Questions now from the party spokespeople. Plaid Cymru spokesperson, Adam Price. 

Thank you very much, Llywydd. I’d like to return, if I may, to the matter of the Government’s support to the film and television industry, which is a very important and significant sector of our economy and our culture. Last month, the Government confirmed in the freedom of information request that the Pinewood company no longer pays rent or is a tenant at the Wentloog studio that they signed a rental agreement for in 2014. However, you did inform us that Pinewood are still committed to operating a studio under the management agreement, even though the details of that agreement aren’t in the public domain. Is it right, then, to take from this that Pinewood was paying the Welsh Government to maintain a studio in Wales and that we are now paying them to maintain a studio in Wales? Considering that they’re not paying rent and that they are not a tenant either, and that they no longer have a role with regard to the investment fund, is it a Pinewood studio in name only?

I will respond to this question as it falls within my portfolio and because I have answered on this matter in the past.

These changes in our relationship with Pinewood follow commercial changes within the structure of Pinewood as a company and the company that is now responsible for Pinewood’s facilities. It is not accurate to say that we as a Government are paying Pinewood, but Pinewood ceased to provide a service in terms of managing third party funds. That is the most significant change, and the agreement that the Welsh Government has renegotiated with Pinewood, within that collaborative framework, means that Pinewood continues to operate the studio but that Pinewood doesn’t promote as it did in the past under the previous contract.

Well, I’m confused by that response, because I understand that the change of ownership that happened with the Pinewood group two years ago means that they have withdrawn from the business of providing advisory services with regard to investment, and the Minister referred to that. But that doesn’t explain why they no longer pay rent, nor why they are no longer a tenant for the studio. That has no connection to that particular question. So, if they’re not paying rent, how are they maintaining the studio? Is it under some kind of management agreement—this strange agreement that we can’t ask for details on?

So, I have to ask about the procurement process. Was there a procurement process for the management agreement for the studio? Did it happen in accordance with public procurement regulations? Why was the clause in terms of a minimum tenancy of five years, which was in the original agreement, ignored? Why would you have such a clause if you were just going to ignore it?

Was consideration given to other options, such as with the Bad Wolf studio, which is rented through a lease agreement with Screen Alliance for Wales? Why wasn’t a radical option considered, if I may say so, which is to run the studio directly? Elstree Studios are run and owned by Hertsmere Borough Council. Now, if a Hertfordshire council can run a studio, why can’t the Welsh Government?

As I explained in response to a question on this prior to Christmas, the terms of the agreement with the company are confidential for commercial reasons. But I can confirm that the relationship with what was the Pinewood unit continues, but that Pinewood no longer operates that role of third party fund management. That’s the situation as it stands, and that situation remains at present.

Well, I’m sorry, but I have to say to the Minister that it isn’t good enough just to reread a script that has been given to you. This follows numerous questions that have been asked, mainly by Suzy Davies, and we haven’t received answers to the majority of those questions. Suzy and others have had to use freedom of information requests in order to find out that Pinewood is no longer a tenant and nor is it paying rent. I understand that there is a possibility that there will be a Senedd committee looking into this. We would welcome that, and I have asked the auditor to do so. But is it not true that, because of the dual importance of this sector, not only because of the economy, but because of our culture, it is unacceptable to hide behind this excuse of commercial confidentiality? It’s too important a sector for you, Minister, to refuse to answer questions and to give vital transparency to us in this way.

I am not refusing to answer questions. I have offered to meet with Suzy Davies to discuss this issue, and I do hope that we can arrange that meeting before too long. Given his great interest in this issue, I’m happy to invite Adam Price to the same meeting or to another meeting.

The citizens of Wales need to hear those answers.

Welsh Conservative Spokesperson, Russell George.

Diolch, Llywydd. Happy new year, Cabinet Secretary. Over the Christmas recess, part of my bedtime reading was your economic action plan—[Interruption.] I did plenty of other exciting things as well. But what struck me was not what was in it, but what was not in it. So, I would like to touch on a few of those items today.

Now, earnings in Wales are the lowest in the whole of the UK. Gross weekly earnings for full-time employees in Wales stand at £498. That's 10 per cent lower than the UK as a whole. Now not only is Wales stuck at the bottom of the earnings pile, but the gap between Wales and other parts of the UK has significantly increased over the past two decades. So, 20 years ago, a Welsh and Scottish worker took home identical pay packets. Today, a Welsh pay packet contains £498 and a Scottish pay packet contains £547. So, a critical focus of any new action plan, in my view, should be about raising wages across Wales. So, can I ask: why doesn't the new economic strategy contain any targets for raising wages across Wales?

Can I wish the Member a very happy new year, and say how pleased I am that my gift to him arrived safely and in time for him to read it over Christmas? [Laughter.] Look, let's just look at the facts concerning average full-time earnings. You're right, £484.40 a week is the average, but, between 2012 and 2017, that average increased by 10.1 per cent, compared to the average across the UK, which was just 8.8 per cent. And therefore the gap has been closing, as a consequence of interventions by this Government. 

It is true that, historically, the gap in wages between us and many other parts of the UK was smaller, but that was at a time when far more people were employed in higher paid jobs in, for example, the steel industry. Consequent to the de-industrialisation, without the safety net in the 1980s, those quality jobs—well-paid, secure jobs—were replaced by jobs that were often temporary and poorly paid. Unemployment rates rose through the roof. Employment today, the employment rate, has increased more quickly in Wales than in the UK throughout the period of devolution. It has increased by 6.5 per cent, compared to 3.1 per cent, and unemployment has decreased more quickly in Wales than in the UK as a whole as well during devolution.

So, I think, if you look at our recent record, if you look at the record of this and the previous Labour Government in Wales, you'll see that, in terms of earnings, we're heading in the right direction and in terms of employment, again, in the right direction. Unemployment is down and it's heading in the right direction, but the big challenge that our economy faces—. And I don't think that the Member would disagree with this, because the Secretary of State at the Department for Business, Energy and Industrial Strategy I'm sure agrees that productivity is the big challenge that we face as a country. And, in order to improve productivity, we need to improve skills levels. Once we've improved skills levels, the availability of high-quality work, then we will see a significant increase in average earnings and we will see that gap continue to close.

Thank you, Cabinet Secretary, for your answer. Of course, my question was why there wasn't anything mentioned, and no targets mentioned, in the economic action plan. 

I've got here a copy of the PricewaterhouseCoopers report from last year—another item on my Christmas reading list. Now, this states that a huge number of jobs are at immediate risk due to automation. This, of course, makes Wales particularly vulnerable because two of our largest areas are heavily reliant here in Wales on retail and manufacturing—an area that is, of course, at a high risk of automation. Now, equipping Wales to cope with the opportunities that exist, as well as the challenges of automation over the next 10 years, I think is critical to support the Welsh economy, and I think we should be taking advantage of this with new technology and to protect Welsh jobs. 

But can I ask why doesn't the economic action plan contain any effective target-led strategy whatsoever to ensure that the Welsh economy takes full advantage of opportunities presented by automation, and why doesn't it contain any targets whatsoever for protecting Welsh jobs from the challenges of technological innovation?

First of all, the action plan does contain—right at its heart is the economic contract and then the subsequent calls to action, the economic contract being the front door—get through that and then through the prism of the calls to action and you'll be able to draw down support that aligns with the main causes or the main factors that influence improvement in productivity. One of those is futureproofing a business in terms of the threat and opportunities of automation and in modern ways of working. So, the action plan does have, at its heart, a desire to make sure that businesses are futureproofed and to make sure that we are embracing and taking full advantage of industry 4.0.

I'll just go back to the targets question again, actually, because the Member's right, I decided not to include those specific targets that he outlined in his first question, the reason being that, often, when targets are set, it becomes an obsession to chase targets. And, insofar as earnings are concerned, what you can do is grow the economy in one part of a country or two parts of a country and make sure that the rich become richer and then close the gap, but what you're not doing is closing the level of inequality between the richest and the poorest. I prefer, through the interventions that we've outlined—regional working, a focus on high-quality secure employment—. I think it's absolutely essential that we go on improving the levels of wealth in Wales, whilst also reducing levels of inequality across the country.

Well, I appreciate your answer, but, of course, targets help us as Members in this Chamber to scrutinise the Government's plans, and, without targets, it makes our job, of course, more challenging. Now, the final part of what I want to raise is regarding procurement. Procurement is, of course, a key part, a key tool that can be used by the Government to support growth across the Welsh economy in the long term. The Welsh Government's track record, I would say, on public procurement to support Welsh businesses, I think, is extremely poor. Now, from the end of last year, I've got here the Wales Audit Office report 'Public Procurement in Wales'. What this report clearly states is that, in Wales, they found that there is clear scope for improvement in how authorities procure services at a national level. So, can I ask why does the economic plan contain so little effective detail on reforming public procurement practices across Wales at Government level? It does seem that the new economic action plan represents a big missed opportunity, I think, to reform procurement across Wales in order that we can support businesses and better support public procurement.

I think the Member, if he rereads it, will find that—it's possibly on page 18. It might not be, but I think it's on page 18 where we talk about disaggregating major contracts, and that's particularly important for smaller businesses. What we've found, in particular with regard to the construction sector, is that there's been a significant increase in Welsh-based companies that are able to win publicly procured contracts in Wales. But what we wish to do is enable more companies, especially smaller and medium-sized enterprises, to win parts of major contracts that, at the moment, only the big companies—often English-based, or even further afield—are able to bid for, because of capacity or expertise issues. The economic action plan deals with that question directly. It may not be on page 18, I can't remember exactly whether it is, but it does specifically reference the need to disaggregate components of major infrastructure projects so that we can give more work to Welsh-based firms and drive up the value of the Welsh public pound.

UKIP spokesperson, David Rowlands.

Diolch, Llywydd. Can I take this, my first opportunity, to wish you, the Cabinet Secretary and the rest of the Members of this Assembly a happy new year? Blwyddyn newydd dda.

Cabinet Secretary, local authorities, businesses and the charitable sector are making very real efforts to address the challenges facing Wales, but the progress that many would like to see is minimal and, in some cases, such as child poverty, we are going backwards. When are we likely to see our economic strategies provide results that will give hope to the poorest communities of Wales?

In many respects, as I outlined to Russell George, the approach that's been taken by this Government and that was taken by the previous Government has already led to a record level of low unemployment, record levels of employment, record low levels of inactivity, but what we need to do is make sure that more people get into work so that they're not caught in a poverty trap, a poverty trap that's been made worse through, what, eight years now of austerity measures. The path into work is the best pathway out of poverty, and our objective is to make sure that we don't just create more jobs for people who are out of work, we create more high-quality jobs. But, of course, on top of that, in order for people to access those jobs, we need to tear down other barriers, barriers concerning childcare and a lack of appropriate transport to get people to and from work. But through one of the most ambitious childcare offers anywhere in Europe, and through reforms to local public bus services and the new rail franchise, I'm confident that we can address those two big barriers to getting people into work and staying in work.

Well, once again, I thank the Cabinet Secretary for his reply, but I have to say that I think the time has ended where we can keep on blaming austerity in Wales for our lack of progress. Once again, after 17 years, the people of Wales are facing another promise of jam tomorrow. The First Minister said, prior to the 2016 Assembly elections, that 'we started the job five years ago, and I need another five years to finish it.' At the next election, in 2021, Labour will have been in power for 23 years. Will the First Minister's promises have been kept, or will we continue on the race to the bottom of all economic indicators?

Well, we should start talking up Wales and the Welsh economy, particularly in those areas where we're appreciating significant success. The Member who represents north Wales, next to David Rowlands, is laughing at this, but the Member lives in a county where we have record levels of employment, where the GVA of the county is higher than virtually any other county in Wales, and is near the average for the north, and rising, where we have invested in companies recently, such as Hotpack, where we've worked with the likes of Tata steel, where we've worked continually with Airbus and other major employers to maximise employment opportunities and to create new, high-quality jobs. We will continue to do that in the coming years, and we will drive up opportunities for employment in higher value industries and the industries of tomorrow, utilising the economic action plan as the basis for creating a new economy based on new and emerging technologies and green growth.

Again, I thank the Cabinet Secretary, and I do share, to a certain extent, your belief that perhaps things may be changing, but things do not all go well, particularly for the poorest in our society. The burden on the taxpayer in 2018 is likely to increase. The Welsh Government's rents policy will increase social housing itself by £200 per two-bedroomed home. And likewise, the modest increase predicted in UK unemployment is unlikely to boost those parts of Wales where unemployment stands well above the UK average. Nor is it likely to help the 13.1 per cent of young adults out of work. It's predicted that inflation will wipe out any real-term earnings growth, and that relative poverty could well rise to 27 per cent for people of all ages, and to around 40 per cent for children, as people's standard of living is squeezed further. I ask the Cabinet Secretary: is this the Wales we want? And are you confident your economic policies are going to alleviate these hardships in both the short and the long term?

I can tell the Member that the Wales that we want, I think, is a Wales where nobody is left behind. The Member highlighted the challenge that many younger people have faced in recent years in accessing jobs. The Member wasn't a Member of the previous Assembly, where we took forward Jobs Growth Wales, but that is a particular programme that has led to 17,000 young people in Wales having an opportunity to work, to gain the skills and the experience to stay in work. And as a consequence, I believe it's more than 70 per cent who have gone on to secure full-time employment or further training that subsequently has led them into full-time, secure work. It's absolutely imperative that we go on supporting projects such as Jobs Growth Wales and the emerging employability plan to ensure that young people, and, indeed, people who are currently in work, can access higher quality jobs. But it's also worth pointing out that Wales is amongst very few nations that have a strong vision for fair work, for a country where the proper, decent living wage is adopted by employers, where trade unions are recognised, where people can expect a fair day's pay for a fair day's work, and where people can expect dignity and respect in the workplace.