The Welsh economy faces enormous headwinds and the consequences of economic shocks have been pushed into the lives of families and businesses everywhere.
There can be no doubt the UK Government has heaped home-made, preventable harm on top of global crises that have seen the UK’s economic forecasts slump to the bottom of the G7 table. This would be bad enough in normal times, it is unforgivable now and it has serious, specific implications for Wales.
It means a smaller Welsh Government budget over the coming years, squeezing opportunities for investment in growth-enhancing activity on skills, innovative business support and much needed infrastructure projects. Any analysis of the levers available via Welsh rates of income tax demonstrates that the Welsh Government simply cannot raise enough, fairly enough to make good the holes created by the economic crisis and ensure higher pay in our public services.
It would not be right - during a cost of living crisis - to ask a parent earning £12,500 per year to pay in extra money they simply do not have, while the Chancellor refuses to ensure that those enjoying non-dom tax status contribute their fair share. The Prime Minister also left enormous loopholes within the paltry substitute for Labour’s proposed windfall tax he reluctantly adopted last year.
As Wales qualified for higher levels of EU funding, the UK Government’s failure to replace these funds leaves Wales with less say, over less money. Every decision on every project is now taken in Whitehall, in an increasingly risible levelling up process that is costing Wales jobs and projects.
The contribution of the Welsh business community, universities, colleges, charities, and trades unions are altogether dismissed and ignored. In a recent article for this paper, the vice chancellor of Swansea University, Professor Paul Boyle, was clear that by shutting out higher education, UK levelling up funding pots will threaten hundreds of existing jobs in innovative, high value projects that are essential to our transition to net zero. That is not caused by the war on Ukraine or Covid, it is the direct result of a bizarre political choice taken by the UK Government.
Read More: Vaughan Gething on Cardiff Airport
My focus as Wales’ Economy Minister is wedded to the same priorities I set out in 2021 - to support better jobs in stronger businesses, narrow the skills divide and tackle poverty in a stronger Welsh economy. We remain committed to the long-term with actions that reinforce our prospects for stronger economic health for good.
This week, we mark the 10th anniversary of Business Wales, a brand that is an asset to our economy and trusted by business. The service has helped to create nearly 47,000 jobs, supported 19,000 new start-ups and provided wider help to over 390,000 entrepreneurs and businesses. FSB Wales has held up the service as ‘invaluable and responsive infrastructure’ that proved its unique value as the pandemic hit. Within a tighter budget, I have had to take difficult decisions to protect this crucial service - which has relied upon EU funds – committing an extra £10m per year until 2025.
The health of our businesses will rely on the workforce as well as business leaders, whether they are in work today or due to enter work in the future. Our new curriculum will support enterprising, creative contributors that are ready for the world of work. This is a major reform, years in the making, and that is only possible with a stable government that is not mired in sleaze and scandal.
For those already in work or preparing to join the labour market, we are redrawing budgets to prioritise their skills and training. As pledged, we are expanding our free, flexible courses for those on low pay to help meet workforce gaps and build green skills through our Personal Learning Accounts initiative.
This investment has helped boost the number of HGV drivers, as well as those working in green energy and construction with an offer that is responsive to the needs of businesses and workers. We are also protecting degree apprenticeships to back learners with strong prospects in the higher value sectors that bring better pay and more innovation to Wales.
EU funds previously supported around 5,000 apprenticeships each year in Wales. Without that investment and in the face of inflationary costs, I have invested an extra £18m to support quality, all-age apprenticeships that are proven to unlock higher earnings in better careers.
However, even after cutting budgets elsewhere to boost this investment, that funding gap and greater costs means we are now forced to push back the target of creating 125,000 apprenticeships by the end of this Senedd by one year. During the last Senedd, we exceeded the commitment to deliver 100,000 apprenticeships and this is a top priority that will be supported despite the economic crisis we face.
The potential of the everyday “foundational” economy around us will also be a priority as we develop more opportunities for local businesses to deliver their great products and services across our public services. I recently launched a new project which will see more Welsh produce on the plates of our schools and hospitals to help open up more opportunities for Welsh businesses.
Later today, I am meeting with our flagship Development Bank of Wales to talk about their latest plans to support SMEs with a green loans initiative, offering practical help designed to lower energy bills for good. DBW is the UK’s first regional bank and it will play a major role in the future of our economy as a dedicated, expert source of financial help.
These priorities are important for our long-term prospects, but UK economic centralism holds back opportunities representing another home-made, preventable problem. A clear UK economic strategy based on strengthening what we do well would, by definition, boost investment in Wales, get growth up and inequality down. By investing in areas such as steel, semiconductors, renewables and nuclear with clarity on long term objectives, better jobs would be protected and created in stronger Welsh businesses.
The UK Government has had three growth plans in as many years, it is time for it to choose a business model for the UK economy and see it through. That is the challenge we will continue to take to UK Government Ministers to boost investment in Wales.
In the difficult times ahead, the Welsh Government will be clear about its priorities and put partnership first, so that we build the stronger, fairer, greener Wales we all want to see.
Read More:
Development Bank of Wales with designs on new British Business Bank funds.
Launch date for British Business Bank's new £130m Wales fund
