Questions now from the party spokespeople. The Welsh Conservatives spokesperson, Suzy Davies.

Diolch yn fawr, Lywydd. Neatly dealt with there, I have to say, Cabinet Secretary. I wonder whether you could give us an indication about when we might expect a full response to the report on Historic Wales. I’m hoping you can do that today, just to give us an idea.

Until then, I’m also mindful of the fact that your predecessors, despite my coaxing on a number of occasions to think otherwise, also always maintained that Cadw was better placed within Government. You clearly have other ideas, which I’m pleased to see, but I wouldn’t believe that you haven’t proceeded to commission the Historic Wales report without giving at least some early consideration to what extracting Cadw from Government might look like. What details can you give you of the preparatory scoping that you’ve done about taking Cadw out of Government? How have you overcome the arguments of your predecessors? Do you have any sort of indicative figures—I appreciate that this is difficult—so that we can get a general sense of costings, notwithstanding, of course, that you’ve yet to make a final decision? Thank you.

Can I thank Suzy Davies for her questions? I’ve received the steering group’s report on Historic Wales. It is an excellent report. I’m currently considering it and I’ll respond formally in the coming weeks. I am also awaiting formal responses from the respective organisations and institutions that the paper concerns.

With regard specifically to Cadw, I will give that recommendation particular attention. Cadw has performed exceptionally well in the past 12 months whilst being in Government, and I want to ensure that that success continues. One of the reasons that Cadw has experienced such a remarkable increase in the number of visitors and members, and, indeed, in the amount of income generated, is because of the personnel within the organisation having the freedom and flexibility to operate as commercially as they wish. I wish to make sure that, whether Cadw stays in Government or goes out of Government, it has the right people—the right, if you like, imagineers—who are leading the organisation in order to draw in more visitors.

Thank you very much for that answer. I just want to move on now to something else that we’re waiting on a little bit, which is the small museum review, which reported in August 2015. It was received very well by the sector, and, despite the six-month delay in the Government responding to the recommendations, they’re eager to see progress.

However, I’ve been told that some of the recommendations are not being delivered upon, at least not at pace. I’d be grateful if you could give us some indication of how your department monitors and scrutinises, actually, your partners, which would include local authorities, to ensure that those good ideas do translate into good practice.

I believe that Members should have received an update on the expert panel review, the recommendations and how we are taking this work forward just prior to Christmas. We accepted almost all of the recommendations. The one recommendation that I had reservations about was the creation of a new museums council that potentially could compete with or could tread on the toes of existing organisations. So, it’s my view that before setting up any new organisations or groups, we should first examine whether those that currently exist actually exist to the best of their ability. If not, then are there changes that are required to those organisations?

There are other recommendations that we had actually enacted before the review had emerged. One, for example, was my desire to see local museums being able to access the sort of funding that local libraries were able to access for the purpose of transforming them into lifelong community hubs. I changed the criteria on that fund and increased the amount of money available so that local museums could benefit from it.

The expert panel report identified this as a transformation fund, and it truly is a transformation fund, but I didn’t wish to wait until the report was responded to and then actioned on before making sure that that valuable resource that could keep local museums alive was made available and, indeed, drawn down. I think the figures are very promising at the moment—there is great interest by local museums. Insofar as the other recommendations are concerned, we are implementing them, but I must stress again that that one recommendation that I have reservations about is based on my belief that we currently have the right institutions, organisations and groups that can represent the museum sector.

Thank you very much for that answer. I’ll certainly feed it back to the sector, if they haven’t already picked it up from this. I just want to move on to something a bit different now, and it’s the fact that Wales is a country of small businesses, many of which will be partnerships rather than companies, and so operating on income tax rather than corporation tax rules. I’m just wondering what kind of discussions you might have had with the finance Secretary about whether—‘whether’ is a genuine question as well—and how income tax-varying powers might be used to encourage the private sector—the kind of private sector we have—to invest in arts and heritage.

I’d be very interested to examine any forms of philanthropy or tax breaks that could enable giving to the cultural and sports sector. I think it’s important that we do look at broadening the availability of resource, and encourage more people—not just individuals, but businesses as well as charitable organisations—to ensure that the culture sector is thriving. I will gladly look at any possible scheme that would see more resource diverted into libraries, museums and arts centres. I think the Members makes a very good point, and I will raise with it the finance Minister.

Plaid Cymru spokesperson, Adam Price.

I’d like to return, if I may, to the issue of inward investment and the role that it should play in our wider economic strategy. Assembly Members will be interested to know that in the last few minutes the First Minister has told the BBC that a trip to Detroit would be pointless, and given the gravity of the situation many observers would be forced to conclude that he’s a pretty pointless First Minister.

I would like to ask the Cabinet Secretary, as he prepares to unveil his new economic strategy, how important he thinks inward investment should be to the Welsh economy going forward, given the fact that there are fewer large-scale inward investment projects than in the past, and we’re not successful at winning them. We didn’t win Jaguar Land Rover, where the engines from Bridgend will be now made. Six years ago, we didn’t win Boeing. There was a headline in the ‘Western Mail’ that celebrated Wales coming second. It sounded like some of the post-match interviews we’ve heard recently. Can the Cabinet Secretary confirm whether or not the Welsh Government offered, as I’ve heard, up to £50 million to Boeing to come to Wales? And can he also confirm that one of the reasons that Boeing decided not to was because of their concerns about the adequacy and the quality of the local skills base?

I think the Member lets himself down with such cheap pot shots at the First Minister that do nothing to offer security to those workers. But, actually, what the First Minister has said in the past few minutes confirms that I have been speaking to the right person—the person that will make the decision about Ford. In terms of FDI projects, there’s been a 77 per cent increase in the number of projects and an 84 per cent increase in the number of jobs from companies that are headquartered elsewhere in the UK coming to Wales. We do have a very proud record of attracting investment to Wales, as shown by Aston Martin. As we leave the European Union, it will become more important that we work with businesses and investors in England, and that’s why I believe that exports—not just abroad, but also exports across the border to England, Scotland and Ireland—will become essential. I do think that we have to have the right balance between attracting inward investment and ensuring that we have more Welsh-based businesses and indigenous companies exporting outside of Wales. For that reason, we’ve been very clear that as we exit the European Union, we must have tariff-free and unfettered access to the single market. I am pleased—it has taken some time—but I am pleased that the UK Government is now talking of a free and frictionless relationship. I think this recognises that the Welsh Government has been right throughout to call for unfettered access that doesn’t have any tariff or technical barriers that prevent companies in Wales from exporting. But I do think, as a whole, exports will become more important to Wales’s economic growth and prosperity.

As a nation, of course, we will always have limited resources—indeed, scarcity, of course, is one of the fundamental principles within economics—so we need to be absolutely clear that we’re investing those scarce resources in the right areas, where they’re going to have the greatest impact. Can I invite the Cabinet Secretary, as he devises and refines his economic strategy, to look at the research project conducted by a team at Cardiff Metropolitan University, including Professors Brian Morgan, Gerry Holtham and Rob Huggins, who have looked across the world at the different variables that are associated with economic success? There were some surprising results—or maybe not so surprising—which actually showed that one of the most important variables is the level of expenditure on education. Indeed, as Professor Holtham has said in the last few weeks, rather than actually raiding the education budget, as we’ve done in recent years to actually inflate our conventional economic development budget, maybe we should be doing it in the opposite direction, and responding, for example, to the call from the Organisation for Economic Co-operation and Development in its report, published yesterday, for sustained investment in education—schools, further education and universities—because that is one of the most reliable determinants of future economic success.

I think the Member is right, and I’d also add that there is great importance that’s attached to early years education as well, and I think it’s absolutely essential that children get the best possible start in life, and for that reason I think it’s also right that we have a very ambitious childcare pledge and that we continue to invest in early education. What we’ve been able to ascertain from all of the available data is that in terms of the gross value added gap between Wales and the rest of the UK, the vast majority of that gap can be determined by productivity deficits, and the difference in productivity, in turn, is largely owing to factors such as skills gaps. It’s essential, therefore, that we invest in the right area of skills training to make sure that every individual looking to get into the workplace is equipped with the right type of skills. I think it’s also essential that we don’t just educate and skill people generally, but that we actually equip people with those skills that are aligned with their intrinsic interests and with their intrinsic abilities, so that they can secure a long career in the workplace of their choice.

The other variable identified as part of this study of global economic competitiveness is the level of business innovation—research and development. Over a year ago, his predecessor commissioned a second-stage report on creating a dedicated national innovation body for Wales, to drive up our level of R&D, both in the private sector and in higher education. Can he report on some progress on the establishment of that body, and can he also respond to some information that I’ve had that suggests that the full-time director of innovation, which was there leading the Welsh Government’s efforts in this area, and former director of the Confederation of British Industry, has been moved out of that post into a post as director of sport, and we don’t, any more, have a full-time director of innovation, which surely has to be concerning, given its importance to our economic strategy? And finally, an innovation that we are looking forward to in the Heads of the Valleys: the Circuit of Wales programme—can he confirm that it is his intention, provided all the information is provided in time to him, to make an announcement before purdah? Surely the people of Blaenau Gwent deserve to know that before the May elections.

In terms of innovation, Innovation Point and other organisations or other initiatives have been able to drive the amount of innovation and enterprise in Wales to new highs. That said, we do need to catch up with many parts of the UK: of that, there is no doubt. But between 1995 and 2015, the average annual increase in real terms, by businesses investing in enterprise research and development, was 5 per cent per year, in contrast to the UK average of just 2 per cent. So, the growth has been greater in Wales, but we still need to see further investment from business, and, indeed, from Government, but it’s absolutely essential that we recognise the challenge that exiting the European Union could have in this regard. It’s also the reason why I’ve been quite clear that we should expect in Wales a considerable proportion of the £2 billion that the Secretary of State for business and enterprise has announced for research and development across the UK.

In terms of the head of innovation within Welsh Government, as far as I’m aware, one of the most impressive academics in this area takes responsibility for innovation and I have every confidence in that official in leading a dedicated and effective team that will drive further resource into research and development, not just in the private sector but across the academic field, and also focus minds, focus attention within Government on what works best to drive enterprise within the Welsh economy.

In terms of the Circuit of Wales, I said back in January that I believed that the people of Ebbw Vale deserved a decision on this project as soon as possible. That’s why I tasked the developers with bringing forward a firm and formal proposal within the time that I allocated them. They brought that back. I then subsequently said that we would begin a process of due diligence, which would last between four and six weeks from the point of receiving the information. It’s still my hope that it will take just four to six weeks once we have received all of the information, and if a decision can be made within the time that leads us to purdah, then surely a decision before that time should be made. But this is very much at the moment in the hands of the developers. We do need the information in order to begin the process of due diligence so that a decision can be made before purdah if it’s going to be made then.

UKIP spokesperson, David Rowlands.

Diolch, Lywydd. Cabinet Secretary, this morning the Economy and Infrastructure Committee considered the strategy of the Welsh Government’s proposal to deliver the borders franchise and the metro project. We note that the Welsh Government has adopted the integrated contract approach, meaning, of course, that the rail franchisee—whoever that might be—and the chosen infrastructure company will have to work very closely together. Could the Cabinet Secretary indicate if he is aware of any discussions between those bidding for the franchise and those engaged in the tender process for the infrastructure to establish some compatibility?

We’re encouraging all of the bidders to engage as widely as possible with current stakeholders and potential stakeholders in the future to ensure that investment in the new franchise and in the metro is maximised and that that investment is channelled in the right way to make sure that services are as efficient and as modern as possible.

Does the Cabinet Secretary not agree with me that it is vital that the two parties have an effective working relationship if the whole project is to be delivered on time and on budget?

Yes, I would agree with the Member. That is absolutely essential. We wish to see a strong relationship developed between those who are responsible for the tracks and those who are responsible for the vehicles that run along them. I think what the Secretary of State for Transport recently announced about bringing together in some form Network Rail and rail operators is very interesting. Of course, what we’re proposing in Wales, to some extent, is similar, but instead of privatising the entire system, we will actually be bringing it closer to public ownership.