We now move on to the short debate and I call on Mike Hedges. We'll wait, Mike, until people move.

I thought you were going to say that.

If you're going, can you go quickly out of the Chamber, please?

It's not a good thing to be picked for the last week of term.

Yes. Right, we now move to the short debate and I call on Mike Hedges to talk on the topic that he has chosen. Mike.

Thank you, Deputy Presiding Officer.

I hope to show the importance of the construction industry, the importance of apprenticeships and having a skilled construction workforce, the importance of supporting and growing Welsh construction companies and also the importance of big projects such as the tidal lagoon in Swansea. The sad thing is that, if I'd been making this speech two years ago, I'd have still said 'the importance of big projects such as the tidal lagoon in Swansea'. I think that one of the saddest things is that we've got a lot of very large projects in Wales that seem to take an inordinate length of time to come forward.

A former county council colleague of mine used to say that success is having a lot of cranes on the skyline. What he meant was that when construction is booming then the economy is booming. I have taken an interest in local construction companies and I have visited Dawnus, Hygrove and RDM Electricals, amongst others, during the last few months. One of our weaknesses in Wales is that whilst we have a large number of small and medium-sized construction firms, many sub-contracting on large projects, what we currently lack are large Welsh construction firms. What we need to do for our economy is to grow some of these medium-sized construction firms into large construction firms.

Construction is hugely important. The Office for National Statistics shows that, in Britain, there are over 2 million people working in construction. In Wales, there are over 90,000, which is almost one in five of the workforce. The Welsh construction industry is predicted to grow fast—the fastest in Britain up to 2020. According to in-depth research from the Construction Industry Training Board, the sector in Wales is predicted to have an annual average growth rate in output of 7.1 per cent, compared with 2.5 per cent for the rest of the UK between 2016 and 2020. During this period the number employed in the sector is expected to rise to over 120,000. The increase forecast is predicted to only be beaten by London, the south-west and the north-west of England. Employment in the construction sector is likely to meet its 2008 peak next year and exceed it by 5 per cent in 2020, according to the Construction Skills Network forecast 2016-2020 report, in association with Experian.

This expansion will be driven by a range of major infrastructure projects. It's almost like we're waiting for them, aren't we? Infrastructure projects like Wylfa—we're still waiting. The tidal lagoon—we're waiting. The work that has been done by local authorities in terms of schools and the twenty-first century schools programme, which has been a huge success, and has had huge support right across the Chamber, has made a difference in terms of employment, and it made a difference in the quality of schools that pupils go to. I remember once, when I was with the county council, we used to say that, realistically, we now expect our schools to last slightly longer than medieval castles, because at the rate we were replacing them it was going to take about 700 years for all the schools in Swansea to be replaced. The only way to get a new school was if the old one burned down. Headteachers were rather pleased when they found their school had burned down, because they knew they were going to get a new one, which is really not the direction we wish to travel in.

So, we've had these huge projects. Flintshire County Council, Carmarthenshire council and Swansea council, amongst others, are engaging in building a large number of council houses again, and I'm really pleased to see this happening. We talk about a housing shortage quite regularly, including this afternoon, and I think that construction, the building of houses, is incredibly important. There are strong growth forecasts for the Welsh construction industry, driven by the infrastructure projects, driven by schools, driven by housing. Construction plays a vital role in delivering a vibrant economy and a quality environment. With spend for the sector estimated at more than £2.3 billion per annum, the sector contributes around 10 per cent of GDP. There are in excess of 12,000 companies involved within the sector, employing more than 100,000 people, including professionals such as planners, architects, surveyors and building engineers as well as the traditional construction companies responsible for new builds and the maintenance and upkeep of our historic and heritage buildings.

I think that's perhaps one of the problems we've got is that people think of construction and think of people putting one brick on the other. They forget about the highly skilled jobs that exist right the way through. Anybody who's tried to build a wall will know that putting one brick on top of the other and getting it to stay up is incredibly difficult. But there are also highly skilled professional jobs—architects or quantity surveyors. It's a highly skilled business, and I think that probably most of us in this room, if we tried to build a house, would probably have it falling down when we got up to one storey, if we got that far. So, housing is incredibly important to all of us.

The challenge of climate change requires a more sustainable approach to development. Wales is committed to cutting its carbon footprint. These changes produce fresh challenges for indigenous businesses engaged in developing, maintaining and renovating homes and other buildings. I was very fortunate, along with other colleagues on the Climate Change, Environment and Rural Affairs Committee, to visit the SOLCER building just outside Pyle, to see how you can actually have a building that is positively putting energy into the grid rather than taking it out. I'm also very much aware of the excellent work being done by Swansea council in their new development in the Portmead and Blaenymaes area. Companies in Wales are at the forefront in developing the knowledge, skills and innovative technologies needed to maximise the opportunities that these challenges bring. The Welsh Government and the industry is working together to ensure that they are able to deliver the environmental and low-carbon solutions that clients want now and in the future, and through this, enabling social and community regeneration as well as business competitiveness.

Research by the Royal Institution of Chartered Surveyors show that skills shortages remain a problem, with quantity surveyors in particular in short supply, with 51 per cent of respondents citing difficulties in recruiting quantity surveyors. The key thing is we need to support our small and medium-sized firms. This is something I keep on going on about to the Minister, both in public and in private. The size of contracts put out by Welsh Government matters. Very large contracts mean that medium-sized Welsh companies are excluded. Whilst sub-dividing contracts into a size small enough for Welsh companies to bid adds additional administration, it increases competition and the benefits to the economy of Wales far outweigh that. Also loans against income and guarantees allow smaller companies to bid. If we are serious about growing medium-sized construction companies then we need to have a strategy on how we can support them to be main contractors, not just sub-contractors, when they sub-contract and all the profit, or most of the profit, makes its way to the large construction company that is sub-contracting to them.

Can I talk about the tidal lagoon? It could have been the topic of the whole 15 minutes. It's a huge project. It's incredibly important to Swansea. It's incredibly important to Wales. It's a pathfinder for the sector. If Swansea gets the tidal lagoon—I could say 'When Swansea gets the tidal lagoon', because it is inevitably going to come. If we're the first tidal lagoon, we'll build up the skill set, we'll build up the design capability, we'll build up the companies able to be part of the construction. It'll be a bit like what's happened in Aarhus in Denmark where they were one of the first to develop wind turbines. All of a sudden, they now send their wind turbines all over the world, because they are the people who can do it, they are the ones with a knowledge base, they are the ones with a supply chain. It works so incredibly well. If we are the tenth, we'll be the ones buying it in. It's incredibly important to be the first.

I'll just say this: the Hendry review, which many of us who are pessimistic thought was kicking it into the long grass, is the most positive I've ever heard. I'll quote it:

'I believe that the evidence is clear that tidal lagoons can play a cost effective role in the UK’s energy mix.'

Ultimately, the UK Government faces

'a strategic decision, every bit as much as an economic decision.'

Moving ahead with a pathfinder lagoon at Swansea bay, as soon as is reasonably practicable, is a 'no-regrets policy.'

I think we can take it that Calder Hall or Windscale or Sellafield would never have been built if the same rules existed back in the 1950s that exist now. We've had technological changes—some have worked and some haven't. Many people remember the arguments over Betamax versus VHS—that's an old argument that's disappeared—and hovercrafts were going to be the vehicle of the future. But, you've got to try, because some of these things really have worked. I think it really is important that we do try. It can do no harm. At the very worst, what you end up with is a defence against flooding in Swansea.

It's a £1.3 billion capital investment; they're targeting 50 per cent of the spend in Wales; reliable net power output of over 530 GWh, enough to meet the annual electricity requirement of 90 per cent of the homes in Swansea bay for 120 years; direct employment of over 2,000 people in construction; £316 million GVA through construction; the key is investment in three new Welsh manufacturing facilities—one for machining and pre-assembly of turbines, one for heavy fabrication of steel components, and one for pre-cast of concrete components; a 12-month process from moving into final-phase negotiations with the UK Government to start construction. It's not just construction jobs, which are very good in themselves, but the fact you're creating a new industry. I just feel it's really important that we do get this tidal lagoon for Swansea. Perhaps I can use the term people often use when developments take place in other parts of Wales: it will be good for Wales. Maybe people in Rhyl may not be speaking of it, but it's going to get up there to Colwyn Bay and Rhyl, it's going to go all around Wales. We're just a pathfinder, the rest of Wales will follow.

Housing is the bread and butter of the construction industry. It has changed a lot in the last 50 years, not necessarily all for the best. There has been a large increase in empty properties, which is unfortunate. Again, I give credit to what the Welsh Government have done in their twin-track approach of giving loans for people to bring properties back into use, and also the opportunity to increase council tax on empty properties. There are people who leave properties empty, quite often very nice properties, for reasons of their own, but it is reducing the amount of housing available within the community. We've seen an increase in the number of single-person households and the number of pensioner households. We've seen a change back into private renting. Council housing has declined. There has been a substantial growth in housing associations. The private rented sector, which in the 1960s and 1970s appeared to be in an almost terminal decline—apart from students—now has had a huge increase.

Construction work is important. We need to build houses. We need to build houses for people. We've just had a debate on housing, which I didn't know was going to occur when I put this in. It's about building houses and building new estates. What type of houses do people want? Most people are not massively ambitious. They'd be quite happy, like me, to live in a three-bedroom semi, whether it's provided by a housing association, the council, or whether we own it ourselves. That's what they want—actually having that done. Can I just say how impressed I am with the Hygrove development on the former Morris Brothers bus site in Swansea? It's building over 200 houses, 20 of them are for the housing association, the rest are for sale. It's a development that has brought a brownfield site back into use. It's producing good-quality homes. How do I know they're good-quality homes? Because they've produced about 60 or 70 now and there's not a 'for sale' sign against any of them. You don't often see that in new estates.

On apprenticeships, construction needs skilled workers. We need apprentices to come through to replace retiring tradespeople. We went through a period of time with too few apprentices. This needs resolving. I am well aware and appreciative of the work done by the CITB, and I know the Welsh Government is looking to work with employers. All apprenticeships include an appropriate competency qualification to at least level 2, an Essential Skills Wales qualification, a technical knowledge qualification, or other qualifications or requirements, as specified by the particular occupation. But one of the great difficulties is getting companies to take people on. I think that is a problem in construction because we've got so many very small construction companies that they're not able to offer apprenticeships. And that's why, if we can start growing some of these companies, you get into a really good system. Companies grow, they start getting bigger contracts, they take on apprentices, and everybody benefits. The Welsh economy benefits, the people taking on benefit, and we as a society benefit.

Construction is at the heart of the Welsh economy. We all rely on it. We need to grow. But can I just say, as I always do—? I always try and end, like I used to when I was teaching, on the things that I really think are important. We need to grow more large Welsh-based construction companies. We need to support them with contracts that go out—especially Welsh Government contracts—that mean they can bid. If you have a building contract to build six schools at £70 million, you won't have a Welsh construction company able to bid. You break it down into six schools at £10 million each, you've got Welsh construction companies able to bid. We have some major projects coming, but we can't just rely on major projects, important though they are. We need to ensure we have a skilled workforce; we have an opportunity to develop construction skills and, most important of all, we need to make sure we get the houses that our people need. Thank you.

Thank you very much. Can I call on Ken Skates as the Cabinet Secretary for Economy and Transport to reply to the debate?

Thank you, Deputy Presiding Officer. I'd like to thank Mike Hedges for calling this debate, and it's my pleasure to respond to him. I'm incredibly pleased to see that the Construction Skills Network, in their latest forecast, predict that Wales will see unprecedented growth in construction over the next five years, and these forecasts are a reflection, I believe, of our continued commitment to long-term infrastructure planning and investment here in Wales. Our intention, as a Government, is to provide the industry with a clear pipeline of public sector projects, and clearly they are huge opportunities for the construction sector at every level, and it's our intention to work with the sector in capitalising on these many opportunities. 

Development and delivery of innovative procurement policy has seen clear, direct benefits to Wales and its economy. Application of community benefits has resulted in thousands of jobs and training places for individuals right across Wales, and it's helped small and medium-sized enterprises in our supply chain to grow and to expand. Low-carbon energy generation is one area that offers enormous economic opportunities over the coming years, and that's why we're supporting the development of the Wylfa Newydd nuclear power station on Anglesey, and it's why we have been and we continue to be supportive of the tidal lagoon in Swansea bay. 

Improving and investing in our transport infrastructure is another key area of growth in the coming years, and we remain committed to improving the M4 motorway around Newport, the metros in south Wales, and also in the north-east of Wales. Investment in infrastructure helps us to grow the economy. It also, though, helps us to tackle social problems, and despite the strong record we have of building more homes in Wales, we still have too many young people who simply can't get onto the housing ladder. And that's why we've set an ambitious target of delivering 20,000 affordable homes, and why we're investing £1.3 billion to support the housing sector over the course of this very Assembly term.

We're particularly keen to see more SME house builders entering the building sector to diversify the market and to promote innovation. The £30 million Wales property development fund, managed by the Development Bank of Wales, will continue to support SMEs that are unable to access affordable finance from traditional sources. Modern methods of construction can also help build homes faster and more efficiently, and we've launched our £20 million innovative housing programme to specifically support alternative and new approaches. It's crucial, given this unprecedented level of infrastructure development, that construction is recognised as an attractive career choice.

The construction sector has come together to develop Go Construct—the first industry-wide interactive careers portal showcasing the wide variety of jobs in construction and the best routes in. As Mike Hedges has already said, apprenticeships have proven their effectiveness in the marketplace and are very highly valued by both employers and apprentices themselves. That's why we've committed to the delivery of a minimum of 100,000 all-age apprenticeships during this Assembly term.

Now, we have to build intelligently and sustainably if we want the investments we make now to be worth while in the long term, and that's the reason we put sustainable development and decarbonisation at the heart of all we do as a Government, and why we're establishing a national infrastructure commission for Wales. As I've said, I want to see as much as possible of the investment made in Wales stay here in Wales, helping us to create better jobs closer to home. 

Our national strategy 'Prosperity for All' focuses the whole of the Government on a number of areas to deliver real impacts, and yesterday I published the economic action plan, which will help us to work with the business community in responding to those key challenges. The plan outlines my aim to deliver modern and connected infrastructure to meet the productivity challenge and also to drive sustainable economic growth as we build as never before. 

Thank you very much. That brings today's proceedings to a close. Thank you.

The meeting ended at 18:17.