3. Statement by the Minister for Economy: Moving the Welsh Economy Forward

Part of the debate – in the Senedd at 3:00 pm on 19 October 2021.

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Photo of Vaughan Gething Vaughan Gething Labour 3:00, 19 October 2021

It's one of the levers that we do have within our control, and, as you'll know, the lead Minister on procurement is the finance Minister, Rebecca Evans, but it's an area where lots of us have a direct interest from our different portfolio perspectives. So, you can expect to hear more about what we're looking to do in terms of valuing Welsh procurement—not just about the spend and the amount of money when it comes to procurement contracts, but the wider value that that procurement delivers. And actually, on that, we're not just finding that there's agreement across the Government on taking that approach, but actually within business groups as well.

And when you talked about infrastructure and access to finance, of course in First Minister's questions we highlighted again some of the challenges on what we consider to be modern infrastructure in a range of settings, including those areas that are not devolved; so, on rail infrastructure, where this Government has invested because the UK Government has not, and on broadband, which is not a devolved responsibility, that infrastructure, but this Government has invested because of the lack of pace and willingness from the UK Government to do so. So, there are areas already where we invest in areas we're not directly responsible for but we recognise there's a need to, to improve people's ability to work and to move around. And actually, that's accelerating, because, when we talk about the ability to work in a different way—in particular, remote working—actually our broadband infrastructure is absolutely essential to do that, and that would be an area where, again, there could be a fruitful conversation between this Government and the UK Government if there was a real willingness to commit to a plan to increase investment. 

I was interested in your point on access to finance, because, actually, we already have some finance we provide and make available. There are traditional sources, but of course the development bank has been a significant asset during the course of the pandemic and beyond, in investing in Welsh businesses to give them the opportunity to grow and grow further. But, more than that, in the British Business Bank, which has a whole remit across Britain, actually when you look at its investment choices thus far, they are skewed to certain parts of the UK, and it's an issue of regional disparity within England itself, let alone the rest of the UK. They've recently announced they're going to have equity investment funds to look at vehicles in some parts of the UK, including the south-west of England. They have not to date looked at a specific investment fund to prioritise and increase the equity investments they are prepared to make in Welsh businesses. That is something that I want to have a conversation with them about, because I do think that if you're not prepared to say you will invest in different parts of the UK, including in Wales, you shouldn't be surprised if businesses here don't access the capital that is available where there are more usual and regular relationships in different parts of business in the UK.

And on the skills shortage, again this is a point that follows on from the DBW. It's a point I've made many times, and I'll keep on making it until we get some recognition of the reality of it. Skills are essential to the future of the Welsh economy. We need to invest in people, as well as places, to make use of the talent we have and to attract and keep talent here in Wales. But, actually, when you look at apprenticeships, which every party in this place supports and wants to see more of, a third of the apprenticeships that we provide are funded by former European structural funds. And without a plan—and there is no plan at present—for what would happen to those former funds, we face not just a point of uncertainty, but the pilot years, with the £10 million that hasn't been funded yet and hasn't gone to any single pilot project, not just in Wales but across the UK, they exclude projects that are of regional or national significance.

So, actually, it's a way to atomise the lessons we have learned and will take money away from investing in skills. It would be a disaster, not just here in Wales, but right across the UK. If you think about the level of expenditure we're talking about, if the pilot money is finally provided and if, amazingly, we're able to spend it all within this year, the deficit will still be extraordinary. To give you an example of just how big it is, the money we won't have within this one year is equivalent to more than double the size of Monmouthshire County Council's annual budget. That's the money that Wales is not going to get this year, and, if there isn't a plan for the future, that will be the deficit next year, for money that should be coming to Wales. And it really is extraordinary to have Conservative politicians talking here and saying, 'Thank God for the UK Government', which isn't providing this funding to Wales. You need to decide whether you're in favour of your constituents, their jobs and the businesses that rely on that money, or whether you're here to be cheerleaders for a UK Government that is taking hundreds of millions of pounds out of Wales as we speak. 

And when it comes to our employability and skills plan, of course this, again, is part of our challenge. So, this is going to be a way in which we are going to be able to look at how we get people closer to the labour market and into work again. The Department for Work and Pensions vacated some of this space in the past and have now come back into more of the employability space with programmes that they run. But most of those programmes are for people who are already near the labour market itself—so people already, essentially, work-ready. What we have to do is both get those people into work, but also people who aren't active, aren't in work and aren't close to being in work. And that's the work that we're looking to do and to prioritise, as I set out in my statement. Because, if we can't get more of those people back into work, then, actually, in the future of the Welsh economy, we'll have a significant drag upon our ability to genuinely raise the income of the whole country. So, that's a really big challenge. You won't see the same return per person as you would with those programmes that are about job-ready people, but you will see a real impact on the future of the economy. You can expect to hear more about that when it comes to the future on renewables, and more about what we do to take advantage of the green potential in Wales, when Julie James sets out the second low-carbon delivery plan before the end of this month.

And, on the Reid review, again, I won't repeat all of the points I've made before about funding, but, of course, higher education is excluded from the current pilots for replacement European funds. And I spoke to the Wales innovation network of Welsh universities, looking at innovation, together with the Learned Society of Wales, and they're genuinely anxious about there not being a plan about how they can continue to be funded for the work they do—not just the academic value of acquiring knowledge, but its ability to be applied and to generate further economic growth. And they recognise that the headline from the Reid review is going to need to be pared back if we don't get that certainty on funding. But we certainly want to be able to take that forward and to meet the commitments we've given if the funding certainty is provided for us.

And on the young person's guarantee, I will have a further statement to make before we get to the end of this calendar year, but we've already taken forward, as I said in my statement, the Jobs Growth Wales+—that's a key part of helping people who are not in education, employment or training back into work, building on successful schemes. And the work we've already done with young people shows that most people who aren't in employment, education or training want to find work. So, more of our support is being shifted to see what we can do to help those people re-enter the labour market, or enter the labour market for the first time, and to find meaningful, decent-paid work. After all, that should be what all of us in the Chamber want to see for our young people and beyond.