Two investment zones should be set up in Wales to drive economic growth and job creation, believes Economy Minister Vaughan Gething.
Mr Gething said the Welsh Government wants to see zones in the south-east and north-east of the country focused on semiconductors and advanced manufacturing respectively.
Investment zones, part of the 海角视频 Government鈥檚 levelling up agenda, are expected to each benefit from 拢80m of tax breaks and other incentives over five years.
In his Budget in March, Chancellor Jeremy Hunt unveiled plans for 12 zones across the 海角视频. With economic development a devolved matter Mr Hunt said he would look to reach agreement with the devolved administrations to establish investment zones. The initial thinking was four across the devolved nations.
Two freeports, which will benefit from tax breaks and other support, are being established in Wales at Holyhead and two ports in South Wales at Milford Haven and Port Talbot under the banner of the Celtic Freeport.
Mr Gething told MSs that talks between Welsh and 海角视频 ministers have been constructive after one investment zone was initially proposed.
He said: 鈥淏ased on our analysis of opportunities for growth in high-potential clusters, we agree that there is a case for two investment zones in Wales.
鈥淥ur preference is for one investment zone in south-east Wales and one in north-east Wales, covering Flintshire and Wrexham.
鈥淭his reflects the specific sectoral strengths and existing clusters in each region, in particular compound semiconductors in Newport, with a link to Cardiff University and the wider south-east of Wales, and high-value advanced manufacturing in north-east Wales.
鈥淭hese sectors in themselves will be integral to the path to stronger economic growth in Wales and the 海角视频 as a whole.
鈥淲e want to see more private sector investment in high-quality jobs, skills and productivity.鈥
Paul Davies, the Conservatives鈥 shadow minister, welcomed progress but raised feedback from England that the incentives for businesses are not long-term enough.
Mr Davies said: 鈥淭he financial incentives on the investment zones are almost identical to the equivalent financial incentives available in freeports, with the exception of customs duties.
鈥淏ut five years is a short amount of time to expect a huge economic impact.
鈥淚t鈥檚 been argued that economic benefits have largely been greater when financial packages have been made on a longer term basis, like the enterprise zones set up in the early 1990s, where the exemption from business rates was for 10 years.鈥
His Plaid Cymru counterpart Luke Fletcher raised concerns that multinationals could exploit the investment zones for tax purposes without delivering tangible benefits.
The South Wales West MS highlighted that an enterprise zone programme 鈥 spearheaded by George Osborne in 2011 鈥 delivered 17,500 jobs compared with the 54,000 first mooted.
Mr Fletcher added: 鈥淭he disastrous free ports policy of the Thatcher government, which was eventually put out of its misery by the Tories in 2012, had a similar record of underdelivering for the local economies for which it was designed.
鈥淎nd the eight enterprise zones created by the Welsh Government in 2012 have fared little better.鈥
In 2018, the Senedd鈥檚 economy committee published a report on enterprise zones, saying the Wales policy鈥檚 aim to create growth and jobs had not been achieved across the board.
Ken Skates, the former economy minister, called for swift agreement from the 海角视频 Government on the two zones as well as a commitment on equivalent funding for Wales.
In the statement to the Senedd, Mr Gething said the 海角视频 Government will be expected to meet the full costs of financing each investment zone.
Fellow Labour backbencher Alun Davies questioned the decision to focus on existing manufacturing and semiconductor clusters.
The Blaenau Gwent MS argued that public funding should be directed at communities that need it most, 鈥渘ot simply into those areas where there is low-hanging fruit, where the greatest results can be achieved from a minimum investment鈥.
Mr Gething stressed that investment zones and free ports are not the sum total of what Welsh ministers want to see delivered for the economy.
He said: 鈥淭here will always be a need and a role for government to intervene to make sure we don鈥檛 simply have two corners that perform relatively well compared to the rest of Wales.鈥
Chris Haines is a ICNN Senedd reporter.
