2. What is the Welsh Government doing to improve economic outcomes in Wales, following the publication of the June ONS statistics which show a pattern of decline in Welsh employment rates and economic activity? TQ795

Thank you for the question. Labour market data should be interpreted in the round and draw on a range of sources, including those looking at longer term trends. The labour force survey results that the Office for National Statistics published are in themselves relatively volatile, as the sample size is small for Wales. Our statisticians advise that a single month's set of results should not be relied on as a definitive representation of labour market conditions in Wales, albeit we are concerned about a number of areas in the economy in Wales, and it remains part of the discussions we have both internally with business, trade union stakeholders, and, indeed, with the UK Government. 

Thank you for that response, Minister. 

Regardless of whether this is a blip or a trend, surely the Government would be preparing for the worst outcome, rather than potentially sitting on its hands and carrying on as if it's business as usual. Last month when we raised concerns regarding recent increases in the rate of unemployment and economic inactivity, both you and the First Minister dismissed the figures as a snapshot. Since then, of course, we've had another release of data from the ONS. We now have the lowest rate of employment across the whole of the UK, and the joint highest rate of unemployment, higher than anywhere else in the UK since last year. We've seen further rises in the rate of economic inactivity, which have also increased to a greater extent in Wales over the past year than anywhere else in the UK.

And, as I mentioned last month, this is against the long-term underperformance of the Welsh economy on productivity, which has shown no discernible improvements since 1998. On practically every metric for employment and economic performance, the picture in Wales is one of stagnation and managed decline. Considering these latest figures, considering the number of closures of workplaces we're hearing about—we had a question on the closure of Tuffnells just five minutes ago—and considering the concerns within multiple sectors of the economy, does the Minister agree that we need a far franker assessment of the state of the Welsh economy than the one he provided last month? 

No, I think that is not a fair reflection on the action of the Government or on the series of statements that I've made about the current position of the economy and the prospects for the future. We are certainly not sitting on our hands and acting complacently. The honest difficulty that we have is that labour force survey figures are relatively volatile, and ONS are looking to revise the labour force survey during the rest of this year to provide more certainty. The more certain picture we have is less timely—it's the annual population survey, and that shows quite a different picture. It still continues to show Welsh unemployment levels below the UK level, it continues to show that there has been, over the period of devolution—and I completely reject his points around productivity—we have seen real improvements in productivity, as well as in employment. And until the post-pandemic period, we'd also seen improvements in economic inactivity rates as well. 

And it's worth pointing out that the pay-as-you-earn figures, which cover employees not self-employment, actually show an improvement over the last year, and they show an improvement over the last month of figures available. So, that evidence suggests that employment is growing in Wales, and that's not subject to a small survey sample, and so it's a confounding picture. It is possible that something entirely different is happening in the self-employed sector of the economy, and I think it's honest to say that we do still have an ongoing challenge with economic inactivity. That's taking place also in large parts of the rest of the UK. The headline figures I think do provide a challenge for economic inactivity in itself, because it still covers full-time students. And obviously, we expect most of those full-time students to go on to secure employment. 

I think the wider point is—. And I just want to remind the Member and others in the Chamber that when I've spoken about the future of the economy, I've been really clear about some of the risks that we are facing, about some of the unevenness in the economy as well. Whilst the UK may avoid a recession, there'll be some sectors where there are significant unemployment events through this year, and other areas where there is real growth and employment. And we still face a challenge in having the available labour and the match-up of the jobs that are available. Some of that really is about the work that we're already trying to do to help people back into the world of work when they are generally economically inactive, and that's work that, actually, we could do with a constructive approach together with the UK Government.

So, there are risks and challenges, yes, and I think I've been very frank about those. I think we could see another blip in the wrong direction when it comes to the withdrawal of what's left of the energy support scheme for businesses, but there will continue to be opportunities, some of which I have seen for myself today in meeting the Port of Milford Haven to look at current opportunities and near-side opportunities to significantly increase growth in that part of Wales, and there are others too, as well. I look forward to being frank and honest about where we are, but I certainly won't apologise for being upbeat about those sectors of our economy where there is real potential for growth that should benefit all of us.

Minister, regardless of what you might say, these latest figures are very worrying. As the economic picture has improved elsewhere across the UK, the Welsh Government must address why there is a pattern of decline here in Wales, and we must better understand the Government's plans to address and improve this situation. Now, earlier this year, the National Institute of Economic and Social Research argued that since devolution Welsh economic policies, 

'have lacked coherence and consistency, and ambitions have not been matched by effective implementation.'

Let me remind you, Minister, that that report was in fact co-authored by a former Welsh Labour Government Minister. Therefore, can you tell us exactly how the Welsh Government will prioritise job creation in this Senedd term to ensure that this decline is now addressed? Can you also tell us what new measures will be introduced to support and nurture more entrepreneurship here in Wales? Finally, can you also confirm that you will urgently review the Government's employability and skills action plan in light of this pattern of decline, given that your current plan seems not to be working?

Well, again, I understand the point that the Member makes given that he's a Conservative Member and the avoidance of some of the facts. When you look at the period of devolution, productivity has increased in Wales over the period of devolution. We started with a significant period of unemployment in Wales being higher than the UK average. The long-term trend has been lower; that's why these figures are particularly concerning and the confounder of, as I say, the PAYE data, which shows that the number of people in paid, direct employment has increased in Wales over the last year, and increased in Wales over the last quarter and the last month. Those are facts, not opinions.

When it comes to job creation, we've regularly talked about what we're doing to support entrepreneurship through a range of our programmes. We also have the challenges over investing in skills for the future, as well, and, again, that's been part of today's conversation with businesses. In all of these areas, there is a Welsh Government plan and approach that businesses themselves welcome. Our challenge is whether we're able to meet the scale of that challenge, and whether, actually, we have a UK Government that works alongside us or not. There are times when the UK Government is relatively constructive, and free ports is just one example. There are others where they are not so constructive: the conversations we are still not having properly around the future of the steel sector, the deliberate and wasteful competition on intervening in skills policy. These are areas where we could always have a better ask and a better deal for the people of Wales, if only Conservative Ministers were prepared to act in a constructive way and to invest in the future of our economy, as, indeed, we will continue to do for and on behalf of the people of Wales.

I have to say I've rarely heard such nonsense from Conservatives in this Chamber, but Paul Davies has clearly not been watching or listening in the last 12 months where we've had a masterclass in economic incompetence and mismanagement from Elizabeth Truss, from Boris Johnson and now from the current Prime Minister. The only thing they have in common is that they don't give a damn about this place and they don't give a damn about the people who pay their wages.

Minister, what we have seen over the last few years has been slow economic growth, slow GDP growth across the United Kingdom—that's been slower than all of our major competitors. And in the last two years, GDP growth has almost come to an end. Since a hard Brexit was imposed on this country, we have seen GDP growth come to an end for the first time in decades, as a consequence of decisions taken in London. Do you agree with me, Minister, that the only way that Wales will benefit from the investments that you are making is if we return to the single market, we return to the customs union and we have a UK Government that believes in redistribution of wealth across the United Kingdom, and has the eradication of inequality as a core objective of economic policy.

I thank the Member for his question, but also for his engagement this morning around the future of members of his community in Abertillery and the work we’re doing, both with Avara, where lots of the workforce are indeed from Blaenau Gwent, as well as Tillery Valley Foods.

When businesses describe the challenges that they have, the new trading conditions of Brexit are one of the issues they raise regularly, together with energy prices, which are still a significant problem, which is why I’m so concerned about the withdrawal of the last vestiges of support from the energy support the UK Government has provided. Inflation remains a continued concern, as indeed does the availability of a workforce and investment in skills. On each of those areas, there is much scope for improvement.

We, here in the Welsh Government, are doing all that we can to support people to trade with the current realities post Brexit, and to actually try and support those businesses with the levers we have available to us. I absolutely agree that improved trading conditions with our closest trading block, our European partners, who will always be our physical neighbours, would be a significant positive for the UK economy and the economy here in Wales. Trade with the EU is a bigger chunk of our economy than other parts of the UK, and I do look forward to a more grown-up conversation around our relationship with the European Union if there is a change in Government. That also, I think, would make a big difference when it comes to investing in the future of our economy, when it comes to recognising regional inequalities, and looking to do something deliberately with the power of the UK Government to work with us to address those issues here in Wales. It’s part of the reason I’m continuing to engage with the current UK Government, as well as those who may appear in a future UK Government, to make sure that the needs of Wales are recognised when future investments do come into Wales, to transform the lives of the communities that we are privileged to represent here in the Welsh Parliament.