The following amendments have been selected: amendment 1 in the name of Rebecca Evans, and amendments 2, 3 and 4 in the name of Rhun ap Iorwerth.

That brings us to the Welsh Conservatives' debate on the economy. I call on Russell George to move the motion. Russell George.

Motion NDM7055 Darren Millar

To propose that the National Assembly for Wales:

1. Notes the Welsh Government’s failure to realise Wales’s economic potential over the past 20 years.

2. Does not believe that the Welsh Government’s Prosperity for All: Economic Action Plan is sufficiently ambitious to deliver significant improvement in the Welsh economy.

3. Calls on the Welsh Government to take further action to improve the economy, including:

a) simplifying and improving access to business support;

b) ensuring policy is aligned with an effective industrial strategy;

c) reforming public procurement to support SMEs;

d) upskilling and re-skilling the workforce to take advantage of new opportunities; and

e) improving infrastructure.

Motion moved.

Thank you, Presiding Officer. I formally move the motion today in the name of my colleague Darren Millar on the economic performance of Wales.

We won't be supporting the Government's amendment today, as it deletes our entire motion, and it is unfortunate that opposition debates are subject to 'delete all' amendments from the Government. I'm sure the Government could have stretched itself to supporting at least point 3 of our amendment, which calls for more action to improve the Welsh Government through its own economic action plan.

With regard to Plaid's amendment on regional inequality, I agree that the gap between the richest and the poorest parts of the country are a national embarrassment. I'm yet to be convinced that the suggested measures of convening a national economic summit and legislating for a regional renewal Bill are the correct ways to bridge this gap, but we on this side are open to listening to the debate this afternoon and listening to the argument in more detail. 

But we agree that there is a necessity to end regional inequality across Wales. In turn, of course, that will boost living standards and properly planned and funded health, education and local government services in all parts of Wales.

Last week, Presiding Officer, we celebrated 20 years of devolution, of our Parliament here. Devolution was intended to significantly improve the economic performance of Wales, but, by any measure, the economic data, without question, indicates that the Welsh economy has underperformed over the past two decades, and has comprehensively failed to catch up to the UK economy as a whole. That said, the Welsh Government's latest economic action plan marks a shift away from a failed approach, which I think is welcome, and perhaps the Deputy Minister and the Labour benches will be surprised by what I'm going to say next, but there is much to be applauded, I think, about this plan. So, my opening remarks are not intended to be a party political attack on the Government this afternoon, but I genuinely believe that the plan lacks detail, which is why we are calling for more ambition in improving the Welsh economy so that we deliver a better deal for Welsh businesses, their employees and the country's taxpayer. I'm sure we can all agree that we want to see the true potential of devolution realised in Wales, which we need to achieve through an ambitious policy programme, in order to shake off the place that we're currently at, at the bottom of the UK league tables.

Now, of the three economic plans that have been launched since devolution, not one—not one—has succeeded in improving earnings or economic output, and the Welsh economy is still the weakest economy in the UK. It has the lowest productivity levels across the UK and, of course, those stagnant pay packets are holding us back. And regarding those stagnant wage packages, it's disappointing that when we do have those tweets, as was listed on the trade and investment tweet—'Come to Wales, we've got 30 per cent lower salary costs than some other parts of the UK'—this kind of culture needs to end within Government and the civil service. This is the wrong approach.

Now, the Welsh Government's economic strategy over the past 20 years has largely focused on attracting foreign direct investment, and while I would, and we on these benches would, welcome countries from across the world investing in Wales, the raw economic data shows us that the Welsh Government hasn't made the most of this opportunity. We would like to see new overseas offices and dedicated trade envoys to boost Welsh trade and connect a strong Welsh economy with the world. Now, of course we have a UK industrial strategy, and I firmly believe this plan will ensure that we have jobs and opportunities spread across the whole of Wales, and this is helping the whole country get ready for the economic change by investing in our infrastructure, driving up research spending and boosting the skills of our workforce. I'm sure that the Deputy Minister will agree with me—that it's important that the Welsh Government's policy is aligned with the UK Government's industrial strategy.

Data on the performance of the economic action plan has been incredibly hard to get hold of. I put in written questions at the back end of last year, but didn't get substantive answers to those questions. We've had very few, if not no, statements at all in regard to performance when it comes to the economic action plan.

Reforming public procurement to support small and medium-sized enterprises is also an important strand of an effective Welsh economic action plan. For example, when we look at the way public procurement has been handled in Wales: in 2018, 22 per cent—22 per cent—of procurement spend by the Welsh Government on construction contracts, worth over £0.5 million, went to firms based outside of Wales. So, this represents a lost opportunity for investment in the Welsh supply chain and, consequently, opportunities to further strengthen the economy of Wales.

Next, a strong, forward-thinking and diverse economy is built by a strong workforce, so I certainly believe that there is a need there to focus on adult learning, upskilling and reskilling, and this provides the workforce with the ability not only to gain new skills and knowledge within their sector, but also the added, indirect benefits of improving the social capital and integration, integrating our health behaviours, skills and employment outcomes. So, it's therefore imperative, I think, that adults are encouraged to participate in learning at any stage of their career, whether it's through work-based learning or personal study.

Improving our infrastructure is also important. It's essential to see the consequences of that to improve our economy. It's high time, I think, that the Welsh Government turns its sights on the delivery of a robust and futureproofed transport network. There are good infrastructure projects that have been delivered, and delivered on time right across Wales, but still we have too many transport projects that are delivered late and over budget. And the stalling of the delivery of major schemes, such as the M4 relief road—that is a problem to our economy. Without addressing the congestion on that stretch of the motorway, the Welsh economy will continue to be hampered by chronic levels of congestion and the delays that it creates.

Finally, it's crucial that we also strengthen the country's growth deals as well. We've got some really good growth deals across the country with a regional focus, a good partnership between local authorities as well. This is an area where I think the Welsh Government has got it right, as has the UK Government as well, making sure that the growth deals are measured and that proposals are coming forward from the ground upwards—that we don't have either the UK Government or the Welsh Government imposing projects on the regions of Wales, but that these projects are coming from the very communities that they come from.

So, we've got to get, I think, that right, and I think that we look at—. Obviously, there's a Swansea bay deal as well, which perhaps other colleagues will talk to later, and there are the recent Government reviews into that. So, I think we do need to implement the outcomes of those reviews. We've got the Cardiff growth deal, we've got the mid Wales growth deal, which is on its way as well, and also, of course, the north Wales growth deal, which is expected to create more than 5,000 new jobs and almost double the value of the north Wales economy by 2035.

So, to conclude, Presiding Officer, we on this side look to the economic action plan and we see the merits in it, but there needs to more action, and there needs to be more detail on that plan, and we need to see performance come forward and see what the performance is as we go forward as well. I very much look forward to the debate this afternoon and look forward to Members contributing.  

I have selected the four amendments to the motion. I call on the Deputy Minister for Economy and Transport to move formally amendment 1 tabled in the name of Rebecca Evans.

Amendment 1—Rebecca Evans

Delete all and replace with:

1. Notes the actions taken by the Welsh Government to support the economy of Wales over the last twenty years which have helped lead to:

a) 300,000 more people in work in Wales since 1999;

b) economic inactivity rates now broadly comparable with the UK average for the first time in history;

c) the proportion of working-age people with no qualifications more than halving since 1999;

d) the proportion of working age people with higher education qualifications increasing from around one-in-five people to more than one-in-three since devolution;

e) the numbers of active enterprises in Wales the highest on record.

2. Notes the Welsh Government’s plans to drive inclusive growth through the Economic Action Plan including the new Economic Contract, major infrastructure investment such as the new £5bn rail franchise and metro as well as the new £1bn Development Bank of Wales.

3. Recognises many of the economic concerns expressed in the EU referendum and the Welsh Government’s focus since publication of the Economic Action Plan in 2017 on nurturing the foundational economy as a driver for inclusive growth.

4. Recognises the fundamental importance of fair work to Wales’s future and the Welsh Government’s commitment to work in social partnership to make Wales a fair work nation.

5. Regrets the lack of UK Government investment in Wales over the last decade as well as cancelled rail electrification, rejection of tidal lagoon plans and failure to secure Wylfa project investment.

Amendment 1 moved.

Formally.

I call on Rhun ap Iorwerth to move amendments 2, 3 and 4 tabled in his name.

Amendment 2—Rhun ap Iorwerth 

Add as new point at end of motion:

Calls on the Welsh Government to:

a) convene a national economic summit to discuss with key stakeholders and industry the future of the economy; and

b) legislate for a regional renewal bill, that will impose upon government the requirement to consider regional fairness and equality in its expenditure decisions.

Amendment 3—Rhun ap Iorwerth

Add as new point at end of motion:

Expresses concern for the future of the Welsh economy post-Brexit.

Amendment 4—Rhun ap Iorwerth 

Add as new point at end of motion:

Notes the failure of the UK Government to deliver detailed proposals or consult upon a new post-Brexit Shared Prosperity Fund to replace EU funding, given its place as a key component of the Welsh economy.

Amendments 2, 3 and 4 moved.

Thank you, Llywydd. This is one of those very important debates as we mark 20 years since the establishment of devolution. I recall making comments as a young journalist 20 years ago that one of the measures of success of devolution, and the success of the Welsh Government in due course, would be its impact on the Welsh economy. And I think, generally speaking, in looking at where Wales is in terms of the economic tables, not only on these isles but beyond these isles too, we can’t say that Wales is anywhere near reaching its potential as of yet.

There has been no lack of ambition expressed by me and predecessors and at times, possibly, even by the Government, but in terms of action, we’re not getting anywhere near the kinds of steps that we know need to be taken in order to take Wales forward into the future that I know it has economically as a young, prosperous nation.

There is much in what’s contained within the Conservative motion that I and other Plaid Cymru Members would certainly agree with, but we have tabled a series of amendments in order to highlight a few areas that we believe are important to emphasise this afternoon. In amendment 2, we are making the case, as I have done in the past, for having this economic summit. We are at that point, I think, where we need that opportunity to air some new ideas for the economic future of Wales in the most dynamic and the most public way possible. There are so many consultative groups that have been established by the Government over the years, and so many people have been drawn into work on a working group here and a working group there, but I think we have reached the point where we would have a real benefit on a national level by having the kind of summit that we talk about in our amendments, in attracting the best ideas and sharing those ideas with the people of Wales, so that they too can contribute to this discussion. So, I very much hope that the Assembly will support us in that regard.

And that amendment also makes reference to this policy that we have espoused for quite some time in this place, that we need legislation in place that would drive the kind of economic fairness and equality across Wales that the people of Wales do insist on having. I know as a Member representing north Wales that there are feelings that north Wales doesn’t get its share, and I’m sure there are similar feelings in west Wales, and even in areas close to this capital city, that prosperity isn’t fairly shared across the nation. I’m not one that wants to divide Wales; I want to unite us and to show that we can work as one nation.

I do think that this regional Bill that we are suggesting would be a means of ensuring, just like the future generations legislation has done, and require the Government to think in a particular way. A regional Bill would require the Government to consider, in everything it does, whether those decisions taken are truly going to lead to action that will benefit the people of Wales, wherever they are, so that we can remove these concerns that prosperity is centralised in just a few areas.

I will turn to the Brexit-related amendments. I think it was important for us to note this. I don’t need to expand too much on the amendment that states that we are concerned about Brexit. I want people to think about the European question in a Welsh context. Over the past few days, I’ve been having discussions with politicians from Gibraltar, and Gibraltar considered Brexit in the context of Gibraltar, and they asked, ‘Is this good for us?’ And 96 per cent of the population there rejected Brexit because of the damage it would cause to Gibraltar. Brexit is damaging to Wales, and I want the people of Wales to think in that way, because what’s bad for Wales as a nation means, of course, that it will be bad for our communities, for families and individuals across the country.

Just a brief on the shared prosperity fund. I do think that the UK Government had pledged to conclude its consultation on this funding that would replace European funding by December of last year. There’s been no consultation done, if truth to be told, which again is one of those elements that causes so many doubts, in my mind, on this question of leaving the European Union.

I will summarise with these few words: I have confidence in the potential of Wales. We are not delivering that potential at the moment. We’re not yet on the pathway that will enable us to deliver that potential. I don’t think that we’ll be able to start to fly as a nation until we are an independent nation. But on whatever side of that debate you are, whether you’re convinced or not on that, we should all be agreed that we should be doing far more and setting the bar far higher in moving to a place where we have firm foundations in place for that day when Wales does get its freedom.

As I note that we still haven't had sight of the report on kukd.com yet, I think I'll begin with the First Minister’s response to last week’s FMQs when he accused my party of not being prepared to take risks when it came to supporting businesses. I think he forgot he was talking to the Conservatives. This is the very group that been exhorting this Government for years and years to be bolder and braver, because our economy has needed it, and it still needs it—Brexit or no Brexit. I think you know as well, Deputy Minister, what we all know, that the reputation of the Welsh economy is the sore that refuses to heal, infecting attempts to spread wealth, to raise the ambition of our young people, to tackle poverty and to persuade the brightest entrepreneurs that it is worth doing business in Wales. And the point my leader was making is that, the greater the risk, the greater the number of stones that need to be turned over. We cannot afford a slot-machine economy, where it doesn't matter if you're investing £10 or £10 million; the greater the risk, the more you show us, this Parliament, your workings. And I think Pinewood was the classic example of that: an idea that excited us all but whose delivery was hidden from view. And the sad thing is, if we'd all had earlier sight of what was going on there, this Parliament would have had the chance to offer some insight, to support Government and share responsibility for the next steps, instead of leaving us with absolutely no option but to reveal the Government's inability to manage risk in that case, and that is not a good advertisement for our nation. The global operators see that as, 'There's a quick buck to be made here', and our aspiring small businesses lose confidence that they're getting the best advice and the most strategic support. 

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

Now, unlike Israel or the US, our culture doesn't accept failure as the next step towards success, and I think that's unhelpful; it depresses wealth creation. But, when you are using my constituents' money to back a horse, you'd better know how to read a form book. It's your record that we are not confident about on this. You might find that simplifying and improving access to small business support, as suggested in our motion, will make due diligence a more straightforward matter and it means that Government can then focus effort on the scrutiny of business models and the books, if you like, of bigger players like Dawnus. Because their resilience may have greater influence over the survival of small businesses in their supply chains than any small business support that you can give.

So, there was no need to delete our motion, not least because it denies us, really, the opportunity to say anything nice about you. Of course we're pleased to see that there are more people in work and people finding opportunities that they can seize and take advantage not just of that sense of achievement, but all of the other things that come with being in paid work, but also the fact that fewer of them have to pay tax, thanks to the UK Conservative Government. Perhaps it would have been a little bit more honest to pay tribute to both Governments, as the UK as a whole has the highest ever number of people in work, including the highest number of women, with more tax being paid by the top 5 per cent than before. But I suspect you’d rather not focus on those specifics, because, despite the growth in the number of people in Wales in work, productivity and the pay packet are still the lowest in the UK. And every time your backbenchers stand up and complain about zero-hour contracts and low pay, they should ask themselves why it is in Labour’s Wales that these are most evident. There is little joy to be gained from points 1c) and 1d) in the Government amendment if those people aren’t seeing their endeavour reflected in their pay packet or their career progression.

If we don’t look like a nation on the up, we will not attract investors prepared to stay the course. Now, I would agree with you, Deputy Minister, the foundational economy is a big part of a bigger picture, but when you consider the record of our universities, fighting above their weight here in spawning start-ups, we want them to grow here in Wales. I worry that these seeds will just get a bit clogged up in the clay of red tape—red tape in the wrong place. And I think that's a lesson, actually, for our city and growth deals to consider too.

Finally—and I have to say I think this deserves more time than I can give it today—is the dead hand of the familiar. Diversity is not just about the different types of businesses we have here in Wales but the variety of people who populate the economy. Just look at the Chwarae Teg reports, the Women's Equality Network manifesto, reports by the Prince’s Trust, Prime Cymru—a host of reports coming out, representing people with different disabilities. Innovation and how we look at opportunity is the driver of growth, and I hope that we will stop wasting huge social and economic capital by changing the way that we look at the economy’s prime asset, and that is its people. Thanks.

The post-war Welsh economy was initially based upon agriculture, coal and metal manufacturing and processing. We then had a growth of light manufacturing and, by the late 1980s, Wales was attracting more foreign direct investment than any other region or nation in the UK. This flowed particularly into light manufacturing.

A combination of proximity to markets, cheap labour, and often direct Welsh Development Agency support, meant that suppliers looking to establish new plants found Wales offered a compelling package for investment. Unfortunately, many of these branch factories closed when either markets reduced or it became cheaper to relocate elsewhere. Whole plants moved from Wales as manufacturers shifted to cheaper locations. One hundred and seventy one plants closed between 1998 and 2008, with job losses amounting to 31,000.

It would clearly be a mistake for Wales to fixate on winning new flows of overseas investment. Some may, of course, be attracted, but it is extremely unlikely that anything approaching the golden age of the 1980s and 1990s could, or should, be replicated—attempts to do so by either reducing wages or reducing environmental or safety laws are entering a race that Wales cannot, and I believe should not, enter.

Using the most recent business register and employment surveys that I was able to access shows that the Welsh economy employs substantially fewer people in the following areas classified by the Office for National Statistics: information and communications; finance and insurance; professional, scientific and technical; and business administration, including support services. I think that if you were to make a list of those areas that paid the most in the economy you'd have most of those on it. There are structural weaknesses in the Welsh economy—if there weren't, our gross value added would be higher. Some solutions to Welsh economic problems have to be reached. Firstly, there needs to be an upskilling of the economy department. We cannot have another Kancoat, where those assessing the scheme cannot see that colour coating is not advanced manufacturing, and do not know that two colour-coating plants had previously failed in south Wales and that Shotton colour coats steel.

Secondly, we need to learn from what previously worked and worked well. In the 1990s, Wales experienced a golden age of animation production. S4C was integral in helping to produce a number of popular animated shows, which I mentioned a couple of weeks ago: SuperTed, Fireman Sam, The Gogs. These were high profile and they actually got translated into English. S4C rapidly gained a reputation, nationally and internationally, for their commercially successful and award-winning animation programmes. As S4C expanded, a whole host of other popular characters came: Wil Cwac Cwac, Toucan 'Tecs, Funnybones. This is an example of where money put into the demand side generates new industry, but needs initial demand. Far too often, we fixate on putting money into the supply side and then we oversupply—we need the demand side to be up there as well.

On a further thing: it must seem to you all rather odd that the world's biggest-selling video game, Grand Theft Auto, started life in Dundee, but there's an economic logic to the way that, in 20 years, the Scottish city has become a notable cluster for the world's video games industry. Abertay University in Dundee found political and financial backing to establish a department offering the first computer games degree in the world in 1997. There are now a clutch of related degrees, including games design and production management. There's also a large computer games industry based in Dundee. Is anybody surprised at the fact—money has been put in, it was there at the beginning—that it now has a very successful industry in an area that pays very well and that is growing? This outlines three points that I continue to make—and I'll probably make them again this time next year—first, a university can be a driver of the economy and the local economy; secondly, that industries tend to cluster; and, third, geography is less important than skill availability. If you're ever picking a place to locate—no disrespect to Dundee, but it isn't top of anybody's list of geographically the most central.

Thirdly, like Gordon Brown, I'm a believer in endogenous growth theory, which holds that investment in human capital, innovation and knowledge are significant contributors to economic growth. The theory also focuses on positive externalities and spillover effects of a knowledge-based economy, which will lead to economic growth. The growth theory primarily holds that the long-run growth rates of an economy depend on policy measures—for example, subsidies for research and development or education increase the growth rate, using the endogenous growth model, by increasing the incentive to innovate. And that's what we lack, really. We talk around it, but what we have not got is enough highly paid jobs, we haven't got enough innovation and we haven't got clusters in high-paid industries. If we can accept what that problem is, then we have to work out how we're going to address it.

I've tried to outline, briefly, some ways of improving the Welsh economy, and I'm, of course, available to discuss these in greater detail with the Welsh Government or anybody else who wants to talk to me about it, but we really have to become innovators—we really have to get into the high-value parts of the economy. You're not going to become rich by having lots of employment with low pay. We can knock our unemployment rate down, we can increase our employment rate, but it doesn't do much for our GVA until we start getting some highly paid jobs in there.

Well, despite inheriting economic crisis and empty coffers, prudent UK Governments since 2010 have successfully exploited opportunities to realise the UK's economic potential. Just this month, official figures for the UK have shown construction output up, production output up, services output up, employment rates up to the joint highest figure on record, unemployment down to the lowest level in 45 years, UK economic inactivity lower than the year earlier and close to a record low, and average weekly earnings, with and without bonuses, up both before and after adjusting for inflation.

However, only Wales has had two decades of devolved Labour Government, with the Welsh Government in Cardiff responsible for economic development and employability in Wales. Those same official figures paint a different and very worrying picture here. The employment rate in Labour-led Wales was both down and lagging behind the GB figure. The unemployment rate in Labour-led Wales was up on the quarter and the highest amongst the UK nations, and the largest estimated decrease in workforce jobs in the UK was in Labour-led Wales at 9,000.

UK research and development expenditure rose by £1.6 billion to £34.8 billion in 2017, above the long-term annual average increase since 1990. However, although the UK spent £527 on R&D per head of population, with England spending £554, Scotland £466 and Northern Ireland £371, the figure in Wales was only £238.

In March, Organisation for Economic Co-operation and Development figures showed that personal well-being levels have improved in the UK, as have mental health scores, increasing by 4.6 per cent between 2011 and 2016 to 63.2 per cent. Only this month, however, research commissioned by the End Child Poverty Network showed that Wales was the only UK nation to see a rise in child poverty last year. Typically, the Welsh Government blamed the UK Government policies, whereas anybody capable of independent thought will understand that UK Government policies applying in Wales also apply throughout the UK, whereas only Wales has suffered two decades of Labour-led Government in Cardiff. And this despite the Welsh Government having blown billions on top-down programmes meant to tackle poverty and drive down the prosperity gap with the rest of the UK. As Wales Online reported in February, quoting people in Ebbw Vale, despite millions spent on regional regeneration projects, it hasn't done what they needed—bringing jobs and bringing businesses in.

ONS figures for 2017, published in February, revealed that productivity levels in all regions of Wales were below the average for the UK, with even the best performing counties of Flintshire and Wrexham still 4 per cent below the UK average. Wales remained the least productive of the 12 UK nations and regions. Even more shockingly, growth in the value of goods and services produced per head in Wales have been slower than Scotland, Northern Ireland and England once again.

Successive Labour Welsh Governments have failed to close the gap between the richest and poorest parts of Wales and between Wales and the rest of the UK. The last UK Labour Government ignored warnings about borrowing levels, sub-prime debt and bank collapse and leaned on the financial regulator to apply light-touch regulation to the banks, causing credit crunch and austerity. [Interruption.] The policies still advocated—. Read the independent reports; I've quoted them in the past. The policies still advocated by Labour would have generated far higher cuts by now, imposed externally. But, as the UK Chancellor said in March, our balanced approach means our country's debt is falling and more money invested in our public services.

The Labour Welsh Government's economic action plan follows three previous failed economic plans in 20 years. They commissioned a report on fair work, but the UK Government had already commissioned the Taylor review of modern working practices, which formed the basis of its 'Good Work Plan'. This commits to a range of policy changes to ensure that employees can access fair and decent work—the right plan for ensuring that the Welsh labour market is both fair to employees and allows businesses to thrive.

The Welsh Government amendment claims a lack of UK Government investment in Wales, conveniently forgetting, for example, that, proportionately, Wales receives £12 million for every £10 million spent in England on services devolved to Wales, nearly £0.75 billion for city and growth deals in Wales, almost £1 billion of defence spending in Wales last year alone, supporting over 6,000 jobs, and £2 billion Network Rail investment over the next five years.

Well, as a nation celebrating innovation and entrepreneurship and embracing technological advancement, Wales would be extraordinarily well placed to benefit from the new industrial revolution. But the real change we need will only begin with a change of Government in Cardiff.

Adult learning, upskilling and reskilling is the key to a forward-thinking and diverse economy in the modern world. We all recognise the importance of providing people with skills required by employers to gain good and sustainable jobs. It is imperative that adults are encouraged to participate in learning at any stage in their career. This can be through in-work learning or by personal study. It is a sad fact that the Welsh economy is facing a serious skills shortage. A survey conducted in 2015 found that nearly 73 per cent of Welsh businesses experienced difficulty in recruiting the right staff. Sixty-one per cent of Welsh businesses said that they feared that they would not be able to recruit enough high-skilled workers to meet demand and to enable them to thrive. This is certainly true of the construction industry. In July last year, two thirds of construction firms in Wales reported difficulties in hiring bricklayers and 60 per cent had problems recruiting carpenters and joiners. The Federation of Master Builders Cymru said,

'The message I hear time and time again from small builders is that there’s plenty of work out there, but too often they simply don’t have enough skilled tradespeople to take on those jobs'.

As a result, they are

'Missing out on a golden opportunity for growth in the construction sector and the wider economy.'

More than half of those economically inactive in Wales hold no qualifications whatsoever. This contributes to the skills gap, leading to fewer employment opportunities and a continuous cycle of deprivation. It is a matter of concern, therefore, that the Welsh Government's latest figures show that the number of apprenticeship learning programmes started has fallen by 6 per cent compared with the previous year. But expanding the number of apprenticeships is not enough. We have to make sure that they provide the type of skills training that business needs in Wales. Estyn recently said most providers of higher-level apprenticeships in Wales do not manage them well and many courses are outdated.

If we are to ensure the workforce simply meets the needs of businesses, there has to be greater collaboration between industry and education. Research for the south-east Wales regional skills partnership shows that while some colleges are making great progress in building relationships with employers, others offer training without understanding the needs of local businesses in Wales. One of the great benefits of degree apprenticeships is that they are employer driven and designed to meet the skills need. This will increase engagement between universities and employers.

Universities in Wales are keen to develop a wider range of degree apprenticeships. Initial degree apprenticeships will be in engineering, advanced manufacturing and computing and digital skills. Data from the take-up of degree apprenticeships in England suggests that they are effective at encouraging more women to study STEM subjects. Digital skills are particularly important. They are having a huge impact as new technologies are adopted. But change is moving at a rapid pace. The digital sector is developing at such a rate that education providers find it difficult to keep up. We face a huge challenge in ensuring that digital training is up-to-date. Presiding Officer, this is vital if we are to meet the demand for workers with digital skills, particularly in specialist areas such as cyber security. People's level of digital prowess is fast becoming a key detriment of their earning powers. Barclays bank estimate that having digital skills can add an extra £11,500 a year to someone's potential earning in Wales.

Across Wales, 49 per cent of employers have said the introduction of new technologies and the associated new ways of working are the single most important factor contributing to the skill gaps that they are experiencing. Deputy Presiding Officer, I know the leader of the opposite party has only recently said that he is going to increase lower wages up to £10 an hour for every worker, but I think it's not fair—under the age of 16 or 17 having the same sort of salary as people earn after getting skills and training. I think you are putting horses and donkeys together, which is definitely not the right approach to developing the economy in the country. So, basically, there should be great research. I'm quite happy to understand the people who have acknowledged brain and—. There are two ways of working: brain and hands. When you use those, you can create an economy that benefits the future national interest. But if you're putting it all together without skill, I think you won't go anywhere. Thank you.

I welcome this debate thoroughly. My blood pressure went up a little bit at Mark's contribution, so you’ll understand if I address some of the comments in my opening remarks directly to Mark.

First of all, let me say: I'd always want a Government that seeks to be an active partner in economic growth, not a disinterested bystander; one that seeks to work with unions and employers, businesses big and small and co-operative organisations to produce not only growth but growth with a social purpose to deliver a fair economy that works for all, not just a few—and where we have qualitative growth, not just quantitative growth, which delivers carbon emission reductions, better communities and environmental gains, as well as distributing growth more equitably across society, where everyone has a stake in that growth.

Now, what I don't want is a Government that stands by on the sidelines as a steel company goes to the wall; a Government that fails to invest in full electrification of rail in Wales, or in rail in Wales per se; that fails to recognise and invest in the potential tidal technology; that puts obstacles in the way of public or not-for-profit ownership of rail or water companies or other utilities that provide a public good—and to see a devastating indictment of a laissez-faire approach to the economy.

Just witness today the news of the liquidation of British Steel, which they've linked, by the way, directly to the dampening effect of Brexit uncertainty and the way in which, again, the UK Government has failed to step up and defend these jobs to the hilt. And I would say compare that to the way in which Welsh Government worked, and continues to work, diligently with the unions, the workforce, the owners of Tata Steel to make it clear that Welsh Government is on the side of jobs and employment, keeping a steel industry in Wales that continues to invest not just in jobs and the community, but in energy and carbon reduction and wider innovation. That's why I support the Government amendment today. I have some sympathy with some of the Plaid Cymru amendments too, but I'd urge colleagues to oppose the motion in the name of the Conservative Party.

And in direct response to some of Mark's comments, for a party that has repeatedly, continuously overlooked the interests of Wales, and that presided over traumatic structural damage to the industry, the economy, the communities of south Wales in the 1980s, that did throw friends of mine onto the scrapheap, that then, and now, repeatedly fails to apologise for the intergenerational damage this caused—the dole queues that lengthened, the sick list explosion, the depressions of wages and loss of highly skilled jobs, the deeply embedded poverty and crushed hopes of decades—. And add to that the drag of austerity funding, which was a political choice, Mark, not a necessity. Despite relentless Conservative spin, it was nothing to do with Labour mismanagement and all to do with a global crash beginning in the US. Add to that the repeated failure, as I've mentioned, of the UK Government to step up to its responsibility to Wales. The damage to Wales through Conservative underinvestment and disinvestment and wider damage to Wales is well and truly established in the Welsh psyche, and rightly so.

But let me say, 20 years on from the establishment of the National Assembly, which Rhun referred to, we rightly have to acknowledge that we need to do more. And my key point to Labour colleagues in Government is that this all has to be about delivery, delivery, delivery—relentlessly. We have the grand plans in place, we have the right strategies in place—we will need to tweak and adjust them as we go—but this is now really about delivery. It's driving hard on some of the existing policies but modifying others. I don't have time to be comprehensive, but let me list a few areas. Inclusive growth set out in the economic action plan needs to be, for my communities, twofold. We need investment at scale and pace in the public transport improvements in road and rail that are promised. And if more money should become available, shove it into public transport and extend the bus trials, for example, so that people can get to the jobs in Bridgend and Swansea and Llantrisant and Cardiff and along the M4 corridor.

Secondly, inclusive growth means delivering these jobs closer to home, so that does mean releasing the potential sites, like the Cosi/Revlon site in Maesteg, which has been lying dormant for years. And it means significant investment and support for the growing, I have to say, success story of the micro and small business sector within the Valleys—the Llynfi, the Garw, the Ogmore—and putting public money through the new economic contract into supporting local procurement right across the piste from builders to food producers, to child and adult care co-operatives and much more. It means the Development Bank of Wales targeting hard these geographic areas to boost and grow indigenous businesses, as Suzy mentioned, which make those local jobs stick and they boost local job generations. And it means working with these small and medium-sized businesses, not just the usual names, to deliver export as well as local markets.

And my final point—because I can see I'm in the red zone, Deputy Llywydd—it means stepping up what we plan to do with the Valleys regional park and making it of national significance so that we drive tourism and visitor and job creation through that nationally significant park in that area into those valleys. So, that would be my request: it's not new plans, it's not grand stuff; it's actually delivery, delivery, delivery to transform our communities.

Whilst we acknowledge that there has been some progress during the Fifth Assembly, it is also true to say that the last 20 years of Labour control has not delivered on the economy in the way those who voted for them should have expected. And don't let us forget that, for 13 of those 20 years, there was a Labour Government in Westminster as well as a Labour Government here in Wales.

The very fact that we still have 25 plus per cent of our population living in poverty, despite the fact that we have been recipients of billions of pounds of so-called EU money—which is, of course, our money coming back to us with strings attached—is surely a dramatic indicator that previous economic strategies by the Welsh Government have largely failed. The problem has been, of course, that most of the money has gone into the public sector. And it is in the public sector that we have seen the greatest rise in employment. Whilst in some instances, these additional jobs have been necessary and, indeed, vital, there are many that are nothing more than an expansion in bureaucracy and unnecessary quangos. If Wales is to improve its performance with regard to expanding the private sector and such economic indicators as productivity, it is crucial that the Welsh Government be seen to concentrate its efforts into growing the private sector in Wales. We cannot afford another 20 years of failed projects such as Communities First, which consumed in excess of £400 million in its 18 years of existence, with little or no impact on the Welsh economy. One cannot but speculate, if £1 million had been given to 400 proven entrepreneurs with necessary checks and balances, how many real jobs might have been created during that period.

There are, of course, real indications that the Government is moving in the right direction—such things as bringing Aston Martin to Wales and the Minister for the Economy and Transport's statement on his efforts to establish the global centre for rail excellence. But there is huge scope for improvement. We're still near the bottom with regard to our research and development sector when compared to other countries and regions in the UK. The figures have been pointed out earlier by Mark. R&D is the springboard for commercial expansion and the Labour Government needs to dramatically increase its funding in this crucial area for economic growth. We look forward to a step change in the Labour Government's commitment to expanding the private sector in Wales.

Thank you. Can I now call on the Deputy Minister for Economy and Transport, Lee Waters?

Thank you, Dirprwy Lywydd. I thank most Members for that cheery canter through the Welsh economic scene.

I think if we'd said to those in the Chamber this afternoon who were here 20 years ago that, 20 years on, rates of economic inactivity in Wales will be now broadly comparable with the rest of the UK, they'd have thought that a significant achievement. If we told them 20 years ago that we will have halved the proportion of working aged people with no qualifications in Wales, they'd have thought that a pretty good achievement. That we'd significantly increase the proportion of higher education qualifications and more active enterprises than ever before—I think they'd have settled for that too. That we have now, in 2019, 300,000 more people in jobs in Wales than there were 20 years ago—I think they'd have thought that a reasonable achievement.

But beneath those figures there remain difficulties and challenges in the Welsh economy—nobody is denying that. I certainly will not take lectures from anybody in this Chamber about a lack of ambition about that. But rather than the tired clichés of partisan point scoring, it'd be more useful if the time were spent in these debates, I think, to focus down on particular problems we have and try and get together to try and come up with solutions, because knockabout is all very well, but it's easy to do.

I particularly enjoyed Rhun ap Iorwerth quoting himself as a young journalist 20 years ago on how devolution will be judged by the success of the Welsh economy. I am far too modest to quote myself when I was a journalist on the performance—

Are you taking an intervention?

—on the performance of devolution.

Are you taking an intervention?

I haven't progressed very far, but I'd be happy to take an intervention.

No, I realise—. Thank you for taking the intervention a little later on. In your opening remarks, you said that you thought the people of Wales would be happy enough that Wales had caught up with the rest of the UK. Are you sure that that's not a bit of a low ambition, when, actually, we should have been using this opportunity of devolution to make Wales soar and not just catch up very belatedly with the rest of the UK?

Actually, what I said was I think the Members who were here 20 years ago would have accepted some of these achievements as reasonable achievements given our starting point of 100 years of economic decline. The litany of challenges that were recited by many Members through the debate are not in dispute. Wales remains a poor economy. We have a number of challenges. This is not something that we are sanguine about.

But can I just gently point out to the Conservatives that the macro-economic levers for economic change do not lie here? We have some powers over economic development, but the real powers to shift poverty, the real powers to shift productivity, the real powers to shift GDP uplift lie not here, they lie in Westminster. The UK Government have imposed nine years of austerity on us, and it is a fact that if our budget had grown in line with UK economy since 2010, we would now have £4 billion more to invest—£4 billion more to invest. So, I think it would show a little humility if the party on the opposite benches were to acknowledge the challenges we've had, not least the failure of the UK Government, who after all have responsibility for the UK economy as a whole, to deliver on major projects that they promised: the cancellation of rail electrification—we're not going to let you forget that one quickly; the failure to deliver on the tidal lagoons, despite a consensus in this Chamber; the stalling of the Wylfa project. Promised investment from a UK Government who have responsibility for all parts of the UK has not materialised.

Despite this, we have made multiple initiatives to try and shift the dial and, as I've already said, there have been real successes, but there remain real challenges. I mentioned the fact there are now more people in employment in Wales than ever before, but it's still true that 40 per cent of people in employment are in poverty. Quoting high-level figures does not tell us the true complexity of the picture and the challenges that we face. So, we do need to have a new approach that looks at the quality of work, of fair work, and also looks at the underpinnings of our economy, particularly in the parts of Wales that I represent and many colleagues here represent that have not enjoyed the benefits of free trade and globalisation and have felt the pain of it, and that was reflected, I think, nearly three years ago now in the Brexit result.

Rather than obsessing, as the Westminster Conservative Party are—and this afternoon, I read on Twitter, they're on the point of throwing out their Prime Minister. They'd be far better off addressing the causes of Brexit,  why people across Wales felt the economic system was not working for them, and that's something this Welsh Government is trying do. It's trying to deliver on the referendum result, but also, in parallel, addressing the underlying causes that led so many people to feel they didn't have a stake in the economy.

And that is exactly what we are trying to do through the foundational economy—work across a range of strands. I was sorry to hear David Rowlands dismiss the investment in the public sector that we've seen in the last 20 years as somehow unworthy jobs, but we need to use these because, in many parts of Wales, they still remain the anchor institutions that are always going to be there because the people in those communities need them there, and our focus should be on how we maximise the value of those jobs and those sectors in those parts of Wales. That's exactly what we're doing, working with public services boards, to apply the lessons that they've learnt through procurement in Preston, for example, but also experimenting. We've launched our £3 million foundational economy experiment fund, which I hope is going to be added to by the Cardiff city region with their own foundational economy work too. This is an area where we can trial things that improve the quality of employment, but also improve the wealth in an area so that it doesn't leak out.

I'm not able to capture all of the points raised in the debate this afternoon, Dirprwy Lywydd, but I would just say that our focus on inclusive growth is at the forefront of our minds. Huw Irranca-Davies rattled through a range of things that he'd like to see, and I have no difficulty agreeing with any of them. On his point about developing micro and small businesses in the Valleys in particular, we are currently trialling a new approach, where we are working with the businesses rooted in those areas to help each other. We are trialling a peer-to-peer business mentorship programme for the chief executives and leaders of some of those Valleys businesses to help each other, and if that is successful, I hope that is something that we are able to roll out.

I think I shall leave it there, Dirprwy Lywydd, given the time. Needless to say, I hope Members will support the Government amendment, and I'm the first to concede there is much more that we can do. Ambition we do not lack, but the circumstances being unleashed on us from Westminster, where a hard Brexit still looks the most likely, is going to make that task all the harder.

Thank you. Can I call on David Melding to reply to the debate?

Thank you, Deputy Presiding Officer. I think we've had a full and constructive debate mostly, perhaps with the occasional flash of partisan anger, but when we are debating the economy, I think there should be some real feeling, so that's perhaps not amiss. Russell George opened the debate I thought, as you'd expect from someone with great authority on these themes, speaking as a really thinking Conservative, but also as Chair of the economy committee here and able to reach out and point to those areas where we surely all agree. After 20 years of devolution, we would have expected more progress. He was very generous in looking at the latest Welsh Government's economic action plan. I mean, I've been here 20 years and I know there have been several past attempts here, but he did say this one has more ambition but we need more detail. So, a really balanced approach, which I thought set the right tone for this debate.

Rhun talked about his time 20 years ago as a journalist and then later the Deputy Minister sort of responded with his own memories of his salad days as a journalist. I think that throughout the debate we've had people reflect on what was being discussed 20 years ago and it was in terms of: we could allow that economic energy that we know the people of Wales have to be released and more effectively enhanced by our own policies, and that's not quite happened. He talked about the need for an economic summit. We will listen to this. I know Ieuan Wyn Jones was very keen on this type of approach at the depths of the financial crisis. And it did have some merit, but I think we do need to ensure that it's the action and the policies that come from such fora that are really, really important. And he talked about Brexit in relation to Wales. Brexit didn't dominate, slightly to my surprise. It was mentioned a couple of times by a few speakers. But he did make a point that I think everyone would agree with, and that's the regional policy that will now have to be negotiated on a UK basis. The shared prosperity fund and how it will be governed and finance are really important, and I hope that we will find agreement around the Chamber that we must ensure that Wales gets effective access to that policy, both in shaping it and then the funds that might come from it. I will give way, somewhat in trepidation, but—.

Thank you very much for giving way. Will you agree with me that it is quite appalling that in the midst of the serious questions about the future of the Welsh economy and our need for that additional fund currently, that there has been such a delay by UK Government in pushing through with the consultation?

Well, it's clearly work in progress, and issues about shared governance require real thought, because they need to be rigorous and really like nothing we've really had before in our internal structure and in terms of how the various Governments in the union operate. So, I'd urge you to be patient, but I don't dismiss the importance of the issue.

Suzy said we need to be bolder and braver. I thought that was a good description, really, of a lot of people's contributions—that was definitely to be heard—and that failure should not put people off trying again when it comes to the economy. I mean, this obviously has been taken up with enthusiasm by the Welsh Government in preparing their latest economic action plan, and we hope that it is most successful. Suzy said that economic growth requires Welsh Government and the UK to work more effectively in partnership, and the Minister fairly did point out that the biggest economic levers clearly are with the UK Government, but there is a need for partnership working for the benefit of the people of Wales.

Mike Hedges, as usual, made an excellent contribution in which he combined firm left-wing socialism with a real desire to see the market economy work more effectively and the skills that we need to have flowing through the economy being emphasised and being driven up, so that we get more of those higher paid professional and managerial jobs. And then he talked with great vigour, I thought, about the creative industries, especially animation and a list of cartoon characters, which I thought the Deputy Minister showed particular interest in at that point.

Mark then took us back to the choices that are inevitably faced on economic matters, and you know, there's a blue team and there's a red team, and it's fair that we reflect on the various interpretations of economic data that we have, but there are some big figures there about the UK economy's performance, and our economy is not performing as well—and it's an issue for us all. I'm not attributing blame; I've already said that we need to work in partnership. But low productivity is a real issue and it's something that we need to be aware of.

Mohammad talked about the skills gap, and again I think that's probably the biggest reason we have lower productivity than we would desire, and emphasised the real need to look at digital skills as being key to higher earnings for people. 

Huw Irranca was very much in the red corner. I mean, Deputy Presiding Officer, he ended in the red zone, but I think he started in the red zone as well. I did agree with him that after 20 years it is now about delivery. Well, it should have been about delivery all along, but at least we are getting to that point when even the Members that support the Government are keen to see more delivery. And he made a really good point that the micro and small business sector in the Valleys can be a key economic generator.

David Rowlands. I mean, I don't agree with him either in terms of 'Public sector bad; private sector good,' but we do need a rebalance in the economy, and we need a larger private sector, so there I certainly do agree with you.

And then the Minister wound up by reflecting on some of the achievements, and that was a fair point. We don't want to be overly gloomy ourselves when we're trying to heighten the ambition of the people of Wales and make us more attractive as a location for investment, but I mean, with the positive messages, around higher economic activity and generally, we are more skilled than we were 20 years ago and employment is higher. These are genuine achievements and the Welsh Government has been part of that, without any doubt. But you know, the challenges that are there do remain, as Mark indicated, and they're deep-seated in our economy. We need more innovation. We need more risk taking, and we need to face up to some big decisions, now that we have taxation power, in how we're going to generate the sort of economy that the skills and abilities of the people of Wales deserve. But I thank every Member for what was in general a well-spirited debate.

Thank you very much. The proposal is to agree the motion without amendment. Does any Member object? [Objection.] Therefore, we will defer voting under this item until voting time.

Voting deferred until voting time.

I now propose to go to voting time, unless three Members in the Chamber wish for the bell to be rung. No. Therefore, we will proceed to vote.