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How might Brexit affect Wales?

Updated Thursday 15th February 2018

Leading experts offer a perspective on how the results of the Brexit negotiations may impact Wales following the decision to leave the European Union.

On Thursday 23 June 2016, the United Kingdom took the seismic decision to leave the European Union. In Wales, all but five voting regions were majority Leave constituencies; Gwnedd, Ceredigion, Monmouthshire, Cardiff and The Vales of Gamorgan were the anomalies.

The specific details of Brexit are likely to be finalised by March 2019 - two years after the EU’s mechanism for leaving, Article 50, was triggered by the Prime Minister, Theresa May. But until then, as negotiations continue, many questions about the aesthetics of Wales’ future relationship with the European Union, and The UK are still unanswered. The devolution of power is still a significant factor for many, and whether powers regained from Brussels will go to the National Assembly, or to Westminster. 

In an attempt to get to the bottom of some of the challenging Brexit questions, we’ve asked leading experts what leaving the EU might mean for Wales.

 

What impact will Brexit have on the Welsh economy?

Joshua Miles of the Federation of Small Businesses, Phil Fiander, director of operations at the Welsh Council for Voluntary Action and Dr Rachel Minto of Cardiff University discuss the potential implications and opportunities for Wales post-Brexit.   ​

Transcript

Mini documentary

What impact will Brexit have on the Welsh economy?

Joshua Miles, Dr Rachel Minto, Phil Fianda:

Joshua Miles A lot of our data shows that it's actually the medium and hire-skilled levels that are more important to firms in terms of EU migration. So you can see how any restrictions there could have a massive impact on the ability of those firms to attract the talent they need to create the products they want to sell abroad. And from our perspective, we'd like to see that be as easy as possible, and that's a really key concern I think for a lot of businesses. Dr Rachel Minto Now a key issue has been the freedom of movement and this has been a key issue across the UK and no less in Wales. So the freedom of movement, the principle of freedom of movement allows EU citizens to move throughout the UK for work. Now the Welsh government has been very clear that it is very important for Wales to allow at least a certain amount of freedom of movement because of the massive contributions that EU citizens make both economically and also socially within Wales. If we look a number of public services, for example, the National Health Service and also if you look at higher education, for example, the contributions of EU citizens is significant and this is something that's been highlighted by the Welsh government. Joshua Miles, I think the best outcome for everybody would be to have a properly negotiated settlement. Again it comes back to the confidence issue at the moment people don't know what's going to happen next year or the year after and that means they put off investment decisions, they put off hiring decisions, and that can be a real concern for growth. So the last thing we'd want to see is a situation where you have a cliff edge with no deal going forward. Dr Rachel Minto For Wales the single market has a particular significance which is the case for small nations because small nations are able to say: 'we can be effectively we can be a gateway to Europe'. So you can come and invest here you don't solely have access to a market of say three million or 65 million, you have access to a market of 500 million. Phil Fianda Structure funds is managed to maintain a stable level playing field as opposed to potentially in 2008 it would have perhaps dropped back further so I think the Welsh government have been very successful in lobbying it they've demonstrated they can do it they do very said that a partnership approach although they still deliver hard percentage of the funds themselves. But there is still that engagement and we're part of the PMC and everything else so I think they've been very successful over and built up since 2000. You know, they've had 17 years experience now and they are very good at it, and we have a very good working relationship as particularly a third sector has benefited because they actually understand that they can't deliver those sorts of projects. They'd like to but they know they can't so my organisation has actually spent a lot of time working with them and we've actually developed schemes and they've allowed those schemes to happen in order to get the money out to the sector. So we've had direct grant programs to third sector organisations in Wales that it's actually not turn around and say I want you to deliver X, Y & Z - MVQ's these are... you know the client groups, you engage with them, you work with them, but tell me what you do with them and what happens next to them. Whereas in England, you know there's been run by government programs most of the through sector organisations have been told you have to deliver X number of MVQ's or X number of qualifications and we have not actually had that. So it's been quite refreshing view for us and some of my colleagues in in England and Scotland have been quite jealous of the approach that we've been able to take in Wales. Joshua Miles So the fall in the value of the pound is interesting for firms because it creates opportunities for those exporters so it makes films in sectors like manufacturing more competitive potentially unable to sell products in ways they haven't before. But it does pose a challenge - as well - for importers so I was chatting to a stationary firm fairly recently who said that had to raise prices because the costs and imports have gone up quite significantly. So really is a mixed effect I think if we were trying to ascertain the overall impact you'd have to look at the sectoral mix and we know Wales is a country that in the past has had a much stronger manufacturing sector than elsewhere in the UK. However, there is a danger here in focusing on a lot of large exporters that would see a benefit for this. I think one of the problems we've had in the past is a lack of diversity in terms of exports or if we really want to make the most of that depreciation in the pound we need to think about how we get new small firms exporting and doing things perhaps they would have considered in the past. Dr Rachel Minto, So we know that the agri-food industry is particularly important within Wales, as is aviation, as is the automotive industry. So when looking at that future relationship between the UK and the European Union, the Welsh government has to be particularly attentive to the shape of the Welsh economy.

-End of opinion piece-

Will Wales have increased autonomy after Brexit?

Professor Roger Scully of the think tank, Wales Governance Centre,  discusses the potential implications and opportunities for Wales post-Brexit with Dr Jo Hunt and Dr Rachel Minto of Cardiff University. ​

Image: Cardiff Castle by Mario Sánchez Prada under Creative Commons licence CC BY-SA 2.0

Transcript

Mini documentary

Will Wales have increased autonomy after Brexit?

Roger Scully, Jo Hunt, Rachel Minto:

We haven't known devolution without being part of the European Union and we need to think what are some of the things that we've just taken for granted Brexit is the most complicated and difficult thing the UK has tried to do as a country since it fort World War II. It is going to affect all sorts of aspects of daily life and it's still I think - even now - too early to say what will be the implications of it. Brexit provides a moment of huge, potentially huge constitutional change. That if we've ever had a constitutional moment a time for proper deep thinking through about our constitution, our UK constitution and how the constituent parts fit together and what powers they should have, and how we police those powers, how we exercise the lines of responsibility between the different the different powers that might wish to legislate in a particular area. Then this is that moment. So the European Union has provided a really important platform for Wales to assert its distinctive identity as conventionally a pro-European nation. So in some respects, the situation that Wales faces is exactly the same as that in Scotland and in Northern Ireland. In that there is this suggested power grab that areas that they believed had being devolved that word evolved under Acts of Parliament, the Wales Act, the Scotland Act, the Act of Northern Irish devolution, say that these are devolved powers. But on Brexit, the UK government through the withdraw bill is saying: 'We're going to take them back and then we'll assess where they may need to go next. 'Now constitutionally there is nothing higher in our system, in the UK system than an Act of Parliament, and so if this is done through Acts of Parliament that is legitimate and constitutional. But it is seen as being problematic, politically problematic, and the Constitution is both a living legal and a political notion. And so there are some concerns that this is legally appropriate but politically constitutionally ill-advised and problematic. The Welsh government has its own distinctive priorities when it comes to Brexit and these are distinct from the priorities of the UK government. So if we go back to the position paper from January 2017 that the Welsh government launched along with Plaid Cymru we can see there they set down a softer form of Brexit, so continued participation in the Single Market, continued participation in the customs union. And these are big constitutional questions about where will power lie we know it's coming back from Brussels, the sovereignty issue about who takes decisions with such a central one in the referendum campaign, but when it comes back from Brussels to the UK where does it go then? Now if we look within the UK we have got already a form of intergovernmental machinery that allows the devolved administration's to seek to influence the UK's, the UK position. So in the context of the Article 50 negotiations, we have what is called the Joint Ministerial Committee on European Negotiations and this was set-up in October 2016 with the express aim of trying to seek a common position amongst the four nations of the UK when it comes to the negotiation of Brexit. Wales has a model of conferred powers which sets out that under the legislation the government of Wales Act the Welsh Assembly in the Welsh Government have the power to take measures to adopt laws in those areas that have been explicitly conferred upon it through the legislation. So we have set out in the government of Wales Act a range of areas saying that Wales can legislate and has responsibility in the areas of health and education, Fisheries and the environment for example. But, that doesn't stop the Westminster Parliament from also legislating, but there is a convention that they will only do so if they've got the permission of the Welsh Assembly. So Wales hasn't sought to be too noisy or too boisterous in asserting itself in Brussels, but instead, it has it has more calmly asserted those distinctive Welsh priorities. All of this is going to be complicated by the Brexit process because at the same time those areas that we thought were devolved are possibly being re-reserved under this withdrawal bill. If the Conservatives preside over a shambolic Brexit which impoverishes much of the country I think this cannot fail but to be deeply damaging to the long-term credibility of the Conservative Party. Even amongst many of those people who fundamentally think that in principle at least Brexit is a good idea. Whether or not you think that almost everyone could surely agree that if we're going to leave the European Union then Brexit ought to be delivered competently and doing that is clearly the major political challenge facing Theresa May's government at the moment.

-End of opinion piece-

 

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