Last Wednesday, the Western Mail's business team 'scooped' the news that the Japanese firm Toyoda Gosei is to create 600 jobs in Swansea.
I originally thought it was a deliberate leak but from what I hear from the rumour mill around the Bay, WAG went ballistic as the spin doctors had hoped to control the release of the jobs announcement for their own political purposes.
Nevertheless, it is difficult to argue that this isn't good news for the Welsh economy, especially after the Bosch closure.
Indeed, at a time when we have lost around 500 jobs a week in 2009, every job we can get is precious, especially for those thousands who are still looking for work.
However, there is a simple question that no-one seems to have asked.
Back in October, the Deputy First Minister stated that the "grants culture was over"?
However, there is a simple question that no-one seems to have asked.
Back in October, the Deputy First Minister stated that the "grants culture was over"?
As he said at the time, "there had to be a radical shift from offering large grants to multi-national companies to move here"
Does that mean that Toyoda Gosei didn't receive a penny of public money to come to Wales or, as would be expected in a deal this size, around £6-7 million was provided from the Single Investment Fund to attract the jobs to Gorseinon?
Can we now say that the grant culture over or are we still paying companies to come to Wales?
Comments
"He (Ieuan Wyn Jones) told BBC Wales' business correspondent Nick Servini that grants would still be available on a smaller scale and where the economy was fragile."
I'd say that £6-7 million does qualify as "smaller scale" and that the economy in Gorseinon is very much fragile at present.
Only last week the Welsh Conservatives and David Melding were effectively demanding Ieuan give another grant to Bosch, and before that Welsh Conservatives said the grant aid offered to Rio Tinto/Anglesey Aluminium wasn't enough and should have been more. Have some consistency for goodness sake!
If you bothered to read the piece (which you clearly haven’t), I was merely posing the question not offering an opinion, given that there seems to be total confusion about whether WAG is offering grants (or not) to large inward investing firms.
Indeed, as the unofficial Plaid Cymru blog said recently,
"An economic model based on the taxpayer funding the exploits of private business is what we have to live with at the moment, but from the Bosch closure it clearly isn't sustainable in the long run".
So, i ask the question again, why is Plaid saying one thing ('end of grants culture') and doing another ('giving grants to large inward investing firm')?
You can’t have it both ways, especially as sending out such mixed messages can seriously jeopardise any future investment into Wales by large companies.
I can assure you that that is the last thing that the economy needs at the moment and in the small world of inward investment professionals, the message will quickly get out there that Wales is literally ‘shut for business’.
Do you really want your party’s confusion on business support to be responsible for that?
p.s. you have also provided a real classic for future reference: "I'd say that £6-7 million does qualify as "smaller scale".
I hate to think what you consider to be a large grant....
You can't have it both ways, Dylan.
That's exactly the point the prof was making about Ieuan Wyn Jones.
Should you have an IQ test for commentators :)
Yes Dylan I would consider 6-7m to be much smaller scale than the grants for the Bosch inward investment (21m), or for Project Red Dragon (hundreds of millions) or for LG at Newport (hundreds of millions). You even left out the quote where Ieuan said some grants will still be available, but that we won't be looking to base our entire economic strategy on grants.
THE loss of 900 jobs at Bosch in South Wales marks the end for the old “grants culture” in attracting investment to Wales, senior Assembly sources said last night (Western Mail, Jan 16th, 2010).
I hardly think those are ambiguous statements emerging from WAG.
My worry is that senior civil servants are allowing their Minister to continually repeat statements on an “end to grants” when they know full well that a number of high profile inward investment projects that are dependent on millions of pounds of grant support are on the way.
Finally, I would be the last to defend LG but let’s get the facts right on previous inward investments if we are going to make comparisons
WAG made a statement in 2006 in which it admitted that the total amount of grant support that had gone to LG was £87 million, of which it subsequently recovered £60 million in cash and land. The argument by WAG is that for £27 million – roughly the amount that WAG has recently given to AirBus - LG Electronics Wales invested £230 million and at one stage employed 2000 employees at the Newport site. Still too much money in my opinion but hardly the ‘hundreds of millions of pounds’ you claim.
"My worry is that senior civil servants are allowing their Minister to continually repeat statements on an “end to grants” when they know full well that a number of high profile inward investment projects that are dependent on millions of pounds of grant support are on the way."
That's a pretty legitimate worry, but I think the Minister's personal quote where he says some grants will still be available, clarifies things.
He's right to announce the end of the "old Grants Culture" in that grants will form a much smaller part of economic strategy in the future, rather than being the centre-piece of economic strategy like under Labour.
I agree that there has to be an end to the 'bribery' policy but such are the economic conditions, that it might take some time to get the right skills in place. The Minister's change of direction is a good thing in my opinion.