Wales' inward investment hit by skill levels, MPs told

Wales is not attracting high quality inward investment due to "appalling" skill levels and a poor education system, an academic has told MPs.

John Ball told the Welsh Affairs Select Committee a key plank of the assembly government's economic strategy was "cloud cuckoo land".

German manufacturers have also argued Wales is failing to sell its exports.

The assembly government said part of its new economic policy was aimed at strengthening exports.

Wales once attracted up to a fifth of inward investment into the UK.

But that share has fallen dramatically and is unlikely to recover soon, according to evidence presented to the select committee on Welsh affairs.

Dr Ball, an economics lecturer of Swansea University, said the skills were not there for inward investors. Something serious, he said, had to be done about education.

He accused the assembly government of prioritising industries in decline.

He said to talk of attracting financial services and research and development jobs was "cloud cuckoo land" because of poor levels of education in Wales.

Earlier, Dr Bernd Atenshtaed, of German Industry UK, spoke to BBC Wales as MPs launch an inquiry into inward investment.

He said the assembly government needed to do more to promote Welsh exports abroad rather than look for external investors.

The assembly government said part of its new economic policy was aimed at strengthening exports.

Germany is the third largest outside investor in Wales, employing 7,148 people on 46 sites.

According to figures released in October Welsh exports fell in value by £1.6bn last year.

'Changed rapidly'

German Industry UK represents German manufacturers in the UK, including energy companies Npower and E-on.

Dr Atenshtaed, its chief executive, said Wales should not only be looking for more inward investment from Germany, but also to export Welsh goods.

He told BBC Wales the assembly government was too pre-occupied with reorganisation rather than delivering results.

According to the Welsh Affairs Select Committee during the late 1980s and much of the 1990s, Wales was successful in attracting inward investment, with the nation regularly gaining around 15% of the inward investment and associated jobs coming to the UK.

"However, in recent years, the environment for attracting investment has changed rapidly, and Wales has lost large portions of its foreign manufacturing employment and output," it said.

It said Wales had attracted 4.7% of all inward investment in the UK during the past 10 years.

An assembly government spokesperson said: "Wales, like the rest of Europe, has recently been through a challenging economic period.

"However, we have implemented a new economic policy to create a strong and vibrant economy in Wales.

"This includes developing and supporting business in Wales, identifying export opportunities and attracting high quality investment from overseas."

Meanwhile, in a speech in London to promote Wales on Monday evening Deputy First Minister Ieuan Wyn Jones ‬‪said he was looking to see if ministers could intervene to stimulate greater supply of commercial finance.

"Our one aim is to ensure that viable Welsh businesses are able to secure the finance they need," he said.