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Wales needs a Champion

Cathrine Grubb reports on views from this morning’s Business Insider manufacturing meeting – charting the way for Wales following last week’s referendum result. 

Overall, the panel, consisting of VB Garg (Liberty Steel), Andrew Howell (BCB International), Paul Lindsey (Aerospace Wales) and Bob Clark (Clarks UK) were quite buoyant about the impact of the referendum result on Wales’ manufacturing industry.

Very few difficulties were envisaged in the short term, with the low value of the pound actually being good news for exports.Difficulties were however envisaged in obtaining new outside investment whilst matters remain uncertain.

Leaving the EU could open up increased opportunities to trade with America, India and the Commonwealth. However negotiating agreements will be challenging. Agreements reached are likely to be industry specific and Wales is likely to find itself at a greater disadvantage in negotiations in more developed or saturated global markets.  Innovation and originality would significantly assist in ensuring success. Costs would need to be kept down to remain competitive, with energy and logistics costs generally being considered some of the highest in Europe at present.

A major difficulty in negotiating new trade agreements is that Wales – and indeed Britain in general – lacks the negotiating expertise to put these agreements in place having not needed to do so during its time as part of the EU.  Finding people with the requisite skills to carry out these negotiations and promote Wales will therefore be critical. 

Whether Wales has the appropriate workforce is also questionable.  Despite wanting to recruit locally, 70% of Clarks UK employees are currently eastern European. ‘They have a different mentality to work and will stay to get the job done’ comments Bob Clark. ‘We need to re-build the work ethic in this country.’ 

VB Garg further noted the need to attract skilled labour to Wales to replace the currently aging workforce. The need to promote Wales as a place with opportunities and further investment into increasing apprenticeships was measures endorsed by the entire panel.  Workers from abroad may be needed to deal with the deficit of skilled labour in the short term.  There was general uncertainty as to whether the proposed Australian points based system would be an appropriate alternative in the absence of free movement of EU persons.

Wales also currently lacks the building and infrastructure to enable it to compete at a top level.  Improving the building situation by way of speculative public development of business units is unattractive and companies are less likely to invest in building their own premises where there is uncertainty around. 

Politicians need to ensure that money not going to the EU is invested to improve the road and rail links north to south and the roads around Newport. The future of the heavily EU subsidised Cardiff to Angelsey air link would also need to be considered.

The recurring message is that Wales needs champions. It needs champions in Westminster and the National Assembly to ensure that the there will continue to be further appropriate investment into Wales following the withdrawal of the £1.8 billion in EU funding proposed to be invested between 2014 and 2020. It will need champions to negotiate trade deals and champions to promote the capabilities and opportunities offered within its boarders both to attract further business and skilled workers.