5. Statement by the Minister for Economy: A greener economy

Part of the debate – in the Senedd at 4:40 pm on 2 November 2021.

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Photo of Vaughan Gething Vaughan Gething Labour 4:40, 2 November 2021

Thank you for the series of questions. I'll do my best not to try the Deputy Presiding Officer's patience by giving long answers to the significant number of questions; I'll try and be as succinct as possible. Next year, I expect, when we're announcing what we're doing on skills, you'll have a significant section on what a net-zero skills plan looks like. I had an opportunity to meet with regional skills partnerships today, and it's part of what we're looking for, but, actually, we do need to have some more clarity—or we'll have to return to this time and time again, I'm afraid—on what the future funding landscape for skills investment looks like, because replacement European Union funds—. The budget was not clear on what will happen with broader levelling-up funds, because those funds, of course, funded about a third of our apprenticeship programmes, so there is a need to understand the funding available. But we're committed to working alongside businesses, as well as providers, to understand what we'll need to do. So, that is both looking at current provision, looking at where gaps, but also where opportunities, exist as well. 

On your point about private finance, we already have access to private finance and how that is being deployed. Now, much of private finance provision isn't particularly interested in the environmental impacts of investment; they're rather more interested in growth and return. But we do know that there are people who are more interested in doing so. We also know that the British Business Bank recently announced a specific equity fund as part of the budget. That was a surprise, I think, to them and to us. We'd called for something like that, so it's a welcome step forward in the Chancellor's announcement, and we'd want to see that fund deployed in conjunction with what we're already doing with the Development Bank of Wales, who certainly will be looking to provide investment into helping businesses both to decarbonise, but also to take up opportunities in the way that the world of work is changing. And we're already asking for a constructive meeting between ourselves and the Government and the development bank and the British Business Bank to try to take that forward in as constructive a way as possible.

You asked a number of questions that, I think, come together on procurement, supply chains and also the way in which we're looking for Business Wales to support small and medium businesses in particular. We are certainly looking to do more of that. Again, Business Wales funding is partly reliant on replacement European Union funds. Now, you've heard me make that point before, but it's a simple fact. We're looking, as part of that, to think about not just how we help them to think about opportunities, but also, for those business that do want to have an economic contract or already have one—and there's a range in the small and medium sector who do that—we are very clear that, in the current contract, the journey to decarbonise is part of it; it's one of the four pillars. And in strengthening the contract, you'd expect to see that enhanced as well. It's part of the work on not just the economic contract, but part of that also is the opportunities to shorten supply chains, which I mentioned in the statement. And I also did mention, of course, Business Wales's role.

We're looking, actually, about how businesses understand the imperative from consumers as well, and from their customers. Many of them now expect to see the way in which they're planning for the future. And it isn't just in the e-commerce sector that you referred to, where that's already a clear expectation that a range of those providers are looking at what their own footprint is, it's in a range of more physical goods and services sectors as well. 

And on transport, there are conversations that we'll have with colleagues in the climate change ministry about the charging infrastructure. It's also an area we could do with a joint plan across the UK for what charging infrastructure will look like, and it is one of the disappointments that I'm sure the Member will share, that, in the recent budget and spending review, there wasn't a significant investment in infrastructure to help with the decarbonisation journey. You heard Julie James mention that climate wasn't mentioned once in the budget, but, more than that, the capital budget that this Welsh Government has and that this place will have the opportunity to scrutinise and help to direct, is actually going to fall in real terms over the period of the spending review. And for all of us, on all sides of this Chamber, that cannot be a positive statement that helps Wales to make an even more rapid contribution to creating the infrastructure to help us decarbonise the way we live here in Wales.

I will try and finish now on the points about steel, Deputy Presiding Officer. There are some positive steps that the UK Government have made on trying to help and incentivise a move forward. We work alongside those, but also the investment that we have helped to create, together with the funding that Swansea do on the future of metals. But, actually, the bigger challenges on decarbonising steel are both about its competitiveness—and there's an issue there about energy prices in this country compared to European competitors—and, in particular, investment—and these are choices we need to make, but largely the UK Government needs to make—in hydrogen and also the potential for carbon capture. Carbon capture and storage is not a mature technology, so it's not going to help in the here and now, but it's a possibility for the future. There needs to be investment now to see if that's possible. Hydrogen is much nearer to being mature, so increasing the investment in hydrogen production and infrastructure is really important in general, but really crucially important if we're going to decarbonise the steel sector and have a just transition in doing so. We recognise it's a high-value, but also a high-emitting sector of the economy, so it's one of the points that I've regularly raised and will continue to raise with the UK Government, as well as the opportunities to see further decarbonisation in other forms of production. So, I think energy prices don't need to mean that steel has to be a high-emitting sector. We think the sector here is making real strides forward in wanting to decarbonise, but to do so in a way that doesn't cost a significant amount in terms of jobs and employment.