Item 5 this afternoon is a statement by the Minister for Economy on economic priorities and UK Government relations. I call on the Minister for Economy to make the statement—Vaughan Gething.

Thank you, Dirprwy Lywydd. I come to Plenary this afternoon having earlier on today had the first inter-ministerial group for business and industry meeting of this year. It was the first such meeting since spring last year. The Welsh Government is firmly committed to proper partnership working arrangements with the UK Government and other devolved nations, and we do so in the joint interests of Wales and the wider UK economy. I am cautiously optimistic that, having had discussions about the regularity and the importance of the IMG today, the new UK Government is showing signs of more meaningful engagement on our joint economic priorities. That is what the new Prime Minister indicated that he wanted when he met with the heads of devolved Governments in November last year. The proof, of course, will be in the action that is taken.

It is vital that we work collaboratively, in proper constructive partnership arrangements, to navigate the severe economic challenges we are facing. The UK begins 2023 on the brink of recession. People and businesses across the UK are under intense pressure from the cost-of-living crisis, with inflation expected to remain in double digits over the first half of this year. A toxic combination of Brexit, a lack of public and private investment, and the UK Government's disastrous early autumn mini budget has severely damaged the UK economy. This had led directly to a widespread expectation that living standards will fall, and fall by record amounts, across all parts of the UK. Productivity has been stagnant for more than a decade and the UK Government’s commitment to

'end the geographical inequality which is such a striking feature of the UK' remains unfulfilled. The continuing but reduced support for high energy costs announced last week will provide some certainty for business after March. However, the new scheme does not protect against energy price volatility or match the higher level of comparative support offered in other European countries.

In Wales, collaboration and partnership are the cornerstone of our approach in Government. Wales has a stable, mature Government and a network of social partners that help us to make the right decisions. That doesn't mean that all decisions, of course, are easy. Together, we have developed a long-standing framework for future-focused inclusive economic growth, underpinned by our groundbreaking Well-being of Future Generations (Wales) Act 2015; an economic strategy that has been revisited, refreshed and refocused, as we recover and reconstruct our economy in the aftermath of the pandemic; and a mission that has a clear commitment to social value, firmly rooted in a greener economy, with well-being, dignity, and fairness at its centre. 

Our long-term plan remains on delivering a prosperous, green economic future for Wales and investing in the skills of the future. Our vision for the Welsh economy is clearly aligned with independent thought leaders, such as the Resolution Foundation, and their proposals for rebooting Britain with a return to inclusive growth. But, all of the UK has needed the UK Government to develop a responsible, coherent economic direction for recovery and growth for some time—a clear plan created in partnership and founded in the economic strengths of each nation. Without it, and with the economic outlook deteriorating, the UK Government must work with us to ensure that there is purposeful public investment to address the current crises and deliver a more productive economy.

Our Government in Wales is clear that, together, the UK is a proud, interwoven union of nations capable of being greater than the sum of our parts. Without proper structured engagement between all UK nations over the last year, there has been a clear void that has brought about incoherent and inconsistent economic approaches in different sectors, led by different UK departments. Some approaches have been more constructive. Together, we have made good progress on free ports, we co-designed the prospectus, including commitments to fair work, and we're co-assessing the applications. Ministers from the Welsh Government and UK Government will together select the successful bid. The approach to investment zones has now moved to a more constructive path. The current UK Government has chosen not to proceed with the previous policy announced in the autumn, as the evidence of the potential benefits from that previous approach from months ago was far from clear, and we agree that a rethink and a more focused approach is required, working with us not around us. The current UK Government now appears to be taking seriously the need to engage on borders policy. That must continue if we are to get the right answer for Wales and Britain.

Some approaches, though, need urgent attention. The UK Government cannot delay action any longer to secure the long-term future of steel. They must deliver on investment that aligns with our commitment in Wales to a green economic future. They hold many of the powers that relate to decarbonising UK steel, and the resources that are needed to help transform our energy-intensive industries. The UK Government must provide clarity on measures that it will use to fund energy efficiency, and the technologies that deliver a low-carbon future. We have repeatedly called on the UK Government to bring industrial energy prices in line with competitors in Europe and to ensure a level playing field for UK steel production.

The semiconductor cluster in Wales is another vitally important contributor to our economy today and in the future. The time taken by the UK Government to reach its decision to revoke the acquisition of Newport Wafer Fab by Nexperia, on national security grounds, has caused great uncertainty to the business and its workforce. The UK Government must set out a clear position for the sector and publish its very long-awaited semiconductor strategy.

The UK Government's choice in designing the shared prosperity fund has disregarded devolution and 20 years' experience delivering EU funds. Wales remains set to lose over £1 billion as manifesto promises are broken on EU replacement funds. Meanwhile, local authorities are still awaiting decisions on bids for round 2 of the levelling up fund, despite submitting bids at the start of August last year. The UK Government's approach has placed local government in an appalling position. Other sectors, like higher education, further education and the third sector, have been excluded, whilst funds are being re-directed away from the poorest areas of our country at the worst possible time. All of this would have been avoided if the UK Government had not broken its manifesto pledge and respected 20 years of devolution. We could then have managed full replacement funding through our framework for regional investment. Across these developments, and others, such as floating offshore wind or carbon capture utilisation and storage, a continuing and constructive commitment to dialogue by the UK Government is critical. Some of our key strategic infrastructure projects planned right across Wales are dependent on UK Government support. The advanced technology research centre, the National Nuclear Laboratory; project ARTHUR; and the Global Centre of Rail Excellence all demonstrate the strengths of high-value manufacturing in Wales. 

After the deterioration in inter-governmental relations earlier in the year, we have seen some improvements recently. But firm evidence is yet to emerge of a regular, reliable rhythm of engagement and respect for devolution across all policy areas. There will always be clear differences between the priorities and objectives of our respective Governments, because they're rooted in different values, and nowhere is that more apparent than in the anti-strike legislation introduced by the UK Government last week, having previously made a clear commitment to protect and enhance retained employment rights as the UK leaves the European Union.

We do not believe that the right response is for the UK Government to introduce new laws that will have a direct impact on the workforce in devolved public services. We believe that the right response is to work with employers and trade unions in social partnership to resolve disputes collaboratively. But if we can engage constructively on free ports, possibly investment zones, and borders, there is no reason why we shouldn't be able to deliver projects of joint strategic significance. Despite our differences, we should have a shared interest in making choices to improve the economic prospects for Wales in what will be a very challenging year ahead.

Can I thank the Minister for his statement this afternoon? Now, I agree with the Minister that the UK is beginning 2023 on a very difficult footing, and there is a need for a real focus from him on the Welsh Government's economic policies. I had hoped that we'd hear more from the Government about some of the specific initiatives that the Welsh Government has for tackling some of the challenges facing businesses in Wales, but detail on that front is lacking in today's statement. Nevertheless, I'm pleased to see that today's statement refers to delivering a prosperous, green economic future for Wales, investing in the skills of the future. The Minister knows that I've been calling for a new net-zero skills action plan for a long time now, to make sure that we have the right people and skills available to benefit from green jobs in the future. So, perhaps the Minister could tell us more about how the Government is building a better understanding and evidence base of the future skills needs to support the transition to net zero, and also tell us how he's driving awareness amongst employers to support reskilling and upskilling their workforce.

Today's statement refers to the continuing support for high energy costs that the UK Government announced last week, and I believe that there is room here for the Welsh Government to act to support businesses too. For example, we know that the Development Bank of Wales is developing a scheme that will allow businesses to take on borrowing to fund capital investment that delivers on decarbonisation. Therefore, perhaps there is flexibility here for this scheme to cover businesses needing acute support with energy costs, so that funding can get to businesses as quickly as possible. So, perhaps he could update us on his discussions with the development bank on the support that they can offer Welsh businesses, and tell us when the new green business loan scheme is likely to become operational.

Dirprwy Lywydd, the Minister's statement focuses heavily on inter-governmental relations, and I want to reiterate that, where Governments work together, Wales benefits. Indeed, I want to remind the Minister that the people of Wales are served by both Governments, and it's in the interests of both to work together. Of course, he is right to say that the UK is a proud interwoven union of nations capable of being greater than the sum of its parts, and the partnership with the UK Government on areas like free ports, like city deals, and the future of borders policy, has shown that, when Governments work together, Wales benefits.

There are, of course, genuine concerns over post-EU replacement funds, and I share some of those concerns, as the Minister well knows. But I really don't see how the Minister's statement today goes any way to tell us how he is going to build a more constructive relationship with Westminster, which is essential for the Welsh economy. Now, it's also essential that the Welsh Government prioritises investment in fields like research and innovation, which has huge potential to transform the Welsh economy and put us at the forefront of technological developments. But we are still waiting for an innovation strategy from the Welsh Government, despite repeated calls from the sector. Therefore, perhaps the Minister could take the opportunity to tell us when we will see an innovation strategy from this Government. 

Now, the Minister makes a fair point regarding the long-term future of steel. It is a foundational industry that is the backbone of our manufacturing sector and we need clarity on how a sustainable future will be secured. Therefore, perhaps the Minister could update us on the latest discussions he has had with UK Government Ministers regarding the future of the industry so that we can better understand the level of engagement on this matter. 

The Minister's statement highlights floating offshore wind as an area where dialogue needs to be strengthened, and I'm interested to know more about his views given that, in the discussions that I continue to have with developers, they make it clear that it's the Welsh Government and the resourcing of Natural Resources Wales that are holding up developments here in Wales, especially regarding planning consents. Therefore, perhaps he could take the opportunity to explain exactly what he means in his statement in relation to floating offshore wind, as stakeholders will be at the Senedd later today and next week and will be keen to better understand his views.

In closing, Dirprwy Lywydd, I'd hoped that we'd hear more from the Minister today about the economic priorities of this Government, particularly in light of the report by the National Institute of Economic and Social Research, which argued that, since devolution, Welsh economic policies have lacked coherence and consistency, and ambitions have not been matched by effective implementation. That report was, in fact, co-authored by a former Welsh Government Minister, and so, today's statement could, and in my opinion should, have been an opportunity to tell Members more about how it will support entrepreneurship and innovation, develop a robust skills pipeline and bring together industry and academia for the benefit of the Welsh economy. Members already know that stronger inter-governmental relations benefit the Welsh economy, and whilst the Minister is right to say that we need clarity from the UK Government in some areas, we also need to see greater clarity from the Welsh Government in many areas too.

Thank you for the questions. As the Member knows, we're developing our net zero skills plan. There are some statements due to be made by the Office for National Statistics and others later in the spring, but I'm interested in how we are able to close the circle. I have actually had further conversations in the last week about the response from a variety of stakeholders, both providers of skills acquisition, further education and others, but also businesses—and business awareness—themselves, and it varies in different sectors. There's a challenge here about raising awareness of the journey to net zero, and the fact that businesses in all sectors will need to change some of the ways they look to work. It's why there's going to need to be not just an approach on what the policy is, but raising awareness, and how we equip people who will come into the world of work for the first time, or who are near the start of their career, as well as those of us who have been at work for a longer of period of time, and how you equip and re-equip the current generation of people already in work. And you'll see that as we take forward the net zero skills plan, but also the work we'll then do in more detail in different sectors. So, I'll have more to say in the coming months, when we actually launch the plan, and you'll see some of that engagement. And I'm sure that, with your other hat on, not of being the Conservative spokesperson but of being the committee Chair, you'll be interested in some of the engagement. And I look forward to the evidence and the examination that I'm sure the committee will give. 

On the Development Bank of Wales's green business loans, you won't have to wait much longer; I think Luke Fletcher has asked this as well. In the coming weeks, that launch will take place to set out how the development bank will be able to support businesses to both reduce costs to save the bottom line, and to do so on a sustained basis, to decarbonise their production, and the advice function will be part of that scheme as well. So, not much longer to wait. But, that does show that we're using the powers and the ability that we have to make a practical difference. 

And when it comes to inter-governmental relations, it requires the UK Government to be a willing partner in a conversation. The meeting that I had today with a Minister within the Department for Business, Energy and Industrial Strategy in the UK Government, a Scottish Government Minister and a civil servant from Northern Ireland was the first one in nine or 10 months. That isn't because we decided not to have the meetings; it was a choice by the UK Government for a variety of reasons for those not to happen. We have always been prepared to engage constructively. It was the same in the meeting that I had earlier this week with Michael Gove on a range of other issues as well. We know that we won't always agree, but we'd much rather have a conversation and to do that at an early enough stage to make a difference. What we have found at various points in the last couple of years is that we have been engaged at a point where we are being told what the decision is, or there is a demand that we agree to a policy and a perspective that we know we will not find agreement on. It's why I pointed out in my statement areas where agreement has been possible, like the fact that we compromised and had agreed a position on free ports, to contrast that with the approach taken on shared prosperity and the shared prosperity fund, for example.

On an innovation strategy, I think I've been as clear as I can be: it's a commitment in the co-operation agreement. We expect to launch that before the end of February, so, again, not much longer to go. When it comes to steel, I welcome what the Members had to say about needing clarity on our future for the sector. That can only come if there is a proper road map from the UK Government on what shared investment looks like and the sort of priorities it wants to set. And that's really important right across the whole sector, not just for the steel sector itself, but then what's going to happen in procurement in a range of other areas where we could and should be having a positive impact from seeing more British-manufactured steel used in a range of products. That would also, I think, require a different approach on infrastructure investment as well.

And when it comes to floating offshore wind, again, an area where steel could and should be used, we have been really clear in our conversations with the Crown Estate. Myself and Julie James, the climate change Minister, have met with the Crown Estate several times, and we've been clear about what we want to see with the future pipeline of leasing rounds, so not just something where there's an opportunity for a period of months and a shorter period of years, but a longer term round of leasing, so you can get longer term investment. And that, I think, would underpin significant investment in port infrastructure in north and south Wales, to allow opportunities to be taken up properly.

And also we've been very clear with the Crown Estate that we want to see a positive advantage and a requirement made in the next leasing round on localised supply chain, and that, actually, the bids would then have to be seen through in practice. There would need to be a contract mechanism to make sure that a bid can't read fantastically well on paper and that something entirely different takes place in reality over the coming years. And I would have thought that the Member and others would be supportive of that, because making sure we generate greater economic value in those supply chains should be a common objective right across the Chamber.

And finally, on your point, you mentioned skills at the end; it's one of the areas we have invested in consistently. We have a good record on investing in skills and apprenticeships through the lifetime of devolution. It's one of the levers we do have and make a difference with. It's also one of the levers where it's harder to do more because of the lack of a proper settlement on post-EU funds. That £1 billion we're going to lose makes a real difference in how we support the economy, how we equip people with skills for today, and for tomorrow, and I really would welcome Welsh Conservatives joining with voices from across the Chamber and wider society and other sectors in calling on the UK Government to revisit what it's done, revisit its broken manifesto promises, and give Wales what it promised it would have, full replacement for former EU structural funds, and that would make a difference to our economic future.

I thank the Minister for his statement today.

I'll start by agreeing with the Government: it is disgraceful that UK Government would rather attack workers' rights than deal effectively with the economic hardships that are facing those workers.

If I could start with one of those hardships, which is energy, the Minister mentioned that the current UK scheme, whilst providing support some support, does nothing to safeguard against energy price volatility. I don't think we'll be able to safeguard against price volatility fully, and in a way that doesn't subsidise shareholders in the private sector, unless we nationalise the energy sector. I hope he would agree on that principle.

Now, the UK Government has decided to significantly reduce support for small businesses through the energy bill relief scheme, which leaves small businesses in Wales facing sky-high energy costs. We have heard already that one in four businesses are considering closing or selling if there is not a replacement energy bill relief scheme. The announcement from the Government on the green business loan scheme is more than welcome and is something that myself, Plaid Cymru, and significant stakeholder groups such as the Federation of Small Businesses and UKHospitality have been calling for, but, additionally, the FSB has been calling for a 'help to green' voucher scheme to be implemented by UK Government, modelled on the 'Help to Grow: Digital' scheme, to help businesses decarbonise. Given the Minister's recent interministerial meetings, would he raise this issue with UK Government and urge them to implement such a scheme to run parallel to a loan scheme here in Wales?

And of course I know the Minister is already raising the issues surrounding steel. Plaid Cymru stands with him in calling on the UK Government to step in and provide the support needed for decarbonisation of the sector. We know steel is vital to decarbonising the economy; we need steel to build renewable forms of producing energy, like the offshore wind the Minister mentioned. That is why it's vital that funding to support steel decarbonisation is forthcoming. Pursuit of decarbonisation, of course, is made harder by the fact that UK steel makers pay 30 per cent more for their electricity than their counterparts in Germany, and up to 70 per cent more than their counterparts in France. I hope the Minister will be able to provide the Chamber with a more detailed statement in relation to his discussions with the UK Government in regard to the steel sector.

Now, we've heard free ports mentioned in the Minister's statement today, as well as in First Minister's questions. I've been clear on my position when it comes to free ports; I don't believe they're the solution to our issues. The Trades Union Congress back in 2020 were saying there's no evidence that free ports create jobs or stimulate growth. I could go on, but the Office for Budget Responsibility has predicted that tax breaks in English free ports will cost £50 million a year. Has the Government made an assessment of the implications here in Wales?

I was also wondering if the Minister could also provide clarity on his role in deciding on which free port goes forward in Wales, as well as what role the Senedd will have in scrutinising the decision. I know it's a joint decision between himself and a UK Government counterpart, but, in the event of disagreement, will he have the final say? But also will Members in this Chamber get a vote on the decision, or even a vote on whether we want free ports at all?

On the first substantive point that he asked about, I'd be grateful if he'd write to me about the detail of the scheme he's suggesting, rather than looking to give a three-word answer in the Chamber today.

On the challenges of reduced support around energy pricing, it's worth people being reminded that, when the UK Government talk about non-domestic customers, they're not talking about public services. So, public services are not domestic customers, but they're excluded from the support, and that will be a real challenge in budgetary terms for those services and a budgetary challenge that the Welsh Government has to meet as well.

When it comes to the responses from business groups, it's been interesting that they have been mixed. Understandably, small businesses are most concerned about the withdrawal of support. There's a range of energy-intensive businesses of small, medium and larger sizes, and I think we will see real challenges with the reduced level of support available. It's still the case that, in my conversations with businesses and trade union partners, energy costs and inflation are still at the very top of people's concerns in running businesses, then labour and skills, and that goes into some of the points about investing in the future, about actually having people to go into jobs where there are opportunities to grow those businesses, and then we still have the challenge of our trading terms with our European partners. On that, there was some modestly positive progress in conversations around the Northern Ireland protocol on data sharing. I hope there's continued common sense in our arrangements, and not a return to previous methods of communication that appeared to be more designed to worsen conditions than the likelihood of successful trade with partners.

I respect the Member for continuing to talk about free ports and making clear his position. I would, though, gently remind him that the position we have reached is not one that is entirely alien to Plaid Cymru. In the previous leadership contest, the person who currently occupies the position of Plaid Cymru leader, at that point, was talking about having more than one free port and about having a free port as a policy position in that.

Now, what a free port is and isn't can be different, because we previously had free ports in the UK when we were part of the European Union, then the Conservatives got rid of them after a different period of time. What's now being proposed isn't the same as what was originally proposed when Rishi Sunak co-authored or sponsored a policy paper. The prospectus that we've got is clear about including fair work, and that's got to be made clear as part of the—[Inaudible.]—and sustainability, things you might not have expected to have appeared if it had been done by the Conservatives on their own in the UK Government, looking to write that bid prospectus. So, it has been a sharing and a compromise between the two Governments. So, we've come to a position where there's something that we can not just live with, but then want to see the opportunities, because, as I said in response to questions from Paul Davies, there are opportunities to invest in ports in different parts of Wales. I look forward to having the professional advice from not just my officials, but input from UK Government officials as well about the nature of each of the bids that have been submitted, and I will then make a decision jointly with the UK Minister. So, it isn't that someone has a veto over the other, it's that we'll need to find a place to agree, otherwise we can't make a decision. 

The scrutiny for that, I expect that we will—. As you've seen last week, there'll be a statement, there'll be an announcement, and I expect that Members will want to question me both in this Chamber, and potentially in the committee that you're a member of, on what's gone into each of those choices and how we've reached a particular position. So, I fully expect that there will be open and public scrutiny on any choice that is made. I hope that's helpful about setting out the choices that we are making and the fact that we're doing something to try to carry forward opportunities to grow the Welsh economy and not to displace activity, which I know was one of the Member's concerns. 

We have almost used the time allocated and I have five Members still wishing to speak. So, can all Members please be brief and can the Minister be succinct in his responses?

I'll try.

Huw Irranca-Davies.

Diolch, Dirprwy Lywydd. Minister, in welcoming the statement today and its very clear focus on social value and social partnership in the economy, can I ask whether Government Ministers will continue to work with those of us—and I draw the attention of the Chamber to my membership of the Co-operative Party and the chairing of the Senedd Co-operative group—those Members who want to see Welsh Government build on its already impressive work on growing the employee-ownership sector of the economy? We thank the Deputy Minister for engaging with us on the Social Partnership and Public Procurement (Wales) Bill, and we do ask how this landmark legislation could more clearly reference employee ownership, but we also ask the Minister whether he will continue to work with us on further ways in which we can grow employee ownership in Wales with non-legislative measures, of course, but also the prospect of groundbreaking legislation here in Wales if a backbencher, perhaps one of the many Co-operative Party backbenchers here in this Chamber, could bring forward a strong and serious proposal during this Senedd term. Would he agree to work with us on that?

I should perhaps note in response that I am also a member of the Co-operative Party. However, in answering the points by the Member, I think it's fair to say this: employee ownership enjoys an important status in the Welsh Government, with a clear programme for government commitment linking our progress to its growth. We believe that the growth of employee-owned businesses will contribute to a stronger, fairer Welsh economy, because they have sustainable development built into their DNA. Despite the rapid growth in the number of employee-owned businesses in recent years, I recognise the ongoing need to celebrate the role that they play. The social partnership and public procurement Bill will contribute to well-being by improving public services through social partnership working, socially responsible public procurement and promoting fair work. We'll now explore ways in which the guidance around the Bill might usefully reference employee-owned businesses. 

Whilst the social partnership and public procurement Bill is not the right vehicle to legislate on employee ownership, I will, of course, work positively with a strong future MS legislative proposal regarding employee ownership. Whilst I can't guarantee that legislation would follow, our commitment to the policy agenda means that we would certainly work with such a proposal. As with our foundational economy approach, and many other ambitious agendas in our programme for government, we believe that progress will be made without legislation, and that is why I do not see a proposal as necessary for action. I'm grateful for the discussions that I and the Deputy Minister for Social Partnership have had with Huw Irranca-Davies to date. We'll now take the opportunity to engage upon how the statutory and non-statutory guidance on procurement and fair work may help to promote the principles of employee ownership within the framework provided by the Bill and in our wider policy.

Can I thank the Minister for his statement, in particular the references to the advanced technology research centre and to the steel industry? But a key component of future economies, both in Wales and across the globe, will be digital infrastructure and digital connectivity. Presiding Officer, I will declare an interest as an unpaid member of the project consortium, 5G project consortium, led by Bangor University. The Minister knows that I don't just want to see north Wales connected, but I want to see north Wales creating and generating the next generation of these technologies. With that in mind, can I ask the Minister what conversations he's had with UK Government counterparts regarding investment in digital infrastructure and the research and development of these types of technologies? 

Yes. Firstly, I have had a number of conversations with counterparts in the Department for Digital, Culture, Media and Sport in the UK Government. I am expecting to have a ministerial meeting within the next few weeks exactly on the potential to invest further in doing so. I'm pleased that, from a north Wales point of view, but I think in every one of our regional economic frameworks, digital connectivity is recognised as not just a key part of the economy today, but an even bigger part of the way the economy will work in the future. This is definitely part of the agenda I have, and I now have, of course, ministerial leadership for the digital strategy for the Welsh Government.

Minister, I think the war in Ukraine has clearly illustrated just how unstable and unpredictable the world is that we live within, and many countries now are working very hard to shore up and support their key industries, their strategic industries. I was very pleased that you referred to the steel industry and indeed the semiconductor industry in your statement, because I believe they are strategic industries that very much need support. Locally to me, Minister, as you know, there are examples of the consequences of the lack of a UK Government strategy that’s everything it needs to be to support and foster development. So, with Liberty Steel, we see the recent announcement as an illustration of the difficulties in the steel industry, and with Nexperia, we see the result of UK Government taking a decision and then walking away from that decision, rather than setting out a viable alternative that would deliver the same sort of development and support for jobs that the acquisition by Nexperia would have delivered. So, with regard to both of those examples, Minister, I wonder if you could say something about what Welsh Government is doing in terms of those current situations.

Thank you. I will try and address the issues as promptly as I can, bearing in mind what the Deputy Presiding Officer said. On Liberty Steel, I've had a conversation with Community about the current situation. We will of course support workers who are facing an uncertain time, but also try to understand what the pause announced by the company actually means. It’s still not entirely clear what that is. What is clear, though, is that there is a future for the steel sector. There’s a future for decarbonisation of the way that steel is produced. That requires investment by the industry itself, but also the Government needs to decide how it’s going to do that. We need to decide whether we’re comfortable with hydrogen production for steel as something that’s going to be developed in the Netherlands in Europe, not here in the UK, and I do think the UK Government needs to be really clear: does it see the steel sector as a sovereign capability for a modern economy, as I think we do here in Wales? And if it does, it needs to act in that way to ensure that investment choices are actually made, including things around the production of scrap and retaining more of that scrap metal here in the UK.

On Nexperia, I’ve had a number of direct conversations around this, both with the workforce and indeed with the UK Government, and actually what we’re looking for is an understanding of the longer term strategy needed for Nexperia and the wider sector itself. So, at some point, as I mentioned in my statement, publication of that strategy would be very welcome for everyone, and the investment choices that should be made, but this is definitely a growth area for Wales.

One of the key strategic infrastructure projects that depends on UK Government support is making progress on the recommendations of the Burns commission to strengthen the east-west rail lines between Newport and Cardiff and beyond, which are the backbone of the south-east Wales metro. I appreciate that transport is not in your portfolio, but I’ve yet to see any progress whatsoever on such a strategically important issue, which is essential for attracting new businesses to south-east Wales. Are you able to report any change of tack by the latest UK Government, any glimmer of hope of Government investment in what is their responsibility, for the east-west rail line infrastructure, which is entirely down to the UK Government’s responsibility? Because without it, I can’t see how we’re going to be able to progress economic development as well as integrated transport.

The Member’s right to point out that this is a reserved responsibility and we look for real progress, not just warm words, being made in this area. The Member’s also right that the Deputy Minister for Climate Change leads in this area. I’m sure he’d be happy to talk to the Member directly, but investing in this area shouldn’t just be good for the economy and for transport; actually, if we did it properly, it would also be part of giving the steel sector a future, and how that procurement could and should be run. It’s part of the challenge about rail infrastructure improvements everywhere in the UK, and I want to see that infrastructure improved, and improved with British-manufactured steel supporting more British jobs.

Finally, Alun Davies.

I'm grateful, Deputy Presiding Officer. I'm grateful to the Minister for his statement this afternoon, although I must say that I find his trust in the United Kingdom Government somewhat touching, and potentially misplaced. We've had a debate earlier today in questions around the way in which the subsidy regime is being managed, and he's quoted himself the betrayal over EU funding. So, I can't see the reasons for that optimism, but we all admire an optimist, and as a Cardiff City FC fan, I'm quite used to it myself.

But let me say this to the Minister: I think sometimes we're in danger of drowning ourselves in process and losing sight of our objectives, and losing sight of our purpose. There are two tests that I will set for the Minister for this statement and the work that comes from it. The first is productivity. Productivity is mentioned almost in passing in this statement, but it's the greatest crisis facing the Welsh economy, and I will want to see investment in improving productivity.

The second test is how it impacts the people I represent in Blaenau Gwent. Too often, Blaenau Gwent is treated as a periphery by the Welsh Government, and we don't see the investment that we require to drive economic growth in the Heads of the Valleys. But, of course, the UK Government doesn't even know where Blaenau Gwent is, and what we're seeing potentially is Blaenau Gwent becoming a periphery of a periphery. So, I want to be reassured that the Government and the Minister will set clear objectives so that the people of Blaenau Gwent can see the consequences of this work, because it is a test of the impact on the people we represent that is the greatest test of all.

I think the Member makes an entirely fair point, as the representative of Blaenau Gwent, as to what will be the impact for his constituency, for the community that he has grown up in and now represents. To be fair, outside the Chamber, Dirprwy Lywydd, the Member makes broadly similar points sometimes a touch more colourfully, but it's part of his role. So, it is part of the test, which is, 'Will it make a difference?', not just for individual projects—we can point to the work we're doing with Thales, for example, but that isn't just founded in Blaenau—but what difference will it make more broadly. So, the work that my colleague the education Minister has seen there about 5G classrooms, and the ability it has to have a much wider, broader and deeper impact. 

On your point about productivity, you're right, of course. Some of the challenges around skills investment, one of the key points, are the adoption of different process improvements, and the difference that that can make in a whole range of sectors; the improvement in leadership and management skills—a key challenge in the Welsh economy; but also the adoption of not just new and leading edge technology solutions, where, actually, a lot of the adoption is about things that are already mature. The pandemic, for example, forced lots of businesses to go into the online world where they hadn't been. Well, actually, there's an opportunity there in operating in a different way. There's also the need to then make sure that you're secure online as well. It's also about understanding simple ways that are adopted and mature in other sectors to make sure you are driving more business and more traffic your way.

I do think, though, that as well as all of those challenges where we understand them—I wouldn't quite put my constructive approach to relations with the UK Government quite the way that the Member would—but there are areas where we see different parts of the UK Government behaving differently. Some are more difficult to deal with than others, and as I mentioned in the statement, the advanced technology centre, for example, that should be based in Jack Sargeant's constituency. Actually, that's a good example of where we can work together, and we want more of that and less of the betrayal that absolutely has happened on the shared prosperity fund, which is something that we'll continue to discuss until the position is resolved. Maybe that will require a change in the UK Government.

I thank the Minister.