Good afternoon and thank you for the kind invitation to address you today. It is a real pleasure to be with you here and to be back in Swansea - a ‘top flight’ city in more ways than one!
I am so pleased that we have heard from Robert on the work of the Autism Society. As the sponsor of the Autism Bill, I know how important the issues he raised are.
Swansea Business Club
I understand that in 1949 one of the founding principals of the Swansea Business Club was to: “assist the development of the Town and Port of Swansea”.
I share those aims and today I would like to outline what the government is doing to boost the economy - here in Swansea, across Wales and the UK.
I would also like to cover our business support activities. For me the two are linked - by supporting and encouraging the private sector we can re-balance the economy and get it back on a sound footing for sustainable growth.
First year in government
The coalition has been in government for just over a year but we’ve already made significant progress on a number of key issues and I hope our credentials for doing this now speak for themselves.
Over the past year the economy has grown by almost two per cent. The private sector has created more than half a million extra jobs, while youth employment across the UK has fallen below the level we inherited from Labour. Businesses have invested £88.6 billion across the economy, up six per cent on the year before.
We are clear that future growth is about business. In the end, it is not government - at any level - which creates growth. It’s business. But you do need some very basic things from us to help you create the wealth and the jobs.
On forming a government last year, we inherited a £890bn deficit that was due to grow to £1.4tn. Our entire economy was unbalanced and our international reputation was at risk; this threatened the financial stability of the whole country.
Tough action was needed. And I am pleased to say that this government grasped the nettle.
Plan for growth
From the very first days in government, our plans for the economy have been clear; growth must come from the private sector. We can (and will) provide the framework - but your businesses, large and small, must invest, hire and export, to ensure the jobs that the people of Wales need.
When it comes to restoring our country’s economic credibility I believe we are on the right track. Last year’s Emergency Budget was about rescuing the nation’s finances and paying for past mistakes.
My predecessor has argued there was no decade of debt and that borrowing was not out of control under the last government. The Shadow Chancellor wants us to rip up plan A and consider plan B. The harsh truth is the Shadow Chancellor and the former Prime Minister didn’t leave this country with the luxury of a Plan B.
We are sticking to Plan A because it provides credibility, stability and confidence in our economy. It’s been backed by the IMF, the OECD and every major business body in Britain. And it is essential if we are to put the public finances back on track. Only this week the governor of the Bank of England made clear that it made no sense to change our economic policy.
We never said this would be easy. But having started the rescue mission we are now reforming the economy to ensure jobs and growth for the future, and doing what we can to help families with the cost of living. Creating the right conditions for businesses such as yours.
Welsh businesses must have the tools to deliver improvements for the economy in Wales and remove the barriers that stifle growth, choke enterprise and suffocate our economy.
This includes removing unnecessary layers of regulation and bureaucracy. It is staggering, but there are more than 21,000 regulations active in the UK today, and these rules have the ability to tie us up with red tape day in and day out.
It’s why we launched the Red Tape Challenge earlier this year and are asking businesses such as your own to let us know what it is that holds you up and causes you frustration.
But what should we focus on to allow you to get on with your job of doing business? You must tell us. I would encourage you to get involved. Have your say. Help shape the regulatory environment you operate in.
Business tell me one of the big issues is getting access to the finance you need, particularly for the small to medium sized enterprises that make up so much of our business sector. This remains a priority for government. The latest lending figures show that the Banks are broadly on track to meet the stretching target that was agreed. I can only re-emphasise the message that if the Banks are unable to meet the agreed targets then we will take further action to bring this lending about.
We are starting to see some sort of return to normality. The Chancellor’s announcement on Wednesday that we are looking to return the Northern Rock to private hands is a sign of this.
The fact is this government is dealing with the consequences of Labour’s failure. We are putting in place a new system of regulation, led by the Bank of England, which will lead to a safer banking system. We always said we will look at all the options for Northern Rock’s future. But it’s now time we started to plan the taxpayer’s exit from the banking system. It may take several years but we can start that process.
You will be aware that we announced in our Budget in March that we are creating ‘Enterprise Zones’ in England. I have encouraged the First Minister to use the money that has been passed to Cardiff to introduce something similar for Wales. We cannot afford to have investment drain out of Wales and I am pleased with the First Minister’s recent statement that he will work with us on this. I, for one, am looking forward to seeing exactly how his government intends to do this - and crucially WHEN - so Wales and Welsh Businesses are not disadvantaged.
Another key strand to our strategy is export support to companies. That is particularly important in Wales and is at the heart of the recent UKTI strategy: ‘Britain open for Business’. UKTI, in partnership with other government Departments and business, will work over the next five years to realise our ambition for growth through trade and investment.
I am working closely with Lord Green and Welsh government Ministers to put Wales at the heart of that ambition. We have a shared aim of getting the levels of investment back to the levels they were 20 years ago.
I have spoken in the past about the dangers of drawing down a “slate curtain” along the border between Wales and England. You in business know only too well that you cannot operate successfully in isolation from other markets.
I am convinced political engagement between our two governments is vital to our economic success. Working together in the national interest to deliver more jobs, more investment, and better services.
With many challenges facing Wales today people are looking to government for bold, decisive action, using every means at their disposal to make a real difference. Not tinker with process. Or complain about what they can’t do.
People want to know what you CAN do. And how you’re going to go about doing it. And where we can ministers in London and their counterparts in Cardiff should work together in the interests of Wales. Instead of looking for reasons not to.
I started by saying that the role of government is about setting the context for you, the business community.
There is one more element to how we are cutting the deficit in a way that helps growth. And I know you’d expect me to address it head on today. By that I mean the steps we take to ensure Wales has the right infrastructure that allows businesses to operate and grow and attract new investment.
I include electrifying the main line into South Wales as part of that. When we announced the electrification of the line to Cardiff earlier this year, we were sending a message that Wales is open for business. And I know for businesses and communities west of Cardiff that decision did not go far enough.
Despite the difficult financial situation we found the money to pay for electrification - to send the right message about Wales as an investment destination. It was a firm commitment, backed by real money, not a hollow promise made on a cheap away day to Wales to score a few easy headlines.
And we should not forget that despite the rhetoric from the government’s political opponents, the previous administration failed to add a single centimetre of electrified rail line in Wales in 13 years in office. If it was as easy as they claim it is, the last Labour government would have already electrified the line all the way to Swansea. And they know it.
I know that to some this announcement confirmed their belief - misplaced as it happens - that the government’s ambitions for Wales stops at the River Taff.
I want investment and economic growth to extend across the whole of Wales, not just limited to the South East. It’s why we are investing millions in superfast broadband - the new highways for business growth in the 21st century.
And it’s why we’re keeping open the case for electrification of the rail line to Swansea. Even on the basis of the announcement we made in March, journey times from London to Swansea will come down by 20 minutes - the same as under Labour’s proposals made so hastily two years ago. Passengers west of Cardiff will also enjoy the same benefits of those on the electrified line - new, faster, greener, more comfortable trains. And importantly for business, shorter journey times to and from London.
We need to talk up the opportunities presented by electrification and modernisation of the main line to South Wales. We need to focus on the positives of this announcement, not dwell on the negatives. And we all need to work together to strengthen the business case for electrifying the line to Swansea. As far as I’m concerned this is unfinished business. And you will no doubt be aware that when he visited Swansea in April the Prime Minister himself said the government is still looking at the case for electrification here.
This is a decision for the Westminster government but all levels of government, including the Welsh government and the European Union have an important role to play. We must look at all options to fund such a project. Indeed, as we progress with the discussions on the future of the EU Trans-European Networks programme - I will explore whether that would be a viable option for a contribution in future.
Working with the Welsh government
‘Working together’ is one of the main messages I get from businesses around Wales. You want government to be seamless: you don’t care where the rules you abide by come from as long as they are the right rules.
I give you my assurance to work to smooth the wrinkles that naturally occur with different levels of government. I meet with the First Minister every month, and I have written to the new Minister for Business to seek the continuation of the joined up relationship I had established with her predecessor that was helping to secure the best interests of Wales.
I could not come to Swansea without saying a bit about how our plans for balanced growth will take effect in this area. Despite the recent times, the evidence is there even as you approach the city.
The new SA1 development is the epitome of Swansea’s regeneration over recent years, bringing together quality architecture, quality urban design and a key insight into the community’s vision for the future.
I recognise that, as with other parts of Wales, there will be concerns about the impact of re-balancing the economy in favour of the private sector. Earlier this year, speaking at Swansea’s Guildhall the Prime Minister emphasised that we were focusing on delivering for Wales and that public spending cuts would be lower in Wales than in England.
I emphasise again that growth needs to come from the private sector - growth from businesses like Tata Steel plant in Port Talbot where the company is investing £185 million to improve efficiency and productivity at the site, and from Ford’s plant in Bridgend where the latest state-of-the-art technology is used in the production of Ecoboost engines and which are now exported across the world.
We also need investment in the skills and expertise needed to drive the Welsh economy forward and Swansea is at the forefront of establishing itself as a centre of excellence in this regard.
The Institute of Life Science is the innovative research arm of Swansea University’s College of Medicine, and through a unique collaboration between IBM, Swansea University and the Welsh government, the Institute of Life Science is making progress in finding new solutions to old problems in medical research and has already delivered a state-of-the-art building, housing specialists in medical research, business incubation and technology transfer.
More is on its way and I look forward to seeing the extended range of facilities in the near future.
Of course, I could not fail to mention the Swans promotion to the Premier League.
This is fantastic news for the thousands of Swansea City football fans who cheered their club into the Premier League but also for the city as a whole. Promotion is, by some estimates, worth at least £30 million a year to the city in footballing terms alone.
Given the English teams that were relegated this is an unexpected example of re-balancing the economy! But it is also priceless in terms of its wider benefit to the local economy. The international exposure promotion to the Premier League gives clubs such as Swansea are an opportunity for every one of you in this room to reach beyond Wales and into new markets.
I was fortunate to visit the Liberty Stadium [this morning] and am very aware of the many benefits this promotion will mean, not only for the club itself, but also for the city’s economy and raising Swansea’s profile around the world.
I have only been able to touch on some of the things you will get from this government:
- a plan that brings sense and sustainability to the public finances
- an open door from me and my colleagues in the Cabinet to listen to what business needs
- an undertaking to ensure that Wales is at the heart of our plans to re-balance the UK’s economy
We’re striving to be the most pro-growth government in living memory. We’ll drive forward a programme with one purpose - creating jobs. We’ll show we are on the side of enterprising business and enterprising people - and that there are no ‘forgotten areas’ of the nation when it comes to growth.
Abroad we will unashamedly talk Britain up - to improve trade and investment so more jobs are created at home. Our message is clear, Britain is open for business.
I don’t promise this will be easy but if we all pull together I believe we can all have a say in a bright future for Wales and for Swansea.