It may be tough at the top, but it’s not much fun being at the bottom. News that Wales had sunk to the foot of the UK league table of nations and regions for gross value added (GVA) was greeted with a loud collective groan. Public and the private sectors have responded in characteristic fashion. The Welsh Assembly Government, with an eye on elections in 2011, is tearing up its business support system and starting again.
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To grow the private sector, economy minister Ieuan Wyn Jones launched a plan which at first seemed revolutionary. Grants to companies would be replaced with loans. The pot of cash for business support would be cut from £80m to between £30m and £40m, and the balance would be spent on infrastructure such as improved broadband. Support would be focused on six sectors – information and communications technologies; energy and environment; advanced materials and manufacturing; creative industries; life sciences; and financial and professional services.
In practice, the revolution will not be quite so dramatic. Non-repayable grants will still be made available to support “mobile investments”, projects where the investor can choose between investing in Wales and elsewhere. It’s a pragmatic approach aimed at ensuring Wales keeps its share of inward investors such as Ford, Airbus, EADS and Toyota. The CBI is a prominent supporter of the new approach. Companies interested in relocating will also need high quality offices to rent in Wales, and while projects such as those on Neath and Colwyn Bay are on the horizon, the market has been relatively flat.
But all this may change again in May, when Wales goes to the polls to elect the National Assembly. The ruling group now consists of Labour, the largest party, and the nationalist Plaid Cymru. Labour may gain an overall majority. Voters in Wales are also likely to be asked this year whether they support fresh law-making powers for the National Assembly.
It doesn’t make a huge difference to some companies in Wales, which are simply trying to survive and thrive in tough conditions. Insider’s Top 300 ranking of Welsh firms has shown a decline in profits for the past two years. But there’s some good news. Wales is the UK leader in online comparison websites, as the home to Gocompare, Moneysupermarket and Confused.
The latter is owned by Admiral, the car insurance giant and Wales’ only FTSE 100 company, which took on over 700 staff in Cardiff, Newport and Swansea in 2010. In North Wales, Steve Morgan has engineered a dramatic recovery at Redrow, the house builder. And beer drinkers will appreciate the fact that Lloyds has provided SA Brain, the brewer, with a £20m facility to extend its pub and bar empire.
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