Candidate to become the next Labour leader in Wales and First Minister, Eluned Morgan, has put improving the competitiveness of the Welsh economy and raising productivity levels at the heart of her campaign.

Writing exclusively for WalesOnline (see below), Ms Morgan, who is currently Minister for Lifelong Learning with responsibility also for the Welsh language in Carwyn Jones' cabinet, said that while the Labour Party has been "good and sensitive about redistributing money within society," it was not "so familiar with knowing how to generate wealth which can then be taxed and shared for the benefit of the wider economy."

She added: "Focusing on the economy therefore makes sense at every level – and if we don’t we will pay the price. Not just in terms of the nation’s wealth, but in the sustainability of our future public services."

Therefore, as First Minister, she said her primary focus - working with the private, third and educational sectors - would be to move Wales out of the unenviable bracket of being one of the most economically deprived parts of Europe.

Her policies include creating the world's equity 'Scale-up Fund' to invest patient capital into Wales' leading indigenous businesses, whether start-ups or established businesses, to support them to significantly expand and create new jobs - with a focus too on them increasing international sales of goods and services.

She is also proposing a new approach to inward investment and export assist through a new at arm's length body from Welsh Government.

However, she insists it would not be a case of bringing back the Welsh Development Agency which was abolished by former First Minster, the late Rhodri Morgan with effect from 2006.

And in an effort to address one of the biggest challenges facing the Welsh economy - low productivity rates - she would appoint a new minister for productivity with direct responsibility for implementing across government policies.

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She would also convene a group of top industrialists, trade union representatives and self-made entrepreneurs to help advise the Welsh Government on how to boost productivity.

Ms Morgan said she would also ensure that more indigenous and smaller firms in Wales were able to secure a bigger slice of the billions of pounds worth of procured contracts from the public sector.

Eluned Morgan AM

Eluned Morgan's article in full

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My number one priority as First Minister would be to drive a radical new approach to the economy in Wales, to provide not just good quality jobs, but also to ensure the sustainability of our public services.

We need to align the key challenges facing our communities with grasping the new opportunities on offer, and we need to focus, for fast delivery.

Welsh Labour can be proud of so many achievements over the past two decades in Wales.

But one area where we have failed to make the impact that we could and should have, is in relation to the economy.

There are several reasons for this, but key among them is the hang over from de-industrialisation which still, after so many years and so many programmes, looms large in our poorest communities.

Generation after generation have been sucked into a belief that living with poverty is simply the way it will always be.

Earlier this year, the Joseph Rowntree foundation published its report on poverty in Wales, finding that 23% of people in Wales still live in poverty.

While in the past the Welsh Government has been able to rely on a block of money arriving every year from Westminster, the new powers over taxes mean that we need to grow our economy if we want to fund our vital public services to pay for our schools, hospitals, and other services which the Welsh Government delivers.

A strong Wales – Cymru Cryf

A key antidote to poverty is the creation of wealth alongside a sensitive understanding of the need then share this wealth to protect and support the weakest and most vulnerable in our society.

In 2009, after 15 years serving Welsh Labour in the European Parliament, I deliberately left the political scene to work in industry.

I was intensely aware that, whilst the Labour Party is good and sensitive about redistributing money within our society, we are not so familiar with knowing how to generate wealth which can then be taxed and shared for the benefit of the wider community.

One of the key lessons I learned was that investors need a stable economic and regulatory framework, buttressed by a skilled workforce and good infrastructure.

If there is one thing we can say about the time we are currently living through as a result of Brexit, it is that there has never been a time which has been more unstable both economically and in terms of knowing what future regulations will look like.

We must therefore do everything we can to make Wales a magnet for investment in an uncertain world and give confidence to our home grown companies to grow to sell goods and services globally.

We need to encourage our businesses to be fleet of foot, and we need as a government to create better opportunities for our companies to grow internationally.

Over the past few months, I’ve been listening to people through the Beyond the Bubble forum.

I asked what they think the future priorities for the economy should be. Many of the ideas below have come as a result of that listening exercise, a truly grassroots approach of how people across Wales would like to see change occur.

A productivity and digital minister

I will appoint a minister responsible for driving up productivity and harnessing the opportunities provided by the shift to digitalisation.

Productivity per working hour in Wales is the lowest in the UK.

I will convene a group of top industrialists and trade union representatives in addition to self- made successful business people (who are not the usual suspects) to help advise on this. We need to ensure that companies in Wales are helping employees to work smarter not harder.

Data revolution

The new Welsh Government minister would be responsible for ensuring that employers across Wales are aware that a radical change in the world of work is afoot, and that they must prepare for the impact that automation, digitialisation and artificial intelligence, industry 4.0 is likely to have on our future economy.

Data manipulation is likely to become the power which determines almost every aspect of our lives, from the way we consume our energy to understanding what diseases we are likely to develop. We cannot resist this change, but we can prepare our people for it.

Developing a specific programme to equip Welsh people with the skills necessary to deal with the new digital age would put Wales in the vanguard of this new revolution.

We need to acknowledge that young people entering the work place today are likely to change jobs around 14 times in their lifetime.

That means that we all need to keep retraining throughout our lives.

Incentivising people to do this would be a key policy for me– we will provide people with co-financed Learning Grants to study courses where we know there are skills gaps, providing a Ladder for Life programme and invest further in the Labour tradition of supporting adult learners in work.

In addition I would also ensure that the digital minister would be responsible for making sure that we take advantage of the opportunities that the new technologies offer us across government to drive change in our delivery of public services.

We will ask the UK Government to allow us to use our new extensive borrowing powers not just to invest in infrastructure, but also to invest in our people.

We will also encourage the Development Bank of Wales to loan further funding to businesses for capital investment to drive up productivity levels.

Procurement

It is clear that we could go a great deal further to reform Welsh procurement to ensure that smaller, Welsh firms win more public sector contracts.

We need to provide the facilities for small firms to work in partnership with other Welsh firms to scale up to be able to tender for Welsh Government contracts, but in order to do this we will minimise red tape and streamline current processes.

Cymru currency

We will investigate introducing a Cymru digital community currency, and we will research how this could help to keep as much of the approximately £16bn spent by the Welsh Government annually within the country.

We will examine the success of similar projects around the world.

The world’s first Scale-up Fund

We will identify the top 50 firms in Wales which have the potential to grow and become world leaders.

We will support indigenous firms with patient capital where the Welsh Government could own a stake and benefit from the growth of the company in order to expand and

create well paid jobs across Wales.

As these businesses succeed we will sell the government share and reinvest this money to help more firms.

On top of this I would put a more systematic approach in place to improve the relationship between the anchor companies and the Welsh Government.

Self employment

There are huge changes in the workplace in terms of how people are employed.

The fact is that there has been a significant growth in the number of people who are self-employed and the upward trajectory is likely to continue.

In the US some estimate that in two years’ time 40% of workers will be self-employed in some way. Today around 14% of Welsh people are self-employed.

The nature of our economy is that of the 250,000 businesses in Wales 95% of them employ 9 people or under.

We already have strength in this area which we need to enhance and support.

Whilst Wales has traditionally been strong in manufacturing today the sector accounts for around 9% of employment.

This is where much of Welsh Government economic support has traditionally been focussed.

The manufacturing sector is indeed a key engine of our economy, but I would also like to make Wales the best place in the UK to be self-employed and will set out a series of specific policies on how we should deliver this, whilst ensuring that we crack down on the bogus self-employed, and penalise companies who force employees to class themselves as self-employed for the sake of the business rather than the worker.

Business and universities

Wales is blessed with a number of strong universities – storehouses of research capability, knowledge, and skills. Sometimes, that capability is combined with business to foster investment; create new businesses; create jobs.

However, experts in the field say that much more can be done. We must therefore incentivise more and better strategic partnerships between business and universities.

At the same time, this will strengthen our ability to attract research and other finance into Wales from UK funding bodies which are increasingly looking for clear ‘routes to market’ as outputs from research funding.

We need greater commercialisation of the great innovative ideas which are being developed in our universities.

Smart eco homes

People are living longer. This is a good thing, too often portrayed as just a problem.

But I believe that we should capture for the economy the skills and experience of older people and allow them to remain independent, active, and productive for as long as possible.

On top of this we will set out a long-term policy working with housing associations, local authorities and the private sector to build Smart Eco homes that are appropriate for older people in every community in Wales (where land can be secured). There will be huge benefits from doing this.

Older people usually want to remain – and be supported as necessary – in their own homes.

Yet many often live in houses which are difficult to manage and to heat without the technical infrastructure that could be helpful to monitor their health needs in their own environment.

Through rolling out this programme in a systematic way we can train people in the construction sector which is desperate for people with relevant skills.

This would then release homes which will become available for younger people and families.

Through changing building regulations, we could insist that more materials are sourced from within Wales thereby stimulating further economic growth. All of these changes will stimulate the foundational economy.

Rural economy

We also need to implement and deliver the rural economic development plan that I published a year after entering the Assembly and develop a fourth rural economic region in mid and west Wales– essential if we leave the EU and in particular if we leave the single market.

We need to establish a rapid reaction team specifically for rural areas to prepare for a no deal Brexit if the worst situation occurs.

The disabled and mental health

Wales currently has a very good record in terms of the numbers of people in employment and, although some of the above initiatives should help to improve productivity and increase wages, one area where we need particular focus is on getting more disabled people into work.

Whilst 76% of able bodied people are employed only 46% of disabled people are employed. This issue needs some serious attention.

My discussions with disabled activists have suggested that the problem rests not with the lack of skills amongst disabled people themselves, but with employer’s reluctance to take on disabled people.

We will therefore work together with the Department of Work and Pensions to provide a package of support measures that we can offer to employers.

We will incentivise them to take on disabled workers and we will develop specific tailored support working with key non government organisations and charities offering £1,000 on production of an acceptable business plan for disabled people to start up their own companies.

We will also give significant additional support through Welsh Government programmes to support people who are suffering mental health issues so that they can remain in work.

Living Wage

The Welsh Government should be rightfully proud of the fact that all people working in the NHS are now in receipt of the Living Wage, but we now need to go further and work towards ensuring that all Welsh Government contracts and Welsh public bodies respect the living wage.

This cannot happen overnight, but we must have this as a medium term ambition.

Infrastructure

To really deliver sustainable growth in the 21st century we need to make sure that we have the infrastructure to support that growth. Fundamental to this in the digital age are smart electricity grids, and an infrastructure that will support the move to electric behicles. Very little commercial activity will be deliverable without super-fast broadband connectivity along with 5G mobile access.

There is no reason why the Welsh public sector can’t help in creating a local market for digital services with for example the NHS using its data more dynamically to drive internal and external innovation. Some of this will be beyond the control of the Assembly to deliver, but falling behind in these areas is not an option.

In addition, we need to improve our public transport infrastructure.

The development of the Metro in south Wales and morth Wales could genuinely transform the economy in these regions.

Focussing relentlessly on the delivery of these would therefore also need to be prioritised by the Welsh Government that I would lead.

Inward investment

Brexit has already caused real damage to the Welsh economy.

We will need to rebuild international relationships to sell Wales as a place to establish industry and create jobs.

We will do this through appointing experts with the skills to encourage investment into Wales, developing relationship management between Wales and the world ensuring that we develop a truly international dimension to our economy.

This group will be responsible for opportunity spotting. This will not be a return to the WDA but a new nimble body which can respond to the needs of the 21st century economy.

We will also explore the option of combining this with an arm’s length export assist office to encourage Welsh companies to sell overseas.

Taxation

We will assemble a panel of experts to give advice on revising taxation in Wales.

This will be a no holds barred opportunity to ensure fairness in our taxation system including income tax, council tax, business rates, land tax and any other relevant taxes.

We will commission the panel to ensure that we maximise the opportunity to fund our public services whilst ensuring that we encourage and stimulate investment.

Hard Brexit

Finally, my most urgent priority would be to do everything possible to stop the incredible damage that a hard Brexit will cause to Wales.

With 15 years EU experience I have an intimate knowledge of how the EU has benefited Wales and where the cuts will fall if we leave without a deal.

Welsh Government analysis has calculated a 10% cut to our economy if a hard Brexit were to occur.

Conclusion

Providing people with good quality jobs gives them a sense of worth, a sense of purpose, and the knowledge that they are contributing to society.

But we also know that a person in work is likely to have better physical and mental health and their children are more likely to perform well in school.

Focussing on the economy therefore makes sense at every level – and if we don’t we will pay the price.

Not just in terms of the nation’s wealth, but in the sustainability of our future public services.