MPs recommend setting up a Welsh investment promotion agency to create new jobs

Martin Shipton

Establishing a dedicated Welsh investment promotion agency would improve and streamline support for overseas businesses wanting to invest in Wales, according to a cross-party committee of MPs.

The report from the Welsh Affairs Committee encourages the Welsh Government to set up such a body, arguing that an IPA would signal to investors that Wales is open for business and improve inward investors’ experiences of investing in Wales.

It follows an inquiry undertaken over a period of months before the recent Senedd election.

Plaid Cymru’s Welsh Government is committed to setting up a new National Development Agency to improve inward investment, but the committee report says there should be an input from the UK Government.

The Plaid MPs on the committee say they will work to ensure that the establishment of any agency should be accountable to the Senedd.

Economic development is a devolved responsibility, although successive Tory and Labour governments have been accused of “power grabs” in the policy area since Brexit.

The former Welsh Development Agency, whose abolition was announced in 2004, was wholly answerable to the then National Assembly, which later became the Senedd.

The Welsh Affairs Committee report highlights the challenges faced by potential investors having to navigate several layers of government, and says a new agency would help by providing a clear point of contact.

An IPA would be in the Welsh Government’s gift, but the report recommends that the UK Government’s Department for Business and Trade (DBT) alongside the Wales Office sets out how it would work with such an agency to provide certainty to investors about how the UK and Welsh governments would work together.

The committee’s inquiry was launched amid concerns that, despite its strong offer to investors, Wales was missing out on inward investment opportunities.

Missing out

Newport West Labour MP Ruth Jones, who chairs the Welsh Affairs Committee, said: “Wales is home to world-leading university research, a globally recognised advanced manufacturing sector, a thriving creative industry, and strong connections to major economic hubs across the UK. But despite its strong offering to investors, there are concerns it is missing out on investment from overseas.

“The investment landscape can be difficult to navigate, with several layers of government involved and no single, clear point of contact for investors. We are encouraging the Welsh Government to establish a dedicated investment agency for Wales, so that anyone who wants to invest here knows exactly where to turn.

“We also want Wales to harness the untapped potential of the Welsh diaspora. There are three to four million people around the world who share a connection to Wales. We would like to see a dedicated strategy to re-engage that global community and channel their networks into investment for Wales. That is why we are calling on the Wales Office to lead a diaspora engagement strategy, one that generates investment leads and reconnects with the Welsh diaspora business community.

“Wales has the talent, the ambition, and a story worth telling. But to tell it well, we also need the right information. We are calling on the Wales Office to lead work on an annual report on Wales’ inward investment results and trends, so that policymakers and investment teams can identify opportunities and respond to them quickly.

“The success of Wrexham AFC under Hollywood actors Ryan Reynolds and Rob McElhenney has created exciting opportunities to promote Wales as a destination for inward investment. Our report sets out the steps that will help make sure the world gets to hear more of Wales’ story and invest in its future.”

The report recommends:

* The Welsh Government should consider establishing a dedicated IPA. If the Welsh Government establishes an agency, DBT must set out how it will work with the IPA in a Memorandum of Understanding (MoU). DBT should develop the MoU in conjunction with the Wales Office.

* The Wales Office should develop and implement an investment-focused Welsh diaspora engagement strategy by summer 2027. The Wales Office should do this in conjunction with DBT and the Welsh Government to avoid duplication.

* The Wales Office should work in conjunction with DBT and ONS to produce an annual report on inward investment results and trends for Wales.

* DBT should publish a summary of the investment enquiries generated by its overseas network as part of its annual inward investment results, broken down by UK nation.

* Data must be accurate and accessible to empower governments, policymakers and investment stakeholders to make the best decisions about Wales’ inward investment.

* The UK Minister for Investment should engage with existing intergovernmental infrastructure, such as the Interministerial Group for Business and Industry, to coordinate with Welsh Government Ministers and resolve any challenges that arise. The UK Government should ensure that these groups meet regularly and consistently to support intergovernmental collaboration.

* The Wales Office should lead work with DBT to map Wales’ clusters (related businesses grouped in a concentrated geographic region) and catalogue what they offer for prospective investors in relevant sectors.

Ambition

A spokesperson for the Welsh Government said: “We welcome the Committee’s report and share its ambition to strengthen Wales’s inward investment offer.

“Through our new National Development Agency for Wales, we will be providing the focused support needed to attract and retain inward investment to Wales, breaking down barriers that have for too long stood in the way of turning ambition into action.

“The new Agency will also support the growth of domestic businesses and help external companies to establish strong roots in Wales through local supply chains. We are open for business and are determined to make it as straightforward as possible for investors to say yes to Wales.

“We are also committed to developing and implementing a diaspora strategy, encouraging those who have left Wales to bring their skills, experience and investment back home, or to support the Welsh economy with their knowledge from afar.

“We look forward to working constructively with the UK Government to ensure Wales captures every opportunity.”

Untapped economic potential

A Plaid Cymru spokesperson said: “We are pleased that the Welsh Affairs Committee’s central recommendation is the establishment of an agency dedicated to driving economic growth in Wales – a proposal Plaid Cymru championed well before the Senedd election on 7 May. The Plaid Cymru government is now turning that commitment into action through the creation of a new National Development Agency (NDA), designed to help Welsh businesses secure investment, trade and innovate.

“The NDA will also unlock our untapped economic potential by building on our strengths to support the growth of domestic businesses, create well-paid and secure jobs and spread prosperity to every part of Wales.

“Plaid Cymru will also develop and implement a comprehensive Diaspora Strategy, promoting Wales as a place for diaspora entrepreneurs to invest and ensuring that recent emigrants are encouraged and incentivised to return. The diaspora is an asset – a source of creativity, skills and investment and with strong leadership from a Plaid Cymru government, the worldwide Welsh community’s expertise, experience, and willingness to invest will be harnessed to drive innovation and growth in Wales.

“The three Plaid Cymru MPs who are members of the Welsh Affairs Committee will work to ensure that any action on the report’s findings remains in line with the Welsh Government’s priorities and will make it clear that the establishment of any agency should be accountable to the Senedd.”