The next item is a statement by the Minister for Economy, regional economic development, moved forward from 11 October. I call on the Minister, Vaughan Gething.

Thank you, Deputy Presiding Officer. I am pleased to have this opportunity to update on the progress that we are making to support stronger regional economic development against an extremely challenging backdrop. Dirprwy Lywydd, our vision for regional investment is to support jobs and growth in communities across Wales. We know that the inclusive and sustainable growth this requires relies upon regional decision making that links national priorities with local opportunities. Our regional economic frameworks were co-designed with partners in each of the regions, including local authorities and regional bodies. They're based on evidence, with clear priorities aligned with our economic mission.

Aligning regional economic wellbeing, transport and planning in new corporate joint committees provides a fresh opportunity to capitalise on the interdependencies between them. This will support local authorities to deliver their regional ambitions, develop successful regional economies and to encourage local growth. Indeed, the four city and growth deals reflect the existing drive for sustainable growth and innovative partnership working amongst regional partners. Although these deals are still in their relative infancy, my officials, alongside the UK Government, continue to work closely with the four regional delivery partners to assess the opportunities within the business cases developed over the lifetime of the deals.

Dirprwy Lywydd, our commitment to regional working is also an investment in more integrated skills delivery. With shared governance, regional skills partnerships will be in a stronger position to influence investment and match provision to demand in a way that is responsive to local opportunities to expand fair work.

Our work across all regions is wedded to the collective goal of securing investment in the industries of the future, which will fuel better-paid, skilled jobs. In south-east Wales we're working with Thales to create a cyber resilience campus in Ebbw Vale through our Tech Valleys programme. Together with our local partners and Cardiff University we are investing in our strengths and supporting new start-ups in cyber security. Tomorrow, I'll be at a groundbreaking ceremony for the latest investment in the semiconductor industry, creating many hundreds of new, well-paid jobs.

In north Wales, we've established Cwmni Egino to pursue ambitious new developments at Trawsfynydd, including small modular reactors to generate low-carbon electricity and a medical research reactor to help with the diagnosis and treatment of cancer and more.

In mid Wales, collaborative working helped us to secure more than 100 jobs with support for automotive parts manufacturer the Marrill Group in Llanfyllin in Powys. And in Baglan Energy Park, we saw how strong partnership working staved off the very real threat of catastrophic harm to businesses and families. As well as issuing legal proceedings, the Welsh Government worked with the local authority, Dŵr Cymru and local businesses to secure power to the energy park and save hundreds of jobs.

We're also taking forward our co-operation agreement commitment to co-produce phase 2 of the Arfor programme alongside local authority partners. This will be supported by additional resources, with £11 million for the three-year period to 2024-25. A further announcement is anticipated in the near future.

Dirprwy Lywydd, we continue to work with the Organisation for Economic Co-operation and Development on regional policy. In the context of the co-operation agreement with Plaid Cymru, the OECD will focus on supporting Arfor and the Valleys through their current project. The OECD will look at and design models for local government to work together, which includes opportunities to develop joint working across regions with Valleys communities. I look forward to working towards a model that brings together decision makers and budget holders on a permanent basis to maximise our collective ability to deliver stronger, long-term economic outcomes across Valleys communities.

Across all our regions, our Business Wales service helps to inspire individuals to become entrepreneurial and ensures that microbusinesses and SMEs have access to support. I've committed to provide £20.9 million per year up until March 2025, extending the backbone of the Business Wales service beyond the end of EU funding in 2023. This includes dedicated advice and support for our social enterprise sector. While providing a one-stop shop for support, I recognise that Business Wales cannot deliver on all local business support required by entrepreneurs, micro and SMEs across Wales. As such, the service is designed to build on its strength as a nationally delivered offer that complements local delivery and wider funding opportunities available to the third and public sectors.

Dirprwy Lywydd, as you will know, Wales's ports are an incredible national asset and an intrinsic part of our history, economy and way of life. We have reached agreement with the UK Government on delivering a free-port programme in Wales, which should support our economic mission to develop the fundamental goal of achieving inclusive growth. I look forward to receiving ambitious and innovative bids that offer the prospect of sustainable, economic and social benefits to Wales. Our message in the prospectus is clear: the free-port programme in Wales must contribute to, not take away from, our wider objectives to create a stronger, fairer, greener Wales. This is a significant example of how Governments can work together in a partnership of equals.

Dirprwy Lywydd, the economic performance of our regions is of course exposed to the extreme macro-economic picture that we now face. In addition to the twin challenges of leaving the European Union and the COVID pandemic, we also face global threats to our energy security and a terms-of-trade shock that have combined to cause dramatic price rises for all. The UK Government's regressive and unfunded fiscal statement sent shock waves through our economy, triggering a market response that will negate much of the support confirmed for households and businesses. The lasting impact of the statement will mean higher costs for all levels of government and our settlement is worth £4 billion less than was the case at the time of the comprehensive spending review.

The UK-level rejection of industrial policy specifically disadvantages regions and nations beyond London and the south-east. Instead, it sends a signal that the new UK Government does not regard them—us—as essential to the UK's growth path. Levelling-up plans, such as they are, in no way make up for this problem, whilst causing duplication and poor value-for-money outcomes at the same as undermining devolution. The funds that support the so called levelling-up agenda represent a shortfall to Wales of £1.1 billion by 2025, compared to the UK Government's manifesto promise to match the size of EU funds for Wales. The UK Government is using these funds to support its own priorities in devolved areas over which it has no mandate. It is clear that Multiply, for instance, is too narrow in focus and will duplicate devolved provision, leading to preventable waste and poor value for money. The top-down shared prosperity fund represents similar challenges and has been defined by delays within an incoherent approach that is widely criticised by expert independent voices at both a Welsh and UK level. The shared prosperity fund will also compound existing inequalities as it is not allocated on the basis of need. Instead, a smaller overall sum is being skewed away from our most deprived communities at the worst possible time.

Dirprwy Lywydd, UK Ministers responsible for these new funds will know that they face significant delivery problems. Welsh local government was not consulted on the funds and have been kept in the dark as Whitehall announcements were frequently delayed. This fundamentally undermines the ability of all partners to produce joined-up plans that meet the needs of our communities. It is becoming increasingly clear that UK Ministers were keen to claw back powers but uninterested in taking responsibility. It is crucial that the right lessons are learnt from this aggressive attack on devolution, and we will challenge any attempt made by UK Ministers to shift the blame for their costly mistakes onto Welsh local authorities. Dirprwy Lywydd, this Welsh Government will continue to invest in stronger, distinctive regions to support a fairer, greener Welsh economy. I look forward to updating Members as we develop our ambitious plans for delivery across all four regions.

Can I thank the Minister for his statement this afternoon? The creation of regional frameworks in December was an important step forward in recognising the economic value of individual regions and also provides the opportunity to build for the future by harnessing the potential of regions in different sectors and industries. For example, in south-west Wales, sectors like tourism, agriculture and energy are areas of strategic importance that provide opportunities for growth, and, through the development of a regional framework, labour market resilience can be built and best practice embedded through the supply chain. Of course, each framework reflects the distinct opportunities for each region but also addresses some of the particular challenges that those regions face in terms of skills, infrastructure development and connectivity. Key to the success of the frameworks is ensuring the frameworks partners work collaboratively to develop the right skills bases for their future workforce. So, I'd be grateful if the Minister could tell us what work has already been done alongside the regional skills partnerships to develop those skills bases and ensure they're aligned to each region's economic development priorities.

Strategic collaboration is essential in maximising regional economic growth, and it's important that local stakeholders feel that they can input to these particular frameworks. High-street businesses, home-based businesses, sole traders and others must all have buy-in to these frameworks so that the voices of those on the front line are actually heard. Now, I appreciate that some collaboration has already taken place in certain places, as mentioned in his statement, but perhaps the Minister could tell us what work is being done to ensure that businesses are consulted in each region and are part of the initiatives that are actually taking place in each region. 

I'm pleased to hear that the Welsh Government is extending the funding for Business Wales until March 2025, and the Minister is right to highlight the support that the service offers. The Minister will be aware that some business organisations have called for Business Wales to include an advice line on sustainability and decarbonisation, and so perhaps the Minister could tell us what discussions he and his officials have had with Business Wales about providing support to businesses in this particular area. 

Now, today's statement refers to the city and growth deals and the good inter-governmental work that has been done to facilitate regional economic growth. The three-way investment agreements between the Welsh Government, the UK Government and local authorities are another important vehicle in providing regions with the funding to drive economic growth in their areas. Of course, the city and growth deals need to be continually reviewed to test and measure their effectiveness, and so I'd be grateful if the Minister could tell us a bit more about how that work is taking place so that we can ensure that they are still effective and not, for example, increasing bureaucracy. 

Today's statement also mentions the levelling-up agenda and the shared prosperity fund, and, in his usual way, he has vilified the UK Government's approach when it comes to these issues. Now, I share some of his frustrations, but I would simply gently remind the Minister that Wales has two Governments and it's important that both Governments work together in the interests of businesses and in the interests of households across Wales. Now, as the Minister has already said, the city and growth deals and the free-port programme are both examples of where, when Governments work together, progress is made. And I want to assure the Minister that I will continue to do what I can to advocate an approach to regional funding that works with all levels of government across the UK. 

Now, looking to the future, I'm sure the Minister will accept the need to do more to invest in emerging technologies, particularly in the fields of energy production, sciences and medicine, and computer technology. Indeed, each of the regional economic frameworks recognises the importance of academic and research capability, and I can't stress how important it is that the Welsh Government prioritises research and innovation funding, going forward. Therefore, perhaps the Minister could provide an update on the Welsh Government's position in relation to funding for research and innovation and what plans it has to increase funding into emerging technologies. 

Dirprwy Lywydd, the Minister is right to highlight the extremely challenging backdrop that businesses and households are facing. That's why it's even more important that the Welsh Government creates the right conditions for businesses to generate better quality, higher paid jobs and other employment opportunities. There are several key issues that are found in all of the regional economic frameworks, including the need for infrastructure improvements, creating the right skills bases, and strengthening the foundational economy to build resilience in the regional economy. It's vital that the work being done to develop and support regional economies in Wales aligns with the Welsh Government's economic priorities and policies. For example, the frameworks could recognise the role that enterprise zones can play in supporting regional economies, too. So, I hope the Minister will give us an update on the work of enterprise zones across Wales and tell us a bit more about how they operate alongside other regional economic programmes, so that we can gain a clearer picture of how the Welsh Government's regional economic ambitions are working in practice and better understand their governance and delivery.

So, in closing, Dirprwy Lywydd, can I thank the Minister for his statement today and say that I support his efforts to facilitate a place-based model of economic development where there's buy-in from local partners? I look forward to hearing more about this work in due course. Thank you.

Thank you for the questions, and I'll try and deal with as many of them as I can promptly, Dirprwy Lywydd. On enterprise zones, I have previously announced a statement on the refresh of enterprise zones, some of which have come to an end, some of which are continuing. So, I won't go through that again.

On infrastructure and the point the Member makes, this Government has an ability to invest in infrastructure. Of course, that's denuded by the reality that we had a cash-cut in our capital budget. It's really challenging to do that. We have more opportunity to derive benefit than our budget allows us to do. It means the choices are difficult, but that means it's even more important to make choices that can actually deliver a significant benefit. And I do welcome the Welsh Conservatives' relatively recent conversion to making the case that there should be a proper direct consequential from HS2. That would give us a significant amount of room to make proper investments in our infrastructure. And on that point, at least, I'm sure the Member would join me in wishing for a u-turn in the current UK Government's position.

On research and innovation, we're out to consultation. The consultation just ended on our innovation strategy, so I'll be able to report back at the end of that, once the views are in, on a new strategy and our approach. When it comes to the resource for that as well, I pointed out in my statement that our budget is now worth £4 billion less than it was at the time of the comprehensive spending review.You can't wish that away. There is real pressure not just across my department, but across the whole of the Government, on how we'll be able to find funds for each area. So, we're not going to have all of the direct resources we'd want to in every single area of the economy. It makes it even more important, and it really highlights the challenge of having lost EU funds that we did put into research and innovation in Wales. It also highlights the fact that we, collectively across Wales—businesses and universities too—need to be better at not just gaining more from the research and innovation that takes place within higher and further education and how that leads into the world of business, but, actually, that we need to be better at gaining more from UK-wide innovation funds. One of the things I do think has been welcome is that the UK Government has set aside a fairly chunky amount of money to go into future research and innovation—it's more than £20 billion. Our challenge is that, in a number of decades past, we haven't done as well as we should have done in Wales in gaining money from UK-wide funds. So, the south-east of England does fairly well, and parts of Scotland do fairly well; Wales gets, I think, 2 per cent to 3 per cent of UK-wide funds. Actually, we're going to need to do a great deal better than that, and part of what that innovation strategy's going to need to do is bring us together to make sure that we are tooled-up to do that successfully.

When it comes to Business Wales and the decarbonisation advice they already provide, that's already part of the mission. I'm sure the Member will recall my written and oral statements on this. One of the three future aims is actually to support productivity, resilience, growth and to decarbonise. On the decarbonisation and sustainability of micro, small and medium businesses, the advice is already there, and we're looking to do more of that in the refresh of Business Wales.

When it comes to business organisations in growth deals and collaboration, I think it's important to recognise that, actually, we do deliberately want to plug businesses in within those regions to the work that is being done. When it comes to business organisations, they do have relationships with those regions. They definitely have relationships with the regional skills partnerships that exist as well, and it's helpful—in one of the few things that made sense and a difference with the shared prosperity fund—that we persuaded the UK Government to have the same regions for the shared prosperity fund that we'd already created. Our challenge is going to be about how we continue that collaboration with some of the alternative headwinds. I'm actually, though, encouraged about the buy-in from all of our local authority leaderships, both before the recent elections and afterwards. You'll see cross-party leaderships in each region of Wales who want to make it work.

There is, though, a challenge about the skills budget, because, again, that's directly affected by the loss of EU funds and the broken promise on making up every single penny of that. That gives us a real headache, but when it comes to the way that those organisations are working, I think we're in a pretty good place, but there is always, of course—I think each region would recognise—more that they could do.

Finally, on your broader point about working with the UK Government, I've given in my statement examples of where we've managed to do that. That has required, though, the UK Government being prepared to work with us, because on the areas where we haven't been able to work together it isn't because we've said, 'We won't talk to you.' The shared prosperity fund didn't reach agreement because the UK Government took our powers and has taken over £1 billion of our money that was promised to Wales in the last general election. I continue to talk with UK Ministers in areas where we can work together, and I'll continue to be constructive in those conversations. There's no lack of willingness from our side to have a conversation, but it is, 'Work with us,' not, 'Decide for us,' not, 'Take our powers and our budget.' 'Work with us and there is a constructive way forward,' but I make no apology for calling out those occasions that have happened in the past if they happen again in the future, where the UK Government has refused to be a willing partner in growing regional and national economies here in Wales and across the UK.

Thank you, Minister, for the statement.

In response to the Minister's last statement on regional economic development in January this year, I brought up my concerns about a lack of energy projects being identified in some of the frameworks, especially in light of the cost-of-living crisis and the rising fuel poverty that exists in Wales. This was only at the very beginning of this crisis. Our post-industrial areas are really being hit; these areas rank higher on Lowell's financial vulnerability scale, while having a higher number of energy crisis hotspots, according to Friends of the Earth.

Due to the unequal spread of energy projects in the regional economic framework documents, can the Minister please reiterate how he will ensure that all regions of Wales can benefit from more green energy project developments, with the aim of making energy bills cheaper, especially as we continue to face a growing cost-of-living crisis? It's clear that we have to crisis-proof the future so that we don't find ourselves in a crisis like this again, which I believe will be done by investing in green energy and ensuring that this industry is nationalised and publicly owned.

Last time I raised the need to move towards green energy within these frameworks, the Minister responded by raising concerns about a just transition, so I would reiterate, therefore, and ask the Minister to consider establishing a just transition commission, so that we can begin transitioning as soon as possible in the face of this crisis and to prevent further energy crises or climate damage.

There was also mention of free ports in the Minister's statement today. Free ports are rarely, if at all, mentioned in any of the regional economic development publications, yet Welsh Government are launching a free-port programme with the UK Government. Free ports are not new and there's a whole bank of research that criticises them. There's a myriad of evidence showing free ports go hand in hand with low-wage job creation, likely job relocation, instead of creation, and the potential for illegal activity while wealthy high-net-worth individuals and businesses stand to gain. Of course, his statement expresses the Government's desire to create better paid and skilled jobs, and the Minister, in the statement, noted that the free-port programme in Wales must contribute to and not take away from our wider objectives to create a stronger, fairer and greener Wales. But it strikes me that free ports don't align with the Government's ambition on this.

It's simple: we cannot be willing to go along with this if it means eroding workers' rights and conditions, as well as undercutting environmental standards. We cannot compromise on our principles. To that end, can the Minister outline his rationale behind Government support for free ports? And would the Minister agree that problems in underdeveloped areas could be solved by investment and community wealth-building strategies without any need for free ports at all?

Finally, in his last statement on the regional economic development framework, I raised the issue of the brain drain with the Minister, and specifically how the framework should be integrated with the young person's guarantee to retain talent and improve job creation in Wales. How does this now align with the Minister's support for free ports to improve regional economic development?

Thank you for the questions. On energy projects, I think you will find that there are green energy projects that are being proposed in every single one of the four regions. Mid Wales isn't just a home to the Centre for Alternative Technology in Machynlleth; there's more to be done there. And actually, the UK Government have recently confirmed that they're interested in more onshore wind generation as well. It's relatively cheap compared to other forms of power generation, but you'll also see offshore wind generation in significant quantities in north Wales and also around Swansea bay with the Celtic sea. So, there's lots of opportunity and, of course, the capital region have purchased Aberthaw as a landing point for green energy generation. And the point for me isn't just to decarbonise our supply of energy; it's the economic activity and benefit that goes with it.

I regularly think about Denmark, not just because my elder brother and his family live there, but, actually, they managed to get to a point with onshore wind in particular, where they got in early, they got first-mover advantage, they got lots and lots of economic benefit, not just the power generation, and I'm keen that we don't lose sight of the economic opportunities. I don't just want us to construct lots of energy projects near to them being deployed and then maintain them, I think there's a real opportunity to do much more. And again, it's another example of where if there was a willing approach from the UK Government, we could do more on investment, because some of the investment around HyNet in north-west England and north Wales could and should be extended; we could also see more across the industrial cluster right across east, west and south Wales as well, and that would be to all of our benefit. 

When it comes to your point about the just transition, that's a key part of our Net Zero Wales plan. We're looking for a just transition, not to simply abandon areas and not to have a plan for a transition from one form of employment to another. And that's not necessarily easy, but there is a real opportunity to do so. Many of the skills that are unlikely to be—. Many of the jobs that are unlikely to be needed in 20 to 30 years will still have skills that will transfer into newer jobs, and part of our challenge is how we reskill people already in the world of work. And that's part of the reason why this Government is investing in personal learning accounts, for example—so, learning in work. And I regularly make this point, and I had a conversation just this morning about this: the workforce of the future is here in very large part. People in work in 10 years' time, most of those people are already in the workforce. So, yes, we need new entrants coming in—we should never apologise for focusing on those new entrants who will learn new skills, coming in today, tomorrow and in the next few years—but we also need to make sure that we take our current workforce with us and provide them with opportunities to acquire new skills. 

On many of your questions around free ports, I will just say there's no need for the Government not to have a focus on community wealth building, and that is very much part of our everyday economy and the foundational economy approach as well: how we try to keep wealth within communities; what that means for local procurement, not just in the bids, but then in the way that people then behave once they've secured procurement contracts as well—that they keep to what they said they'd do. That is very much part of what we'll need to see in the free ports programme as well.

Look, this was a UK Government initiative, and the Welsh Government has negotiated to a position where we can agree to the deployment of a free port on terms that we have inserted. And there's similarity in what we have agreed and what the Scottish Government has agreed as well. So, we do have conditions around fair work in the prospectus, and you'd expect me, not just as a former trade unionist and Welsh Labour Member, but you'd expect me, as a Minister in a Government that has a commitment to Wales being a fair work nation, to see free ports must be part of that and not separate from it. So, that's what's in the prospectus, and I'm not going to agree to any bid that comes forward on the basis of diminishing terms and conditions, on diminishing environmental regulations, on diminishing labour rights. And that is a genuine decision, where we will make the decision, as well as the UK Government. I'm prepared to say 'no' to bids that don't meet that standard.

As well as seeing what's in the bid, I also want to see how that's going to be monitored and managed. That's why we set up some of the architecture on what's being called essentially a workers committee. There'll be people who recognise this a joint union committee in other workplaces, where you do have a way for trade unions to be part of what takes place on a work site, on a multi-employer site as well. It's not that unusual in power, steel and other places as well.

So, I look forward to bids, but also to activity. For me, the test will be not whether within that area you see more economic activity, but whether you overall see more activity, rather than activity that has been displaced. That's part of the challenge of previous examples of this sort of intervention: can we genuinely grow overall economic activity and not simply shift it from one part of the country to another?

Thank you, Minister, for providing this statement today. Just to pick up on your points there, and, Luke, your questions about free ports, I would hope, then, that that would mean that the Welsh Government would never make a deal with DP World, which owns P&O Ferries and sacked 800 of their staff. Unsurprisingly, but disappointingly, the UK Government, two of their largest are run by DP World, Dubai based, and they have given them £50 million to do that.

I'd also just like to say as well that the UK parliamentary representative in my community keeps calling for it to be in Porthcawl. I would just like to say that I haven't heard a single person in my community call for a 44 km free port to be in our Porthcawl marina, although we would, of course, like to benefit from, as you said, the community welfare, the jobs and everything that comes from it; for example, we've always had a very close relationship with Port Talbot. So, yes, just to say that on behalf of my community.

I just wanted to say as well that the Welsh Government has recently invested in a multimillion-pound site at Brocastle, and there is further investment in the infrastructure to accompany the new site, with a £2 million active travel route. This is great news for the local economy and opportunities for jobs. However, we do know that more can be done, and the Ford site continues to be a reminder of the opportunity for investment in our communities. I know that you are working very hard to get that sorted out.

You do need to ask your question now.

Sorry. So, it'd be great to have an update on that, if possible. Also, I would just like to ask, Minister: do you agree that the Welsh Government does value the constituency of Bridgend and other communities as places to invest and grow our local economies?

Thank you. I'll just deal with the free-ports point first, and I'll tell you upfront that I'm going to avoid giving you a straight answer, because I'm going to be the decision-taking Minister, so I can't tell you that I definitely won't accept a bid from someone, because I'll have to consider that objectively.

I've heard what you've had to say about Porthcawl and Port Talbot, and I'm sure there'll be bids right across the country. I see Members in this Chamber who have alternative ports that they take an interest in, who may want to press me to agree at this point that their local area will be the one that'll be agreed. But, I will look at all of the bids and I will do what the prospectus says we're going to do; so, anyone who isn't committed to fair work isn't going to get agreement to be a free port in Wales, at least.

On your broader point about Brocastle, it's interesting, because it's one of the things that we're going to need to do more of and to think about: how we not just see large employment sites and get good-quality employment on there, but, actually, how you get people to and from work as well. So, that's both about the design and about their links to public transport, but it is also about active travel and options to think about how, if you can't decarbonise the whole journey to work, can you do something about the last mile or the last element of it. Can you do something that will take out the workers' footprint on getting to work itself? But, I'm really optimistic about Brocastle. It's been a significant investment by the Welsh Government that's brought that site forward. We should see a large number of jobs on that site, and, again, jobs with a real future.

With Ford, my officials and I have been in contact with the company to make clear that it's a really significant employment site. It has had high-quality, high-wage employment on it in the past for a significant period of time. What I don't want to see is that that employment site goes into a much lower wage series of alternatives. The company will need to decide—we're not in a position to make the decision for them—but I do think there are high-wage and high-skill opportunities that we would definitely want to see put onto that site, and that continues to be the case that we make to the company itself.

I do see Bridgend as being hugely important, not just in terms of it being the Member's constituency, but for the number of opportunities that there are within the different employment available, with lots of it high-wage and high-skill, but also our contribution for the future; for example, the new investment in the college as well, to make sure that people are properly equipped for the future and at a variety of different ages. I do look forward at some point to visiting the constituency with the Member, as she has asked me on a number of occasions; at some point, I'm sure our diaries will align.

Thank you, Minister, for your statement. I'm pleased that you recognise transport as a key thread. The need to rethink transport systems across Wales is important, and it's clearly evident in all of the four regional economic frameworks, as we've seen published a little while ago. 

If I focus on the south Wales metro scheme, this has the potential, as you know, to enhance economic opportunity and prosperity right across south-east Wales, including my constituency, Monmouth. But, I think there are questions over the progress and action that is being seen for modal shifts, such as rapid bus transit, to encourage the economic growth we all need to see. Transport for Wales oversees the metro, and it’s not in the gift of the city deal to oversee that, but perhaps that’s something that needs to be considered. How are you engaging with the various regional cabinets to ensure that the needs of local communities and economies are fully incorporated in your plans?

I want to touch briefly on the point Paul raised as well. I was pleased you mentioned that the Government are trying to seek out further investment, which is absolutely fundamental. We’ve had some great innovations in south-east Wales, such as the compound semiconductors, and the rest of those clusters that are evolving, but it relies upon continued access to investment and skills to drive progress on a more impactful scale. So, I just want to labour that point again, about the fact that we aren’t working closely enough with UKRI or Innovate UK to lever in those funds. We keep talking strategy, strategy, strategy; when do we get to action, action, action, and lever in the moneys like Scotland have done, and actually drive things forward? We are getting left behind.

I think there are two broad questions there. On innovation funds, I am keen, as I’ve said, to see much greater outputs in terms of research funding being awarded, and then outcomes in terms of what those funds will allow us to do. We have really good examples of applied research and the difference it can make. The knowledge transfer partnerships we have are a really good example on a small level, and I’m sure you’ll have seen that in your own constituency, and in your previous life as a leader of a local authority—the difference that can make to the productivity and profitability of a business. Our challenge is, with the shift in funding, how we take more out of UK Research and Innovation funds. That requires a shift here in Wales, not just within the Government and what the strategy will set out, but actually all of our various different partners. Because the Government can’t write bids for HE or for businesses that want to get those funds. What we need to do is not just copy what other regions have been successful in, but think about the distinct offer we have and where we could and should see investment funds being made here in the future of research and innovation.

The second part we require a shift in is in the minds of decisions makers. It’s a point that I’ve made regularly. I’m not trying to land a party political shot here, but George Freeman, the previous science Minister—I genuinely don’t know who the current science Minister is; up until a couple of weeks ago there wasn’t one—was someone who had come from the sector into politics, and he was very keen to see innovation take place right across the UK. He understood that there are areas of opportunity in Wales where he would want to see funds go to that. If we had a similarly committed science Minister who understood the landscape, I think there’d be a place for a conversation that was both an intelligent one and would lead to some different choices being made as well. Like I say, there is a genuine opportunity to do something of value both to Wales and across the UK.

On your point about the metro and modal shift, I regularly talk to cabinets from the various different regions, and you’ll know a bit about this, given that you were on the capital region cabinet at one point in time. I’ve met them recently. I’ve met with people around the Swansea bay deal as well and their regional cabinet. I’ve met the north Wales group as well, and I expect to see them again soon. I look forward to seeing more work done on the mid Wales deal, which is in a different place because they’ve actually reached their agreement later than the other three regions of Wales. But I’ll continue to keep in touch with them as partners—not as someone to tell them what they must do, but as partners in what we’re looking to do, the role they have in regional economic development and the role we have alongside them, and choices that can only be made at a national level as well.

I’m grateful to you, Minister, for the statement. I'm also grateful for your continuing commitment to Tech Valleys and your previous commitments to the programme and its budget over future years. The macro situation we’re facing in Blaenau Gwent and elsewhere is far more difficult than it has been in the past. We’ve seen a disastrous Brexit that has locked us out of significant markets, and where the UK Government seems more interested in the money markets of the City of London than either agriculture or the regional economies anywhere in the United Kingdom. We’ve also seen levelling up dumped by the new Prime Minister, and we’ve seen incompetent handling of the economy that means that any business wanting to invest is going to be borrowing at far higher levels, and at far higher rates than even a few weeks ago. So, it's incumbent upon the Welsh Government to take action to protect regional economies like that in the Heads of the Valleys. Will the Minister commit to creating a delivery mechanism in the Heads of the Valleys to ensure that we can direct funding and bring together different programmes to have the greatest possible impact in investing in our economy? I welcomed the Secretary of State for Wales to Ebbw Vale over the summer, and I'd be very happy to welcome him again to the Heads of the Valleys and to Blaenau Gwent to work with him and work with others, with local authority leaders and yourself, to ensure that we have all the abilities brought together to invest in the future of our communities.

I thank the Member for his comments and questions. In my statement, when I referred to the terms of business changing, this is exactly what we're talking about—the terms of business for importers and exporters. With the recent fall in the pound and then the partial recovery, the interest rate rises are still locked in, and the spike in UK terms is very different to other parts of the world facing similar global pressures. Our challenge is that it is now much more difficult; there is more cost, unavoidably so, in being an import or an export business. The challenge, though, is that it is still possible to do that, but people need more support and more help. They've also already recognised that they need to take on more people to actually deal with the paperwork that they now have to do to understand how to get goods to and from places, but also the extended time frames for goods to be delivered, and, frankly, less reliability.

When it comes to business loans and the rise in rates, it's one of the things that business organisations have been very keen to tell me about recently. They've already seen a significant increase in the rates that they're going to need to pay. That means that, actually, there will be less investment, and, more than that, there are some people who are thinking again about whether they want to invest at this point in time. Part of what we want to try to do is to still give people a good reason to invest in the future of the Welsh economy.

That brings me to your point about work in the Valleys. I do remain committed to seeing real improvements, not just words. It's one of my big priorities in the department to get a future structure that, as I said in the statement, brings together budget holders and decision makers. The Organisation for Economic Co-operation and Development work, within the current contract, is designed to get us there, to look at the current structures that we have and how do we get something that can work best with the particular challenges that exist in Valleys communities. I spoke to your colleague Vikki Howells earlier, and she's keen for Valleys constituency Members to have a further conversation with me. I'd be very happy to facilitate that, this side of the half-term break ideally, to make sure we can have not just a conversation but to keep you updated on the detail of the work that we're looking to do and to make sure the OECD work works for your communities and other Valleys ones as well.

Thank you, Minister, for your statement today on economic regional development. Of course, economic regions and economic boundaries often don't match administrative boundaries or regions. You will, of course, Minister, be aware that this is really important for my residents in north Wales, because every 24 hours, 200,000 people move between north-east Wales and the north-west of England, going backwards and forwards across that really important economic boundary. That's why, Minister, I'm really keen to support the work of the Mersey Dee Alliance and to see their work progress to see that economic region develop over future years. Minister, my question is: how do you see the future of the Mersey Dee Alliance, and how do you see your role as Minister and as Welsh Government in seeing the success of the Mersey Dee Alliance and that really important economic region?

I'm very positive about the Mersey Dee Alliance from the previous conversations I've had with them, but also with the ambition board across north Wales, again, that you'll be familiar with from a previous role before coming to this place. But, actually, the plan that exists there, and making sure that the Mersey Dee Alliance adds to that and doesn't compete with it or potentially duplicate some of the work, is important. So, the two Welsh authorities, Flintshire and Wrexham, and the two authorities in Cheshire—. Actually, I met them last week in a meeting chaired by Ken Skates, who had brought them together. It was actually genuinely constructive around the conversations we're trying to have about how we can see more go into the Mersey Dee area. The challenge is still about whether there will be resource to help them realise their plans.

They've got a range of projects that would work and benefit both sides of the border, and there is a recognition that there is a very large travel-to-work area there that flows on both sides of the border. We've had some previous embarrassing incidents in the past where UK Ministers have said they're visiting Airbus in Cheshire. Of course, Airbus isn't in Cheshire—it's on our side of the border—but lots of people who work there do live on the other side of the border, so it's not much of a surprise. The challenge is will we get to a point of stability in the policy-making framework, an understanding of the resource that's available, and then some genuine investment choices being made to help advance the ambitions of the Mersey Dee Alliance. I'm optimistic about that.

I am, though, concerned about the potential pebble-in-the-pond of investment zones. There hasn’t been a change in this perspective, at least. Of the 38 potential investment zones, one of the possible ones was Cheshire west. If there's an investment zone in Cheshire west, what does that do to the Mersey Dee Alliance? Does it unbalance things? It isn't clear to me. It isn't clear to me about the reliefs and incentives and whether that will displace activity rather than grow it. The collaborative way that those four authorities are working is a good example of what really can be done when people recognise they have a common interest.   

And finally, Carolyn Thomas.

Diolch. I was going to say also that the north Wales economy and transport work cross border. I attended a Growth Track 360 fringe event last week. We talked about the importance of HS2 funding coming to that border region and, with Cheshire West and Chester being possibly an investment zone, the impact it could have on Wrexham industrial estate, Deeside industrial estate, and enterprise zones. So, I'm hoping you will talk with UK Government, as you have done over the free-port status, so that we protect working conditions and environmental conditions.

The Prime Minister has said that she wants to build back the economy through creating jobs. We have lots of jobs in Wales, jobs in the public sector, that we cannot fill, that are really important. Do you agree with me that businesses, as they are saying, need education for skills to employ people, that they need pot hole-free roads, and that we need good public transport and planning in place so that they can build houses and healthy communities? Minister, what can we do to promote these jobs as well to help build our communities, as well as promoting building up the private sector? Thank you.

I'm very clear that we should continue to invest in our public services. If we had the ability to do so, then, in direct contrast to what's likely to happen, I think we would see direct benefits for the private sector. The numbers of people, the quality of education people get, and the quality of public services make a real difference to all of those things. It also makes a real difference to local economies, where people spend their money locally. It's part of what I was talking about earlier with the everyday economy and that, actually, if we can keep more of that money in terms of what goes into procurement and local spend for public service workers, it will make a difference.

I am genuinely concerned about the consequences of the reported £18 billion cut to public services that has been floated by UK Ministers. Ushering in a new age of austerity at the same time as releasing the cap on bankers' bonuses and the direct transfer of money to the wealthiest 5 per cent in society would be entirely the wrong decision to make. There will be many people who recognise the direct unfairness of that choice. It's never too late to think again, and I certainly do hope that the Prime Minister and the Chancellor reconsider the course that they have set.

On your broader point about HS2, I certainly agree that consequentials would make a difference, not just in border areas, more than that in terms of investment that we could make in our infrastructure. And on investment zones, I have had an introductory meeting with Simon Clarke. He's written to both myself and the finance Minister. When I met him, I made it clear that the Welsh Government is prepared to talk about what investment zones mean. But, actually, we're also very clear it cannot mean a rolling back on environmental standards or on fair work, as we set out with free ports. If that’s what they're looking for, we won't reach agreement. I'd also need to understand, if there are going to be changes to devolved taxes, what does that mean for our fiscal position, given the significant challenges we face. So, there's a range of questions that I've yet to have answers to. It may be possible for us to reach agreement. It may be possible for to have a plan that will generally add to economic growth, not displace it. But if we don't get that, then I'm prepared to say 'no' and not to agree to have investment zones in Wales. So, there's a discussion that is starting. I hope it'll be constructive and we'll see at what point that reaches a conclusion.  

Minister, I've had a last-minute request. I'm in a generous mood this afternoon. I know the Member will also be brief. Rhun ap Iorwerth.

Thanks for letting me sneak in, and thank you for the statement. I'll just make the case that, as well as spreading prosperity through regional working in general, I encourage Governments at all levels to think sub-regionally; it's not just the north, but Ynys Môn feeling that it gets a crack at the whip, and within Ynys Môn, places like Amlwch, that have suffered so much, feeling that they are being prioritised too. 

Just very quickly though, I just wanted to explore your reference to free ports. You know I've always sought honesty, and honesty about what was being put on the table in the first place—£8 million for Wales, £25 for England. We held out and we got that. We sought honesty about assurances on workers' rights and on environmental regulations. But there's an ideological context here; the masked slipped, didn't it, with the economic policy published by the UK Conservative Government—tax cuts for the top at the expense of people at the bottom. Now, that's the context in which the free-ports policy exists. So, whilst looking at how we can maximise benefits from Anglesey—the Anglesey council-led bid—and try to make it the best bid that comes in front of you, we need to make sure that it's the workers who will benefit. How can you give assurance that we are dealing here in people, in communities, and not just in profits, in pound signs that we'll probably see very little of locally? 

The requirements for free ports will need to be supported by the host local authority and indeed their economic region. That's part of the condition for the bids to go in. They'll then be assessed by the two Governments, and, as I've said, and I'm more than happy to repeat again, there has to be a commitment to all aspects of that. That includes the Welsh Government's fair work agenda, it includes our environmental standards as well. And bids that don't meet that test won't be successful. And I'm not giving anything away; I'm not prejudicing my position as a decision maker because that's what's in the prospectus, and it means what it says. And I'm interested in how we then measure, as we go on, whether people are doing what they said they'd do at the bidding stage, if and when a free port comes into operation here in Wales, indeed wherever that free port may be. 

I know that the Member will have a particular view about where it should be, but I've yet to receive the bid. And when it comes to that point, I will of course return to this place to explain not just the decision, but I'll be more than happy to answer questions from Members. I'm sure that, while some may be positive about whatever decision is reached, there will be others asking other questions. I do hope that whatever happens, we will get serious investment plans that will allow us to look again at the future of port investment and genuinely generating extra economic growth and activity. 

Thank you, Minister.