Examination of Witnesses (Questions 1000-1019)|
7 OCTOBER 2008
Q1000 Albert Owen: One of the early
successes of the Assembly was that it was more accessible for
particularly the voluntary sector and community. Do you feel that
the Assembly has developed that approach with business or do you
find Whitehall is easier to access than the Assembly itself?
Mr Jenkins: I think it is fair
to say that the intent is there and the systems are there, so
the Government of Wales Act 2006 was amended in line with the
Business Partnership Forum that is meeting, but the issues of
business are in some ways different from others and business is
not just interested in economic development, it has a bigger interest
in planning sometimes and skills as well. It would be worthwhile
exploring what kind of additional requirements businesses have
to ensure that certainty and those directions are given to market
forces to enable companies to invest and I am not quite sure we
are there yet. There is a will, but I am not quite sure we are
Q1001 Mr David Jones: You have indicated
that there is a need for greater strategic co-ordination of cross-border
service provision. Do you consider that the establishment of formal
cross-border structures would be a good idea and, if so, what
sort of structures would you recommend?
Mr Rosser: I think there is a
role for that. It is not always visible to ourselves as a business
organisation, as a lobbyist, the extent to which that co-ordination
goes on between the two governments. We receive assurances from
Ministers and officials in the Welsh Assembly Government that
it does take place, but it would be of interest to us to see that
happening more visibly and, indeed, where appropriate, perhaps
to participate in it. Some of the areas where that could be particularly
pertinent are around transport where there surely has to be a
role, for example, in the Welsh Assembly Government and the government
structures in the south-west of England to develop a case for
improved rail links to the south-west corner of the UK and, indeed,
in energy policy where energy supply and its resilience in Wales
is of critical interest to business and policy is largely determined
in Westminster except for energy generation under certain limits,
which is in Wales. That kind of strategic co-operation could work
Q1002 Mr David Jones: Do you consider
there are any forms of structure that could be put in place which
would make life easier?
Mr Rosser: I think a new structure
has just been set up specifically to look at the proposed Severn
Barrage, for example, which has the Welsh Assembly Government,
the south-west of England government structures and also central
Government. It is probably early to say just how effective that
is likely to be, but that strikes me as a model which could be
Q1003 Mr David Jones: You mentioned
the issue of transport and the importance of co-ordination of
cross-border policy and, in fact, you devote paragraphs 18-22
of your submission to the issue of the planning system. You point
out, as you have just done, that planning is a vitally important
issue, but you express some concern about the growing disparity
between the planning systems in England and Wales. You comment:
"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."
I take it that this is in the wake of the Planning Bill that is
currently going through Parliament?
Mr Rosser: Certainly the CBI is
a strong supporter of the IPC (Infrastructure Planning Commission)
which will apply in Wales for large energy generation but not,
for example, to large transport projects, which it will in England.
If that provides a barrier to us developing our transport infrastructure
and improving it in an efficient manner, that would be a great
shame. We are also aware of other reviews going on in England
to try to streamline the planning system for smaller scale applications.
I am not sure we detect a similar enthusiasm to do that kind of
wide-ranging review in Wales. Anything which makes it more difficult
and more cumbersome (a) for companies to invest and (b) for the
public sector to invest in public infrastructure in Wales would
not be helpful.
Q1004 Mr David Jones: Do you consider
it a matter of regret that the single consent regime which will
apply to highway projects in England will not apply in Wales?
Mr Rosser: Yes, we do.
Q1005 Mr David Jones: Do you know
of any proposals in Wales for putting in place a similar system
to the single consent regime that will apply to transport projects
Mr Rosser: We are not aware of
Q1006 Mr David Jones: Would you agree
with me that this is going to be a particular problem in respect
of important cross-border routes, such as the M4 where, of course,
a major relief road is proposed for Newport, and the A494 in north
Wales where there will have to be, as it were, a process of negotiation
between the Welsh Assembly Government and the Department for Transport?
Mr Rosser: I think the situation
with the M4 south Wales is a little more self-contained in that
the improvements which need to take place, I believe, rest entirely
within Wales, so it is for the Welsh Assembly Government to get
its processes and systems operating as efficiently as possible.
One assumes that its commitment to that improvement remains firm.
I think it is much more of an issue in north-east Wales where
the road needs improving across both sides of the border and it
would seem silly to treat them as two separate applications and,
indeed, for one side of the road to be determined, delivered and
then grind to a halt whilst planning procedures are then implemented
the other side of the border.
Q1007 Mr David Jones: Of course,
the single consent regime which is provided for in the Planning
Bill actually envisages the completion of the whole consent process
in nine months, whereas is it not the case that in Wales we will
be left with lengthy planning inquiries which could potentially
take several years while people are waiting for their road improvements?
Mr Rosser: Indeed.
Q1008 David Davies: What do the CBI
think about a new Welsh Language Act?
Mr Rosser: Gosh!
Q1009 Chairman: This is wide-ranging!
Mr Rosser: It is wide-ranging,
you are right. It rather depends what a new Welsh Language Act
Q1010 David Davies: If it contained
provisions for strongly encouraging private companies to adopt
a Welsh language policy, which is what is suggested, would that
be something the CBI supported?
Mr Rosser: No, it would not. The
CBI is entirely opposed to any form of compulsion on private sector
companies to provide services to customers through the Welsh language.
Those companies which do, and there are several, currently report
a very low take-up for those services provided in Welsh. We strongly
believe that the efforts and resources which might otherwise be
put into policing legislation would be far better applied to encouraging
provision on a voluntary basis where companies see it as being
appropriate, but more so to encourage the use of them by the people
of Wales. Passing legislation which requires a relatively small
number of companies probably, ex-utilities, current utilities,
to provide more services which most of them already do something
on and nobody is using seems rather pointless. The CBI has offered
to work with the Welsh Assembly Government and with the Welsh
Language Board to develop and promote a more comprehensive accreditation
scheme for companies providing Welsh language services, some form
of kite marking, if you wish. We would use our best efforts to
work with our members, with other business organisations, to promote
that across a range of sectors and then to promote take-up of
it by the public in Wales.
Q1011 David Davies: Do the CBI think
that were that Act to happen and were it to impose obligations
on private sector companies that would act as a barrier to businesses
coming to Wales?
Mr Rosser: I think that depends
very much on the sorts of companies that might be covered by any
legislation. At the moment our understanding of the thinking within
the Welsh Assembly Government is that it is likely to apply to
companies predominantly providing public services, which we take
to mean probably ex-public sector utilities. We think that would
lead to a dumbing down in some areas of the services provided
by those utilities that currently provide good services and a
levelling up in others, costs which would almost certainly be
passed on to the consumer in Wales, and we already have regional
pricing in most utilities. Any language compulsion in legislation
which went into other business sectors would have a much more
dramatic impact, but we are not certain that is the way WAG are
thinking at the moment.
Q1012 Alun Michael: In your evidence
and in your note in advance you have talked about the importance
of certainty, clarity and communication, things like that, and
understanding your business concerns. Do you feel that officials
at the Welsh Assembly have a good grasp of business issues and
is the relationship right following the incorporation of the WDA
(Welsh Development Agency)?
Mr Rosser: Inevitably the grasp
of business issues is going to be highly variable. One might expect,
and one does see, that officials within the old Welsh Development
Agency who are now within Economic Development and Transport tend
to have a better feel for the way businesses are thinking, what
the issues are and what concerns them, than officials in maybe
the Environment Division or Culture Division dealing with Welsh
language issues. That is perhaps not surprising. Quite a lot of
our work is not actually talking to Economic Development within
the Welsh Assembly Government, it is talking to other departments
to try and get across some of those messages from the business
Q1013 Alun Michael: There are a couple
of comments that you make in your evidence. You say: "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." Have you come
across specific examples or is this a sort of fear rather than
Mr Rosser: It is certainly a fear.
We very much encourage the UK Government to consult with companies
in Wales when it is dealing with requests for powers which would
transfer power to the Welsh Assembly Government that would have
an impact on the business community. One, for example, that springs
to mind is the transfer of building regulations, which I think
will be done as a Transfer of Functions Order rather than the
LCO Measure process, where there are very clear consequences for
companies, for the development industry in Wales, but we have
gained a very strong impression when we have come to Westminster
to talk to officials that it is a done deal.
Q1014 Alun Michael: Another thing
you say is: "Learning from each nation or region needs to
be better integrated into the policy making processes that impact
on Wales." Are you, as the CBI in Wales, drawing on experiences
in other regions to try to inform that sort of debate? In future,
will you be drawing interesting comparisons to the attention of
Members of this Committee, for example, as well as to Assembly
Mr Rosser: We would be happy to.
The CBI in Wales is a fully integrated part of the CBI nationally,
so we have regular discussions with colleagues in Scotland but
also policy experts in our head office in England. We have been
talking to the Welsh Assembly Government, for example, about innovation,
research and development vouchers piloted in the West Midlands,
delivered by the University of West Midlands in Bristol, just
across the border, and now being rolled out in Scotland and Northern
Ireland too. We very much welcome the opportunity to speak to
this Committee about some of those issues in the future.
Mr Jenkins: A positive example
of this type of dialogue can be found in the DET that have set
up the KPI panel, and that is a dialogue with business, almost
a first blush, behind closed doors discussion about where we are
going on certain key consultations and we have found that incredibly
helpful because it enables businesses and policy-makers free discussion
on some critical issues that will impact on businesses down the
line and allows them to be fed in at the earliest stages. That
type of approach has been very fruitful.
Chairman: Can we move on now to higher
Q1015 Mark Williams: What are the
consequences for employers of the different funding policies between
England and Wales with regard to higher education? You have talked
in your brief about the shortfall of 61 million that the Welsh
universities are facing. What are the practical manifestations
of that for you as employers?
Mr Rosser: The CBI has most of
the large higher education institutions in Wales within membership,
but I will answer this question from the perspective of our mainstream
business members. To date, I do not think business is seeing any
consequences in terms of the quality of graduates leaving Welsh
institutions. Speaking as somebody who sits as a governor on one
of Wales' HEIs, universities in Wales find it more difficult increasingly
to invest in their estates, in their facilities, in the best teachers
and research teams. Whether that will have an impact on the choices
of potential students as to the institution they choose to go
and whether they will gravitate more towards better funded institutions
outside Wales is something that is not certain but we should all
keep an eye on. Companies in Wales will work with the most appropriate
higher education institution when it comes to research, for example.
Some of the large companies are equally likely to work with English
institutions as they are with institutions in Wales, but there
is a much greater appetite to work with their local university.
Q1016 Mark Williams: Have you detected
a change in attitude between higher education institutions and
Mr Rosser: There is an undoubted
change in attitude between the two groups wanting to work together.
The agenda of business and HE working together is moving ahead
at a pace. Medium-sized and smaller companies are more likely
to turn to their local university rather than larger companies
who might trawl the expertise wherever it exists in the UK or,
indeed, Europe. If the funding gap between HE in Wales and England
continues and, indeed, continues to widen, as it currently is,
and Welsh universities are less able to invest in their research
capability then one could see that being a problem for Welsh businesses,
but I am not certain that we are there yet. Lastly, I think what
are called third mission activities for universities, which generally
include working with companies, working with businesses, is something
that they tend not to be core funded for. At a time when universities
are under financial pressure, I think a number of them would like
to do more with companies in Wales than they feel currently financially
able to do. It is more a question of companies in Wales to a certain
extent not knowing what they are missing, there is more that could
be done if the funding was better managed.
Q1017 Mark Williams: Notwithstanding
that, and you talk of good relationships between the institutions
and business, in your brief you talk about the funding gap as
being "Extremely difficult. We have got to rectify that now.
It is going to be difficult to rectify this at a later stage.
Action must be taken immediately". What action would you
like to see to remedy the gap?
Mr Rosser: It is very easy to
call for some more money to be ploughed in. The consequence of
the decision on tuition fees policy in Wales was to take some
higher education budget and put it into the hands of students
as opposed to into the hands of institutions, and one can understand
the arguments for putting money into the hands of students but
there are consequences which flow from that. The tuition fees
policy is likely to be reviewed both in England and Wales in the
next year or two and it will be interesting to see what decisions
come out of that. I do not think we would want to see that reiterated
in the next review.
Q1018 Mark Williams: Do you have
a view on that as an organisationspecifically on the lifting
of the cap?
Mr Rosser: I am not sure we have
developed a view on that, but certainly the consequences of the
differential policy are clear to us. One other thing which could
be usefully done, I think, is consideration given to moving higher
education from the Education Department within the Welsh Assembly
Government and putting it into the Economic Development Department
if we are serious about making universities part of the infrastructure
for developing our economy. Whilst universities are competing
for funding alongside schools they will always struggle somewhat,
but putting them within an Economic Development budget might make
us think more clearly about how we use that Economic Development
Q1019 Mark Williams: It would be
a very interesting dialogue with the universities on that one!
Mr Rosser: I think the universities
would probably support that.