We now turn to spokespeople's questions and, first of all, UKIP's spokesperson, David Rowlands. 

Diolch, Llywydd. Cabinet Secretary, sadly Wales currently has the lowest productivity of any UK nation, standing at just 83 per cent of the UK average. Economists identify improving productivity as central to our economic future. Can the Cabinet Secretary outline his plans to improve productivity levels in Wales?

Yes, absolutely. The productivity challenge is something that this Government and the UK Government have made critical parts of our respective industrial and economic strategies. Insofar as our actions are concerned, we're looking at the factors that contribute to making an economy more productive. In Wales, we've analysed those factors and found that driving up skills levels and increasing investment in modern infrastructure and making sure that we have the right management techniques are absolutely critical in the development of a more productive economy. But we also recognise that the economy is changing fast and that we need to change the shape of the economy in order to attract more investment that's going to be based on high-tech industries of the future. And we also need to take account of the fact that if you have a workforce where the well-being is poor and where workers are not able to contribute as fully as they would wish to during their working day, then that will impact on the competitiveness and productivity of a business. So, through our economic contract and, subsequently, through the calls to action, we are challenging the problems that are holding back our economy, in particular the productivity challenge that so very urgently needs to be got to grips with.

I thank the Cabinet Secretary for his reply, but I'm sure he will agree that any strategy or improvement plan needs to be assessed and measured over time. This demands that the Government has to have in place economic indicators that facilitate this analysis. This, of course, applies as much to the notoriously unproductive public sector as it does to the private sector. Can the Cabinet Secretary outline to us any target figures or strategies that he has in place to measure the progress, or otherwise, being made?

We're making sure that our indicators are consistent across Government. So, the well-being indicators will be applied to our interventions in economic development, but, as I've already said in this Chamber, I'm also keen to have a good degree of international challenge applied to the actions of this Government. Therefore, we've opened up discussions with the Organisation for Economic Co-operation and Development. It's my intention to also open up discussions with the World Economic Forum in terms of how they can challenge and test the effectiveness of our economic action plan.

Again, I thank the Cabinet Secretary for his reply, but, given such startling figures as places such as Camden in London being 23 times more productive per head of population than north Wales, there appears to be a huge gap to fill. Economists say that they're not surprised at Wales's lack of productivity, identifying low levels of business investment, poor transport infrastructure and our lack of investment in skills, and low levels of innovation—all critical factors affecting productivity. Are you confident, Cabinet Secretary, that Welsh Government's economic strategy is robust enough to achieve a dynamic private-enterprise-driven economic expansion, or possibly, I should say, 'explosion' that Wales so desperately needs?

Yes, I would, and, taking up the first point that the Member made, there is a very great need to rebalance the economy of the United Kingdom. Again, that is touched upon in the UK industrial strategy and it's at the very heart of the economic action plan with our commitment to empowering the regions of Wales. But each of those factors that the Member has just outlined that contribute to a more productive economy are going to be tackled through the calls to action and through also the economic contract. So, in order to get support from Government, you have to deliver on a set of criteria that will deal with skills, that will deal with the well-being of the workforce and that will deal with ensuring that you have growth potential. But then, our support in the future will be challenged through a new prism. The prism will be the calls to action, again aimed at making sure that we get a greater degree of innovation diffused across the economy, making sure that we have greater commitment to the development of high-level skills across the workforce in all sectors and in ensuring that businesses are able to challenge Government in order to bring forward funding programmes that meet their requirements as well.

The Plaid Cymru spokesperson, Adam Price.

Diolch, Llywydd. The Permanent Secretary and other officials appeared before the Public Accounts Committee on Monday to give evidence in relation to the Circuit of Wales project. In that session, the Permanent Secretary told us, I believe for the first time, that you'd arrived at the conclusion that any solution could only be achieved if the Welsh Government guarantee was to be reduced by at least 50 per cent, effectively reducing it to around 25 per cent of the overall project cost. Could I ask the Cabinet Secretary, given that you previously announced a target of 50 per cent of the overall cost and 50 per cent of the risk, I believe in July 2016, why you did not tell the Assembly that that had, effectively, changed to 50 per cent of the risk and 25 per cent of the project cost, particularly as this wasn't the first time, of course, that the goalposts had been changed? More pertinently, could you specifically address questions that officials were not able to answer on Monday? Was the company or were the other private sector partners told, in advance of the Cabinet decision, that it was necessary to reduce the guarantee further in the way that the Permanent Secretary described? And were the company's principals told on the preceding Friday that there were no major problems or outstanding issues that had been identified through the due diligence process? 

Can I thank the Member for his question and confirm comprehensively what we informed the Heads of the Valleys Development Company? Back in 2016, I told the Heads of the Valleys Development Company that no new proposal to support the Circuit of Wales project would be considered until at least 50 per cent of the finance and 50 per cent of the risk was being taken by the private sector, and the project also needed to provide evidence of value for money. The Welsh Government did not arrive at a formal conclusion as to what level of guarantee would not give rise to a classification risk in practice. However, it can be established that a much smaller guarantee would have been needed to reduce the risk of an adverse classification ruling—a reduction potentially of more than 50 per cent—but no definitive number can be established in the abstract. Now, reducing the classification risk would not necessarily have made the project suitable for Welsh Government support. Classification risk is not the same as commercial risk for neither the Government nor for the senior funders for the scheme, who would have found themselves investing in a proposition with a different risk and reward profile.

I've said repeatedly that we have worked with the Circuit of Wales backers to try to make this scheme a success and a viable project. We are now moving forward with the £100 million automotive tech park and this is already attracting considerable interest globally and we're moving forward with the development of the sites required to deliver that vision.  

Could I ask the Cabinet Secretary just to address specifically the detailed questions that I asked him and, indeed, I asked officials on Monday? So, was the company told, in advance of the Cabinet's decision, about the assessment that the Permanent Secretary described in terms of the need to reduce the guarantee further? And, also, were they told on the preceding Friday, before the Cabinet decision, that there were no major problems? Now, the issue of balance sheet classification was core to the Government's rejection of the proposal. We know from information provided by the Permanent Secretary that advice was provided by the Welsh Treasury on balance sheet classification on 20 June last year. Now, there's some ambiguity following Monday's evidence as to whether the official or officials that provided that advice on classification on 20 June were fully aware of a number of relevant details about the project. Specifically, again, can I ask the Cabinet Secretary if the official or officials in the Welsh Treasury that gave that classification advice on 20 June were aware, at that time, that the guarantee only commenced when the project was completed? 

Can I thank the Member again for his questions? And, in order to seek the clarification that he has asked for, I will ask my Cabinet colleague, the Cabinet Secretary for Finance, to engage Welsh Treasury officials to provide the answers that he requires. In terms of whether the company was told that there were no major problems, again, I would need to ask my officials whether that was the case. I am not aware of the discussions that may have led to that assurance being given, but I will seek clarification from my officials. 

And could he also seek clarification about the other question that he's been unable to answer? 

Finally, Cabinet Secretary, in an interview you gave following the Cabinet decision on 29 June to Brian Meechan on Wales at Work, I think you said that your door was still open if a restructured proposal came forward, that you were willing to sit down and talk again. And the Permanent Secretary did say in her remarks on Monday that the reason the Welsh Government had invested so much time and money and energy in this project was because of its huge potential to bring about a major investment in a part of Wales that hasn't seen investment at that scale.

Now, I understand that there is ongoing an attempt to restructure the proposal, to bring it forward in a different form, and that those discussions are proceeding positively with local authorities. If they do bear fruit, would the Government not give financial support, but give its blessing and actually welcome the possibility that a restructured proposal would be able to bring about the badly needed investment that was anticipated in Ebbw Vale?

I think it's important that Government considers all legitimate proposals for economic development in all parts of Wales. With regard to the Heads of the Valleys, I'm determined to move on with the development of the automotive tech park. It was found, based on international evidence, that the development of a cluster did not require the circuit that was proposed—that specific proposal—however, a test facility, which would be akin to a circuit, could be complementary to the development of an automotive tech park, and, indeed, build on the investment that could go into it. So, I remain open minded about the long-term development of that particular project.

In the short term, we're determined to move ahead with the building of a suitable facility that can kick-start the vision of delivering 1,500 jobs. In the longer term, it's entirely possible that automotive companies that will be based in the tech park will require a test facility, and that's something that—I think we can base it on 5G technology. If we can base it on autonomous and connected technology then it's something that would provide Wales, but particularly the Heads of the Valleys, with a really unique selling point in a global market.

Conservative spokesperson, Suzy Davies.

Diolch, Llywydd. Cabinet Secretary, I'd like to refer back to the economy committee report on city deals if I may, and the recommendation that the boundaries of the deal area should be as flexible and as fuzzy as possible. Now, you rejected the recommendation on the grounds of governance, explaining in the debate two weeks ago that you're establishing chief regional officer roles to ensure that the deals are complementary, and so these fuzzy boundaries are unnecessary. I wonder what you can tell us about these chief regional officers, because they've not really come up in open exchanges like this before. Will they be Government appointed and funded, from whom will they take their steer, and to whom will they be accountable?

Can I thank Suzy Davies for her question? I think it's important to revisit this issue. My problem was largely with the wording, the 'fuzzy' boundaries, and the implications that that could have for the governance structures that are already in place. My vision for the chief regional officers is that they will be the voices of Government in the regions, but also, crucially, the voice of the regions in Government, able to influence Welsh Ministers, not just within my department, but across Government, on what it is that each of those regions requires in order to become more productive and to generate a greater degree of prosperity.

In the first instance, they'll be pulling together business plans across each of the regions—business plans that will be developed in partnership with the city and growth deal stakeholders and with local government across each region and with a wider degree of stakeholder engagement that will include representative bodies such as the Confederation of British Industry, the Federation of Small Businesses, the Institute of Directors and trade union partners as well. So, by developing a regional business plan that will examine what the pipeline of opportunities is right across the patch, we'll then be able to ensure that all initiatives across Government, whether it be city and growth deals, whether it be the development of infrastructure, whether it be the development of hospitals and schools and skills training provision, can all be aligned to meet those strong regional projects that are going to develop a future economy in Wales.

Thank you for that answer. I think what I got from that is that they're Welsh Government individuals.

They are.

That's fine, thank you. In the same report, of course, governance and scrutiny also came up as areas of concern. My understanding is that once the Swansea city deal board has been established, made up, as it will be, of local authority leaders, of course, its work will not go back to those local authorities for scrutiny, and nor will any supporting advisory bodies—[Inaudible.]—such as the economic strategy group. Can you confirm, then, whether the role of scrutiny falls entirely to both Governments, and, if so, what joint and separate key performance indicators have you already determined for the gateway assessments, as, of course, they'll be the looming threat for the success of these deals?

This is largely a question for the Cabinet Secretary who leads on the city deals in the south, which is Mark Drakeford, the finance Secretary. But working to ensure that each of the projects delivers on the aims that they were meant to deliver on, that they do create jobs that we aspire to see created in those regions, and particularly within the Swansea bay area, it's absolutely essential that each of the projects is deliverable and that they deliver to the aspirations that the communities that are represented by the local authorities hope to see delivered.

Now, in terms of the chief regional officers, I should have added as well that these roles could evolve in the future. This is the first time that we've had a structure where we have individuals that can become single points of contact for local government, for businesses and for stakeholder organisations. And, over time, I see the chief regional officers becoming increasingly important in terms of being able to ensure that each of the regions works in a collective way and also in a complementary way, so that we can avoid unnecessary and damaging competition within the regions in Wales.  

Thank you, and thank you for the elaboration as well, because I was hoping you'd say 'avoiding duplication of effort' in that as well. And thank you for taking the question. I appreciate that some of this is the finance Cabinet Secretary's responsibility, but, as an economy Secretary, I would hope that you would be at least playing a part in defining those KPIs.

The deals, of course, have had a lot of media focus and attention over the last year or so. That means that businesses have been contacting me to ask how they can get involved, and I've already raised the example of Associated British Ports with you, who could, in my view, be obvious players in your ports strategy. With the logistical expertise and experience that they have, I think they could be significant players in the city deal as well. In September last year, the First Minister said that he would ask the shadow board what they are doing to engage with ABP, but ABP have still not heard anything from the shadow board. So, I'm wondering if you could check and report back whether the First Minister did write, and what response he had to that particular overture, but, more generally, how the board respond to any request you may make of them now about how the city deal projects might be tweaked in order to fit better with subsequently produced Welsh Government strategies—the economy and the port strategies being the obvious ones, but those that have come after the city deal, rather than before.

Yes, indeed. And, again, that will be a role for the chief regional officers. We've been quite consistent in our call on the shadow board to work in social partnership, as we do in Welsh Government, with businesses, with business representatives, and with trade union partners and with the third sector. I think it's absolutely essential that, with projects of this magnitude, there is full buy-in from the business community and from other stakeholders, as I say, from the trade union movement and the third sector. I will ensure that an answer is delivered concerning the potential input of ABP. As you rightly say, ABP are a major employer and a significant business that could have a very important role in the development of the city deal and the projects that are contained within it.