Good afternoon, everyone, and welcome to this afternoon’s oral evidence session of the Welsh Affairs Committee. My name is Ruth Jones and I am the Chair of the Select Committee. Our session today is the final one on promoting Wales through inward investment. I thank Minister Stockwood and Tim Newns from the Department for Business and Trade—it is great to have you with us, gentlemen, thank you. As no Members have any declarations of interest, Minister, perhaps you would like to open with a brief introduction of how you fit in the DBT structure, with Tim Newns afterwards. We will then go on to the questions.

Happy to. Good afternoon, everyone. I have been in post for six months. The Office for Investment is the Ministry for ensuring that the Government industrial strategy is funded. That is the primary role, but there are some secondary roles as well. It sits between the Department for Business and Trade, and the Treasury, so part of our role is to make sure that the voice of business is in the Treasury as well. As someone who has had a 30-year career in business, I am glad to do that. The third part is to act as an interface with legislation for businesses—for people trying to invest in the UK or trying to expand in the UK, we try to make sure that we interface with those businesses. Our primary role is to represent the UK’s interests with investors.

I am Tim Newns. I am one of the directors in the Office for Investment. I have been there for just over three years. As well as being part of the major deals unit, I oversee our place team and our strategic opportunities team.

Brilliant, thank you. This is the Welsh Affairs Committee so, Lord Stockwood, what are the Office for Investment’s priorities in Wales?

May I step back from that, actually? The priorities overall are concurrent across the whole UK, but then we can talk specifically about Wales for the purposes of this conversation. What we try to do is to look at the industrial strategy for the next 10 years, which has eight key growth sectors. Our role, as an organisation, is to ensure that those strategies are clear and investable. Specifically, the eight core growth sectors do not mean with exception to other industries, but that they are the eight core growth sectors where we have comparative advantage, internationally as well. Alongside making sure that we have those plans specific for each region of the UK—whether that involves working with combined authorities or the Welsh Government—we try to make sure that as a team we work in collaboration to understand that there are investable opportunities that we can then go and match to capital globally or nationally, through the pension funds. Specifically for Wales, we are trying to build on the growth capabilities, whether that is in the creative sectors or what we are seeing with semiconductors down in the south, or whether we are looking at the opportunities in the new AI industrial zone in the north. We are trying to make sure that the industries of the past are secured and retained and that we have the right sort of insight and capacity there, but also to make sure that we are looking internationally for further growth opportunities. In Wales, those are the main things we are doing today. We are looking through the growth zone in the north and looking at semiconductors through the investment that Tim can speak to and that we helped to secure in the south—in your constituency, I believe.

indicated assent.

And a couple of weeks ago I was in Wrexham, with Andrew, looking at the myriad opportunities there. We are making sure that we are supportive as well. So this is proactive in terms of working with local parties, but also reactive in that we take instruction from local politicians or Members of Parliament, to ensure that those strategies are well supported and built out, so that they are investable.

You have identified those priorities, and priorities and growth zones are great, but how do you measure specific progress against the priorities?

The OFI has its own metrics. We take instruction from the industrial strategy: there are reports quarterly in terms of the growth objectives, foreign direct investment and how projects are being delivered. Then we have our own capacity. We look at what we call hunt lists, which is about trying to make sure that we are proactively out in the market looking for businesses and investors that can support this work as well. The industrial strategy’s delivery is the main way we are measured, but internally we also look at the lists of businesses and investors globally, to make sure we have a strong pipeline for the whole of the UK.

Brilliant—thank you very much. Obviously, you are talking about the priorities now. How about over the last five years? I appreciate it may be difficult for you to talk about the last five years, but how have those priorities changed over the last five years?

I came into the OFI six months ago, and one of my personal reasons for coming into Government, taking my earning potential down to zero from what it was seven months ago, was this. The agenda that the Government have around the industrial strategy is, I firmly believe, the right one, but what that is in service of is more important. What is important to me, coming from the north-east and in particular from Grimsby, a post-industrial town, is that we have to make sure that the story of growth in the UK, whether we are talking about the industrial strategy or the infrastructure, makes sense to people and impacts people’s day-to-day lives. I think that is the difference that I have witnessed. There is now a really clear articulation and understanding that we are starting to make sure is pervasive through the organisation. The growth agenda for the main economy is, I believe, on track. Inflation is at the right sort of target. The cost of living should come down in the next 12 months. That is the real reason we are doing this—to ensure that there is a real focus on the regions of the UK and make sure that this has a real effect on people's lives, but political expediency as well. I can’t talk for the last five years, but I can say that in the last six months there has been a real understanding that this has to connect to people’s day-to-day lives, rather than being at the aggregate, macro level—around inflation and interest rates. They are important, but actually connecting that and making sure that all the regions are well served is a high priority, certainly for the OFI and certainly for the Government.

There have also been a number of policy interventions over that time, as we have obviously seen throughout Wales, in terms of the freeports and the investment zones. There are a number of policies that are distinctly to increase the attractiveness for potential investors on a very geographical or place-focused basis. Over the last 12 months, we have seen an expansion of the OFI as well. Previously, in its initial incarnation, the OFI was very focused on the really big deals. There is certainly still an element of that, but it is now a broader investment promotion agency for the UK. We have put quite a lot of care and attention into the structure of that to make sure, first, that place or nations and regions are a common theme throughout that, irrelevant of which team it is—whether it’s the capital formation team or the strategic investment opportunities team. That has been a critical part of this. Indeed, it’s one of the big bets, as we call them, across the Department for Business and Trade more generally; it’s one of the six priorities for the Department. We have seen a combination of factors, from policy to delivery, and then, at a more macro level, more of a focus on high-value transformational investment. I suppose it is about where the UK Government’s most definitive intervention is. That is where we have seen, particularly in Wales, a number of large projects, like Shotton Mill. We have talked about the semiconductors area in south Wales—in your constituency, Chair—with Vishay and some of those really key investors in terms of the volume of capital and jobs that they are bringing, as well as the impact on the supply chains and overall growth.

Thank you, both, for coming to see us today—it is good to see you again, Lord Stockwood. You have already touched on quite a bit of this in answering the Chair’s question, but how is the Office for Investment delivering benefits for Wales and where in Wales are those benefits being felt? Could you go into some more detail, particularly in terms of what the delivery involves and who it involves? You have touched on local authorities and things, but what about how you work? That would be useful.

Maybe I can talk about the bigger levers that we have to pull, and then Tim can come in on the specifics. Overall—I think this follows on from the Chair’s question—this Government have now put significant investment vehicles in place for the whole of the UK, and certainly Wales is going to benefit from this, if it is not already. When we look at where there are financial constraints on investment throughout the market, we now have instruments or organisations that can address those: Innovate UK, at the start-up end of the scale, through to the British Business Bank, which is investing in funds to help scale up, and the National Wealth Fund—and then we have GB Energy as well. There are multiple sources of capital that we can now bring to bear on strategic investments throughout the UK. There are then the structural initiatives. We have already talked about the AI growth zones, but it is brilliant to see the first major announcements in north Wales. There are also the policies around clean energy, with initiatives and commitments to floating offshore wind farms in the Celtic sea. There are structural initiatives as well, so capital exists and the structural initiatives exist. Importantly, I think our role is then to connect inward investment to help to accelerate and amplify those capital investments by the Government, including through foreign direct investment. In November or December, I took a group from Oman—the ambassador and the Omani Finance Minister—down to Cardiff to show them the opportunities for investment and different cultural opportunities outside the south-east of the UK. It is really important to ask how we think about investors from pension funds in the UK, private equity funds globally or the sovereign wealth funds, to make sure that they are thinking beyond just anodyne structural investments in funds and to show them the communities that this can really impact. From top to bottom, there are a number of initiatives now. It has only been six months, but I am encouraged by the amount of activity in Wales, certainly relative to other parts of the UK, in terms of both entrepreneurial activity in communities and structural projects like the AI growth zones. It is good to see both working. There is a lot of work to do, and it could be better, but it certainly feels like it is being well supported. It is something to build on.

The story of investment in Wales over the last few years is a relatively positive one. We have seen growth in the numbers of investments taking place, and we have seen job numbers going up steadily over the last few years. I think the most recent figures that came out show Wales receiving about 4.7% of the UK’s investment share, which is almost equivalent to the population share of Wales in the UK. In that respect, I think we have a solid foundation to build from. From a delivery perspective, I mentioned some of the larger projects that we have worked on. The other positive thing is that those projects are quite well spread across Wales, both in the north and in the south. Mid-Wales is probably one of the more challenging areas, but we have still seen Kiernan Structural Steel, for example, and one or two others, going into that area of the country. From our perspective, as the Minister said, we are concentrating on the industrial strategy as the ultimate plan that we are working towards. We can really promote Wales’s internationally significant clusters, such as semiconductors, aerospace and some of the life sciences elements, both in Cardiff and north Wales, and draw investment into them through the international network. I mentioned the structure of the OFI and one or two of the teams that we have set up on the delivery side to help. As I say, we have a place team, or a nations and regions team, where we have a dedicated Welsh senior investment partner, Liz, who is sitting behind me—I am not allowed to look around, apparently, but I know she is there. Liz has huge experience in trade investment, having been involved in trade negotiations, investment and trade for many years. That is a dedicated position to purely work with the Welsh system to make sure we are delivering for it and that there is the infrastructure here to support those projects. The strategic investment and opportunities team is actively working right across the UK, including in Wales, to uncover the major investment opportunities. At the Welsh investment summit, a number of big capital opportunities were put forward, which was great. I think they came across really clearly. We were able to bring capital investors into that environment and see some of those opportunities. We have a new marketing team—there was no dedicated marketing team before—which allows us to be much more on the front foot with the nations and regions element. Although we will probably continue to lead with sectors to support the industrial strategy, place comes through in the sector piece really strongly. If we are talking about aerospace, we will be talking about Broughton in north Wales. If we are talking about semiconductors, which we will be, we will be talking about Newport and that whole corridor in south Wales. That is important. We also have a financial services concierge service, which is working with the world’s largest financial services companies. Insurance in particular is a real strength in Wales, so that will become part of it. We also have our triage service, which has been really important in finding power connections in particular, as well as in looking at planning and skills availability to help to land investment. There is a broad range of different units, all of which are quite tactical, to try to unpick any barrier as we bring investment through the system. There is also, as the Minister said, the proactive element: going out there and hunting the new.

You talked about place and regions. You mentioned local authorities—we have mayoral authorities and all those kinds of things. Is there capacity or ability to bring those together? I am thinking about Wrexham, where I am. The whole north-west England corridor—Manchester; Liverpool—is so important for us. I imagine that it is the same down south in Cardiff and Bristol. Are you able to operate on that scale as well, rather than getting too tied down in place, regions or nations?

My personal view? One of the things that I have found interesting about coming into Government is that there is a deliverability factor to who you are working with. That is an obvious statement, but I thought it might be slightly different to the commercial world. The regions that are having the most success have a coherent story and a belief that you can deliver the project. You can put investors in front of them and there is a coherence. When I came to Wrexham, it was brilliant. We had such a good day and there was so much enthusiasm, but I came away thinking, “Who do we speak to directly about projects?” There were so many different people from local and national Government; you were there; there were entrepreneurs there. If we look at Teesside or Manchester as an example—I know they are combined authorities rather than nations—they are really coherent. We go to the mayor and the mayor has an economic plan. It helps us to prioritise. We have to try to work with a range of opportunities with finite resources. One of the things that we were keen to work on with you more generally was how we create a more coherent single voice that represents the opportunities—whether that is regionally in Wales or nationally in Wales is up to the people to decide. I came away from that day thinking, “Who are the people we are going to partner with to deliver these projects specifically?” It does not have to be that clear cut all the time, but when I think about the last four months, I notice the areas that are doing particularly well have a clarity of delivery. There is clarity about where you can get data and information from quickly, and who the decision makers are. There is a clear, coherent plan for the region that maps to a national plan. That is one of the things that we need to do better with the Wales team to try to help. By the way, those capabilities are at varying degrees of maturity based on where the devolved powers are and how long they have been in place. That was one of the things I was a little confused about. Ultimately, we want to get deals done that impact the local communities—that is the first, second and third order of our priorities—but the ability to deliver stuff needs clarity of purpose and clarity about where decisions can get made. Maybe we could work together to make that slightly clearer. Is that fair, Tim? That is just a personal view after those meetings.

I would agree with that completely. We do bring certain regions together over certain initiatives as well. Obviously, the devolved nations are dealt with at a national level. In England, we have a couple of initiatives—the northern growth corridor and the OxCam corridor—that are, again, collective propositions. The way we deal with the sectoral aspect of things—with the creative clusters, for example—is to present them as a collective as well. I think we do bring them together in the right circumstances. The Minister has probably covered everything else.

OxCam is quite a good example, actually. There is a new initiative to connect Oxford and Cambridge together, and Lord Vallance is the champion. It creates a coherence and a narrative that allows us to go out internationally and talk about large-scale numbers and investment propositions in the round. We have a whole list of tactical opportunities that are really important in themselves. They might be £10 million, £20 million or £30 million at project level and involve 200, 300 or 400 jobs, but the sort of people we talk to who are looking to invest are often trying to talk in the billions. To get to that sort of scale, if we can create a more coherent picture and investable proposition, that will be more efficient for all of us and will ultimately have more impact on the nation.

That has just reminded me: we had all the Scottish cities down in London about two weeks ago on an investment mission, if you like. Again, there were two or three initiatives that would work well collectively across the whole of Scotland. One was a university spinout vehicle, which all the different cities were very keen on to support their key universities. The other relates to the Minister’s point about how we aggregate some of the smaller investment opportunities that, individually, would not really get the attention of the major investors. With things like heat networks, for example, obviously there will be many of those opportunities throughout Wales, but they are probably only £3 million or £5 million at individual level, whereas if we bring them together across regions we can start to aggregate them to £50 million or £75 million. That is where we can start to get interest from some of the big domestic pension funds or international funds, for example. We can do that, but we need that important co-ordination resource.

Thank you very much. Moving on, is the Office for Investment targeting specific markets overseas to promote Wales?

The honest answer is no. We are talking generally about the UK, and Wales is a part of that. We do not go out there and think, “This trip is specifically for Wales,” but we are super supportive and aware of the opportunities throughout Wales itself, so it is part of the portfolio. If we could work on an investment prospectus specifically, when we think about the industrial strategy, it makes it easier for us to think about clusters more than individual destinations, but our role is to represent the whole of the UK.

Same question—in terms of the UK, are you targeting specific markets?

Yes, definitely. That is the main thing we are doing. I am in the middle east on Wednesday—in the Gulf states. The optimist in me, being an entrepreneur, thinks that the UK has huge assets and comparative advantages, particularly post Brexit. As much as that was a tragedy in my personal opinion, with the geopolitics and where we find ourselves in the world, we have comparative advantage in our rule of law, our R&D base and our great universities. We could go on and on about our natural assets or our historical industrial clusters, but we are targeting specific nations that have an interest. There are investors globally that have expressed an interest to us in parts of the industrial strategy. Over the last six months, Tim, myself and the team have been trying to be more targeted around those initiatives, rather than just looking globally for a travel schedule and turning up. We are trying to be very targeted in saying that this nation, or this particular investor, is interested in infrastructure, offshore wind farms or whatever, so that we are going in with a targeted objective for each of those meetings, rather than just representing the UK.

On that question, how future-proof are those markets to potential shocks, given global insecurity? Is that a consideration you look at?

I think we have only met twice, Andrew. You are overstating my ability to look at things like that—it is beyond my pay grade. We have two huge assets that we can leverage with investors. First, we have the international markets and the private equity markets globally. Wherever they are domiciled, they will be spread globally in terms of their risk appetite. Ultimately, I worry less about the global capital markets overall. The under-represented opportunity, which I knew very little about apart from the headlines six months ago, was the Mansion House accords and the Sterling 20. This predates me, but we are trying to do quite a lot of work to say that there are tens of billions of pounds of capital locked up in our defined contribution schemes in the UK, which do not have a risk tolerance for start-up and scale-up capital in particular. The Mansion House accords are an expression to try to encourage the largest 20 defined-contribution pension schemes in the UK to invest in our own markets. I think that is the biggest opportunity for us, first, because it is our own money as a nation and, secondly, because it does not play in this area historically. Where we really need capital is predominantly in the start-up and scale-up communities—not that we do not need capital for infrastructure, but I think infrastructure projects and the return profile are fairly easy to invest in, notwithstanding the 10 or 20-year return horizons. It is about the venture and start-up stuff; our pension funds helping in that could unlock tens of billions of capital to help us to support the industrial strategy.

On the markets, I mentioned the expansion of the OFI, but that also came with the restructuring of existing investment resource in the wider Department as well. As part of that, we have focused on 25 core markets for investment globally, all of which your Welsh international offices overlap with—aside from Belgium and Ireland, but we can service those quite easily from our other offices in Europe and obviously in Northern Ireland it is very easy for us to go between the two. That has given an additional focus to fewer markets. We are homing in on those markets that we feel have the highest potential over the next 10 years plus. Again, it is with the industrial strategy in mind and the markets that will service that the best, but there is quite a diverse spread in terms of economic security. I should also mention the Brand Wales funding that is coming through as well. That is a great opportunity for us to work together on the balance between the Welsh brand, the sectoral strengths and the cultural and wider asset base that Wales has to offer. We are really looking forward to working with you, the Joint Committee and the growth deal areas such as the Cardiff capital region and Ambition North Wales to work through how that money can be put to best use. Wales has a particularly strong offer in some sectors, such as on semiconductors: where we do tech events, Wales will absolutely be at the forefront. In March, we are going to be talking about clean energy in Oslo, for example, and the Celtic sea will be front of house on stage. Even though, as the Minister said, it is not necessarily a Welsh-only mission, but the strengths of Wales will come through in those environments.

Mr Newns, earlier you mentioned the Scottish cities coming down to London, so when are the Welsh cities coming down, or have they already been?

It is an actual association in Scotland, which is why they have done it for the last few years. It is driven by themselves, but we interlock with them as they come down and help them build a programme. We would be perfectly open to the major Welsh cities doing something similar—but I was not aware of a specific organisation working in the same way. However, that is not to say that it should not be quite straightforward to build up.

Thank you both for appearing before the Committee this afternoon. Mr Newns, you mentioned earlier that it was a little more challenging to attract investment in mid-Wales than in the north and south. I am a mid-Wales MP, and am sat next to my constituency neighbour, so can I quickly ask: what challenges are you encountering?

It would probably have been better for me to say we have had more success in north and south Wales rather than saying it is challenging in mid-Wales. The industries we have focused on in clean energy semiconductors and some of the life sciences have tended to be in the north and south. I know that there are also advanced manufacturing opportunities in mid-Wales and some other areas. The point was that we have had more success with some of those core sectors in those areas. It was a poor choice of language.

Not at all. You mentioned the Shotton Mill development, semiconductors and energy. Could you share a little more about the pipeline of opportunities that you see Wales being able to benefit from in the forthcoming years?

Sorry to be relatively boring, but it is around those key sectors again. Wales has probably had more activity from the wider OFI team than either Northern Ireland or Scotland just because of the mix of sectors. Most of the team has been involved. That could have been on the semiconductor side—which is still very active. The OFI team has also been very heavily involved in the establishment of the AI growth zones as well and has worked very closely with DSIT. The north Wales opportunity around the AI is incredibly exciting with the SMR potentially powering multiple data centres in that area. Likewise, there is Vantage in south Wales and a potential £12 billion investment pipeline there as well. The team is very focused on delivering some of those deals that have been announced—but are still at an early stage—and then doubling down on that. We have data centres connected to the AI growth zones, we also have the semiconductor work, particularly in the Newport corridor and the investment zone there. We also have clean energy. We had the auction round announcement, which was positive news for floating offshore wind in the Celtic sea. Again, part of the team is working actively on that and looking to build supply chains. I can go on and on, but those are the types of opportunities we are focusing on. They are all very much in support of the industrial strategy.

Thank you, that is very useful. Lord Stockwood, you mentioned that it is sometimes useful when you have regional mayors, for example, because they will have an economic plan and that helps inform your thinking. Do you have a similar conversation with the Welsh Government? Do they present a set of priorities or key sectors that they wish to benefit from your support?

The interaction tends to happen with the industrial strategy board. Basically, the plans for the UK are combined and we get our marching orders from the industrial strategy board. In the first six months, I have not had a personal interaction. I do not know if Tim has.

The team are dealing with the Welsh Government on a day-to-day basis. We also have a deputy director, Tom, who is based in Cardiff as well. Again, there is daily connectivity, both with the Welsh office and the Welsh Government. Those strategies and plans are shared as they are published and are generally part of the consultation process as well. We also interact heavily with the likes of Cardiff capital region and Advantage North Wales as well. We are generally quite close to those things.

Finally, you mentioned a few members of the team—and Liz is with us today. How many team members are based in Wales or predominantly work on Welsh matters?

We have 13 people based in Wales, 12 of whom are core DBT while Liz is our investment partner—so she is the 13th. We are a team that is spread across the UK as well. We are not all London—I am based in Manchester, actually. One of my fellow directors is based in Sheffield. We are quite dispersed in that sense; we are not a London-centric team by any means, but our roles are national. It was a great pleasure to come to Celtic Manor for the Welsh investment summit and spend some time down there. I am very familiar with north Wales as well, particularly living in Manchester—I am sure you are probably sick of Mancunians coming over. But we are very dispersed and, aside from a handful of regionally specific and nationally specific people, we are generally a mobile team in that sense.

Following on from something that Andrew asked, are certain countries prioritised over others for attracting inward investment? If so, what are the criteria by which they are prioritised? You have the growth in Asia and proximity in Europe; you mentioned the Gulf states as well, and I wonder whether there are ethical considerations there. What criteria are used?

For selecting the inward investment, the ethical considerations are front of mind. We are looking to trade with progressive countries that share our values. It is really about the sectors. To be honest, there is a reactionary element to what we do. We take calls daily—weekly—from countries, companies and investors looking to invest in the UK, and our job is to help filter that and match them to opportunities. But we are trying, and this is in the last six months, to be more proactive in trying to select targeted markets that have an expertise or the desire to invest in eight industrial strategy sectors. We take our advice from the Foreign Office in terms of the ethical considerations. It is beyond us to make those decisions; if the Foreign Office is happy for us to trade in those countries, we will be there, and I think open trading with markets is one way to bolster international relations anyway. I think the secondary consideration is really looking at partnerships. We try not to be transactional as a nation, to make sure that we are not turning up and just looking for people to write cheques to us. We are trying to work on ways in which we can build our economies together. We have long-standing, historic relationships with many countries. I am visiting the Gulf states this week; we have decades of trading relationships and history. We are making sure that we are prioritising long-term partnerships in the sectors that help us grow, but in a way that is reciprocal rather than transactional. I think we have done that as a country over the last number of decades, and I do not think it serves us, particularly in the long term. At the moment, we take the industrial strategy as our core reference point of what the Government are trying to deliver. We then map that internationally to markets that have an appetite, expertise or interest in those sectors, and that is where we target. The deliverability of those investments is key for us, because there will be other markets that are new to us that might be more speculative. We are on a ticking clock with getting the economy growing again; we all know that. We are trying to look at delivery where there are long-standing relationships, where we know we have trust built and where people can transact quicker on deals. That is important to us but, ultimately, it is about balancing all those things.

Is there anything that you would like to add, Mr Newns?

Yes. I mentioned earlier that there are 25 markets that we focus on. Exactly as the Minister said, they have been chosen on a number of different priority levels. Some were chosen because they are priority capital investment markets; the middle east is more in that category, for example. Others are more on the industrial side, such as India. Others cover multiple, such as the US. They are aggregated in that respect, but very much to back up the industrial strategy, as the Minister said.

Last year, the Office for Investment had a recorded spend of about £67 million, yet this year the budget is only £24.7 million. Are you confident that that is enough to deal with all that you do?

Day by day, I remain increasingly optimistic, having come into the job. There are always more resources—there is more to do in a day than there are hours, undoubtedly. But with both our position in the world as a nation, outside of the EU in particular, and the quality of the team that we have, I feel that the opportunities are there for us to deliver on. I tend to work with what we have been given, and have said that there is a job to do and we are committed to it. I think the comparative advantage is significant. While there are definitely opportunities for more resources, I do not spend my time worrying about that. I am trying to deliver on what we have to—and I feel the urgency of the work, based on the way that our economies and democracies have been going. I spend my time thinking about the assets that we have got; we have a talented team that are taking on that challenge, and that is the way that we are trying to approach it.

I understand that, but given the fact that your budget has been slashed by more than half and given that the growth agenda is obviously falling very heavily on your Department, are you confident that you have sufficient resources to carry out this job?

I would say yes to that. Certainly, there are places where we could invest more—the GREAT brand, for example—but I choose to spend my time on the positives. I am not being trite. I came into Government being warned about some of the ways I could spend my time or end up spending my time. I am saying that we have talented people and a clear mandate, and we are trying to execute that for as long as I am the Minister in the role, and I am going to focus my energy on that. There is a conversation around how the civil service expanded through covid and there is some right sizing of that. The permanent secretary takes the time to look at that and we work closely with our permanent secretary to look at the budgets, but I am targeting execution more, if I am being honest. I want to make sure of that, and I think it is a good use of my entrepreneurial energy and experience as opposed to working with the permanent secretary to look at the budgets at the right point. I should say that I have asked for one resource since I came in, which is hiring a CEO for the OFI—someone who will outlive any ministerial appointment and have a long-term view of the opportunity. I think that the OFI is not especially political—it is the least political part of Government. It is about supporting our growth, industrial strategy and the team to get on with the job of doing deals and representing the UK. Hiring a CEO who is not necessarily from the civil service will give us that longevity beyond ministerial appointments. The team is fantastic and is working hard; my hope is that a CEO who gives that five-to-10-year view will make sure that the execution focus remains beyond my time. The previous Minister for Investment was there for nine months; I hope that I last longer than nine months, but it is not in my gift. I am not trying to evade answering your questions, but I have chosen to avoid getting into budget conversations and leave those to the permanent secretaries. I have a view on it, that we have externally, but I think the entrepreneurial energy and the deal delivery is more important for us as a team.

It might be worth adding that one of the OFI’s roles is to convene wider Government structures, so we take advantage of resource elsewhere. None of the projects that I have talked about today does not involve other Departments. For example, the Department for Science, Innovation and Technology is leading on the AI growth zones and putting huge amounts into them, and we are supporting that; we will be working with the Department for Energy Security and Net Zero on offshore wind projects and so on. With all of these things, we are convening resource elsewhere to make a greater sum of the parts, if you like.

I am tempted to build on that, if I may. We have mentioned initiatives such as AI growth zones. We also have the strategic sites accelerator where, through the OFI, there is a targeted budget of £600 million to try to locate and activate strategic sites throughout the UK that can encourage economic development. While the headcount budget has gone down, there are initiatives that go across Government on economic development and growth that we are trying to lead on. We have enough in our toolkit, I would suggest, to make an impact; that is the punchline.

To build on this point, how does the OFI evaluate its activity in Wales in terms of effectiveness and value for money? Is there a mechanism that does that, or is it across the UK?

Again, we take our instruction from the industrial strategy. We have internal metrics around deal flow and hunt lists to make sure that we meet weekly to ensure that all of the growth sectors and the foundation economy has enough resource, and a pipeline of investors and businesses that want to support those areas. We are measured by the industrial strategy quarterly reports, and whether that activity is sufficiently on target. Internal metrics are something, but that is really the thing that we are looking at.

They are at a UK level, but we also have a conversation with the Welsh Government about day-to-day activities. At the end of the year, we will look at the figures, and there will be a conversation every year locally about how we are doing. As the Ministers say, we judge ourselves at a macro level in that sense, but that is not to say that those conversations will not be happening with Liz and others about how the performance looks on the ground.

They will feed back to you on their targets about employment and the quality of that employment—for example, the skill levels, regional prosperity and other things—but you measure the success of the activities you are taking on at more of a macro level.

Our role is to find capital to support the local plans, allied to the industrial strategy, as we have said. If a national Government, local authority or combined authority has a plan, our role is to make sure that it is capitalised. Ultimately, it is down to them to convince, alongside us, on the delivery of a project. We can walk someone to the door and find the capital, but ultimately it is about the deliverability by the local team. Our role in the part of the value chain is to ensure that we help the projects get capitalised or that business is landing, as opposed to the overall economic strategy for that region.

Minister, you are new to post from a heritage of business rather than politics, so I wanted to ask you a first-base type of question. We know that the world is a highly competitive place for investment, and that lots of emerging countries are looking for inward investment and so on. We have city mayors, the Senedd, the Scottish Parliament, the Northern Ireland Assembly, the London Assembly, the myriad Departments of Westminster and so on. Bearing in mind that we are, arguably, a small archipelago of islands just off the coast of northern France to a lot of the world, are we just too complex in the mosaic that we offer? In other words, if you had a clean sheet of paper, would you be saying, “This is something that is best led as a front door from London”? and you have designated people in all quarters of the UK to whom you then turn and say, “Right, you are now going to do the hand-holding bit of the relationship and walk them through local rules and by-laws, planning and so on.” Do we not make it a bit complicated doing that, rather than saying, “Come to France,” or “Come to Germany”?

That is fascinating. We could fill the next hour with this one, couldn’t we? I will try to keep it brief. The philosophical belief going into this is that devolution matters. I believe that; I believe in the idea of subsidiarity and that the people local to an issue understand their problems, challenges, and, more important, their opportunities. I think that an over-centralised system is what got us here. Its peak, its apotheosis, was in 2008, and the version of capitalism and centralised Government that we had then is why we are here today with our politics. I believe in that philosophical point. I believe that the reason that my hometown of Grimsby was one of the highest Brexit-voting places in the UK is that the people there felt disenfranchised by national politics. I did not understand that at the time because I was living in north London. If you are of a certain political background based in Whitehall and you are trying to make protestations around what is good for Grimsby, Cardiff, Wrexham or Newcastle, I think that is fundamentally flawed. That is the philosophical view. To address that, we need to rebuild local government to have the capability it needs. Coming into government six months ago, we saw that the level of maturity and capability within the different devolved regions and combined authorities varies massively. That is partly a time thing, a capability thing and a character thing. At its best, I believe that is the model that works, because those regions are sufficiently large enough to impact on people’s lives and to be investable. When you are talking about several million people and budgets of tens of billions, that is an investable size, but at the same time, it has the local knowledge and insight to make the impact as well. I think we need to do a bit at both ends of the telescope. At one end, we definitely need to be talking about the GREAT brand, invest in the UK, invest in Wales, invest in Scotland and invest in Northern Ireland, at the specific and aggregate levels. That local knowledge mapped to the high-level plan of an industrial strategy is the right balance. You cannot do it all, and we have asked, “Where do we have comparative advantage internationally in these eight sectors?” The regions can then say what they have in terms of local skills capability and desire to meet that, and with finance resource, we can try and make that work. Where the wheels have come of off is where you have lots of different plans that are not connected to a national strategy and that also have no sight of local desire or impact. I have genuinely been encouraged in the five or six months I have been doing this that we have got the constituent parts right. There is more devolution coming for England, in particular. I think we can work better, and there are ways of developing that. I personally believe in devolution; you need the local insight and understanding of what communities want and what their capabilities are, but you also need the top of the funnel, and to ask what the industrial strategy is at scale, so that we can raise tens of billions to ensure that we are making the large impact that we need to nationally. There are going to be choices. Not every area of the UK can be or should be excellent in each area, so there are some competitive tensions and trade-offs, but I think that gives us the best chance in a competitive global market. I have been encouraged that we are still viewed well globally; our reputation is well founded, so I have been encouraged by that as well.

On the point about granular knowledge, when the Committee undertook a trip to the States as part of this inquiry, we were very struck by the importance of having a mayor—a pinnacle, local point of contact—and, in relation to the semiconductor sector, our attention was drawn to the fact that a much faster and more knowledgeable response came from Cardiff than ever came from Westminster. In that mosaic—and it is a mosaic of often competitive voices—google tells me, which I hope is not incorrect, that you were once managing director of something called match.com—

I thought I recognised you—is that you?

Maybe not in this light. Touché, Minister—damn, my secret is out! It all went very well, you will be delighted to hear, and it was long-term rather than just transactional—with my surname, I have to be careful about that. Do you see part of your role as being the Minister of HMG? I do not mean that in an actual sense. Would you have a conversation with somebody and then say, “Ah, in fact, you need to talk to whatshisname in Cardiff, Belfast, Yorkshire” or somewhere like that? Do you act as the sort of matchmaker and hand-holder, developing that relationship?

Yes, definitely, although it is more the team than me. I am six months into the role, but we have deep knowledge and sector expertise. My background is in dating, but Tim’s background is building industrial strategies for areas like the Manchester region. We have deep expertise across the team. One of the things that I am very cognisant of is the deliverability—I keep saying that, so apologies. When a commercial operator or investor looks at an investible opportunity, the pace that we have to operate at is that of the commercial sector. We are looking around and saying, “There is an opportunity there, and we know those people in that region because they have declared that they are interested, and they are ready to go.” It is a relationship based in that world, but the team look at the strategies and plans and build the relationships in the regions, so that they know who to pick up the phone to talk to. With commercial pace versus governmental pace, that is when we are in danger of that capital going to different markets. Singapore is held up as one of the bright lights of where you can get to a Minister. I went to Saudi Arabia, and a friend of mine who had gone there a month before showed me that if you are trying to invest in Saudi Arabia you go to one building and literally just go around the different desks—you leave within an afternoon, ready to trade. One of the roles of the Office for Investment is to act as a concierge service. I do not think that diminishes it. We want to ensure that we are saying, “We see an opportunity there, we know who is brilliant for this, so let’s pick up the phone to representatives in that region and try and match them as well.” It is not all like that, but on deliverability, we are trying to short-circuit the service, so we know with a degree of confidence that we can get the projects delivered.

When was the last time you had a conversation with the First Minister?

It was in December, when I was in Cardiff, I believe.

Is that a regular programme to make sure that the Welsh Government are carrying out the strategy?

It is not, to be honest—

Should it be?

Probably, yes. The team have day-to-day connections, but, first, I was trying to make sure that there was clarity of purpose for the OFI and the industrial strategy, and we have done that within the first few months. Secondly, I am trying to make sure that I am personally out there meeting people who have the large pools of capital. But that is probably a good encouragement for the next year, as long as I stay in the role. It would be good to have those relationships and ensure that I am getting instruction as well.

During this inquiry, we heard that the relationship between different departments of the Department for Business and Trade and the Welsh Government can be inconsistent, and with other Government Departments back to Cardiff. What is your role, if any, and if not yours, whose is it to better co-ordinate to get as much uniformity as possible?

That is interesting, because I have not seen my role as co-ordinating internally in government so much as it is the strategy. We definitely have a co-ordination role on the commercial side. If someone comes to us and is struggling to navigate through government, given the nature of my role between Treasury and DBT, we have a dual reporting line already. I have a weekly call with No. 10 as well, with the senior business advisers there. Clearly, we have relationships throughout the whole of Government, but I have not seen it on the other side of that. From a strategic point of view, the teams work very closely with all the regions, but I have not yet been asked to do a co-ordinating role on strategy, as it were. Certainly I am available if people need to navigate government, but there are better people with experience in government for navigating—

My heart always sinks when I hear, “Rest quietly. We have a strategy.” Ministers of all colours say this, as if the ownership of the strategy is the answer to the problem or the question. We know that it is not. It is not so much co-ordinating the strategy, but co-ordinating the message, the overtures and the meetings, the overall approach that fleshes out the skeleton plan of a strategy. That must rest with you, Minister, surely.

I am happy to reflect on that. Six months in, it has been about clarity of the strategy and delivering. As an entrepreneur, I know strategy is almost worthless without that—I mean, that is where I have lived my life. I take that point, actually, so maybe it is something for me to reflect on. Because I have not come from a political background, execution is everything for me, and we are executing at pace, at scale to the ambition of the UK. This is continuing from before my becoming a Minister, by the way, but I think I have added some clarity with the team’s construction and the focus on the areas. I have not spent a lot of time, as of yet, on that political co-ordination. I am absolutely available, if Ministers or other people in the political system feel that they are not getting the service they want, specifically for my Department, but that has not been a call or demand on my time yet. I am happy to take that feedback and reflect on it, but it has not been a demand in the first six months.

Maybe you could write to us on that.

I am happy to.

My final question follows on from the strategy—[Interruption.]

I think Mr Newns would like to come in.

If I could just finish with the Minister, I would encourage him. The civil service, Whitehall and everything else have a wonderful way of getting their claws into people from business and moulding them into the perfect Whitehall creature. In fact, however, having that entrepreneurial—I do not use this in a rude sense—brashness of business actually helps enormously, so all power to your elbow. Looking ahead, in five years’ time or moving towards the end of this Parliament, what will make your involvement either successful or a failure in this absolutely critical endeavour?

The success is straightforward for me in the growth mission of the UK overall, and making sure that the industrial strategy is funded, not just with reactive historical relationships, but with a proactive, forward-facing and front-leaning initiative. We are really moving the OFI from reacting to investors wanting to come to the UK, to going to find the right partners. My mission is aligned with that of both the Treasury and DBT, which is to achieve stability in the UK economy overall—bringing inflation rates down, getting the growth rates up and making sure employment goes to all the regional sectors. Specifically, with the investment market, we want to make sure that the differentiated comparative advantage of the UK is well understood and being well served, and that the UK is the destination of choice for investors globally. The third one is in reaction to your comment about the civil service. I want to make the OFI the most high-performing department in Government. I think we have the capability and the people in there. I mention that for a reason. My experience so far, notwithstanding that they have to tell me when to put a tie on to go into meetings—that is the entrepreneur in me, and I do take instruction on that—is that it is very entrepreneurial. The people who are hired and the senior directors are very independent and are acting on their own initiative, and so they should be. Where we have the best opportunity is by not worrying about the politics, and saying, “We have a clear plan, and we will execute it, irrespective of who the Minister is.” It is the macro stuff around the economy overall—the growth and investment—but, for me, it is making it a high-performing team and focusing on that. That is what I intend to do, and the CEO coming in will do, to make sure we are building on the existing capabilities, which I find to be exemplary so far.

I was just going to mention quickly that the background strategy that drives us, the industrial strategy, was obviously developed with massive consultation with the Welsh Government and the Wales Office directly involved. We do work incredibly closely with the Wales Office and the Secretary of State for Wales, who has an explicit responsibility to ensure that the UK Government and Welsh Government work efficiently together. That goes on at a macro level. It would be interesting to pick up what inconsistencies you have seen, because we will obviously check into that, and we would like to do that. But I am aware that there is a really solid relationship between the OFI, the wider Department for Business and Trade and the Welsh Government. To your point around co-ordination, at project level, that is absolutely what we do: we try to iron out the complexity of UK Government, local government and national Government—almost acting as an agent for the company that we are representing—and to clear that path and make it as simple and straightforward as possible. On a project level, we absolutely do that; we try to bring all the right parties to the table. Then it is a mixture, really. Some of the levers that we use are national and UK-level—the National Wealth Fund, the automotive transformation fund or whatever it may be—and some of them are very much local. Those might come from, for example, the Cardiff capital region also co-investing alongside national Government. We have had a number of examples of that type of set-up just in the last 12 or 24 months, with some of the projects that I have mentioned. Generally, the partnership works well, but I would be interested if you have seen those inconsistencies. We will look into them.

I want to ask why Wales is lagging behind other regions in the UK in respect of FDI. There are obviously levers on a UK level that are being pulled. For instance, we had the Harrington review of FDI in 2023, and we have had evidence from the CBI in Wales talking about the importance of reducing the cost of business. Why do you think Wales lags behind particularly when looking on a UK level?

Can I gently clarify the question? Which data are you looking at that says it is lagging behind?

In terms of the amount of foreign direct investment or inward investment into Wales as a region, in the context of the UK.

I think Tim quoted earlier that, proportionately to the population, it is probably on target. By the way, I am not disagreeing or saying that there is not work to do, but when I think about the last six months overall—Tim, do you want to clarify on that?

I mentioned at the start that the picture has been improving for the last few years. The latest figures show a proportionate amount of investment coming into Wales as part of the overarching UK picture—about 4.7%. But as we say, we would not be complacent about that. We would still look to build on it.

The DBT figures show consistently that Wales has never actually gone above the 100 projects, whereas Scotland has only ever once dropped below the 100 projects. That is certainly where I am coming from, and I am sure Henry is coming from the same place.

Organisations have done reports setting out a UK attractiveness level, but Wales does not—there seems to be a disconnect between what the Committee has found in our research through the inquiry and what you may be setting out in respect of information or what analysis you are doing on the ground.

It potentially depends on what you are analysing. As I say—

Do you think we are being too ambitious?

No, you can never be too ambitious. What I was going to point to is that we have switched focus from volume to value over the last four or five years. This has meant that the sheer number of projects that certainly we will intervene in has reduced, but the value of those projects has gone up significantly. Also, global FDI has reduced over the last few years, so although the UK is still third globally in that context, the project numbers have decreased. But the value of the projects has gone up dramatically. I think Wales has generally reflected that national picture. Depending on the sectors—obviously Wales has distinctive sectors—they will have had success or less success in different economic environments over the last five years. We are aware that in advanced manufacturing at UK level there are challenges; there are barriers that we are very aware of—things like energy pricing, which we are looking at countering with the British industrial initiative that is the BICS, bringing some of those costs down significantly for companies. That will make us more competitive. Those types of factors in specific industries—Wales is obviously very strong on advanced manufacturing—will hopefully have a really strong impact on the attractiveness of the UK overall and of Wales in that sector in particular.

Just to build on that, the macro challenges that the UK has faced over the last five to 10 years are really about our ability to deliver predictable returns for investors. I think some of our politics has not helped with that. The industrial strategy—I keep going on about it—is the first time we have had a long-term plan since the 1960s. Again, having a predictable, investable plan and having a macro environment where, as difficult as some of the decisions by the Government were, the ability to stabilise interest rates and bring interest rates down—six Bank of England rate cuts create an investable environment that looks like stability, with fiscal rules that we are going to stick by. The sort of investors we are talking about are looking for that certainty and stability. That is the precursor to investment decisions on the international stage. While it is not specifically about Wales, I think the ability to show stability and a predictable plan for the country—to the point earlier, it absolutely needs delivering, but that is the foundational level that allows us to go and have those investor conversations. There are weird offshoots around what has been put out in the international press about the UK as a place to invest that we have to combat. The stage for this year is really about reinforcing our comparative advantage as a nation, as a country, and the stability that we are promoting. That is not specific to Wales, but I think that is the work that has been done in the last 18 months, and certainly when we are travelling now, that is what we see as being understood, relative to the geopolitics and the macro environment, when people have investment choices.

If I may, I will explore one point. You have talked about, from an intellectual, philosophical basis, your support for devolution and the importance of those decisions being made locally. If you are acting as a concierge service for investment, Wales does have particular challenges. I think we have noted, certainly in my constituency, public transport challenges and broadband challenges. Do you think there is a lack of understanding about the nature of those challenges when you are fronting investment opportunities for places like the constituency that I represent in Pembrokeshire—in terms of that local knowledge?

The honest answer is that I don’t know. On the issues that you have highlighted, there are places in the north of England that have the same problem, so they are not unique to your constituency; they exist up and down the UK. When I talk about devolution, I think it is important that they are partners to a national strategy. I don’t think they are up and down, because I think that discredits the local work that is done. I think they are partners: you need the local knowledge and understanding. But there are competitive tensions at the national level as well. Both those conversations need to be successful. I do not think a fully devolved Government would work. I do not think a fully centralised Government would work either. I think that is the path we are on. When I talk about devolution, we undoubtedly need to make sure that there are strong relationships, conversations and strategies locally so that we can meet in the middle and make sure that we are doing our part of that bargain. Sorry—I don’t know whether that answers your question. It is not a philosophical call to swing one way or the other. They are both important. We are aware of the issues around infrastructure. That is something that gets fed back to us. When we look at investable propositions, infrastructure is a part of that. As Tim mentioned, we try to leverage the initiatives—whether that is grid connections or infrastructure—relationships and conversations to lead into that. However, that is not the specific role of the OFI.

We will report back, and we will escalate where we see those barriers. I should say that, within the investment space, there is a partnership between us at the UK level, the Welsh Government and the local authority level. I have mentioned the Cardiff capital region and the advantage of north Wales, but we also deal with individual local authorities around specific projects and opportunities. We utilise local knowledge to gain experience, for example in the work we have been doing in south Wales around Port Talbot and projects such as advanced manufacturing, clean energy and data centres. Power availability in south Wales has been a big factor in that. Our connections acceleration service, which is a relatively new service that we have set up to address some of these barriers, has gone in and looked at the availability. The long-term availability will be a constraint to major manufacturers that need big power connections down there. We are in the process of gradually escalating that to see how to solve those issues. Part of the solution might be inward investment either through further private capital investment or a new power and utilities investment that could come in to service that. We will look at those things specifically. We are also very aware about some of the sites. The Minister is absolutely right that they are not isolated in UK terms, but neither are they consistent in every place. The remediation level that is required on some of the key sites in Wales is really challenging. The Minister mentioned the strategic sites accelerator initiative. When we have challenges around deliverability of a site that could support the acceleration of the industrial strategy, we are able to use that fund to intervene and to accelerate that. However, ideally, we need an end user that is interested or some demand signals from the market so that we know we can make the investment work and stack up and that it is not highly speculative. What is very difficult in the current market is making highly speculative opportunities stack up because the funding is so complex. Construction is so expensive at the moment. However, we are constantly trying to innovate on the levers that we have available to us to pick at the barriers as we see them. From the partnership work that we have with Welsh Government, the Wales Office and local authorities, we are constantly aware of tensions in the marketplace that could be potential barriers to investment.

I was talking earlier about co-ordination elements at the right scale. The UK Government have put £400 million into rail infrastructure. It is about making sure that there is co-ordination at a national, or at least regional, level to make sure that the projects, from our point of view, are investable to the investors we talk to—the tens of millions and into the billions as well. There is something around ensuring that there is a co-ordinated narrative for regions. First, it helps to build the case within national Government, and, secondly, from our point of view, it makes it more investable. The amount of effort for us to do a £10 million deal is probably the same for as a £10 billion deal. Again, it is about where we can place the resources that we have to make an impact. Co-ordination is really helpful to build the narrative, like in the Oxford-Cambridge corridor, which I mentioned, or the northern corridor, as we are seeing across the north of England. The next stage of work for us is how we help Wales to tell that story in a more coherent way. There is not a single document, strategy or prospectus for us at the moment. I think that would be a good action off the back of this meeting.

Picking up on Mr Tufnell’s point, there is a chicken-and-egg problem there. You go out and talk to people who say, “Yes, we’d love to come to the UK.” Then a basic table stake is power, water, qualified and enthusiastic staff and so on. Then you fall at a basic hurdle because there is not enough stuff on the grid to power whatever it is they want to do. By the time the grid has sorted that out, the investment has gone elsewhere, and not only is that opportunity lost but subsequent opportunities from that same investor, because they will just think it is a complete and utter waste of time. Returning to co-ordination, does anybody triage and map the UK to better target these things rather than responding ad hoc? Also, who is our main competitor for inward investment at the moment and what differentiates them from here?

Tim can talk in a second about the AI growth zones, but we also have a triage service for the grid connections. You mentioned the right stuff—it is grid connection. I do not think that we have a problem with access to talent in the UK. Wherever we go we can tell that story, but we play an active role in those grid connections, particularly with the upsurge in data centres—where we have seen a massive number of projects—and on the green energy initiatives around windfarms as well. What is the initiative called? Is it called the grid connections triage?

There is the connections accelerator service.

The CAS, yes. We take a list and try to help with the deliverability of the projects. But you are right that how we upgrade our infrastructure is one of the barriers to growth at the moment. We are trying to ensure that combination of high-value job creation and deliverability. Deliverability is massive for us. It is about keeping people in the system. There are a bunch of speculative initiatives from investors with landowners just wanting grid connections. We try to play an active role in helping highlight the ones that are deliverable. On your second question around who we compete with, it depends on the sector. For life sciences, there is the US in particular. We also have strict competition coming out of China in some of those sectors. On advanced manufacturing, you have to look east for a lot of those things. It is really sector specific. As much as it sticks in my throat to say this, being outside of the EU—even though we need to get closer to our biggest trading partner—has given us the opportunity to go and set trading agreements globally as well. That helps us to understand the comparative advantages and what they are trying to focus on for their own investment at the same time. It varies by sector, but I think we are well placed. That stability message comes through very often—particularly when people are looking at five-to-10-year event horizons on their investments, they feel like the UK offers certainty in an increasingly volatile and complex world.

On co-ordinating sites with the right amenities, the AI growth zones are a very good representation of that. There is a huge amount of up-front due diligence done on those sites based on power, water and all those availabilities before they are essentially cleared. Once they are announced—as the two in Wales have been—we then know that it is a proposition that we can confidently go to market with.

During the course of our inquiry we took evidence from a number of businesses—some of whom have tried to invest in Wales and some of whom have. We also spoke to the Wales Director at the CBI. During those roundtables, they tended to express a frustration that there are many front doors and that once you are in through one there is not a co-ordinated approach behind it. What impact would there be of having an arm’s length investment promotion agency like we used to have? Those of us who are old enough will remember the Welsh Development Agency, for instance. What sort of impact do you think that would have?

Tim can talk about the specifics, but I think that it would be positive. Regarding the visit to Wrexham and Cardiff, a lot of people are doing their best work in trying to put their regions forward. However, from a commercial background, having a single co-ordinating agency would be positive. With the best will in the world, we are trying to have the right relationships locally, but there are finite resources. I think we work well with Invest Northern Ireland and the Scottish equivalent. It seems to me that that is a part of the puzzle that would be helpful. Tim, your experience is longer than mine.

Evidence definitely backs up the fact that places with an investment promotion agency tend to be more successful in terms of investment attraction. At the moment in Wales we work across, as I say, a number of Departments within the Welsh Government, depending on the opportunity. We will work with sector teams. We will work with the Trade and Invest team in Wales. We will work with the Wales Office. We will work with the local authorities or the city regional authorities. We work our way through it, and we have good relationships there, but a single agency brings a level of co-ordination that is helpful. We certainly work well with Scottish Development International and Invest Northern Ireland, as the Minister said. They also bring huge resource with them. It is very much a partnership. This is a joint effort between the UK Government and the Welsh Government. I think Scottish Development International has about 220 people, 80 of whom are investment focused. Invest Northern Ireland has around 500 people. Not all of them are investment focused, granted, but a decent proportion of them are. It does make a difference, but as I say, at the moment we work through the systems that are here and hope that we can still provide a strong and more simplified offer to businesses. As I say, the evidence always suggests that it makes a difference, and certainly my experience, as someone who used to run an investment agency for a place, is that it makes a big difference to be able to provide clarity, a single front door, really clear marketing projection, targeting of the companies that you want, and clarity on who is doing that and how projects are handled once they hit the system, and then are followed up and account managed afterwards. My experience is that it is a very positive thing.

Obviously you would know, coming from Midas. In terms of setting up such an arm’s length agency, would the UK Government look to help with funding that, if one were to come into being, alongside the Welsh Government, for instance?

I have no idea on that one. I would have to come back to you, as it is a new idea. I was not thinking about it beforehand, so I would have to come back to you on that. I am not familiar with how they are funded. They are funded through the settlement with combined authorities, traditionally.

Yes, I think in Northern Ireland and in Scotland they are self-financed.

Thank you—that is helpful.

That moves us nicely on to my question. We have mentioned the compound semiconductor cluster in south Wales. When Committee members visited the United States, the companies there were really impressed with that cluster, and the amount of knowledge that they had of what existed in that area. We know that there are other successful clusters in Wales as well—creative industries in south Wales; agritech and decarbonisation in Deeside and Wrexham. We know that those clusters are there, so how does the Office for Investment engage with those Welsh clusters, and how do we make sure that we proactively promote those competitive advantages so that investors out there know what these areas of Wales have to offer? Possibly it should be through an agency, as we have spoken about, but how does it happen now?

I am new to the role, so I get a brief from the team whenever I go out internationally or speak to investors about where the opportunities are throughout the whole of the UK, so that I can speak to specific investors who have an appetite in those particular regions. I take instruction from the team about an investor. If it is in infrastructure, for example, I will talk to them about certain projects. If it is in a creative industry, it will be a separate project at the moment. What we try to do is map an investor’s appetite for investment in a particular region with the places that the team know already. Tim, is there anything you can say to build on that?

There are particular initiatives in particular sectors. There are the creative industries clusters, for example. There is work that we do specifically on that. There is all the international outward-facing work that the UK does. Also, Welsh Trade and Invest will push particular opportunities that it is interested in. There have been recent visits to semiconductor-specific conferences, for example, where, as I mentioned before, Wales or south Wales has been very much at the forefront of the UK offer. I mentioned a clean energy event in Oslo, and again Celtic sea ports will be very much front and centre as well. At the moment, we very much tend to look at the sectoral aspect to back that, but we also facilitate a huge number of in-visits, again supported by local partners and Welsh Government. The Minister mentioned an Omani visit that he joined. Likewise, we get multiple sector visits from, again, our key markets across the world. We help to facilitate those and bring them in to see things. Again, my experience is that people are much more likely to invest if they have actually seen a place and can actually see the tangibility of what it looks like in the flesh, also gaining the confidence in the people they have met that this can happen; that they can deliver it. In areas like the creative industries, Wales has been particularly successful. That, again, is a combination of the very focused promotional work that has happened around Bad Wolf, Dragon Studios, etc, and the gaming side. The interventions that the Welsh Government have made on some of those have been very strategic and specific. That has proven to be incredibly successful. It is having that very focused approach on a particular asset—like Bad Wolf and in the creative industries—knowing the market you are going to and having the specific visits, and knowing the potential investors you are going to, and then having the specific levers to make sure you can get a deal over the line. Once one is successful, that brings confidence for others. That would be my approach. In particular, I know in the creative industries, and to an extent in the likes of semis as well, there has been success so far. A continuation of that, and building on it, will allow us hopefully to increase the overall volume of capital investment into Wales.

When the Omani ambassador wanted to go outside London, we chose Cardiff. He had an interest in semiconductors and in the space industry, so we introduced him to Space Forge. He also had an interest in sending his daughter to the university, so we thought we would kill all birds with that stone, but it was just a way to say, “Look, these are investors with a love for the UK overall, and a desire to see opportunities as well.” By building that capability, taking them to the Principality stadium and showing them the different assets around the UK, it builds a different picture of the investable opportunities.

I am interested in your point about investing in places. We heard that strongly from the diaspora, when we did our visit to the States. They were very invested in Wales, because of not just the economic potential, but that idea of place and belonging—Wales as a nation, and the different parts of Wales and what they can offer.

I think that is one of the biggest strengths of Wales—just to divert slightly. One of the reasons I ended up in politics is my own home town, Grimsby. I have spent the last five or six years focused on how to rebuild institutions in the town, to make it investable and build the confidence. We bought the football club and we are building a youth facility and social housing so that we can tell a different story. I really admire the work that is happening in Port Talbot now, for example—you have to rebuild the institutions in a place and lean back towards its historical precedents to lean forward into the future. It is about new industries as well. I think there is the idea of, “How do you connect the diaspora?” and everything people are proud of in their place. This Government have put £5 billion into the Pride in Place initiative. I think that is our most critical intervention as a Government. The economy stuff is going to work—I am bound to say that, not just as the OFI, but because I can see the path now towards stability—but it is how we connect that with people’s resonance about where their identity matters to them. Wales speaks strongly to that, particularly in the regions of Wales. That is the real asset, the natural asset, that we have to utilise. Sorry—I diverted slightly there, but I see that really powerfully.

I completely agree, and we have heard that in previous evidence. It goes back to the point about devolution as well—you can make the most of that place to make it attractive. With that in mind, do you think there is a place for clusters to support investment in more rural and coastal areas? In north Wales, for example, the Federation of Small Businesses Wales put out a report to say that there is potential for a more rural and coastal creative cluster that would feed into the work going on in the northern corridor, because geographically, we go across rather than down. What do you think about that? Is there potential for SMEs to grow around that kind of cluster?

There definitely is. The danger is trying to have a top-down strategy around clusters and trying to make it work with local communities. If it does not exist naturally, we have to be respectful and realistic about either setting the conditions for it to flourish or recognising that SMEs have their own value and right to exist, as a separate part of the nation’s strategy. When we went to Wrexham recently, one of the things I was really encouraged by was an amazing entrepreneur, Elin Haf Davies, who built a clinical trials business called Aparito. She was talking about setting up a cluster of entrepreneurs in the north through the universities. I am meeting her in a couple of weeks. She is an entrepreneur who believes in it. If you can find that initial spark of energy around a cluster, it is about entrepreneurship, creativity and building businesses irrespective of their cluster or sector. That in itself has real value, but it needs that initial spark. The top-down industrial strategy is vital, but we have to be really careful not to try to shoehorn every community to fit with that. The entrepreneurial energy from someone like Elin also needs support. I am going to meet her personally to see what we can do around the entrepreneurial community. It is a different sector of the area—VC, how we build those ecosystems, and the access to capital in that sector—but it is something that could work with a looser cluster around entrepreneurship as well.

Sure, and allow the dots to be joined from the bottom-up as opposed to top-down. I think you are right; we need both.

Yes, exactly. The worst thing you can do is try to impose a cluster on an ecosystem. If it is not there naturally, and there are not local people who are representative of that skillset initially, it is doomed to failure, because Government strategy will come in and change, whereas someone like Elin is saying, “Look, entrepreneurs can exist in any shape and form.” We just need to put some wind in her sails, quite frankly.

There seems to be potential to join up people across rural and coastal areas in that way, if they can find each other naturally.

Yes, exactly.

I think that is where the partnership between national and local comes in. Only certain places will have what we refer to as the absorptive capacity to attract investment, which includes the foundations of skills, capital, facilities, etc—not everywhere can. When we do land something like that, the important thing is how you connect to local ties. Lockheed found that recently in the space industry in the north-east. They landed thinking, “There is not a space industry here at all,” but within six months of doing analysis of the companies that were there, they realised that even though they were not facing the space industry at the moment, there were at least 35 to 40 really strong supply chain companies that could face into the space industry. That was, again, with a lot of help from local authorities that knew the business base well and could start to plug it all together. That is where that partnership really works well.

Know your places; know your people.

Exactly.

My colleague Gill German mentioned the diaspora. GlobalWelsh, an organisation that tries to represent the Welsh people abroad, is quite keen to see more work being done to engage with the diaspora, particularly with a view to attract more investment into Wales. A survey that it ran found that a quarter of Welsh businesspeople abroad said that they would be willing to invest in Wales immediately, I think. Is that something that is on your radar? If so, what sorts of steps are you taking to try to tap into that diaspora? Other countries have been quite successful by tapping into their respective diasporas to build up their brand on the international stage.

I love the idea. It has not been our radar, but it has been on mine personally. I think there is an under-utilised connection into place and identity. That is why I have ended up doing the work in Grimsby, quite frankly. I have not lived there since I was 18, but it has given me my identity and my connection, and it is where my friends are still. I am not familiar with any initiatives that are under way. You are right to call it out. I talked about the defined contribution schemes. Giving people some agency about where they invest is an idea that I have thought about. There are not any particular initiatives, but I would love to maybe work with you and think about that, because I think it is an undertapped resource. One area where it is being worked on—I am attending my first board I think in a couple of weeks—is the Office for the Impact Economy, which now sits in the Cabinet Office under Darren Jones. What that is trying to do regards impact investment, but it also includes philanthropy and other asset classes that could be focused on it. I think it would fit really neatly into there. Maybe we could think of that collectively. I am happy to give that some thought. I think it is a massive opportunity, because where you have capital and emotional connection to a place is where it is most powerful.

The Irish do it brilliantly. The Scots have GlobalScot as well, which is very strong. I remember meeting the chief exec of Intel Capital—which at the time, was the largest private fund in the world—while I was in my old job in Manchester, to try to promote Manchester to him. He said, “Look, I’m just going to stop you there. As you can probably tell”—he also had a thick Irish accent—“I’m Irish, and pretty much any investment I get hold of is going straight back to Ireland.” At which point, I said, “There are a lot of Irish people in Manchester.” It is very powerful, and certainly on the west coast, the Irish have done brilliantly around it, and as I said, the Scots are improving at it, so there is real merit in it. I think that at post we sometimes do it more than we do from the centre here in the UK. This is where there are opportunities to do things like St David’s day activities, or things around rugby or some of those international and cultural instances as well, because that tends to bring them together. Likewise, there are opportunities in working with universities and their alumni, which is really strong. As well as people who are from Wales originally, there are those who have almost adopted Wales, emotionally at least. I think it is very powerful. My experience is that most of those are driven from the place that they are representing. As the UK Government, we are aware of them, and we try to utilise them where we can, but we are not necessarily driving them from the centre.

I will commit to writing, as I am going to assess this myself. I would like to see where this sits within Government and how we can utilise it. I think it is a really powerful idea, so I will do some work on it and write back to you, if that is okay.

Thank you—that is very kind.

I thank both witnesses for attending this afternoon. Lord Stockwood and Tim Newns, thank you very much for your time and attention. It is really great to have you both in front of us. We look forward to you writing back to us, and I am sure we will prompt it with some questions.