1st Report - Promoting Wales for Inward Investment

We welcome recent inward investment results that suggest Wales is returning to a more competitive position in comparison to the other UK nations. However, these headline figures cannot be cause for complacency. Lower value-added investment and a reliance on investment from Europe means Wales may be vulnerable in future to economic shocks or to changes in the relationship between the UK and Europe. (Conclusion, Paragraph 37)

Data must be accurate, accessible and comparable to enable governments, policymakers and investment stakeholders to make the best decisions about promoting Wales for inward investment. Neither the UK nor Welsh governments are currently providing comprehensive analysis of Wales’ inward investment results. (Conclusion, Paragraph 42)

The Wales Office should work in conjunction with the Department for Business and Trade and the Office for National Statistics to produce an annual Wales-specific report on inward investment results and trends for Wales. This should include the sectoral composition of inward investment in Wales and provide a comparison with other UK nations and regions which reflects on the sizes of their respective population and economies. The Wales Office should ultimately be responsible for the publication of this report. We expect the first report to be published before the end of this calendar year, to provide sufficient time for analysis of DBT and ONS data that is generally published in the summer. (Recommendation, Paragraph 43) Why Wales?

Wales is a strong and distinctive investment proposition, thanks to a strong pool of talent in key sectors, world-leading university research, its geopolitical stability, and capacity to work at pace and in collaboration with the UK and Welsh governments. (Conclusion, Paragraph 54) 33

No amount of promotion can overcome fundamental challenges with the business basics, so we therefore encourage the UK Government and incoming Welsh Government to continue to work together to deliver vital improvements to Wales’ infrastructure. We will continue to monitor how the UK Government invests in reserved infrastructure in Wales throughout this Parliament. (Conclusion, Paragraph 55) Making the case for an investment promotion agency for Wales

Data about Wales investment enquiries generated by DBT officials overseas and transferred to relevant partners is not being monitored or published. This makes it impossible to assess how the UK Government’s overseas network promotes Wales for inward investment. It is important that DBT demonstrates how its overseas offices deliver for Wales and the other UK nations. (Conclusion, Paragraph 66)

The Department for Business and Trade should publish a summary of the investment enquiries generated by its overseas network as part of its annual inward investment results. The summary should be broken down to a UK nation level. (Recommendation, Paragraph 67)

It is disappointing that intergovernmental infrastructure does not appear to be being used to support inter-ministerial collaboration on inward investment, as a key growth priority. Consistent engagement at a ministerial level between the UK and Welsh governments would provide clear political direction to departments about the importance of collaboration between the two governments to deliver inward investment for Wales. (Conclusion, Paragraph 71)

The Minister for Investment should engage with existing intergovernmental infrastructure to co-ordinate with Welsh Government ministers. Interministerial groups should be used to facilitate discussions about challenges as they develop and to agree solutions. We recommend that the next meetings of the Intergovernmental groups on Trade and Business and Industry take place in autumn 2026, to provide time for incoming ministers in the devolved administrations to be appointed to their posts. Thereafter, we recommend that the UK Government ensures that these intergovernmental groups meet regularly and consistently, as they are an important vehicle to support intergovernmental collaboration. The Minister for Investment should regularly attend these meetings. (Recommendation, Paragraph 72) 34

There is strong evidence that an arms-length investment promotion agency for Wales would have a positive impact on attracting inward investment into Wales. The Committee recognises that establishing an investment promotion agency for Wales is in the gift of the Welsh Government. However, should the Welsh Government choose to do so, the agency must co-ordinate with the UK Government to have the greatest impact on delivering inward investment for Wales. This Committee believes that establishing an investment agency would signal to investors that Wales is open for business, improve investors’ experience of investing in Wales, and provide the tools to tackle the challenges that face investment promotion in Wales. (Conclusion, Paragraph 82)

We encourage the incoming Welsh Government to seriously consider establishing a dedicated investment promotion agency. If the Welsh Government establishes an investment promotion agency for Wales, the Department for Business and Trade must set out how it will work with the agency in a Memorandum of Understanding. DBT should do this in conjunction with the Wales Office and in collaboration with the Welsh Government. This is a vital step, as it provides certainty to investors about how the two governments will work together. (Recommendation, Paragraph 83) Untapped potential

The Welsh diaspora is an untapped resource that offers new and exciting opportunities to engage with emerging markets and strengthen the diversity of Wales’ inward investment profile in a distinctly Welsh and personal way. The UK Government should celebrate and better connect with a Welsh diaspora that is successful in business, outward looking, and that wants to support Wales’ prosperity and growth. (Conclusion, Paragraph 91)

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 the Department for Business and Trade and in collaboration with the Welsh Government, to avoid duplication and to harness the strength of the UK Government’s global reach. The strategy should be focused on generating investment leads and gathering intelligence to support inward investment into Wales. The strategy should include a campaign that re-engages with the Welsh diaspora business community. (Recommendation, Paragraph 92)

Clusters present an opportunity to showcase and communicate Wales’ strengths to prospective investors, and these valuable stories should be more consistently harnessed to promote a region’s advantages to investors. (Conclusion, Paragraph 101) 35

The Wales Office should lead work with the Department for Business and Trade to map Wales’ clusters and catalogue what they offer for prospective investors in sectors relevant to each cluster, such as R&D facilities and a robust supply chain. This map and catalogue should be regularly updated and provided to the Office for Investment to be promoted to prospective investors. The Wales Office should regularly engage with clusters that operate within the UK Government’s priority sectors in Wales, to gather investment insights, and monitor for emerging clusters to promote as opportunities for early investment. The Wales Office should use intergovernmental structures to co-ordinate this work alongside the Welsh Government’s investment activities. (Recommendation, Paragraph 102) 36