The next item on our agenda is the statement by the Cabinet Secretary for the Economy and Transport on the economic action plan, and I call on the Cabinet Secretary to make the statement, Ken Skates. 

Thank you, Presiding Officer. Since devolution, we have strengthened the foundations of the Welsh economy. Our labour market performance is strong, with more people in work than ever before. We have a record number of active businesses and new business births are at their highest level for over a decade. Our exports and levels of foreign direct investment continue to impress, demonstrating global confidence in the quality of Welsh business, products and services. 

The Deputy Presiding Officer (Ann Jones) took the Chair.

However, this is not a time to stand still. We live in an age of unprecedented change alongside huge opportunity. Fired by the fourth industrial revolution, the way we work, live and spend our leisure time is transforming before our eyes. 

This has implications for all of us—for every business and every community. We must get ahead of that change to equip our people, places and businesses to face the future with confidence, and that is why I am publishing 'Prosperity for All: the Economic Action Plan'. The plan sets a clear vision—a vision of inclusive growth, an economy built on strong foundations, supercharged industries of the future and regions empowered to become more productive. Responding to what businesses, trade unions and communities have told us over the last year, this is a whole-Government plan for growth. I am grateful for the work of Cabinet and ministerial colleagues whose input into this framework has been essential and will be critical to delivering it on the ground over the coming years.

This is a plan for everyone in Wales, a plan that meets the needs of today and the opportunities of tomorrow, a plan that drives change in policy, delivery and the way we work in Government and with others. Amongst its key changes are a new economic contract to frame a fresh and dynamic relationship with business, based upon the principle of public investment with a social purpose. As part of a reciprocal relationship, we expect businesses to commit to growth, fair work, reducing carbon footprints, health, skills, and learning in the workplace. In return, we will simplify our finance offer and deliver a competitive wider offer to business. 

We will help businesses overcome the key challenges of the future, summarised by our five calls to action: decarbonisation, because we want to enable more of our business base to become carbon-light or free. Innovation, entrepreneurship and headquarters—we want to support businesses to innovate, to introduce new products and services. Exports and trade—we want to proactively support trade with the UK and with the rest of the world. High-quality employment, skills development and fair work—we want to improve our skills base and ensure that work is fairly rewarded. Research and development, automation and digitalisation—we want to help to develop new products, automate and digitise to remain competitive in the fourth industrial age. 

We will change our primary support mechanisms to focus on these calls to action. Any business asking for direct financial support will be required to develop proposals that respond to and align with at least one of these. This will ensure the financial support we provide delivers against businesses preparing for the future. And whilst our economic contract requires a business to do the right things today, the calls to action require businesses to respond to the challenges of tomorrow. Together, they ensure the investment we provide to business delivers for the present and for the future. 

As part of our offer, we are responding to the call from business and others for greater simplicity.  We will streamline and simplify our approach into a single, consolidated economy futures fund.  The fund will align the financial support we provide business to our five calls to action and the economic contract. For the first time, we will actively encourage and work with groups of businesses to develop challenge proposals delivering against our calls to action.  We'll consider proposals that have a transformative effect on those businesses themselves, as well as wider regional impacts. This approach empowers the business community to drive change with bold and ambitious proposals. In addition, I will establish a cross-party group of Assembly Members to help to identify challenge proposals that focus on the key themes in the economic action plan, and its calls to action in particular.

To maximise our impact, we need to focus our financial resources and target our support—we cannot proactively work with every sector in the economy. So, in response to the rapidly-changing economic environment, including a convergence of sector boundaries, we are simplifying our approach around three thematic sectors and four foundation sectors. Our national thematic sectors are: tradable services, including fintech services, online insurance and creative; high-value manufacturing, including compound semiconductors and new composites manufacturing; and enablers, including digital, energy-efficiency and renewables. Our foundation sectors are tourism, food, retail and care. We'll work across Government on a range of issues in these foundation sectors, including skills development, new business models and infrastructure. We'll also work with the sectors to develop enabling plans to capitalise on opportunities for growth and innovation and to address key issues.

Despite being a small country, we are no less diverse. Each of us represents different parts of Wales that have their own distinctive opportunities and challenges. It's time for us to recognise and respond to these. Rather than a one-size-fits-all approach, we will strengthen regional collaboration and use local intelligence to tailor our national delivery. Chief regional officers will promote regional interests in Government. This will complement good activity already happening on a regional basis, including city and growth deals. In order to make a success of regional and local economic development, it will require more effective partnership working on the ground, and I am keen that this plan works with, and complements, associated announcements such as the new model for regional economic development being launched later this week.

The regional footprint of the plan is consistent with our local government reform agenda and those used by the regional skills partnerships. We do not discount the importance of mid Wales, and commit in the plan to working with partners there on a growth deal proposal. We will improve our infrastructure and, through the plan, we commit to a five-year programme of transport capital funding aimed at delivering projects in the most efficient and effective way. This will have a headline target of driving 15 per cent to 20 per cent efficiencies across the five-year investment portfolio for new projects. Taking the 2018-19 draft published budget figures for transport capital over the next three years as an average annual spend, potential efficiencies of up to £630 million over a 10-year period may be achievable. Pumping savings of this magnitude back into business, skills and infrastructure development will further enhance our growth and competitiveness.

This is an exciting agenda for change in what we do and how we respond to challenges and opportunity. We understand the need to measure the progress we are making through this new approach, recognising economic outcomes are influenced by a range of issues beyond our control. UK Government policy, EU exit negotiations and the state of the global economy are all hugely influential. The well-being indicators provide us with a clear and consistent measuring framework across Government. We will use these to track progress over the longer term, in line with the 'Prosperity for All' national strategy measures.

I am keen that, in taking forward this plan, we work within an international framework, learning from the very best practice across the world. In the context of Brexit, this challenge is more important than ever. This means opening ourselves up to constructive challenge from international bodies with expertise in economic development. For this reason, I am keen to open a dialogue with the Organisation for Economic Co-operation and Development and other international partners in this area and will seek further engagement in the future.

Change is rarely easy, but it can be necessary. Unless we change our future today, we will never grasp the opportunities of tomorrow. We cannot do this alone, though. I call upon all of us—the business community, our learning institutions, trade unions and wider society—to join with us. Let us unite for a growing Wales, a fairer Wales, and a Wales that seizes opportunities for prosperity for all.

Thank you. Russell George.

Diolch, Deputy Presiding Officer. Cabinet Secretary, I'm pleased that you have finally launched your economic action plan. I would say it has come 19 months since the 2016 Assembly elections, in which, of course, you stated that the economy would be your Government's No. 1 priority. The document was only received this morning by Assembly Members, but I've done my best to read as much as I can in the time I've had this morning.

I am somewhat underwhelmed by your passive approach. The plan has no reflective merit upon the economic challenges that face Wales. Back in 1999, the then Welsh Government announced its intention to raise gross value added in Wales to 90 per cent of the UK average in order to deliver a strong Welsh economy and higher wages to the ordinary Welsh worker. Now, the economic action plan today is the fourth economic strategy launched by the Welsh Government since 1999—almost 20 years of these economic strategies. Welsh GVA has shrunk from 72 per cent of the UK average in 1999 to 71 per cent in 2015. The practical results of these successive failures, I would say, in strategies is that productivity in Wales is now the lowest out of all home nations and regions, and Wales, therefore, now faces an acute productivity crisis and Wales has the lowest weekly earnings in the UK. It's no surprise that the 90 per cent GVA target has been quietly dropped by successive Welsh Governments as a stated aim for the performance level of the Welsh economy.

Looking at the action plan, there are very laudable ambitions, I think, in the action plan, but the strategy is devoid of any strategic insight and methods of delivery, and though I welcome the intent, of course, in the action plan, it seems that the commitments are simply ambitions and words with little insight and direction as to how they will be driven forward, and little support for businesses.

As you would expect and as is also correct, I want to closely scrutinise the development of the ambitions as they move from words to reality, but this is going to be almost impossible as the action plan includes no measures and no measurable outcomes. So, can I ask: what is the timetable for delivery on these ambitions and how will you measure success? You say that the scale of your ambition is huge. That's what you say in the document. But what is the final goal? What does success look like, in your view?

Turning to the specifics of the action plan, the document makes no mention of the resources that will accompany the plan or the Welsh Government's flagship economic policies, including enterprise zones and the attraction of foreign direct investment into Wales. The omission of these policies, perhaps, from the action plan, I'd suggest, speaks volumes about the complete lack of success on these measures.

Through the economic contract and calls to action, you also appear to be changing your approach from targeting a number of priority sectors to broad headline sectors, but it provides no meaningful detail as to how the Welsh Government plans to support businesses going forward. So, it does nothing to increase or speed up business lending, I'd say, and only adds to the administrative burden facing firms seeking support to grow and flourish.

From a business perspective, I do have concerns about whether businesses will be able to identify which sector they belong to. As you're no longer going after sectors, I would welcome more detail on why the Welsh Government has adopted this change of approach.

Turning to the economy futures fund, I understand that the fund will operate as a mix of grants and loans, with the balance between the two changing, depending on the economic cycle. So, this doesn't appear to be very different from the system of repayable finance. So, I would welcome more detail on the following areas. What do you envisage the mix of grants and loans will be in the first year of the fund? What will be the reporting milestones in assessing the balance between the mix of grants and loans? And what existing funds are going to be simplified and consolidated into this fund?

Finally, I welcome the shift to a more regional approach and addressing regional inequalities. I was very pleased to see this direction in the action plan. I have to say that I am sceptical about the way in which you have drawn up the map, grouping together mid and south-west Wales. Parts of Powys have very little in common, I would say, with Swansea and Port Talbot. The economies are very, very different. So, I would like to understand more about your logic in terms of how you've developed the map.

Reading on page 23 of the plan—

I'm sorry, I think you had a 'finally' then, so I'm going to say that you've had a 'finally', thank you. Cabinet Secretary.

Can I thank the Member for his questions? I'm sure that there will be many more opportunities to question the plan further. I'm happy to offer any Member in this Chamber a briefing session on the economic action plan. Implementation of the plan will be crucially important and this will be conducted in consultation with social partners, including businesses and trade unions, the third sector and other stakeholders. But I am delighted that this action plan has been published, following the publication, of course, of the national strategy 'Prosperity for All'. 

The Member asks us to reflect on the challenges of the Welsh economy. I think they've been well rehearsed, but what's clear, especially from the Member's own contribution, is that the productivity gap with the UK, and indeed much of the western world, is our key concern, but so too is the degree of inequality.

Over the last five years or so, the economy has performed exceptionally well in terms of jobs growth and in terms of driving down unemployment and economic inactivity, but what's quite clear is that the benefits of economic growth have not fallen equally across Wales. That's why we're keen to pursue a place-based approach to economic development and that's why, in turn, we're keen to make sure that there is a regional development ethos to what we offer.

But there are some obvious areas of intervention that can be made to improve the productivity of the Welsh economy. We've examined them and we've found that, principally, improving the skills base of Welsh workers, improving the infrastructure of Wales, improving leadership within business, improving the diffusion of innovation across the Welsh economy and improving working practices will contribute to improved productivity. These align with the calls to action and the employability plan, and, of course, the Welsh infrastructure investment plan. All of our interventions are now designed to improve the productivity of the Welsh economy.

Now, as I say, implementation will be crucial, and this is a plan for the long term. It would be easy to chase targets, but the problem with many targets is that they're easy to meet if you pick off the low-lying fruits. We now need to deal with those deep structural problems within the Welsh economy, and that is why I have every confidence in the likes of the OECD to provide external and expert challenge, to be able to monitor our success or any failure to perform against international best practice. I'm also confident that we should be judging our success and progress against the well-being indicators. My view is that success takes a very simple form: that we improve and increase the level of well-being and wealth across Wales whilst at the same time reducing levels of inequality across Wales.

This isn't about spending, necessarily, more money on our interventions; it's about making sure that the money that we spend across Government is better aligned with our priorities, and that's why I think it was essential that we introduced 'Prosperity for All: the National Strategy' ahead of this particular action plan. Although the plan does not go into detail in terms of the specific allocation of resources to the economy futures fund, because there are literally dozens of funds that are going to be consolidating and we're looking at the launch of that new economy futures fund at the start of the next financial year, the plan does identify approximately £630 million over the course of a decade that could be invested back into delivery, and that could make a major difference to our competitiveness and our productivity levels.

I do think that the balance of grants and repayable finance that we offer currently is appropriate for the economic cycle, and I think we need to be able to flex appropriately to remain competitive, in any given time of the economic cycle. Right now, our export rates and our foreign direct investments are all healthy. What we need to do is make sure that our investment in those areas that drive up productivity remain healthy and appropriate for any given space in time.

In terms of the sectors, well, sectors in their traditional sense are already converging, and I think this has been recognised as well by the UK Government with its recent UK industrial strategy. It's very difficult to determine, for example, whether fintech sits neatly with digital or whether it sits neatly with financial and professional services. The fact is that many new industries of tomorrow overlap the current sectors that we operate and support, so it's absolutely vital that we look to the future, that we leap to the future, that we're not dragged there or that we don't follow others into a new way of supporting business development. So, our thematic sectors, with experts and support from Welsh Government, available to support the growth of those new thematic areas in business, I think, is the right path to be taken.

In terms of our foundational economy, we determined that those four particular areas of the foundational economy are most significant because of the numbers employed within those particular sectors, because of the numbers of people that are employed across all regions of Wales—these are, in many respects, the foundations of the economy across every community in Wales, and particularly in the rural economy—and also we identified them because they present some of the most pressing social and health changes, as well, in the coming years, particularly if you take, for example, care and food and retail. Retail is one area where we will be giving a new focus, a renewed focus, in terms of place building, as well. The approach that we're taking to the foundational economy therefore aligns very well with the announcement recently made by my colleague Rebecca Evans concerning the £100 million regeneration scheme that will significantly add to the potential to improve quality of place and, with it, the retail potential in towns and cities across Wales.

As I say, there will be an opportunity to consult further during the implementation stage. I think it's going to be vital that we continue to work in partnership with business and trade unions and other social partners, as we have done during the design of the economic action plan. But this is a plan for the long term. This is a plan for the next two decades or more.

There are some aspects of this economic action plan that are to be welcomed—the new focus on the foundational economy and decarbonisation, for example. But, in stepping back and looking at the economic strategy as a whole, I think it's important to benchmark it against the three key ingredients that we know, from across the world, make up successful economic strategies. A strategy needs to diagnose what is holding us back, it needs to identify new activities that we're particularly well placed to develop, and it needs to build institutions that have the co-ordinating capacity to leverage collaboration within and across sectors. Against all three of those benchmarks, it's difficult to see how this strategy takes us forward. Indeed, arguably, I think it takes us a step back.

Let's take one of them, that issue of: do we understand our unique competitive advantage, those areas in which we can grow and develop? The strategy here is, at best, unclear. I think it's unconvincing that the Government is binning the sectoral prioritisation approach first adopted in 2009 for a much broader one. Cabinet Secretary, you referred in your Western Mail article to evidence that shows that tradable services, high-value manufacturing and the catch-all category of 'enablers' offer particular opportunities to grow the industries of the future. I would be very interested to hear: are you talking there about global evidence or evidence that is particular to Wales? Because the sectors, or the broad themes that you're referring to there, are very generic. They could apply in almost any advanced economy in the world, and we know that that sort of cookie-cutter approach to economic development simply doesn't work. You need to actually understand where your competitive advantages lie.

Now, we did have that attempt, I think, with the sectoral list that we did have before. Indeed, it was partially successful. You actually say in the economic action plan:

'Since 2009, our approach has been to support individual sectors, many of which like creative industries...have become huge success stories.'

So much of a success story that it isn't mentioned again in the economic action plan. Life sciences, again, was a cornerstone growth sector, it was mentioned in the innovation strategy from only three years ago, but it has disappeared, apart from a desultory reference to 'refocusing the Life Sciences Hub' behind us here, which has been half empty since you created it.

You referred to innovation—very welcome as a theme, yet your Government is cutting innovation expenditure by 78 per cent next year. You demoted the post of director of innovation within Welsh Government. You're abolishing the innovation advisory council and you're going to replace it with a sub-committee of the new tertiary education body, even though research quoted by the Be The Spark initiative, which you support, points out that 97 per cent of innovation in Wales doesn't happen on the lab benches of our universities, it happens on the workbenches of our businesses. 

I think that's the area, Cabinet Secretary, where I think the strategy is weakest: it's an action plan with five calls to action but no clarity about who the actors are. Who's going to do the acting? You're abolishing the 48 advisory panels; it's a kind of mini bonfire of the quangos, mark 2. You're replacing them with a single ministerial advisory board. I don't understand the difference between that and the council for economic renewal. Maybe you can explain it to us. Just three regional officers across Wales, and underneath that tier, with the exception of the development bank, an institutional desert.

The problem, Cabinet Secretary, that small businesses face in a small nation is not so much being small, but being lonely, and it's the job of Government to build up that social capital to create the kind of economic institutions that other nations have at their disposal: a trade and investment promotion agency, a chamber of commerce movement on the continental model, regional development corporations, a national innovation body. We are facing the economic equivalent of climate change, and epochal challenges of global proportions from Brexit to automation, but I fear, Cabinet Secretary, you are leaving us naked in the eye of that storm.

Can I thank the Member for those compliments that he's given to the plan—the elements of the plan that he has welcomed, the change that he has welcomed? And insofar as the criticisms that he also raises, I'll try to address them.

First of all, I think in his final words he presented what he believes is a way forward for Wales, which is to create more bodies, whether that be in terms of international trade or new mini WDAs across the regions of Wales. What we have been clear of is that there is a need to simplify and enhance what we're doing well. We have achieved record levels of employment, we have driven down unemployment to the lowest level in a generation, but we recognise that to deal with the stubborn structural problems, we now need to change direction, and that direction must be to the future. 

I know that it's very difficult for some Members to appreciate that the move from nine priority sectors to three thematic national sectors is a radical departure, but one that will mean that wherever a business sat in the traditional silos, provided they are operating in a way that will futureproof them, provided that they are operating in a way that aligns with the calls to action, they will be able to get the appropriate support from Government and support with Government in order to become more productive and more competitive in the future. The industries of the future align with those thematic areas and align with—and, indeed, have to embrace; if they're going to survive, they're going to have to embrace—the principles of the calls to action.

Now, I agree; I agree with the point the Member made at the outset that any economy, to be successful, has to contain three key factors. Actually, those three key factors also relate to businesses themselves, and I think, actually, they were contained in the analysis by Jim Collins in his book Good to Great. He framed it in a slightly different way. He said that you need to face the brutal facts, you need a hedgehog—what you do best, what your unique offer is—and also you have to have the right people on the bus. 

In terms of the brutal facts, we know that our productivity is lagging because we need to improve our skills base. We're going to deliver that through the new employability plan. We also know that we need to improve our infrastructure. We're going to do that by building as never before. We also know that we need to improve leadership skills within business, and, again, the calls to action are designed to do that: to offer that financial support, to offer that incentive to improve leadership skills. And, of course, with the focus being in particular—and I know Members in the Chamber have already raised it today—on mental health and well-being in the workplace, if we have a focus on that, by virtue of focusing on that, if we're successful, if businesses are successful, then they will have also achieved improvement, discernible improvement, in terms of leadership practices. 

In terms of the other areas that you could constitute as brutal facts—those factors that are holding us back, the barriers—as I said to Russell George, you have to have the right regional economic development vehicle in order to support businesses, and I think it's absolutely right that we do have the regions acting as key influencers with one chief regional officer. But not one office; a whole range of offices across the regions, working, as well, with those officers in local government and with the regional skills partnerships who are able to, in turn, influence Government policy and, in turn, also work with, where necessary, cross-border partners. This will be a new feature of our objective in empowering and growing the regional economies of Wales.

In terms of getting the right people on the bus, Wales is a very, very small country, and when I came into this job, I was somewhat surprised, given the small size of our country, by the number of advisory boards, groups and panels that currently exist—more than 40. I think, by any measure, anybody reasonably minded would suggest that that is too many. Consolidating much of the expertise into a ministerial advisory board, I believe, is the right thing to do in order to not waste people's time, but also in order to bring together experts from across the sectors and from across the regions to work together to be able to share ideas and innovation.

Speaking of innovation, the Member also raised this as a crucial factor in the development of sustainable and resilient economies—highly productive economies. Well, our call to action has innovation running through its veins. The challenge proposals are designed to extract the best innovation and the best calls for innovation from across the business community. In terms of the actors, well, the actors are our partners with us: in business, in trade unions, in social enterprise. We must work together—we are all actors. And in terms of what our unique offer is, it has to be our people, our human capital.

That's why I am determined, through the economic contract, to ensure that people in Wales don't wake up each working day dreading the working day ahead of them, but get up looking forward to work, being productive in the workplace. Caroline Jones was right; £15 billion is lost in productivity as a consequence of people turning up at work and not being able to operate to the best of their ability. I want Wales to be known as a place where people want to work, where they don't just deliver enough during the working day, but where they excel, where they have unique skills—all of them—and they are able to utilise their skills, where they have transferable skills, where they have secure employment, but also know, and have the security of mind knowing, that they have the skills that can easily be transferred to other occupations should they lose their place of employment. And I want another additional unique prospect for Wales being a fair-work country. We have to set our ambitions high insofar as the country and the values and the principles of Wales are concerned, and this action plan sets out to do just that.

Thank you. I am going to have to ask for shorter answers, though, Minister. We've had two very lengthy answers to only two questions, and we're way past into the third sector of this statement. I have four speakers, so it's going to be—. We're going to have to have tighter answers. Hefin David.

I welcome the economic plan, and Adam Price has already made reference in the Chamber to my Cardiff University briefing back in September. I had no sight of the action plan before the embargo, but I would say that it does reflect some of the things that we've been talking about as backbenchers on this side of the Chamber, certainly the introduction, and particularly the foundational economy. You mentioned human capital, Adam Price mentioned social capital, and I think that is the key. I don't think you answer that question, though, through institution building, it's got to be said; I think you answer it through skill building, which was the gist of my question to the First Minister earlier. I think that's what the focus should be, particularly in the foundational sector.

So, in order to recognise the time constraints and cut things short, I'd like to reflect on that question I asked the First Minister earlier. Where you've got microfirms and self-employed people bidding for contracts collectively, how do you ensure—and how will this plan ensure—those foundational sectors are able to continue and sustain their collaborative working through skill development, sustain that collaborative working beyond the contracts to which they apply, to ensure that you aren't just creating a short-term collaborative approach, but you're sustaining that for the longer term?

I do think that Be The Spark, albeit a new initiative, is one that is already making great progress in bringing together stakeholders from across academia, finance and Government, and ensuring that the collaboration stretches over the long term, and stretches beyond traditional boundaries and silos. But I also think that if the Member looks at—I think it's page 16 in particular—there is a particular focus on disaggregating components of major procurement exercises so that we can better benefit smaller and medium-sized enterprises. It's absolutely essential, though, that microbusinesses and people who are self-employed get opportunities to get on the procurement ladder and grow as a consequence, and we're working to ensure—with the work that is taking place by my colleague Mark Drakeford—that people who are self-employed and people who operate microbusinesses are able to take advantage of all procurement opportunities in their local area. There is a lot of work that can be done in the coming months in implementing this plan, but also in taking full advantage of the reforms that have been taken forward by Mark Drakeford, which could and should benefit micro-sized firms across Wales. I think in particular the pilots that are taking place in the Valleys taskforce area concerning Better Jobs Closer to Home offer a template for this sort of improved opportunity across Wales, and certainly I'm looking forward to seeing the outcomes of those pilots. I have every confidence in them being successful and enabling us to extend the same principles across the Welsh economy.

We in UKIP welcome this plan and recognise such things as the central Cardiff enterprise zone, which has been a major success story for Wales's financial and professional services sector. We would hope that it's a model for further expansion across all sectors of the economy. We also note the Cabinet Secretary's past admission that, with all the challenges that we face in Wales, we can only succeed in partnership with the business sector. Those challenges include digitalisation, automation and an ageing population, all difficult obstacles to overcome. But if we are successful in dealing with this change of pace in our economy, it will establish Wales's future for generations to come.

Whilst having some political differences with the Cabinet Secretary, I sincerely do not want him to fail in his comprehensive ambitions for the Welsh economy. But can I ask him to note that the key enablers to economic success must include business support for the private sector, which should involve access to finance and minimum regulation, taxation or public sector intervention; a robust support regime for innovation and entrepreneurship in partnership with our universities; and, perhaps most of all, investment in our youth in the form of the very best education, both academically and vocationally? Above all, we must instil aspiration in our youth, who are partners in this enterprise. The road to long-term improvement can only come through raising the education and training levels of our people, especially in ensuring that adequate literacy and numeracy levels are universal. But it must be pointed out that even the right educational policies will not alone be sufficient to change Wales's economic position. However, it is a necessary element that few, if any, would dispute.

In order to achieve its economic objectives, the Welsh Government needs to have a system of targeting companies who provide higher value and a greater degree of sustainable tenure in Wales than has hitherto been the case. We must move away from a satellite companies approach to one that encourages those who will locate their headquarters in Wales.

Economic development does not just happen. There is no invisible force that creates jobs, provides new investment or expands the tax base authority of local government. It is people and organisations who make economic development happen, either through private or collective decisions. We need a heavy emphasis on investing in science and technology research and development in this country's self-established goals, and we need to understand the failures of the past—the 'clear red water' ideology that led us to what are termed the wasted years, where billions of pounds of so-called European money has been spent with little or no improvement in the economic prosperity of the nation or its people.

Wales can no longer afford an economy that is based on a bloated public sector that adds little or no financial benefits to the economy. Economic policy in Wales needs to be considered and assimilated with appropriate adaptations to local conditions. We acknowledge the current situation of the Welsh economy can be described as challenging: gross value added lower than the UK average, our country's peripheral position, the lack of large conurbations and relatively low skill levels in the general population all exacerbate the difficulties Wales faces. We in UKIP welcome the economic ambitions, including the plans, and look forward to a stronger economy it promises that will hopefully benefit all of Welsh society.

I don't think I actually heard a question from the UKIP spokesperson, but I'm sure there were some comments that you could perhaps briefly respond to.

I'd like to thank the Member for welcoming the economic action plan, and for giving it his party's best wishes. The Member raises some important points about education, and the role that education and skills training has in developing a modern and secure economy.

I think, also, the Member touched on—. I think it's worth, actually, my reflecting on the point that was made about appropriate regulation. There is a Welsh Ministers' business service that currently exists, but we will be looking at strengthening that service, working with the council for economic development and the new ministerial advisory board in shaping regulation that is appropriate—regulations that are fit for purpose, of course minimal regulation, but also regulation that protects people as well as ensuring that businesses are as competitive as they can possibly be. And I would say that whilst employment numbers within the public sector have indeed reduced in recent times, the public sector still offers £6 billion of procurement opportunities for the private sector, and it's essential that Welsh-based companies are able to take full advantage of those opportunities.

In terms of growth potential, well, that's going to be part of the economic contract: if you you're going to get to base camp, you're going to have to prove that you have growth potential. And then, as part of the climb to the summit, we will offer, through the calls to action, an opportunity to draw down Welsh Government funding and support if you are willing to headquarter in Wales, because I think every person in this Chamber would recognise the need to have more HQs in our country.

I'd like to start by congratulating you, Cabinet Secretary, on the publication of your long-awaited economic action plan, and looking at the way it's cross-cutting across all aspects of Government, I think it very much was worth the wait.

I welcome, in particular, the commitment to develop new structures to support the key foundational aspects of the Welsh economy. This is something that I, along with other backbench Labour AMs, have been calling for for some time. With around four in 10 Welsh jobs being based in the foundational economy, this area, I would argue, has never yet been properly integrated into Welsh economic policy. So, I'm very glad that you have redressed this.

I have two questions for you today. Firstly, we know that there can be challenges around the quality of jobs in these foundational sectors. How do you plan to work with foundational employers to improve the social ask of their firms and enhance their employment offer? And secondly, I welcome your reference to simplifying business support structures too. I know that evidence already heard as part of the cross-party group inquiry on small shops into entrepreneurship has strongly supported this, but what can the Welsh Government do around supporting those entrepreneurs who may have a great idea but who lack the time, capacity or skills to apply for funding?

Can I thank Vikki Howells for her questions and put on record my thanks to her, and to colleagues, for the encouragement that is being given for developing an approach that will support the foundation economy across Wales—an economy that, in many parts of Wales, is the only economy? I think many of the most marginalised communities in Wales are those that have great potential to develop the foundation economy over other parts of the economy, other sectors of the economy. It's going to be incredibly important, as we move forward, to recognise that some big societal challenges that we face—an aging population and the childcare demands that are faced across communities—are also huge opportunities to grow the foundation economy.

But each of the four foundation sectors that we have identified have their own unique challenges, own unique opportunities, and will therefore have different interventions applied to them. For the care sector, for example, there is particular need to address the skills challenge and the need for more sustainable business models. So, we'll be working with the sector to develop—again through short, sharp, task and finish work, aligned to the ministerial advisory board—we'll be looking at solutions that deal with those challenges.

In retail, we know that a major problem facing the retail sector is competition posed by online retail, but also the lack of quality places where people can feel safe, where people can feel good shopping. Therefore, it's absolutely essential that, as part of the intervention to support the retail sector, we look at enhancing the quality of place across communities in Wales.

For tourism—well, tourism has already been invested heavily in by the Welsh Government, but it continues to possess huge potential. In all likelihood, given changes to the way that we work, people will have more leisure time in the years to come, and therefore there is great potential to fill that leisure time with business opportunities within the tourism sector. 

And then with food—well, there is a good story to tell for the Welsh food sector. I think exports in the past few years have risen by approximately 95 per cent. We have carved out a very distinct, high-quality identity as a food-producing nation. We wish to support an improvement and an increase in the quality and availability of food produce, again working with the sector in this regard. 

Each of the approaches will therefore be different, but in order to drive up—and Vikki was absolutely right, some of these areas of economic activity offer, I'm afraid, job opportunities that are currently poorly paid and are not secure. But interventions in the foundation sectors will also be relevant to the economic contract, and dependent on those criteria being met. Where those criteria cannot be met, there will be support offered through other means, and in particular for smaller and medium-sized enterprises—and there are a huge number of those in the foundation economy—there will be the support Business Wales, the development bank, of course, and other services outside of Government.

Our intention is to offer the incentive to become a responsible employer, a fair working place of employment, and that should apply not just to advanced manufacturing and fintech and life sciences, it should also apply, Deputy Presiding Officer, to those sectors in the foundational economy.

Thank you. And finally, with a question—just one question—Rhianon Passmore.

Thank you. I would like to obviously, though, welcome this particularly important and innovative document, and also the innovation around the new economic contracts. My question really is around the potential for the communities of Islwyn around tourism. I wonder how the Cabinet Secretary foresees the future of the Cwmcarn forest scenic drive—it is an area of stunning Welsh landscape, historically and for the future of that community. Also, how would you characterise the Welsh Government's 'Prosperity for All' plan on key sectors, such as within the steel industry, in comparison to the paucity of vision shown in the UK Tory Government's expression of an industrial strategy? Thank you.

Can I thank Rhianon Passmore for the questions that she has offered, and also for the determination that she's shown in terms of delivering a reopened Cwmcarn forest drive? I think that would contribute to the place-building objectives of the local authority, and indeed the Member herself—. I'm keen that I and my colleague in Government Dafydd Elis-Thomas take forward, if possible, the proposals to reopen the forest drive, potentially through an investment aligned with the Year of Discovery in 2019. 

In terms of steel, no matter how much money we throw at the steel sector, unless it can be globally competitive, ultimately, at some point, it will fail. Therefore, our investment in the future has to be aligned to those calls to action to decarbonise and therefore to become more energy efficient. Investment in research and development brings new products to market sooner and products are facing shorter lifespans: the cycle of a product is shortening by the day. Therefore, our investment in the sector, as with many other sectors, has to be based on making it more competitive and futureproofing it from competition around the world.

Thank you very much. Thank you, Cabinet Secretary.