3. Statement by the Cabinet Secretary for Economy and Transport: The Economic Action Plan

– in the Senedd at 2:45 pm on 22 May 2018.

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Photo of Elin Jones Elin Jones Plaid Cymru 2:45, 22 May 2018

(Translated)

The next item is the statement by the Cabinet Secretary for Economy and Transport on the economic action plan. Ken Skates. 

Photo of Ken Skates Ken Skates Labour

Diolch, Llywydd. When I launched the economic action plan, I made it clear that I was introducing a new approach to deliver public investment with a social purpose in support of our national strategy 'Prosperity for All' and its five priority areas of early years, mental health, employability and skills, housing, and social care. Through the plan, we are building on the excellent progress we have made. With over 37,000 jobs supported across the whole of Wales in the last year and over 190,000 in the last five years of the Government, our record is strong. However, our economy is changing and we must change with it to be inclusive and competitive in the future. Today, I am pleased to announce a major step forward in delivering the plan and its compelling vision to strengthen our economic foundations, futureproof businesses and empower productive regions and people.

Since launching the economic action plan five months ago, I have been encouraged by the positive way in which it has been received. We have travelled the length and breadth of Wales to talk to businesses, representative organisations and others about the plan and to seek their input on how we implement and deliver its commitments. These conversations have been stimulating, challenging and, above all, hugely interesting and informative. What we have heard has been invaluable in shaping the way forward, and I'm very grateful to all those who took time to talk with us. The nature of those conversations has been as diverse as the participants, but a number of common messages have come to the fore time and time again. Firstly, economic development is underpinned by strong relationships not just between business and Government, but also with a range of other partners, too—our learning institutions, trade unions, local authorities, third sector, and, of course, people. Secondly is the importance of proportionality and flexibility in addressing varying needs of businesses of different sizes, types, and locations across Wales. Thirdly, making a difference is about more than simply changes in policy; it’s about cultures, behaviours and ways of working.

We have used this learning to develop the new operating model that I am launching today. Through the economic contract, we will develop a new and strengthened relationship with business to drive inclusive growth and responsible business behaviours. Businesses seeking our support will enter into an ongoing dialogue with us—one that shifts from co-existence and moves to collaboration. We expect businesses to commit to growth, fair work, reducing carbon footprints, health, skills, and learning in the workplace. These are the behaviours already exhibited in many successful and responsible businesses. We'll recognise those businesses already taking steps to adopt responsible business and employment practices, and we'll encourage and support others to take a similar path. This is about engagement, incentive and spreading good practice—a reciprocal something-for-something approach. 

If the economic contract focuses on what businesses are doing today, then it is our calls to action that will prepare businesses for tomorrow. We want to work with business to co-invest in the types of investment that will futureproof them and strengthen our economy today and for future generations. From today, five calls to action will be the new lens through which we will channel our direct business finance. 

The calls to action challenge Government and businesses to look at future investment through the contribution it will make to innovation and entrepreneurship, research and development and automation, exports and trade, high-quality employment and skills, and decarbonisation. These are some of the key strategic challenges we have to address if we are to secure growth not just today, but growth that is futureproofed to maximise opportunities that lie ahead. Taken together, the economic contract and calls to action form the basis of our new operating model targeted at ensuring public investment with a social purpose—driving wealth and well-being, inclusive growth today, futureproofing business and the economy for tomorrow.

From today, we will switch seamlessly to this new approach. All new business investment proposals that come forward for direct financial support under my direct control will be subject to this new prism, with the former way of working only applying to legacy projects to guarantee business continuity and a smooth transition. As we implement this new approach, I am determined that we capture learning and use this to refine and drive continuous improvement. This is part of our new way of working, and so I will be carrying on the conversation with business to get their feedback on how the new operating model is working in practice so that we can continue to evolve and shape our approach accordingly. My vision, and that of Cabinet, is that, over time, we will broaden the scope of this new approach and embrace direct financial support to business across all of Government. However, this is a significant change and I want to ensure that we implement it well and use our learning for further implementation.

I recognise the calls from businesses and others to simplify and streamline our approach wherever possible. One of the areas where we hear this plea loudest is in relation to our financial support. There is no doubt that businesses value the financial support that we provide and it plays a big role in helping some businesses to fulfil their aspirations to sustain and grow. However, sometimes, the sheer range of schemes, programmes and funds that we offer can be confusing and complex. I am responding to these concerns and, as part of the new operating model, I have taken the step of consolidating a number of current schemes within a new economy futures fund. I want the direct financial support that we offer to business to be clear, easily understood and responsive. The economy futures fund will make an important contribution in that regard. 

In line with this simplification agenda, I am pleased to announce the establishment of a new overarching ministerial advisory board alongside a parallel process to streamline existing advisory bodies where possible and practicable. The new ministerial advisory board will complement existing social partnership arrangements and provide a strong external mechanism for challenge and advice to support effective implementation of the economic action plan. I am establishing the ministerial advisory board on a transition basis to allow time for a public appointments process to be undertaken. It will be chaired by Sir Adrian Webb, and a full list of its members will be published on the Welsh Government’s website.

Implementation of the economic action plan does not end with my statement today. We have important work to do in implementing other key aspects of the plan—our new approach to regional economic development and wider cross-Government activity. These will be the areas that we will focus on in the second phase of implementing the plan, and, to help take this forward, I am establishing and will chair a cross-Government delivery board of senior civil servants. 

As we deliver this plan, we will learn from international best practice, and this includes taking the bold step of opening ourselves up to constructive challenge from the Organisation for Economic Co-operation and Development and from other international experts in the economic development field. I'll be in a position to provide further detail on this work in the next phase of implementation. 

I look forward to keeping Members updated on these developments in the weeks and months ahead. 

(Translated)

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

Photo of Russell George Russell George Conservative

Diolch, Deputy Presiding Officer. I think my genuine fear is that businesses up and down the country, if they're listening to this, will be scratching their heads thinking, 'What's all this about?', and that's part of the issue for me. I was waiting for something tangible in your statement this afternoon, Cabinet Secretary. When you got halfway through and started talking about the economic contract and your aims, I thought, 'That's great; now you're going to come on to talk about the how and the detail', but that didn't come forward—certainly not in my view. Of course, this is the fourth economic strategy relaunch since devolution, so I am wondering whether this signals an abandonment of the Welsh Government's long-standing approach to economic policy in Wales.

What you have said in your statement today actually contains nothing that I can fundamentally disagree with in principle, but, for me, there's no new information today here, and, more importantly for me, there are no targets on which we can actually hold the Government to account, and that's our job in this Chamber and as Assembly Members—to hold the Government to account. We can't do that unless we've got some tangible targets to measure you on.

Now, you say, Cabinet Secretary, that the economic action plan sets out an ambitious agenda for change, but I can't see anything that spells out any concrete proposals whatsoever about raising productivity levels across the Welsh economy—plenty of aims, but no concrete proposals. Now, at a meeting of the Economy, Infrastructure and Skills Committee in January, you stated that work was under way in delivering this new economic action plan, and there was some frustration from Members that there was no further detail at that time. When committee members asked you about that, and asked about the detail, you talked about how discussions were under way between Welsh Government and relevant stakeholders and said that more details would follow. But three months later, I put in a written question to you and asked you about the progress, and you answered that,

'We have been discussing our approach with businesses and other organisations across Wales.'

Well, that's the same as you told us three months before. So, it just seems to me that little progress is being made. So, can I ask: when will we finally see some meaningful action take place in relation to the delivery of the plan? Can you outline what measures there will be for success, because, as far as I can see, there's a strategy that contains 17,000 warm words but not a single target?

Now, as far as I could also gather, the economic contract provides no meaningful detail as to how the Welsh Government plans to support businesses going forward. What I can see is lots of red tape and admin. So, in that regard, can I ask you to outline what simple, practical and meaningful policy solutions are included in your economic action plan to help tackle Wales's productivity crisis, which will make a practical difference to the day-to-day operations of businesses up and down Wales and, ultimately, enable them to increase wages for their workforce, which is, of course, what we all want to see? So, I'm looking for areas of solutions in your answer, Cabinet Secretary. Also, how do enterprise zones and the attraction of foreign direct investment fit into your action plan? There's no mention at all of those in your action plan or in your statement this afternoon.

Now, I suspect this is an area that you will agree with me on. I'm sure that you would agree that the Welsh economy does need to transition to an investment culture that supports Welsh firms and delivers value for the Welsh taxpayer. So, how does your strategy make progress towards that investment culture? What focus is there on supporting our current SMEs? If there's an SME watching today, listening to this, help them to understand how this is going to support them. What intention does the Government have of using public procurement to support the Welsh economy, because, as far as I can gather, the action plan contains no practical measures to boost the level of support that Welsh firms receive from public spending in Wales? Also, how will the UK Government's industrial strategy be integrated into your economic plan? And how will you address the regional inequality that exists in different parts of Wales?

On increasing wages, export activity is absolutely crucial, of course, for increasing growth and jobs and wages across Wales. When I asked you about this in a written statement just a few weeks ago, you talked about publishing details on your website and some engagement via ClickShare and video links on social media. But are you completely satisfied, Cabinet Secretary, that the economic action is doing the job for boosting Welsh exports over the long term?

Finally, Cabinet Secretary, aside from threatening, of course, to introduce a crippling new tax on the tourism industry in Wales, what specific measures are contained within the action plan that are going to be implemented by the Welsh Government to support the tourism sector in Wales going forward? What is it that the tourism sector can be pleased about in your action plan this afternoon? So, I am sorry to say that, for me, the document doesn't have the practical solutions to address the economic challenges that are before us.

Photo of Ken Skates Ken Skates Labour 2:59, 22 May 2018

Can I thank the Member for his questions? I'll start by saying that I think, perhaps, there is misunderstanding of what an action plan is about. We're not going to be prescriptive in addressing the productivity gap. As I said in my statement, this is about ensuring that we move from a position of Government being prescriptive and co-existing with business and co-existing with learning institutions to being collaborative, to seeking out solutions to problems that may be distinct for discrete areas of the economy, but also solutions that may apply to the whole of the economy.

Photo of Ken Skates Ken Skates Labour 3:00, 22 May 2018

Now, the Member asks, 'What is it all about?' It's about making sure that we drive investment with a social purpose, that we drive inclusive growth, and that we futureproof the economy. In order to drive inclusive growth, we've developed the economic contract. In order to drive up productivity, we have the calls to action, and each of those calls to action mirror the factors that are contributing to our lagging productivity. Therefore, by making sure that funding from Welsh Government is only channelled through those calls to action, we will also be channelling our money into those areas of activity that need to be addressed if we are to improve the productivity of the economy—for example, the diffusion of innovation, relatively poor leadership. Relatively poor leadership also will be addressed through the implementation and adoption of the economic contract, because too many people go into the workplace unable to contribute as fully as they could do because they feel too stressed or too anxious or too depressed, for example. That will be addressed through the economic contract by making sure that employers commit to improving the health—and particularly the mental health—of the workforce. Raising wage levels will be dealt with through placing an emphasis in the economic contract on fair work and through placing within the calls to action an emphasis on high-quality employment and skills—skills contributing probably more than any other factor to improving wage rates and progression in the workplace.

Now, in terms of—. And I was very pleased to hear the Member say that he had little to disagree with in the economic action plan. In terms of how it can fit with the UK industrial strategy, I think—or I would hope—that the Member would recognise that the five calls to action actually mirror very, very neatly the UK industrial strategy's call for a challenge fund, applications for innovation, for, essentially, a way of doing business that irons out regional inequality. There is a common theme across both plans that concerns inequality across the UK and inequality across Wales. So, our plan is designed to dovetail with some of the challenge fund opportunities—the big money that can come from UK Government—by ensuring that we use our plan as the vehicle to drive collaboration across businesses and between businesses and learning institutions.

In terms of what success will look like, given that the focus is now on inclusive growth, success will be measured by how we drive up wealth in the aggregate, for sure, but also how we drive up levels of well-being, whilst also reducing inequality between the two. Now, we're taking a step ahead of where many other countries are going in terms of inclusive growth. The Member may have noticed that an appointee to the ministerial advisory board is the director of Purposeful Capital, a global organisation that looks at best practice and at disseminating best practice in driving inclusive growth. It's one example of how I wish to have external challenge inform the development, the implementation and the future implementation of other phases of the economic action plan to ensure that we do deliver against what I see success to look like.

For small and medium-sized enterprises, and for micro-sized enterprises, Business Wales will continue to offer expert advice. Business Wales will go on working more closely than ever before with Careers Wales. We now have a record number of business births, a record number of active enterprises, and all activity that Business Wales will be conducting will be aligned to the calls to action and the economic contract. So, any small and medium-sized or micro-sized business that fails to meet the criteria of the economic contract will get support from Business Wales in order to come back to the door to re-apply for direct financial support.

In terms of red tape and administration, I can guarantee to the Member that we are simplifying our approach through the economy futures fund, and that bureaucracy will be kept to an absolute minimum in terms of the application process for the economic contract forming one sheet of a contract. It will not be burdensome. The contract is about making sure that we maintain a constructive ongoing dialogue with businesses so that we don't just hand out money, wait for it to be spent, and then monitor it in years afterwards, that we actually go on conversing with business about the best way to modernise, the best way to be more productive, the best way to adopt fair working practices. I recognise that this is a very different way of doing economic development and, in the future phases, there will be another major shift, and Russell George mentioned regional inequality. Well, the next phase of our work will involve the establishment of new spatial, place-based economic development ways of working—I've already appointed the chief regional officers for the three regions—and that will be looking at how we can ensure that the regional plans are agreed to by local authorities and other stakeholders across the regions, so that, in the three regions of Wales, all partners, in the spirit of the Be The Spark initiative, are working to the same ends.

Photo of Adam Price Adam Price Plaid Cymru 3:06, 22 May 2018

We always welcome any new thinking in economic strategy and the Cabinet Secretary will be aware that I'm myself trying to engage positively with him. It's in all of our interests that, actually, the high-level goals at the heart of any economic strategy are achieved. But, I have to say, if what we get is an ever lengthening series of vague statements, that initial enthusiasm, that there is a genuine paradigm shift in thinking here, will soon be dissipated, and what we were left with is a growing sense that what this is is an economic inaction plan.

Can I ask him—? There was precious little detail really in the statement that he just read out or in the press release. Is there anything more than that? Is there more detail in documents around the calls to action, on the economic contract, and on the economy futures fund? And, if those documents exist, why haven't we got them, so that we can ask more intelligent questions of you? I think our own Standing Orders, actually, dictate that if a statement refers to Government documents then they must be provided for all Members. Now, I've seen Labour Members, actually, with some glossy document on the economic action plan, which the Cabinet Secretary may be about to hold up. Well, maybe he can confirm that an advance copy wasn't given to Labour Members in the Labour group meeting, because that would be, absolutely, an abuse of Government resources. We need all Members to be involved in the development of Government policy.

In terms of the detail of what he said, the cross-Government delivery board that he mentioned—can he just explain to me how is that different to, or is that taking the place of, the strategic delivery and performance board that, certainly up until recently, I think the Permanent Secretary chaired? And how is it different to the delivery unit, the First Minister's delivery unit, which was launched with a great fanfare in 2011 and then sort of disappeared with a whimper in 2016? Isn't there a danger that we've been here before? And where's the sense of urgency, Cabinet Secretary, in what you've said today and what you've said previously? There are great opportunities: the lowest interest rates in history, a massive increase—you've got to applaud the UK Government—in terms of research and development, the biggest R&D investment that we've ever seen across the UK, and all the potential in terms of technology, industry 4.0. Are we grasping that, and where's the urgency in what he has said? And, indeed, on measurement as well, how can we get the critical challenge that he referred to in terms of the ministerial advisory board if we're not clear what we are measuring?

Finally, the First Minister earlier said that the Public Accounts Committee report was a serious report, and there will be an opportunity for the Government to respond in full, but it does say that the project 

'created a strong impression to the committee of a department'— his department—

'which was not properly in control of its business'.

Are the changes that the Cabinet Secretary has announced today a candid admission that this was a dysfunctional department, and isn't the first step in changing that an admission of previous failure?

Photo of Ken Skates Ken Skates Labour 3:09, 22 May 2018

Thank you. Can I assure the Member that the changes within the department had already taken place before the publication of the report that he refers to? And changes include the new way of working on regional economic development. Changes at a senior level, as the Member is aware, were made as well. We have new officers taking charge of business and regions who have been working relentlessly in order to produce the implementation plan and we have new officials working on strategy as well. So, those changes had already taken place.

I think it's worth just taking a step back and looking at where we stand right now, with record employment levels, record low unemployment levels—the inactivity rate is at or near a record low, and the Welsh economy is growing faster than any other nation in the UK. But what this plan seeks to do is ensure that, from a relatively strong position today compared to the 1980s and early 1990s, we leapfrog some of our competitors, rather than allow them to embrace technological change, to embrace new ways of working, faster than us. Because, frankly, if we don't shift, if we don't move towards inclusive growth, if we don't move towards embracing what we've described as calls to action, we will be left behind by more dynamic and more nimble economies and countries.

We do not wish to have that happen, which is why we've developed a way of working with the calls to action, with the economic contract, that—. Sure, it doesn't enable Government to state what all of the solutions are to all business difficulties and challenges, instead what it enables us to do is to invite businesses to work with us collaboratively, and with one another, and bring forward collective challenge opportunities to Government in order to solve their own particular issues that are holding them back, that are preventing them from going from good to great. So, I don't think Members should necessarily look to Government for all of the answers to every single business problem that exists across every single part of Wales. This is a plan that is designed to enable and empower businesses and regions to work together in order to present the challenges that they face, and for us to then fund them, to work with them, in order to make sure that we do have sustainable economic growth.

The details that the Member refers to are indeed in the glossy brochure that I have a box of today and I'm happy to distribute to as many Members as possible. I thought the Member had taken one this morning, but, if not, then I have one here for him right now. What it does contain for businesses—it does contain information on the various initiatives that form the heart of the economic action plan. But, as I said, we're now moving forward with the second phase of implementation, which involves regional economic growth, in order to get maximum buy-in from across Government, from across departments.

I think I've already said to the Chamber that many Ministers are already enthusiastically embracing the principles of the economic contract, but, in order to ensure that we get maximum buy-in, I've decided to chair a cross-Government board of officials. This will operate in parallel with the Permanent Secretary's performance board, which is designed for the Permanent Secretary to ensure that, right across 'Prosperity for All', there is cross-Government activity. Insofar as the economic action plan is concerned, I take the implementation very seriously myself, and that's why I wish to chair a cross-Government board, to ensure that all departments are working towards successful application of all components within the plan.

Photo of Jack Sargeant Jack Sargeant Labour 3:13, 22 May 2018

Can I thank the Cabinet Secretary for bringing this very important statement forward today and praise him for the work he's done so far on this issue? I also want to thank the Cabinet Secretary for coming to my constituency last week to attend a jobs and prosperity summit, which I held at Deeside Sixth. It was a great opportunity to discuss with the local business community and others some of the issues that are outlined in this plan. And it's also great to see the Airbus Beluga on front of the brochure there as well. 

I want to focus part of my time on the section of the plan relating to the calls to action, particularly in automation and digitalisation. The Cabinet Secretary will know that I recently referred to the fact that Alyn and Deeside was highlighted as the area with the highest percentage of jobs at risk of automation, with 36 per cent. The impact of automation on work is most prominent in manufacturing, but is increasingly affecting traditional white collar services jobs. I wonder if the Cabinet Secretary could say a little bit more about some of the plans to deal with automation and some of the investments that the Government could be making to deal with the challenges and opportunities of automation—things like investing in professional development and skills, but also some more radical, long-term thinking and developments, perhaps, like the universal basic income, using our future tax powers and looking at a type of Government jobs guarantee.

On digitalisation, I wondered whether the Cabinet Secretary could outline how he is working with the leader of the house, the business community and the Department for Digital, Culture, Media and Sport at a UK Government level to explore the concept of gigabit hubs; for example, Flintshire and Wrexham could link together to be a gigabit hub, working closely with border cities such as Chester. Through the design and deployment of this type of futureproof full-fibre infrastructure, we could help bring the benefits of unlimited bandwidth and gigabit-speed connectivity to entire communities.

Finally, if I have enough time, I'd like to touch briefly on regional economic development. He will know, as a fellow Member from north Wales, that people do sometimes feel isolated, and there is a feeling at some times of a north-south divide—I'm sure the same could be said for many other parts across Wales. We've got fantastic developments already taking place in north Wales, just like the advanced manufacturing research institute in my own area, but will he agree with me that the economic action plan gives us a real opportunity to realise even further the potential of north Wales by embracing effective regional collaboration, but also using the levers, as outlined in this action plan, to work with our neighbours in the north-west of England? Thank you.

Photo of Ken Skates Ken Skates Labour 3:16, 22 May 2018

Can I thank Jack Sargeant for his contribution? It was a pleasure to be able to join him at his recent jobs and prosperity summit and at the launch of the advanced manufacturing research institute, where we cut the sod, which will be a world-class research institute contributing something in the region of £4 billion in gross value added to the regional economy.

I know that this is a particular scheme that other Members have been keen to learn more about—Steffan Lewis, I know, raised it some time ago in the Chamber. It's a prime example of how the Welsh Government has been able to respond to the calls of the local enterprise zone. This, perhaps, is an example of the good work that can come from enterprise-zone activity, which was referred to by Russell George. Without the Deeside enterprise zone board, this project would not be where it is today—we probably would not have considered it. This was a specific bespoke project that was brought forward by a board that was acting in a very dynamic and informed way.

I was also pleased to, on the same day, launch the Wrexham enterprise hub—a hub that is being supported by us, the Welsh Government, which will create 100 new business and is expected to create 260 new jobs. It's fair to say that many of those businesses will not go on to be significant in size, and there may be some failures—we would expect that. However, we would only need one or two of the businesses that are being created in that hub to be the new Moneypenny or Chetwood Financial in order to justify not only our financial contribution but also to add very significantly to the employment rate in the Wrexham area. These are two really good examples of how the Welsh Government is using money strategically and smartly in order to drive the industries of tomorrow. Those particular issues comply perfectly with the economic contract and with the calls to action, with a sharp focus on research and development, skills, entrepreneurship and embracing new digital technology.

This week, we've seen the Digital Festival take place at the Wales Millennium Centre. That is a particular event that is growing year on year. It's now recognised not just as a Wales digital festival but an international festival that takes place in Wales, such is the calibre of the people who attend from around the world. I think that the presence of such a festival in Wales on an annual basis highlights how the emerging tech sector in Wales continues to go from strength to strength, often with direct help through Business Wales or through our business development managers.

I also think another prime example of how we are investing in the industries of tomorrow—embracing automation and embracing artificial intelligence—comes with the investment that we're making in the Tech Valleys initiative, with £25 million over the next three years and £100 million over the next decade, designed to attract businesses and to grow businesses in Wales from scratch based on tech and on emerging digital technology. Included within that particular region, in this area of activity, will be an enterprise hub along the lines of that which I opened in Wrexham.

I was particularly interested to learn about the proposal for gigabit hubs in north Wales. I think this could be a project that should be considered by the growth deal board in north Wales, not least because it would dovetail with some of the programmes that are being explored just across the border, and there's been a very clear direction that any growth deal in north Wales should dovetail with the growth deal in the Cheshire and Warrington local enterprise partnership in order to capitalise on collaboration and co-operation, and to avoid any unnecessary competition.

In terms of regional economic development, I know that the Member is very keen to ensure that north Wales gets its fair share. The second phase of the implementation plan will concern regional economic development and the development of regional economic plans, which are designed to empower the regions of Wales and to ensure that local authorities, Welsh Government, businesses and other stakeholders are all investing in the areas of expertise that currently exist, and in areas of economic activity that will be futureproofed.   

Photo of David Rowlands David Rowlands UKIP 3:20, 22 May 2018

It is gratifying to see that the Welsh Government now has a clear idea of its role in supporting the business community in Wales, especially with regard to investment. It appears we now have a framework within which the Government can achieve its objectives. This is an essential part of delivering that much-needed boost to prosperity so desperately needed by the people of Wales, especially those in the lower-end skills sector. The new economic contract is also to be welcomed. We particularly like the Cabinet Secretary's objective to ensure that with all contracts, each party gets something for something and that it is to include an ongoing dialogue with business. We all acknowledge the considerable challenge Wales faces with the relatively small amount of money companies are investing in research and development. So, it was good to see that this point is dealt with in the financial contract that would ensure that companies improve productivity, upskill workforces and invest in R&D. 

Turning to Government investment in the business sector, I have long called on the Government to simplify pathways to investment for businesses, and it is to be noted that this was one of the key issues raised in your consultations with the business sector. I have some concern that you feel the best way to deal with these issues is, in consort with the consolidation of some funds under the economy futures fund, to advocate yet another advisory board. Is this introducing yet another tier of bureaucracy? There is no doubt that calls to action should very much concentrate financial assistance to those businesses involved in developing the goals that the Government has outlined in other statements on economic policy, but there are many business types out there that may not, because of the very nature of the business, be able to comply with the criteria set out under the calls to action. Are those to be excluded from investment entirely as a result of the implementation of this action plan? 

We do note the considerable engagement the Welsh Government have had with industry in developing this new economic strategy and welcome this constructive process, especially as the business sector seems to be fully engaged. It is to be hoped that this consultation process will continue in order to help facilitate the goals set out by the Welsh Government. Whilst, as has been indicated, we welcome many of these proposals, I must agree with both of my fellow AMs Russell George and Adam Price. We note that, however, there are no well-defined targets other than the stated goal of seeing productivity and gross value added per head narrowed to 90 per cent of the UK average by 2030. We urge the Government to give more clarification regarding timelines and targets, so that the Chamber can scrutinise the delivery of those targets. After all, measurability is a crucial part in triggering corrective actions in order to bring plans back on track.   

Photo of Ken Skates Ken Skates Labour 3:24, 22 May 2018

Can I thank the Member for his contribution and for generously welcoming the statement today? I'm very pleased, in particular, by his recognition of the public investment with a social purpose ethos that is right at the heart of the economic action plan. Investment clarity and simplicity was something that many, many business stakeholder groups called for. I'm pleased that we've responded with the establishment of the economy futures fund, and that Business Wales will be working more closely with Careers Wales, so that we will have a far clearer and far simpler method of drawing down not just financial support but also advice from businesses.

I should assure Members that the ministerial advisory board will not have a role in determining funding applications. There will be no additional bureaucracy associated with the establishment of the ministerial advisory board with regard to any applications that come forward from businesses for the economy futures fund, or any other fund for that matter. The ministerial advisory board is there to provide challenge and advice to us as we implement further other parts of the plan and as we test its impact.

One of the early pieces of work that the ministerial advisory board will be undertaking will be a review of the impact of the economic contract. It's absolutely vital that we're able to demonstrate that the contract is indeed leading to improvements in terms of quality of work and working practices, that it is leading to an accelerated pace of decarbonisation within the workplace, and that it's contributing to growth—either directly to a business concerned or within the supply chain. And we have fully engaged with the business community—the Member is right—during the process of designing the plan and designing the implementation of it. I can assure Members that any business failing to comply with the economic contract—while they may not be able to apply for direct financial support in that instance, what they will be given is support and advice in order to improve their working ways so that they can come back round to the door and reapply.

Photo of Jenny Rathbone Jenny Rathbone Labour 3:26, 22 May 2018

I know that a large number of people want to speak, so I'll be brief. About 20 per cent of the people working in my constituency are on less than the real living wage, and a considerable proportion of them are also on zero-hours contracts, and that is a massive problem in terms of the well-being of their children, because if people don't know when they're supposed to be working they can't make suitable childcare arrangements if they haven't got the money to pay for it. So, I wondered whether the Cabinet Secretary could say a bit more about how you're going to tackle the issue of fair work and particularly the role of the fair work board—how are they going to actually influence this agenda and drive down this casualisation of all our workforces?

Photo of Ken Skates Ken Skates Labour 3:27, 22 May 2018

Can I thank Jenny Rathbone and recognise the difficulty of low salaries and also zero-hours contracts for the working population of her constituency and Wales as a whole? The fair work board will become the fair work commission, tasked with bringing forward recommendations and a clear definition of fair work by the spring of 2019. On an interim basis, we have adopted a definition of fair work that's been agreed by social partners. It will apply to the economic contract until the fair work commission bring forward a clear definition, but clearly the real living wage, zero-hours contracts, the right to be heard, the right to participation—these will all be factors very carefully considered by the commission and we look forward to adopting that new definition when it is presented in the spring of 2019.

Photo of Hefin David Hefin David Labour 3:28, 22 May 2018

Can I ask the Cabinet Secretary why the concept of the multiplier effect through the supply chain is not so fundamental that it wasn't considered to be a fifth pillar of social purpose?

Photo of Ken Skates Ken Skates Labour

Well, multiplier effects are included in the action plan—

Photo of Ken Skates Ken Skates Labour

It's one part of the economic contract, ensuring that we don't just see growth within a business in its own right but that we actually look downstream at the supply chain, at the impact that a business can have on the wider business community within any given area or within the sector as a whole.

Photo of Vikki Howells Vikki Howells Labour 3:29, 22 May 2018

Thank you, Cabinet Secretary, and it was a pleasure to join you yesterday at Abercynon-based Pinkspiration for the launch of the economic contract. I'm sure that, like me, you were struck by the way that Pinkspiration supports women in the business world by mentoring and also into non-traditional areas of work like construction. I was struck, for example, by the fact that their construction sites have a 50:50 gender split. How can this sort of advancement be captured in the contract, and in what way will it be used to encourage the participation of women in particular in the economy?

Secondly, I'm keen for further information about the position of smaller firms that may not be directly accessing Welsh Government contracts or support, but may be part of a wider supply chain. How will the experiences of these businesses be embedded into the contract, and also how will Welsh Government ensure that they are supported to maximise the benefits in turn to their workforces?

Photo of Ken Skates Ken Skates Labour 3:30, 22 May 2018

Can I thank Vikki Howells for her questions and say what a delight it was to be able to join her in her constituency at Pinkspiration, who provided a very clear idea of what it is to be a fair employer, an employer that values a diverse workforce, and values fair work and the principles of fair work? What the plan is designed to do is to drive behavioural and cultural change within business, and with some companies, we've already seen that accomplished. Pinkspiration is a great example of a company that does comply already very clearly with the criteria of the economic contract. Others need encouragement. This plan gives that encouragement. It gives it in the form of significant financial resource if they should apply for Welsh Government support. 

The behavioural and cultural change that is required, though, won't happen overnight. We will need further work to be undertaken in terms of collaboration across the business community in order to influence and inspire the sort of change that we require, because inclusive employment is something that really has been a challenge in many parts of Wales, for many communities, for many people. I met yesterday with Daniel Biddle who was a survivor of the 7/7 bombings. Daniel will be providing me with advice on inclusive employment, and what he was able to highlight were the multiple challenges facing disabled people in accessing work and then remaining on the employment escalator. In order to bring about cultural and behavioural change, it will require leaders in business to inspire other leaders in business to change their ways, and this is something that I'm particularly keen to see happen through the calls for action and the economic contract. 

Photo of Ann Jones Ann Jones Labour 3:32, 22 May 2018

Thank you very much, Cabinet Secretary.