As new UK and Welsh Labour Governments settle into their new relationship, we are beginning to hear the chirps of fledgling ideas that will apparently bring wealth and prosperity to our home nation.
First Minister Eluned Morgan has claimed there has already been a “transformation in terms of our relationship with the UK Government”. Last week was a chance to see that transformation in action as the Labour Party faithful gathered in Liverpool for their annual conference.
But in a series of speeches clearly designed to tell us it is not all bad in the UK after all, there was little in the way of actual substance for the country to get its teeth into.
The Chancellor of the Exchequer Rachel Reeves’ speech was a case in point. One highlight was the announcement of a new UK industrial strategy to come in October.
I was excited to hear about how this would be delivered in Wales but, as it turns out, we were not mentioned at all, despite name checks and projects for most of the rest of the UK.
So, I thought I would take the opportunity to put forward some suggestions that could be prioritised for Wales in the UK industrial strategy.
Technological and infrastructure solutions contribute to growth. Sectors such as data centres, automotive manufacturing, carbon capture and storage and net zero energy and transport systems – all mentioned as critical industrial developments in other parts of the UK – are Wales’ priority sectors too, and will require substantial state and inward investment to become a functioning reality.
The National Wealth Fund has £7.3 billion to invest in infrastructure developments, particularly around energy and housing. These developments are happening here in Wales, with the development of the Freeport status around Neath Port Talbot and Milford Haven, and the plans for floating offshore wind and carbon capture and storage.
These are all infrastructure needs that will require an increase in electrical infrastructure and more low carbon electrons than are currently available. And not just National Grid upgrades either, but also micro-grids, localised power generation, solar and hydrogen solutions.
Alongside these is the development of an electric arc furnace for steel making at Tata’s plant in Port Talbot, a critical site for domestic steel production in the UK that will need lots of electricity to keep it running. This furnace will also need a robust supply of recycled steel from across the UK for it to work properly. Currently, that supply chain does not exist, and investment is paramount to secure it.
The Chancellor also talked about growing and anchoring industries across the UK, something we at Industry Wales, along with a great many other partners and stakeholders in Cymru plc, have been working extremely hard on.
Anchoring is crucial to the long-term economic stability of a region as it means that the research and development, design, finance, training, HR and manufacturing can happen here and support a much wider supply chain.
An anchored economy has far more power in creating a strong export market and the ability to bring more inward investment to a region. New entrants into the markets can feel the trust that existing companies have, and choose to make Wales their home as well.
Without the UK Government recognising how important Wales is to the delivery of a UK industrial strategy, companies will not choose to invest here and that anchoring capability that we have been building in Wales will be lost.
Central to building this confidence in a region is the skill level of the incumbent workforce. Between 2017 and 2022 skills shortages doubled; this is evident in Wales too.
Understanding the nature of the engineering, digital literacy, financial and leadership skills needed to strengthen Wales’ position in the world is required. This must be followed by implementing pathways that provide parts of Wales with the skills needed to ensure that technology and infrastructure can continue to be delivered.
Recently, I met a world-leading electronics firm in mid Wales where I learned that, currently, there are no electrical engineering courses at the local colleges. The consequence is that potential employees go elsewhere for these courses and often choose not to return; they are lost to England and North Wales.
We know there are many skilled workers across Wales who would like to be able to use their skills in the emerging technology and infrastructure sectors, but do not have a clear pathway to follow. As part of a UK industrial strategy to be delivered in Wales, skills pathways from 16-66 years will be essential.
My message to the Chancellor and the Secretary of State for Business is do not forget us here in Wales. We are making the television programmes you watch, organising your insurance and banking, making steel for your construction projects, providing healthcare solutions for Alzheimer’s, building the aircraft you fly in, insulating your homes, producing hydrogen, making money, looking after your data, generating renewable energy and seeking solutions for carbon capture and storage, and soon, we will be recycling your paper too.
- Dr Jen Baxter is an internationally recognised expert in energy system development and infrastructure, with specific expertise in co-generation and hydrogen production and use, industrial capabilities and clusters and the successful diffusion and commercialisation of new and emerging technologies and infrastructure. She is CEO of Industry Wales, Deputy Chair of the National Infrastructure Commission for Wales and a Board Member at Newport City Homes.
