The State of Britain


Planning permission for Wylfa Newydd nuclear power project deferred, a slew of job losses, and taxpayers on the hook for more cash at Cardiff Airport

Reading Time: 4 minutes

Unemployment in Wales increased by 5,000 to 64,000 between June and August, the increase of 0.4% took the overall rate to 4.2%.

The South West of England continued to record the lowest rate at 2.4% with the UK rate at 3.9%. The highest rate was 5.8% which was recorded in the North East of England.

The South West also had the highest employment rate at 81.0% which compared with 74.1% in Wales. UK employment was estimated at 75.9%.

Welsh average property prices increased by 2.3% to £168,318, which took annual growth to 4.5% which was the highest in the UK. In comparison, UK prices grew by 0.8% to £234,853 during August, an annual growth rate of 1.3%.

Analysis by the BBC has found workers living in coastal communities in Great Britain earn on average £1,600 less per year than those living inland. Since 2010 wages fell by c20% in real terms in Delyn the fifth biggest faller in the UK.

In seaside towns median wages were £22,104 compared with £23,785 in non-coastal areas.

The ONS’s Personal Well-being (or Happiness) Index has ranked Wales eighth out of the 12 UK ‘regions’ in terms of improved happiness since the last survey. Overall though, the Northern Irish were still the happiest in the UK with Londoners still the most miserable.


UK Business Secretary, Andrea Leadsom, has deferred the decision on whether to give the stalled Wylfa Newydd nuclear power project planning permission, citing the need for more information on environmental and other impacts.

At £15bn it is the biggest energy project ever proposed in Wales. Developers Horizon Nuclear Power said the decision would heavily influence how the project progressed.

Is the Government losing interest in the project? Given EDF Energy said the construction cost for Hinkley Point C in Somerset had climbed by between £1.9bn/£2.9bn to a total cost of £21.5bn /£22.5bn last month, and the success of the Government’s recent offshore wind auction, it is possible.

Another wrinkle is the Government’s growing fondness for a new consumer pays first funding model, known as RAB (Regulated Asset Base), which has already been used to finance some large infrastructure projects, including the £4.2bn Thames Tideway ‘super-sewer’. This might also explain the delay.

In terms of economic development, c9,000 workers were expected to be involved in building the two nuclear reactors in Anglesey. Private sector funders, Japanese energy firm Hitachi, have already put plans on hold after failing to reach a deal with the UK government over the price it would be paid for power from the site.

In Chirk, wood panel manufacturer, Kronospan, will now go ahead with the firm’s £200m three year expansion project at its site where more than 600 are employed.

Wrexham councillors put Kronospan’s plans on hold in March amid concerns about the impact on road safety but the firm launched and won an appeal to the Welsh Government.  About 100 new jobs will be created. It can sometimes be frustrating for promoters of local economic growth when expansion plans can be hindered by councillors.

The Welsh Whisky Company, which currently operates the Penderyn Distillery near Aberdare, is proposing to open a second £5m distillery and visitor centre in Llandudno by 2021. The Welsh government has offered £1.4m of public money towards the project.

The firm is also redeveloping a disused building at the Hafod Morfa Copperworks site in Swansea, with an opening date of 2022.


Eighty-two workers were made redundant in June when cheese maker GRH Foods in Minffordd, Gwynedd, went into administration.

The company has now been acquired by continental cheese supplier Futura Foods which plans to restart operations in the coming months. The firm was not able to comment on how many staff it would hire.

Hi-Lex Cable Systems, which makes door and window parts and cables for cars at its plant in Port Talbot, has announced it will close in 2021.

The Japanese firm, which supplies Honda, Audi and BMW among others, said it did not anticipate any redundancies in the next 12 months but about 125 jobs will eventually go. Any work left at the plant in 2021 will be transferred to a Hi-Lex plant in Hungary.

Tomlinsons Dairies in Wrexham has gone into administration with the loss of 331 jobs. Administrators cited increased energy costs and a fall in the price of cream as reasons why the firm has become unviable.

A further 120 jobs are to be lost at claims management call centre We Fight Any Claim in Cwmbran, Torfaen, bringing the total jobs lost over the last two months to 250. The firm said 150 of its 400 staff would remain at the company after demand for its services fell following the passing of the PPI deadline.

Furniture company Triumph Furniture of Merthyr Tydfil, has gone into administration with 252 job losses after an unprecedented fall in sales. The company previously entered administration in 2011 before a management buyout.

Peter’s Pies based in Bedwas, Caerphilly, said it had spoken to some of the 252 Triumph staff after the firm announced the creation of 110 new jobs. The company is moving to a two-shift operation after securing a number of new deals.


A Welsh Government spokesman has said state owned Cardiff Airport adds £240m GVA to the Welsh economy and sustains around 2,400 aviation related jobs.

This was after a new tax payer loan was announced bringing the total amount of cash the airport can borrow from the Welsh Government to £59.4m. Most of the original loan of £38.2 has already been drawn down according to officials, which suggests the new £21.2m blurs the line between investment and working capital. 

Its latest accounts show the airport made a pre-tax loss of £6.6m in 2017/18. Welsh ministers paid another £52m in 2013 to buy the airport.

At c£80m of public money already deployed to keep the airport operating, and with a further £21m now at risk, the economic case looks increasingly thin.

APD not devolved, Ineos chooses Bridgend for its new 4×4 and Welsh average property prices rise the fastest in the UK

Reading Time: 4 minutesUK ministers have declined to devolve powers over air passenger duty (APD) to the Welsh Government despite a unanimous recommendation by Westminster’s Welsh Affairs Committee in June. The Committee had recognised the move would adversely impact Bristol airport but decided the economic benefits of devolving the tax would outweigh this. UK Ministers attached more weight to the threat to Bristol. Passengers on economy class outbound flights of more than 2,000 miles pay air passenger duty of £78, with those on long-haul business class charged £172. Although the latest ONS figures below show that the Welsh economy outperformed the South West, generally, or when compared with the Bristol economy, it lags behind. In terms of government spending, the South West costs the Treasury £868 per person (the lowest deficit in England) compared with £4,395 in Wales, although any additional revenue raised from APD would likely reduce the Welsh block grant. An additional complexity is that the Welsh Government owns Cardiff airport.

Is it worth it? Recent analysis by Northern Ireland’s Department for the Economy has suggested cutting APD would not deliver value for money. APD does not apply on long haul flights from NI but the Province’s airports have lobbied for it to be abolished altogether. Civil servants and their consultants acknowledged that cutting the tax could help develop new air routes and there would be economic benefits, but Northern Ireland’s block grant would be cut to reflect the reduced revenue going to the Treasury, as mentioned above, this would also likely happen in Wales. An implicit subsidy to already commercially viable routes might also raise state aid problems. The Scottish Government has the power to set APD but recently declined to abolish APD on environmental grounds, although Inverness airport remains exempt.

Ineos Automotive has chosen Bridgend for the production of its new 4×4 Grenadier vehicle, creating around 200 jobs with up to 500 possible in the long-term. Ineos is investing c£600m in a manufacturing and assembly plant at Brocastle, near to Ford Bridgend, which will close in September 2020. Production should begin in 2021 and will enable Ineos to employ some of the Ford workforce. At full capacity, it is hoped 25,000 vehicles a year will be produced at the new 23,250 sqm site which the firm is buying at market value from the Welsh Government. Key parts for the vehicle, which is inspired by the original Land Rover Defender, will be built at a second factory in Portugal before being brought to Bridgend for assembly. BMW will supply the engines, and engineering assistance will be provided by another German company, MBTech. Taxpayer support from the Welsh Government and funding from the UK Government as part of a competition to develop new technologies has not been disclosed.

Up to 380 jobs could be lost with the closure of the Tata steel plant in Newport although the firm hopes to offer jobs elsewhere in Wales where it employs over 6,000. The factory, which makes electrical steel used in power transmission, has not been in profit for four years and was put up for sale in May 2018. The firm said it would have cost £50m to upgrade the site to make it competitive. The plant is in Tata’s Cogent division, part of which is being sold to the Japanese steel company JFE Shoji Trade Corporation. The sector has been suffering from over-capacity in recent years, with UK firms struggling to compete with big volume producers in China.

A claims management call centre, We Fight Any Claim, in Cwmbran, Torfaen, is cutting 130 jobs following the end of the claim window for mis-sold payment protection insurance. In 2013, the firm received a £290,000 grant from the Welsh government.

The Stats
For the first time, the ONS has published quarterly GDP estimates for Wales and the other nine English regions. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013. The latest available figures, which are for the year ended 2018, showed the Welsh economy grew by 1.8%. This ranked the ‘region’ fifth of the twelve UK ‘regions.’ The East Midlands topped the table with growth of 3.4% whilst at the bottom the South West economy declined by 1.1%. UK growth over the same period was 1.5%.

The quarter to Dec 2018 showed education grew by 3.3% and had the highest contribution to growth. This was followed by construction, which grew by 3.3%, and transport and storage, which grew by 5.0%. Manufacturing fell by 0.6%, public administration and defence fell by 1.2% and human health and social work industries fell by 0.9%. These industries made the largest negative contribution in Wales. Overall, the construction sector was the main driver of GDP followed by services. More recent estimates (six months later) for the year ended June 2019, published by ESCoE last month, ranked Wales eighth with growth of 1.3%, which suggests the Welsh economy has marginally weakened this year relative to other parts of the UK.

More data from the ONS showed unemployment in Wales fell by 11,000 to 58,000 between May and July, the drop of 0.6%, took the overall rate to 3.8%. The South West had the lowest rate at 2.4% with the UK rate at 3.8%. The highest rate was 5.0% which was recorded in the North East. The South West also had the highest employment rate at 80.8% which compared with 74.7% in Wales. UK employment was estimated at 76.1%.

Welsh average property prices increased by 1.0% to £165,303, which meant annually prices had risen the fastest in the UK by 4.2%. In comparison, UK prices grew by 0.5% to £232,710 during July, an annual growth rate of 0.7%.

Wales sees its drop in unemployment and house price growth the best in the UK, some optimism over the future of the Ford site at Bridgend

Reading Time: 3 minutesGrowth in Wales was 1.3% in the year to June 2019, which ranked the country eighth (out of twelve UK ‘regions’) according to estimates from ESCoE. London had the best performance nationally at 2.3% with Northern Ireland at 1% the worst (12th in the UK). The national growth rate for the same period was 1.5%. With the UK economy contracting by 0.2% in the quarter, low growth in Wales reflects this, but it is possible that the country has outperformed other regional economies which have shrunk.

Unemployment in Wales decreased by 10,000 to 61,000 between April and June, the drop of 0.6% to 3.9% was the best in the UK. The South West had the lowest unemployment rate at 2.7%, the North East had the highest at 5.3%, with the UK rate at 3.9%. The South West also had the highest employment rate at 80.5%, which compared with 75.0% in Wales; the UK rate at 76.1% is the joint highest since comparative records began in 1971.

In June, Welsh average earnings increased from £553 to £576 per week. London had the highest average earnings of £831; the North East had the lowest at £537. In the UK average earnings grew by 3.7% or by 1.8% after inflation.

Welsh average property price increased during the month, the 1.2% rise to £163,768 meant annually prices increased by 4.4%, the best price growth in the UK. In comparison, UK prices grew by 0.7% to £230,292 during June which left the annual growth rate unchanged at 0.9%.

There is some optimism over the future of the Ford site at Bridgend after the Welsh Government confirmed that talks with Ineos Automotive are very advanced. Ineos has been deciding where to build its new 4×4 model, with the choice between Bridgend and another site in Portugal. Ford announced at the beginning of June that it would close its Bridgend plant in 2020 with the loss of 1,700 jobs. Ineos plans to build a vehicle inspired by the Land Rover Defender, which went out of production in 2016. The Welsh Government should be in a good position to offer financial inducements to Ineos. Ford received £140m of public money since 1978 of which the latest tranche of £11m will be paid back

A report by an All-Party Parliamentary Group (‘APPG’) of MPs which looks at Post-Brexit Funding for the nations and regions has found that the UK would receive additional EU funding in the 2021-27 spending round. Three additional sub-regions are likely to slip below the threshold of 75% EU average GDP per head that would qualify them for ‘less developed region’ status. Existing less developed regions like West Wales & the Valleys, will be joined by Lincolnshire, South Yorkshire, Tees Valley & Durham. These areas would likely have received at least €500 per head in EU regional development funding over 2021-27 which adds up to an extra £950m.

Additionally, the EU has proposed that ‘transition region’ status should be extended to cover all regions with a GDP per head between 75-100 per cent of the EU average, compared to 75-90 per cent at present. Seven additional sub-regions are likely to slip below the threshold of 100% EU average GDP per head, qualifying them for ‘transition region’ status. East Wales falls into this category, as well as East Anglia, Greater Manchester, Leicestershire, Rutland & Northamptonshire, Outer London South, North Yorkshire and South Western Scotland. It is not clear how much extra funding these areas would have received from the EU, but €50 per head over the next EU spending round would equate to £560m.

The UK government has promised to replace EU funding to the regions with a new UK Shared Prosperity Fund. If the new sub regions are added, the APPG calculates this amounts to c£1.8bn pa, on top of the c£2.2bn pa already committed as part of Local Growth Funds (in England). Integrating the Local Growth Fund into the UK Shared Prosperity Fund could be problematic. The Local Growth Fund allocates funding to LEPs via competitive bidding whereas the allocation of EU funds uses a fixed formula. How the Shared Prosperity Fund will be allocated to Wales and the other devolved nations and mesh with other pots like City Deals is yet to be determined.

Wales records the biggest drop in unemployment in the UK, a new growth deal for Mid Wales announced but still no Welsh unicorns

Reading Time: 3 minutesUnemployment in Wales decreased by 11,000 to 60,000 between March and May, the decrease of 0.7% to 3.8% was the best in the UK. At 2.6% the South West of England had the lowest rate and at 5.6% the North East had the highest rate in the country. The UK unemployment rate stands at 3.8%.

Welsh average property prices decreased by 1.4% to £159,428 during the month which reduced the annual growth rate to 3.0%. In comparison, UK prices increased by 0.1% to £229,431 during May which reduced the annual growth rate to 1.2%.

A cross-border economic collaboration between south-east Wales and the west of England has been envisaged. Commissioned by Cardiff, Newport and Bristol councils, the 49 page report in to a ‘Great Western Powerhouse’ says an alliance could boost industry and enhance the regions profile. Echoing The Northern Powerhouse strategy the Great Western Powerhouse report reflects the trend towards greater regional devolution and the emergence of regional powerhouses in the UK. The report suggests a M4 powerhouse stretching from Swansea in the west to Swindon and Bath in the east, and as far north as Tewkesbury. There are already three established city regions but no overarching powerhouse concept for the region. The report argues that the Northern Powerhouse; and Midlands Engine; ‘brands’ have been successful at attracting significant levels of government funding and investment. The cyber security, aerospace and creative industries are highlighted as examples of cross-border complementary strengths. The report calls for the UK and Welsh governments to help set up a cross-border organisation to co-ordinate the initiative.

A commission has been set-up to look at alternatives to the M4 relief road south of Newport which was axed by First Minister, Mark Drakeford, in June because of its £1.6bn cost and impact on the environment. The Government has asked Lord Burns, chairman of Ofcom, to find ways of reducing congestion. The Welsh Government is currently recruiting other members of the commission to assist Lord Burns and promises an interim report at the start of next year. Whether the commission will consider how the £1bn earmarked for the M4 relief road should be spent is unclear.

The UK has produced 72 tech unicorns over 20 years, including 13 in the last year. Most are located in London with some hubs in regional cities, none are in Wales. Unicorns are defined as $1bn technology start-ups. Attracting sufficient skills is challenging for peripheral economies like Wales according to Professor Jones-Evans, Professor of Entrepreneurship at the University of South Wales who also cited access to finance as a problem. Finance from vehicles like the state owned Development Bank of Wales can help establish firms but global scaling up requires major equity investment. The British Business Bank, according to the Professor, concentrates its equity investments in the south east of England rather than in Wales, Northern Ireland and the north east of England where it is most needed. The British Business Bank is also state owned.

On interventions, the new prime minister has announced six new growth deals, three in Scotland, two in Northern Ireland and one in Wales. The UK government said the allocation of the £300m pot would depend on the strength of proposals put forward. Growth deals (also known as city deals in urban areas) are national, devolved and local government funding packages aimed at boosting regional economies often by encouraging private investment on specific projects. Cardiff and Swansea Bay are at the centre of growth deals already in place while another is being negotiated for north Wales. This new deal covers Mid Wales (Powys and Ceredigion) which will get a proportion of the £300m to be spent over 15 years. A potential of 4,000 new jobs could be created boosting the mid Wales economy by £200m a year. Transport, broadband and connectivity projects are likely to form part of the Mid Wales bid which will aim to uplift Mid Wales’s productivity. Powys has the lowest rate of productivity per hour of any local authority area in the UK. The Growing Mid Wales Partnership is gathering ideas for the deal with new developments in green energy agricultural techniques being mooted.

A surge in Welsh property prices but Wales has the lowest disposable household income in the UK, and a series of setbacks for the Welsh economy

Reading Time: 4 minutesUnemployment in Wales increased by 1,000 to 69,000 between February and April, an uplift of 0.1% to 4.4%. The South West had the lowest rate in the UK at 2.7%; at 5.7% the North East had the highest. The UK unemployment rate stands at 3.8%.

Welsh average property prices increased by 2.4% to £163,902 during the month which meant annually prices surged by 6.7%, the highest growth rate in the UK. In comparison, UK prices increased by 0.7% to £228,903 during April which held the annual growth rate at 1.4%.

According to the latest figures from the ONS, Wales had the lowest disposable household income in the UK between 2016 and 2017. The UK average is £19,514 per household with only England higher than this at £19,988; Scots had £18,099 of income whilst the Northern Irish narrowly beat the Welsh with £15,813 versus £15,754. Nottingham had the UK’s lowest gross disposable household income (wages or benefits) of £12,445 with London borough Kensington and Chelsea recording household income over £60,000 and a growth rate of 4.9% from the previous year. With inflation over the period at 2.6% the growth in Welsh incomes of 1.0% suggests a decrease in disposable income in real terms.

Ford’s engine plant in Bridgend will close in the autumn of 2020 with the loss of 1,700 jobs. With a £45,000 average salary the Welsh Government estimates the factory added £3.3bn of value to the Welsh economy over 10 years. Ford has received £140m of public money since 1978 of which the latest tranche of £11m will be paid back. With the motor industry pivoting towards electric cars, investment in a new petrol engine, called Dragon, was scaled back at the factory, while production of an engine for Jaguar Land Rover is due to end this year. Factory shutdowns designed to cope with disruption from a 29 March Brexit, cut UK car production in April by almost a half. Brexit was delayed but the factories still closed and production fell 44.5% according to the Society of Motor Manufacturers and Traders.

There has been no decision yet by Ineos Automotive on whether to build its new 4×4 in Bridgend. The internationally mobile project has meant the company has been deciding between the Ford site and another in Portugal for months. Ineos Automotive plans to build a vehicle inspired by the Land Rover Defender, which went out of production in 2016. No doubt the Welsh Government is closely examining the EU state aid limit for the town.

More bad news came when the University of Wales Trinity Saint David confirmed it is facing financial uncertainty and that it was looking at 110 possible job cuts as part of a restructuring. The university has already saved £6m and has received 94 applications for voluntary redundancy and made 16 compulsory redundancies. The University is based across three locations in west Wales – Lampeter, Carmarthen and Swansea – and employs 1,500 people teaching c10,000 students. The university is behind the Yr Egin complex in Carmarthen, the first phase of which houses S4C’s headquarters. It also has a campus in London and a learning centre in Birmingham which opened in March 2018.

In Newport, almost 300 workers lost their jobs after Quinn Radiators went into administration. Administrator, Grant Thornton, made 280 staff redundant immediately.The factory had two production lines with capacity to produce 3.5m domestic radiators a year. In 2016, the Welsh Government gave the company a £3m loan aimed at creating 120 jobs and safeguarding a further 290.

In Cardiff, up to 180 jobs are at risk after Allied Bakeries – producers of Kingsmill bread – announced plans to halt production at its site. The facility in the Heath area of the city would instead be used as a distribution depot for Wales and south-west England.
The firm will now enter consultations with the 360 staff at the Maes-y-Coed Road site. Bread sales are in decline in the UK and earlier this year the firm lost a contract for a major store own-brand label bread.

Also, in St Asaph, Denbighshire, Honeywell, which manufactures plastic conduits and switches under the brand MK, told 129 staff the factory will close. Production will be redeployed to some of the USA-based company’s other sites in the UK and abroad. Job opportunities for staff would be in south east England or Hungary.

Then in Port Talbot, construction company Jistcourt has gone into administration putting about 50 jobs at risk. The company, founded in 1980, specialised in housing association and local authority developments. More positively, rechargeable battery manufacturer OXIS Energy will establish a plant in the town. The factory will produce components for batteries to power buses and trucks and will export to another plant in Brazil. The firm has received £3.2m of support from state owned Development Bank of Wales and hopes to have created 50 jobs in Port Talbot by the end of 2020.

Aston Martin has started making cars at its south Wales factory. The first pre-production models of the Aston Martin DBX have been rolled out at its St Athan site, with the factory expected to go into full production in 2020. The company has created 200 jobs and plans to recruit up to 550 more people, some of whom maybe from Ford’s Bridgend plant. The 90 acre former MOD site was announced as the second UK plant for the Aston Martin Lagonda in early 2016. The company was given a total of £18.8m in grants from the Welsh Government.

Welsh growth below average and the public sector deficit the highest in Great Britain, continuing concerns over the Swansea Bay City Deal and the Global Centre of Rail Excellence on track

Reading Time: 4 minutesGrowth in Wales increased by 0.3% to 1.1% in the year to March 2019 according to estimates from ESCoE. At 2.7% and 0.7% London and Northern Ireland had the highest and lowest growth rates in the country. The East of England was the most improved region of the UK with growth accelerating from 0.9% to 1.9%. The UK growth rate for the same period was 1.5%.

Unemployment in Wales increased 5,000 to 71,000 between January and March; the increase of 0.4% to 4.5% was the highest in the UK. At 2.4% and 5.4% the SW of England and the North East had the lowest and highest unemployment rates in the country. The UK unemployment rate stands at 3.8%.

In March, average earnings in Wales decreased to £553 per week. London had the highest average earnings of £762 whereas the Northern Ireland had the lowest of £513. In the UK average earnings grew by 3.3% or by 1.5% after inflation.

Welsh average property prices, at £123,046, remained flat during the month which meant annually prices grew by 3.0%. In comparison, UK prices dropped by 0.2% to £226,798 during March which cut the annual growth rate to 1.4% although transactions were up by 1.4%.

In its estimate of regional public spending and regional tax revenues in 2018, the ONS has concluded that Wales had a deficit of £13.7bn. This compares with London which had the highest surplus of £34.3bn. On a per person basis the Welsh deficit was £4,395, the highest in Great Britain. London had the highest surplus of £3,905 per person and Northern Ireland had the biggest deficit in the UK at £4,939. The only areas of the UK to run surpluses were London, the South East and the East of England. At a national level, the UK had a deficit of £636 per person which split into deficits of £106, £2,452, £4,395 and £4,939 for England, Scotland, Wales and Northern Ireland.

City Deals are one of the UK Government’s key regional policy tools aimed at giving local areas powers and funding aimed at supporting economic growth, creating jobs and investing in local projects. Some deals have worked well, but where deals involve multiple different local authorities and public agencies they can unravel. The £1.3bn Swansea Bay City Deal, signed in 2017, aimed at stimulating economic growth in a region stretching from Pembrokeshire to Port Talbot, involves four councils, two health boards, two universities and both the UK and Welsh governments. With private sector investment, c£1.8bn could be deployed across 11 different projects creating 9,000 jobs, but disagreements amongst the partners, especially over a £225m wellness village in Llanelli, has meant the £241m contribution from the UK and Welsh Governments has not been released. One of the partners, Neath Port Talbot Council, has threatened to pull out of the deal, citing the cost of bureaucracy and issues of confidence in governance.

A Welsh assembly inquiry has called for taxpayers’ money given to the Welsh film and TV industry to be more targeted at Welsh crews. The industry generates £187m in economic value and supports 58,000 jobs. Since 2010, £105m has been invested supporting 2,900 jobs. The Welsh Government has a £30m budget which can provide commercial funding for TV and film productions if at least 50% of the production is shot in Wales. The Wales Screen Fund also enables the Welsh Government to provide funding – since 2015, 21 productions have been awarded c£9.5m which has levered in £75m of spend on Welsh Goods and services. In comparison, Northern Ireland Screen’s c£16m investment in production funding for Game of Thrones has brought £251m to the Province’s economy since production began in 2010. The Committee also looked at the Welsh Government’s lack of transparency in its relationship with Pinewood Studios, concluding that investing public money in a studio site which was described as unsuitable for large film productions was disappointing. The Welsh Government is yet to respond.

Tata has committed to keeping the Port Talbot steel plant open, after its planned joint venture with German rival Thyssenkrupp was likely to be blocked by the EU because of competition concerns over creating what would be Europe’s second biggest steelmaker. The plant employs about 4,000 staff directly with another c15,000 in the Port Talbot supply chain. The unfortunate demise of British Steel in Scunthorpe is likely to add to the plant’s medium term viability.

In Merthyr Tydfil, Hoover Candy’s parent company, Haier Electronics, is looking to centralise some of its head office functions in Warrington by the spring of 2020 – 45 jobs are at risk. A distribution centre at the south Wales site – which employs about 60 staff – will benefit from a £2m upgrade.

A £100m project to allow trains to be tested on special tracks laid out on 4.5 mile and 2 mile ovals, at speeds of up to 100mph, has moved forward with the Welsh Government entering into a Joint Venture Agreement with Neath Port Talbot and Powys Councils. The Nant Helen opencast mine near Ystradgynlais is the preferred site for the proposed Global Centre of Rail Excellence. Currently manufacturers have to send trains across Europe for testing before they come back to the UK for service.

On transport, regional airline, Flybe, has announced it will cut six routes, mainly to Italy and Germany, from Cardiff Airport under its winter schedule plan. Extra flights on existing routes including Edinburgh, Belfast City, Cork and Paris have been added. Flybe announced it would be ending its jet operations from Cardiff this year, but would continue to offer turbo-prop flights. Cardiff Airport was bought by the Welsh government in 2013 for £52m.

Welsh unemployment sees the biggest jump in the UK, Welsh house prices have the biggest increase in Great Britain and income tax is partially devolved to Welsh ministers

Reading Time: 3 minutesUnemployment in Wales increased by 6,000 to 71,000 between December and February; an uplift of 0.4% to 4.5% -.the biggest jump in the UK. The SW of England had the lowest unemployment rate in the country at 2.6% and the NE of England had the highest at 5.6%. The national unemployment rate stands at 3.9% and UK average earnings grew by 3.5% or by 1.6% after inflation. Scotland’s unemployment rate is at a new record low of 3.3% as is Northern Ireland’s rate at 3.0%; the UK rate is now lower than at any time since the end of 1975.

Welsh average property prices ticked up by 0.2% to £159,559 during the month which meant prices increased by 4.1% over the year – the biggest increase in Great Britain. In comparison, UK prices dropped by 0.8% to £226,234 during April which cut the annual growth rate to 0.6%.

Welsh ministers can now adjust income tax by 10p in the £1 although the Welsh Government has confirmed rates will not change in 2019-20; ministers have also said a change in rates before the 2021 assembly election is unlikely. From this month 10p in each band will go directly to the Welsh Treasury. The personal allowance – the amount people can earn before they pay tax – as well as the level of income at which the higher and additional rates apply remain the same in Wales as in England and Northern Ireland. Ministers will no doubt be observing whether there is any evidence of a ‘brain drain’ in Scotland, where rates for higher earners have recently been increased and personal allowances effectively cut in comparison with other parts of the UK.

The Welsh Government has also argued it should have powers over air passenger duty (APD), allowing it to attract more long-haul flights, but UK ministers said it would give Cardiff an unfair advantage over rivals, especially Bristol. In Scotland, Holyrood, which has the power to vary this tax, had planned to halve APD with a reduced air departure tax (APT) but this has been abandoned after the SNP bowed to environmental pressure.

Flybe has cited APD as a reason why it is struggling to deliver its strategy of better connections between UK airports. Announcing the end of its jet operations and servicing operations from state owned Cardiff airport, the airline will only continue to offer turbo-prop flights which will mean the destinations offered will be reduced.

The Trostre steel plant in Llanelli, Carmarthenshire, could be sold as part of an EU competition probe into the deal to merge Tata Steel with German steelmaker Thyssenkrupp. The Carmarthenshire plant, which produces tin used in the food industry, employs 650 workers. The European Commission is investigating the proposal over concerns over competition.

Also in Carmarthenshire, Japanese firm Calsonic Kansei looks likely to cut 95 staff from its Llanelli factory. The firm employs c300 people at the plant which develops cooling systems and air conditioning components for car industry customers like Toyota, Nissan and Honda. The company was offered a £4.4m grant by the Welsh Government to create 88 jobs but this has not been claimed by the firm. The automotive industry in Wales includes 40 component firms, 100 firms in the supply chain, has c£3.2bn in sales and employs 18,000. Calsonic Kansei and the Welsh Government blamed Brexit but state policies to ban diesel and petrol engines within 20 years are also a contributory factor.

In Anglesey, Amlwch – the most northerly town in Wales – will be badly affected by German firm Rehau’s decision to close its plastics factory following a significant drop in demand; more than 100 staff could be made redundant. The plant produces a type of polymer called PVC Edgeband, used on desks and furniture; the firm’s other factory in Blaenau Ffestiniog will not be affected.

On development, a £30m regeneration of a seaside promenade in Rhyl could see the Queen’s Buildings turned into a mix of retail and food outlets, a contemporary market, offices and flats; the project also includes the former Savoy Hotel and Queen’s Market buildings. The project will be funded by Denbighshire council, the Welsh Government and the European Regional Development Fund – subject to planning permission. Similarly, proposals to regenerate the Pier Hotel and the former Dunraven Court – vacant for 20 years – in Porthcawl are underway.

Like many UK resorts, Rhyl and Porthcawl has declined in popularity since the 1970s but the depreciation of the pound, last summer’s hot temperatures, and worries about passport queues and car insurance on the continent is sparking renewed interest in staycations in Wales this year. The 10m annual overnight trips to Wales result in visitors spending more than £17m a day or about £6.3bn a year.

On interventions, the Welsh Government has set up the £6.5m Circular Economy Fund to help businesses go plastic-waste free, trying to keep resources in circulation instead of being incinerated or ending in landfill. Companies can apply for grants of £25,000 to £750,000 to increase their use of recycled plastics. Ministers hope it will help Wales hit its target of recycling 70% of its waste by 2025 and 100% by 2050.

The Welsh labour market in focus, debates about ‘Northshoring’ and Welsh Government interventions in the spotlight

Reading Time: 4 minutesUnemployment in Wales fell by 2,000 to 68,000 between November and January; moving the rate by 0.2% down to 4.3%. At 2.9% and 5.2% the SW of England and Yorkshire & Humberside had the lowest and highest unemployment rate in the country respectively. The UK unemployment rate stands at 3.9%.

In March average earnings in Wales increased to £564 per week. London had the highest average earnings of £846 whereas the North East had the lowest of £523. In the UK average earnings grew by 3.4% or by 1.5% after inflation.

Welsh property prices fell by 1.3% to an average of £160,232 during the month which trimmed the annual growth rate to 4.6% – the highest in England and Wales. In comparison UK prices dropped by 0.8% during March which cut the annual growth rate to 1.7%.

The drop in the unemployment rate and the increase in the employment rate to 76% – up 0.8% – were welcome but masked the disparity in earnings between other parts of the UK where workers earn on average £637 per week and Welsh earnings of £564. This disparity was used as a sales aid in a tweet by an inward investment agency which lauded ‘up to 30% lower salary costs’ as a reason to invest in Wales. The tweet by Trade and Invest Wales – a Welsh Government marketing initiative – drew widespread criticism which ignored so called ‘Northshoring.’ This occurs where lower wages are one of the key reasons why firms move operations out of areas with higher labour costs such as London. For example Deloitte located its delivery centre in Cardiff four years ago and KPMG put its tax compliance centre in Glasgow, to pretend that lower wage costs were not a factor in these decisions is disingenuous. On this theme, a Welsh Government appointed academic has pointed out that a proposed post-Brexit salary threshold for migrants – a minimum £30,000 salary for skilled workers seeking five-year visas – would hit Wales harder than the rest of the UK. Prof Portes, a professor of economics at King’s College London, highlighted that although average full-time earnings for the UK as a whole are not far off £30,000, in Wales they’re significantly below £30,000 and that the possible hit to the manufacturing sector was a concern.

The Welsh Government continued to have a bad PR month when it was revealed it had lent £3.5m to Swansea’s Dawnus, a construction firm that went into administration still owing £1.5m to the state. The £12m Kingsway redevelopment in Swansea was halted as a result, with Swansea council hoping to complete a deal with Welsh civil engineering contractor Griffiths to allow work to restart. Dawnus employed 700 people and its failure will have an impact on its Welsh supply chain.

Independent TV producers Bad Wolf are taking over the troubled Pinewood Studio Wales as tenants of the Welsh Government. The Welsh Government was recently severely criticised over the project to convert the warehouse into the Pinewood facility. It originally spent £9.5m on buying and fitting out the studio for Pinewood, then a Wales Audit Office report estimated that the Welsh Government was paying £392,000 a year to run the place. Bad Wolf and the Welsh Government will each pay £600,000 for improvements to the studio. The firm will shoot the second series of the Sky TV series A Discovery of Witches at the 180,000 sq ft complex followed by an HBO series, Industry. Bad Wolf has agreed to rent Pinewood for the next 12 months with an option to extend the lease for a further two years.

The £1.6bn Stronger Towns Fund targeted at stimulating jobs and growth in England – largely in the north and midlands – has sparked debate whether it will result in any new funds for Wales. Under the Barnett formula new cash on English public services generally results in more money for Wales, but it was not clear whether the Stronger Towns Fund is new cash or comes from an existing English budget.

On Welsh development, plans for a £200m adventure resort on forestry land near Port Talbot have been approved. The project promises alpine sports and white-water rafting along with a hotel, spa, apartments and restaurants. About 535 construction jobs and the equivalent of 700 operational jobs would be created at a 325-acre former forestry plantation at Pen-y-Bryn; an area in decline in population terms since the demise of the coal industry. A £15m indoor water park in Rhyl has opened five years after the closure of Rhyl Sun Centre. The project is part of a regeneration plan which has seen derelict properties flattened and two hotels, a restaurant and a pub opening. It is hoped that some of the 8m visitors who visit Rhyl annually can be enticed to stay longer.

An opencast coal mine in the south of Powys could be re-opened after it was mothballed in 2016 following a drop in demand for anthracite coal from Aberthaw power station; 100 jobs could be safeguarded. Celtic Energy said it needed to resume mining at Nant Helen for another three years to replace supplies running out at nearby East Pit. Powys councillors are due to consider the bid to resume mining in what is one of the most deprived areas in Wales. Bridgend based Cellnovo Limited – which developed, manufactured and marketed the first mobile all-in-one diabetes management system – has appointed administrators; about 70 staff have been made redundant with 20 retained to oversee the wind-down.