Not long after the UK General Election gave Labour a substantial mandate to pursue a policy of economic growth, a very different story was unfolding in Wales as the devolved parliament entered another period of uncertainty.
With Vaughan Gething’s resignation as First Minister, businesses were fearful that high politics – rather than the tough decisions needed to set the country on a path to growth and prosperity – could take centre stage once again. Fortunately, the swift election of Eluned Morgan means that a prolonged period of uncertainty should be avoided.
Wales’s incoming leader can get on with tackling the substantive issues that are holding back the local economy. The negotiations over the future of the Tata Steel facility in Port Talbot are at a critical stage after months of uncertainty for employees, their communities and the supply chain. Key challenges around upskilling and retraining the local workforce, improving connectivity, and building a sustainable net zero economy will also fill her Economy Secretary’s in-tray.
There are also fiscal matters at stake, as the Welsh Government’s Budget must be passed soon so that people can continue to access high quality public services. These support the local economy and people across Welsh communities, many of whom have not been able to work due to ill health or caring responsibilities since the pandemic.
The King’s Speech provided reassurance for business as he set out the Westminster Government’s programme of big choices and bold moves that are needed to deliver a shift in gear for the economy. Firms across Wales know public finances are tight, but there were bold signals of intent and a positive vision from the new Labour administration, particularly around speeding up planning systems and approvals for major infrastructure projects. At a local level, that could really support the freeports in Neath Port Talbot/Milford Haven and on Anglesey, as well as road and rail projects.
There was also good news for unlocking investment in areas like renewable energy.
Promoting a more joined-up approach between local and national government will allow us to really capitalise on major opportunities, will ensure projects are more responsive to local needs, and will give businesses the confidence they need to unlock serious levels of investment. We also want firms to thrive and we want to improve Wales’ productivity rates with the improved UK tax receipts leading to better funding for high-quality public services and infrastructure everywhere.
In the wake of the General Election, Wales also welcomed a new Secretary of State for Wales, Jo Stevens. Representing Wales at Cabinet level is undoubtedly a brilliant job, and I have already written to Jo to offer my congratulations. But it is also one that carries a huge amount of responsibility. To help the new Secretary of State we’ve outlined three key priorities for Welsh businesses and stand ready to help in any way we can.
Firstly, business would like to see closer working with the Welsh Government to produce a single, unified, export and trade offer – one that firms believe would be more impactful than the current approach of distinct devolved and UK level policies. With the value of goods exports from Wales worth almost £20 billion last year, this would allow for the development of a clear strategy to ramp up foreign direct investment in Wales.
Secondly, Welsh firms continue to highlight access to labour and skills as a barrier to growth. With devolved funding for apprenticeships under pressure, the Apprenticeship Levy urgently needs reform. The current rules mean that companies cannot allocate their Levy funding to be directed to train workers in the devolved nations. Removing this blocker would free up tens of millions of pounds into the local economy.
Finally, we really need to up our game on productivity to achieve long-term prosperity. We need an innovative net zero policy that can drive late-stage innovations that improve productivity while pushing forward a just transition, which should be a national priority mission, to support workers with skill sets in traditional industries across our local economy.
With inflation back on target, the economy is beginning to pick up steam and Wales can’t afford to be left behind. This requires a relentless focus on delivery by the UK and devolved governments, deploying the capability and capacity of industry to turn these measures into swift and bold action.
