WHO WINS UNDER PROACT? NOT CONWY....

As this blog has pointed out time and time again, the ProAct scheme is a policy that could support businesses through a recession, but only as part of a wider package of measures. It certainly isn't the panacea to the deep-seated economic problems faced by our country.

Despite the fact that small firms have been hit hardest during this recession, 68 per cent of ProAct funding has gone to large firms and I find it strange that £1.1 million of public support should be offered to a multinational company such as Corus, especially when there are thousands of small businesses that require help during the economic downturn.

Of course, there are those who disagree with this, such as Gareth Jones, the Assembly Member for Aberconwy, who recently was moved to write a letter to the Daily Post criticising my stance on this issue.

I have a lot of time for Gareth, which is why I am perplexed that he suggested in his letter that I was wrong to criticise "the ProAct scheme for investing a million pounds in Corus because....it wasn't one of many small firms in serious financial difficulties and implying that this investment was of no help to small businesses".

Given this, it gives me little pleasure to reveal that the latest figures from the Welsh Assembly Government show that not one penny has been paid out under the ProAct scheme to help businesses in the Conwy local authority area, where the official unemployment rate has risen from 5.3 per cent to 8.1 per cent between September 2008 and 2009.

Therefore, whilst ProAct has actually been of no help at all to the small businesses in his own constituency, the local AM seems content to support the gift of over a million pounds to a large company that has itself admitted that it did not even qualify for the funding.

THE DANGER FACING WELSH UNIVERSITIES

Last week, an article appeared in the Times which highlighted the dangers faced by Scottish Universities following Lord Mandelson's proposed shake-up of the higher education sector in England.

The warning came from Lord Sutherland, former principal of Edinburgh University, who believes that there are significant funding implications for Scottish Universities if universities in England are able to charge higher fees whilst improving the experience offered to students and making a more explicit contribution to Britain’s economy.

Of course, higher education is devolved in both Scotland and Wales and what applies to the Scottish Higher Education system probably applies even more so the sector in Wales.

Therefore, rather than rewriting the whole piece to reflect the Welsh viewpoint, I have merely substituted "Wales" for "Scotland" in the Times article. It does not make easy reading for politicians and policymakers in Wales.

"Welsh universities could fall behind their English counterparts as a result of a new Westminster blueprint for improving higher education in England.

The warning came yesterday as Lord Mandelson, the Business Secretary, announced a 10-year strategy which suggested that universities in England may be able to charge higher fees — but only if they improve the experience offered to students and make a more explicit contribution to Britain’s economy.

Lord Mandelson said that students should be entitled to full details on the quality of teaching and academic support. At the same time, vice chancellors should be given a new responsibility for filling skills gaps in the economy, particularly in science and technology. The twin emphasis on student entitlement and business needs, will define the role of universities for the next decade, he added.

The plan had the potential to boost the funding of English universities, particularly the most prestigious, thus enabling them to attract a higher calibre of academics. But it could adversely affect Welsh universities by drawing more funds towards their English counterparts, and making access to them more attractive to students. There were three proposals which could affect Wales— a potential rise in the cap in tuition fees, a concentration of funding in top-flight universities, and a drive to improve access to universities.

Lord Mandelson has made plain that public spending on higher education faces “constraints” in the coming years, leaving business and students to make a higher contribution, supplemented by universities seeking philanthropic support and more earnings from overseas students.

Later this month he will launch a review that is expected to lead to the lifting of the cap on variable tuition fees, which have risen in line with inflation since they were capped at £3,000 in 2004. Many English vice chancellors want the upper limit to rise to between £5,000 and £7,000 a year. According to one former Vice Chancellor, “This will significantly affect Wales as it will raise the level of funding available in the south. It means their institutions will be able to headhunt quality staff, offering very well-resourced laboratories compared to here.”

The blueprint also states that taxpayer funding of higher education research will be concentrated on fewer universities which can demonstrate world class capability. It means that institutions less associated with research but which excel in a handful of disciplines will lose out unless they collaborate with established research centres. It could also leave Welsh universities behind. “The implication is that the best universities in England, which are the top of the class in the world, will have more concentrated resources available to them – and that will put extra pressure on other universities”.

The third proposal which could improve the higher education sector in England beyond that in Wales was the move to increase participation among those from disadvantaged backgrounds who would not normally attend university. This would serve to attract the most capable students, regardless of their background as “talent is not postcoded ”.

A worrying time for universities across Wales unless a radical approach is taken soon.

Indeed, it would suggest that regardless of the high quality of research in Welsh institutions, the majority of UK research funding (which is not devolved) would be focused in a few English institutions.

Given that Wales only attracts around 3 per cent of the £2.8 billion made available by UK research councils every year, it means that around £50 million is 'unBarnetised' and goes to other universities within the UK system. This is mainly because there are too many high quality UK proposals and simply not enough funding to go around.

As a result, the funding gravitates to established research groups within the more prestigious Russell Group universities, thus widening the gap between them and the rest of the university sector.

Given this, I would suggest that Welsh policymakers need to seriously consider whether Wales' share of the funding should be ringfenced under Barnett to ensure that we do not become third class citizens in the battle to secure more funding for higher education.

If we do not, then the gap between Welsh universities and the rest of the UK will continue to grow.

WE WILL REMEMBER THEM

Every year, I go and pay silent tribute to a grandfather I never met because, like millions of others, he died serving his country during the Second World War.

I am sure all of our thoughts on this special day of remembrance will go out to the families of all our serving troops who are risking their lives to help others.

DOES SIZE MATTER?

Last week, the Western Mail reported on "Size Analysis of Welsh Business, 2006", a government report that provides data on the structure of enterprises active in Wales, including employment, turnover and the sectors in which businesses operated.

Drawing on its own unique Welsh data set, it indicated that 41% of business sector employment was accounted for by large firms i.e. enterprises with 250 or more employees.
Not surprisingly, the CBI commented that this proved that large businesses were “vital for Wales’ economic survival.

It went on to say that while large firms accounted for 0.8% of total businesses, they contribute a staggering 55% of Wales’ national turnover and that, as a result, we should “readjust our understanding of what factors deliver the most wealth and employment for Wales and support them to innovate and grow here in Wales.”

So there we go, 20 years of an academic career down the drain!

Why on earth have I bothered to focus on supporting the development of small firms in Wales when, all along, I should have been expounding the importance of large firms to the economy?

However, doesn’t this data seem to contradict other information about the business sector in Wales? For example, the Western Mail’s Top 300 supplement of the biggest firms in Wales shows that only 135 of the companies listed would qualify as a large firm under the current standard definition.

So have the government number-crunchers got it wrong? Well, yes and no.

If anyone bothers to read the statistical report in detail, they will discover an interesting disclaimer hidden away in the notes. This states that “in all cases, the size band of the enterprise is based on the number of UK employees… so an enterprise employing 10,000 UK staff but only a handful in Wales is categorised as a large, and not a micro, enterprise”.

Basically, that means a company employing 300 employees in Manchester and having a base in Llandudno employing 30 people would be classed as a large firm, even though it would be employing the same number of people in Wales as a small independent store next door.

Indeed, what it shows is that there are about 800 large firms with an employment presence in Wales but only around 150-200 large firms which are completely based in Wales, which roughly reflects the Top 300 estimates.

Is this surprising?

Of course it isn’t, as many of the shops and stores we find in the high streets up and down Wales are branches of large companies which are based across the border, such as Burger King, Boots, Waterstone’s, Jessops, Body Shop, WH Smith and Moss Bros.

With the honourable exceptions of the Principality and a couple of smaller building societies, most of the large banks and building societies also do not have headquarters in Wales.

Indeed, more than 50% of the 405,000 jobs within large firms in Wales can be accounted for by retail and finance companies and, according to the report, every large company has, on average, around 10 branches across Wales employing about 30 people.

That is not to disparage the contribution of large UK firms with branches in Wales to the Welsh economy and any job is critical in the current economic downturn.

However, even by stretching the imagination, I fail to see how we can encourage a branch of NatWest in Barry or Debenhams in Bangor “to innovate and grow here in Wales”, as claimed by the CBI.

While many Welsh companies have kept the faith with their employees during the worst recession since the Second World War, it is the branch plants of many non-Welsh firms which have closed their operations and abandoned thousands of workers.

More importantly, will it be large firms that are going to lead the Welsh economy out of recession during the next few years?

The evidence seems to suggest otherwise. For example, if we examine the US economy in the period 1980 to 1986, while 34 million jobs were lost, 45 million jobs were created with 32 million of these being generated from the birth of new businesses.

Indeed, during the recessionary period of 1980-82, small firms provided almost all of the new jobs in the US economy. Closer to home, the growth of the UK economy since the last recession of the early 1990s has been supported by an increase of more than 25% in the number of small businesses.

There is no denying that large firms in the UK are significant employers across all regions, including Wales. However, if we just accept this particular set of statistics on face value, then I believe we are in danger of forgetting the importance of new and small firms to support the recovery of the economy.

Last week the Wales Fast Growth 50 project demonstrated what the indigenous business population of Wales is capable of achieving, with our fastest growing firms generating more than half a billion pounds in turnover in 2008 and creating more than 4,000 jobs.

If we are to develop a successful economy, it is clear we need to encourage the likes of Corus, Admiral, Airbus and Ford to continue to develop their operations here in Wales.

However, it would be foolish in the extreme to use these statistics as the basis for ignoring the potential of thousands of Welsh companies that, with the right support, could grow and make a major contribution to wealth creation and jobs within this nation.

WELSH DEVOLUTION AND THE CONSERVATIVE PARTY

Clearly, the main political story is the decision by David Cameron not to veto further powers for the National Assembly for Wales if two thirds of members vote for them and the Conservative Party is in power in Westminster when such a decision is made.

He also made it clear that Conservative party members would be free to campaign for or against further powers as they see fit.

Naturally, as a pro-devolutionist within the Conservative Party, I am glad that this issue has been cleared up once and for all and that we can now focus on developing policies towards the next Assembly election.

However, if you read some of the recent political commentary, you would have thought that it was only the Conservative Party that has any difference of opinion on key issues. Of course, that simply isn't the case and you only have only look at the differing policies being put forward by the three candidates for the labour leadership.

For Plaid Cymru, even the most die-hard nationalist would find difficulties in arguing that the economic viewpoint of Dafydd Wigley reflects that of Leanne Wood, and I won't even go into the diverging opinions of Kirtsy Williams and Lempit Opik!

But that's politics for you. You take a particular stance on a subject within your party and debate your opinions with your fellow members in the hope that you can persuade them of your arguments.

As Thomas Jefferson said, “I never considered a difference of opinion in politics, in religion, in philosophy, as cause for withdrawing from a friend” and certainly I feel that my pro-devolution views should not make me withdraw from debate on the subject in the Conservative Party.

Far from it, and whilst I will continue to argue for more powers from Wales, I understand that some of my friends within the party may have a different viewpoint. My role, as a member of a democratic political movement, is to work alongside other like-minded people to persuade them of the benefits of devolution. If they do not agree, then to quote another US politician, "you can't please all of the people all, of the time".

I am a pragmatist above everything else and I made my stance on further devolution absolutely clear in the response to Lord Roberts in May of last year. It may not be to everyone's taste but if anyone has any doubts regarding where I stand on this issue, the letter to Wyn is reproduced below.

Lord Wyn Roberts
House of Lords,
London,
SW1A 0PW

Annwyl Wyn,

I am writing to you with regard to the review of Welsh devolution that you have been tasked to undertake on behalf of the Conservative Party.

It is my opinion that there has been a steady acceptance that not only is devolution here to stay in Wales but, more tellingly, that Wales was short-changed by the Labour Party relative to Scotland in the Government of Wales Act, 1998. Certainly, the new law-making powers introduced by Labour this year have actually made the situation even more confusing and have led to conflict, not clarification, between Wales and Westminster.

This review is critical as I expect that it will be a Conservative Government in Westminster that will make the final decision on a referendum for further powers in 2011. Whilst it is tempting for the bulk of the Conservative Party to reject the importance of this issue, it is critical that the decision arrived at regarding Welsh devolution reflects the realities of the new political situation in Wales.

As my nain would have said, “Yn iawn neu ddim o gwbwl”, and I believe that is the real issue facing us today – we should have a proper devolution settlement for Wales or none at all.

The fact that the Labour Party has mismanaged Wales during the last nine years, even with the current powers that the Assembly Government has at its disposal, is no excuse for assuming that we could not do better. Indeed, the Conservatives, as they have done at a local authority level, could develop a more efficient public service that could benefit the whole of the nation and create an entrepreneurial and innovative economy that would raise Wales from the bottom of the UK’s prosperity league table.

Contrary to the nationalist viewpoint, I do not believe that a Welsh Parliament is a step towards independence but a move towards equality within a Union of Parliaments within the United Kingdom, a Union that would be strengthened by having a Welsh ’Senedd’ with full law-making powers. The vast majority of the population of Wales perceive themselves as both Welsh AND British and there has been an increasing pride in Wales being able to make its own decisions over a number of key areas.

There is also the assumption by the majority of our party that Labour will always be in power in Wales within the Assembly and that our party are reluctant to grant more powers as a result of this. This is a false assumption and I believe that the hegemony of the Labour Party is over. Its position as the major political force has been broken forever in Wales, as yesterday’s council election results have shown.

We should have no fear of having further powers in a parliament in which Conservatives will play a full role. Indeed, creating a Welsh parliament will weaken and not strengthen the nationalists’ position in Wales, as few will ever have the appetite for independence, especially an independence which has Wales as a region in Europe but not in the United Kingdom. Our British ties, especially in the more populated areas in the North east and South East of Wales, will see to that.

From an economic point of view, I believe that the assumption that full powers for the Assembly along the lines of the Scottish Parliament, would not help Wales, as indicated by several business organisations during the original devolution debate, is no longer valid.

The real question, which must be addressed by detailed research, is how further powers would make Wales a more attractive business environment for both inward investors and indigenous businesses. Indeed, there could be a viewpoint that a more radical Assembly Government, with increased devolved powers, could use legislative powers to boost investment and profitability. This would certainly be an improvement on the current settlement where economic development policy in Wales is straitjacketed by having only one real instrument – grants to business – as the means of making any real difference to the economy.

To date, there has been little examination by policy-makers of the impact of such new legislative powers on the Welsh economy, and it is about time that a cost-benefit analysis is undertaken of the effect of additional powers, taking into account the benefit for Welsh businesses. Most importantly, such an exercise should look to learn from other small countries that have managed to buck the trend that big is best and created competitive dynamic economies.

In my opinion, we have waited too long to examine the effect of greater legislative powers on economic and enterprise development, and I was extremely disappointed that this was not discussed in any real depth during the enquiry by the Richard Commission into further powers for the Assembly. I believe the time has now come to have an honest debate to thoroughly re-examine the whole issue of the additional powers that can create competitive advantage for Welsh businesses, as opposed to grants that do little to support long term investment.

Many would argue, including many of my colleagues within the Conservative Party, that Wales is not mature enough at this stage in the devolution process to consider further powers. However, this is no excuse for not having a wider and deeper debate specifically on the effect of further powers on the competitiveness of the Welsh economy, especially as the political bandwagon towards further decentralisation from Westminster is rolling ever more quickly down the hill. To this extent, this consultation is merely one stage in the process of examining further devolution and is, I would hope not, just an event, to quote a recent Welsh politician.

With regard to the debate on devolution, I sometimes think that politicians are their own worst enemies, and arguing for more powers just because we have less than the other devolved parts of the UK is just not good enough and will attract little support from the business community. Instead, we should be arguing the case for greater powers because they make a difference to Wales and not because of any devolutional shortcomings relative to Scotland, Northern Ireland, or even Guernsey.

However, there needs to be a ‘quid pro quo’ in any new devolution settlement. If Wales, as a nation, wishes for further powers from Westminster, then the Conservative Party must reduce the current political representation at the House of Commons to reflect this, possibly halving the number of Welsh MPs, and increasing the number of AMs necessary to deal with primary legislation.

In addition, I would expect the next Conservative Government to undertake a thorough review of the Barnett formula and to look at alternative methods of funding UK regions. There is a price to be paid for greater powers and if the Welsh nation decides that this is the way forward, then greater economic self-dependency has to be part of this change.

At the same time, we must, as Welsh Conservatives, acknowledge the fact that two thirds of Wales, as well as pockets of poverty in Cardiff and Newport, are amongst the poorest parts of Europe and will need to argue strongly for fiscal support from any incoming Conservative Government to enable any regeneration to take place.

As I mentioned earlier, given the position of some of the bodies representing business during the initial devolution campaign, such a debate will clearly polarise opinion on the legislative influence of government on business, but the data shows that Wales still needs to improve its economic performance relative to the UK and the Assembly clearly has a major role to play in this.

The increasing self confidence that has come from the first stage of devolution has prompted a growing number of businesses, especially those in new knowledge-based sectors, to adopt a more positive attitude towards devolution. It has also encouraged larger businesses, especially within banking and finance, to create Welsh headquarters for their divisions which were previously managed from Manchester, Birmingham and Bristol.

With this change in attitudes by an increasing number of the wealth creators in our economy, I can only be hopeful that there are enlightened individuals within our party - be they academics, businesspeople and even politicians - that will consider the possibility of adopting a different and more positive approach to further devolution that can make a real difference to Welsh businesses and ensure a prosperous future for our economy.

Yn ddiffuant,



Professor Dylan Jones-Evans

AND THE FASTEST GROWING FIRM IN WALES IS...

....Unit Engineers and Constructors Ltd of Pembroke Dock.

Since starting in 2004, this Pembrokeshire-based company has grown to a turnover of over £17 million in 2008 and its workforce to 167 people.

In 2008, the total turnover of all the firms on this year's Fast Growth 50 list was £565 million as compared to £273 million in 2006. Therefore, the companies have collectively generated £292 million of additional sales in two years at an average growth rate of 107 per cent.

As in the previous ten years of the list, Fast Growth 50 firms have created employment at a time when the economy was at the edge of recession. In the period 2006-2008, the fifty companies will have created around 1900 new jobs, doubling their workforce.

If we take this in context of the entire Welsh economy, government statistics show that number of people employed in the private sector in Wales increased by around 12,000 people in the period 2006-2008.

Therefore, this year's Fast Growth 50 has been responsible for around 15 per cent of all new private sector jobs in Wales during this two year period, a remarkable achievement that shows the importance of supporting indigenous businesses during a recession.

The Fast Growth 50 dinner, attended by nearly 400 guests last Friday, was a resounding success and the speech by Bill Ledwood (above) of Unit describing how he had grown the company from a position of extreme adversity and with little support was a tale of entrepreneurship that every politician and policymaker should listen to.

As one company wrote to me afterwards,

"I just wanted to say thank you to everyone involved for a great Friday night at the FG50 awards on Friday. I was a guest of one of the finalists, having not been to the FG50 since 2005 and hope very much that our organisation will be part of awards themselves in 2 or 3 years time. Thanks again for a really well organised evening in which I met many interesting and inspiring business people. For me the FG50 is a unique and valuable concept that gives small business like mine a real incentive to become profitable and consistent, whilst showcasing success alongside the large players."

Full details of the Wales Fast Growth 50 winners for 2009 can be found at http://www.fastgrowth50.com/.

PETER AND RHODRI'S RED HERRING

A lot of attention has been given by the Western Mail to the joint press event held yesterday by Peter Hain and Rhodri Morgan.

According to their interpretation of the proposal by the Conservatives to cut down on the number of Welsh MPS, there would be a knock-on effect for the Assembly unless new legislation was introduced to change the way its members are elected.

The logic is that as the Government of Wales Act requires that the constituencies from which the 40 directly-elected AMs are chosen are identical to the ones used to send MPs to Westminster, both of them argued that this could result in an Assembly with just 30 constituency AMs and only 15 AMs from the top-up list.

I assume this calculation has been made because the 2006 Government of Wales act states that "the total number of seats for the Assembly electoral regions must be one half of the total number of the Assembly constituencies".

The Secretary of State for Wales then went on to state that "With the Richard Commission saying that the workload required 80 members, to turn the argument the other way around and actually reduce the number of Assembly members would be very, very serious..."

So taking that logic to its conclusion, then we would need roughly 53 parliamentary constituencies in Wales to enable the Richard Commission vision of having 80 members of the Assembly sitting in Cardiff Bay!

This would require a new Act of Parliament to enable this unlikely scenario to happen.

However, one would assume that any incoming Conservative Government, in changing the number of MPs across the UK, would also make legislative provision for changes to the Government of Wales Act to enable the regional list calculation to change accordingly i.e. this would allow for the reduction in the number of MPs whilst maintaining the current number of AMs, as has happened in Scotland.

Of course, if the reductions in MPs were to be made and the link maintained between Westminster and Cardiff Bay constituencies, this could mean that there would be 30 first past the post AMs elected and a further 30 from the regional lists.

I wonder what that would do to Labour's election prospects in any future Assembly election?

MAXIMISING THE WELSH POUND?

Last week, the public sector borrowing requirement for the UK was announced at a record £15 billion for September.

On the same day, and seemingly oblivious to this news, the Welsh Assembly Government (WAG) announced that £120 million of taxpayers’ money was being spent on a number of public sector projects across the nation.

Certainly, one cannot argue with funding of £8 million for a new children’s hospital for Wales, although why WAG has waited so long to support this critical project remains a mystery.

However, one has to question whether, at a time when we should be doing everything to bolster our economy, any of the other projects receiving public money will really help to deal with worst recession since the Second World War?

Is it really a priority for WAG to back projects such as £35 million for the Ebbw Vale Learning Works (which includes a sports, leisure and arts centre); £15 million on an arts and science centre at Bangor University; £3.5 million for the Glyn Vivian Art Gallery, Swansea; and nearly £1 million for eco-lighting at 17 monuments?

According to WAG, resources need to be used effectively and efficiently to ensure value for the Welsh pound.

Therefore, why has the Assembly not partnered with the private sector to deliver key projects that can make a difference to the economy? Surely that would have ensured that public money, matched with the private sector, would have gone a lot further.

As it stands, most of the additional funding for the projects approved will come either from other public sector pots or from European funds.

You also have to ask why not one single proposal to boost the business performance of the Welsh economy was funded by WAG?

For example, Wrexham Council submitted a bid for a Western Gateway "green" business park project and Flintshire for offices, warehouses and workshops in Sealand.

Neither were supported and yet a £15 million bid from Bangor University to build a replacement for Theatre Gwynedd and a new students’ union nightclub was approved?

Of course, WAG has argued that the projects funded "will create or support over 3,000 jobs during the construction process".

As this works out at roughly £40,000 per job, it is a very expensive way of getting people back to work, especially as it is nearly four times the cost of a job created by grants to business. There is also no guarantee that any of the capital projects funded will go to local Welsh companies, given the procurement rules operated by WAG.

With the current restrictions on public funding, one would wonder where WAG has managed to find an additional £120 million for these projects.

Well, it would seem that the answers lie in the details of next year’s WAG budget, which shows a reduction in capital expenditure for the economy and transport portfolio of £60 million and for education and learning of £82 million.

For the last couple of years, WAG has been advocating 'a bigger bang for the Welsh buck'. If that is the case, how can it approve a tranche of public sector projects that will do little to support Welsh industry and bring down the 130,000 currently unemployed in Wales? How can WAG support a £142 million cut in expenditure in the main areas that can help to build up Welsh business, namely economy, transport and skills?

That is hardly "maximising the benefit of every Welsh pound for the people of Wales". Worst still, with estimates of 160,000 people being unemployed in Wales by next year, it seems that the future of Welsh business is being mortgaged for the sake of a number of pet projects that could, and should, be delayed until the economy recovers.

WALES FAST GROWTH 50 2009

Tonight, we celebrate the best of Welsh business at the annual Fast Growth 50 award dinner, which will be attended by 400 entrepreneurs and supporters.

The official results will come out next Wednesday in the Western Mail and the Daily Post and I am pleased to say that there will be some real positive surprises in store for the Welsh economy.

In the meantime, the Western Mail has published a taster of the results which, in the middle of a recession, are more important than ever as a sign of the entrepreneurial potential that could take us out of the economic downturn.

TOO POSH FOR BUSINESS?

A very pertinent article appeared on BBC business on Monday which questioned the sectoral approach that many regional development agencies have undertaken to attract high technology jobs to a region.

As a result, expanding businesses in other sectors were being excluded from support.

Interestingly, the article also referred to the situation in Wales and suggested that the Welsh Assembly Government is using both domestic and European Union funding to build new business parks, even when existing developments are at best half-full, and at worst, completely empty.

It quoted the example of the Bryn Cegin business park on the outskirts of Bangor that has received £9.5m of public subsidy and yet remains empty.

According to a local chartered surveyor, "local businesses think it's a waste of money because it's empty ever since it was built and they think it's a waste of money because it's not for them".

The article also refers to the situation 20 miles away in Holyhead where new roads, roundabouts and a high speed broadband internet network have been put in place at another new site - Parc Cybi. This time, more than £17m has been spent and, according to the article, neither park has a single company signed up wanting to move in.

As the surveyor notes,

"It's perfectly understandable that there should be a political aim to bring high-grade employment to a university town like Bangor. The problem is that's been the aim for the last 50 years and it's never worked. Can we just look at what the local market is, instead of dreaming of a large spaceship coming here from Japan and giving us some hi-tech employment."

Whilst the last point is made more in jest, there is a serious side to it. WAG has decided that it needs to compete in a few key sectors, like every other RDA in the UK, and yet as any businessperson will tell you, opportunities can arise in any industry.

Tomorrow night, we will have proof of this during the annual Wales Fast Growth 50 dinner, where 50 of the fastest growing firms from all parts of Wales and, more importantly, from all sectors of the economy, will have generated over half a billion of sales during the last two years.

The simple lesson from eleven years of the Fast Growth 50 is that Government should be backing winners, not picking them.

40,000 WELSH FIRMS FACE AN INCREASE IN BUSINESS RATES

Finally, some good news on the business rates front, especially after the thousands of words I have written on the subject over the last month.

As I had predicted on Saturday, the Welsh Assembly Government (WAG) has followed England and reduced the multiplier which helps to calculate business rates.

However, this will still mean that 40,000 businesses across Wales are still facing an increase in their bills next April at a time when they need every penny they can get.

Therefore, there is still much that needs to be done to deal with these higher bills and I remain concerned that the Assembly still denies that it does not have the power to delay the property revaluation exercise, which runs every five years, and so help those small firms which are facing increases in their rates.

There is simply no reason why, under the powers it has through the Local Government Act, why it could not suspend the payments by companies which are being hit hard by the revaluation exercise for at least one year, given that such support could essentially be classed as a rate relief, and I hope that pressure will continue to be exerted on Ministers to re-examine this critical issue.

I suspect this prevarication over revaluation has more to do with political cowardice and a reluctance to admit the truth rather than doing what is right for small firms.

However, let's get one thing clear about this before any politician decides to be disingenuous with the truth about how much WAG is helping small firms. In this case, there has been no additional support from WAG for Welsh business.

As the Valuation Office stated recently, the fact that this was not an income generating exercise meant that WAG had to reduce the multiplier to a point where the business rates scheme was cost neutral. Therefore, it is not WAG that will be paying for the decrease in business rates for 64,000 businesses across Wales but the 40,000 firms which will be getting an increase in their business rates as a result of revaluation.

Therefore, unlike Scotland, the fight for a fairer business rates system for Wales goes on and I hope that the FSB, the IOD, the CBI, as well as politicians across Wales, will continue to pressurise WAG for a fair deal for our small business community and to follow the lead of Scotland in ensuring that the majority of our small firms pay no rates at all.

LARGE FIRMS BENEFIT MOST FROM PRO-ACT

Whilst I have had my suspicions, I had always wondered whether Pro-Act had been geared towards large firms or small firms.

Finally, we have the answer, that to a roundabout reply given by John Griffiths to a written question from David Melding.

According to the Deputy Minister, “a total of £5.7m has been committed to companies in Wales with under 250 employees. This is around 63% of the total companies who have been approved for ProAct and 32% of the funding.”

In other words, 68 per cent of the funding allocated under Pro-Act has gone to companies employing more than 250 people i.e. over £12 million has gone to large firms - most of whom can afford to pay for the training themselves.

Indeed, Corus has received £1.1. million to train workers which it admitted were not under threat of redundancy.

Therefore, large firms in Wales have received over twice as much support as SMEs (small to medium enterprises) under the Assembly’s ‘flagship’ programme against the recession.

Compare this with the £7 million which the Assembly Government decided to pay out to extend rate relief in Wales last September.

So much for supporting the small firm sector in Wales during the recession.