The Big Questions: Economy

The parties competing for your vote in the upcoming election respond to our Big Questions on the economy.

The IWA has developed a set of Economic Priorities for the next Welsh Government, focussing on the potential for Renewable Energy, the Foundational Economy, and crucial reforms to how economic policy is made and implemented post-Brexit. 

The economy is a broad topic, and we aren’t seeking to create a comprehensive document on all aspects of economic policy. We recognise the important work being done by other organisations to highlight other important economic issues, particularly tackling poverty and inequality.

We asked the parties standing in the 2021 Senedd elections specific questions around our priorities, and you can read their answers below. Not all parties who we contacted provided a response. 

Here’s an analysis by the IWA team of the responses received. 

The IWA has previously shown how an ambitious target of 100% renewable energy by 2035 could deliver a low carbon stimulus for Wales’ economy, and most parties are calling for a ‘green recovery’ post-Covid-19.

How will your party’s policies ensure this vision becomes a reality? And how will you ensure communities across Wales feel real benefits?

Plaid Cymru has met the challenge set out in the IWA’s report Re-energising Wales and has committed to amending Wales’ emissions reduction pathway in its first year of government.

We will set a target to meet all of Wales’ energy demands – electricity, heating and transport – entirely from renewables by 2035, which falls under our radical vision for Wales to achieve net zero carbon emissions by 2035.

“Wales 2035” will become a national, cross-sector and cross-community mission with the following plans:

  • Decarbonising all of our railways by 2035.
  • Legislating to ban sales of new petrol and diesel cars and vans before the UK date of 2030.
  • All electricity demand in Wales to be renewable by 2030.

In addition, we will create a long term energy efficiency plan to retrofit the entire Welsh housing stock to higher environmental standards over the next 30 years. This will contribute to ending fuel poverty and the associated ‘excess deaths’ in winter.

To maximise community benefit, we will require all new renewable energy projects in Wales above 5MW to have at least between 5 per cent and 33 per cent community and local ownership, to support rural and coastal economies.

Our new non-profit body Green Transformation Wales Fund will issues bonds to pay for urgently needed decarbonising investments, including solar across all public sector rooftops and carparks. The fund will also finance thousands of house deep retrofits each year, all with roof-top solar.

An online crowdfunding platform will open up literal and emotional ownership of the transformation to the people of Wales, with a low minimum investment threshold for individuals.

These large-scale, multi-year programmes will minimise unit costs and give suppliers confidence in developing capacity and taking on and training employees. Thousands of jobs will be created across Wales.

We would exempt sub 500 kWp renewable energy installations from business rates, and support low interest decarbonisation loans to SMEs. Essential support will also be provided for grid upgrades, offshore wind, tidal and wave development.

Under the Welsh Conservatives, Wales’ future will be powered by a green recovery and we can rebuild our country to be a place of opportunity.

We will transform the Welsh economy with dynamic infrastructure investment, and the installation of 20,000 green charging points as we move into the new electric-hydrogen car era.

As part of our plans, we will create 15,000 green jobs for local people, ensure Wales is the green energy capital globally, and create a £150-million Wales Marine Energy Investment Fund to purchase equity in marine and hydro energy projects to produce renewable energy.

We will fund a Welsh Tidal Power Feasibility Study to accelerate the delivery of tidal power projects around Wales and provide open source data for developers, and work with Welsh universities and the private sector to create a new centre of excellence and research into energy storage and transportation.

Our bold vision will create more jobs in the green sector for the people of Wales, as well as increase renewable energy for the future.

Welsh Labour is committed to bold action to tackle the climate crisis and to supporting a green recovery.

In government we’ve already set stretching new targets towards net zero and taken meaningful actions across government to help us get there. A good example is our new Wales Transport Strategy which is a bold change to transport policy in Wales and which sets out clear actions to encourage modal shift.  

Wales has made good progress in securing more renewable energy generation in Wales with more than 50% of the energy we consume now produced from renewables. There are now no coal fired power stations operating in Wales. 

Our manifesto sets out proposals to Move Wales Forward including building 20,000 new low carbon social homes for rent; developing a new Tidal Lagoon Challenge as part of a world leading marine energy industry, including tidal stream and wave.

Welsh Labour is also committed to our entire energy system being net zero by 2035 at the very latest and, importantly, we want more of the energy infrastructure of Wales in our own hands – owned by Welsh communities, cooperatives and public bodies. 

A green recovery is key to our recovery from the pandemic, and we aim to meet the calls of the UK Committee on Climate Change, spending £1bn a year over the next term to ensure this becomes a reality.

Homes are at the heart of our plans for a green recovery. We will build 30,000 new social homes for rent which will be green homes and set a new ‘Homes as Power Stations’ standard for house building.

In addition, we’ll invest in retrofitting existing homes to kick-start our plans. Our plans will benefit communities across Wales, creating jobs, reducing bills and tackling fuel poverty.

A Clean Air Act and investment in active and green travel will help to address health inequalities facing too many of our communities, and investment in climate resilience and greener communities can help to protect communities at risk of flooding.

The Foundational Economy has become an important lens through which to view economic policy, by investing more in the dependable, local parts of the economy that people value.

Do you agree that these parts of the economy merit greater attention?

What will your party do to support growth, social value, and innovation amongst foundational firms and sectors in Wales?

Wales has one of the lowest levels of local business ownership of any advanced economy. That must change.

Time and time again public money has been spent to attract new investment and either the investor then exports the profits or simply walks away. This has been the story of economic development in Wales for over 50 years.

Instead, Plaid Cymru plans for a smarter economy will be based on expanding, supporting, and protecting domestic businesses. A Plaid Cymru government will adopt a new Local First policy built around local ownership of the economy, infrastructure, and business, and a sustainable skills base for a revived workforce and economy.

As part of this we will create a Welsh model of local public procurement built on the foundational economy. We will set a target of increasing the level of public sector procurement from 52 per cent to 75 per cent of the total spend.

The principal aim of our economic policy will be raising standards of living through the creation of fairly paid, high-quality jobs in every part of Wales.

This includes new, well-paid jobs in the foundational economy, seeing an expansion of employment in people-related jobs less vulnerable to automation, especially in caregiving, teaching and the arts.

Our policies for a Green Wellbeing Economy include the Foundational Economy approach of leveraging public expenditure and commissioning to support a greener and fairer economy.

The pandemic highlighted who our really essential workers are but to reward them properly we need a shift in the way we measure our success – away from Gross National Product (GNP).

This means strengthening the Future Generations Act approach and really delivering on Wellbeing Economy commitments of Welsh Government with innovative indicators and budgeting. 

We have a range of policies in support of local economy and value, including extra support for the not-for-profit social and environmental economy, building on existing successes in Wales.

The Foundational Economy approach is a great transitional step, but has to be linked into a wider strategy to reform the economy. This means organising in defence of Welsh government powers and their extension in order to gain powers to really shape a Wellbeing Economy in Wales. 

The COVID—19 pandemic has exposed what 22 years of Labour rule has done to Wales’ foundational firms.

In a nutshell, they have been badly let down, where they are still being hammered by the highest rate of tax in Britain, as well as fearing Labour imposing disastrous taxes on employee parking and tourism.

But we will reverse this by kickstarting the sector’s recovery.

To achieve this, we will maintain the cut in VAT to 5% for tourism businesses until April 2022; create business rate-free zones; and abolish business rates for small businesses. 

We will also support new micro firms who want to expand by creating grants to pay the employer NI contributions for two new starters for two years, helping to accelerate growth. 

Businesses also need certainty and that is why we will halt Labour’s planned tax raids, which includes Tourism Tax, Social Care Tax, Driving Tax and Employee Parking Tax.

Welsh Labour has made an important start in government over the last few years in raising the profile of the foundational economy, developing a new £4.5m Challenge Fund to test innovative new ideas and by publishing a new Foundational Delivery Plan.

Jobs at the heart of our communities such as in care, food, housing, energy, tourism, construction and retail play a critical role in our lives – just look at how the last twelve months have demonstrated this. This part of the economy is estimated to account for four jobs in every ten and £1 in every £3 spent. 

Taking further action to help strengthen this area of our economy will be a priority for the next Welsh Labour Government. We will look to scale lessons that have come out of the Challenge Fund projects and help develop the missing middle of the Welsh economy.

We will use all our policy and delivery levers to strengthen Foundational sectors – ensuring that everybody has access to basic essential goods and services within this part of the economy and ensure that the people delivering them are properly valued and that where possible our public services can procure more goods such as food locally. 

In the manifesto we launched recently we set out plans to move Wales forward by putting into law our new Social Partnership and Procurement Bill, to use the Development Bank of Wales to support more firms with patient capital and to develop a new Backing Local Firms Fund which will all help support this vital area of the Welsh economy. 

The last year has challenged us to rethink many of the things that we value most in our day to day lives. We’ve come to appreciate those things which not only benefit us as individuals, but our wider community too.

Our recovery from the pandemic must allow everyone to thrive, and must invest in a way which provides a sustainable footing for our economy, but also provides opportunities for families and communities across Wales.

We’ll provide free part-time childcare for all children from 9 months until school age and ensure that all care workers are paid the Real Living Wage.

We will also pass an Economic Development Bill for Wales which will provide the stability and capacity to strengthen local supply chains and provide clarity for foundational sectors in Wales on our direction of travel. 

Wales has previously benefited from EU structural funds, at both a local and national level. These funds now look likely to be administered by the UK Government, and Wales will need to get the structures right so it can compete with other parts of the UK to secure them.

How will your party ensure Wales makes successful bids into this new UK-wide framework?

Powers over economic development are devolved to Wales – but the UK Government’s Levelling Up Fund bypasses the Senedd and instead gives the Secretary of State for Wales a role akin to feudal overlord.

The Community Renewal Fund, the pilot scheme for the Shared Prosperity Fund provides £220 million for the entire UK, whereas Wales alone received around £375 million a year in needs-based funding through EU structural funds. 

Plaid Cymru is highly critical of this scheme which, in promoting UK-wide competition, rather than a needs-based system, has effectively broken Wales’ economy into 22 competing units.

Plaid Cymru offers an alternative plan – a strategic £6 billion recovery stimulus to make Wales’ economy fairer and greener. A Plaid Cymru government will seek an expansion of economic powers for Wales from Westminster.

Ultimately, a Plaid Cymru First Minister will let the people of Wales, not Westminster, decide on our future and a Plaid Cymru Government will hold a referendum on independence by 2026, giving the Welsh people the democratic right to decide whether they agree that all decisions affecting Wales should be made in Wales.

This question should openly engage with what is really happening to democracy in Wales and how it affects our ability to shape economy – and for people in Wales to have the power to vote for Wellbeing approaches.

The Westminster grab of devolved powers is well underway. Under the guise of a bill that is ‘just about the economy’ (the UK Internal Market bill)
Westminster aims to severely limit any distinctive Welsh economic approach essential for a more social and environmental future.

This is a very serious moment for Welsh democracy, which the legal challenge from the Welsh Government (still current) makes clear. The
centralised so-called ‘levelling up’ fund will be used to undemocratically strengthen the hand of Welsh Tories in their plans for a return to ‘business as usual’ in Wales.

This is not a time for progressive parties to fight over how to get a bit of cash through this flawed process – but a time to form an alliance in defence of devolution and the right of the Welsh people to gain democratic control of our economy, together with the other devolved
nations of the UK.

Labour wore EU structural funds as a badge of honour, yet the “once in a lifetime” funding was given to us again and again as ministers misspent the cash on pet projects and gimmicks that failed to deliver improvements and prosperity in the Welsh economy.

The new UK shared prosperity fund will replace the overly bureaucratic EU system, and Wales is guaranteed to receive at least the same level of funding as we currently receive from the EU.

This funding will be used to tackle inequality and deprivation right across Wales but local decision-making on how it is spent, not a ‘Welsh Government knows best’ and Cardiff-centric approach, will be critical to its success.

Rather than putting up barriers to dialogue and playing political games, the Welsh Conservatives will eagerly engage with our Conservative colleagues to secure the best deal for Wales and ensure bids are successful.

For more than three years, the Welsh Labour Government has worked with stakeholders from across Wales – advised by the Organisation for Economic Cooperation and Development (OECD) to design a Framework for Regional Investment to provide the context for the replacement funding for the Structural Funds.

Recent announcements by the UK Conservative Government have shown a renewed determination to undermine and marginalise the role of both the devolved Governments and legislatures and to put in place structures designed directly to challenge, duplicate and compete with those we have here in Wales in areas of devolved competence.

Instead of a coherent, strategic approach to regional development, they favour a ‘pick ‘n’ mix’ solution where they pick the winners from uncoordinated, competitive bids.

We find this completely unacceptable, and we have called for a reset of the relationship based on the Welsh Labour Government’s vision of a reformed and strengthened United Kingdom, in which all the governments work together for mutual benefit and treat each other with respect.  

The next Welsh Labour Government will use its mandate to persuade the UK Government to adopt a fundamentally different approach.

If this is rebuffed, we will do all we can to ensure that local authorities and other stakeholders in Wales submit collaborative bids which fit with the strategic framework they have helped to design. We will strive to prevent the UK Conservative Government using the Internal Market Act to fund interventions not supported by the people of Wales.

We will insist that Wales gets its fair share of the Shared Prosperity Fund and the so-called Levelling Up Fund from Whitehall and that the funding we receive is spent in accordance with our Framework for Regional Investment.  

Wales must not see a penny less under the new Shared Prosperity Fund.

With many projects falling in devolved areas, the Welsh Government must have the scope to shape, at a minimum, the priorities of projects in Wales.

We also believe that funds must be ring fenced for Wales or fair funding mechanisms put in place to fund Wales fairly and transparently.

EU Structural Funds have also been of great importance to Welsh research and development, such projects should continue to be eligible under the new scheme to allow universities and colleges, and others, to continue world-leading research into health, public health, technologies, and more.

Economic development and environmental sustainability can no longer be treated as two separate areas of policy. Our economy must be clean, green and fair – but we will only achieve this if it is successful and delivers prosperity.

To unite these objectives, we believe these policy aims must sit in a single ministerial portfolio – encompassing economy, energy, transport and the environment.

How would your government ensure these priorities complement each other?

To be serious about climate change, Plaid Cymru agrees that we must tackle it across multiple areas, but environmental sustainability must be embedded at the heart of decision-making at all levels of government. 

A Plaid Cymru First Minister would take personal responsibility for the economy after the election – a reflection not only of the size of the challenge but also Plaid Cymru’s commitment to overcoming it.

Sustainability will be at the heart of the economy, because with a Plaid government, Wales would be at the leading edge of the green industrial revolution, becoming a testbed for global innovation on climate change and helping us achieve a net zero carbon target by 2035.

While addressing our harmful impact on the planet will be the collective responsibility of the whole government, this will be guided by the Minister for the Environment, Energy and Rural Affairs who will have overall direct responsibility.

The WGP Manifesto makes clear that we need joined-up government but we do not believe that the ‘strong-man’ model of a swollen portfolio is the answer. More systemic understanding of the overall aims of government as a whole can be developed, with a democratic mandate.

This means progressive parties campaigning for Wellbeing social goals and engaging civil society to find better solutions. In Welsh Government this means moving from a civil service compliance model to more open, learning and listening government, including across departments.

WGP believe these changes are urgent as we move to deal with our linked climate, nature and inequality crises. We need to be developing stronger communities and ecologies and this means democratic innovations. 

The transformation needed will not be achieved whilst we are tied to the backward-looking Westminster ‘Singapore Island’ project with attacks on work and environmental standards. The undermining of devolved powers is a key part of this project and must be resisted. 

Only the Welsh Conservatives can kickstart our recovery by building both an economically stronger and greener Wales.

Economic development and environmental sustainability go hand-in-hand and our bold policies will place both at the forefront.

To create a greener Wales, we will deliver 65,000 jobs, with at least 15,000 green jobs and 20,000 green charging points, and we will achieve our net zero target with investment in clean energy solutions to reduce carbon emissions.

Welsh Conservatives will also scrap Natural Resources Wales to improve transparency and create two separate organisations focused on the commercial and the current regulatory function.

We will create an Independent Office for Environmental Protection and Climate Change for Wales, to hold the Welsh Government and other public bodies to account in tackling climate change and protecting our environment.

Our robust plan will build a greener Wales by generating sustainable jobs for the long term.

Since 2016 the Welsh Labour Government has taken a whole government approach to vital areas such as economic development and decarbonisation.

A major plank of our approach has been the Economic Contract – with decarbonisation, fair work and skills development now much more prominent factors in economic policy and which guide government support for businesses.

We’ve also had the Decarbonisation Ministerial Task and Finish Group which has included Ministers from across government in its work. 

The next Welsh Labour Government will move Wales forward by implementing its new Economic Reconstruction Plan which has green recovery, environmental sustainability and inclusive growth at its heart.

We will strengthen our Economic Contract so that public investment with a social purpose becomes the driving force of economic development. We will also continue to take a joined up, whole government approach to vital areas such as economic development, decarbonisation and transport. 

Crucially, we will involve partners outside Welsh Government in that work too – and use the bold new regional structures developed with local government over the last few years to help shape policy development, planning and delivery. 

A Welsh Liberal Democrat government will put wellbeing and our planet at the heart of its agenda: we want to ensure a future for Wales where people and planet can thrive.

Climate responsibility needs to be embedded across the whole of government and collaboration with local government and wider society is essential to deliver a greener economy for Wales.

We must use different measures of success in order to achieve the step change in approach, which is why the Doughnut Economics approach sits at the heart of our plans.

We also need to address the gap that our departure from the European Union will leave in environmental policy and governance, ensuring that we do not fall behind.

We will look to establish a new independent body that will hold the Welsh Government to account and ensure compliance with policy and practice.


We approached nine of the parties fielding candidates in the election, and five of them responded.


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