The new Plaid Cymru Welsh Government has set a key economic target of halving Wales' productivity gap with the UK average within a decade. This ambitious goal was outlined by Cabinet Minister for Enterprise, Connectivity and Energy, Adam Price, in a statement to the Senedd.
Current Productivity Levels
Latest figures from the Office for National Statistics (ONS) show that output per head in Wales is around 85% of the UK level. The administration views this target as achievable, given that key levers such as skills and education are devolved. However, it remains a challenge as other UK nations and regions also seek to improve their productivity rates, with artificial intelligence expected to be a major driver.
Partnership Approach
The national productivity goal will be delivered in partnership with businesses, trade unions, regional stakeholders, and the UK Government. A specific focus will be placed on supporting firms to scale and unlocking the full potential of the Welsh economy. Mr Price emphasized that the target demonstrates a clear commitment to improving lives in Wales by delivering higher pay, stronger businesses, and thriving communities.
New Development Agency
To support this drive, the Welsh Government is establishing a new arm's-length national development agency, which will oversee business support and inward investment efforts. While the precise remit and structure are still being developed, it is expected to take on functions similar to the Transport for Wales model, bringing expertise from the private sector. The agency will shape how the government supports businesses, develops skills, and invests in the foundations of a stronger economy.
Historical Context
The last major economic target was set in 2000 by the former Labour administration of Rhodri Morgan, aiming to improve gross value added per head to 90% of the UK average by 2010. However, the gap never improved and remains around 73%. The current government is determined to avoid repeating past failures by turning ambition into action.
Skills Audit and Monitoring
An across-Wales skills audit will be conducted to ensure support meets the needs of expanding firms. Details on how the productivity target will be measured and monitored will be announced later this year, with a role for the proposed economic and fiscal commission. Mr Price stated that it is too early to say when the new development agency could become operational, but work is ongoing to finalize its structure.
