Eluned Morgan’s twenty-second session as first minister comes to a close.

Image source, Senedd Cymru

Image source, Senedd Cymru

Conservative Andrew RT Davies refers to concerns voiced by Wales' auditor general over the "irregular" accounts of a company wholly-owned by the Welsh government.

Andrew RT Davies describes it as a "deplorable situation".

The first minister replies that the auditor general "was concerned about three fixed assets to the value of around £1 million. My understanding is that those were for lines in relation to a very quick response to preparing and supporting us in relation to Covid and the pandemic. It is important, though, that we get the financial statements correct. My understanding is that there haven't been any concerns in terms of the rest of the financial statements. My understanding also is that Industry Wales has implemented all the recommendations in the auditor general's report, and is confident in its robust accounts procedures moving forward."

Auditor general Adrian Crompton had said said it was "highly unusual" that he could not form an audit opinion on Industry Wales, the trading name of Sector Development Wales Partnership Ltd (SDWP). Industry Wales, which aims to provide expert advice and support to grow "Wales plc", has received around £9.7m from the public purse in the past decade, according to accounts.

The company, which was set up by the Welsh government in 2013, has spent more than £1m on an automated decorating, cutting and packing line which is not yet operational.

In a letter to the Senedd public accounts committee, Adrian Crompton wrote "I ‘disclaimed’ my audit opinions on these accounts. This is a highly unusual position whereby I am stating that I am unable to provide either a ‘true and fair’ or ‘regularity’ opinion on the accounts as I have been unable to obtain sufficient, appropriate evidence over material assets. Unfortunately, this inability to obtain sufficient, appropriate evidence applied to multiple connected parts of the accounts."

Image source, Audit Wales

The first minister tells Plaid Cymru MS Cefin Campbell that the Welsh government will be formally responding to the report by Comisiwn Cymunedau Cymraeg/Commission for Welsh-speaking Communities: Empowering communities, strengthening the Welsh language, published in August 2024, in May at Eisteddfod yr Urdd.

Cefin Campbell asks whether the recommendations of the report will be acted upon during this Senedd term, so before the May 2026 election.

The first minister replies "I do think it was a very important report, and it's important that we take time now to look at the recommendations and consider which we can accept".

The report said "communities with a high, or relatively high, percentage of Welsh speakers should be designated as ‘areas of higher density linguistic significance’. This designation should exist alongside a firm commitment by the Welsh government to revitalise the Welsh language across the whole of Wales."

The first minister describes Brexit as having "a negative and damaging impact on Wales".

She tells her Labour colleague Mick Antoniw, "the trade and co-operation agreement governs our relationship with the EU, but it cannot replace the market access we had previously, and it creates barriers for Welsh businesses."

She adds, "Nigel Farage and his crew of Brexiteers, along with most of the Tories, told the people of Wales that they wouldn't be worse off when they left the EU, but now we know they were duped. They were promised more money for the NHS, they were promised that we'd have amazing trade deals that would boost trade with the rest of the world. They said we could control our own borders and reduce immigration. Well, what we did get? We got an 8 per cent reduction in exports, so that Welsh businesses, which employ thousands of people, are worse off. We've seen a 17 per cent drop in food and drink exports. We've seen a 29 per cent reduction in imports from the EU, and that's before we start on the £772 million shortfall when it comes to structural funding, and that's before, don't forget, the £243 million that we're not getting in terms of EU rural funding. On that big issue of, 'Oh, yes, this is all about stopping the immigrants', well, we've had more people migrating into this country than ever before, and many of them are very, very welcome, because they are supporting our public services."

Conservative Joel James responds, "overall wastage and lack of vision for areas such as Pontypridd was the ultimate reason why the EU was rejected by them. I was proud to be the Pontypridd constituency rep for Vote Leave, and I was there on the night when all three constituencies - Pontypridd, Cynon Valley and the Rhondda - declared for leave. I have no doubt they would do it again."

Image source, Getty Images

Plaid Cymru's Adam Price asks "what plans does the Welsh government have to commission its own review of the water industry to assess the merits of bringing it into public ownership?"

The first minister replies that an independent commission into the water sector and its regulation was launched by the UK and Welsh governments in October, and that she would consider the Welsh government’s "next steps" after that commission reports later this year.

Adam Price says "there is evidence from other nations that suggests that a public ownership model can bring better outcomes, but the commission that you've just referred to, first minister, has shut out that option of nationalisation because of the cost in terms of compensation to shareholders. But, in the case of Dŵr Cymru, that doesn't arise, because there are no shareholders."

The first minister responds, "Well, we all know how sensitive the issue of water is in Wales, and it is important that we treat it as such. We've got a history of seeing things like Tryweryn and we need to make sure that we don't see those kinds of things repeated. This is one of the most extensive independent reviews of the water sector in terms of regulation since privatisation. So, this is a comprehensive review. The focus will be on restoring the health of rivers, lakes and seas, and also in driving economic growth. Nationalisation is not in scope because of the high costs but also the delays that it would cause in achieving better outcomes for consumers and also the environment. But, I'm sure you'll be pleased to hear that the new UK Water (Special Measures) Act 2025 will provide powers for Ofwat to ban the payment of bonuses to water bosses if they fail to meet high standards in terms of protecting the environment, consumers and their companies' finances."

Image source, Getty Images

Plaid Cymru leader Rhun ap Iorwerth says "the UK government has today announced punitive cuts to welfare that will, no doubt, lead to denying many disabled people a sense of dignity and trapping more people into poverty. There is a case to be made always for improving the welfare system, but cutting financial lifelines, which allow the most vulnerable to undertake basic tasks, is not it."

He calls on the first minister to "condemn the actions of the UK government".

The first minister replies "I know that there have been people across the whole of Wales who have been very concerned about the speculation that’s been going on over the past few days, and I recognise that concern. That’s why I personally spoke to number 10 last week, to outline some of our concerns in terms of the potential impact on some of our communities in Wales. And I’m very pleased to see that many of those concerns have been taken on board and that the most vulnerable will continue to be protected. But I think it is important to recognise that there is a need for reform of the system. You talked yourself about people being trapped in poverty. Benefits trap people in poverty."

She confirms that she wrote to Work and Pensions Secretary Liz Kendall to set out the Welsh government's views.

Image source, Senedd Cymru

Darren Millar, leader of the Welsh Conservatives in the Senedd, calls again for a "full Wales-specific public inquiry into the response to the pandemic here".

The first minister replies "I think it is important that we allow the public inquiry, which has spent a huge number of hours and has taken evidence from ministers across the Welsh government - I can't tell you how many hours of work has gone into this by, certainly, government ministers, certainly officials. And to duplicate that work I don't think would make sense for anybody."

Darren Millar says that Jane Hutt - Cabinet Secretary for Social Justice, Trefnydd and Chief Whip - has this morning refused a request from the Senedd's Wales Covid-19 Inquiry Special Purpose Committee for decision-makers including ministers to appear under oath or affirmation.

The committee had written to the Llywydd asking for standing orders to be amended to that effect.

Darren Millar accuses the Welsh government of "blocking" scrutiny.

The first minister replies that the Senedd's Wales Covid-19 Inquiry Special Purpose Committee "is not a public inquiry".

She adds, "I recognise that people who suffered during the pandemic want answers. They are getting answers. It’s very interesting to look at the particular issue that they’re focused on at the moment, the personal protective equipment system. And we’ve made it very clear that, when it came to PPE in Wales, we did a much, much better job than the absolute scandalous waste that your party put up with. And the absolute corruption, where you had mates being given contracts worth millions upon millions of pounds for PPE that was unusable, it’s a scandal. And I’m glad that it’s coming out in the public inquiry. You won’t find that in Wales."

Image source, Senedd Cymru

Plaid Cymru MS Siân Gwenllian says she is "concerned about a lack of significant progress with a scheme to improve health and well-being facilities in Dyffryn Nantlle".

She explains, "despite several promises and consultations, for around seven years now, the site earmarked for the Lleu health and well-being centre continues to be empty. There is no mention made of any of the major changes promised, and local residents are very disappointed, and I share their frustration."

The first minister replies that the Welsh government awarded Grŵp Cynefin £1.2m to develop proposals, but several partners have withdrawn from the project.

She elaborates, "whilst they were developing this, they were looking at a number of different independent funding sources, including Cyngor Gwynedd and the National Lottery. But the fact is that there are a number of partners that have withdrawn from the project, and that is not the fault of the Welsh government. Now, I know that the Welsh government has met with Cynefin in February, and that they are reassessing the original model proposed, and there will be an update at the end of this month."

Grŵp Cynefin have said their plans for Canolfan Lleu, a community hub in Penygroes, Gwynedd, have had to be "reviewed and re-evaluated" because of "a huge increase in construction costs, inflation, a change in grant terms and cuts in public funding".

Elements of the original plan omitted include Theatr Bara Caws' plans for a new theatre and offices.

A Theatr Bara Caws spokesperson said last autumn: “It’s with disappointment and sadness that Theatr Bara Caws now realises that it will not be financially viable for us have premises in the Canolfan Lleu location. Constant changes to the timetable, including the financial obligations, have forced us to this decision."

Image source, Senedd Cymru

Image source, Senedd Cymru

Llywydd Elin Jones conducts a ballot to determine the names of members who may table questions to the first minister.

Conservative Laura Anne Jones asks "how is the Welsh government supporting businesses in the defence sector in Wales?"

First Minister Eluned Morgan replies "the Welsh government offers comprehensive business support to companies in Wales, including those within the defence sector. This support includes innovation, export and skills development."

Laura Anne Jones says "last week, alongside my leader, Darren Millar, I visited Sierra Nevada Corporation Misson Systems UK in St Athan, a Welsh success story that develops and delivers critical defence capabilities to the UK and its allies. What I found so wonderful in my new portfolio role was that 60 per cent of its workforce is made up of veterans, as well as fantastic opportunities for STEM graduates as well, all to get to high-paid, high-tech jobs, and to be trained on the job, in terms of the veterans."

She calls on the Welsh government "to foster connections and match-up more veterans with high-paid jobs across Wales".

The first minister says "we know there’s going to be a significant increase in the amount spent on defence by the UK government. It’s very important that, in Wales, we get our fair share of that funding. There are 285 companies in Wales related to defence, and eight of the top 11 global air and defence companies have a significant presence in Wales."

Prime Minister Sir Keir Starmer has said the UK's aid budget will be reduced from 0.5% of gross national income to 0.3% in 2027, "fully funding the investment in defence", which will rise from 2.3% of GDP.

That would mean spending £13.4bn more on defence every year from 2027.

Last year the UK spent £53.9bn on defence.

The defence sector employs over 20,000 people in Wales.

Firms include BAE Systems, which has a munitions facility in Monmouthshire, and General Dynamics, which is constructing its AJAX armoured vehicles in Merthyr Tydfil.

Image source, Reuters

Hello and welcome to our live coverage of Eluned Morgan’s twenty-second session of First Minister's Questions.

The meeting is held in a hybrid format, with some members in the Siambr (Senedd chamber) and others joining by video-conference.

You can click on the play button above to watch the proceedings from 1.30pm.