Good afternoon and thank you to David Soutter for inviting me to speak today here, at Enterprise House.
I have been asked to speak to you today about the importance of business to Wales and how important the Assembly is to small and medium sized Businesses.
The Reserved Powers Model allows the Assembly – or Welsh Parliament - to make laws on matters that are not reserved to the UK Parliament.
This means that the Assembly is responsible for Business support, economic development and employability in Wales.
I am not a member of the Welsh Government and I speak today as an Assembly Member representing North Wales, as Welsh Conservative Shadow Minister for North Wales, Communities and Local Government, and as a former member of the Assembly’s Economy, Infrastructure and Skills Committee, which examines legislation and holds the Welsh Government to account by scrutinising expenditure, administration and policy matters, encompassing economic development; transport; infrastructure; employment; skills; and research and development, including technology and science.
The fact that Wales is a nation of small and medium sized enterprises should always be key to Welsh Government policy making.
My Party wants to put SMEs at the centre of economic policy in Wales to boost job creation, address regional inequality and increase wages – where Wales has the lowest level of weekly wages across the UK.
There are 248,425 micro, small, and medium sized businesses in Wales, which collectively make up 99.3% of all enterprises operating in the country and account for just under 65% of total employment across Wales.
SMEs are especially important drivers of growth and job creation in rural areas of Wales, where larger firms are less present.
As of 2017, Figures from the Federation of Small Businesses (FSB) show that Wales’ 240,000 small to medium sized businesses turned over £46 billion a year, equivalent to £126m per day.
To put this is context, the Welsh Government’s discretionary budget for 2016/17 was £15.3 billion.
FSB research has identified the key megatrends affecting towns in Wales today and made some suggestions on how towns can shape their own destiny against them, as well as embracing new trends and technology in order to ensure the future success and sustainability of our towns in Wales.
They are calling for :
- Published town strategies in every town – ensuring the ownership is local and businesses, voluntary and public sectors are engaged.
- Introduction of a Future of Welsh Towns Fund – to support towns to develop and deliver their own strategy and local interventions.
- Incorporation of demographic change in strategies – Looking at how future trends will change the local economy, using the Wellbeing of Future Generations (Wales) Act.
- Introduction of ‘digital’ town centre managers – Collating the efforts of independent businesses, the voluntary sector and public services into one regularly updated town offer.
- Consideration of the of establishment of a property register – to help build a basis for engagement, where interventions often fail with absent or unidentifiable landlords.
- Adoption of new uses for towns – retail is important but some towns could change the use of buildings to support new offices, residential, community or even coworking spaces.
- And rethinking of the role of business rates in towns – replicating the recently announced English relief for high street businesses and then better consideration of the impact of rates on our towns in the longer term.
In my meeting with the Welsh Retail Consortium this week, they also called for:
- “tangible headway to made on recasting the rates system for the future, to ensure that Wales does not get left behind as developments take pace in the other UK Nations”.
- for introduction of a Regulatory Review Group
- and for a commitment to rule out increases in Welsh Rates of Income Tax.
According to FSB figures, self-employment in the UK grew from 3.6m to 4.33m between 2007 and 2016, and accounted for 44% of total jobs growth.
During the same period, self-employment in Wales increased from 161,000 to 176,000, representing 38% of total jobs growth.
The UK Government has commissioned two major reviews over the last three years, which help better understand the nature and implications of this rise in self-employment.
The FSB notes, however, that in Wales, the Welsh Government has so far failed to respond to this.
Moreover, although there has been growing interest in Wales in these trends as a research topic, the regional, sub-regional and, in particular, local trends remain largely under researched.
Given this change in employment, FSB Wales have identified eleven key policy issues and associated action points emerging from their research into self-employment patterns and experiences in Wales.
These include:
- macroeconomic policy;
- supporting entrepreneurship and local economic development;
- replacement demand and succession planning; collaborative local economies;
- networking the self-employed;
- the regionalisation agenda;
- overcoming barriers to self-employment; promoting self-employment;
- skills policies for the self-employed;
- housing policy and the self-employed;
- and business premises.
Taken together, they formed the basis for a necessary policy review in Wales, which takes account of the significant increase in self-employment over the last decade.
Last year I took part in the Economy, Infrastructure and Skills Committee report on Enterprise Zones – and I Chaired the Committee in North West Wales when we took evidence from the Anglesey and Snowdonia Enterprise Zone Advisory Boards.
Each emphasised the need for their work to continue.
The subsequent Committee report stated that “there is little evidence to show that Wales’ 8 Enterprise Zones have been transformational in terms of job creation – but different outcomes are inevitable because each has faced different challenges and different local circumstances”.
It also found that “a recurrent theme among Enterprise Zone Chairs was the lack of available property for businesses and that there is a lack of modern floor space across Wales”.
I have been a strong and active supporter of the North Wales Growth Deal from inception.
The UK Government announced in its March 2016 Budget that it was ‘opening the door’ to a Growth Deal for North Wales and that it would be looking for the Welsh Government to devolve powers down and invest in the region as part of any future deal.
In September 2016 I then led a Welsh Conservative Debate on the North Wales Growth Deal in the Assembly, noting that:
- this was supported by the leaders and chief executives of all six unitary authorities within the region, the North Wales Business Council, Bangor University, Glyndwr University, Coleg Cambria and Grwp Llandrillo – Menai (College).
- the North Wales Economic Ambition Board’s consequent “Growth Vision for the Economy of North Wales” set out shared aims and aspirations for “a confident, cohesive region with sustainable economic growth, capitalising on the success of high value economic sectors and its connection to the economies of the Northern Powerhouse and Ireland”.
- and that North Wales is well placed to receive a range of new responsibilities, and is confident that negotiated powers that will be devolved to the region will have a positive impact, boosting productivity levels and improving the employment prospects of our residents”.
I have subsequently repeatedly highlighted and supported the North Wales Economic Ambition Board’s call for the devolution of powers to North Wales.
In January 2018, after the Growth Deal Bid from North Wales had been submitted to both the UK and Welsh Governments, I questioned the Economy Minister, Ken Skates, over “the Growth Bid's invitation to the Welsh Government to support the formation of a Regional Transport Body to deliver strategic transport planning and projects in North Wales, on a region-wide basis, with powers delegated to the body from local authorities and Welsh Government to allow it to operate in an executive capacity, with a regional transport fund of £150 million over 10 years, including the Welsh Government's existing £50 million for the North Wales Metro commitment?”.
Mr Skates instead told the Assembly that he had instructed Transport for Wales to bring forward proposals for a North Wales Office, and that he had already established a North Wales Metro Steering Group.
Speaking in the Assembly in September 2018, I again called on him to respond to calls from North Wales for more capacity and flexibility to make decisions at a regional level.
I stated that “The North Wales Economic Ambition Board had published a ‘Growth Vision for North Wales Draft Proposition Document’, which identified ‘poor transport links and physical infrastructure’ as ‘hindering journey time, especially to major hubs’, and identified five Integrated Travel Zones they wished to focus on, including the A483 and Wrexham Town Centre, as well as Deeside and through to North Anglesey”- and asked him to respond to the Board’s statement in this document that they seek the support of UK and Welsh Governments ‘to be given more capacity and flexibilities to make key decisions at a regional level’ where ‘our approach advocates regionalism and devolution'?
In his reply, the Cabinet Secretary stated that he “warmly welcomed proposals within the proposition document for those five key zones” and “for the creation of a regional transport body”.
At last November’s North Wales Growth Bid conference, I was advised that Mr Skates had instead proceeded with his own proposal for a North Wales Transport Office.
Last Month I met Lee Robinson, North Wales Development Director for ‘Transport for Wales’, the Welsh Government’s wholly owned Transport Authority, to discuss issues including disability access, joint transport authorities and the need for regional decision making at a regional level. I was also told that clarification about the ‘North Wales Metro’ is anticipated over coming weeks.
Last October’s budget announcement by the UK Chancellor of £120 million of funding for the North Wales Growth Deal, supporting investment, jobs and prosperity in our Region – was followed by the Welsh Government’s announcement of match funding for this last December.
The Growth Bid proposals united Local Authorities, Businesses, Further and Higher Education across North Wales.
Heads of Terms on the Growth Deal were due for agreement by the end of February.
This was then deferred to July – and then to October/November.
Once Heads of Terms have been agreed it is understood that it would take 4-6 months to finalise the business cases ahead of a final announcement.
To complement the forthcoming North Wales Growth Deal, now expected in 2020, the North Wales Economic Ambition Board announced in June its plan for investing up to £7 million from Wave 3 of the UK Government’s Local Full Fibre Networks programme, which will see Gigabit capable fibre and Ultrafast broadband services being used to connect up to 400 further sites.
I cannot conclude without mentioning the “B” word – but rather than getting into the politics of this, I will leave the last word to Ian Davies, South Irish Sea Trade Director for Stena Line, the Port Authority at Holyhead, who stated this week that the UK is now far better prepared than March 31, the original Brexit date – and that although there will be disruption, that this will only be for the first day or two, just because of uncertainty but this will be very short term.