The following amendment has been selected: amendment 1 in the name of Siân Gwenllian.

Item 7 today is the Welsh Conservatives' debate on the Welsh economy. I call on Paul Davies to move the motion.

Motion NDM7993 Darren Millar

To propose that the Senedd:

Regrets the poor stewardship of the Welsh economy by successive Welsh Governments.

Motion moved.

The Llywydd took the Chair.

Diolch, Dirprwy Lywydd, and I move the motion tabled in the name of my colleague Darren Millar. Today, our motion reflects the fact that, by many key indicators, the Welsh economy continues to lag behind other parts of the United Kingdom. For example, it's a fact that out of all the nations of the UK, Wales has had the worst gross value added growth since 1999. We've also had the lowest gross domestic product output per head, at £24,586. We raised the least amount of revenue per head in the financial year ending in 2020, and people living in Wales have the lowest gross disposable income in the UK, at £17,263. These are not new statistics, and they are not the case because of the COVID pandemic or because the people of the UK chose to leave the European Union. In 1997 Welsh and Scottish workers brought home identical weekly pay packets at £301 per week. But by 2021 a Welsh pay packet contained £562, whereas a Scottish weekly pay packet contained £60 more, at £622. Indeed, through my entire time as a Senedd Member from 2007, there have been so many debates about the state of the Welsh economy and the need to do things differently, and yet, year after year, our economy has stagnated and lagged at the bottom of many key indicators. And that is why we have tabled this debate, because, despite the clear ambition and determination of businesses, something is not working. And so it's vital that the Welsh Government reflects on these serious statistics and looks to bring forward innovative industry-backed solutions. 

Now, I see that Plaid Cymru has tabled an amendment to our motion that states their view that only through independence will Welsh businesses reach their full potential. I'm sure that it'll come as no great shock to anyone in this Chamber this afternoon to hear that we on this side of the Chamber will not be supporting Plaid Cymru's amendment. Indeed, we believe that our membership of the UK is exactly what has protected the Welsh economy in recent years, and that if we were independent, our economy would be in a much weaker position. This was highlighted during the pandemic when our membership of the UK helped us weather the storm of a global pandemic, with billions of pounds of support provided to Wales to tackle the impact of COVID-19. It's quite clear that being part of the UK helped tackle the pandemic, with the UK Government providing vaccines, COVID testing and armed forces' support in Wales, as well as groundbreaking financial measures that have protected around 500,000 livelihoods in Wales. Therefore, we believe that an independent Wales would jeopardise the Welsh economy and make it less resilient to pandemics and global shocks.

Are you taking the intervention?

I will take an intervention from the Member for Mid and West Wales.

I thank you for taking the intervention. And, yes, it is right that the pandemic was supported at a UK level, but what I'm interested to hear you explain is whether you think that that shouldn't have been the case. Because, surely, in a pandemic, it is the duty of the Westminster Government, the overarching body of the four nations, to protect all of its citizens. I was a bit unclear from the point that you were making.

Well, I'm not sure whether you're a unionist or not, Joyce, to be perfectly honest, after that intervention. I'm a unionist, I believe in the United Kingdom and so should you if you are a member of the so-called Labour unionist party.

Now, one of the biggest burdens on businesses in Wales is non-domestic rates, and that has been a long-standing issue for businesses. At the end of the third Assembly, there was an opposition debate on the Welsh economy, very similar to this one, and in opening that debate in 2011, my colleague Darren Millar said we have the least competitive business rates environment in the whole of the United Kingdom. Well, fast-forward to 2022 and that's still the case. Welsh businesses pay 53.5p, in stark contrast to England, where small businesses pay 49.9p and large businesses pay 51.2p, and in Scotland, where small businesses pay 49.8p and big businesses pay 52.4p. Welsh businesses continue to have the highest business rates, and I know, from the conversations that I've had with businesses in my own constituency, that business rates continue to be a real burden for businesses, particularly small businesses.

Now, I appreciate—[Interruption.] I will in a minute, Mike. I appreciate that there is support available for eligible small businesses with a rateable value of up to £6,000 and tapered relief for those with a rateable value of between £6,001 and £12,000, but there's still more that needs to be done. Indeed, the Federation of Small Businesses's recent report 'A Vision for Welsh Towns' also called for decision makers at all levels to address and alleviate the immediate cost pressures that existing small retail businesses and town centres are enduring, including business rates, parking and direct business support. Now, the Minister for Finance and Local Government has recently made it clear that the Welsh Government will be bringing forward legislation to move towards a three-yearly revaluation cycle so that Welsh businesses will be in line with other parts of the UK, but we're yet to hear exactly when that legislation is coming forward. And so perhaps in responding to this debate the Minister will update us on what progress is now being made in this area and in terms of wider business rates reform. And I give way to the Member for Swansea East.

Thank you very much for doing that. Will you agree that one of the other things we've got is lower rateable values in Wales so that the actual amount paid in Wales is quite often less than it would be in England or Scotland?

Yes, but the statistics are very, very clear, Mike: Wales's businesses pay the highest business rates in the whole of the United Kingdom. That is a fact and a fact that you cannot get away from.

Of course, business rates are just one piece of the jigsaw puzzle in creating the conditions for growth and making Wales a more attractive place to do business. We need to harness the potential of our whole landscape, from our city centres to our rural areas to our ports and to our coastlines. The Welsh Government's programme for government lacked analysis of the needs of rural Wales and any action to develop the rural economy or harness its benefits. Similarly, there needs to be more support and investment in our ports, which will become increasingly important in the coming years.

Now, last week a business made it very clear to me that they were held back by the Welsh Government's lack of investment in port infrastructure, which could help attract global business opportunities. That has to change. Members will know that our manifesto promised a £20 million Welsh ports development fund for this exact purpose—to support an increase in Welsh exports, help create more jobs and help attract global business opportunities.

That brings me to infrastructure investment more generally. We know that businesses are also calling for much-needed infrastructure investment and support in the form of transport infrastructure, green infrastructure and infrastructure to help businesses decarbonise. As Welsh businesses strive to decarbonise their businesses, it's vital that there is support available to help them navigate these waters and understand exactly—

Will you take an intervention?

—what action they can take. And I will take an intervention from the Member for Islwyn.

Thank you very much. Do you acknowledge that the level of UK infrastructural spend in Wales has been negligent and when is your party going to stand up for Wales?

Well, Llywydd, I'm not going to take any lectures from the Labour Party when it comes to running the economy. Let's not forget that it was the Deputy Minister for Climate Change that said—and this is what he said—

'For 20 years we’ve pretended we know what we’re doing on the economy—and the truth is we don’t really know what we’re doing on the economy. Nobody knows what they’re doing on the economy.'

That's the verdict of one of your own Government members, so I'm not going to take any lessons from your party when it comes to running the economy.

Now, as we bounce back from the COVID pandemic, we have an opportunity to do things differently and one area that I hope will be better prioritised is in relation to entrepreneurship and developing start-ups. There is some promising news here, as the number of business start-ups in Wales has risen by more than half since December last year, which means that people clearly believe the market can support new businesses. We need to build on this and ensure that start-ups have the support, guidance and access to finance that they need. Recently there have been calls for the development bank to offer more help to businesses and Professor Jones-Evans is right to say the Welsh Government's bank could play a bigger role in the microfinance market.

Now we also need to see more action to tackle the skills gap in the Welsh workforce, so there needs to be a much greater priority given to investing in research and development. Wales has suffered the largest nominal cut out of the four UK nations in relation to research and development funding, and that does not bode well for the future. And the Welsh Government has finally come clean and confirmed that it's no longer implementing the Reid recommendations now in full. And Professor Richard Wyn Jones is right to say that the Welsh Government has abandoned a strategy aimed at the long-term transformation of the research and innovation landscape. As we move forward, we must be looking to the future and investing in emerging technologies, but that cannot happen if the Welsh Government doesn't adequately fund research and development. 

Llywydd, we are at a crucial point as we navigate a new normal post COVID, and the Welsh Government must use all the tools that is has at its disposal to stimulate and develop the Welsh economy. The Minister has announced a series of strategies and plans in the past few months, and it's vital that that activity is co-ordinated, streamlined and monitored to ensure that they're not duplicating each other or adding more governance and bureaucracy, but instead delivering real outcomes for businesses. And we need to hear more about how the Welsh Government is nurturing and encouraging start-ups and is also working to develop the next generation of entrepreneurs.

Therefore, in closing, Llywydd, we have an opportunity to change our mindset in how we approach Welsh economic policy and I hope we do so for the sake of our businesses and for the sake of our economy. I look forward to Members' contributions and hearing their ideas for how we can stimulate and support our businesses here in Wales and I urge Members to support our motion. 

I have selected the amendment to the motion and I call on Cefin Campbell to move amendment 1, tabled in the name of Siân Gwenllian.

Amendment 1—Siân Gwenllian

Delete all and replace with:

To propose that the Senedd:

Believes the stewardship of the Welsh economy by successive Welsh Governments has been limited by not having the full economic and fiscal levers of an independent country, which is the only sustainable way of ensuring Wales achieves its full economic potential.

Amendment 1 moved.

Thank you very much, Llywydd. Before I turn to the contribution I want to make, I want to make a declaration of interest for the final time, because I am a county councillor for one final day.

It is rather ironic that the Conservatives have brought forward this motion today, as not only is their party against allowing Wales to have the proper economic and fiscal levers available to us that we need to truly and radically develop our economy, but their policies undermine the Welsh economy time and time again.

For decades, Wales's resources have been extracted—that extractive economy you've heard about so many times—by Westminster. Wales was once at the epicentre of the industrial revolution, with our coal and steel firing the economy. But, unfortunately, the wealth accrued left Wales to bolster the economy of the south-east of England. Our resources were exploited, leaving little left for Wales. We now have a legacy of comparative poverty, with one in three of our children living below the breadline, and we have long-term illnesses, incapacity and poor health. Even today we export more electricity and water than we need, but we don't get a penny back in revenue; the profits pour into the coffers of private companies over the border. We also represent 6 per cent of railway track mileage in the UK while receiving only 1 per cent of the current Network Rail budget, not to mention the impact of HS2, which is costing £5 billion to Welsh taxpayers, without an inch of that track being in Wales. The lack of investment in our infrastructure by Westminster has been appalling.

Wales represents 4.7 per cent of the UK population, but, in 2020, we only received 2 per cent of the UK research and development budget, which is crucial for the growth of our economy. On top of this, we've historically seen chronic underinvestment, leaving us underprepared for a crisis like the current cost-of-living crisis, whilst unable to take control of the situation ourselves. Westminster still handles 45 per cent of Welsh expenditure, with no guarantee it will be spent in line with the needs of Wales.

If we look at the recent cost-of-living crisis, for example, it has disproportionately affected poorer communities, which means it has had a massive impact on Wales compared to other, more prosperous parts of the UK. We already entered this cost-of-living crisis with the highest level of relative income poverty and the highest level of child poverty in the UK. But, crucially, the tools available to us to deal with the crisis are largely reactionary rather than preventative. We don't, for example, have control over welfare here in Wales, nor do we have control over our taxes. We couldn't implement a windfall tax, for example, on the obscene profit margins made by oil and gas companies, nor could we try to redistribute wealth to help those worst affected. Can you imagine an independent Wales not providing welfare support to low-income families, unlike the heartless cutting of the universal credit uplift by the Westminster Tories? And let's look at the cost-of-living crisis: the UK Government's attempts to tackle this crisis have been abysmal. The best the Tories can come up with is moving car MOTs from one year to two, saving one-car families a paltry £23 a year. Now, wow, that is what you call real radical thinking.

The energy bill support scheme is poorly thought out, leaving the most disadvantaged families horribly exposed. And yesterday's car-crash interview on Good Morning Britain will probably become a pivotal moment in this Tory Government's awful tenure, when Boris Johnson basically acknowledged he had no answers to our cost-of-living predicament. The vision of Elsie, and thousands of other Elsies across these islands, travelling on a bus to keep warm, will be the enduring image of a failed and rotten Government.

Let's throw—to conclude, Llywydd—Brexit into the mix. The Prime Minister secured a very weak Brexit deal for these nations, which has meant that Wales has lost out to the tune of almost £1 billion over the next three years, and the impact of this on our agricultural sector and the most deprived areas in Wales is very, very significant.

Yes, certainly, the Welsh Government could be doing more to grow the Welsh economy, but they have been hampered in their ability to truly do so due to constraints imposed by Westminster. We could do so much better than this in Wales if only we were given the fiscal levers to protect our most vulnerable people in society and grow our economy to its full potential. Support the amendment. Thank you. 

It's a really sad fact that, under Welsh Labour, as my colleague Paul Davies said, Wales has the highest level of business rates, the lowest weekly wages and the lowest amount of disposable household income in the United Kingdom. Let me be honest—it gives me no joy in saying this—that Welsh Labour's stewardship of the Welsh economy has been marked by a lack of ambition and support that has hindered businesses from reaching the same potential as seen in other parts of the United Kingdom, which really saddens me, as I always wanted to see Wales as a global player in every aspect of the world, as do many of my Conservative candidates—colleagues, sorry, who are sitting here—

You meant candidates.

I will mention them shortly, Mike, don't you worry; I won't leave them out. But, as many of my Conservative colleagues here, inside and outside of the Senedd, do feel and believe, including now, Mike, yes, you'll be pleased to know, our fantastic Conservative council candidates who are standing across Wales in the election tomorrow—. I have spoken about this issue many times in this Chamber, about how Welsh Labour's neglect, particularly in our transport infrastructure, has seriously damaged our economy, and my feeling on the lack of movement is no secret amongst those of you sitting here around me today.

Having worked in the Senedd prior to becoming a Member, it often feels like we hear words, but we don't see much action. We've all heard the phrase, 'If you snooze, you lose.' Well, today, I wish to raise an issue amongst you all today and I want to ask the Welsh Government to support an ambitious and vital project that will bring huge benefits to north Wales and particularly the Welsh economy as a whole.

The port of Holyhead is the second largest roll-on, roll-off port in the UK. It provides a critical link between the United Kingdom, the Irish Republic and the EU. The value of the roll-on, roll-off freight handled at Holyhead is estimated to rise to £794 million by 2030. However, the future of the port of Holyhead is at risk because of the deterioration of the Victorian breakwater. Holyhead's breakwater protects the port's operation. Without it, the wave conditions would be too severe for services to run and, ultimately, this would force the closure of the port. Since its construction in 1873, the rubble mound built on the sea bed on which the breakwater is founded has gradually eroded, with an increasing probability of a breach in the structure occurring during storm conditions, which are expected to worsen due to climate change.

Due to its design, the breakwater has always required regular maintenance by its owner, Stena, to maintain the condition of the superstructure and replenish the rubble mound. This maintenance regime has become increasingly expensive, and it's no longer matching the rate of erosion of the rubble mound. It is clear that a more viable long-term solution to ensure the stability of the breakwater is ultimately required.

Now, the cost of refurbishment is currently estimated to be between £90 million to £100 million, which I know seems like a lot. However, if nothing is done, it is believed that costs could double within the next three to five years, which means that, if action is not taken now, it will cost us and the taxpayer a lot more in future if something is not done now. Stena has confirmed that they've allocated £30 million for the refurbishment. They are seeking financial support from the Welsh Government to assist with the cost, given the strategic importance of the port to Wales.

Now, I wish to pay tribute in this contribution of mine to our very hard-working local Member of Parliament Virginia Crosbie, who has proved to be a great champion for the interests of Ynys Môn, and I hope the Minister in his response will respond positively and recognise the vital importance of the port of Holyhead to the Welsh economy and, moving forward, will find a great solution for everyone here in Wales. Thank you.

I think the Welsh Conservatives have a lot of audacity bringing the debate forward, blaming the Welsh Government for poor stewardship of the Welsh economy. The Conservative UK Government has cut public service funding under austerity. Public services are one of the biggest employers in Wales.

This current UK Government's push for Brexit then created a mountain of bureaucracy and cost for Welsh businesses and farmers wanting to export and has made it very difficult for much-needed workers to continue to come over here and work, creating a shortfall of employees as well as depriving Wales, who were net beneficiaries from European funding, of vital replacement funds. And the cost of materials has risen by 50 per cent, 70 per cent, 90 per cent in some areas. The UK Tory Government has eroded workers' rights in a race to the bottom, with zero- or limited-hour contracts, fire and rehire, and unrealistic shift patterns.

One of the biggest employers in Wales is public services. These employ local people right across urban and rural areas who spend in their local communities. In Wales, the average is 30.1 per cent, but in north Wales this figure is higher, with 38 per cent in Anglesey and 35.4 per cent in Gwynedd employed in public services. The impact of the Conservative Government cutting public sector funding year upon year under austerity has had an impact on these jobs and important services, and unfortunately councils are getting the blame on the doorstep.

And now, the UK Government wants to continue with the privatising agenda and further cuts to public services on top of the cost-of-living crisis and rising fuel prices. The passport office and the Driver and Vehicle Licensing Agency could be next hit, Mike, under Jacob Rees-Mogg, the Minister for Brexit Opportunities and Government Efficiency—it's in the title. By privatising public companies, what will happen is that you'll end up with several people on the top on massive wages and their main workforce on less money with poor working conditions. Look what happened to the probation service that was being discussed earlier. A similar thing is happening with the Royal Mail since privatisation. I was invited to a presentation last week about how the Royal Mail will ensure great delivery, seven days a week, for our constituents, but what about the workforce who are our constituents? Rounds are increasing—doubling in some areas; they were already on an unrealistic 12 miles a day in some areas, and now they're looking at fire and rehire for the managers.

People need a basic decent income that they will spend and invest in the economy, and they will lead healthy lives. The stress of worrying about money can be all-consuming, leading to mental and physical health issues as well. At the recent women's cross-party group, chaired by Siân Gwenllian, who I believe is online there, we recently had a presentation on a care-led recovery, employing local people in the care service who will spend in their local communities. It's greener than construction and gives greater opportunities for women.

All we've seen from the Conservatives is a race to the bottom in workers' rights and conditions, where wages have not risen in line with the economy; productivity and efficiency have been pushed beyond the limits, where people are expected to work ridiculous shift patterns that do not fit in with family life, impacting on children and the relations of the exhausted workforce. I was looking at some jobs advertised recently, for my husband, actually: seven days a week, they were 12-hour shifts, seven days a week, and then you have a week off and then back on that seven-days-a-week 12-hour shifts. How can you bring up children in that and have a family life? It's ridiculous. All this needs looking at. And, on top of this, the shift to UC from working and child tax credits means people are worse off. Give people money in their pockets and a basic income to live on—Jack; create healthy, happy communities across Wales and grow the economy that way.

Fact: poor stewardship of the economy by Welsh Labour has led to Wales having the highest business rates in the United Kingdom, the lowest weekly wages, and the lowest amount of disposable household income in the United Kingdom. The Welsh Conservatives believe that the current Welsh Government have facilitated an anti-business stance, causing poor investment and growth opportunities for two decades.

Recently, a Lloyds Bank barometer found that Welsh business confidence fell by 34 points to -5 per cent, making it the only area surveyed with a negative rating. By comparison, confidence in the south-west of England was at 8 per cent, and Scotland 17 per cent. Figures from the Office for National Statistics showed that gross disposable household income—GDHI—per head in 2019 for Wales was £17,263. That's the smallest amount compared to the rest of the United Kingdom, with the average being £21,443.

Now, while we are small in population and size, other small countries on the continent have demonstrated greater resolve in being major actors in business and industry growth. Widely recognised as a leader in the global green economy and with the seventh lowest Gini coefficient—a measure of economic inequality—Denmark serves as one economic model for which Wales could actually strive to match and compete with. Home to the Medicon Valley, Copenhagen has attracted big international companies who have used the city as a launch pad into the Nordic, German and Benelux markets. In 2017, 78.8 per cent of all 15 to 64-year-olds in Denmark were active in the labour market—the sixth highest number among all Organisation for Economic Co-operation and Development countries.

Unlike Denmark, however, Wales is rich in renewable energy development. Equally, we have a long and proud agricultural industry, such a thing that has been on the decline in Denmark for many years. Here in Wales, we need to boost the sector by delivering an agricultural support scheme that backs our active farmers and drives up food production, and put a pause on a target of 180,000 hectares of trees until such a time that this Welsh Government can assure us that rural communities are not being driven out by foreign buyers. Focusing on home-grown projects, I am sure that you will join with me in welcoming the Prime Minister—yes, the Rt Hon Boris Johnson MP—and his commitment to Wylfa over the next couple of years, and the jobs it will bring to north Wales.

As has been suggested by my colleague Natasha Asghar some time ago, Wales is in desperate need of its own tech and green industry valley, where barriers are lowered for big companies in order to invest, and attractive packages are created to launch a major banking and financial district in the capital, as well as create new services here in north Wales. Looking across the Irish sea and to our friends in the north-west of England, we see around 25 per cent of employees crossing the border between England and Wales for work. In 2019, 1.9 million people and 5.3 million tonnes of goods moved via the port of Holyhead, to and from the island of Ireland to Wales. These are opportunities we can expand and will certainly improve our local communities.

But despite this, the Welsh Government continues to dither and delay on committing to make Holyhead a free port, therefore dragging investment along the north Wales riviera from east to west. A lack of direction and a poor sense of economic development and purpose will continue to let the people of Wales down, as it has done for the past 22 years. No matter who they or you as the Welsh Government try to blame, there is no excuse whatsoever for Wales not to be a thriving, innovative hub in the United Kingdom. We have the tools to build a global capital hub and a thriving, specialised, industry-based economy. If you are struggling for ideas, there are success stories globally, and I think that you should be looking at those.

But tomorrow, our voters go to the polls to elect their candidates in the local authorities, and I would just say, compare 22 years of failed Welsh Labour Government, see it as we have done over many years in Welsh Labour-led local authorities, and I just hope that the Welsh Conservatives, who are fielding more candidates than ever before, will provide that opportunity for our voters tomorrow to come out and firmly vote Welsh Conservative. We need change in Wales, and we can start by people voting Welsh Conservative tomorrow. Diolch, Llywydd.

Time and again, we've been told that Wales is too small to be independent and that we couldn't survive economically. That's been the mantra for so long that we've come to believe it without even questioning it. But, times are changing, and people are now waking up to the idea that Wales could survive economically as an independent nation state in our own right. In fact, an independent Wales could be amongst the wealthiest nations, economically, socially, environmentally and culturally.

Across the world, we see that the happiest nations are the smallest nations. Look at the Norden countries—Iceland, Sweden, Norway, Denmark and Finland, for instance. Now, gross domestic product is a poor measuring stick, but it's what's been used to measure economies across the world for decades and, with a GDP of around £80 billion, our GDP is already bigger than that of Bulgaria, Estonia, Croatia, Lithuania, Latvia, Slovenia and many others. So, this is our low base. Imagine what we could do with economic and fiscal levers to really turn our economy around.

Naysayers tell us that we don't have enough resources for a successful economy, so let's think about that for a moment. Firstly, we have more natural resources than, say, Switzerland, one of the world's wealthiest countries. Now, think of some of the wealthiest regions in the world—the Silicon valley, Monaco, London even. What natural resources are they exploiting in those regions to become so wealthy? It's certainly not coal, it's not wind, it's not timber, it's not any commodity. The single most valuable resource that any nation or region can have to develop its economy is people. People create wealth. People drive the economy. Now, if you think that the people of Wales are too stupid to run their own economy, then say so. But I don't think that the people of Wales are stupid. I have complete faith and confidence in my family, in my friends, in my neighbours, in my compatriots. The people who live in Wales are as able as anybody else to run a successful economy.

Unlike other constituent parts of the UK who, 40 years ago, shifted to being dependent on the service sector, we still make things in Wales. Our economy is built on manufacturing and that provides a far more stable basis for a strong economy than outsourcing production to cheap labour overseas. But there is a reason why our economy has been stagnating for the last 50 years, and that's essentially because the south-east of England, and specifically London, acts like a big black hole, sucking in investment and leaving little for everybody else.

This is where Paul Davies and I will agree: a lack of investment in infrastructure. I've quoted Adam Smith before, but it's worth referencing him again. A successful economy, he says, is dependent on building and maintaining infrastructure. Infrastructure spend is a multiplier. It creates wealth, bringing in new money, but historically what we've seen is spend on infrastructure in Wales being a tiny fraction of the spend in England, and the south-east of England especially. We've just heard today the confirmation of the £18 billion Crossrail in London alone, without the equal spend here in Wales.

And this isn't only a problem between Wales and London: the Labour Welsh Government have been busy replicating that London-centric model here in Wales. You try to take your goods to market from rural north, mid or west Wales, with no freight on the train lines, with poor road infrastructure, and now Brexit decimating shipping. Yes, the UK has allocated some infrastructure spend here in Wales, but the vast majority is to do with energy projects, which will only serve to extract wealth out of Wales and not benefit our communities to the degree they should.

Finally, it's worth noting that it's London that sets the economic and fiscal policies that govern us here in Wales. Our economy is built on manufacturing, yet London gives sweetheart deals to companies—[Interruption.] Yes, Darren.

I was the shadow economy Minister when the then Deputy First Minister, who was responsible for the economy, Ieuan Wyn Jones, your former party leader, was responsible for the production of a manufacturing strategy, which he failed to produce in the five years that he was at the helm. Do you regret the former Deputy First Minister not producing a manufacturing strategy, which would be having an impact now had he pulled his finger out and done it?

No, I think what you'll find is that Ieuan Wyn Jones invested in the infrastructure of Wales and ensured that north, mid and south Wales were connected, meaning that we could take some goods around Wales, and linking up communities in Wales, which has been crucial for our communities. We'll continually thank Ieuan Wyn Jones for that work.

But the fiscal policies that emanate from London—things like sweetheart deals for Goldman Sachs and others in the finance sector—these deals are designed around the economic strengths of London and the south-east of England. They don't understand the economy of Wales. The Welsh economy is different to that of London. This is why independence would strengthen our economy. We would decide on our own fiscal policies based on the strengths and weaknesses of our own economy. That's why I'm calling on all of you here present to please support our amendment. Diolch yn fawr iawn.

As outlined by Paul Davies, who of course opened today's debate—a really important debate about the stewardship of the Welsh economy—we are seeing the poor stewardship of our economy by the Labour Party in Government here in Wales, with the highest business rates in the United Kingdom, the lowest weekly wages, and the lowest amount of disposable household income in the UK. These statistics are truly shocking.

So, in my contribution today, Llywydd, I'd like to focus on just three brief areas that I will outline where I see the Labour Government here failing the Welsh economy.

The first one is particular to my region of North Wales and how the Government's neglect for my region has led to a north-south divide. Whatever economic statistics we could look at, the north Wales economy continues to lag behind the rest of Wales. One such example is around GVA. Cardiff has about double the GVA per head of some of the areas in north Wales. When it comes to transport, the Welsh Government's metro project is another prime example where we're seeing a lack of investment, earmarked investment, into north Wales. Mabon ap Gwynfor—oh, he just disappeared—mentioned the importance of infrastructure and the difference that that can make to the economy, and we're not seeing that investment in north Wales at the rate that we should do. It's £750 million that's earmarked for the metro in south Wales, and it's £50 million for north Wales. 

Another area where we see a north-south divide and a real missed opportunity, in my view—you may shake your head, Minister, but it's a real missed opportunity—is around investment in sport. The economy around sport and the potential around sport is huge. We're currently seeing one professional sports team flourishing in north Wales, which is great to see, but that's nothing near some of the investment we see in south Wales, with the national sporting events predominantly held in the south. There's a great opportunity for Welsh Government to promote sport in north Wales and promote that part of the economy. 

The second area that I believe needs continuous attention is the importance of tourism to the Welsh economy. I'm grateful to the Minister for looking to attend the cross-party group on tourism later this month, and I did contribute to the debate last week, outlining how crucial it is to the Welsh economy, with so many people enjoying our attractions, spending their money—all of this supporting around 140,000 jobs. Minister, I think you'll probably hear from attendees at the cross-party group next week the challenge they had through the pandemic. And yes, they're grateful for the support they received through that time, but also looking to the future, to the support that they want and a celebration of them as a sector and the work that they do in this country. What they don't want is more taxation; what they don't want are more restrictions around them in terms of making the most of their businesses and employing more people here in Wales. 

The third area, the final area that I just want to touch on briefly, Llywydd, has already been mentioned, this anti-business stance, causing some businesses to struggle in Wales, and it's having a detrimental effect on our economy. It's already been mentioned, an example of this, around business rates. What we must see are business rates being reduced, not business rates in Wales that are the highest in the United Kingdom. This is surely contributing to the fact that Welsh shops—

Will you take an intervention?

Certainly. 

Thank you. Would you acknowledge that the rise in national insurance contributions is going to hit the poorest people, pro rata, the most, and that this is taxation by stealth?

As the Member will be aware, there is a need to make sure our public services are properly supported. And when it comes to businesses, employing businesses are creating jobs, which is a fundamental part of our economy; these business rates, we hear from businesses across Wales, are hitting them the hardest. And an example of this is that, in Wales, we see the worst footfall in the United Kingdom for those shops and those businesses. Surely these business rates are not helping one bit. 

In closing, Llywydd, it's clear that the Welsh Labour Government continues to fail this Welsh economy and the people of Wales, with the lowest weekly wages and the lowest amount of disposable household income. Now is the time to deliver more jobs, hope and security for everybody in Wales. It's time to rebuild and rebalance the Welsh economy and level up the whole of Wales with new technology and new investment. In light of this, I call on Members to support the Welsh Conservatives' motion and reject the amendments in front of us. Diolch yn fawr iawn.

The Welsh economy has not performed well either before or after devolution. When the Assembly opened in 1999, online retail was in its infancy, it was eight years before the first iPhone, five years before YouTube came online, computer games generated a fraction of the income of today, and the Sega Dreamcast, the world's first internet-ready console, was a year away from being launched. Jobs such as the influencer, professional computer games player and Uber driver did not exist. Since then, employment has become less secure and reliable. In 1999, the Welsh Government continued the Welsh Development Agency policy of enticing mainly far eastern and American investors with grants, offering high skills and relatively low wages compared to other advanced industrial nations, and access to European Union markets. Not all attempts to attract foreign direct investment were successful—and I know this was before devolution, but the principle is the same—with LG being the classic example. In spite of a grant of £200 million, around £30,000 per job, the expected employment did not materialise.

The reason any economy is not successful is the same—not enough skilled and high-paid jobs, too reliant on low-paid seasonal jobs and on primary production, not on adding value. Having listened to the Conservatives on the economy for 11 years, their strategy can best be summed up as agricultural produce, tourism and seeking inward investment to bring branch factories. If someone could tell me of a successful economy based on that strategy, I will happily take an intervention. Again, I will say: if you need to give companies a substantial financial incentive to bring a branch factory here, they don't want to come. Successful places such as Palo Alto, Cambridgeshire and Mannheim do not have to bribe companies to come; they provide the educated workforce, the infrastructure and the opportunities for inward investment and start-ups. Again, what we need in Wales is fewer LG-type investments and more Admiral Insurance. Plaid Cymru's policy of independence would reduce the Welsh economy and Welsh Government spend by a third. The economies of recently independent countries such as South Sudan, North Macedonia and Bosnia are doing less well than the countries they split from.

Successful places need to be able to attract and then retain businesses, and this must be based on understanding their requirements. An analysis of successful and less successful places suggest the following four factors as the key to economic success: a culture of enterprise and innovation, where places adapt quickly to new opportunities and everyone can share in the possibility and reward of business success, this includes embracing the opportunities presented by the revolution in life science, information and communication technology, artificial intelligence, and one of the fastest-growing areas, which is computer games; access to investment, including venture capital, essential for businesses to start up, grow and deliver jobs and opportunities for all; people equipped with the skills that employers need, as well as with motivation and opportunities to work; a culture of lifelong learning, enabling people to fulfil their potential and maximise employment opportunities, enabling a flexible response to changing opportunities and encouraging companies to come to and remain in our towns and cities; an efficient and reliable transport system, enabling efficient delivery of raw materials to industry and of goods to market—and when I say transport, I mean the internet as part of the transport, because if you're an online company, the internet is what you transport information from, and that's what you send your computer games and your music down; and providing access to jobs, making towns and cities better places to live in, and help tackle social exclusion.

Economic and transport planning needs to be based on the Welsh regions. We need to build on the strengths of the universities to see them as economic drivers. Too many students, including many brought up in the area, move away on graduating and often never return. We need science parks attached to universities so that we can use them as innovation hubs, and to specialise in key economic sectors such as—again, as I've said—life sciences, artificial intelligence and ICT. We also need an entrepreneurship and innovation centre that can provide a founder and incubator platform for students, young entrepreneurs and investors. I know this because it works in Mannheim. We need access to capital, not just at the start-up stage, but at the two important growth stages of small to medium-sized and then medium to large. Too many firms on the move from medium to large end up being bought by bigger companies from other places in either Britain or Europe, and the economic benefits then disappear. Work in universities and further education will need to look at upskilling our population; education should not end at 16, 18 or 21.

Finally, it's not a secret formula—we just need Welsh politicians of all colours to adopt it as a means of going forward. To Janet Finch-Saunders on Denmark, a country I've studied in some detail, Denmark has a major industry called Lego, which I think you've probably all heard of, but perhaps the key compared to us is you've heard of Castello cheese, you've heard of Arla, you've heard of Lurpak. They turn their primary agricultural production into secondary goods where they make the profit. We need to do the same.

The Minister now to contribute to the debate. Vaughan Gething. 

Thank you to Members for their contributions. I'm sorry I won't be able to respond in detail to each one of you and the points made. I should, though, at the start just make clear that the Welsh Government, to the surprise of no-one, opposes the motion. And on the amendment, whilst I agree with much of what Cefin Campbell had to say, we simply don't agree on independence being the answer. I want, and the Welsh Government wants, a reformed union that works for Wales and respects devolution. Since the beginning of devolution, we have more than halved the gap in employment rates between Wales and the rest of the UK. That is a historic move of great importance for both economic and non-economic outcomes, including health and well-being.

In terms of unemployment, the latest figures show that the unemployment rate in Wales was at 3 per cent, compared to a UK rate of 3.8 per cent. Over the last decade, we have helped more than 19,000 young people access good quality work through Jobs Growth Wales. More generally, Wales has the second-fastest growth of any UK country or region over the period between the recession in 2008 and the most recently available data. Wales was only outperformed, and only narrowly, by London.

As the Resolution Foundation reported prior to the pandemic, the proportion of low-paid employees in Wales has been falling. On hourly pay, which we've heard much about, median hourly pay in Wales is now higher than north-east England, the east midlands and Yorkshire and the Humber. That was not the case at the start of devolution.

In February this year, the National Institute of Economic and Social Research suggested that parts of Wales, along with London and Northern Ireland, appear to have had a stronger recovery from the pandemic than other parts of the UK. I'm proud of what we did during the pandemic, in successfully supporting Welsh businesses with more than £2.6 billion, protecting over 160,000 Welsh jobs, which might otherwise have been lost, and going above and beyond the Barnett consequentials that we received from the UK Government.

But we now face a cost-of-living crisis, where the UK Government has refused to properly support the people of Wales. Despite widespread calls before his spring statement, the Chancellor announced an increase of just £27 million—in real terms, a cut, with inflationary increases—to the Welsh Government budget. And in a clear message for families and businesses struggling to get by, the Chancellor has even said that it would be silly to give more support on energy bills to families and businesses. That is the Tory approach.

In comparison, the Welsh Government has already announced £380 million in support for families, to help with their rising household bills. I remain extremely concerned about the challenges faced by our least well-off communities here in Wales. They will not be resolved by George Eustice's solution of going to own-brand products that, in themselves, in some supermarkets, have risen faster than the rate of inflation. It really does show how out of touch the Tories are.

The cost-of-living crisis is hitting our businesses too. That's why we continue to call on the UK Government to introduce a windfall tax on the excess profits being enjoyed by gas and oil producers. As the head of BP has said, a windfall tax would not stop them from undertaking any of the investment choices that they are already committed to. We need to end our reliance on fossil fuels and move to a quicker transition to renewable energy and better energy efficiency, with a just transition. That will have a significant impact on reducing energy costs for us and, indeed, across the world.

I should also remind Members that the impact of the UK Government's trade and continuity agreement with the EU is predicted to hurt the UK economy by double the impact of the pandemic. Businesses are already struggling to trade with EU countries and are facing significant increased costs and staff shortages. And, as we've heard several times over recent days, the latest research shows that Brexit has added 6 per cent to Britain's food bills.

That leads me to the shared prosperity fund, the UK Government's answer to all of our woes, and the much-proclaimed replacement for any previous EU funding. I remind Members that it is plain and undeniable that the UK Government has failed to honour its manifesto pledge to fully replace EU funding. As a direct result, Wales will be more than £1 billion worse off. No Member of this Senedd, from any party, should welcome or try to deny that betrayal.

Economic development is a devolved competence. Regional funding has been managed by Welsh Governments and has been scrutinised by this Senedd for more than 20 years. The UK Government approach continues to disrespect our devolution settlement. Devolution, of course, has been endorsed by two referenda and multiple elections. Despite that, the UK Government continues to use the internal market Act to wrestle funding and decision making away from the Welsh Government and the Senedd.

On innovation funding, which is mentioned several times, of course, there is a funding shortfall from the shared prosperity funding outcomes, and that will hurt, not help, our shared ambition to invest more in research, development and innovation. I am intensely aware of the enormous stress and pressure that the uncertainty and the funding shortfall places on current beneficiaries who use that EU funding: the people and the businesses who are helping to improve the Welsh economy with it.

Unlike the UK Government, the Welsh Government's stronger, fairer and greener economy will be grounded in our values of progressive change, co-operation, not competition and not dividing against each other. So, we will go forward with our partners, in the public sector, in business and in trade unions. We will build on our economic infrastructure for long-term and sustainable home-grown and rewarding jobs. That includes tackling the climate emergency, as part of the just transition to net zero, with our overarching ambition encapsulated in an £8.1 billion infrastructure investment strategy. In particular, we want greener forms of transport to be provided to more people, providing more choice in how we will be able to get around, as well as laying foundations for investment in renewable energy.

We're on a £5 billion journey to transform rail services over the next 15 years, and Transport for Wales inherited a challenging legacy, but new rolling stock is now being introduced across Wales, with fare reductions to the rail network putting money back into the pockets of people across Wales.

We have set up, here in Wales, the first ever development bank, with more than £1 billion of funding to support the wider Welsh economy. We have and we will continue to invest in advanced modern manufacturing. And against a really difficult financial backdrop, including that loss of £1 billion of former EU funds, our new plan for employability and skills provides a strong offer for employability and skills to invest in our people.

The future that the people of Wales want will not be found in small amounts of money being thinly spread on a range of unconnected projects and decided by UK Ministers. It will be found in this Welsh Government's social partnership approach, bringing people together to promote fair work and better jobs, to work in partnership with local government, businesses and trade unions. Our 'team Wales' approach will deliver for Wales, and I look forward to playing my part in helping to make a greener, fairer and more prosperous Wales.

Mark Isherwood now to reply to the debate.

Diolch, Llywydd. Thank you to Paul Davies for opening this debate, stating that the Welsh economy continues to lag behind other parts of the UK with the worst GVA—meaning the value of goods and services produced per head—since 1999. As he said, we've had so many debates about the need to do things differently, but the economy has lagged at the bottom of so many key indicators, because something is not working—the Labour Welsh Government. He said that membership of the UK has enabled Wales to weather the storm of the pandemic, and much more needs to be done to assist businesses and create conditions for growth, and make Wales an attractive place to do business, including and especially in our rural areas and the ports, which of course are dear to his heart. He talked about the need for green transport infrastructure and support for businesses to navigate those waters, and he said, as we bounce back from the pandemic, we have an opportunity to change our mindset and do things differently. 

Cefin Campbell, as you might expect before an election, talked about his party's primary purpose in existing, which is separatism—perhaps ignoring the historic reality that Welsh actually means British. He then pulled out a few points—. I'll quote an example: 6 per cent of rail track in Wales, only 1 per cent of budget. When we put that to the Office of Rail Regulation in committee a few years ago, they stated that Wales received 9.6 per cent of net Government funding for franchised train operators and Network Rail, and 6.4 per cent of total net Government funding for national rail routes.

Natasha Asghar said she often feels like we hear words but we don't see any action, and she called on the Welsh Government to support Holyhead port. Thank you for supporting north Wales and the great work, of course, of Virginia Crosbie MP.

Of course, our motion today is about the poor stewardship of the Welsh economy by successive Labour Welsh Governments. [Interruption.] Well, I congratulate Carolyn Thomas on her audacity in deflecting Labour Welsh Government failure. It's to drag Wales from the bottom of the economic pile and liberate its great entrepreneurial spirit. 

Janet Finch-Saunders referred to the poor stewardship of the Welsh economy by Labour, having left Wales with the lowest level of disposable income in the UK. She referred to the commitment of the Prime Minister to Wylfa Newydd on Anglesey, where 23 years of Labour Welsh Government has left prosperity levels at the lowest in Wales, at just under half those levels in Cardiff. She said there's no excuse for Wales not to be striving, innovative part of the United Kingdom.

Mabon ap Gwynfor: more nationalist mantra—understandable, but perhaps betraying the true history and legacy of our people, the historic Britons and its destiny to unite the lands of Britain. Read Y Mabinogion. As he said, however, people create wealth, and the people of Wales are not stupid; they are as able as anyone else to run a stable economy—absolutely right. He said, though, however, the Welsh economy is different to that of London. It is, but not to multiple regions in other parts of the UK.

Sam Rowlands pointed out that Labour was failing north Wales, creating a north-south divide, with north Wales's economy lagging behind the rest of Wales, and giving the example of the lack of investment in the north Wales metro—just £50 million compared to £750 million in the south Wales metro. And he talked about the need to promote sports in north Wales and the importance of tourism to the Welsh economy, supporting 140,000 jobs, and he criticised again the anti-business stance, causing some businesses to struggle in Wales.

Mike Hedges—you should be over here, Mike. I loved your speech; I'd agree with 90 per cent of it—the importance of access to investment and venture capital and of a culture of lifelong learning and efficient transport systems, encouraging companies to come to our towns and cities. How right you are.

The Minister, Vaughan Gething: I agree with him when he said that he doesn't agree that independence is the answer. He then said unemployment in Wales is below the UK rate but failed to point out that the employment level in Wales is below England, Scotland and the United Kingdom. He detailed how Welsh Government had spent the money received from the UK Government, but then said he wanted more—always spending on not solving the problems affecting Wales, always then demanding more. Despite Labour Welsh Government having received billions of EU funding, supposed to close the prosperity gap both within Wales and between Wales and the rest of the UK, these gaps have instead become entrenched. However, although this funding was only ever intended to be temporary, Labour Welsh Government use it to subsidise rather than target the deep-rooted causes of economic underperformance and consequent social deprivation in large parts of Wales, misrepresenting this as a permanent source of funding, keeping the people down and dependent.

Wales has 5 per cent of the UK population, but after 23 years of Labour Welsh Government still only produces 3.4 per cent of UK wealth. Wales has the lowest output per head and raises the least revenue per head amongst the UK nations—

I am going to remind you of the time. I've been quite generous already.

Oh, I didn't appreciate.

No, that's okay. If you can bring your contribution to a close now, Mark.

Wales has the highest business rate in Great Britain, and only one business in the FTSE 100.

I'll conclude: the Welsh Government is ignoring warnings by the united voice of the key Welsh tourism industry that its proposals for them have not being based on a full economic impact study and will shut down many locally run businesses. Their only effective economic policy is being economical with the truth. Nothing will change unless Ministers in Cardiff Bay stop dictating policy and start working with businesses and industry leaders in genuine equal partnership to drive the sustainable change so desperately needed, rather than condemning them to a subservient relationship and seeing them too often disinvest and go elsewhere.

The proposal is to agree the motion without amendment. Does any Member object? [Objection.] There is objection, therefore we will defer voting on the motion until voting time.

Voting deferred until voting time.

We now reach voting time and we'll take a short technical break to prepare for the votes.

Plenary was suspended at 17:24.

The Senedd reconvened at 17:26, with the Llywydd in the Chair.