Of course, it's not only through research and innovation that universities have an economic impact. They are anchor institutions and significant employers. In 2019-20, one in 20 jobs in Wales was associated with university activity. Over 21,700 jobs were provided by Welsh universities, with a further 19,600 jobs created in other industries through the knock-on effect of higher education. I am proud that universities in Wales are paying the living wage, and I would encourage more in terms of local and regional procurement. This year's growth in the number of undergraduates will have an immediate economic effect in local communities, and thanks to our progressive student finance reforms, the number of postgraduates continues to increase, translating into future researchers and innovators in the years to come, which will bring its own economic effect.

Skills levels are clearly correlated to economic growth, and we are investing in our universities to deliver part-time education, more postgraduate activity, degree apprenticeships, all alongside their core offer. We have invested in a microcredentials pilot, the expansion of medical places through the new north Wales medical school, and continued investment in higher cost subjects, such as science, technology, engineering and mathematics courses. We're ensuring that Wales is seen as an inviting study destination for international students and researchers, and also that our international partnerships are able to continue and grow. Our Taith and Global Wales initiatives are good examples of our work in this area.

I said I would return to the issue of European funding. I'm sure that everyone here is concerned about the loss of the European research and development funding. By refusing to replace these funds, the UK Government is leaving a funding gap, undermining competitiveness during a time of immense change. I am absolutely clear that we must see funding levels at least equivalent to those we received historically return to Wales. To secure greater investment and return us to at least historic levels of funding, the direct support and co-operation of the UK Government and its departments and agencies, particularly the Department for Business, Energy and Industrial Strategy and UK Research and Innovation, are needed to work in partnership on decisions impacting on Wales. The UK Government must improve relationships with the EU to bring about the UK's full participation in Horizon Europe, as agreed under the trade and co-operation agreement. Association with the programme is in all four nations' best interests, and I made this point very much over the last two days in my visits to Brussels. It is our firm view that dialogue and negotiation is the sole route to a positive outcome that would prevent material harm to the Welsh economy. As a recent Russell group report said,

'Failure to secure association to Horizon, Euratom and Copernicus will significantly limit the UK’s attractiveness as a destination for talent and investment.'

If the UK Government can't deliver what was agreed in the trade and co-operation agreement, then we must build a close, long-term relationship with Horizon Europe as a third country. This is vital to our economy. Maybe the Member can talk to his colleagues in Westminster about some of these issues.

Another area in which European funding was important is innovation, so crucial to our economic development. Under UK Government arrangements, the Welsh budget is losing over £1.1 billion of replacement EU funding. We know that schemes such as SMART expertise have been highly impactful in supporting effective collaboration between research and industry. These recognise the shared effort between parties, resulting in shared rewards, in particular the generation of intellectual property, exploited to create economic and social impact for all partners.

This Government is of the view, Dirprwy Lywydd, that universities are a core part of the Welsh economic and educational infrastructure, and we have invested accordingly, supporting research and innovation, skills development and knowledge dissemination. We've worked with the sector to deliver the real living wage, encouraged innovation and procurement and enhanced community engagement through civic mission activity. Investment in our universities is investment in people, in researchers, in support staff, in technicians, in lecturers. It's investment in our economy, in one in 20 jobs across Wales; it's investment in our students and their futures, in the skills for Wales in the twenty-first century.

I'll conclude, Dirprwy Lywydd, by restating part of my vision for higher education being one of distinctive institutions working in partnership. It is by working together that they can make the most out of the substantial investment they receive, and by working together, they will continue to make a significant contribution to economic growth.