Today, the Welsh Conservatives' Economic Commission releases "The Challenge", its report on the future for the Welsh economy.

The Commission was established in 2008 to develop policies that would drive forward the economy of Wales, currently languishing at the bottom of the UK prosperity league table.

During the Commission’s period of review, the UK economy was hit by the deepest recession since the 1920s, with over 88,000 private sector jobs lost in Wales during this economic downturn.

The Commission therefore had to change its focus not only on revitalising the economy of Wales but also on examining how the business sector could be supported to recover from the recession. Therefore,  the recommendations contained in this document reflect the main priorities that the Commission believes could make a real difference to the overall economy of Wales over the next decade.

Over the next few days, I will be posting more details of the individual recommendations from the report. The Western Mail has already gone big on the main recommendation today. However, for now, here is the summary of what we think should be implemented to revitalise the Welsh economy:

CORPORATION TAX - If elected, the Welsh Conservative Party should seek immediate discussions with the UK Government and the other devolved administrations about the feasibility of reducing corporation tax in Wales to encourage investment and create vital employment at a time when the economy is recovering from recession.

BUSINESS RATES - A part of the economic development department's budget should be used to directly support rate reductions for the vast majority of small firms in Wales. This will ensure that no small business having a rateable value of less than £12,000 will pay business rates in Wales.

BUSINESS PARTNERSHIP COUNCIL – The BPC should be reformed and made formally responsible for agreeing and measuring strategic economic development objectives. The First Minister and a senior representative from the Welsh community would jointly chair it, demonstrating the importance of government and business working together for the future of our economy.

WORKING WITH THE PRIVATE SECTOR - The Welsh Assembly Government must ensure that the private sector is fully involved in delivering its strategies. Opportunities should be created for Welsh businesses to work more closely with the public sector and ensure that the private sector can play a major role in improving public services and, more importantly, create wealth and employment in the economy as a result of this involvement.

FUNDING FOR SMALL BUSINESS - Unlike the narrow sectoral approach of the current Labour-Plaid Government, the Welsh Conservative Party should make the new repayable grant system available to all sectors of the Welsh economy and all sizes of businesses.  It is vital, as the nation struggles to come out of recession, that every business that needs finance to grow and create employment within their local economies is given every opportunity to do so. However, this should not mean abandoning SMEs within our poorest communities and, in particular, there will still be a need for grants in the Convergence region of Wales, especially for start-ups and for innovation-based projects that are higher risk and would not be in a position to agree terms on repayable loans.

PUBLIC PROCUREMENT - A proactive culture of preference for Welsh companies should be encouraged within public procurement practices to help develop the indigenous SME sector.  The Commission therefore recommends that WAG should set targets, as the US Federal Government has done through its Office of Government Contracting, for spending its annual budget with local small firms.

SMALL BUSINESS SUPPORT - All business support services should be contracted out but those deliverers should fully accountable for results and contracts withdrawn if they are not delivered.  All support to business will also be merged into one central contracting service, such as the human resource development advice that is currently based in DCELLS and the support for tourism businesses that is currently within the Department for Heritage. This will minimise duplication of business services and cut down on red tape.

ENTREPRENEURSHIP – The private sector led Entrepreneurship Action Plan should be reintroduced to act as a focal point for encouraging new business start-ups across Wales and in developing social enterprise as a key part of the delivery of that strategy.

REVITALISING MANUFACTURING - The Commission believes that a coherent approach by WAG could herald a revival for manufacturing again, especially if companies have the right management, the right products and the right skills in place, and the exchange rate remains competitive to drive export activity. The Welsh Conservatives should therefore look to implement the manufacturing strategy for Wales immediately and provide support for the manufacturing sector to develop in the future.

STIMULATING INNOVATION - If Wales is to improve its innovation performance over time then the sum of the parts – government, industry and academia – must be greater than the whole. Therefore, the Welsh Conservatives should look to establish a Welsh regional innovation system, which will be directed under a separate private sector led Innovation Council for Wales.

GOING INTERNATIONAL - New policies in Wales should be developed to identify and map key global communities of practice, and then make companies better aware of these communities. International network development should be supported and there should also be an increased focus on internationalisation as the economy needs more firms to consider markets outside Wales if they are to grow, including greater co-operation with UKTI.

SKILLS - Business development and skills should go hand in hand within any enterprise support network and there should be a seamless approach by government to the delivery of support in this area. The Welsh Conservatives should therefore create a new Department for Business and Skills that will enable a clear strategic approach to be adopted.

HIGH SPEED RAIL LINKS - Given the years of underinvestment into the rail network in Wales, the Commission believes that the Welsh Conservatives should work alongside colleagues in the South West of England to lobby the government to make the Great Western line a priority for new high speed infrastructure investment.

HIGH SPEED BROADBAND - It is critical that the Welsh Assembly Government ensures that every community in Wales receives the promised UK Government funds to build a "digital hub" with a fibre optic internet connection in every community by 2015. WAG should also explore a number of options to deliver super broadband solutions across Wales, such as working alongside smaller companies in the marketplace, many of whom can offer a more competitive price than telecommunications giants, especially if they are allowed to run their own cables through existing ducts and telegraph poles.

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