Select Committee on Welsh Affairs Minutes of Evidence

Memorandum submitted by the Government


  1.  The Government welcomes the Welsh Affairs Committee Inquiry into the promotion of Wales abroad. Post devolution Wales remains an integral part of the United Kingdom so that, in addition to the promotional activities of the National Assembly for Wales and its own agencies, the promotion of all aspects of Welsh life—economic, social and cultural—remains a high priority for various government departments and agencies.

  2.  Current activity on these fronts very much follows the pattern of that which was taking place before devolution. However, reflecting the establishment of the Assembly, the relationship between Government Departments and the Assembly is now codified in the overarching Memorandum of Understanding (the MOU) (Annex C) and supplementary agreements between the UK Government, Scottish Ministers, the Cabinet of the National Assembly for Wales and the Executive Committee of the Northern Ireland Assembly. There is also a series of bilateral concordats between the Assembly and individual Government Departments.

  3.  Broadly the major areas of promotion of Wales relate to international relations, including EU negotiations; trade; commerce; and cultural and social activities. This is achieved by:

    —  promotion and representation of Wales by overseas diplomatic missions;

    —  considering Wales when formulating UK policy for EU and international negotiations;

    —  the support of export activity;

    —  the promotion of Wales as inward investment location;

    —  the promotion of Wales as a tourist destination; and

    —  the development of cultural and social links and associations.

  This memorandum describes the activities of the lead UK departments in these fields.


Constitutional context

  5.  The role of the Secretary of State for Wales and of his Department is to represent Wales in the UK Government, to represent the UK Government in Wales and to promote and defend the devolution settlement. Much of this work is behind the scenes, ensuring that the Welsh angle is adequately represented during Cabinet committee discussions of subjects, including EU and international policy issues, so that the UK Government collective line adequately represents Welsh interests.

Promotion of Welsh interests in formulation of UK Government policy

  6.  Between them, the Secretary of State and Parliamentary Under-Secretary of State sit on 23 Cabinet Committees and are also represented on various new ad hoc groups, where they ensure that the Welsh perspective is taken into account when UK policy is formulated. Some of these committees, such as (E)DOP (European issues) relate directly to the promotion of the interests of the UK and its constituent parts in the European or international arena. However, there is often a European dimension and sometimes also an international dimension to the work of other Cabinet Committees, such as MISC 6 (biotechnology and genetic modification), EA (economic affairs) or ENV (environment). In such cases, Welsh interests can also be promoted overseas, although more indirectly, when the UK pursues policies and negotiating lines internationally or in European fora which have been agreed domestically in these Cabinet committees attended by Wales Office Ministers.

  7.  In addition, the Wales Office also contributes to interdepartmental Ministerial correspondence in a wide range of policy areas to ensure that Welsh interests are taken on board and that the Assembly is adequately consulted in accordance with the Memorandum of Understanding and overarching concordats.

  8.  Specific areas where the Wales Office has played a public role in ensuring the promotion of Welsh interests when a UK-wide policy is being formulated in relation to European/overseas matters include:

    —  the UK's Structural Funds map for Objective 2 (agreed in partnership with the National Assembly and DTI), which was formally approved by the European Commission in March 2000; and

    —  the UK's Assisted Areas map for 2000-06, formally approved by the European Commission in July 2000, where the Wales Office carried out the public consultation in Wales on the UK Government's proposals for the map—again developed in close partnership with the National Assembly and DTI.

Public presentation

  9.  There is, however, also an important public element of the role of the Wales Office, in helping build new kinds of partnership between Cardiff, London and Brussels and Wales and other regions of Europe. The Wales Office therefore seeks to promote a greater understanding of Wales and the devolution settlement among other countries, regions and European decision-makers.

  10.  For example, Wales Office Ministers have held meetings, organised with the assistance of the FCO, with the Irish Taoiseach, the Minister Presidents of Flanders and Wallonia, representatives of the four Motor Regions (Baden-Württemberg, Rhône-Alpes, Lombardy and Catalonia), with which Wales has links, and with relevant European Commissioners.

  11.  More recently, the Secretary of State opened the inaugural Belgo-British conference in Bruges entitled "Globalisation and Regionalisation; What are States for?" on 19-21 October. His speech (Annex A), considered, from the perspective of a British politician from Wales Belgo-British relations; the position of the small so-called "stateless" nations in today's European Union; and the position of the larger "nationless" states. It also looked at Welsh regional links and the levels of decision-making in the EU of the future: EU-level, national level and regional level.

  12.  The Secretary of State also spoke at the closing session of the devolution conference in Valencia entitled "Polycentric Europe: Regional Government in Europe" (Annex B). In this speech, the Secretary of State explained the Welsh experience of devolution and stressed the close links and common interests which exist between the UK and Spain—and between the devolved Governments in both countries.

  13.  There is also a group of UK Ministers and Ministers from the devolved administrations, chaired by Foreign Office Minister of State, Keith Vaz MP, and attended by the Secretary of State and the First Minister of Wales. This group provides FCO-led co-ordination on both step change and public presentation of EU issues. The FCO provides support and advice to Departments and the devolved administrations in achieving this. Wales Office Parliamentary Under-Secretary of State, David Hanson MP, will be participating in an FCO-led Ministerial visit to Bratislava and Prague in November, which will help promote links between the UK and Slovakia and the Czech Republic. The presence of a Wales Office Minister will also help raise Wales' profile and the profile of the devolution settlement.

  14.  Wales Office Ministers have also hosted visitors from European dignitaries with an interest in, amongst other areas, the impact of devolution on UK policies. These have included Mr Reinhold Bocklet, Bavarian State Minister for European Affairs and Professor Doctor Kurt Biedenkopf, Minister President of Saxony and President of the Bundestag.

Other Wales Office activities

  15.  Wales Office Ministers are in close contact with other UK Departments and agencies and with Assembly-sponsored public bodies such as the Welsh Development Agency. They work in partnership with them and the Assembly to emphasise, for example, to potential overseas investors, that both the UK Government and the National Assembly are committed to Wales and the Welsh economy.

  16.  Ministers have met with companies interested in potential inward investment, at their request. Although primary responsibility lies with Team Wales partners including the Assembly, Invest UK and the WDA, Ministers have promoted Wales as an inward investment location whilst directing companies to appropriate officials within Team Wales and central Government Departments.

  17.  Following on from the UK-US Conference hosted by the Chancellor of the Exchequer and the US Ambassador, Mr David Hanson MP, Parliamentary Under Secretary of State, hosted a visit of US entrepreneurs to Wales in July. The entrepreneurs in question were visiting all parts of the UK with a view to offering their advice and support in the regeneration of deprived areas.


Constitutional context

  18.  Under the Government of Wales Act 1998 and Scotland Act 1998, the UK Government remains responsible for international relations, including relations with the EU. In particular the FCO continues to be responsible for the foreign policy of the UK and for promoting the international interests of the UK. By extension the FCO missions abroad continue to serve the interests of the whole UK.

  19.  The conduct of international relations has implications for the devolved administrations. Two of the Supplementary Agreements to the MOU about International Relations concordat and the European Union concordat, cover the FCO's relationship with the devolved administrations (Annexes D & E).

  20.  We believe that the arrangements the FCO and the devolved administrations have agreed for implementing the concordats are working well.

Promotion of Welsh interests in policy formulation

  21.  The FCO has ensured that the National Assembly for Wales receives relevant information and FCO departments are consulting and involving the National Assembly on policy matters where appropriate. Assembly officials routinely receive copies of Whitehall correspondence establishing the UK position to take in EU negotiations on issues which fall within the Assembly's remit. As a result, the Assembly is fully involved in the formulation of UK policy position on these issues and the UK position will be formed in knowledge of the Assembly's view.

  22.  In addition, UK Government Departments provide briefing for all UK MEPs, including Welsh MEPs, on issues being considered in the European Parliament, thereby keeping them informed and better able to formulate their positions.

Public presentation

  23.  The FCO is engaged in public diplomacy activity to help promote Wales. Recent activity includes an FCO publication on Wales, a poster promotion on Cardiff, and sections on Wales in a range of other booklets—examples are attached at Annex D. In addition, the FCO recently arranged and funded a visit to Cardiff by 10 overseas journalists, to look at devolution issues in Wales.Items on Wales are regularly included in the radio and TV programmes produced daily by the FCO and offered to broadcasters world wide. The Welsh language will be featured in a forthcoming FCO film series. FCO public diplomacy aims to promote creativity and innovation in Britain—a range of exciting developments in Wales means that Welsh items will continue to feature prominently in all its output.

  24.  One of the FCO's objectives is to increase the impact of and respect for British foreign policy and values. This also means ensuring effective international public presentation and providing posts with appropriate information to help them present a positive image of a changing Britain. This has been achieved through providing guidance to posts on devolution developments and the impact it has on posts; encouraging posts to include a devolution/constitutional change element in their public diplomacy objectives; and assisting in arranging visits by senior Embassy staff to the devolved capitals. We have also produced an FCO webpage explaining devolution in Wales, Scotland and Northern Ireland, to be used by our posts overseas. Ministers are the best means for achieving our public diplomacy objectives. For example, Mr Hain MP, FCO Minister, visited Cardiff in July 2000 to address the Institute of welsh Affairs on "Wales and the World".

  25.  The FCO also hosted a reception for the London Diplomatic Community last year to inform ambassadors and other senior diplomats about the new constitutional framework in the UK, and in particular encouraging them to see for themselves the new devolution arrangements in Cardiff and Edinburgh.

  26.  Recent examples of direct FCO assistance include:

Helping the National Assembly for Wales to establish the National Assembly for Wales Brussels Office

    —  this Office has a close working relationship with the UK Permanent Representation in Brussels (UKRep), with the specific aim of influencing EU decision making and policy development, while implementing the National Assembly's commitment to working with the UK Government in Europe. Co-operation between UKRep and the National Assembly for Wales Office in Brussels has been very positive and the FCO will continue to work to develop and deepen this relationship;

    —  the Office was opened on 19 September 2000 by the Rt Hon Neil Kinnock, Vice President of the European Commission, Mr David Hanson MP, Parliamentary Under Secretary of State, Wales Office, the Rt Hon Rhodri Morgan AM MP, First Secretary of the National Assembly for Wales and Mr Nigel Sheinwald, the United Kingdom Permanent Representative to the European Union. The opening was attended by representatives of the UK Government; the National Assembly for Wales; the European Parliament, Local Government, the WDA and various commercial organisations; and

    —  according diplomatic status to the Assembly Office in Brussels and its two full time staff so that the office can conduct its business of promoting Welsh interests without constraint. As part of the diplomatic representation of the UK, officials of the Assembly Office in Brussels also have access to information and policy advice from UKRep desk officers and the Head of the National Assembly for Wales Brussels Office attends weekly Section Heads meetings at UKRep with the Permanent Representative. He also has regular ad hoc meetings with UKRep staff on issues of particular interest to the Assembly.

Participation in EU negotiations

    —  ensuring that Assembly officials and Assembly Secretaries are able to attend relevant negotiations as part of the UK team: for example, the attendance of the Welsh Agriculture Secretary at the EU Agriculture Council on the modulation of farm subsidies. The FCO is keen to see Assembly Secretaries attending EU Council meetings, and other meetings in Brussels, when the Assembly wishes to be so involved.


  27.  The FCO also encourages secondments from the National Assembly to UKRep and other EU institutions. For example, Assembly officials regularly participate in the 6 monthly Civil Service stagiaire schemes to work in the institutions of the European Union, and are invited to apply for longer term postings in the EU institutions—for example as "Detached National Experts"—or to apply for secondments in UKRep itself. The National Assembly for Wales is kept informed of all vacancies by the Cabinet Office European Union Staffing Unit.

Overseas visits and links

  28.  Wales has existing links with European regions such as Catalonia, Baden-Württemberg, Lombardy and Rhône-Alpes. Recently the FCO was involved in the promotion of Wales during the Welsh Cultural Week in Rhône-Alpes. The British Consulate-General in Lyon arranged a programme of meetings and visits which helped the First Secretary of the National Assembly for Wales to make important contacts and promote Wales to a wide and influential audience. The British Consulate-General in Milan has also been assisting the National Assembly for Wales organise the Welsh Public Exhibition to be held in Milan in November, and the agenda for the First Secretary's programme with the Regional Government of Lombardy.

  29.  The FCO provided support for the visit to the Republic of Ireland by the Secretary of State for Wales and Assembly First Secretary. This highly successful partnership visit included meetings with the President and the Taoiseach.

  30.  The FCO co-operates with the Assembly on furthering its links with New South Wales, Australia. The British Consulate-General in Sydney was involved in arranging the Assembly First Secretary's visit to Australia, during which Mr Morgan reaffirmed the Memorandum of Understanding on education, science and technology and the arts between New South Wales and Wales. The Consul-General also helped arrange for the First Secretary to address both Houses of the Legislative Assembly in Sydney.

  31.  Other examples of FCO activity in promoting Wales abroad are:

    —  organising the Welsh Cultural Week in Brunei to promote Wales, with the help of the British Council and the Welsh Higher Education International Liaison Association;

    —  inviting the Athletic Association of Wales to send a Junior Team to Sarajevo as part of the "Britain and Bosnia" festival held in June 2000, an event which was very well received and played some part in encouraging Bosnia to include four track and field athletes in their nine-strong squad for the Sydney Olympics; and

    —  assisting and co-operating with the Province of Chubut, Argentina, which was settled by Welsh emigrants during the 19th century, and where there remains a significant Welsh-speaking community today. Our Embassy in Buenos Aires has been involved in projects which have contributed towards local quality of life, as well as to Welsh language education. There is also an on-going penal reform project, which saw Provincial judges visit Wales in 1997, and a return visit of Welsh Magistrates to Chubut is being considered for 2001.

Trade and inward investment

  32.  Promoting trade and investment is the FCO's single largest activity overseas, accounting for 39 per cent of frontline overseas FCO staff activity. Around 1,400 commercial staff, based in over 200 embassies and other diplomatic posts overseas, operate under the direction of British Trade International, a combined FCO/DTI organisation. British Trade International brings together the work of the FCO and the Department of Trade and Industry in support of British trade and investment overseas, both manufacturing and services sectors. Examples of the help given to Wales are described in the separate section on BTI.

  33.  Our posts have been closely involved in a series of trade missions made over the last year by the Assembly First Secretary to promote Welsh business with, for example, Kuwait, Japan, Saudi Arabia, Singapore, and for forthcoming trade missions to Spain, Canada, China, Argentina, and South Africa.

  34.  For example, the British Embassy in Tokyo, in co-operation with the Welsh Development Agency and Wales Trade International, organised the Welsh First Secretary's recent visit to Japan. His visit reflected the wide and enduring range of Welsh contacts in Japan, concentrating on promoting the new Wales, politically and economically, to a Japanese audience. In addition to trade promotion, his visit focused on Japanese investment in Wales, the opportunities for collaboration with Welsh centres of academic expertise, high technology developments in Wales, tourism, Welsh devolution and Wales' place in the new knowledge driven economy.

  35.  Our posts in Korea and Japan in particular continue to promote Welsh business interests and help to ensure that inward investment continues to benefit the Welsh economy.

Student exchanges

  36.  The FCO also operates the Chevening scholarship scheme for foreign students wishing to study in the UK. Overseas students are placed in Universities around the UK including over 140 student placements in Welsh Universities since 1997. The UK Government sees scholarship programmes as good opportunities to raise the awareness of British culture and values and encourage a sympathetic understanding of British interests abroad. The Chevening scholars are selected on their potential ability to rise to positions as future leaders, decision makers and opinion formers in their own countries. FCO Ministers have hosted various Chevening scholarship receptions around the UK including Cardiff; the most recent Chevening reception in Wales was hosted by the late Derek Fatchett MP at Cardiff Castle in 1998 and a further one is being planned for early next year.

  37.  The FCO and its posts also support Wales through the British Tourist Authority (BTA). BTA promotes tourism for England, Wales and Scotland, and the Wales Tourist Board (WTB) has representation within the BTA. The FCO liaises direct with the WTB, where necessary, for example when producing booklets on Wales. FCO missions overseas also assist in promoting the constituent parts of the UK through the British Council; this is described in a separate section of this memorandum.


  38.  A Concordat between DTI and the Cabinet of the National Assembly for Wales was agreed and published earlier this year. It sets out how the two organisations will exchange information and work together on matters of mutual interest.

  39.  DTI's major role in promoting Wales abroad lies in the field of exports from, and inward investment to, Wales. The lead in such activities is taken by British Trade International (see separate section below).

  40.  When DTI promotes Wales abroad, it tends to be as part of wider exercises to promote Wales and other parts of the United Kingdom rather than through activities aimed solely at the promotion of Wales. In such cases, Welsh interests are taken into account through discussions with the National Assembly for Wales in accordance with the Memorandum of Understanding and concordats.

  41.  Following devolution, there has been no reduction in DTI activities to promote Wales abroad but there has been an increased role for Wales, through the Assembly, to promote Wales abroad.

Links to the National Assembly for Wales and the Wales Office activities

  42.  DTI's role links to those of the National Assembly for Wales and the Wales Office in two areas ie (A) where DTI promotes Wales abroad and (B) where DTI activities affect the Assembly's role in promoting Wales abroad. For example:

(A)  Where DTI promotes Wales abroad

  An example is the Small Business Service's promotion of the Smart scheme to overseas representatives. Smart is a grant scheme to support the identification of opportunities for, and the development of, new innovative products and processes by small and medium sized enterprises (SMEs). Responsibility for administering the scheme in Wales, Scotland and Northern Ireland lies with the devolved administrations and over time the individual schemes in each country have changed slightly to meet local needs. Nevertheless, when the Small Business Service (SBS) promotes Smart to overseas representatives, it is always mentioned that it is available in some form throughout the UK. Current literature mentions this and provides contact points in the devolved administrations. Similar information is available from the Smart web site. To ensure that activities are co-ordinated with those of the Assembly, managers from each of the devolved administrations and SBS meet twice yearly at "policy workshops".

(B)  Where DTI activities affect the Assembly's role in promoting Wales abroad

  An example is the designation of Assisted Areas and its effect on the Assembly's activities in attracting inward investors by offering financial assistance. The Assisted Areas map shows those areas where state aid may be paid to individual companies in accordance with European law. The main form of such aid is Regional Selective Assistance (RSA), which is managed in Wales by the National Assembly. Such funding can be used to create or safeguard jobs in most manufacturing sectors and service sectors. It is available to both national and foreign firms, and may be a major factor in attracting inward investment.

  In common with all other Member States, the UK recently carried out a review of its Assisted Areas map, following the publication of new Guidelines on National Regional Aid. DTI led the UK review. The UK was faced with a number of constraints, including a reduction in the overall population ceiling of 25 per cent from the previous map. During the review process, DTI held regular discussions with the Wales Office and the National Assembly for Wales, and the Wales Office carried out the public consultations in Wales on the proposed map as part of the wider UK consultation process.

  DTI played a similar role, and consulted the Wales Office and the Assembly in a similar manner, in the review of the Structural Funds map.

Links with Assembly sponsored public bodies

  43.  The Assembly sponsored public body with which DTI has most contact is the Welsh Development Agency (WDA). The links with the WDA fall into two groups ie (A) provision of advice to the WDA to help it promote Wales abroad and (B) discussions to ensure DTI takes account of the views of the WDA when promoting Wales abroad. For example:

(A)  Provision of advice to the WDA to help it to promote Wales abroad

  For example, the remit of the Advisory, Conciliation and Arbitration Service (ACAS) covers the whole of Great Britain. ACAS's office in Wales has provided information and advice to the WDA and prospective inward investors, for example, on employment legislation, employment policies, employment relations culture and background, pay rates and other terms and conditions of employment, Trade Union recognition, and working patterns. In one case, an ACAS official travelled to Korea to help the WDA to secure an inward investment project.

  In many cases, inward investors, once they have established a presence in Wales, remain clients of ACAS for advisory mediation services. The WDA has a policy of providing on-going support to key inward investors. ACAS is sometimes asked by the Agency to assist a company with employment relations problems, even though they may well have been in Wales for some time. ACAS also receive requests for their involvement directly from established foreign companies.

(B)  Discussions to ensure that DTI takes account of the views of the WDA when promoting Wales abroad

  For example, DTI's Joint Environmental Markets Unit (JEMU) promotes the UK environmental industry as a whole abroad through a number of activities: trade missions, exhibitions, seminars, publishing directories and case studies of UK environmental capabilities. It also provides a range of information to the UK industry about opportunities in world markets.

  In its work to map out the UK industry and raise its profile overseas, JEMU works closely with trade associations and other representative bodies which are generally pan-UK in their coverage. JEMU maintains a database of UK environmental technology and services suppliers which is made available world-wide. The database currently includes around 150 Welsh companies and JEMU is working with the Welsh Development Agency to increase this number.

  Other DTI "sector Directorates" also play a role in promoting Wales abroad. For example, Chemicals and Biotechnology Directorate promotes chemical exports including products from Wales, inward investment including to Wales, and supports and helps the business competitiveness of companies located in Wales.

International negotiations

  44.  DTI leads international negotiations on behalf of the UK in a number of areas, including trade policy, matters affecting industry and science and technology issues.

Trade policy

  45.  Under the devolution settlement, DTI leads on UK trade policy. The UK is represented, along with other EU Member States, by the European Commission within the World Trade Organisation (WTO). In line with the concordat the National Assembly for Wales is included in discussions on UK trade policy. The DTI-led inter-departmental Trade Policy Group, which meets monthly to discuss trade policy issues, includes representatives from the National Assembly for Wales. The National Assembly is also included on the Whitehall-wide distribution list for papers circulated in connection with the EU's Article 133 Committee, including agendas and reports from meetings.

Industry matters

  46.  More generally, the DTI consults or liaises with the Assembly on individual issues which have potential implications for industries in Wales. The Assisted Areas negotiations mentioned above are one example of how this works in European negotiations.

Science and technology

  47.  Another example relates to science and technology and the role of the Office of Science and Technology (OST). OST International Directorate is the UK co-ordinator for the EU's Framework Programmes for Research, Technological Development and Demonstration. As such it is responsible for developing the UK negotiating position, which is based on open public consultation, to which Welsh organisations as well as others in the UK can contribute. It is also responsible for overall promotion of Framework, and assistance to participants, in the UK; all promotion and assistance work is targeted at the whole of the UK including Wales.

  48.  Within the Framework Programme (FP), the EU part-funds a network of Innovation Relay Centres (IRCs) across the EU and near accession countries. There are regional springboards for the promotion of trans-national technology co-operation. There are eight IRCs in the UK, including one in Cardiff, hosted by the Welsh Development Agency. OST co-ordinates the UK elements of the IRC network and facilitates communication between IRCs and national contact points for FP5 programmes.


British Trade International: Overview

  49.  British Trade International (BTI) is the combined FCO/DTI organisation set up following the Wilson Review of Export Promotion last year and formally launched by Sir David Wright and Ministers on 31 May 2000. It comprises Trade Partners UK, which deals with trade development, trade promotion and outward investment; and Invest UK (formerly the Invest in Britain Bureau, IBB) which promotes the whole of UK as a location for inward investment.

  50.  While Trade Partners UK has the trade development and promotion remit for the entire United Kingdom, our devolved partners in Wales Trade International, Scottish Trade International (STI) and Trade International Northern Ireland (TIN), played a full part in the development of the National Strategy for International Trade Development and Promotion. Each of the devolved administrations has had a seat on the BTI Board since its inception and is represented at senior official level. This Forum continues to prove essential for overseeing the development of BTI's trade development and inward investment agenda.

Role of Trade Partners UK (TPUK)

  51.  In common with STI and TNI, Wales Trade International has its own system of local support and services, able to offer businesses in its region both particular help and to call upon all that BRITISH Trade International offers through Trade Partners UK and Invest UK, here and through the UK's extensive network of overseas diplomatic missions. About 1,400 commercial staff are engaged in trade promotion work overseas at a cost of £142 million in over 200 posts and roughly 140 overseas markets (figures taken from the Wilson review). But in addition, Wales-based business may also apply for grants under any of the national schemes which Trade Partners UK offers to UK businesses eg overseas trade missions, exhibitions, the Export Explorer scheme etc. Take up of these programmes by WTI has been particularly enthusiastic. To date there have been three Export Explorer group visits introducing 25 companies to exporting and a further two visits are planned for 2001-02. Devolution has not resulted in any change in the distribution of resources available for trade development and promotion.

  52.  BTI has for a number of years been forging strong links with the trade bodies in Wales, Scotland and Northern Ireland. Devolution has bought focus to the development of Wales Trade International, development with which BTI has been closely involved by offering advice and best practice from, amongst others, a number of Export Promoters. This is reinforces by personal contact and visits at senior and working level with BTI's Regional, Business and International Groups. Work is progressing to achieve co-branding of all trade development and promotion work with our devolved partners.

The role of Invest UK in relation to inward investment in Wales


  53.  The lead role for attracting inward investment in Wales lies with the Welsh Development Agency (WDA) which works in partnership with other public sector bodies in Wales as well as with Invest-UK (formerly the Invest in Britain Bureau).

  54.  Figures co-ordinated centrally by Invest-UK show that since the WDA was set up in April 1983 there have been 916 decisions to invest in Wales by foreign owned companies promising 74,290 new jobs and 54,979 safeguarded jobs. Projects may be new, expansions, mergers/acquisitions or joint ventures.

  55.  Europe is one of the world's focal targets for foreign direct investment (FDI) and within Europe the UK's record in attracting inward investment is second to none. Latest Office for National Statistics (ONS) figures show that the stock of inward investment into the UK has reached a record figure of £252.4 billion at 31 March 2000, an increase of 23 per cent over the previous year. The UK has consistently been the prime location in Europe for inward investment and it is one of the DTI and FCO's published objectives to maintain that position.

  56.  The UK's performance in 1999-2000 was a record with Invest-UK recording 757 inward investment decisions by overseas companies with over 134,194 associated jobs of which over 52,500 were new jobs. Of these figures 45 projects went to Wales with 7,724 associated jobs of which 4,108 were new jobs.

The role of Invest-UK

  57.  Invest-UK, working under the umbrella of British Trade International, markets the UK abroad as an investment location, working with its partner agencies in Wales, Scotland, Northern Ireland and the English regions to secure projects. Britain's Embassies and Consulates overseas are the spearhead of marketing and promotion work to generate new inward investment opportunities. Invest-UK is represented in Embassies and Consulates in over 35 cities around the world by staff which are dedicated to inward investment work involving contacts at the most senior levels with companies who are actual or potential investors in the UK.

  58.  Invest-UK does not itself deliver the final location project to inward investors. That is the role of its partners in the development agencies across the UK. The attraction of inward investment is therefore a team effort, which also involves local authorities, the private sector and other organisations at the local level.

Co-operation and co-ordination

  59.  Invest-UK works closely with its partner agencies, including WDA, on regional tours and briefing, research, marketing and operation/development of the national computerised system for handling inward investment enquiries. There is also a close working relationship on individual projects, which has helped secure successes for Wales.

  60.  This is formalised through the Committee on Overseas Promotion (COP) which is chaired by Invest-UK's Chief Executive and has Guidelines on procedures for Invest-UK and its partners to work together in a co-ordinated way. The COP procedures rely on co-operation between Invest-UK and its national and regional partners. They primarily cover the exchange of information, to ensure a cohesive approach at home and overseas. Posts overseas have a major role in the co-ordination of the regional agencies visits, marketing and other activities abroad, complementing Invest-UK's enquiry handling co-ordination.

Post devolution

  61.  In respect of inward investment promotion, the effects of the devolution settlements and the establishment of the Regional Development Agencies in the English Regions have been positive. Invest-UK promotes the whole of the UK as a location for inward investment, working in partnership with Development Agencies in each region and overseas. In addition to working with Invest-UK to attract, retain and add value to inward investment, staff in all these agencies have actively participated in the Committee on Overseas Promotion which brings together inward investment practitioners from throughout the UK-wide network, to discuss operational issues, and share best practice. The WDA has continued to make a significant contribution to the work of COP, to the benefit of Wales and the UK network as a whole.


  62.  With the rapid pace of global change, the UK has to build its international business reputation as the business centre of Europe. In line with the Government's competitiveness agenda Invest-UK has developed a strategy to focus more effort on the attraction of high value, knowledge driven investment requiring high skill levels. By positioning the UK as a base for leading edge technologies and by emphasising our culture of innovation and the higher education/research infrastructure which supports it, Invest-UK aims to attract a substantial share of internationally mobile projects, particularly those with growth potential, to all parts of the country. This is consistent with the WDA's own strategy set out in the Strategic Priorities listed in the WDA Corporate Plan for 2000-03.


  63.  The Department for Culture, Media and Sport's promotion of Wales abroad falls into four broad headings: Tourism; Films; Heritage; and Sports.

  64.  A Concordat between DCMS and the Cabinet of the National Assembly for Wales was agreed and published earlier this year. It sets out how the two organisations will work together on matters of mutual interest.


  65.  On devolution, the public expenditure for promoting Britain overseas was retained in a single budget which is the responsibility of the Secretary of State for Culture, Media and Sport. The aim was to achieve maximum impact for Britain as a whole, including Wales, by combined effort. DCMS funds much of the promotion of Wales abroad as a tourist destination through the British Tourist Authority (BTA). This is part of a wider DCMS remit to attract overseas visitors to Britain. It is worth noting that the Chairman of the Wales Tourist Board is a member of the BTA board. Tourism makes a considerable economic contribution to Wales. Spending by overnight and day visitors now amounts to just over £2 billion (7 per cent of Welsh GDP) and tourism supports around 100,000 jobs. In 1999, the latest year for which firm figures are available, just over 1 million overseas visitors to Wales spent some £269 million.

  66.  The way in which tourism in Wales is being promoted is set out in detail in the BTA's evidence to the committee. The work required of the BTA each year is set out in a Funding Agreement between DCMS and BTA. The devolved administrations are consulted about that Agreement and, in addition to the general provisions on consultation provided for under the terms of the Concordat, officials from DCMS and the devolved administrations discuss tourism matters at regular meetings hosted on a rotating basis.

  67.  A Quinquennial Review of the BTA is currently underway. The Steering Group for the Review has concluded that post-devolution arrangements are working well. Its Stage One report is likely to recommend that, while the Wales Tourist Board (WTB) sees no duplication between its work and the BTA's, Stage Two of the Review should ensure that a satisfactory process exists to avoid any such duplication by the BTA, Scotland and Wales in marketing overseas.


  68.  The British Film Office (BFO) in Los Angeles worked with Sgrin (Wales Media Centre) to organise the first St David's Day Dinner in Los Angeles on 1 March 2000, subtitled "Hollywood Wales Film—an Exciting Future". The dinner was held at the conclusion of two trade shows in which Wales had been represented and was attended by over 100 people drawn from the film industry, with speakers from the Welsh Development Agency, Welsh Tourist Board, Sgrin and Paul Dimond, British Consul General (representing BFO and British Consulate-General Los Angeles). The food was prepared by two chefs brought over by Taste of Wales.

  69.  The BFO was also able to tie in publicity (and the BAFTA LA screening) for the Welsh language Oscar nominee Solomon & Gaenor. There are three Welsh Film Commissions—Mid Wales Film Commission, North Wales Film Commission and South Wales Film Commission—which aim to attract film production work to their areas. The three Commissions had their own stand at the Locations Show, and received a number of solid enquiries. A smaller dinner was also arranged to enable the UK Film Commissions to meet US contacts.

  70.  The BFO also arranged for Sgrin's Executive Director to attend the American Film Market to meet the international and UK companies taking part and to check on distribution for "One Of The Hollywood Ten" a film with a Welsh director (Karl Francis) and some Welsh funding. Discussions have started with Sgrin and BAFTA LA on a second St David's Day Event in 2001, which the BFO will be supporting.

  71.  All three Welsh Film Commissions (North Wales, Mid Wales and South Wales) are taking the opportunity of attending a trade mission to Mumbai, India, 13-17 November 2000, which is being organised by the Mid Yorkshire Chamber of Commerce and focusing on the creative industries, particularly film, TV and video. The mission is being supported by the British Council and the British Film Commission (BFC). The BFC will lead the group of Commissions within the main group to visit Bollywood to look at the workings of the Indian Film Industry and present a seminar on filming in the UK.


  72.  DCMS represents the UK at the World Heritage Committee of UNESCO, putting forward sites in Wales, amongst others, for potential inscription as World Heritage Sites (WHS). The World Heritage List currently contains the Castles of Edward I in Gwynedd and we anticipate that the Industrial Landscape of Blaenavon is likely to be added to the list later this year. WHS status plays a significant part in attracting visitors from abroad.


  73.  UK Sport was established by Royal Charter on 19 September 1996 and became fully operational on 1 January 1997. It is responsible for fostering, supporting and encouraging the development of sport and physical recreation and the achievement of excellence in the UK and the provision of sporting facilities at the UK level. It takes the lead among the sports councils in all aspects requiring strategic planning administration, co-ordination or representation for the benefit of the UK as a whole, identifying sporting policies that should have a UK-wide application and areas of unnecessary duplication, overlap and waste in the way sport is administered in the UK.

  74.  It focuses on high performance sport at the UK level, including Wales, with the aim of achieving sporting excellence on the world stage. The work of UK Sport is all about building a framework for success—developing and supporting a system capable of producing a constant flow of world class performers.

  75.  Ultimately the aim is to increase the prospects of attracting major sports events to the UK, thereby giving athletes and teams from the UK medal winning opportunities through the benefit of home advantage. Numerous sporting events are held annually throughout the United Kingdom and UK Sport is empowered as the primary lottery distributor for major events and has an annual budget of £1.6 million to support events throughout the UK. The decision to hold an event in Wales is taken in close consultation with the Sports Council for Wales and the relevant local authority and/or public agency.

  76.  The work on major events at UK Sport is overseen by their Major Events Steering Group. Members come from a range of appropriate backgrounds and Lynne Evans MBE was proposed by the Sports Council for Wales as their representative.

  77.  The Council of UK Sport consists of 16 members one of whom is Gareth Davies, Chairman of the Sports Council for Wales. Another member of the Council for UK Sport is Tanni Grey-Thompson a former member of the Sports Council for Wales. In seeking candidates for appointment as members of the Council of UK Sport, the Department seeks advice and contributions from the Welsh Assembly and the Sports Council for Wales

Broadcasting: S4C

  78.  The Welsh Fourth Channel Authority, S4C, is funded primarily by a grant from the Department for Culture, Media and Sport (£78 million for the year 2000). Productions funded by S4C have enjoyed considerable international acclaim, including recent Oscar nominations in the Best Foreign Language Film category for "Solomon and Gaenor" and for the animations "Famous Fred" and "Canterbury Tales".

  79.  S4C attaches considerable importance to international programme sales and international co-productions, which raise the profile of both Wales and Welsh film and television industry overseas. International programme sales rose from 103 in 1998 to 196 in 1999, in which year 35 co-productions were at different stages of development, including the 26 country "The Animated Tales of the World". S4C's first animated feature film, "The Miracle Maker", a collaboration with animators from Russia, secured cinema release in France, Italy, Spain and Latin America and was also purchased by the US television network ABC.


  80.  The British Council is the United Kingdom's principal agency for cultural relations with other countries. Its aim is to enhance the reputation of the United Kingdom in the world as a valued partner. This is achieved via the Council's network of over 230 offices in 110 countries:

    —  projecting the UK's creativity, cultural diversity and recent achievements;

    —  support for educational exports;

    —  enhancing the teaching of English;

    —  assisting reform and sustainable development;

    —  strengthening the UK's role within Europe; and

    —  encouraging greater international awareness in the UK.

  81.  From the Council's offices in Cardiff and Bangor and through the British Council network of offices overseas, the British Council in Wales seeks to create opportunities for partner educational and cultural institutions to promote the strengths of Wales overseas.

  82.  The Council gives support to English language centres and Institutes of Further and Higher Education to attract international students to Wales as a study destination. Under the Prime Minister's Initiative and in the National Assembly Business Plan, new and challenging targets have been set for this work. The Central Bureau for International Education and Training, as part of the British Council, promotes education and training activities involving schools, business and colleges.

  83.  In partnership with the Arts Council of Wales, the Council offers Welsh artists, writers and performers the opportunity to appear on the international stage and present and promote the rich arts resource to be found in Wales. For example, in May this year, Rag Foundation played a series of concerts in Lyon, performing Welsh language popular upbeat music. Other examples outside Europe include:

    —  February 2000
      Community Music Wales to South Africa;
    —  July 2000
      Carney Lafar Music presentations in USA;
    —  October 2000
      Robert Minhinnick Poetry in USA;
    —  October 2000
      John Metcalf, Music, New South Wales;
    —  November 2000
      Robert William, Drama in New Zealand;
    —  December 2000
      Rubicon Dance Group to Utah USA; and
    —  ongoing visual arts project Richard Cox to Delhi/Rajasthan and reciprocal visits.

  84.  Under British Council auspices visits, courses, consultancies and showcases are arranged from, and into, Wales. These create opportunities for international partnerships in education, science, arts, the media and other sectors.

Links with the National Assembly

  85.  The British Council is a member of the National Assembly for Wales International Group and has been actively involved in their visits to Baden Württemberg (May 1999) and Lyon (May 2000). The next Motor Region exhibition in Milan (November 2000) will be undertaken as the result of a British Council initiative. The Council has also been involved in Assembly initiatives in mutual priority countries—New South Wales (ongoing arts exchanges; academic links; the "Montage" programme), and the United States (UK in NY) in particular.

  86.  A British Council/National Assembly group meets three times a year (Director of the British Council Wales and Party leaders in the National Assembly under the chairmanship of the Deputy Presiding Officer) to discuss matters of mutual interest. Resulting from one of these meetings is a project to bring East Europeans to Cardiff under the "Leonardo" Scheme (see below) to work with Assembly Members as political researchers.

  87.  An annual reception with an Arts presentation for all Assembly Members is planned.

  88.  The British Council Wales manages the Welsh Language Project in Patagonia on behalf of the National Assembly; the budget will be around £40k per year for the next three years.

  89.  The Central Bureau for International Education and Training has a promotional post based in the Council's Cardiff office although at present all executive work is done from the British Council Headquarters. The Cardiff post gives particular emphasis to the promotion of the "Comenius" and "Leonardo" projects, and the "Montage" Programme of internet links between schools. The National Assembly contibutes £20k per annum for a co-ordinating post.

Links with Assembly-sponsored public bodies

  90.  The Director General of the British Council and the Chair of the Arts Council of Wales recently signed a Memorandum of Understanding providing shared funding for inward and outward Arts visits of performers, exhibitions and literature events through Wales Arts International. WAI has an annual operational budget of £130k on a three year rolling basis. Staff costs are shared.

  91.  The Wales Tourist Board, the British Council Wales and eight British Council accredited language teaching centres co-operate on a project promoting Wales as an English language learning destination. A joint brochure, poster, and biennial fair in Wales as well as participation in overseas education fairs (Expolingua, Madrid April 2000) are planned. The project has a joint annual budget of £12k.

  92.  The British Council frequently co-operates with the WDA on science and technology visits and initiatives, all-Wales activities (eg Japan 2001) and joint BC/WDA activities overseas (for example Science Seminar with six Welsh Academics focusing on research support to the Pharmaceutical Industry Tokyo, September 2000).

  93.  During the UK Presidency of the EU Council of Ministers in the first half of 1998, the British Council and the Arts Council of Wales jointly staged a festival of contemporary Welsh art—"Art from Wales"—which included photographic and art exhibitions as well as a Dylan Thomas monologue and performances by Theatr Clwyd and Welsh musicians.

  94.  As part of the Prime Minister's Initiative to attract more international students to the UK, the British Council provides the secretariat to WHEILA (Wales Higher Education Liaison Association)—the partnership body which produces an all-Wales brochure, a website, and organises all-Wales Higher Education fairs (Brunei 1999; Japan 2001). The Higher Education Funding Council for Wales (HEFCW) provides £25k annually to cover the costs of a co-ordinating post.

  95.  The Council believes good progress has been made but has plans to do more. These will aim to enhance current arrangements; for example:

    —  broadening the WHEILA remit to include Further Education in a drive to meet the PM's targets for that sector in Wales as well as those for the Higher Education sector;

    —  more use to be made of the Welsh Language Board's expertise to provide consultancies/seminars/inputs overseas to countries requesting assistance with bilingualism (especially bilingual education policies), language planning, and advice on minority language status; and

    —  strengthening the Central Bureau's and school based (pre-16) activities.

Examples of promotional activities

  96.  In celebration of St. David's Day, arts events were organised in Brussels through Wales Arts International as part of the "Wales in Brussels" programme. A reception was given for international students and Central Bureau Language Assistants in Wales. These are now annual events, the arts components of which may in future extend to Portugal, Quebec and USA.

  97.  During 1999 film fairs were held in the Motor Region capitals of Stuttgart, Munster and Lyon, attracting total audiences of over 1,000 to see Welsh films and videos. Particular successes have been "Human Traffic" and animation films such as "The Canterbury Tales".

  98.  Arts showcase events in Wales, which generally attract European participants (but are by no means limited to these) have promoted theatre and visual arts. A music showcase is planned to coincide with the National Eistedfodd in 2001.

  99.  Other specifically European-focused events have been those facilitated by the Central Bureau's role as an agency for EU programmes. Elements of "Socrates II", "Comenius" (school education), "Grundtvig" (adult-education and lifelong learning); "Lingua" (promotion and learning of foreign languages); and "Minerva" (open and distance learning and the use of ICT in education).

  100.  "Leonardo" provides European vocational training opportunities and "EUROPASS", a new initiative for recognising skills developed on transnational work placements, will bring east European researchers to work with Assembly Members in 2001.

  101.  All-Wales combined events (education/arts/business/sport) under British Council auspices have already been held in Australia and Brunei and are now planned for Croatia (March 2001) and Japan (April 2001). These provide an opportunity to showcase the best of each of these sectors and create higher impact than the sectors individually. A notable success in Brunei was performances by students from the Welsh College of Music and Drama, thus combining promotion of education and the arts.

  102.  The Central Bureau's "Montage" internet project has enabled school children in Wales and New South Wales to exchange information with each other and to communicate on such central issues as the environment, human rights and citizenship. Wales now has its own section on the "Montage" website (

  103.  Governance activities have included a seminar on devolution held in Cardiff and Edinburgh over the week of the Assembly/Parliament elections in May 1999, and attendance by Assembly Members at British Council events focusing on devolution and Human Rights issues (Paris, Brazil in 1999). This area is now being developed by the informal Assembly Group referred to above.

Rt Hon Paul Murphy MP
Secretary of State for Wales

November 2000

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