Scrapping WDA reduced Wales' visibility overseas, say MPs

Recognition of Wales has suffered abroad since it no longer has an agency dedicated to promoting trade, say MPs.

The House of Commons Welsh Affairs Committee said investment opportunities had been missed since the Welsh Development Agency (WDA) was scrapped.

MPs also criticised Welsh government Business Minister Edwina Hart for refusing to appear before them.

The Welsh government said its new way of attracting investment was "flexible" while the WDA had run its course.

The committee called for a successor to the WDA to market Wales around the world.

Getting rid of the WDA - which was abolished as part of Labour's bonfire of the quangos in 2006 - "has reduced Wales's visibility in the global market place," it says.

Mrs Hart angered MPs by declining their invitation to meet the committee when it visited the assembly in Cardiff during its inquiry into overseas investment.

At the time she said economic policy was her responsibility and she was "capable of doing my job on that".

In its report, the committee says: "The minister's decision was a grave discourtesy to the committee and to Parliament."

Members were also disappointed, but "not particularly surprised" by an apparent lack of contact between the Welsh and UK governments.

Welsh Secretary Cheryl Gillan said Mrs Hart had "only agreed to a meeting every six months if she considered "that there [was] something we need to talk about'".

The Welsh government "must engage" with the UK government to improve prospects for the economy, the report says.

It tells the two administrations to work together on reversing a decline in foreign investment.

Welsh success in attracting foreign businesses has deteriorated since the late 1980s and early 90s when it accounted for 15% of investment into the UK. By 2009-10 it was down to 6%.

UK trade officials based in Germany - which the committee visited to gather evidence - said there had been "little or no contact" with the Welsh government over an 18-month period, which "contrasted starkly" with other parts of the UK.

Witnesses also spoke about the importance of the Welsh government boosting its presence in London. It is currently looking for a site to open a full-time London office.

The report underlines the importance to the economy of improvements in education and transport.

Failing to improve the key skills of young people in key areas will contribute to continued economic decline, it says.

It welcomes the electrification of the great western railway line to Cardiff, and says there is a "strong economic case" to extend it to Swansea.

Committee chairman David Davies said: "Traditional approaches, such as grants and low labour costs, can no longer be relied upon to attract inward investors.

'New leads'

"The Welsh government must think innovatively about how to attract investment and develop a clear economic strategy.

"Without a dedicated trade promotion agency, Wales' international recognition has suffered."

A Welsh government spokesman said: "We have already recognised the need to enhance our trade and investment effort in these difficult economic circumstances and an increasingly competitive market place.

"We have established a major projects team to lead on trade and investment.

"We are delighted that the committee has endorsed our proposals for a new London office and a fresh approach to inward investment.

"A large number of new leads and enquiries are being generated and delivered.

"Our new model is a more flexible and responsive model and fit for the future, not simply a throw-back to the WDA, which had run its course."