Tourism, the Promotion of Wales Overseas, Exports and Inward Investment

2011 Gorffenaf 13 4:29 PM
Gan Peter Black
Cyhoeddwyd yn wreiddiol gan Peter Black a Democratiaid Rhyddfrydol Gorllewin De Cymru

Peter Black: I move amendments 1 and 3 in my name.

I will carry on from where Andrew R.T. Davies finished with regard to the abolition of the WDA. I supported that decision and I have not changed my mind, but the problem was that, once the WDA was abolished, there was no strategic take-up of the work that it was doing to attract inward investment to Wales. In 2004, Wales attracted around £4.5 billion of foreign direct investment, which more than trebled the following year. However, since then we have fallen back. As Andrew pointed out, we have fallen from second to ninth in the inward investment tables produced by UK Trade and Investment and Foreign Direct Investment. We have taken our eye off the ball as regards attracting inward investment to Wales.

Starting to address that problem is a huge issue. We need a more structured and strategic approach to attracting inward investment. If we are not going to bring back a purpose-built quango like the Welsh Development Agency, we need to start putting in place co-ordinated and concerted efforts to do the same job under the auspices of the Welsh Government. That has not happened since the WDA was abolished and does not appear to be happening as yet under the current Government.

The Welsh Liberal Democrat amendments hopefully address this in two ways. First, on a Welsh stock exchange, I noted Andrew's comment that he is agnostic on this point. We believe that a Welsh stock exchange would serve two purposes: it would help to raise capital for Welsh businesses and would help to promote the Welsh economy across the world. Access to credit for medium-sized companies is notoriously difficult at the moment, and when access to credit is difficult, many companies list on a stock exchange. However, a good number of companies in Wales are unable to list on the London stock exchanges because of the high associated costs. Even the alternative investment market-the smaller branch of the London stock exchange that is aimed at smaller companies-is still out of the reach of many Welsh businesses, as the associated costs are too great. A Welsh stock exchange would be easier for many to access. If it focused primarily on medium-sized businesses, the regulatory regime could be more proportionately designed in order to attract a variety of companies into its fold.

Another advantage of a Welsh stock exchange is that it would put down a marker that the Welsh economy is open to global investment. There are few successful economies-even those in smaller countries than Wales-that do not have their own stock exchange. A Welsh stock exchange is viable; a recent Federation of Small Businesses study found that 34 per cent of members would support a stock exchange for Wales and 21 per cent of members would consider floating their business in the short or long term. Like the Welsh Liberal Democrats, the FSB has called for a feasibility study into establishing a stock exchange. The previous Government committed itself to looking at the feasibility of a Welsh stock exchange, but the new Minister for business has confirmed that the Government will not pursue this issue, as it believes that the private sector should instigate it. However, we argue that the Government should initiate this. A stock exchange should be seen as part of an essential infrastructure established by the Government and adopted by the private sector. For the next few years, it is possible that a stock exchange would need a subsidy to ensure that it was viable in the first instance. That kind of seed funding is, in our view, a price worth paying if it helps to bring new forms of capital into Welsh companies. With that in mind, we urge the Government to reconsider its position on not establishing a Welsh stock exchange.

Our other amendment concerns investment in skills, which can be used to improve the ability of Welsh businesses to compete overseas and to attract overseas investment into Wales. The succession of reports highlighting the poor performance of the Welsh education system shows just how much of an opportunity we are missing. This is not only devastating for the individuals concerned, who may miss out on life opportunities, but is also seriously damaging our ability to improve the nation's skills to create the high-level jobs, products and enterprises that will set Wales up as an international player in the business world. Unfortunately, Wales is losing out to other regions in the UK with regard to foreign investment. We need to start reversing that trend, which, combined with the points made here in this motion and our amendments, would be the start of turning this around and putting Wales, once more, in the top two areas with regard to attracting inward investment.

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