Memorandum submitted by CBI Cymru/Wales
1. The CBI welcomes the opportunity to respond
to the Welsh Affairs Committee inquiry into cross-border public
services in Wales.
2. The CBI deals principally with cross-sector
issues which affect the business environment in which all companies
operate. The CBI's strength lies in its breadth of membership,
which includes companies of every size, including over 200 trade
associations and academic institutions, and from all sectors of
the economymanufacturing, construction, retailing, financial
services, e-commerce, leisure, transport and so on. The CBI represents
companies employing about 50% of the private sector workforce
3. This paper is intended to summarise CBI
Wales' positions on some current cross-border business issues;
they are the policy making process, public services, climate change,
planning and higher education.
4. The advent of the Welsh Assembly Government
has led to businesses having a closer and more open relationship
with policy and decision makers; this is to be welcomed. However,
a great number of non-devolved services remain the responsibility
of Whitehall and Westminster and their delivery is critical for
the continued growth of the Welsh economy.
5. Even with the Welsh Assembly Government,
there remains a need for Whitehall and Westminster to ensure that
the services within their remit are delivered efficiently and
effectively within and throughout Wales, meeting the challenges
6. Incorporating the perspective of businesses
that operate in Wales within the earliest stages of policy development
remains an important aspect of any successful UK government proposal.
Deferring to the expertise of the Welsh Assembly Government should
not always be the assumed course of action for Whitehall and Westminster
when developing non-devolved policy proposals or considering requests
for the transfer of legislative competence.
7. Where policies diverge there ought to
be greater joint working to ensure both parties make clear to
businesses operating in Wales the different funding and administrative
arrangements being put in place. We endorse the committee's recommendation
that "policy developed in England and Wales should be
`border proofed' in order to ensure that policy developed within
one jurisdiction does not have unintended consequences for patients
in another". We would extent that health-care related
principle to policies that impact on the business environment.
8. There should be no reluctance from either
Whitehall or the Welsh Assembly Government to learn from policy
best practice in any nation or region of the United Kingdom. Businesses
will invariably locate in the part of the UK which offers the
most attractive business environment. Learning from each nation
or region needs to be better integrated into the policy making
processes that impact on Wales.
9. CBI Wales is committed to strong public
services that promote social justice while remaining economically
efficient and affordable.
10. Based on the private sector's experience
in responding to customers' needs, we believe that the future
of public service provision in Wales lies in a mixed economy,
with public, private and voluntary providers all making a contribution
and working in partnership.
11. Public Private Partnerships (PPPs) have
been successful in improving efficiency and service quality. However,
the challenge is to create the right environment for PPPs to flourishPPPs
need strong political will, the right commissioning skills and
a fair market for suppliers to operate. Wales has benefited from
more flexible and innovative non-devolved public services. In
non-devolved areas such as criminal justice the role of the private
sector has grown and delivered benefits for users, employees and
12. In devolved services however Wales has
a growing "infrastructure gap" where funding for capital
projects has not grown to the same extent as in England. The result
is Wales has no "schools for the future" programme,
no large road building programme etc. If action is not taken to
address these issues the long-term result for businesses is likely
to be the emergence of financial, social and logistical disincentives
to operating in Wales.
13. Further consideration about how the
public and private sectors can collaborate more closely to deliver
types of PPP projects is also needed and greater cross-border
working between Whitehall and the Welsh Assembly Government would
certainly assist that process.
14. The CBI's landmark climate change task
force report"Climate Change: everyone's business"
called for radical UK and EU joint action to reduce emissions.
The Task Forcerepresenting over five million employeesis
now engaged in a challenging three year plan to reduce greenhouse
gas emissions, invest in renewables, work with government and
consumers to change behaviour and bring low-carbon products and
services to the market to make behavioural change easier and to
reduce the time lag for return on investment to enable many more
companies to invest in green technologies.
15. At the same time, some Welsh Assembly
Government policy proposals run the risk of putting additional
Wales-only burdens on categories of businesses that are already
harshly exposed to tough global competition. Many of these manufacturing
companies have also long invested in reducing emissions and are
already signed up to further tough EU emission reduction targets.
The result is many have already reduced their emissions significantly
and have signed up to joint-EU action for further long-term reductions.
The consequences for companies of additional Wales-only annual
3% reduction in greenhouse gas emissions being over and above
UK Climate Bill need to be understood.
16. A clear consequence of devolution is
the possibility of divergent decisions on funding for higher education.
However, we believe the current £61 million investment gap
between the Higher Education sector in Wales and England must
17. Higher education (HE) is vital in supplying
the economy with graduate and postgraduate skills and engaging
in research and development partnerships with business. While
HE is as yet performing well, Wales cannot hope to fully achieve
a "knowledge driven economy" with an underfunded HE
sector. It is almost inevitable that underfunding will lead to
Wales falling behind EU nations and greatly undermining this major
driver to a knowledge economy. It will be extremely difficult
to rectify this at a later stage. Action must be taken immediately.
18. For many businesses in Wales, planning
is a vitally important issue. In cross-border transport infrastructure
it is a policy area where the Welsh Assembly Government and Whitehall
could significantly improve people's quality of life, better connect
communities and enhance the contribution of renewable energy by
reforming the planning system.
19. There are a number of strategic challenges
for the planning system that require a systemic review. Climate
change, energy and infrastructure needs will place an unprecedented
burden on the planning system. Early action is needed to ensure
it is fit for purpose to handle the coming challenges. This has
been recognised by the UK government which has taken action by
introducing Planning Bill reforms and instigated the "Pretty
and Killian Review" into planning applications. The Welsh
Assembly Government has yet to do likewise. A more efficient and
effective English planning system will be a strong draw for future
business investment. Early action to improve Wales' planning system
20. All countries within the UK will need
to undertake an unprecedented amount of investment across all
its core infrastructure networks over the coming decades. Capacity
across the UK's infrastructure networks is being stretched due
to increased demand resulting from a period of sustained economic
growth. Many core infrastructure facilities, particularly in the
energy sector, also need upgrading or replacing.
21. Without a more expeditious decision-making
process there is a real risk that the UK will develop an infrastructure
deficit which will pass damaging costs onto the economy, undermine
our ability to achieve a number of environmental objectives and
have a detrimental impact on peoples' quality of life. The Infrastructure
Planning Commission (IPC) is set to attempt to tackle infrastructure
needs by speeding up the process. In contrast, in Wales there
are no current plans to introduce similar systemic reforms to
speed up Wales' planning system.
22. The result of these policy choices may
be a growing disparity between the planning system in England
and Wales. Where England's planning system will be faster and
more responsive, delivering early decisions on vital infrastructure
projects, Wales' planning system could remain largely unchanged.
If planning in Wales becomes slower and less responsive than England's
system there is a danger that this will create a disincentive
for businesses to operate in Wales.
23. With regard to cross border service
provision, be it in transport infrastructure or in education,
there is a growing need for greater strategic co-ordination to
plan and deliver better public services. The nature of devolution
is likely to result in growing differences in key components of
the business environment- planning, higher education services
and public services. This is understood as a natural consequence
of devolution. However key elements of our infrastructure need
to be planned cross-border. And companies operate cross-border,
and use services cross-border. As the Welsh Assembly Government
gains more and wider primary law making powers, there is a growing
need to ensure such differences do not become barriers to current
and future businesses that operate in Wales.