Welsh Assembly statement on Airbus - June 26

As the First Minister said last week, this warning is of very serious concern to the Welsh economy. Companies such as Airbus are now actively making plans based on the worst-case scenario. What businesses have been saying in private for some time is now being said publicly, and it is clear that they are losing faith in the UK Government’s ability to negotiate a sensible outcome that works for our economy and that protects jobs. My message to the UK Government is a very simple and very clear one: the situation is now critical and it is time for them to recognise the fundamental threat their approach to Brexit poses for Wales, for our economy and for our communities. It is time to rule out a 'no deal' scenario and relaunch the negotiations on a basis that puts jobs and the economy first.

We share the significant concerns expressed by the chief operating officer of Airbus commercial aircraft, Tom Williams, last week. Airbus Group is the largest employer in Wales in the aerospace and defence sector with around 6,500 individuals employed at its site in Broughton and a further 500 or so in Newport. Across the UK, over 100,000 jobs rely on the Airbus presence on these shores. Since the referendum in 2016, the Welsh Government has been very clear that in leaving the European Union, the UK cannot take the huge risk of cutting our economy adrift from the single market and customs union arrangements. We have made the case, clearly and consistently, that any deal to leave the EU must see us stay in the single market and negotiate a new customs union with the EU.

This warning by Airbus, alongside others given by manufacturers such as BMW, make real the threat we face. Indeed, the concerns expressed by Airbus are certainly not confined to the aerospace industry. Just today, the Society of Motor Manufacturers and Traders, which is the voice of the automotive industry in the UK, has given the UK Government the starkest warning yet from a business sector, saying that it needs, as a minimum, to remain in the customs union and a deal that delivers single-market benefits. Their chief executive, Michael Hawes, has sent the simple but clear warning to the UK Government:

'There is no Brexit dividend for our industry'.

The stakes could not be higher. It is clear that the time for warm words and for meaningless platitudes is over. Clarity is now urgently required from the UK Government. The detail the UK Government needs to come forward with needs to address the three key issues raised in the Airbus risk assessment: the movement of parts within an integrated supply chain, the movement of people, and future regulatory environment. The possible disruption to the flow of materials caused by changes to the customs union and single market could have a negative impact running into many billions of pounds, leading to irrecoverable delays and many of our businesses in Wales losing their competitive edge. Restriction of the movement of people would cause major disruption to Airbus operations, with 1,300 Airbus-employed UK nationals working in EU members states—the majority being in France and Germany—and 600 Airbus-employed EU nationals working at Airbus operations in the UK. The third key issue relates to regulations and the European Aviation Safety Agency in particular. Without EASA approval, UK aerospace suppliers will no longer be part of the aircraft manufacturing supply chain. And supply chains cannot simply be switched on and off againlike a light switch. They take years to build, and businesses have a right to expect more certainty from the UK Government two years on from the referendum.

The First Minister has pressed again for the UK Government’s White Paper to signal a change of direction to commit to staying inside the single market and a customs union with the EU. We all recognise the importance of the aerospace and defence sector to the Welsh economy. The sector in Wales adds £5 billion to our gross value added and employs over 20,000 people. We will continue to support Airbus at Broughton and Newport to mitigate the impact of the approach being taken by the UK Government. We've already shown our support for the sector through our financing of the Advanced Manufacturing Research Institute at Deeside, worth £20 million, in order to secure the prototypes of Airbus’s wing of tomorrow.

We urge the UK Government to respond and to provide clarity as soon as possible, and before this situation escalates even further. Prolonged uncertainty would do irrevocable damage to our manufacturing base in Wales and its extensive supply chain—employment that in Broughton, and across Wales, is the lifeblood of many communities. This is the most serious economic threat facing Wales in a generation. Airbus is a jewel in the crown of the Welsh economy, but it is also strategically vital to the United Kingdom. It's time for the Brexit parlour games to end. It's time for the UK Government to give business and our economy the certainty that it needs.

I think it is clearly concerning when any major employer issues a warning that they may withdraw from Wales. It's also important that we all aim to ensure that this, of course, doesn't occur. The Cabinet Secretary has made various comments in his statement, and I would say that I think the UK Government on countless occasions has restated its commitment to getting the best possible deal for the UK and the Welsh economy. And I firmly believe that we will remain plugged into the wider European economy, but also be able to seize on those opportunities for trade with the rest of the world.

In order to provide reassurance, Cabinet Secretary, to Airbus workers, and the wider supply chain, would you, Cabinet Secretary, be able to provide an update on the outcome from the First Minister's talks with UK Ministers in a recent meeting of the British-Irish Council? I think that would be helpful. Clarity over Brexit is clearly important for businesses in planning for the future—I for one completely understand that—but there are clearly devolved levers here at the Welsh Government's disposal to encourage inward investment and retain major employers here in Wales. So, can I turn to this? What specific measures are you implementing to create the right economic conditions to ensure that companies such as Airbus remain in Wales? For example, regardless of Brexit, I do have concerns that Wales has failed to capture the opportunities of world growth over the past 20 years, and has failed to diversify into the export market. What intention do you have, Cabinet Secretary, to ensure that Wales seizes on those opportunities to access non-EU markets, and what are you doing to raise the commercial presence of both advanced and developing economies in particular? 

I've looked again at the Welsh Government's 'Prosperity for All' action plan and I can't see any mention of the Welsh Government's plans to attract and retain foreign direct investment into Wales. So, I would be grateful if you could outline the Welsh Government's approach to this. You've also previously mentioned, Cabinet Secretary, that the Welsh Government will focus on the high-value manufacturing sector as one of its new priority sectors. So, can I ask: why does the Welsh Government's budget fail to allocate additional funding to this sector, and doesn't this undermine, of course, the Welsh Government's commitment to ensuring that the Welsh economy develops an advanced manufacturing capacity to deter companies like Airbus from investing in Wales? My point here, Deputy Presiding Officer, is that, beyond Brexit, which I acknowledge we need to get absolutely right, of course, there are devolved levers here at the Welsh Government's disposal, which can and should be used to ensure that companies such as Airbus are encouraged to remain and indeed expand their operations here in Wales.

Can I thank Russell George for his contribution and his questions? I'll say at the outset that I know that there are also good Conservatives in Westminster as well, who, like the Member, share concerns for the future of Airbus. I think, based on the comments that both Stephen Crabb and Guto Bebb have made recently, we do have Conservative parliamentarians who are there to champion Airbus. And although it wasn't featured on Radio 4 when I gave the interview, I did press the case for Stephen Crabb to be brought back into Government and Boris Johnson to be evacuated from the building. 

In order to get the best possible deal for Britain, what Theresa May first of all has to do is drop her red lines and free herself from the handcuffs that people like Boris Johnson and Jacob Rees-Mogg have applied to her. The First Minister, I believe, has issued a statement following discussions that were had during the British-Irish Council, but I will happily ensure that that statement is shared with Members again. The discussions that took place, I believe, in Guernsey covered the announcement by Airbus and the response from the First Minister, and also the joint statement from the First Ministers of Wales and Scotland.

Parking Brexit for one moment, the Member is absolutely right that the Welsh Government can and must have a role in ensuring that the right conditions are created for sustainable economic growth, not just within the aerospace sector, but in other sectors right across the economy as well. For our part, I was determined some time ago—and it was for this reason we built it into the Welsh Labour manifesto some years ago—to ensure that we captured the wing of the tomorrow. This is the future of Airbus composite manufacturing processes. If we don't get the wing of tomorrow, it's going to be far more difficult to ensure that the Broughton site has a long-term, viable future.

In order to capture the prototype of wing of the future, we decided to invest in the Advanced Manufacturing Research Institute. This is based on the well-proven model of the Advanced Manufacturing Research Centre just near Sheffield. It was a proposal that was also promoted by Plaid Cymru Members, including Steffan Lewis. Just a few months ago, I cut the ground on the AMRI. This is a crucial facility that will enable the prototypes of the wing of tomorrow to be developed in Wales. Okay, it may only have been £20 million, which, compared to investments that Airbus makes very regularly, may be a small sum, however, our contribution of £20 million will lead to an increase in GVA for the area of something in the region of £4 billion over the next 20 years. And if we get the right deal from Brexit negotiations, it will also secure employment for 6,500 people for many years to come.

Now, in addition to developing the AMRI, what we are also doing is making sure that the supply chain remains strong. It's quite a striking fact that the aerospace and defence sector in Wales employs 20,000 people across over 150 companies. We are incredibly strong in this sector, and that's part of the reason why we are so vulnerable and exposed in terms of Brexit. Six of the top 10 aerospace and defence companies worldwide have located significant operations in Wales. Airbus have two sites, General Dynamics have two sites, GE Aviation, Raytheon, BAE Systems—[Interruption.] No, the Member, from a sedentary position, says 'in spite of Brexit'. No, these are companies that have been based here for a good length of time and who share the concerns that Airbus have expressed recently, but which Airbus has been telling Members such as himself. If he would only get up to Broughton to talk with managers there. If he would only get over to Newport to talk with managers there. If he would only get over to General Dynamics, to GE Aviation, to Raytheon, to BAE Systems, to Safran who’ve acquired Zodiac. If he’d only get to companies like Qioptiq, like British Airways, the Defence Electronics and Components Agency, Babcock, Triumph. All of these companies have been consistent in the message that they have given to us in Welsh Government and to UK Government—that a 'no deal' scenario will hammer the defence and aerospace sector. In order to keep jobs in Wales, in Britain, we need a decent deal. To get a decent deal, Theresa May has to drop her red lines.

In terms of the wider economic conditions that can be created to support growth, the economic action plan clearly articulates a need to invest more in export and trade. As we exit the EU, we need to make sure that we rebalance the export profile of the Welsh economy. But we also need to make sure that we are exporting in the aggregate far more, that we are trading far more, and that's why we are opening more offices and we're having a greater degree of a presence in key territories around the world. We've opened offices recently in places like Montreal, and we'll be opening in other territories that are crucial to the future of the Welsh economy.

The economic action plan as well is clear in creating a lens through which we will support businesses that is designed to reduce the productivity gap between the Welsh economy and the economy of the rest of Europe. So, we will only invest in projects that can demonstrate that they are contributing to decarbonisation or improving trade and exporting figures, or ensuring that we embrace the fourth industrial revolution, that we are at the forefront of new technological change, or that ensure that we are creating high-quality employment. For that reason, because we are developing a consolidated fund, we expect to be able to allocate more resource in the future to those businesses that create jobs that are sustainable, that require higher skills, that are more productive, that contribute more to the Welsh economy and that offer opportunities for fair work and progression, to ensure that anybody that gets into the workplace can have an escalator of opportunity to get as high as they can possibly get.

We all remember, I'm sure, back in 1980, when Deeside saw the worst mass redundancy of modern times when Shotton steelworks axed more than 6,500 workers in a single day. Of course, it took the area a generation to overcome that. In fact, I'm sure the effects are still being felt. But it has re-established itself—the area—as an industrial powerhouse in the north-east of Wales, but, of course, last week's intervention has cast another shadow that is causing huge concern in terms of the jobs, in terms of the impact on the wider economy and in terms of the wider supply chain, certainly. And were Airbus to abandon its operations in Broughton, then I fear that the effects wouldn't be as bad, they would probably be worse than those experienced back in 1980.

So, this is a real Brexit wake-up call for people in all parts of the UK. This is the reality check that many of us have been warning about for a long, long time, and it leaves highly skilled and well-paid workers facing huge uncertainty. It won't happen overnight. Whatever the circumstances, it'll take years, if this is to happen, for investment to disappear, but it certainly casts a shadow over those hard-working, dedicated and loyal workers at Airbus, the youngsters who are currently there, studying their apprenticeships, and the thousands of workers, as I said earlier, in the wider supply chain who fear the impact Brexit will have on their jobs. 

I'd just like to refer to a press article that I saw in The Leader where Shaun Hingston, a 15-year-old youth council representative from Saltney—you've seen it; I'm glad. He raises some real, pertinent points about how Airbus leaving the UK would be devastating for young people in Wales, and he really reflects the angst felt by the younger generation, who, of course, will be the generation that will live longest with the legacy or the consequences of Brexit, and he says that

'The moving or closure of Airbus in the UK would result in huge job losses, that would start a negative multiplier effect, businesses in the local area would relocate or close.'

By moving, of course, that would mean that people don't have the opportunity to go on work experience at Airbus or to complete apprentice programmes—the programmes that hundreds of young people across the area are doing and want to do, and are aspiring to do because they see Airbus as one of their dream jobs. 

Now, Shaun clearly understands the effects of the chaotic Brexit policies currently being pursued by this UK Government, even more so, I venture to say, than some UK Government Ministers. And that's the underlying issue here, I think, isn't it, that the current Brexit policy being pursued by the UK Government to leave the EU single market and the customs union—? I recognise, as you referred to, I think, earlier, that the Welsh Government's position on Brexit is to maintain membership of both. It was certainly detailed in the White Paper, 'Securing Wales's Future', that was co-authored with my party, but I have to say that the actions by the UK Labour Party have contradicted that. I'm just wondering whether the Cabinet Secretary shares some of my frustration at how ineffective Labour MPs have been in stopping this prospect of a hard Brexit.

We've seen the banners at Labour Live, we heard the chants and the singing at the rally at the weekend. Does he not feel a smidgen of regret that Labour opposition at Westminster is failing to change this trajectory that is leading us down this horrible path? And does he not wish that things were being done differently by his own party, whilst not letting the Conservatives off the hook? Because if that trajectory isn't successfully changed, then I fear, as many other people have said before me, that this Airbus example is just the tip of the iceberg. 

Usually, when I respond to a statement, my first questions is, 'What's the Government going to do about this?' But, of course, the scale of this prospect is so huge, it's so unprecedented in the devolved era, that it's quite a difficult question to ask, let alone answer. But I would like to know, and following on from the questions asked previously, what scenario planning the Government has done. Have you plotted out what the impact of a hard Brexit would be and what action you would consider to try, as much as you can, to mitigate those impacts? 

You mentioned your economic action plan, 'Prosperity for All', are you revisiting that in any way in the light of this? Because the thrust of it, and it's one that many of us support, is that we need to grow more well-paid and highly skilled jobs here in Wales. But, of course, this will require a rearguard action, because we're moving in the wrong direction. It will be about consolidation, as best we can, let alone growth in that particular respect. 

Airbus, of course, has its risk assessment, as we've all read. Where is the Government's risk assessment? Have you done some of that work? Maybe you could let us know. 

And, of course, the impact that this will have on further education and higher education is significant. Both the Cabinet Secretary and myself were at a meeting of the cross-party group from north Wales, last week, where we were left in no uncertain terms about the impact on important institutions in north-east Wales, such as Coleg Cambria. It would be significant, and I'm wondering what discussions the Cabinet Secretary has had with his Cabinet colleagues about maybe how some of those impacts could be mitigated and managed if they were to be realised. 

Are you winding up, please? 

I am, I am, yes.

The NHS was supposed to enjoy a £350 million a week Brexit dividend. Of course, the Centre for European Reform has told us now that the true cost is already £440 million a week, and that's a Brexit deficit, and this is before Airbus, BMW and the others potentially up sticks. Now, I didn't see that on the side of the Brexit bus that was driven around this country. But does the Cabinet Secretary, therefore, sense that with the reality of a hard Brexit now dawning on people, and what the real impact of that hard Brexit would be on people's jobs and people's wages, that there actually is now a shift in public opinion, and that if the referendum was held today, the result actually would be quite different?  

Can I thank the Member for his questions and his contribution as a whole? It's a tragic fact that Shotton still holds the European record for the most lost jobs in a single day in modern industrial history across Europe. I was in receipt recently of a 1963 black-and-white photo of that year's intake of apprentices. It featured my dad, that's why it was sent to me, and upon scrutinising this photo, it became quite clear that most of the people in that photo were not in work at that site within 20 years of the photo being taken. I do wonder how many people at Airbus today will have work at that site in two decades in the event of a 'no deal' scenario.

I think it's also tragic that Shaun, a 15-year-old, can articulate far better and with greater maturity the threats and challenge we face than Jeremy Hunt is able to do, in terms of what could happen to Airbus and the aerospace industry. Airbus are not fearmongering. Airbus are stating the facts. Airbus are doing what a responsible business should do, which is to share candidly, frankly, openly and honestly with a Government the likely outcome of a bad deal being reached or, even worse, a 'no deal' scenario, and Airbus are not alone in expressing these concerns.

Today we heard that companies representing something in the region of 850,000 people across the UK share those very real concerns. Although Airbus is clearly the biggest private sector employer in north-east Wales, and certainly the biggest employer in Wales in terms of aerospace and defence, within that small part of Wales there is a strong cluster of businesses in the aerospace and defence sector. There's Airbus of course; there's Magellan; there's Qioptiq; DECA; Raytheon—businesses that employ people who are incredibly, incredibly well-skilled, and paid good salaries, people who are really loyal, people who contribute hugely to the local economy and to the Welsh economy as a whole.

I think, as we look to the future, we need to just reflect on the very clear and consistent approach that the Welsh Labour Government has taken since the referendum, and it's an approach that, on occasions, has been adopted—perhaps stolen—by UK Government, certainly in terms of the free and unfettered access to the single market. It is something that, at times, the UK Government tried to replicate, in terms of hyperbole. Sadly, the red lines that have been drawn out by the Prime Minister would not allow that to happen in reality, based on the discussions that have taken place, but I do think that Keir Starmer has done a fantastic job in holding the UK Government to account, and continues to do an outstanding job in holding UK Government Ministers to account.

In terms of what we're doing, we've looked at the impact of various scenarios on the Welsh economy, sector by sector, and what is quite clear is that if there is no deal, we cannot possibly mitigate against all of the consequences; this is just too grave a situation. The economy would shrink by more than 10 per cent in all likelihood, but the EAP, the economic action plan, has been designed as such to allow for automatic stabilisers to be deployed, rather than for the strategy to be shelved and a new strategy to be adopted for panic circumstances. The economic action plan is designed to be robust in any environment, but clearly, depending on the type of deal—and whether there is a deal at all—that emerges in the coming months, support for businesses will be focused on those areas that can weather the storm that is to come. But I don't think that we should believe that we can endure a 'no deal' scenario without the loss of significant jobs in the Welsh economy.

I regularly speak, not just with my colleagues in the department for education, but I also speak with leaders in higher and further education and, again, their concerns are very real, and very grave indeed.

I think it's fair to say that any deal that is reached should be agreed by the Parliaments of the UK. Should Parliaments decide that a deal is not sufficient and reject it, then in all likelihood, a general election could be called, and it may well be the case that another vote would have to take place. We shouldn't rule out the likelihood of people turning on the decision that was made, given the very real threat that so many people now face in terms of their livelihoods.

Well, it's hard to stifle a yawn at the latest example of fake news from project fear: the latest in an interminable line of such prognostications over the last three years. This is a political statement, more than anything else, in the propaganda war by the remainer establishment that—as the Cabinet Secretary just let the cat out of the bag in his final words—refuses to accept the referendum result of two years ago, where 17.5 million people voted to leave the EU.

He knows as well as I do that most aircraft components would be tariff-free under WTO rules, and even in the few cases where they would be subject to tariffs, those tariffs would be very, very low—certainly less than 5 per cent. But of course we all want a free trade deal with the EU—it makes common sense on both sides—but the obstacle to this deal isn't Theresa May; it's Michel Barnier and the EU Commission, because they put the political interests of the unelected European federalist establishment ahead of the economic well-being of the people of Europe. A free trade deal is clearly in the interests of EU citizens, because last year they sold to us £192 billion more in goods than we sold to them. So, if they had to face reciprocal tariffs to compensate for the ones that would be imposed upon us as a result of a Brexit 'no deal', then there would be massive convulsions in the EU as well.

To take up one point that the Cabinet Secretary mentioned in his remarks a moment ago about the Society of Motor Manufacturers and Traders joining Airbus as prophets of doom, 14 per cent of every single vehicle produced in Germany is exported to the United Kingdom. If they had to face a 10 per cent tax upon imports to this country as a result of doing the same to us exporting to the EU, that would be massively against the interests of German motor manufacturers.

So, I hope that these individuals are putting as much pressure upon Monsieur Barnier to agree a free trade deal as their counterparts in this country are doing to the United Kingdom Government to give in to every demand of the EU establishment. I'd like to know, for example, if Airbus bigwigs have written to Monsieur Barnier to complain about his point-blank refusal to discuss a sensible free trade deal, as agreed recently with Canada, and a few years ago with South Korea. Why shouldn't we have a deal of that kind? What is the political objection to that?

That a company like Airbus should act as an accomplice of a hostile foreign power seeking to undermine British interests, I think, is disgraceful, but I wonder whether this might be in some way connected to the $18 billion-worth of illegal state aid that they've received from European Governments in recent years, as recently adjudicated only a month ago by the World Trade Organization. As a result of that, the US trade representative has said this paves the way for the United States to impose retaliatory tariffs upon EU goods. This is not the way to go if we're to have sensible policy making in Europe, and I hope that the Welsh Government will agree with me in that respect.

But this statement today, of course, is really an illusory one because there is no prospect whatsoever of Airbus closing down its entire operations in this country. Where otherwise would the wings for the plane be made? It isn't so easy just to close down and transfer to other parts of Europe or the world. Let's look at the context in which this statement has been put out. How many huge companies have made similar prognostications of doom that have been overtaken by events and shown to be false in recent years? Goldman Sachs's Lloyd Blankfein made some of the most apocalyptic statements about the effects of Brexit, and yet, in April this year, opening a new £1 billion office complex in London, he said,

'I am wrong because I would have thought there would have been a worse outcome...The UK economy has surprised to the upside'.

Look at Siemens: again, Joe Kaeser, a massive remainer, said that Brexit would disrupt the economy, uncertainty about the relationship with the EU would have significant negative long-term effects, the UK would be a less attractive place to do business, it may be a factor when Siemens considers future investment here, and yet, in November 2017, whilst cutting 3,000 jobs in Germany and 1,000 across Europe, he announced an investment of £39 million to expand its largest UK plant in Lincoln, which employs 1,500 people.

Just to turn to Airbus finally, and its previous remarks in this respect, of course, Airbus say now they will pull investment, whatever that means—or may pull investment, whatever that means—if there is no deal. It's hedged around with so many 'ifs' and 'buts' and caveats it's impossible to draw any conclusions from it. But only two years ago, of course, Tom Enders was one of the chief players in project fear during the referendum campaign. In intervention after intervention he threatened to pull investment if the company voted to leave, and yet, of course, they haven't done that. Since then he has admitted that the company plans to retain its operations—and I quote—'long into the future'. He wrote to Greg Clark in February of this year to say that they regard the UK as a home country and a competitive place to invest. The 'home country' reference, of course, is important because that means that, within the economic strategy development within the company, Airbus's national divisions are regarded as a priority and influence the decisions on production and strategy.

So, what this is all about, actually, is trying to make sure that 'no deal' is well and truly off the table. Well, he hardly needs to do that because Theresa May's incompetence and the shambolic Government that have completely wrecked the whole Brexit opportunities that were presented two years ago have already achieved that objective: in effect, we will remain part of the EU, in form if not in name. So, Airbus has nothing to worry about.

This is—. It's embarrassing, frankly. I hope nobody within any industrial sector and no investors have listened to this contribution. But just one quick question that's been playing on my mind whilst listening to the Member: where is the Member that is supposed to be representing the 6,500 people in Broughton within your party right now? I don't see the UKIP Member for North Wales present behind you cheering what you were saying. I don't see her supporting what you were saying about the future of the Airbus plant.

It is frankly shameful that you choose to rubbish not just Airbus, but the likes of—[Interruption.] You were rubbishing Airbus. You were rubbishing their concerns. You were claiming that the likes of Oxford Economics are merely opposed to Brexit and therefore motivated by one factor rather than carrying out objective analysis on behalf of Airbus. I don't know whether you've read 'The impact of Airbus on the UK economy'. I don't know whether you've visited any of the Airbus sites. You have? Have you visited the Broughton site recently? Have you spoken with senior managers? Because you surely haven't listened to them. The words may have been spoken, but—[Interruption.] Look, my message will be really clear: get out of your trench, take out your ear plugs and listen to people who know about the aerospace sector a hell of a lot more than you do, because 6,500 jobs in Broughton are on the line, 400 to 500 in Newport are on the line. This company does not play petty party politics. This company is an international operation that is determined to make sure that it has future growth, and, if it can't do that in the UK, it will do it elsewhere.

This isn't just about tariffs. The Member seems to think that the only question in town in terms of Brexit is whether we have to apply tariffs. It's not about tariffs for Airbus. It's very clear, if you read 'The impact of Airbus on the UK economy', that actually it's about the movement of people and it's the regulatory environment that could cause severe disruption.

In terms of car imports, are you seriously suggesting that consumers would be happy to pay an extra 10 per cent for cars that are imported into Britain, in spite of the fact that a huge number of components of those cars are actually made in Britain, that jobs depend on those cars, that—?Okay, their final assembly may take place outside of Britain, but the jobs that supply the components are actually here within the UK, and therefore tariffs will have a major impact—[Interruption.] They would have a major impact, and they would lead—[Interruption.] Within the supply chain, they could lead to considerable loss of jobs.

Look, these are warnings. At what point are you going to actually accept that warnings need to be heeded, that you cannot ignore warnings that a 'no deal' scenario would be far more damaging— far more damaging—for the UK economy than a decent Brexit deal? Instead you just want to march full steam ahead to a cliff, without any due regard for the 6,500 people employed at Airbus in Broughton, the 400 to 500 that are employed in—[Interruption.] I notice that the Member is making comments from a sedentary position. If he has an intervention to make, I'd happily take it.

No. No, there are no interventions, and I would ask—[Interruption.] Just a minute, just a minute. I would ask all Members, just listen to the Cabinet Secretary. You've asked a set of questions and you should listen to what the answers are. Thank you.

Finally, in terms of the point that the Member made concerning false warnings that have taken place elsewhere in the industry, not just concerning Brexit, but other historical, other factors, one big point to bear in mind that is many politicians only woke up to the threats that Tata were making, and the concerns that Tata were expressing, when the businesses here in Wales and across the UK were put up for sale. Will it take the loss of tens if not hundreds of thousands of jobs in the UK for those who are championing a 'no deal' scenario to actually wake up and accept that they were wrong and that they put people out of work?

Can I start by thanking the Cabinet Secretary for bringing forward this hugely important statement today? From the outset, I think it is important to recognise that this isn't just a warning unique to Airbus—it's a warning right across the sectors and industries in Wales, and across Europe as well. Over the weekend we've had BMW and we've had many others, including Ferrovial today, and SMMT, which you've made reference to within your statement. All these warnings have one thing in common, and that one thing is uncertainty. Just last week, I was asking the finance Secretary about the issue of uncertainty, and it's been a common theme throughout my time on the external affairs committee. Whenever I've visited workplaces, such as Airbus, Tata Steel or Toyota, it's always been an issue that has been raised. Unfortunately, the clarity that we all have been seeking has not been forthcoming. So, could the Cabinet Secretary update Members on whether the UK Government has made any clear representations to him since Airbus's announcement? In addition to that, could he say whether he's had any correspondence with Unite the Union on this particular issue over the weekend? I spoke to representatives from the union and they shared many of my concerns, mainly because they know the incredible contribution that Airbus makes to Alyn and Deeside, to Wales, and to those right across the UK.

You've mentioned that Airbus is one of the largest employers in Wales, employing nearly 6,500 people, and that makes it the second largest private employer in Wales. So, would the Cabinet Secretary agree that it is not too late for the UK Government to show leadership and provide the clarity that the business needs, and not only the business, but, more importantly, the workforce, needs? Airbus makes a substantial direct contribution to the Welsh GDP, as Members know, and in 2015 the company made a direct value-added contribution to Wales's GDP of £563 million. Now, that's the equivalent to over 5 per cent of the economic output produced in Cardiff during the same year.

I welcome the Cabinet Secretary's continued support, and, most recently, the investment of the Advanced Manufacturing Research Institute within Airbus's plant in Broughton, and I believe we need more investment from the Welsh Government. But I just need to say: would the Cabinet Secretary agree with me that those figures that I've mentioned there and this announcement should be a wake-up call for the UK Government? And, if it isn't, I really don't know what will be.

Just briefly, I'd like to touch on a point made by my colleague from across the Chamber Llyr Gruffydd, when he raised the importance and recognition of what happened during the Shotton closure. You're absolutely right; it won't be as bad, it will absolutely be worse, and that's something we simply cannot let happen.

Finally, Deputy Presiding Officer, I would just like to pick up on a point, where—. I do not believe this a political stunt from Airbus, I believe this is a clear warning and a warning that should be taken very, very seriously. I'm not sure if you've seen it over the weekend, Cabinet Secretary, but, on the Daily Politics show, Nigel Farage attacked Airbus as a political project before sniggering at the talk of Welsh people, Welsh families, potentially losing their jobs. So, would you join me, Cabinet Secretary, in denouncing this complete irresponsibility and join me when I say to those Welsh workers and their families, and the workers in the future, that we are with you during this difficult time, and we will stand up with you?

Can I thank Jack Sargeant for his contribution and for his questions? He's absolutely right—what investors want when they look at any country is certainty in terms of the political and economic environment and they need the right skills to be available and the right infrastructure in place. In Wales, we're improving the skills base, we're developing the right infrastructure, but Brexit risks impacting on us terribly if there is no deal or if there is a deal that does not meet the needs of Welsh businesses.

Can I say to Members that I have spoken with Greg Clark? I spoke with the Secretary of State for Business, Energy and Industrial Strategy on Friday. I conveyed to him my very serious concerns and also expressed my support for Members within his own party, albeit most from the back benches, including Anna Soubry and Guto Bebb, in terms of their comments recently concerning the statement by Airbus. It is not too late for the UK Government to change course. They need to drop the red lines and they need to accept a pragmatic arrangement. Unfortunately, because the Prime Minister is being shackled by those on the far right of her party, such an outcome is increasingly unlikely.

Now, I can say that, in addition to speaking with the Secretary of State, I speak very regularly with Unite the Union and with Airbus itself, with managers. Indeed, I recently appointed Katherine Bennett, senior vice-president of Airbus UK, to the new ministerial advisory board, recognising her insight, knowledge and expertise not just in the aerospace sector and manufacturing as a whole, but also in terms of the UK economy and the opportunities that we have, if we get the right Brexit deal, to develop the supply chain for the aerospace original equipment manufacturers. 

Now, Jack Sargeant is absolutely right, we are investing very heavily in Broughton; we have in the past. It's as a consequence of the repayable aid and the skills support and other forms of support that have been offered to Airbus over many years by successive Labour Governments that we now have 6,500 people employed at that site. We have helped to grow that site and we'll die in a ditch defending those people who are employed there; we will not give up on them.

As far as Nigel Farage is concerned, and his sniggering on television at the prospect of people—thousands of people—losing their jobs, this is the behaviour of a silver-spoon-sucking toff who, I'm afraid, has no awareness of what a decent hard day's work is like in the aerospace sector. If all he can do is respond by sniggering, then I'm afraid he won't be welcome at Airbus or any other industrial site where jobs could be obliterated by a 'no deal' scenario.

Thank you. I've got two more speakers. I will extend this statement, but that's not to say that I expect the next two speakers to go on at length, so—. Jayne Bryant.

Diolch, Deputy Presiding Officer. I'd like to thank the Cabinet Secretary for bringing forward this important statement today and for his strong words. Last week's announcement has been very worrying. Airbus employs thousands of people in Wales, and, whilst the vast majority of workers are based in Broughton, Airbus employs 450 people in Newport. Airbus Newport is home to the digital transformation global cyber centre of excellence, and the team of cyber research engineers delivers world-leading research in the field of cyber defence. They predominantly work in highly classified environments, delivering high-grade cyber protection. 

Following the uncertainty of Brexit, I understand Airbus are already seeing an impact on their space business with the Galileo satellite navigation programme. I visited the Newport site in my constituency immediately after the Brexit vote to listen to their concerns. We must not lose these highly skilled good-quality jobs nor see a decline in investment. There will be a significant knock-on effect on the economy and the local area if we do. In addition to those who work in Newport, some of my constituents work at Airbus in Filton, which manufactures wings for military aircraft, as well as the design, engineering and support for Airbus commercial wings. 

Airbus has been consistent with its messaging to the UK Government since the referendum—a 'no deal' Brexit would severely disrupt production. Furthermore, Airbus are concerned that the current planned transition is too short for a company to implement the required changes within its extensive supply chain. So, does the Cabinet Secretary agree that the warning from Airbus and others must be a reality check for the UK Government, whose lack of clarity is putting future investment and jobs at risk?

Yes, I'd agree very much with Jayne Bryant. I know how much she's championed Airbus in Newport since being elected to this Assembly, and I also know how much this particular employer matters to the region—450 skilled people are employed at the site. The site is one of our proudest industries of tomorrow, offering immense opportunity for many people who are entering a specific field in which we have great capabilities, great existing capacity as well, and I do fear that if Brexit continues to go in the direction that we've seen in recent months then those jobs could be at risk, as Airbus have identified.

I'd also agree that the transition period is too short, insofar as what businesses have told Welsh Government. Generally, we've been told that two years, as an absolute minimum, are required for a safe transition period—often, three years are identified as the best period for which we should have a transition.

I know that Jayne Bryant, and many other Members in this Chamber, will feel incredibly frustrated that in spite of their warnings, in spite of the concerns that they have expressed in this Chamber and outside, those warnings still fall on deaf ears in Downing Street. It's for the Prime Minister to change direction, and the way that she can do that is to remove the red lines and negotiate sensibly with our European partners.

Finally, Mark Isherwood. 

Diolch. Of course, I have visited Airbus very many times. I've known Katherine Bennett for many, many years and discussed this and other matters with her. I've even been to Toulouse and met senior management and employees there, some of whom were from Broughton and were working alongside their colleagues in Toulouse. 

After Friday's announcement by Airbus, I received an e-mail from an employee of Airbus who said that the news that no deal has been forthcoming to protect the thousands of highly skilled UK jobs at Airbus and their suppliers is rather worrying to say the least. Of course, the negotiations are ongoing, so I responded by saying that negotiations on the withdrawal agreement are ongoing, that the Prime Minister has made it clear that instead of a hard Brexit, she seeks a

'new, comprehensive, bold and ambitious free trade agreement', 

and that she said that the agreement we reach with the EU must protect people's jobs and security. 

However, given the mixed messages and the concern that employees got the message that negotiations are over, no deal is being done and they could be up the swanny accordingly, what action will you take to help balance their understanding—yes, understand the risks, but also understand the broader scenario? For example, we know that last December the European Council agreed that sufficient progress had been made in phase 1 of the Brexit negotiations with the EU to allow talks to move on to phase 2.

In March, EU and UK negotiators reached a political deal on the terms of a Brexit transition period in a new draft withdrawal agreement, following which the director general of the British Chambers of Commerce said that this was a milestone that many businesses across the UK had been waiting for, and that the agreement of a status quo transition period is great news for trading firms on both sides of the channel, as it means that they face little or no change in day-to-day business in the short term. 

Will you join me in emphasising to those employees in Broughton that the UK Government last month agreed that it would be telling the EU it wished to extend Britain's membership of the customs union beyond the initial transition period, until such time as arrangements for whatever customs agreement is reached can be implemented in accordance with that agreement, and to tell them that on 19 June, last week, a joint statement from negotiators of the European Union and the UK Government on progress of negotiations under article 50 said, 

'The statement details the articles of the draft Agreement where agreement has now been reached at negotiators' level, as well as those areas where further progress has been made'?

And there's a long list of areas already agreed. They concluded:

'note that the progress recorded in this statement will contribute to the finalisation of the Withdrawal Agreement'

and

'The negotiators commit to making progress as quickly as possible on all aspects necessary to reach such an agreement.'  

Is it not, therefore, vital that we balance this by ensuring the workforce know that these negotiations are ongoing, know that transition has been agreed, know the UK Government acknowledges, now unanimously, the need to extend transition into extension of the customs union, for the reasons that I describe, and know that only yesterday, Greg Clark, who you referred to, the UK business and industry Secretary, told a hearing in the UK Parliament that an agreement that ensures that avoidable threats of frictions and tariffs do not take place is absolutely within our grasp, and it is what all parliamentary parties should back during the months ahead?      

I'm pleased that Mark Isherwood has discussed this issue with the senior vice-president of Airbus UK and with many other managers in Broughton and in Toulouse. I imagine that pretty much all of those senior executives will have disagreed with the Member over the vote to leave the EU. And those UK Airbus employees that he'll have met in Toulouse, I'm afraid, if the course of direction is not changed, won't be able to get on a plane in an instant to go to any of the European Airbus facilities as they are now, and that is an essential factor that the company needs to consider in terms of where they invest. They need the surety that, when a fault develops, when maintenance is required, they can deploy skilled people, experts, technicians at the drop of a hat. I'm afraid, based on the negotiations that have taken place so far, they cannot be given that certainty. 

I don't think employees have had mixed messages from Airbus. Airbus couldn't have been clearer in what they said last Friday. I think it's the UK Government that are all over the place in terms of the messages and the negotiations that are taking place. Although the request is in for me to give Airbus workers messages of comfort over Brexit negotiations, I'm afraid I have no warm messages of comfort over the negotiations, because unless Theresa May is able to drop those red lines that she's clinging to so fervently, I'm afraid that it could be catastrophic for people who are employed in the aerospace sector in the UK. Yes, ongoing negotiations are taking place, but it's the red lines that are preventing the sort of deal that we believe is in the absolute vital interest of the aerospace—[Interruption.]

I'm afraid the Member's holding up a sheet of paper with lots of words on it. If only he would read about the impact—it's a longer document, granted—but if only he would read about the impact of Brexit on Airbus he might have reached a different conclusion when the referendum took place. Let's just remind those 6,500 employees at Airbus in Broughton that the Member for North Wales from the Conservative Party actively campaigned for Britain to leave the European Union.