First Minister Outlines Economic Vision for Wales
First Minister Eluned Morgan has announced plans to further empower the Development Bank of Wales while firmly rejecting proposals to establish a new version of the Welsh Development Agency. Speaking at the CBI Wales North Wales dinner, the First Minister outlined her economic priorities, including a commitment to chair a new national Jobs Council if re-elected after May's Senedd Election.
Strengthening Business Support Mechanisms
Addressing business leaders, Ms. Morgan emphasized the need to enhance the Development Bank of Wales, suggesting a significant increase in its financial capabilities to better support small and medium-sized enterprises across Wales. The development bank has already provided over £1 billion in loans and helped create tens of thousands of jobs since its establishment.
The First Minister stated: "We will empower the Development Bank of Wales even further. We will cut down on business bureaucracy by streamlining support and carry out a root-and-branch review of business rates to make them fairer for all."
While specific details about how the bank would be empowered were not provided, potential avenues include securing investment mandates from pension funds through the British Business Bank and increased utilization of UK Treasury-funded financial transactions capital.
Rejecting Calls for New Development Agency
In a clear departure from Plaid Cymru's policy position, the First Minister dismissed calls for creating a new streamlined version of the Welsh Development Agency. The original WDA was abolished in 2004 by then-First Minister Rhodri Morgan after it had grown to employ more than 1,000 staff with numerous business support strands.
Ms. Morgan criticized the proposal: "Wales may give its support to others - those who offer plans for more plans, delay, duplication, indecision and commissions. Also for a new WDA, but with no plan for what it will do, nor the money to make that happen."
Plaid Cymru has committed to establishing a national development agency that would take on Welsh Government business support and inward investment functions, though the relationship between such an agency and the Development Bank of Wales remains unclear.
Focus on Innovation and Research Funding
The First Minister highlighted her commitment to securing a fairer Welsh share of innovation and research council funding from publicly funded bodies such as research councils and Innovate UK. This forms part of the Wales Growth Plan, which is backed by £500 million to support innovation, adoption of new technologies, and business expansion.
"Productivity sits at the core of the Wales Growth Plan," Ms. Morgan explained. "Our productivity rates are increasing more quickly than the UK's, but we acknowledge that we are starting from a lower base. I will push to secure Wales's fair share of the UK's investment in R&D, which will be essential for those productivity gains."
Planning System Reforms and Industrial Strategy
Responding to business concerns about planning processes, the First Minister noted that Wales now has some of the fastest decisions on major energy infrastructure in the UK, with almost two dozen clean energy projects approved since she took office.
"My challenge for the next government has been clear: to make Wales the fastest place in the UK to get planning permission," she stated. "If we are leading the next government, we will introduce new degree apprenticeships in planning."
Ms. Morgan also committed to implementing a new Welsh industrial strategy aligned with that of the UK Government, focusing on advanced manufacturing, renewable and clean energy, digital and AI-driven industries, life sciences, and the creative industries.
Financial Transactions Capital Analysis
According to a recent report from the Institute for Fiscal Studies, the Welsh Government received £3.4 billion in financial transactions capital between 2012-13 and this year. Of this amount, 80% must be repaid to the UK Government, while the remaining 20% can be recycled indefinitely into further loans as repayments are made.
The report indicates that current plans imply an additional £600 million of funding between 2026-27 and 2029-30, with changes in rules meaning this can all be recycled into further loans in the future. This change will enable the Welsh Government to make increasingly large loans to the private sector, subject to state aid rules.
Business Community Response
Russell Greenslade, director of CBI Wales, welcomed the First Minister's focus on economic growth: "The CBI North Wales business dinner showcased the incredible businesses that are contributing to Wales's impressive economic growth story. The First Minister rightly focused on the region's enterprising firms, our green growth opportunities, and a higher education sector that works in partnership with business."
He added: "Long-term sustainable growth depends on the Welsh and UK governments continuing to work in partnership with North Wales businesses."
The First Minister's comprehensive economic vision emphasizes strengthening existing institutions rather than creating new ones, with particular focus on supporting SMEs through enhanced financial mechanisms and reducing bureaucratic barriers to business growth.
