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Establishing Wales as a centre for outside investment

Submitted by on 23 Nov 2010 – 16:01

Cheryl Gillian MP. Photo: The Prime Minister's Office.

By Cheryl Gillan MP, Secretary of State for Wales

It’s not often I find myself agreeing with my predecessor Peter Hain.

But he was right when he said the private sector in Wales is too small.

My regret is that he didn’t persuade his Labour colleagues to do anything about it in 13 years of government.

On practically all the main economic indicators Wales, is lagging behind the rest of the United Kingdom.

The unemployment rate is higher than any other UK nation, half-a-million people are economically inactive, wages are lower, the prosperity gap is widening, and too many people are trapped in the cycle of worklessness and benefits.

That’s why the spending review is one of the important keys to shaping our economic future.

It is about promoting a more balanced, sustainable level of growth, making the sums add up, delivering value for money, and supporting those in genuine need.

The Chancellor is right when he says Britain can get back on the road to economic recovery without sacrificing growth or becoming an unfair society.

And he is right to start now.

Failing to do so now would guarantee economic chaos and put growth and prosperity at risk.

The Bank of England, OECD, the G20 and the President of the European Commission all agree that making savings early is the right thing to do.

And in Wales it is only by growing our private sector that we can reverse the years of economic and social decline which blight too many of our communities.

Recently the Prince’s Trust found one in five young people in Wales felt their parents did not have the knowledge to help them find work. The children themselves said they felt talentless and often expected to follow in their parents into unemployment.

Rather than condemn young people to a lifetime of dependency we are taking action to revolutionise the existing failed benefits system, making it easier to help people into work, providing support for those who need it, and making it fairer to those who contribute to the welfare state.

Devolution allows two governments to work together on the action needed to grow the economy. But this requires co-operation.

I will do all I can – working with ministers in Cardiff and at Westminster – to help businesses in Wales to grow and to help individuals find work.

I welcome the principles of the Assembly Government’s recently published economic renewal programme in making Wales open for business.

But they will be judged on whether or not they can turn these principles into achievements.

There have been a number of success stories in Wales, from Amazon’s distribution centre in Swansea, Tata’s investment in the Port Talbot steel works, and Admiral Insurance – Wales’ only FTSE 100-listed company – which recently announced plans for a new HQ employing 3,000 people in Cardiff.

Projects such as the new BBC drama village being constructed in Cardiff Bay will also provide a centrepiece for the creative industries.

Inward investment projects can have a dramatic impact on local economies, creating large numbers of jobs and generating significant amounts of wealth in a relatively short space of time.

But we also need businesses to start up, to remain and to grow in Wales and successful Welsh business people to return to Wales bringing back their expertise.

Wales offers significant benefits to outside investors, including a diverse and highly skilled workforce coupled with comparatively lower costs of living and wages. All this without sacrificing proximity to London and the South East.

That’s why I welcome the government’s decision to freeze National Insurance contributions on the first 10 new employees for any company who start up in the UK, outside London and the south east.

We are also reforming the corporate tax structure, with an ambitious aim to have one of the most competitive corporation tax regimes in the G20 within the next four years. This will ensure Wales and the rest of the UK remain attractive to foreign investment.

By unleashing the entrepreneurial spirit in Wales and freeing businesses from the shackles of bureaucracy, we can drive up living standards and end the culture of welfare which all too often smothers opportunity and talent.

I am under no illusions about the difficult decisions being taken to deal with the profligacy of the previous Labour administration.

As well as paying for the bills of the past, this Government is planning for the future.

We are creating conditions for private sector-led recovery.

But without a strong economy and stable national finances we cannot do the things we want to support businesses, support hard work, support saving and investment, support the vulnerable, and support communities.

In Wales the test of these aims is whether it lifts our country from the bottom of the UK’s prosperity league table – a position it has occupied for far too long.