The following amendments have been selected: amendment 1 in the name of Rhun ap Iorwerth, and amendment 2 in the name of Jane Hutt. If amendment 1 is agreed, amendment 2 will be deselected.

We move on to the Welsh Conservative debate on economic development. I call on Russell George to move the motion.

Motion NDM6232 Paul Davies

To propose that the National Assembly for Wales:

1. Notes the UK Government’s industrial strategy and the impact it will have on Wales.

2. Recognises the inter-governmental work to develop the North Wales Growth Deal.

3. Believes that city regions can play a valuable role in delivering economic improvements to communities across Wales.

4. Calls on the Welsh Government to work with key stakeholders to drive economic growth in all parts of Wales.

Motion moved.

Thank you, Deputy Presiding Officer. It gives me great pleasure in introducing the second Welsh Conservative debate this afternoon, and I formally move the motion in the name of Paul Davies. I should say that I agree with all of Plaid’s amendments. Unfortunately, we can’t support them because they delete all of our motion.

The Llywydd took the Chair.

After the referendum to leave the European Union and the inevitable uncertainty associated with the result, the UK Government’s recently published industrial strategy, I believe, provides businesses with the security and certainty to plan for their future, as well as a firm foundation for improving living standards and investing in the future success of all parts of the UK. It outlines major investment for infrastructure, new investment in science, in research and development, and aims to ensure that growing enterprises have the skills and support to create new jobs and prosperity.

Looking at the Welsh Government’s White Paper—and there is much I can agree with in that, I should say, but there is little in the way of support to businesses and little to drive forward important infrastructure projects. We have to wait, of course, until the spring to see what the Welsh Government plans for the Welsh economic strategy. When that plan is published, I hope that the Welsh Government looks to ensure that its strategy dovetails with the UK Government’s industrial strategy and is equally forward looking and ambitious for the future economic challenges that face Wales. The UK’s industrial strategy puts emphasis on addressing the regional disparity in economic prosperity and the skills shortages that exist within the UK and in Wales, which, if successfully addressed, will drive increases in productivity and in social mobility.

It ought also to be noted that the industrial strategy will support the economy of north Wales, with the north Wales growth deal, major transport schemes under construction, including a third crossing over the Menai straits, work to improve the A55 and the A494 interchange, and also the electrification of the north Wales coast line. One of the ways in which the industrial strategy is doing this is to recognise R&D as an essential part of the future economy. It is, therefore, I think, a welcome development that the UK Government is concentrating on making the north of England a tech region. This will present significant opportunities, I think, for north Wales to plug into the wider Northern Powerhouse. I want the Welsh Government to have the appetite to drive R&D forward to ensure that north Wales has the tools to be able to take advantage of these opportunities. The Welsh Government has, historically, chosen not to invest heavily in R&D. It continues not to in the 2017-18 budget, in terms of business innovation and R&D facilities. The year-on-year budget remains unchanged, and, of course, that represents a real-terms decrease in funding for this, I’d say, crucial growth area.

Now, when it comes to support for the steel industry, we need to ensure that the industry can be commercially sustainable in a competitive global market. The UK Government have been addressing some of the key asks of the industry, including compensating—[Interruption.] in a moment—energy-intensive manufacturers, providing flexibility over the implementation of EU emissions regulations, and have also pressed for action against unfair steel dumping. I give way to David Rees.

I thank you for taking the intervention. You mentioned steel, so, me, so—. Clearly, are you as disappointed, and perhaps disgusted, as I am at the lack of emphasis on steel, a foundation industry here in the UK, in that industrial strategy, and that, in fact, to date, the UK Government’s done very little to support the steel industry? It’s the Welsh Government that’s been doing it, not the UK Government.

Well, I just outlined, just before you intervened, what the UK Government’s been doing. But what Greg Clark said last week is he wants a special deal with the steel industry as part of the Government’s flagship industrial strategy. I’ve got to say, I won’t take any lessons from Labour, and I don’t think the UK Government should take any lessons from Labour, in regard to the steel industry. The steel industry reduced productivity by around about a third when the last Labour Government was in power. Also, in terms of people employed, the industry halved the amount of people employed whilst Labour was in office as well. So, I don’t think the UK Government should take any interventions in that regard.

In drawing my remarks, Presiding Officer, to a conclusion, the UK’s industrial strategy is optimistic and ambitious for Britain’s future, from a UK Government that is determined to make a success of leaving the EU, and surely we should all be supporting that aim. My concern is that the recent White Paper issued by the Welsh Government and Plaid Cymru is not a plan that supports the economy. Welsh businesses need that security to plan ahead. Now, the Welsh Government promised to, and I quote, ‘produce a plan for confidence-building measures, to help re-assure businesses and investors that Wales remains open for business, and that the economy is a priority for the Welsh Government.’

Now, in my view, as much as I agree with a large amount of what’s in that White Paper, what I’ve just read out now is not achieved when it comes to the ambition of the Welsh Government in that regard.

The UK Government’s industrial strategy is a vision for a modern, successful, ambitious Britain that gets every part of the country firing on all cylinders. It’s now time, I think, that the Welsh Government devoted the same kind of commitment as the UK Government in laying the foundations for improved living standards, economic growth, and a more prosperous and equal Wales. So, I do commend our motion today to the Members, and I look forward to contributions from Members throughout the next hour.

I have selected the two amendments to the motion. If amendment 1 is agreed, amendment 2 will be deselected. I call on Adam Price to move amendment 1, tabled in the name of Rhun ap Iorwerth. Adam Price.

Amendment 1—Rhun ap Iorwerth

Delete all and replace with:

1. Notes the need to strengthen the performance of the north Wales economy.

2. Recognises the importance of infrastructure investment to promote the economy of north Wales.

3. Believes that any UK Government Industrial Strategy must address historic under investment in Wales’ infrastructure.

4. Calls for a sustained programme of improvements to the A55 corridor, and calls on the Welsh Government to continue to support the electrification of the North Wales Coast Line.

5. Calls upon the Welsh Government to publish its Economic Strategy for Wales which will set out how north Wales can develop into an economic powerhouse in its own right whilst also cooperating with the northern powerhouse in England and promote cross-border economic activity.

Amendment 1 moved.

Diolch, Lywydd. I welcome this debate because I think there is a vacuum at the heart of Welsh Government economic strategy at the moment. Unfortunately, and the reason why our amendment is a ‘delete all’ amendment, the motion doesn’t seek to fill that vacuum with anything that is distinctive or new, but seeks to borrow the UK Government policy and apply it to Wales.

Now, we are in a position where we have an economic strategy going back to 2010. Effectively, that strategy was ripped up in 2011. The basic, key changes that were in that strategy, which were having a much more tightly focused sectoral approach to economic development, well, that went when three additional sectors and virtually every business in Wales outside of retail became a target sector. And, also, the move away from the old approach, which is, basically, the kind of grant-aid, inward-investment focused strategy—moving from that to one that was focused more on business investment based on equity or loans—that was ripped up as well and it was a reversion to type. What we have now is not a strategy but a lot of activity, but without actually a coherent economic strategy to back it up.

The same is true about our regional economic development position. We have still, in theory, a spatial plan, which was first published in 2006. We learnt—[Interruption.] Well, the leader of the Welsh Conservatives may laugh, but most economists would say that, actually, place making, having a spatial economic strategy, is absolutely critical. I give way to him.

I do not laugh at the spatial plans; I just remember the long and tortuous debates that my namesake, Andrew Davies, when leading those debates in the third Assembly, had Wednesday after Wednesday, Tuesday after Tuesday, in this Chamber. That’s why I laughed when you talked about the spatial plan.

Of course, there was a revision in 2008. It’s quietly been buried, but, actually, we heard only in the last few days, of course, that’s it’s still on the books; there’s going to be now a new national development framework. But the thinking behind the spatial plan, of having a clear idea about the different roles, the spatial roles, that the different regions and centres of population in Wales have within our national economic strategy—all of that has been lost. So, we are in this position where we don’t have a strategy at the moment. The Welsh Government now has set out in the amendment, thankfully, a date for the new economic strategy, and we all look forward with bated breath.

But the problem is that economic policy also abhors a vacuum, and so what the Welsh Government has allowed to happen is for Welsh economic development policy to be written in Whitehall. The new economic map of Wales that was unveiled by the Minister for finance and local government was written in Whitehall; what was the point of devolution? Because it’s based, of course, on the map of the city regions, the city deal regions and the growth deal for north Wales. What is the point of having this institution if we allow even something as fundamental as the economic regions of Wales to be actually decided by a pot of gold in Whitehall? I give way.

I’m grateful for your taking the intervention. There are two points I’d wish to put to you. One is the fact that the Welsh economy is connected to the economy over the border in England and therefore it’s entirely appropriate that we should consider what is going on over the border. Secondly, you had a Deputy First Minister who was responsible for the economy for a number of years while I’ve been an Assembly Member. I can remember trying to get a manufacturing strategy out of the Deputy First Minister for many, many years. It was finally produced in his last year in Government and it was a simple, two-sided page document that did nothing to enhance the manufacturing industry here in Wales. What action do you think your party has contributed to the economic decline that we’ve seen in Wales in recent years?

Well, thank you for that injection of positivity and creativity to our economic policy debate. You know, that’s the way we’re going to move things forward, isn’t it? We can—[Interruption.] We can all stand here—. I was only elected a few months ago. We can all stand here—[Interruption.] We can all stand here and jab and point the finger, right; the only way—. [Interruption.] The only—. I’ll give way to the honourable Member again, if he likes. No. Right, okay.

Just to make the point again—he’s not honourable. [Laughter.]

The only way we’re going to prise ourselves out of the rut is if actually we produce some positive ideas, and I noticed that there are none coming from the Member opposite.

Finally, if we allow our economic strategy to be written in London then we see an economic policy that is actually not fit to actually address the unique problems in Wales. The obsession with the city regions, with the city as the motor of economic growth—that is not the way that we’re going to actually deal with the problems of places like the Heads of the Valleys or rural Wales. That sort of metropolitan approach is not going to work here.

And this obsession with the old west-east corridors as well is something that has been an affliction in terms of Wales’s economic development. It is not going to provide us with a solution. Trickle-down geography, as the late Doreen Massey called it, will not provide the solution that we need in Wales. We need unique, innovative economic thinking, not borrowed, old-fashioned ideas from Whitehall.

I call on the Cabinet Secretary for Economy and Infrastructure to move formally amendment 2, tabled in the name of Jane Hutt.

Amendment 2—Jane Hutt

Delete all and replace with:

To propose that the National Assembly for Wales:

1. Notes the publication of the UK Government’s Industrial Strategy Green Paper.

2. Notes the UK Government’s intention to develop a more active industrial policy, but regrets their failure to support the steel industry across Wales and the UK over the last twelve months.

3. Notes the Welsh Government’s plan to publish a cross-cutting strategy to support economic growth later in the spring.

4. Recognises the intergovernmental work that has been undertaken by the Welsh Government and the UK Government on the Cardiff and Swansea City Deals as well as the North Wales Growth Deal.

5. Notes Welsh Government’s intention to work constructively with the UK Government on areas of shared interest for the benefit of businesses and the economy of all parts of Wales.

6. Calls on the UK Government to engage meaningfully and in a spirit of equal partnership on cross border industrial issues, fully respecting the devolution settlement.

Amendment 2 moved.

Moved—formally.

As the Prime Minister said in her Lancaster speech last month:

‘I want Britain to be what we have the potential, talent and ambition to be. A great, global trading nation that is respected around the world and strong, confident and united at home.’

She said this is why this UK Government has a plan for Britain that:

‘sets out how we will use this moment of change to build a stronger economy and a fairer society by embracing genuine economic and social reform.’

It’s why, she said:

‘our new Modern Industrial Strategy is being developed, to ensure every nation and area of the United Kingdom can make the most of the opportunities ahead.’

Well, this strategy aims to provide, after the referendum to leave the EU, improvement in living standards in all parts of the UK, major investments in infrastructure, new investments in science, research and development, ensuring that people and businesses have the skills they need for the future, and supporting firms looking to scale up.

Nowhere is this needed more than Wales after 18 years of, dare I say it, Labour-led Welsh Government—a Wales ranked tenth for poverty, eleventh for weekly earnings, and bottom for both GVA economic prosperity per head and people not in employment, amongst the 12 UK nations and regions.

Worryingly, the latest GVA figures show north Wales trailing even further behind. West Wales and the Valleys, including four north Wales counties, still have the lower GVA of all UK sub-regions, down again to just 63.3 per cent of the UK average. Anglesey—lowest GVA of all UK local areas, down again to just 52.9 per cent of the UK average. Even GVA per head in Wrexham and Flintshire, which stood at 99.3 per cent of the UK average in 1999, at the time of devolution, has fallen again to just 84 per cent of the UK average. Hence recognition in our motion today of the inter-governmental work to develop the north Wales growth deal.

The Chancellor’s autumn statement provided public confirmation of his commitment to a north Wales growth deal, described by the chair of the north Wales business council as a very positive outcome. As the director of CBI Wales said:

‘we are pleased the Chancellor today reaffirmed his commitment to both the Swansea Bay City Deal and the North Wales Growth Deal. Business in Wales wants credible deals that truly deliver more prosperous regions.’

The north Wales growth deal includes major transport schemes from west to east, which we’ve heard referred to, but also working with the counties to the south and the electrification of the north Wales coast line from Holyhead to Crewe. The North Wales Economic Ambition Board’s growth vision for the economy of north Wales was submitted to the UK and Welsh Governments last summer, supported by the leaders and chief executives of all six local authorities in the region, the north Wales business council, both the region’s universities and both the region’s further education college groups. Key to this, the vision calls for the devolution of powers by the Welsh Government over employment, taxes, skills and transport, stating that this would boost the economy, jobs and productivity, create at least 120,000 jobs and boost the value of the local economy from £12.8 billion to £20 billion by 2035. This would enable north Wales to maximise the opportunities presented by the UK Government’s devolution of powers to England’s adjoining Northern Powerhouse. As the North Wales Economic Ambition Board’s vision states:

‘The Vision complements the developing strategy for the Northern Powerhouse, is fully integrated with the Strategy Growth Bid submission of the Cheshire and Warrington Local Enterprise Partnership, and has the Growth Track 360 plan for rail investment at its core. By building an investment strategy around this outward-looking vision we can succeed in capitalising on the opportunities within the North Wales region whilst adding value to a connected and cumulative set of regional plans for Northern England and the wider UK economy.’

The UK Treasury responded to the growth vision document by asking the ambition board to detail strategic priorities and to prioritise projects. However, whenever I have asked Ministers here whether and how they have responded to the document’s call for the devolution of powers by the Welsh Government, they’ve provided a classic diversionary Labour Welsh Government response by referring instead to its proposed north-east Wales metro: no details and only generalisations about its connectivity with the growth vision’s proposals. I therefore ask the Cabinet Secretary: is it to be ‘yes’ from a confident, can-do Welsh Government or ‘no’ from a craven controlling one?

I’m pleased that we are debating the need for an industrial strategy today. It’s taken, from my point of view, far too long to get to this point, when it seems that the vast majority of us are in agreement that it should be a political priority. It’s something that I know from my previous life before being elected here that the trade unions have been pressing for for a number of years, as far back as I can remember. I’m going to focus briefly on three points today. The first is steel, the economic needs of north Wales and ensuring that Welsh Government’s new economic strategy meets those economic needs of north Wales.

It’s clear that saving and sustaining the steel industry in Wales is key and the foundation industry is key not just simply in itself but also as part of any wider strategy. And whilst I welcome the UK Government’s warm words in support of British steel and the production of the UK Government’s industrial strategy, I noted with some surprise, like my colleague David Rees, that there is just one mention of steel in the 132-page document, buried away on page 91. I do acknowledge that the UK Government has talked about a potential sector-wide deal for the steel industry, but we’re still waiting to see this principle actually in practice, and we need to take that forward with some urgency now.

I’d contrast this with the proactive approach of the Welsh Government and support that has actually been recognised directly to me when dealing in my regular meetings with the workforce and management at the Shotton steel site, a site that is profitable—I can’t say enough that it’s profitable—innovative and successful, the Tata site at Shotton, and it’s one aspect of our advanced manufacturing base in north-east Wales, a priority sector that is a fundamental part of any north Wales growth deal and key to our regional economy.

Aligned with these key priority sectors, it’s crucial that we make our cross-border connections much more competitive and appealing. I welcome the Welsh Government’s announcement that next month it will consult on much-needed and long-awaited improvements to the A55 across north Wales, and I also look forward to plans for the north Wales metro to progress with pace.

As part of any growth deal for north Wales and for the region, and the Welsh Government’s overall economic strategy, we must continue to work with stakeholders and partners such as the North Wales Economic Ambition Board and the Mersey Dee Alliance, and for the Welsh Government to provide the levers to emancipate economic development across north-west and north-east Wales, something that I am personally and politically committed to.

To conclude, on the Welsh Government’s economic strategy that is now due later in the spring, I trust that this strategy will reflect and recognise regional priorities and a level of autonomy. I will hold my own future Flintshire event next month in order to ensure that the economic aspirations of my area shape the economic strategy of our nation, and through inter-governmental co-operation working with the Welsh Government, supporting our vital industries and recognising regional diversity and the value of regional stakeholders and businesses, we can build a new economy that can exceed our economic potential as a nation.

I’m pleased to take part in this afternoon’s debate, welcoming the announcement of the UK Government’s industrial strategy. We’ve heard in the opening remarks from Russell George about some details of that strategy, placing education and skills at the heart of the economy, and re-establishing in some measure technical education, too long undervalued, as David Melding mentioned in the previous debate. We clearly need to lift literacy and numeracy skills, and many people are falling short of the threshold needed for skilled employment in Wales.

At the heart of this debate is the need for a Welsh industrial strategy, and a strategy as soon as possible. We know that the Welsh Government capital budgets will benefit from an extra £400 million over the next five years as a result of last year’s autumn statement, but this needs to be channelled into capital projects. We believe that rather than an ad hoc approach to this, it would be better to have a strategy that underpins this spending. I listened as always to Adam Price’s comments earlier, and I take some of your points, Adam, about the need for a Welsh dimension and a Welsh solution to Welsh problems—as you say, that’s what devolution is all about—but I think to try and isolate that from a broader UK strategy doesn’t seem to me to make any sense. Yes, we may want to enhance the north-south transport and economic links within Wales—yes, of course, we all do—but at the same time those east-west links have served Wales very well. The M4, the A55—like them or not, they are the key arteries, and have been for a long time, of the Welsh economy, and they do integrate us into a wider economy, as my neighbour, Dafydd Elis-Thomas, pointed out a few moments ago. What is the nature of the border between England and Wales? Actually, it is England and Wales, and whilst we strive to seek a distinct Welshness—and all of us in this Chamber are here to do that—we do have to recognise that those links do exist from Cardiff to Bristol and from the north of Wales across to Liverpool. Those are there, and they will remain there until there is a viable alternative. And I think all of us in this Chamber do want there to be increasingly viable alternatives. We don’t want the Welsh economy to be—. I’m looking at Nathan Gill, who’s caught my eye—he doesn’t want the Welsh economy to be dependent on the European economy. We don’t want the Welsh economy to be too dependent on any other economy, other than the necessary trade. We do want a home-grown economy here in Wales, and one that looks to the future and deals with some of the underfunding deficiencies that we’ve had in the past. Adam Price.

You said that one of the problems with the proposed regional economic map of Wales, by including the more prosperous areas, for instance Cardiff, with the Heads of the Valleys in a single region, is that it artificially masks the level of deprivation in those areas, which means that we could, potentially, under a future regional policy framework, not have the highest level of development aid. That’s why we redrew the map for convergence funding to create the west Wales and the Valleys region, rather than having the old industrial south Wales, where we didn’t actually have the highest level of aid.

You were clearly very kind to me in my short debate on the city region last week when you didn’t raise any of these concerns. I’ve listened to what you’ve just said now and what you said in your contribution earlier, Adam. And you clearly have major issues—. Well, you’re thinking outside of the box in terms of the city region. I think everyone else at the moment is saying, ‘Aren’t the city regions, the city deals across Wales the best thing since sliced bread?’ They are not perfect; you are right to say that there are other parts of Wales that we need to think about as well. But I would say, going back to your earlier comments, that, where you have a vacuum, you need to fill it with something, and I think at least those city deals are going to bring in considerable investment; we’re looking at £1.2 billion from the UK Government and the Welsh Government supporting that city deal in south-east Wales. So, I think for us to simply say that that doesn’t address the needs of the Welsh economy and the south Wales economy would be wrong. I think that you have to recognise that they are important. That’s not to say that we don’t support developing the Heads of the Valleys corridor, and that we don’t believe in my area, in Monmouthshire, in making sure that the rural economy there is able to stand on its own two feet as well. Of course we want that, but at the same time, we also have to recognise that, in this part of the world, and for me and my neighbouring Assembly Members and Mohammad Asghar in south-east Wales, the south-east Wales economy is going to be bolstered by the Cardiff city deal, and it will be wrong, I think, to isolate areas like mine from that. So, I hear what you said.

It was nice to hear you mention the spatial plan earlier, by the way. As Andrew R.T. Davies said, it’s been a long time since his namesake mentioned that in this Chamber. There are a lot of good things in that spatial plan, as you pointed out, and we do need to make sure that those are incorporated into a strategy. But first and foremost, in conclusion, because I can see that the Presiding Officer is wanting me to wind up—first and foremost, let’s get on with the job of developing a fully-fledged Welsh manufacturing strategy, an industrial strategy that fits in with the UK strategy, but at the same time, does its own thing—models on providing Welsh solutions to Welsh problems.

UKIP welcomes the UK Government’s Green Paper, ‘Building our Industrial Strategy’. We look forward to the Welsh Government’s plan, which we should have in April. I’ll echo what Russell George has said, and the other people, that we hope it will fit in with the plan of the UK Government.

Now, we accept that some progress has been made towards rebalancing the economy since 2010, but the disparities in economic performance between different parts of the UK and Wales should not be underestimated. The move by the Blair-Brown partnership from a large industrial base to that based on financial services did unbalance the economy and it will take time to unpick that misbalance.

It is a long-accepted fact that weaknesses in infrastructure and connectivity can limit growth areas with lower productivity. The qualification and skills levels of people vary substantially from one part of Wales to another, exacerbating the productivity levels between regions. Now, we must accept that there’s been a great deal of progress made by the Welsh Government, as was succinctly outlined by Alun Davies earlier on. But we have to note that, in the Senedd yesterday, the First Minister said that he had to defer to London for staff, because we do not have personnel with the necessary skills in Wales—surely a damning indictment of 17 years of Labour in this Assembly.

There are issues with retaining those with the requisite skills, and only by expanding the Welsh economy, particularly in the higher skills sector, will we be able to address these deficiencies—

Will you take an intervention?

One second, Dave, and then of course I will.

The steel industry should play a large part in retaining and expanding such a skill base.

I thank the Member for taking an intervention. Do you therefore welcome the input of European money into the development of skills, particularly the Master’s level skills that came through that programme? We now have far more graduates and Master’s graduates as a consequence of their investment.

Well, David, obviously I would argue the fact that it wasn’t European money: it was British money coming back to us after they took something like 50 per cent of it.

However, as we know all too well in Wales, the steel industry suffers from energy costs much higher than its competitors, exacerbated of course by the environmental levies, and these, coupled with high business rates, make our steel industry less competitive. Steel making in the UK as a whole has contracted drastically over recent years, and I will here restate some points made by Russell George with regard to employment in the steel industry. There were 68,000 employed in the industry in 1997, falling to 31,000 in 2010: a loss of 37,000 steel jobs under a Labour Government and, I shall point out, whilst we were in the European Union. Well, indeed, the very fact that we were in the EU probably contributed to such a demise. The EU Commissioner in charge of competition policy, Margrethe Vestager, summed up the rules last year. She said,

‘EU countries and the Commission have put in place strict safeguards against state aid to rescue and restructure…companies in difficulty.’

Will my colleague give way?

I will.

Does he agree with me that the newly competitive pound has been a huge shot in the arm for the steel industry and is a big part of the turnaround we’ve seen in the prospects of Port Talbot?

Absolutely. I’m sure we all welcome that. We all care passionately about the steel industry and the people it employs in Wales. EU state aid rules only allow state support in such areas as research activities or relief of energy costs of steel companies. We shall support this motion. Thank you.

I obviously welcome the opportunity to speak in this Conservative-led debate today, and importantly to highlight some of the important relationships that the Welsh Government should be establishing, and also mapping out at the start of its term in office, which is for five years. Believe it or not, at the end of this term, 20 per cent of this Assembly term will already have gone. It’s unbelievable to think that the time has gone so quickly and yet we are obviously still waiting for the Welsh Government to bring forward its own industrial strategy, and indeed to clarify some of the policy areas that the previous Minister engaged in when she was talking about economic regeneration, and importantly to map out the direction of travel and the support that the Welsh Government will put in place for the Welsh economy over the next five years.

I fully take on board the point that the Minister has commissioned a review of all the bodies that advise him when it comes to developing policy and developing support, and I think even he pointed out that there had been a pyramid of organisations, totalling some 46, I think it was, different organisations feeding in just to the economy department in the Welsh Government. And as we know, the economy is far bigger than just the one department. Education, lifelong learning and skills, health, for example, and transport, there’s a whole pile of organisations that sit in other departments—local government another one—that need to be linked together, locked together, to deliver the support that the Welsh economy needs going forward. And, as we see with the city deal concept that is being brought forward and has been welcomed by the Welsh Government and positively engaged by the Welsh Government, the level of support that can be brought together in one pot when Governments work together and local authorities work together, along with independent businesses in the locality, can have a huge impetus of driving economic regeneration.

But this is an issue that I’ve raised several times with the Minister in the Chamber, and I hope he might reflect on this in his response today. When you look at the way that regeneration and local development is going in England, in particular along Offa’s dyke where you have incredibly powerful local mayors now, in Bristol, in Birmingham, in Manchester and in Liverpool, there is, unless they are positively engaged with, a real challenge to the work that is going on here in Wales when it comes to obviously attracting inward investment and new opportunities to Wales. I’ve yet to hear how the Welsh Government is going to work positively with that new regime of regeneration and restructuring of support for regional aid in England. Again, what is important for the Welsh Government to appreciate here is the big infrastructure projects that will drive much regeneration and job creation capacity around Wales.

I was reading from the construction federation, only today, when they cite three major projects—and some people might question the viability of some of those projects—HS2, Heathrow Airport, and Hinckley Point, that those three projects on their own will create the demand for an additional 35,000 construction jobs over the next five years. That is a huge opportunity for the construction sector to create a skill base in those communities where those projects are being built that will last for generations. But, obviously what’s got to happen is the colleges and the skills providers linking up with these big projects to make sure the opportunities are there. As has been pointed out earlier by Nick Ramsay, and others in fairness, in the autumn statement an additional £430 million-worth of capital spend was made available to the Welsh Government over the next four years, and that will go a long way to activating many of the big construction projects that we would like to see creating opportunities here in Wales.

One of the manifesto commitments that the Welsh Government talked about at the recent Assembly election was the north Wales metro—page 19; the Minister himself wrote that manifesto. But, as of the First Minister’s questions yesterday, I now hear that that metro is no longer the north Wales metro—because it clearly talks of a north Wales metro in the manifesto—but now the talk is of a north-east Wales metro system. So, it’s already scaled back in ambition, or perhaps the Minister could enlighten us all as maybe that might have been a slip of the tongue. Because last time I looked at—.

Might I help you again on the history and the development of transportation in the north? It all started from the east and moved west.

I don’t doubt that. But if you read the manifesto, as I pointed out to you, the manifesto talks of a north Wales metro system, and now it seems Government policy has moved firmly just to stick with the east and forget the west. As we know, in the western part of north Wales we have the lowest levels of gross value added to be found in Wales—in Anglesey, for example. One thing successive Welsh Governments have failed to do is lift GVA levels across Wales and, importantly, take-home pay across Wales, which are the lowest levels anywhere in the United Kingdom. Economic development, training and skills will upgrade the workforce, upgrade the job opportunities to lift those wage levels, lift those GVA levels, so that we get more money circulating around the domestic economy of Wales that does create continued opportunities for some of our most deprived communities.

That is the challenge to this Minister and this Government, at the outset of its term in office, to clearly map out its vision for where it wants to be at the end of its term of office. And I have to say, I haven’t heard nothing to date that convinces me that some of the wrongs of previous administrations will be corrected by this Minister and this Government.

I acknowledge the importance of the Cardiff city deal and, as long as we get the connectivity through the metro, I’m sure it’ll be a great way of joining up Monmouthshire with Bridgend, and the Rhondda with our capital city. But, today I wanted to talk about something that’s more fundamental to both the UK industrial strategy and the Welsh industrial strategy, which is the issue of automation, which is very tentatively mentioned in the UK’s industrial strategy Green Paper. It talks about the increasing pace of technological change, which will need more people to retrain, and the fact that they’re going to put some investments into supporting robotics and artificial intelligence. But this is not really spelling out the extent of the change that’s going to be required, both by companies as well as Government. I just thought it would be useful to reflect on what exactly is involved.

President Kennedy declared that the major domestic challenge of the 1960s was to maintain full employment at a time when automation was replacing men. This was when computers just began to appear in offices, and robots on the factory floor. Indeed, I can recall, in the early 1970s, talking about what we were going to do with all the extra leisure time that we were going to get as a result of computers. Remember that? Anyway, it definitely didn’t turn out like that. But today, we looked at three different reports, all of which confirm that about one third of current UK jobs are likely to be automated in the next 20 years. Deloitte has highlighted that people paid £30,000 a year are five times more likely to be replaced by machines than jobs paying £100,000. Although the replacement of people by machines is well understood, the scale and scope of the changes yet to come may not be, and it’s certainly not reflected in the UK’s industrial strategy Green Paper.

The jobs least at risk from computerisation are those in senior management, financial services, computer science, engineering, education, legal services, community services, the arts and media, and healthcare—those jobs that require people skills and brainpower to make decisions whether to do one thing or another. The jobs obviously at risk are those in office and administrative support work, sales and services, transport, construction and extraction services. We already see that. If you go to the M4 toll road, coming from Bristol, there are practically no people manning the tolls. It’s all being done by machinery. There are going to be fewer and fewer tasks where a labourer alone is required, and more and more tasks where brainpower has to be the given.

But, interestingly, even cognitive tasks can now be automated. This is talked about in an Oxford University study on the impact of future technology. A computer can, apparently, now dispense expert radiology advice currently undertaken by highly trained radiologists, thanks to the advances of deep learning and other forms of artificial intelligence. I’d like to know a great deal more about that and the accuracy of interpreting radiology reports, which is, obviously, a very key thing. But it just tells you how far automation is going in terms of the artificial intelligence. In an earlier debate, we talked about big data being used in agriculture, and the ability of farmers to examine exactly which patch of grass would be most profitable to put the livestock on and/or which things to grow to nourish the quality of the grass. But this is something that’s going to affect all jobs.

I think the key issue for us is who is going to benefit, because if we are going to see routine-type jobs done, for example, in the public sector, things like—midwives and health visitors have to input data on the outputs of their work, and very important work it is, too, but it’s quite routine, and if we can get the computers to do that job for them, it could, in theory, free them up to provide more care. But who is going to benefit from all this automation? Is it going to be a way of improving the quality of care services, or is it going to be yet another excuse by our UK Government to slash and burn public expenditure even more than they’re doing already? Are we the people or the transnational companies that are larger than many nation states, and increasingly feel they are beyond the law, the ones who are going to benefit? This is something that’s absolutely key for us as legislators.

I welcome the debate today, and thank the Welsh Conservatives for tabling this debate. I commend Plaid Cymru’s amendment, which I think is very timely indeed. The Cabinet Secretary for the economy has stated that he wants the north to be a part of the English Northern Powerhouse. Last summer, he also said he wanted mid Wales to join a midlands powerhouse. The First Minister is on record in this Chamber dismissing the idea of economic growth holes in the Valleys and in Gwent. So, we are left with a very inadequate economic paradigm from this Government, at least as far as economic geography is concerned.

In the absence of a Welsh Government economic plan for Wales—I echo the concerns expressed by the leader of the Conservative group on the delay in producing an economic plan for Wales. In the absence of such a plan, we are left to put together the fragments of what could possibly be a plan. Essentially, from what we’ve heard so far, this boils down to communities in the south, within a certain radius of Cardiff and Swansea, relying on trickle-down from those centres, whilst communities in the north and mid Wales hope for trickle-down from the midlands and the English Northern Powerhouse: city-centric trickle-down for the south, cross-border trickle-down for mid and north Wales. The fact that our political entity will not therefore be coterminous with our economic entities, I am sure, will lead to a lack of regeneration, a lack of opportunity and, almost certainly, a lack of political accountability. Instead, the Government should be considering what best practice there is at an international level for countries of a similar geography to Wales, with a similar industrial legacy and with a significant rural profile. In that sense, I would suggest that we would be better off looking at cross-border co-operation and economic co-operation that we can see in places like Malmö and Copenhagen—far better and far more useful, I think—that could deliver equitable economic regeneration. I give way.

Would you agree that, actually, the importation of a city-region-based economic strategy is particularly curious in the case of Wales, which has among the lowest levels of population—or proportion of the population—living in cities amongst virtually any nation in western Europe?

I would, of course, agree with that. There’s nothing wrong with the concept of regional economic growth, or indeed with the city region models. There are OECD reports that are demonstrating that where city regions work, and where regional development works—it’s by how you measure the peripheral areas to the population centres. I fear, from what we’ve heard so far from this Government, that there’s a lot to be concerned about in the so-called peripheral areas of the proposed city regions in the current models.

In terms of the key factors identified by the OECD and others in driving regional success, they include: encouraging critical mass or thinking regionally in order to compete globally—that’s where digital infrastructure is crucial, something that Members in the north, I’m sure, will be very keen to highlight; spurring innovation that can transform a region’s economy—this is where partnerships between HE and the private sector are absolutely crucial; specifically aiming to increase job opportunities and per capita income in a region to at least parity with the state or the nation as a whole—I think that should be a central objective of this Government at a national as well as regional level; strengthen the capacity of people to compete in a global economy—this is where an FE strategy might come in handy; the delivery of proper apprenticeships across the country; and develop and improve regional infrastructure to enhance economic competitiveness—that means a metro system that covers all parts of a region, not just one corner of it, for example.

Some Members will know my particular interest in the idea of creating designated economic growth poles across the nation. One of the great benefits of having a youthful democracy in an old nation like ours is that we can make a choice to build our nation from the bottom up and decide to build in political and economic redistribution to our plans if we choose to. So, designating towns and cities outside of the capital has had, in particular, national significance, and locating corresponding public institutions in them gives all citizens a stake in our national success story and can be a catalyst for local and regional economic growth.

Trickle-down doesn’t work; bottom-up does. I would suggest to the Cabinet Secretary that these should form the key principles of both a national and regional economic vision for our country, when or if an economic plan for this nation is eventually published.

I call on the Cabinet Secretary for Economy and Infrastructure, Ken Skates.

Thank you, Presiding Officer. Can I begin my contribution today by thanking the Conservatives for bringing this debate to the Chamber in a week in which I’m pleased to have already announced more than 500 new jobs through Government intervention? The Green Paper released by the UK Government was certainly an interesting read. The Prime Minister herself gives the document and the new policy a very bold introduction. When she talks about a new approach to government, she says,

‘not just stepping back and leaving business to get on with the job, but stepping up to a new, active role that backs business and ensures more people in all corners of the country share in the benefits of its success.’

This is important, I believe. It demonstrates a major philosophical shift for the Conservative Government, and it recognises that active intervention in the economy makes for stronger economies and more balanced economies. As I sat in my office reading those paragraphs of the introduction to the policy, I did wonder what the disciples of free market economics, such as Keith Joseph, would have made of the conversion that we have now seen from the UK Government. I do like to be collegiate, and so it gives me great pleasure to be able to say that we really are all interventionists now. I will also say that there is a lot in the Green Paper that I can agree with. Prioritising activity that supports business and trade, improving infrastructure and enhancing conditions to support sustainable growth are areas of policy that I am more than willing to put my name to. But, I do want to make two very important points. The first is about actions over words. The Green Paper talks very openly about the opportunities to stimulate the economy in important strategic sectors. It talks about a potential sector deal for steel—a new partnership between steel businesses, the supply chain, research institutions and Government that can support the steel sector to grow and thrive into the future. My reaction is a positive one. The steel sector across the UK is in urgent need of the support that the UK government can offer on a scale that only the UK Government can offer. But it is just a shame that the 12 months that it has taken for the UK Government to come to this conclusion have been the very same 12 months when the steel sector needed Government intervention the most. As Hannah Blythyn rightly said, Tata, unions and the workforce recognise that we have only been able to avert disaster in the steel sector because of interventions by this Welsh Government. So, I do hope that the move to interventionism by the UK Government is going to be realised in actions as well as words.

Another important point I would like to make is about devolution. I do think a key weakness in the Green Paper is the lack of any coherent understanding of the way in which economic policy making has changed in the UK over the past two decades. Now, much of the success of Brexit, as I think we explored yesterday, will be determined by how effectively the UK Government engages with, and opens up to—and engages meaningfully with—devolved administrations and regional areas about the decisions that will affect us all. So, too, this industrial strategy will stand or fall by how much this UK Government wants to do to Wales, and how much the UK Government wants to do with Wales. Now, as the Welsh Government amendment makes clear, and as I have told the Secretary of State, Greg Clark, myself, the Welsh Government stands ready to work collaboratively and meaningfully with the UK Government on areas of shared and overlapping industrial interest. As I have already said, later this spring, we will be publishing our cross-Government strategy to develop the Welsh economy, and we will work with the UK Government to ensure that both approaches work for Wales, its economy and its businesses. I agree entirely in this regard with the fine contribution made by Nick Ramsay, but I want to lay down a very clear marker here and now: the partnership between us and the UK Government must be one founded on respect and of equal standing. It must recognise and respect the devolution settlement.

One area where there is an important and effective partnership is in north Wales. I think it is to his credit that the Secretary of State for Wales and his ministerial team have shown what I believe to be a willingness through the north Wales growth deal to work together in a way that can benefit the region by taking advantage of the cross-border economy. Work is at an early stage but the relationships that have been developed thus far have been encouraging. Again, though, it is about actions, not words. Through the growth deal, the UK Government has another perfect platform with which to demonstrate the more muscular industrial policy that it talks warmly of in the Green Paper.

I look forward in the coming months to seeing tangible progress on electrification of the north Wales main line, more active support for Wylfa Newydd and a clear vision for how the region can plug into the Northern Powerhouse and the Midlands Engine as key leaders of dynamic regional economies. Russell George identified the need for greater investment in technology within the regions of England. In north Wales, where he talked specifically of the need to invest, we have announced the creation of an advanced manufacturing research centre to conduct that sort of innovation and research. Also, we are investing in the Menai science park for the same purpose. We are demonstrating, with cash, our determination to invest in north Wales. We look forward to seeing the UK Government doing so likewise.

Now, I do wish to be generous to my Conservative colleagues—[Interruption.] No. I do wish to be generous to my Conservatives colleagues, so I will at this point give a very heartfelt ‘thank you’ to the UK Secretary of State for Transport, Chris Grayling, who last week paid a very fulsome tribute in the House of Commons to an important intervention the Welsh Government has made in the Welsh economy in recent years when he praised the major success Cardiff Airport has been since it was purchased by us in 2013. He said:

‘Cardiff airport has been a great success story, and I pay tribute to all those involved.’

With record passenger numbers, new routes and sustained growth, the transport Secretary is absolutely right to celebrate the interventionist policy that we have adopted for Cardiff Airport and the Welsh economy.

So, my message to the UK Government in this debate is a simple one: we will work with you, but on an equal footing, and where the UK Government shows a new willingness to invest in Wales.

I call on Angela Burns to reply to the debate.

Diolch, Presiding Officer. I’m very pleased to be able to wind up on this debate, and I’d like to thank Russell for opening it the way he did, because I think, Russell George, you painted a very broad canvas of the economic needs of the country. You rightly pointed out the growth of the Northern Powerhouse and the opportunities for north Wales and the north Wales growth deal. However, despite you doing that, we’ve said that we can’t support the Plaid Cymru amendment because although, technically, everything you say in your amendment is absolutely right, you only concentrated on north Wales. Steffan Lewis, in your contribution, much of which I did agree with, you talked about poor economic paradigms, you talked about the trickle-down effect not working, but above all, you actually talked about not raising or not leaving behind our peripheral areas. Yet your amendment focuses on only one area, and I would like to remind you: we have mid and we have west Wales.

So, Adam Price, I’m going to go through in just a moment—because you obviously weren’t listening terribly clearly—what our plan is for developing economic growth in Wales. But before I do that, I would like to just address a comment made by both David Rees and by you, Cabinet Secretary, over the steel issue. I take great exception to the fact that you both stood up in different ways and in different tones to say that the UK Government have done absolutely nothing to support the steel industry—[Interruption.] Don’t start leaping up to your feet. You are the king of interventions, and it’s not happening today. Let me be clear: the Westminster Government have set up a dedicated steel council to work with all key stakeholders to explore actions that industry and government can take. They have already paid over £133 million—[Interruption.]—no, I won’t—to the steel sector to compensate for the cost of the renewables and the climate change policies. They’ve already secured flexibility over the implementation of the EU emissions regulation. They have successfully pressed for the introduction of trade defence instruments to protect the UK steel produces from unfair steel dumping. Let’s be absolutely clear: this is a global problem, and they have taken action. So, Cabinet Secretary, when you so gleefully talked about Chris Grayling saying how wonderful you were for Cardiff Airport, and you said that in a spirit of generosity, I would challenge you to equal that spirit of generosity and to recognise what the United Kingdom Government has helped to do for the steel industry.

Ken Skates rose—

Of course.

I take it, then, that the Member is confident that the UK Government has done all it possibly could do in the past 18 months for the steel sector in Wales—everything that it could have done.

I cannot actually tell you if it’s all, because who knows? In the same way, you guys most certainly haven’t done all you could do. But let’s be clear: what do we have? We have a result that protects a valuable industry for Wales. We have a result that actually will enable an enormous investment to happen in Tata Steel and in the steel industry in Wales, and that’s what we want—outcomes. Outcomes, I’m afraid, Cabinet Secretary, are what we don’t see from you. We’re still waiting for the spring to see what your industrial strategy is, and all we ask you to do is note the fact that the United Kingdom Government has led the way. They’ve put out there—for good, for bad, for comment, for improvement—a UK-wide strategy that we can all look at and see how we can take it, move it through Wales, and help to drive our economy.

Because what we need, Adam Price, is research and development. We need education and skills. We need support for the vast majority of businesses in our country, many of whom are in the small to medium-sized sectors. We have to spread that equitable economic growth that Steffan Lewis keeps talking about, and rightly so. R&D is vital because it doesn’t have to live in traditional areas. We need new industries.

Jenny Rathbone, I do appreciate the concerns and the worries about automation and what automation could do to industries as it goes forward. But, here we are, we’re in a catch 22, because automation ain’t going to go away. It is the way of the world. Your children, my children and our grandchildren are going to live in a world so different to the one that we live in. What we have to do is find those new businesses, encourage them to grow in areas where people live, where people want to live, skill them up and look at different ways of being able to make money, earn salaries, buy our homes, look after our families and live a good life. But wishing automation away simply won’t happen.

There are some very good points in the UK Government’s industrial strategy. I like the industrial strategy challenge fund. I think that’s so positive. It’ll give UK companies the chance to capitalise on our strengths in things like biotechnology and green energy. I like the fact that they’re going to look at tax breaks for people who invest in research and development. Let’s use some of these wealthy people’s lots of money to invest in research and development and to help to grow the communities we need.

Yet, I have to say, Cabinet Secretary, I don’t see that the Welsh Government has shown the same levels of investment in research and development. There have been huge cuts in the budget lines in business innovation resource funding. There’s been huge cuts in innovation centres and R&D facility budget lines. And R&D, of course, is just one plank of supporting a successful industrial strategy.

Education and training—a subject after most of our hearts. We talk about the need to upskill our people. I am not going to rehearse the issues, challenges and disappointments we have in this area in this country, but we must step up, because 72 per cent of Welsh businesses are experiencing difficulties in recruiting the right staff—72 per cent—and 61 per cent of Welsh businesses fear they will not be able to recruit enough highly skilled workers to meet both current demand and to support further growth. If we cannot support further growth, how are we going to grow our economy? That is the vital key we are still missing here in Wales. I challenge you, Cabinet Secretary: you need to be more ambitious in supporting small and medium-sized businesses. I say to you that your business rates fudge is not good enough. Free up funding. Lean on the banks.

The White Paper has zip in it about driving the economy forward. Businesses, both current and potential, have to wait until the spring. And this is in a background of Wales lagging badly behind the UK on GVA. The UK Government’s industrial strategy is a way forward that aims to deliver an improvement in living standards in all parts of the UK. It’s a way forward to deliver major investment in infrastructure. It’s a way forward to deliver investment in R&D and science. And it’s a way forward to support business growth. I suggest, Cabinet Secretary, that you start walking forward and not keep going back.

The proposal is to agree the motion without amendment. Does any Member object? [Objection.] I will defer voting under this item until voting time.

Voting deferred until voting time.

A dyma ni’n cyrraedd y cyfnod pleidleisio. Oni bai bod tri Aelod yn dymuno imi ganu’r gloch, rwy’n symud yn syth i’r cyfnod pleidleisio.