Welsh business on what it wants from the new Labour UK Government

Welsh business has given its reaction to Labour’s landslide victory as it seeks the new government to prioritise investment and policies to support growth.

Amongst the pressing economy issues for Keir Starmer’s new Westminster administration in Wales is what will happen to Port Talbot steelworks. Indian-owner Tata is adamant that it will close blast furnace no 4 - having earlier this week switched off blast furnace no 5 - in September and begin a two year process of building a new electric arc furnace operation.

Labour has called for a phased transition and keeping the remaining blast furnace open for a number of years. In its General Election manifesto the party pledged £2.5bn to support the UK steel sector to decarbonise, but without detailing how much could be assigned for Port Talbot. The previous Tory UK Government had promised £500m towards Tata’s £1.2bn electric arc furnace plans, which will see 2,800 jobs losses, with the majority in Port Talbot. That funding deal wasn’t signed off ahead of the General Election.

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The successor funds to former EU structural funding - such as the Shared Prosperity Fund and which under the Tories bypassed the Welsh Government - will also be keenly watched. Mr Starmer has already said that decision making will return to Cardiff Bay, but with the important caveat of input from his Westminster government. What will be interesting is whether monies could be deployed regionally with the Cardiff Capital Region in particular seeking to secure investment directly from London.

The Welsh Government will also be looking for Mr Starmer’s government to address under investment in Wales’ rail network over the last few decades - although the Cardiff Bay administration now views rail devolution as a process rather than an event.

Lloyd Powell, head of ACCA Wales/Cymru said: “It will be interesting to see how the Labour Government in Westminster works with the Welsh Labour Government in the Senedd to address the range of challenges facing the Welsh economy and society.

“The incoming Labour government must act swiftly, as the first 100 days in office are crucial for any new administration. ACCA would welcome outline timetables for addressing key issues, such as economic, fiscal and corporate governance reforms. A focus on increasing business confidence through improvements to the HMRC service, encouraging investment (both domestic and international) and supporting small business owners effectively with growth are all things ACCA has raised previously this year.”

Richard Selby, director and co-founder of Caldicot-based Pro Steel Engineering, said:“With Keir and his party heading into number 10, we really need them to lead for the benefit of the construction sector from the get go. We need the buy-in into the green agenda that we’ve been promised, and assurances that projects like the Celtic Sea and tidal range developments not only move, but move with pace. Furthermore, we need to ensure the wealth creation plans promised are actioned, and benefits are felt before any additional business costs are added.

“We also need them to be proactively looking at ways of improving the construction sector; we need to be taking the sector to the next level, not being stagnant, or even feeling like we’re taking a step backwards while the party finds its feet, and its voices.”

Chief executive of Net Zero Industry Wales (NZIW), Ben Burggraaf, said: “As we embark on a new Labour Government, my hope is that NZIW can continue working in partnership with the Welsh and UK governments to reduce industrial emissions and make Wales the country of choice for sustainable goods and services.

“Wales hosts a large number of carbon intensive industries, emitting more than 20 million tonnes of climate-warming gases. If we are to support Welsh industry on the delivery of net zero, then it is vital for Wales to secure UK Government funding that is proportionate to the emissions released in Wales, while making Wales an attractive country to invest in. Not only does this include investment into our natural resources and rich industrial heritage but also into our people — ensuring individuals have access to the high-quality skills required for organisations to uptake low carbon technologies.”

Joel Strange, economics consulting director at Grant Thornton in Cardiff said:“It’s simple enough to say that business growth needs to be the priority, but the realities of driving up GDP are obviously challenging in the current climate. The UK is the sixth largest economy in the world and the second in Europe and, as a country, Wales has plenty of strengths to build upon that will help make the most of the opportunities that undoubtedly exist.

"The growth in offshore wind, new infrastructure developments and exciting digital opportunities could all help shape the Welsh economy in the coming years. “While the Senedd has devolved powers covering a wide range of key economic levers, the direction that the new government in Westminster takes will have clear implications for Wales and its business community. Further devolution over the course of the next parliament could be instrumental in further boosting the Welsh engine and driving growth across the country.

“The business community as a whole would welcome a period of stability and certainty and to be able to operate in a competitive but fair tax and regulatory environment, ensuring unencumbered access to European and global markets.”

NFU Cymru president, Aled Jones. said: “The next few years look set to be another defining period for Welsh agriculture, and as a union we very much look forward to working with our politicians as we promote and seek to advance the interests of Wales’ farmers.” “Our manifesto made a number of asks of the next UK Government, and chief amongst those is an inflation adjusted, ring-fenced and multi-annual agricultural support budget which will take us through to the next election, helping give the industry the certainty it needs to plan for the future and to deal with market-place volatility.

“Alongside this we have to see food production and food security given the priority they need and deserve to ensure we support primary production in Wales. That’s why in our manifesto we called on the next UK Government to establish minimum standards and to promote fair and functioning supply chains, as well as increasing the amount of Welsh food which goes into the public sector and to strengthen country of origin labelling across retail, hospitality and food service with clear and accurate labelling to allow informed consumer choice.

"We also want to see future trade deals with third countries be more balanced with the needs and sensitivities of the agricultural sector taken into account, with agriculture no longer being a bargaining chip when it comes to making trade deals and we have emphasised this point once again in our manifesto.”

Ben Francis, FSB Wales policy chair, said: “This is an opportunity to establish a new constructive partnership between the Welsh and UK governments, one which enables the delivery of a shared mission focused on building Welsh SMEs’ capacity and capabilities for sustainable growth.

“A key starting point will be to improve the delivery of regional investment so that it delivers strategic and transformative economic development projects that directly address the needs and aspirations of businesses throughout the Welsh economy.”

Paul Butterworth, chief executive of Chambers Wales, said: “Congratulations to the Labour party on their victory after a long and hard-fought campaign and to the newly elected MPs across all parties.

“The public have delivered them a clear and decisive parliamentary majority – hopefully they will use this mandate to provide the stability and certainty that businesses in Wales crave.

“Closing the skills gap, growing exports, boosting productivity and harnessing the power of digital innovation won’t happen overnight and our hope is that with a joined-up Westminster and Senedd in Cardiff we will see a better working relationship, real-time progress and some united policy thinking to develop the Welsh economy on which businesses can base their investment plans and growth strategies.

Businesses will also want to see early movement on pledges around business rates reform and improving our trade relationship with the EU and furthering other trade agreements.”

Robert Lloyd Griffiths OBE, firector of ICAEW in Wales said: “Congratulations to Sir Keir Starmer and the Labour Party on their success in the General Election. ICAEW looks forward to working with the new government to help them deliver on their manifesto promise to unlock stronger economic growth. Businesses throughout the UK need stability and continuity so that they can plan, invest and grow. That is our expectation of the government and we are ready to support them in achieving it.”