INTERVIEW WITH VAUGHAN GETHING, MINISTER OF ECONOMY, WALES

11 Mar INTERVIEW WITH VAUGHAN GETHING, MINISTER OF ECONOMY, WALES

Vaughan Gething, Minister of Economy, Wales, has a vision of the Welsh future that sees revitalized industry, an emphasis on renewable technology, and a tourism sector that will be drawn to this example for the world.

Can you give us an overview of Wales’s largest growing segments and the reasons for their growth? What are the nation’s main economic strengths?

 There is a significant interest in advanced manufacturing, and we have an advanced manufacturing center in North Wales with close ties to automotive but also aerospace. Airbus is a big company in North Wales. Because of the strong agricultural history of Wales, we are also really interested in food manufacturing and provenance, and we have lots to offer there. There is a developing sector in some of the new areas of the economy that are now much more established in fintech, and the U.K. government recognizes that the sector in Wales is one ripe for growth. We have a significant compound semiconductor center with lots of academic research around it, and that is still expanding within South Wales too.

On our broader service space, cybersecurity is another area where we really do punch above our weight. Wales has a very good story to tell in life sciences and transforming rapid innovation into practical application. I was very keen when I was the health minister to be able to have open and grown-up conversations with people who wanted to understand the data and performance of how our health care system worked and the way our system is organized. We needed to make sure we did not lose sight of the public service ethos and the value of what happens while making sure there are opportunities for research, development and good jobs to be created here in Wales. Having more good jobs for the future is a key aspect for me and my new role as economy minister.

What major initiatives is the Welsh government undergoing to support regrowth of the economy after the COVID-19 pandemic? What strategies is the government employing and what impact will they have on the nation’s industry and citizens?

 A number of our traditional industries, such as the steel sector, still have a significant role in the new economy, and that is not just important for the jobs where it has traditionally been relied upon, but actually in advanced manufacturing too. For instance, there are huge opportunities in renewable energy, for both tidal flow but also offshore in the Irish Sea between ourselves and partners in the Irish government. We are going to need an active steel sector to create some of those products to make sure we are generating power in a different way that is generally sustainable and, crucially, protecting the jobs that go alongside that. We will continue to invest in apprenticeships, investing over a third of a billion pounds in the next three years for our apprenticeship program. We recognize that skills are one of the big factors for investors, but also for homegrown companies to want to stay here and grow their business. To achieve this, we are working collaboratively with people in business, on the trade union side in the workforce, and with regional groups. Our local authorities have come together in four different regions in Wales, and we are investing in each of those regions, together with the U.K. government as well. That is about people understanding their local economy and us being able to support them to grow, whether that is in renewable energy in North Wales, the potential for new nuclear investment in North Wales as well, or in the fintech sector in Cardiff, Swansea, and Newport or, indeed, the compound semiconductor cluster In Newport. There are different opportunities in different parts of Wales. Our challenge is making sure we understand where the opportunities are and to invest alongside businesses in both the people and the skills that will allow us to exploit them. In this next phase of the Industrial Revolution, the way the world keeps on changing, we need to keep abreast of the new opportunities and enable people to make Wales a good part of their story and their success.

What have been the largest economic impacts of Brexit on Wales, and what has the government done to lessen the burden? What kind of support does Wales require to completely mitigate setbacks?

 There is a U.K. government choice about the form of leaving the European Union and it is one that requires checks on borders for goods. Although they are not tariff barriers, non-tariff barriers can still make a difference in the time you need to have to get your paperwork in order to have it checked. Then you have the particular check that needs to be done, for example, on livestock transfer. We are having to invest public money in infrastructure on borders to undertake some of that checking to make sure we can carry on trading, but there is a practical challenge. There is a difference between cost and certainty sometimes, and some businesses are choosing certainty over cost and speed. Essentially, what we are looking to do is to make sure that Wales is still very definitely open for business. We have good relationships with the government in the Republic of Ireland. I was part of a meeting with our first minister and Simon Coveney and other ministers from the Irish government recently to look at joint opportunities for Ireland and Wales in our university sector, in industries and, as I mentioned earlier, in floating offshore wind, as well as the potential for green hydrogen production in the Irish Sea.

The other part is that the European market is still our biggest and most important market, so we are looking to help companies with an export action plan to continue exporting successfully. That goes alongside our ambitions of good relationships with the rest of the world. We have U.S. and Japanese direct investors outside the European framework that are still here with us, and we also have growing links with Canada and the Middle East. Shortly I will be going to Dubai for part of the end of Expo 2020, looking at opportunities there to work with both Welsh businesses in the diaspora community but also particular areas: life sciences would be one of them, and we know we have a really strong offer. We want to make sure the rest of world knows we are very much open for business, have a very good business environment, and a government that wants to work alongside people that want to invest in our future as well.

What recent foreign investments are likely to have the most effect on the Welsh economy and what markets is the government targeting in its efforts to attract FDI?

We are strong in life sciences and renewable technology exploitation, and we have really good and interesting partnerships with a number of Japanese businesses in that area. The whole world is looking at how you decarbonize successfully. You can do that on a basis where some people want to test what that looks like. We are going to need to be able to move around within countries and between countries in a way that does not destroy the future of the planet. Furthermore, we are going to be able to test out how the systems we are producing — both new forms of getting around, but also storage and the distribution. There are real opportunities in that, and not just the new future for the steel sector, but new manufacturing opportunities as well.

At the same time, our services sector, fintech in particular, is one of the areas where we have a lot of opportunities to build upon. Some of them are with people who already have an interest in Wales, but we also have links with a number of different countries. The rest of it is about the fact that we are very willing to work with, not just the world as it is today, but the world as we want it to be tomorrow. For a number of investors, that is an incredibly attractive quality in a government.

What strides has the nation taken in its sustainability strategy to set the foundation for Wales to take advantage of these new opportunities? What key areas of Welsh industry are supporting the sustainability agenda?

When you look at what we are doing, some of this is about the attitude of people in the whole country, and about the fact that there is an acceptance that the world as it is today cannot stand still. Otherwise we will get taken over, left behind; as well, we will destroy the future of the planet. The Future Generations’ legislation is a recognition that we need to consider what we do today, consider its impact on tomorrow. We made real strides in simple things, like significantly increasing our recycling rates. People are getting used to the fact that it is a normal thing to do and that they are doing the right thing. In fact, I believe we are the second-best recycling nation in Europe, and the third best in the world. We need to change the way we live, and this is not just for younger people. In people of my generation as well, there is a real recognition that the world has to change.

That is why we have set so much stock in our decarbonization journey for the whole of industry. We have published a net zero plan that will require industrial transformation. It also requires significant change and innovation in the way we deliver public services. Thinking back to my old times as the health minister, the health service is a massive emitter because these are sites where many people go to work. The heat that a hospital generates is a major one, made worse by the fact that many of our buildings are quite old now. You have to think about how you retrofit and improve what happens in that environment and still save money. There is a great deal of innovation going on there and the money saved does not just help with the planet, it also helps you to put that money into frontline patient care as well. Therefore, there is an economic necessity to do this. But there is also a real opportunity.

The other thing that is relatively unique to Wales is our opportunity to do something about tidal energy in the Severn Estuary, which has the second highest tidal range in the world. We have the possibility of being at the forefront and that requires figuring out how tidal energy can be properly used and exploited in a way that is generally sustainable. We already have some of that taking place in North Wales, but the big prize is more around the Severn Estuary: in generating reliable clean power, the jobs that come from that and the opportunity to create an industry for the future.

What is the government doing to support the regrowth of the tourism sector and brand the destination as a sustainable getaway to international and U.K. tourists? What impact would a revived and renewed tourism sector have on the Welsh economy? 

Tourism is a huge sector for us here. It employs an exceptionally substantial number of people, and it is of significant financial value as well. It is part of the reason people know where Wales is and what Wales is about: from having visited or seen our striking and unique landscapes and features. The challenge is that international tourism shrunk significantly (for reasons we all understand) during the pandemic. That was then accompanied by more people making choices within the U.K. about where they would go because they could not go abroad. Our domestic tourism sector had two remarkably busy summers as a result. Our challenge is in how we continue to attract those people to return again when there are options to go to other parts of the world. To extend the season out, we are having regular conversations with our tourism sector, and I hope to have an agreed approach with them on how Wales is a destination for people within the U.K. and Ireland for those shorter trips and overnight stays. There is also good reason to be optimistic about international visitors for both business or for a combination of business and leisure visitors.

I expect that you are going to see more from Wales inviting people to rediscover the country when they are looking for somewhere to spend their time. We do know we have significant markets in the U.S. and further afield where people are looking to do that. There is much history between North America and Wales to build on.

We are looking forward to welcoming people back. I certainly hope that you and your readers will see more about Wales and the offer we have to welcome you back in a way that is safe and sustainable. The way people behave when they are here is important as well. I hope people are inspired by some of the choices we make when they return to their own country.

As a minister, what are your key personal priorities moving forward and what must be done for these goals to be achieved?

 In October, when we thought we were not going to have a return of COVID and then the Omicron wave happened not long after, I relaunched an economic mission for Wales where we were looking at some of the challenges we have, but also some of the opportunities. Central to that is understanding what Wales has to offer for people to be able to come here and to stay here, in terms of both the business environment and the way the government works. It is also about the reality that we need more young people to make their choice to come to Wales, stay, grow their business and raise their family.

The pandemic brought many challenges, obviously in different parts of the economy. Part of the challenge has been the one that hospitality has faced in persuading people to stay in the sector. That is why we worked alongside them to try to promote hospitality as a career and not simply a casual job to do at seasonal times in the year. The pandemic also made many of us reconsider what we really wanted — the balance between work and life outside work, and the value we place on time with family. For Wales, there is a new opportunity for people to think about what they do outside of work. Now I know that I do not have to be physically present in an office five days a week for as many hours as I can. How can I have the advantages of working remotely from home or elsewhere, potentially commute to a center for a shorter period of time, and enjoy the other parts of life that make it worth living. That shift is already taking place, and we are well placed to be able to do that through investment in things like broadband infrastructure, investment in the ability to work remotely, and marketing the fact that you do not just work somewhere, you can also live somewhere that does not have to be where your headquartered building is. There are real opportunities to sell the quality of life you have here in Wales, as well as the opportunity we talked about earlier with growing and developing sectors of the economy. The challenge is how to take on board the threats and the risks and how to be positive and confident about the opportunities. I have always been a glass half full sort of person, naturally optimistic, which has been important in the last two years. I have a genuine sense of optimism about what we can do together here in Wales, with a real mission for the future.

Final Message

My final message would be that Wales has a great past and a past to be proud of, but more than that, we have a great future ahead of us.