Good morning/bore da,
I would like to begin by thanking Emma Watkins and Karen Thomas for hosting today’s discussion – events like these are so important because they give us the chance to share thoughts, gain feedback and to help people like me to explain the direction of policy.
After all, there has never been a more important time to listen, respond and to communicate actions in light of major changes that have taken place and the consequences ahead of us.
I’d also like to thank David Smith, Dylan Jones-Evans and Michael Plaut who will be contributing later – David’s expertise and analysis is recognised throughout the UK and beyond.
There is no one individual who has done more to champion entrepreneurialism than Dylan Jones-Evans; and Michael Plaut is someone that doesn’t just talk about it. He does it. He is an exporter and wealth creator helping us pay for the public services we need.
So talking about anything today, other than addressing some of the big issues we face - head on - would be a dereliction of my duty as Secretary of State for Wales.
The referendum on June 23 changed everything. The government has to respond and we have set out our plans to offer certainty in our approach, as much stability to the markets as we possibly can and reassurance to industry.
First of all, we are determined to proceed with our timetable to deliver the will of the British people. Yesterday’s judgement was disappointing and the decision will be appealed. We must not forget that the UK, including Wales, voted to leave the EU in a referendum approved by an Act of Parliament and we will respect the result of the referendum.
Consequences of different outcomes yesterday were obviously considered beforehand and even if the verdict had gone the other way, there were widespread reports that there was a likelihood of appeal by those challenging the government position. Some felt that this was always going to end up in the Supreme Court.
Whatever the outcome of the appeal there is an obligation on individuals of all views, from whatever political persuasion – across different levels of government - to respect the referendum and to act in the interests of the British people. This is to allow the government to give the certainty business needs. Although it may be tempting for some to make political capital, this has to be everyone’s priority to give you as investors and employers the certainty you want.
The second element, is the approach. We have announced the Great Repeal Bill. This will convert the body of existing EU law into UK domestic law, as it is. – The same standards, same rules, same regulations, same measures – the same obligations that we have to live and work with now, into UK law. The key difference being will be that Parliament will be free to amend and improve them in the future. I don’t think the significance of this approach has been appreciated by everyone. It does two really important things.
The first, to offer certainty to businesses like you, that as we exit the EU, we will have the same practices as now; and secondly, it sends a clear message to EU leaders that we are not tearing up the rule book and abandoning common practices. We want to reassure them that we want to work with them as we negotiate our exit from the EU. It is in our own interest the EU economy continues to grow and in their interest ours does.
Even before we get to these two actions – much work is on-going and has been conducted since last June.
Although I can’t go into detail of our approach, please take confidence from the analysis and scoping that has and is being conducted of our economic position.
For example, we have been looking at the sectors of the economy in detail, how they integrate, their value, their importance to different regions and nations. Their key markets for import and export and the actions we need to take to best support them.
To Wales, aerospace, steel, automotive, agriculture, financial and professional services are central to our consideration.
The new Department for International Trade is fundamental to our future marketing opportunities and naturally, some markets are more significant than others. You only have to look at national statistics at the value of exports of different nations to the UK economy.
The scoping and analysis and what sustains these sectors in the UK and actions needed to support them is part of our consideration ahead of Article 50 being invoked.
But we approach Brexit from a position of economic strength – the IMF say that the UK is the fastest growing G7 economy this year.
We must take confidence from the broadest economic data published – quarterly growth/ Bank of England Adjustments.
The largest Japan – UK investment in history – also the largest Asian investment on record to the UK, Softbank’s £24Bn acquisition of iPhone chipmaker, ARM - was signed in July.
Only last week, Nissan, part of one of those key industrial sectors I referred to earlier - committing to the new Qashqai and X-Trail production lines in Sunderland. Major boosts of confidence in the post-Brexit UK economy that will send key messages to others considering investing.
Here in Wales:
*We have a record number of people in work and unemployment continues to fall – the lowest rate across the UK.
*Research by Barclays showed that Wales saw a boost in GDP per capita of 9.7% on last year, a growth level ahead of London, the North East and West.
t’s also good to see that small businesses in Wales have increased their turnover over the last year, with Cardiff leading the way with 12% growth, the third fastest growth across the UK, outpacing London at just 7%.
Importantly, Wales has come a long way in terms of its exporting capability over the last few years – the value of Welsh exports has more than doubled since 1999 and stands at £12.6 billion in 2015, with 60% going outside the EU.
Last year the USA remained Wales’ largest market, with £2.8Bn of goods and services making their way across the Atlantic. Non EU countries such as Singapore, Quatar and Japan all feature in the top 10 destination for Welsh exports.
Engines from Ford in Bridgend and GE in Nantgarw are great examples of successes. Every two seconds, a GE powered airplane is taking off somewhere in the world.
Such is our success in this sector that over half of the world’s commercial aircrafts are now flying using wings made by Airbus in Broughton.
Specific investments come from Toyota’s plans to build the next generation hybrid engines at Deeside is a further boost and on Monday the FM and I were with Aston Martin in St Athan – specific Welsh examples of investment takin place in Wales.
Productivity is still a challenge which the UK Government and Welsh Government must work together on.
Looking ahead, we also need to consider what further opportunities are there for export growth. Whilst power generating machinery and equipment was the highest value export product in 2015 I believe we can see further growth here as well as in other sectors.
I want to open new markets and this is where our dialogue is important.
The DIT is a Whitehall Department that will work for the whole of the UK and Liam Fox and I are determined to reflect the needs and opportunities for Welsh businesses. Just yesterday, the Minister from the department, Lord Price was in Cardiff with my colleague Guto Bebb, meeting Ken Skates and Welsh businesses. Ken and I are determined to work closely so that we compliment the activities of both Governments.
Every business here is equally entitled to the support offered to any business in Bristol, Bath or Birmingham. The Trade Missions, Embassy and Consulate support and the Networking opportunities and I will have more to say on this over the coming weeks.
UKTI as was, - has a good record in supporting Wales, where 90 out of the 97 Foreign Direct Investment projects in Wales last year received their support.
As we look ahead to the next few years, be assured that the UK Government is committed to doing all it can to provide certainty and stability for business.
I’m passionate about selling Wales to the world and bringing inward investment from across the globe into Wales. This is essential if we are to build on our country’s strengths and drive the economic growth that we all want to see.
As we prepare for our negotiations to exit the EU, I want to make sure your voices are heard directly. I mentioned Lord Price yesterday and just two weeks ago I introduced David Davis, Secretary of State for Exiting the EU to Welsh Vice Chancellors so they could air their views in person. I will have more such opportunities and I want you to play a part.
So I urge you, as key players in business and industry, to engage with my department, to champion your successes, to share your difficulties and to communicate your demands so that we don’t only get the best deal for the UK but also the best deal for your business.