5. Will the First Minister outline how the Welsh Government measures the success of its wealth creation policies? (OAQ51116)

It’s important to consider the performance of the Welsh economy using a basket of indicators and not look at one individual measure. Of course, ‘Prosperity for All’ shows the way forward. The plans that will follow will provide greater detail.

I thank you for that answer, First Minister, but in measuring not only wealth creation, but also health, education, housing provision et cetera, is Ron Davies, the former Labour Welsh Secretary, correct when he says that, after 20 years of a Labour-controlled Welsh Assembly, Wales is now poorer than it was 20 years ago? This former Labour luminary went on to say that he is not able to name a single initiative that has improved the lives of the people of Wales. Surely, First Minister, you have to agree that this is as damning an analysis of Labour policies since devolution as any expressed in this Chamber.

‘No’ is the answer. Now, where do we start? Let’s start with Jobs Growth Wales, shall we? The fact that so many people were helped to get into jobs, young people were given training. Let’s look at the help that was given to workers to keep their jobs when the recession hit hard in 2008-09. Let’s talk about the people who are alive because of the Human Transplantation (Wales) Act 2013, supported cross-party across this Chamber. Let’s look at the fact we have the best foreign direct investment figures for 30 years. Let’s look at our employment levels. I suspect, really, that Ron needs to read a few more papers.

The Federation of Small Businesses has claimed that Welsh Government offices overseas have failed in their aim of boosting exports to those countries. Figures suggest that exports to those countries have, in fact, fallen between 2013 and 2016, down 13 per cent to the United States, down 22 per cent to Belgium and 55 per cent to Japan. First Minister, what plans does the Welsh Government have to review the effectiveness of its overseas offices in boosting trade with the countries in which they are located?

He’s fallen into a trap there, set for him by the UK Government, because what has happened is that the methodology has changed, so that—if I remember rightly—if you have a factory in Wales that is exporting, but its headquarters are in England, it’s counted as an English export. That’s the problem. So, all of a sudden, we see these sudden changes in the export figures, not because physically fewer goods are being exported, but it’s because they’re counted as having come from England because their headquarters are in England. We know that many organisations in Wales that manufacture don’t have their headquarters in Wales.

He asks a question: what are we doing to boost our presence overseas? We are moving ahead with a strategy to do just that. The balance that has to be struck is between: do you boost an existing office or do you open a new office? We commissioned work from the Public Policy Institute for Wales; they gave us information as to how we should approach that. Over the next few months, Members will hear of new office openings and, of course, boosting of staff abroad in order to make sure that we boost our presence, working quite often with the Department for International Trade—in fact, most often with DIT—but in those markets where Wales has a strong presence and needs to strengthen its presence in the future.

Isn’t it true, though, First Minister, that despite what you said about unemployment levels—and that is welcome; they dipped below the UK average for a period in the early 1990s as well, didn’t they? But the problem is in terms of income, in terms of prosperity. You can choose any number of a basket of indicators, whether it’s average earnings, household disposable income, gross value added per capita, income per hour worked, et cetera. We have gone backwards compared with where we were at the beginning of devolution, and that wasn’t what was promised. So, where are we going wrong and what is the indicator—how are we going to measure the, hopefully, success that will come at some point in the future?

It’s not that we’ve gone backwards, and that people are somehow poorer than they were. What is correct to say is that, as our gross domestic product—or if you want to measure gross domestic household income as well— has gone up, it has not improved at the same rate as other parts of the UK. That’s the accurate description. He asked the question: what do we do about it? At the heart of it all is skills—it’s skills. What happened at the beginning of devolution is we did see a lot of those businesses that, I think, came here because of the money and provided unskilled work—they left. They went to Hungary. A business in my own constituency went to Hungary. They went to lower cost economies, because all they wanted to do was to manufacture cheaply. Now, we can’t play that game, nor should we try and do it. So, the focus now, heavily, is on skills. One of the questions we’ve always been asked by overseas investors is, ‘Have your people got the skills that we need in order for us to be able to function in Wales?’ Increasingly, of course, the answer is ‘yes’.

We work very closely with further education colleges and we work with our universities in a way that, 10 years ago, wasn’t happening. Our universities were not interested in working towards economic development at that point; they saw themselves purely as academic institutions. In fairness to them, they’ve changed. It will take some time for the fruit of that work to come through, but we are seeing investors coming to Wales that, bluntly, wouldn’t have come 20 years ago—high-end investors who are paying more in terms of the jobs that they create. What’s key now is to keep on moving on that track, not just in terms of FDI. He will make the point, I understand, in terms of encouraging SMEs in Wales. It’s not a question of one or the other, and that’s exactly what we want to do as well, working again with the universities and others, making sure that young entrepreneurs who have good ideas get the support they need to put those ideas into practice. Increasingly, across Wales, we are now seeing those businesses starting to be created and to grow.