of Wales. We know that the process of leaving the
:00:57. > :01:02.European Union, backed by Welsh voters will, will start in March
:01:03. > :01:06.next year, and we also know, thanks to a blunt message from Theresa May
:01:07. > :01:12.that there will be no formal place for Wales at the Brexit negotiating
:01:13. > :01:18.table, or any of the other devolved nations. What does Carwyn Jones make
:01:19. > :01:25.of that? And you can join in using our hash tag on social media. Before
:01:26. > :01:29.we spoke to Carwyn Jones we asked a prominent Welsh economist to outline
:01:30. > :01:39.the challenges of Brexit for Wales as he sees them. Leaving the UK have
:01:40. > :01:41.enormous implications. We have 40 years worth of secondary
:01:42. > :01:47.legislation, foreign policy, commercial policy, which we are now
:01:48. > :01:55.having to overturn. We either have to recreate it or replace it. It is
:01:56. > :02:03.a big deal. One can think of for quite separate areas where it could
:02:04. > :02:10.have a first or the effect. One is resource flows to Wales. We know
:02:11. > :02:15.that the European Union in structural funds alone provides ?1.8
:02:16. > :02:20.billion over six years, ?300 million per year, 2% of the total Welsh
:02:21. > :02:26.budget. Maybe one fifth of its capital budget. Will those fun to be
:02:27. > :02:29.replaced by the British government? Big question. I don't know that I
:02:30. > :02:36.would be all that confident of it, frankly. Trade is another area, will
:02:37. > :02:42.we have free access to the single market or not? Will there be
:02:43. > :02:48.tariffs? Nontariff barriers? That is not all bad, actually, on the trade
:02:49. > :02:53.side because the biggest Welsh export market is the USA. And there
:02:54. > :02:58.are many progressive companies in Wales that are selling to the third
:02:59. > :03:02.World, Africa, and Asia. They will probably benefit because we have
:03:03. > :03:10.already seen the pound down as a result of Brexit and my view is it
:03:11. > :03:13.will go lower. When you come to foreign investment I think that it
:03:14. > :03:17.is easier to see that we have got the wind in our face. This will be
:03:18. > :03:24.able to hold. Many of the companies that we are able to attract into
:03:25. > :03:27.Wales were looking to sail into the European market. Maybe they can
:03:28. > :03:33.continue to do so. Maybe it won't be much worse. But it certainly won't
:03:34. > :03:37.be any better. And finally there is the whole issue of regulation. Many
:03:38. > :03:42.people have hopes that leaving Europe will enable us to dispense
:03:43. > :03:49.with red tape. I am afraid that I think that is a very exaggerated
:03:50. > :03:54.hope. I think Carwyn Jones has said the right things. His hand is
:03:55. > :03:58.weakened by the fact that the Welsh electorate voted to leave. If he was
:03:59. > :04:02.sitting on the Northern Ireland or the Scotland vote he could say,
:04:03. > :04:06.look, we didn't vote for this. As it is he has a bit of a problem that we
:04:07. > :04:14.are in the same bag as England, and she has to deal with that political
:04:15. > :04:19.fact. I think that there was a case for having a minister, or some
:04:20. > :04:25.senior person with full-time responsibility foreshadowing the
:04:26. > :04:28.Brexit discussions. They seem sufficiently complex and
:04:29. > :04:30.wide-ranging to me that having somebody with a political
:04:31. > :04:35.responsibility keeping an eye on it all the time, I would have thought
:04:36. > :04:39.there was a case for that. There is a major problem of coordination. The
:04:40. > :04:43.responsibilities will run across departments. I hope and that things
:04:44. > :04:47.are improving but certainly historically it has been a weakness
:04:48. > :04:51.for the Welsh Government. Ministerial responsibilities taken
:04:52. > :04:58.very seriously, but tending to be silent. That was the economist Jerry
:04:59. > :05:01.Houlton giving us his sense of the challenges ahead. The First Minister
:05:02. > :05:05.is with me, thanks for joining us, we will chat in a second but what we
:05:06. > :05:10.should do at this point is remind ourselves of what the Prime Minister
:05:11. > :05:14.has been saying in Birmingham this week, specifically in a Welsh
:05:15. > :05:19.context. I was very pleased that one of my early visits as Prime Minister
:05:20. > :05:25.in July was to Cardiff, and I sat down with the First Minister and
:05:26. > :05:29.talked with the Secretary of State about how we would involve the Welsh
:05:30. > :05:34.Government in the discussions that we have. Of course it will be the UK
:05:35. > :05:40.that is negotiating with the EU in terms of the terms of Brexit, I want
:05:41. > :05:44.to make a real success of it, but in doing our preparations I want to
:05:45. > :05:47.listen to the devolved administrations, and here the
:05:48. > :05:53.particular issues in different parts of the UK. So that they are fully
:05:54. > :05:56.engaged and will continue to be. As we go through the negotiations we
:05:57. > :06:01.need to ensure we get the right deal for Britain. That is what I want to
:06:02. > :06:04.do. But alongside that there are real opportunities for the UK as we
:06:05. > :06:08.leave the EU and we have opportunities for trade around the
:06:09. > :06:12.world, so I will be looking at developing those opportunities as
:06:13. > :06:17.well. We're going to make a real success of leaving the EU so there
:06:18. > :06:20.will be some tough negotiations, they will take time and there will
:06:21. > :06:24.not be a running commentary on the negotiations, but as we do that we
:06:25. > :06:28.will be looking at the opportunities we can have, and one of the things I
:06:29. > :06:32.have been absolutely clear about, it is my vision for the government that
:06:33. > :06:37.I lead, it would be a government that works for everyone and not just
:06:38. > :06:40.a privileged few. We need to look at the opportunities that we can see
:06:41. > :06:45.around the world. And we need to look at how we can ensure that we
:06:46. > :06:49.are providing support where it is necessary, we have already been
:06:50. > :06:53.clear in terms of agriculture that we will continue in terms of the
:06:54. > :06:58.financial support, certain financial support that farmers are getting, up
:06:59. > :07:02.until 2020, but we need to talk to them about what will then becoming
:07:03. > :07:06.ever after. It gives us an opportunity, it gives us the
:07:07. > :07:10.control, that is one of the key issues, a lotta people when they
:07:11. > :07:14.voted to leave the EU it was about not having control over their lives,
:07:15. > :07:17.and as the British government we will be the ones who are able to
:07:18. > :07:20.make decisions about how we ensure that the economy is working for
:07:21. > :07:24.everyone across the country and society is working for everyone
:07:25. > :07:27.across the country. That was the Prime Minister speaking in
:07:28. > :07:31.Birmingham just a few days ago and of course she had a big speech to
:07:32. > :07:34.deliver today at the conference, thank you for joining us, First
:07:35. > :07:38.Minister, lots of April are concerned when they realised
:07:39. > :07:44.suddenly that those negotiations are happening at the EU, on the Brexit
:07:45. > :07:50.process, there will not be a formal role for Wales. That must bother
:07:51. > :07:54.you. We had been promised engagement and consultation but what does it
:07:55. > :07:58.mean in reality? There is a template for this. When I was agricultural
:07:59. > :08:01.minister we would meet on a regular basis, with the four MAC
:08:02. > :08:04.governments, sitting down and working out respective positions
:08:05. > :08:08.when discussions took place at European level. I expect that to be
:08:09. > :08:11.put in place. It is right to say that the UK Government will carry
:08:12. > :08:14.out the negotiations, that is true, it is in the driving seat, but in
:08:15. > :08:18.all seriousness the UK Government cannot be thinking that it wants to
:08:19. > :08:21.have an agreement that is opposed by Scotland, Wales, and in Northern
:08:22. > :08:26.Ireland, where there are major issues that need to be resolved, so
:08:27. > :08:30.the wider the buy in surely the better it is. I will remind you of
:08:31. > :08:34.what you said not so long ago, if this becomes a two-way dialogue
:08:35. > :08:38.between Brussels and London it will fail. Cardiff, Edinburgh, and
:08:39. > :08:43.Belfast must also have seats at the table. At the table, for most
:08:44. > :08:55.people, would involve being in the room with people like Boris Johnson,
:08:56. > :08:58.Liam Fox, and who ever else, and that is not now going to happen, so
:08:59. > :09:00.I wonder if you think we are heading for failure in that sense? We will
:09:01. > :09:03.continue to talk to the commission ourselves. And we've been talking to
:09:04. > :09:06.Gibraltar, they have a particular about what it might mean for them.
:09:07. > :09:10.So from my perspective I'm saying that we expect to be part, not of...
:09:11. > :09:14.Not expecting to be told what is happening, but to be able to feed
:09:15. > :09:18.into what the UK position actually is, and to my mind that there should
:09:19. > :09:21.be ratification by all the parliament within the UK, the
:09:22. > :09:24.difficulty we have is the UK Government has no real idea of where
:09:25. > :09:31.it goes next, the hardline supporters of Brexit, their promises
:09:32. > :09:37.are now disappearing, and were seen blind panic. In some sections of the
:09:38. > :09:40.UK Government. It needs to get it act together and explain to the
:09:41. > :09:44.people of Britain exactly what the red line is in negotiations, and
:09:45. > :09:48.explain what it sees as the best outcome for Britain. We have not had
:09:49. > :09:51.that so far. There is no sense from any of the ministers that there
:09:52. > :09:58.should be ratification, as you call it, from the devolved parliaments,
:09:59. > :10:01.there is no sense of that, is that your understanding? Are you
:10:02. > :10:04.expecting this to be a formal ratification process? Because I
:10:05. > :10:07.don't think they are. They are already in trouble over the
:10:08. > :10:10.triggering of the article 50 process with court challenges in Northern
:10:11. > :10:14.Ireland. It makes perfect rational sense for there to be as much by in
:10:15. > :10:18.as possible. If you look at Northern Ireland for example, EU membership
:10:19. > :10:23.is an integral part of the peace process. Will they really impose a
:10:24. > :10:27.settlement in the teeth of problems in Northern Ireland? It makes no
:10:28. > :10:30.sense at all. So far so good from the UK Government, what they promise
:10:31. > :10:34.of engagement, we expected to be real, not coming back later saying,
:10:35. > :10:39.this is what we agreed for the City of London, but and manufacturing are
:10:40. > :10:43.not so important. Because there are elements of the UK Government that
:10:44. > :10:47.actually believe that. That put it another way. You make your case in
:10:48. > :10:49.terms of the consultation process that the prime and star has
:10:50. > :10:53.mentioned. You then have to have faith that those views will be taken
:10:54. > :11:00.in to the formal negotiations on Braxton, and that will be Liam
:11:01. > :11:03.Johnson and David Davis, so how can Welsh people have faith that the
:11:04. > :11:06.Welsh interest will be at heart? And secondly, what will you do if you
:11:07. > :11:11.don't dig you are getting the kind of purchase that you need? I will
:11:12. > :11:15.say so, and say to the people of Wales, we need the UK Government to
:11:16. > :11:18.insure that there is a Welsh voice. We will make common cause with the
:11:19. > :11:22.other devolved administrations where we can. It is not just about
:11:23. > :11:26.politics. There is a sense to this. If you look at farming and
:11:27. > :11:28.fisheries, they are both areas where the UK Government has effectively no
:11:29. > :11:34.role in Scotland, Wales, Northern Ireland. They cannot do all the
:11:35. > :11:38.negotiating on our behalf then present us with a fake company. We
:11:39. > :11:43.need an input. So far they have said it will happen. They have not said
:11:44. > :11:45.the door is shut to Scotland, Wales, Northern Ireland, and Gibraltar.
:11:46. > :11:49.Have had the promise of engagement and it is time to make good on that
:11:50. > :11:52.promise. But before we even get to that position and to understand
:11:53. > :12:02.exactly what their position is in terms of any negotiation. Liam Fox
:12:03. > :12:05.is saying, hey presto, at the we will unveil a load of free trade
:12:06. > :12:08.agreements. The miraculous, it has never been done in human history in
:12:09. > :12:10.that period of time. David Davis has said, it does not matter if we have
:12:11. > :12:14.tariffs, ?2 billion to the Exchequer, paid for by the consumer,
:12:15. > :12:17.Joe Public, and disastrous for manufacturing. My greatest fear is
:12:18. > :12:21.that they will focus on the City of London to get a good enough for the
:12:22. > :12:25.city at the expense of other sectors of the economy, and that, clearly,
:12:26. > :12:28.for Wales, is problematic. On the single market, because this is right
:12:29. > :12:32.at the heart of economic or it and is very important for Wales as well,
:12:33. > :12:36.is the opposition now that you can buy an outcome which is basically
:12:37. > :12:39.saying we will not be having full membership, formal membership of the
:12:40. > :12:44.single market, that we will have some kind of access to it, some
:12:45. > :12:48.negotiated access, would that you be a good outcome, or just unacceptable
:12:49. > :12:53.outcome or, what is the ideal? The red line for me is no tariffs. Any
:12:54. > :12:57.outcome that lead to tariffs is bad. It will mean of course that it makes
:12:58. > :13:03.it impossible for us to say, and this has been a fantastic success, a
:13:04. > :13:06.successful route we have taken, it will be impossible for us to say to
:13:07. > :13:09.investors, come to Wales because you have access to the European market
:13:10. > :13:13.which is bigger than America and Russia combined. If we have tariffs
:13:14. > :13:17.of the investment will go elsewhere. So tariff free access is absolutely
:13:18. > :13:21.essential, anything else has to be built on top of that. But without
:13:22. > :13:26.that, no agreement will be worth the salt.
:13:27. > :13:33.Big you think it will be worth, in terms of the concerns over freedom
:13:34. > :13:36.of movement, you think seeding membership of the single market is
:13:37. > :13:42.worth it in order to have control over freedom of movement? No, I
:13:43. > :13:48.think we should have access to this angle market. Where are you on
:13:49. > :13:54.freedom of movement? Noah has the answers to this yet, one of the
:13:55. > :13:59.areas it could be, for example, there could be as seven hyping year
:14:00. > :14:05.moratorium on freedom of movement as it currently stands, in order to get
:14:06. > :14:10.other countries time to catch up. That's one possibility. While we
:14:11. > :14:14.reckon as we do need to move back in for, is it possible to have freedom
:14:15. > :14:19.of workers rather than freedom of people? So if there is a job in the
:14:20. > :14:24.UK, they can move freely. These are all things that can be explored. At
:14:25. > :14:27.the heart of this is that people had no control over their lives, and
:14:28. > :14:33.people were taking jobs that may be made available to them. That issue
:14:34. > :14:38.has to be addressed, whether it's correct or not. It is important we
:14:39. > :14:42.say to people, people are coming here to pay taxes and patented the
:14:43. > :14:49.health service, they're not taking jobs that could be done by local
:14:50. > :14:55.people. To what extent have you been successful telling people that there
:14:56. > :15:00.is, clearly, an advantage to being open to workers from other parts of
:15:01. > :15:05.the EU and the world, that that is very important aspect of of
:15:06. > :15:12.movement, is that a aspect you are moving away from? I made it
:15:13. > :15:16.absolutely clear that there is no country in the developed world that
:15:17. > :15:20.doesn't draw doctors from other countries. It's world market. The
:15:21. > :15:27.idea you can only have UK doctors is nonsensical. The Government in
:15:28. > :15:31.London is talking about cell sufficiency? It's crazy, it can't
:15:32. > :15:36.happen. It takes at least ten years to train someone to the level of
:15:37. > :15:40.consultant. I want the best doctors working in the health service, I
:15:41. > :15:45.don't care where they're from. I want the best with people of Wales.
:15:46. > :15:50.The message that the Government in England is giving is that you can
:15:51. > :15:55.come and work for us, but when we have had enough of you, we will chug
:15:56. > :16:00.you out. That is a great way of attracting the best brains. They are
:16:01. > :16:07.now proposing a list of foreign workers. That is the most sinister
:16:08. > :16:14.thing I have heard. She said it was possibly a knowledge, not formal
:16:15. > :16:22.policy. In other words, I said it, and that I regret saying it. This
:16:23. > :16:28.list, is this the 1930s? It is a crazy situation. As public sector
:16:29. > :16:33.employers in Wales, we will not be doing that. You will not be doing
:16:34. > :16:35.that, but you're still acknowledging that there are concerns around
:16:36. > :16:41.freedom of movement which bed into the result in Wales over the
:16:42. > :16:47.referendum. There are two messages here just as you are concerned over
:16:48. > :16:50.uncontrolled freedom of movement? I'm not concerned over freedom of
:16:51. > :16:55.movement of doctors and nurses. In fact, I wanted the best people
:16:56. > :17:00.coming from abroad into Wales. There are plenty of firms in Wales? They
:17:01. > :17:06.will bring their own people in, that is crucial. We are saying to
:17:07. > :17:11.companies you can't employ anyone outside the UK? So what is the
:17:12. > :17:18.freedom of movement that you do want to control? It is the low-pay that
:17:19. > :17:23.is the issue. People who are in jobs where they feel they are badly paid
:17:24. > :17:28.and had no security of employment, no pension at the end of it. They
:17:29. > :17:32.are under pressure of their incomes due to the fact that the businesses
:17:33. > :17:37.can employ other people in the areas where they work, that has brought
:17:38. > :17:44.pressures on wages. I have heard that and it is true in the terms of
:17:45. > :17:49.the low paid, it is not true on the other end of the spectrum. What
:17:50. > :17:54.would be your message to those ministers in London on freedom of
:17:55. > :17:57.movement? The last thing we want is to restrict doctors and nurses
:17:58. > :18:02.coming into the UK, we've always relied on them and training doesn't
:18:03. > :18:06.work in itself. You can train doctors, but they may go to other
:18:07. > :18:13.countries. What about foreign students? We want them here, white?
:18:14. > :18:19.They pay higher tuition fees then well students do. If they do not
:18:20. > :18:26.come here, tuition fees will come up for home students. Warren students
:18:27. > :18:31.subsidise the education of UK students, that's the reality. We
:18:32. > :18:34.want to bring the best brains into Wales and into Britain, because
:18:35. > :18:37.other people who were pure people in the future and set up businesses in
:18:38. > :18:45.the future if they choose to stay in Britain. Working with the people we
:18:46. > :18:52.already have here. The Home Secretary has spoken about people
:18:53. > :18:55.with lower-quality altercations, in Wales, that would mean distinction
:18:56. > :19:01.between our universities, is that healthy? No. We need to make sure
:19:02. > :19:09.that the courses offered sufficient standard. Is that the case in Wales?
:19:10. > :19:15.We have very good universities in Wales. Across-the-board? Foreign
:19:16. > :19:18.students coming to Wales, and there are advantages there. If you look at
:19:19. > :19:23.it purely financially, they pay more. If you look at what they can
:19:24. > :19:28.contribute, they bring in their own knowledge. Also, if the come to
:19:29. > :19:32.Wales and study and return to their home countries, they're ambassadors
:19:33. > :19:35.for Wales. I've met people all around the world he came to
:19:36. > :19:39.university here, have a great memory of that, and positions where they
:19:40. > :19:45.can take decisions about jobs in different parts of the world. If we
:19:46. > :19:51.cut ourselves off from that, and cut ourselves off from so much in terms
:19:52. > :19:56.of being sale the macro able to sell Wales around the world. We had the
:19:57. > :19:59.chance at this work document turbulence, a roller-coaster right,
:20:00. > :20:05.the Autumn Statement coming up could be a bigger squeeze possibly on
:20:06. > :20:10.public steam the macro spending. What is your strategy around
:20:11. > :20:15.spending? We have to see what the Autumn Statement actually says. I
:20:16. > :20:19.welcome moving away from this scripture is of austerity, if I can
:20:20. > :20:28.put it that way. The Robbie decisions we have to take. --
:20:29. > :20:32.strictures of austerity. We had five years between 2011 and 2016 where
:20:33. > :20:37.there was no products that we broke. It was not easy to do that. -- no
:20:38. > :20:44.promise that we broke. We want, at all costs, to avoid the temptation
:20:45. > :20:47.that afflict all politicians to make promises we couldn't keep. In our
:20:48. > :20:51.manifesto, we made sure we could keep our promises, it even bearing
:20:52. > :20:59.in mind the squeeze coming down the line from Whitehall. The IFS by
:21:00. > :21:07.saying there could be a real terms reduction of several% of the funding
:21:08. > :21:12.that comes to the Welsh Government. What are going to be your spending
:21:13. > :21:17.parties? What we can't do is salami slice, that is not strategic or make
:21:18. > :21:20.sense. What we have to do is look carefully at our budget and take
:21:21. > :21:27.strategic decisions on what we want to fund. Simply cutting bits here
:21:28. > :21:31.and there is not going to work. It doesn't make sense in terms of what
:21:32. > :21:38.we're trying to do to make Wales a better place. The Prime Minister's
:21:39. > :21:43.case today is that health spending in Wales has compared unfavourably
:21:44. > :21:48.compare to England and has performed unfavourably compare to England,
:21:49. > :21:56.that is their experience, what is your thoughts? First law, it is not
:21:57. > :22:02.even true. We spend more on health in Wales and England does per head.
:22:03. > :22:06.That is a fact. We know that when the different health services in the
:22:07. > :22:11.UK were like that, there were no substantial differences. Whenever
:22:12. > :22:19.anybody wants to criticise Government elsewhere it is a sure
:22:20. > :22:24.sign they are in trouble. This cannot be solved by deporting
:22:25. > :22:29.doctors. They are now saying to doctors who work in Britain, you can
:22:30. > :22:35.stay here for a while, then we will chuck you out. That is effectively
:22:36. > :22:40.what they were saying. I've following to the same trap, because
:22:41. > :22:44.I've accused them of something. From our perspective, we are happy with
:22:45. > :22:49.the health service and the money we have put into it. We know it
:22:50. > :22:55.delivers for the vast majority of people, day in, day out. It is a
:22:56. > :23:01.question of focusing on those errors. Are you happy with the
:23:02. > :23:04.current Labour leadership, another Jeremy Corbyn's been re-elected and
:23:05. > :23:10.people are retractable behind, you also pulling behind him? Yes, it is
:23:11. > :23:14.vitally important the party in Westminster actors opposition. Is
:23:15. > :23:24.not doing that now? Adam Taggart has been. -- I don't think it has been.
:23:25. > :23:32.People in the party have different views, but those views are expressed
:23:33. > :23:36.in a friendly way. We came through the last election with 29 seats,
:23:37. > :23:40.though we were told we would have far fewer than that. We won every
:23:41. > :23:49.seat in a labour force as Tory straight fight. The objective
:23:50. > :23:53.politics is not to transform a political party, it is to deliver
:23:54. > :23:58.for the people who voted for you. The people voted Labour want to note
:23:59. > :24:02.the Labour Party in Westminster will stand up for justice and
:24:03. > :24:06.opportunity. We haven't done that. We haven't done that up to now, so
:24:07. > :24:12.it is important we unite as a party and start to be an effective
:24:13. > :24:19.opposition. When you choose one to represent Wales on the executive
:24:20. > :24:22.committee, you chose Alan Davies. Hidden the past he has been on
:24:23. > :24:28.record as not being impressed with Jeremy Corbyn. Where did you do
:24:29. > :24:35.that? Firstly, the gravitas to do the job. He has availability for the
:24:36. > :24:42.time in the NEC meets, so I know he will be able to do the job. I am
:24:43. > :24:50.told that Jeremy Corbyn felt he was not the ideal choice because it was
:24:51. > :24:56.not I ideological eat sympathetic to what the leadership is trying to
:24:57. > :25:01.achieve? In my judgment, ie had to pick who would speak for Welsh
:25:02. > :25:09.Labour. Per semester, thank you very much. That's all we have time for,
:25:10. > :25:18.don't forget if you want to e-mail us, the address is... From now, from
:25:19. > :25:26.the Senedd in Cardiff Bay, thanks for watching.