UK government warned over Brexit and Wales by peers

The UK government must "raise its game" on Brexit and find ways to protect Wales' interests in the negotiations, a House of Lords committee has warned.

The EU Committee's report on Brexit and devolution said ministers in Wales and Westminster should work constructively.

It has warned of potential risks to Welsh agriculture and manufacturing.

Welsh ministers urged UK ministers to act. The UK government said it is committed to "positive and productive engagement" with the devolved bodies.

The committee report, published on Wednesday, said the loss of EU funding could put Welsh agriculture at risk - and that manufacturing could be hit hard without a comprehensive trade deal.

Peers said the Welsh economy was heavily dependent on exports to the EU, operating a £2.25bn trade surplus with EU member states, against a £2.3bn trade deficit against non-EU countries.

They highlighted "acute concern" that EU funding for the poorest parts of Wales would not be fully replaced by the Barnett formula, which allocates UK government funding to the four nations according to population.

The report said Brexit means that "it is now time finally to bite the bullet and replace the Barnett Formula" with a needs-based funding arrangement.

It also said powers over farming and environmental protection should return from Brussels to Cardiff rather than Westminster, as the UK government intends as a temporary measure.

First Minister Carwyn Jones welcomed the findings and said the UK government "cannot simply continue to put its head in the sand".

"As the report notes, we have repeatedly tried to engage with the UK government and have put forward constructive proposals about how we can deliver a Brexit which honours the result of the referendum, safeguards the economy and respects devolution," he said.

"I once again urge them to give serious consideration to our policy paper on Brexit and Devolution, which offers a workable blueprint for a major constitutional renewal of the UK."

A UK government spokesman said: "We have been clear that the Repeal Bill will not take away any decision making powers from the devolved administrations immediately after exit.

"Instead, to protect the UK internal market, some decision making powers being transferred into UK law will be held temporarily to allow intensive discussion and consultation with the devolved administrations.

"As the Secretary of State for Exiting the European Union has made clear, it is our expectation that the outcome of this process will provide a significant increase in the decision-making power of each devolved administration and we are committed to positive and productive engagement."