Speech by Secretary of State for Wales to IOD Wales in Cardiff

Stephen Crabb today (10 November) gave a speech at IOD Wales setting out his economic vision for Wales.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Stephen Crabb

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Good afternoon ladies and gentlemen, it is a real pleasure to be with you in the wonderful Millennium Centre. The last time I was here was three or four weeks ago for an amazing production by the Welsh National Opera of William Tell – and those of you who know William Tell the opera will know that it is a great opera but not a very short opera – it is about three and a half hours so it is in that spirit that I am looking forward to speaking to you today.

Since becoming Secretary of State in July, I have had the privilege of visiting some of the really great world leading companies that operate here in Wales, and of meeting superb business leaders all across our nation who understand what it takes to be successful – even in a time of continuing uncertainty, risk and change.

From the enormous manufacturing and technical operations at Airbus or Toyota in North Wales, and GE Aviation and BAMC in the South, to the fast-growing start-ups like Hydro Industries in the West- there is a dynamic, cutting edge private sector here in Wales and we have many - many - amazing Welsh business managers, entrepreneurs, directors, executives who are doing great things right now.

And it is these people – people like you here in this room today - who are forging the economic recovery in Wales.

It is because of people like you – with fresh ideas and a determination that we are seeing 8,000 new businesses starting in Wales each year.

And it is because of people like you that we saw 23,000 net new private sector jobs created in Wales last year and around 100,000 new private sector jobs since April 2010.

And, let’s be clear, the majority of these jobs are permanent, full-time, quality jobs.

Don’t let anybody talk this down.

There is an economic recovery in Wales, and it’s being led from the front by the only people who can genuinely create wealth and opportunity in society – and that is the men and women who risk their own capital to start and run businesses.

So let’s make our starting point a positive one.

We have some really good foundations to build on as we look to the future and the prospects for a stronger, more successful Welsh economy.

Because the mission of this Government – from the Prime Minister down – is to put in place a long term plan for growth and a rebalancing of the economy which will give the UK the very best chance possible of competing and winning in the harsh global marketplace of the 21st century.

And, as a government, we are determined to keep business at the centre of this long term plan – and that means listening to business, working with business and doing everything possible to smash down the barriers that hold businesses back.

And the plan starts with something which, for a long time, business voices like the IoD, like the CBI, had been calling for– and that is the need to restore stability and restraint to our national finances.

Put simply, to get back to living within our means.

In the years ahead the global economy will prove a punishing place for those economies which run large budget deficits and saddle their populations with unsustainable debt.

So the challenge of getting a grip on our national finances is at the centre of everything we are trying to do; it is written into the very DNA of this coalition government which came together around this vital point of national interest to give this country a fighting chance of getting out of the hole it found itself in.

And so four and a half years on we’ve cut the deficit by a third and put in place a framework for returning this country to balanced budgets by 2019. But nobody should be in any doubt whatsoever about the scale of the task. Whichever Party is in power after the next election will need a disciplined plan for controlling public spending, which will involve very difficult decisions.

And any parties who come to you and say that there is a softer way round this, that we can get to where we need to be without further difficult spending choices being made, should be treated as quacks and snake oil salesmen. For that is what they are.

Furthermore, public spending restraint is also key to the wider rebalancing of the economy we are trying to achieve.

You will know as well as anybody that in the late 90s and early 2000s UK economic growth was far too reliant on just a few activities which actually served to worsen the economic problems we face – most notably the growth in public sector and unhealthy growth in financial services.

In Wales we understand this challenge very well.

The role of the public sector is important and cherished, and is a vital component of the economy in many areas of our nation. But never let that blind us into believing that somehow the mission we are trying to achieve for the UK does not also apply here in Wales.

Back in 2010/11 there were people in Wales actually saying that the private sector here was too weak for the rebalancing of the economy to take place here. They argued against the steps we were taking to rein in public spending by saying that Welsh businesses couldn’t plug the gap in economic activity, if we reduced spending to sensible and responsible levels.

Well they were wrong.

All those new private sector jobs I mentioned previously – they far, far outnumber the reduction in size of the public sector that has taken place.

What we have seen all across the UK – more than 2 million new private sector jobs, dwarfing the reductions in taxpayer funded jobs – we have seen in Wales too.

And we all need to stop treating Wales like it is some sick younger sibling of the rest of the UK family nations that constantly requires a different kind of medicine.

Because what I see across Wales are inspirational business leaders with skilled and dedicated workforces producing some of the most innovative products available anywhere in the global marketplace.

And we have got the potential to be so much more successful.

Which is why we are doing everything we can to put business at the heart of the economic recovery.

It is why we have taken action to reduce the rate of Corporation Tax so that Welsh businesses can share in one of the most competitive tax regimes anywhere in the world.

We are also cutting National Insurance for those businesses that want to take on more staff and grow, and we’re scrapping it for the under 21s altogether.

Our Employment Allowance is giving cash back on jobs, saving businesses in Wales up to two thousand pounds each. Some 35,000 employers in Wales are benefitting from this scheme, and some20,000 small firms in Wales have been taken out of National Insurance Contributions altogether.

And whilst we are taking action to support business through the tax system, we also recognise there are areas where we, as a Government, need to simply get out of your way and let you do what you do best.

So, by scrapping or amending some 3,000 regulations, we are saving businesses more than 850 million pounds per year. Savings that can be re-invested back into business growth and productive activity.

And these steps we are taking to drive down business taxation and reduce red tape, whilst still taking action to bring stability to our public finances – these steps are working.

The UK is becoming more competitive out there in the global economy.

We’ve moved up the international competitiveness rankings as measured by both the World Economic Forum and the World Bank.

This will be a vital ingredient of the long-term strategy for the economy.

But we also know that for our long-term competitiveness we need to keep improving our infrastructure.

As Welsh Secretary I am clear that Wales needs world class infrastructure every bit as much as the South East or the North of England – and I want to use my time in this office to do everything I can to unlock that investment in infrastructure.

That means sitting down with Welsh Ministers, rolling up our sleeves and working together collaboratively and pragmatically to take this agenda forward.

I don’t believe business in Wales wants to see administrations in London and Cardiff at logger-heads when there is so much critically important work needing to be done which requires the two governments to work together effectively.

Which is why we have been working closely with the Welsh Government to give them the financial tools to invest in upgrading the M4 around Newport – it is a project that has been talked about for 20 years and we have not seen progress and I am hoping that with the measures we have been able to make available to the Welsh Government we can press on with that and achieve a project that I believe there is strong business support for here in Wales

I continue to work closely with Edwina Hart, and other ministers and officials in the Welsh Government to look at the electrification project for South Wales railway and also the north as well and we are working to give ministers the power to issue their own financial bonds to invest in infrastructure.

And we also continue to work closely with them on the rollout of superfast broadband, which will have such a transformational impact on business particularly in rural parts of Wales. And I believe together we are developing an exciting vision around infrastructure investment in Wales and my aspiration – my ambition - is that in the next ten years or 20 years regardless of which colour party is in power in London or in Cardiff, there will be a vision for infrastructure investment that will have high level political will and support of the business community but we will have put that long term vision for infrastructure investment in place that governments can work towards and will have such a transformational in the Welsh economy.

And before my meeting with Edwina Hart I had a meeting with the First Minister where we were talking about this and I believe there is the potential to achieve a consensus vision around investment and infrastructure in Wales.

But success is not just dependent on the quality of our physical infrastructure. Human capital is our most precious resource and asset in Wales.

Success in the 21st century will come to those economies that are hot beds of innovation, technology, constantly pushing the boundaries of intellectual achievement and being able to harness it commercially.

So having a strong network of universities and colleges in Wales will be critical. And there are some excellent things happening in the Higher Education sector in Wales, despite the obvious funding challenges.

Projects such as Cardiff Metropolitan University’s National Centre for Product Design and Development Research is conducting applied, industry facing research that is supporting great innovation in Wales.

And I believe there has never been a better time to showcase this innovation and to showcase what Wales has to offer.

Back in September, it was a real honour to help welcome world leaders to Wales for the NATO Summit.

The scale of that event cannot be overstated – it was simply the largest gathering of international leaders ever to come to the UK.

And it was wonderful to see Wales take centre stage and to see Wales shine and I believe world leaders went home in no doubt as to the quality of products, services and welcome we were able to provide here in Wales and our global profile could not have been higher.

I am determined that we build on this to ensure we have a lasting economic legacy.

That is why the UK Investment Summit we are bringing to Celtic Manor next week is so important.

To highlight why Wales is such a great place to invest.

On show to a global audience will be some of the most technologically advanced innovations available anywhere in the world.

Innovations that were conceived in Wales, developed in Wales and manufactured in Wales.

Business leaders from some of the most successful companies operating across the globe will be shown that the technology that runs more than half of all the worlds’ mobile phones is made in Newport, South Wales

They will be shown that Raspberry Pi – the credit card size computer that is made in Wales and which has been such an export success.

And they will be shown that the buildings of tomorrow – will be capable of generating their own energy - are being pioneered in Wales.

But the real headline message I hope they will be taking back to their companies is that Wales is an ambitious nation, with a forward-looking economy, meeting the needs of business today and developing the solutions for tomorrow. Today marks the beginning of the Government’s Export Week, where UKTI will be highlighting the support available to businesses such as trade support programmes, help with market research and identifying contacts overseas.

I want Wales to be known in every corner of the world as a great place to do business and a great place to invest. My vision for Wales is one that is not always trailing behind national economic trends, but leading the way.

We are seeing unemployment falling in Wales for two years, we are seeing reductions in the number of households were no one works and we are seeing jobs being created at an exciting rate.

One of the most important statistics I have seen this year, which got virtually no attention in the Welsh media, came out a fortnight ago and showed that there are now 43,000 fewer homes in Wales where there isn’t a single person working compared to four years ago.

That means tens of thousands more children growing up in Wales seeing a mum or a dad go out to work.

This is what excites me.

We are not just talking about economic theory here. We are talking about real change within communities and within families in Wales. This is the kind of change that made me want to go into politics. Economic and social renewal. But this can only happen with a thriving private sector, with businesses that are making more, trading more and growing year after year.

That is the driving force behind the economic recovery in Wales. And that is why my new Economic Advisory Board, which meets today for the first time, is comprised of business experts from across Wales to help us at the Wales Office but also across UK Government understand and really get to grips with the needs and aspirations of Welsh business.

Because only by consulting and working with you can we get to grips with the issues facing Wales. We know that we need to stand side by side with business if we are to deliver our long term vision for Wales.

I am ambitious for Wales. I am ambitious for Wales to succeed and I believe that we have the capacity, the resources and the potential in our nation. To become a stronger, more confident, more outward looking nation that delivers better outcomes for our children and their children after.

Thank you very much.

Published 10 November 2014