CORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 854- v

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

WELSH AFFAIRS Committee

INWARD INVESTMENT IN WALES

Tuesday 14 JUNE 2011

SIR ROGER JONES OBE and GLENN MASSEY

Evidence heard in Public Questions 247 - 349

USE OF THE TRANSCRIPT

1. This is a corrected transcript of evidence taken in private and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2. The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the Welsh Affairs Committee

on Tuesday 14 June 2011

Members present:

David T. C. Davies (Chair)

Stuart Andrew

Guto Bebb

Geraint Davies

Jonathan Edwards

Mrs Siân C. James

Susan Elan Jones

Karen Lumley

Jessica Morden

Owen Smith

Mr Mark Williams

________________

Examination of Witness

Witness: Sir Roger Jones OBE, former Chair of the Welsh Development Agency, gave evidence.

Q247 Chair: Sir Roger, diolch yn fawr am dod heddiw.

Sir Roger Jones: Diolch i chi, am y gwahoddiad.

Q248 Chair: I am afraid there are no translation facilities here.

Sir Roger Jones: That’s all right.

Q249 Chair: We all know who you are, Sir Roger. I am not sure whether there is any point in asking you to introduce yourself, but perhaps I should, just for the sake of form.

Sir Roger Jones: You have got me worried now.

Q250 Chair: We will take it that you are Sir Roger Jones. I am David Davies. Basically, we are conducting an inquiry into economic development in Wales. We are very interested in how you saw the role of the WDA in your time there. To kick off, in particular what changing patterns of investment did you see? What was the difference in the types of companies and industries that came into Wales in the years when you were with the WDA?

Sir Roger Jones: Prior to the time I started I was involved with the training and enterprise councils and sorting out the LG mess. We had put all our eggs in a single basket; there were very little funds left over to encourage other investments, and, as we all know, tragically, it did not work out.

Q251 Chair: Was the problem that we were just going round the world saying, "Have some money and come to Wales", and people were taking the money, coming and then disappearing at the first opportunity, or is that too simplistic?

Sir Roger Jones: That is probably too simplistic. Proper companies do not establish a business just because there are grants there. They are much more interested in skills and markets. If a television assembly or electronics plant in Wales gave them market entry, I believe that was the major reason they were there, not because of the grants.

Q252 Chair: In your paper you have been critical.

Sir Roger Jones: I have rather, haven’t I?

Q253 Chair: You have not pulled your punches, which is great and we like that. To play devil’s advocate, is there not an argument that we were bound to lose out on those kinds of manufacturing industries because of the growth of China and the Far East? Was it not inevitable that it would be harder for us to compete in manufacturing?

Sir Roger Jones: With hindsight, all of us have 20/20 vision, have we not? We really were not to know. I am going back now to 2001 and 2002. Yes, there were signs of the Far East markets changing substantially, but they had not done so at that point. Upon reflection, we could have done better. There were different things we could have done, but it was a big beast and the big beast was captured and brought to Newport. You can’t really knock it. I think we should have looked more carefully at the political risk because, if we saw the places in the UK where LG had other plants, then any cutback they were going to be making could have been in south Wales or elsewhere. I do not think that risk was properly evaluated.

Q254 Mrs James: In the 1980s and 1990s we had huge success in Wales in attracting inward investment, but was there too much emphasis on creating low-skilled jobs and not enough on the long-term need to invest in skilled labour?

Sir Roger Jones: The point is that if you do not have a highly skilled work force you will not get the jobs. You have to bring in the industries that can use the level of skills you have currently. We can complain and say that these were low-skilled jobs, but by and large we had a low-skilled work force. We start off by improving the skills of the work force so it is ready for investment.

Q255 Mrs James: You talked about the LG factory. In a previous Welsh Affairs Committee inquiry we visited where LG had gone. We visited Poland where the factory went and it is now empty and being used as storage space because they have moved on to China. I was quite interested in what you said earlier about the need to know what the market is and to be at the entry level of the market. Will we ever be in that position, because things are moving so quickly?

Sir Roger Jones: Unless we are tracking the markets very carefully, that is where it starts off. You then see what industries are required in order to enter those markets. But it all starts off with the markets. If you do it the other way round, it is a recipe for failure.

Q256 Mrs James: I want to ask you a question about the Massey report. It identifies a deteriorating performance in Wales in attracting inward investment in the period post-2000. Why do you think Wales lost its competitive advantage in attracting inward investment?

Sir Roger Jones: There was not a lot of inward investment around. Things dried up fairly quickly. I think the Welsh Assembly Government were minded that the sun would stay in the sky for ever, that all these things would happen and all the glory would descend upon them when it happened. They did not look at the downside risk and the skills required in order to stay afloat and win in a more difficult market.

Q257 Mrs James: Is trying to attract inward investment, including foreign investment, still a valid policy?

Sir Roger Jones: We do not have the capital base ourselves. I do not see any other solution. We cannot go to Government and ask for handouts. We are at 75% of UK per capita in Wales at the moment. What are we going to do? We have got to get more investment in, upskill the work force, earn more money, just playing up GDP.

Q258 Mrs James: We need a successful investment policy then.

Sir Roger Jones: We need a successful investment policy.

Q259 Mrs James: How would we judge that?

Sir Roger Jones: If I had the skills, I would be living in the south of France or somewhere now. I wouldn’t be living in Brecon.

Q260 Mrs James: Come, come, come! Brecon can compete any day.

Sir Roger Jones: It is a matter of risks. You have to understand the market, go there and evaluate what industries and companies we can go for. What is the purpose? What advantage do we give to a company for investing in Wales? If we are not doing all of those things, we will never succeed.

Q261 Mrs James: What you are talking about is the requirement to be fleet of foot, is it not?

Sir Roger Jones: Yes.

Q262 Mrs James: We have got to be really reactive and be able to change quickly.

Sir Roger Jones: Absolutely.

Q263 Mrs James: How do we grow that culture?

Sir Roger Jones: To start with, you do not get anyone who is fleet of foot-sorry, sorry, sorry-in the civil service. You are asking the wrong people to become fleet of foot if you are asking the civil service to do so.

Mrs James: I think there are some questions about that later.

Q264 Jonathan Edwards: If you were formulating an FDI policy now, would it be based primarily on grants, or would you be looking at a favourable tax environment?

Sir Roger Jones: I have never been a major advocate of grants. The only advantage of grants for indigenous companies or companies coming in is that, if you get a letter from the Government saying, "We’re going to give you this much grant", you can take it straight to the bank and say, "Lend me money at favourable rates against this letter." That is a huge advantage of having a grant. The actual quantum of the money that you draw down is not that important. Access to markets is the most important thing. Companies do not need grants; they need business. That is how I would try and do it. I would use Government influence to try to help people to enter markets that otherwise might be difficult for them.

Q265 Karen Lumley: What do you think the strengths and perhaps the weaknesses of the WDA were?

Sir Roger Jones: It was an organisation ready for change. There were some serious flaws in the WDA, and I readily admit that. The management style was wrong. Its weakness was that it encouraged interference from civil servants and Ministers, saying, "Are we doing all right? What are we doing today? Are you happy with this?", instead of having a board that said, "This is what we intend to do. We will come back and tell you in six months whether or not it has been successful." Micro-management by people who do not know very much is a very dangerous practice.

Q266 Karen Lumley: In what way did it insulate politicians and civil servants from the risk?

Sir Roger Jones: There is someone there to say, "It was my fault; I got it wrong. The Minister said this to me. He was quite right and I was wrong."

Q267 Karen Lumley: How did you sell Wales as a location for inward investment?

Sir Roger Jones: The environment and quality of life for employees was a big selling point. Unfortunately, it was very difficult to sell our skills base because it was not that good. Certain people, like tool-makers, were in very short supply in Wales from 2000 onwards. It was very difficult. Key skills were missing. So we could not sell those but we tried to sell what we could. We sold training. We said, "If you come here and do not find the right skills, we will give you money. You tell us what training you want and we will implement that on your behalf", so that is worth while.

Q268 Chair: At this point perhaps I may say how much I appreciate the very frank and short answers that you are giving to us. Perhaps you will give another one on the quality of the people who are coming out of universities at the moment and the courses that some are undertaking. If 50% of those who go to university are undertaking courses that may, some argue, not be that pertinent to industry, is that good or bad? Is this the right way to go?

Sir Roger Jones: As pro-chancellor of Swansea university my answer will be somewhat clouded. I cannot simply say and write off that 50% is too much, but what is important is where our universities are in the league tables. Swansea university is No. 4 in the UK in engineering after Leeds, Sheffield and Imperial College. We have some very good things happening but you build on your strengths. You find out what you do well and then tell the world about it.

Q269 Guto Bebb: I want to go back to the question asked by Karen Lumley about the strengths and weaknesses of the WDA. You specifically said that it was an organisation ready for change. To clarify that, do you believe that in terms of the WDA in general, or are you talking specifically about the part of the WDA which tried to attract inward investment? This inquiry is looking specifically at inward investment. Do you believe that that department was having problems, or was it a general problem?

Sir Roger Jones: I was looking at the general picture. The structure was one where you had the Welsh Assembly Government handling trade and the WDA handling inward investment. As I said earlier, what people want are markets. That is the main driver. I do not think that separating the two in the way the Welsh Assembly Government did was an effective strategy at all because we did not know where the markets were.

Q270 Mrs James: You mentioned the lack of tool-makers. Can you see a direct link with the demise of heavy industry? People like my husband, who was apprentice-trained and qualified, came out of the heavy industries; they worked in the big factories.

Sir Roger Jones: I had a factory in Tredegar. I think it is probably the most successful indigenous company. I sold it to the management it was so good. I had taken it as far as I could take it, so I gave it to them. But you are quite right. We have wonderful skills available if you are prepared to find them and work with them. It is difficult clay to work. My goodness, once you have got the right stuff, it is magic; it is a very good work force, so we can do it. Those skills came largely from the coal industry. These were the engineers, electricians and so on who were used to much more robust machines but they could turn their hands to smaller stuff. The makings were there. What did we do? We declared many of them redundant and came out of the work force altogether. That is a dumb thing to do.

Q271 Mrs James: My husband is 59. He came out of the collieries and went into a factory and stayed there.

Sir Roger Jones: Do you understand what I am saying?

Mrs James: Yes. They are very much needed.

Q272 Chair: Does anybody want to come in on this point?

Sir Roger Jones: I am sorry.

Chair: Not at all. We are fascinated by this.

Q273 Geraint Davies: In your view, grants are not very important and it is about skills and markets, but, given your experience of Swansea, do you agree that one of the key successes there is to establish a research and development cluster that is networked into industry and works with it to develop globally relevant products, like Tata out of Swansea, Rolls-Royce and Boots? It is not about selling tellies down the road in England; it is a matter of having that cluster of activity and building on the engineering and equity you mentioned. You can then provide a platform for future jobs based in Wales rather than being an outpost of a big multinational.

Sir Roger Jones: I like to think I had a small influence in taking the university in that direction, but it is for others to decide that.

Geraint Davies: So, yes.

Q274 Owen Smith: That is a very interesting take on the skills deficit, and I think all of us can agree that is evident. Is that not a much longer-run problem? Is it not true that perhaps the relative success of Wales in respect of heavy industry masked a more profound long-run deficit in education and skills? Is that not what we were dealing with in the era of relative success that you talked about? Is it not very difficult to imagine how any agency, whether it be the Welsh Assembly Government, WDA, or its successor bodies, can address that quickly? Will it not take a long time to turn round?

Sir Roger Jones: The longer answer to your question is yes; the shorter answer is no.

Owen Smith: Now I am confused.

Chair: By one letter in fact.

Sir Roger Jones: It works both ways. We were doing things right, if you bring in employers to decide on obtaining the skills and the level of skills required. Lots of jobs are becoming deskilled. I can bore for Wales on this subject. I will not try to give you a diagram, but, if you look at a bell-shaped curve, the skills requirement is biphasic. There is a huge peak there, it levels off for management skills, and then you have the technical skills. These guys run the process; these guys manage the process; and these guys design and set up the process. I am sorry; I should have had something to show you. Getting the right level of skills is the trick to industrial development. You are quite right. If you give people insufficient work to use their skills, they become very dissatisfied and it does not work out. On the other side, if you give them work that is too difficult for their skills, that, again, is disenabling. It is a matter of pitching the right level of skills for the job. The people who can best tell you what level of skills is required are of course employers because they buy competencies. You do not buy qualifications but competencies-people who can do the job-and we call it employment.

Q275 Jessica Morden: Earlier you were very honest about the flaws you saw in the WDA. When Dr Ball from Swansea university gave evidence to this inquiry, he commented that he did not feel it was arm’s length from Government, which you mentioned; he did not feel it had the appropriate policies; he thought it was poorly managed and led; and it did not have clear objectives. Do you think that is a fair assessment based on what you said earlier?

Sir Roger Jones: Yes. As I say in my paper, about half the employees of the WDA were inward-focused, making sure that the information was available for the civil service and their political masters, which left you 50%, at best, to go and interface with the private sector, which is where the jobs were.

Q276 Jessica Morden: When you were chair of the WDA what did you do to try to address those weaknesses? What was your aim?

Sir Roger Jones: It was very difficult. I pleaded to be left alone. "Let us get on with the job."

Karen Lumley: No chance.

Sir Roger Jones: Therefore, what I am advocating is that, if you have an arm’s length agency, make it arm’s length so that all the instructions and everything else come in to the board, which then discuss them and accept them, leaving the operation to carry on in the way it should.

Q277 Mr Williams: How successful was the WDA in working with UKTI? What was the relationship in the promotion of Wales?

Sir Roger Jones: It was rather strange. I was the representative on UK overseas trade for Wales; I was there even before I was chairman of the WDA. UKTI is a strange organisation. In a way, it gets taken over by the export manager in the company. The company making widgets has an export manager and he is the one who goes on to UKTI. He goes on the trade missions and various other things. The guys you really want in UKTI are those who are designing the widgets and understand what other widget makers are doing. By and large, I think it is represented by the wrong people. I find it very boring.

Q278 Mr Williams: In your submission you say that you felt the decision to have a spread of offices in all continents was flawed. When this Committee went to Germany, we heard that the German Chamber of Industry and Commerce had 120 offices in 80 countries, and the Länder often had their own representation throughout the world. To what extent should Wales have a spread of offices across the world, and how should those offices be utilised?

Sir Roger Jones: The need to have offices overseas is now probably less. You have Skype and various other things. If you have a centre looking out into the world that has good language skills and people there, you can cover the ground from the UK, followed up by two, three or four trips a year. You then have much better control over those people than if you have them in Los Angeles and they send you a postcard once a month. It is difficult to manage them.

Q279 Mr Williams: It is more a case of getting the right people out there.

Sir Roger Jones: Yes.

Q280 Mr Williams: Like the Chairman said, it was very refreshing to read your very robust submission about the origins of International Business Wales and the end of WDA. At the time a joint ministerial statement was made which talked about the hope for a new, sharply focused commercial organisation which was the best of its kind not only in the UK but in Europe, but your written evidence is very concerning and robust. Would you like to say more about the impact of the abolition of the WDA?

Sir Roger Jones: I remember him saying that. They were not my words but the Minister’s.

Q281 Mr Williams: I suspected as much. Can you say more about the impact of the abolition of the WDA?

Sir Roger Jones: This is a very important point. If you get only one thing from the discussion this morning, it is that the private sector is interested in one thing only: outcomes. The public sector is obsessed with process. In my life, personally I do not give a bugger for the process. I am concerned only with the outcomes I can get. I get paid only when the stuff gets on the truck and leaves the factory. You must have process to get to that, but it is not the be-all and end-all; getting the outcomes is the important thing.

Q282 Mr Williams: What was the debate like at the time? You gave warnings about the three years to realise the mistake; three years to decide what to do; and another three years to implement change, with dire implications for parts of the Welsh economy.

Sir Roger Jones: I was not afraid to say it.

Q283 Mr Williams: What was the debate like at the time? What was the political reaction?

Sir Roger Jones: I was ridiculed. "We’ve got to do this. These wonderful civil servants have got to be able to understand how to get industry going. Yes, they understand everything. After all, they all have MBA degrees, so they will hit the ground running, won’t they?"

Q284 Chair: Everyone wants to come back again, Sir Roger, including me. If I understand it, are you saying that, rather than have lots of offices round the world, we would be better off simply having a group of people who can fly off on trade missions, follow up very quickly with meetings within 48 hours anywhere in the world with anyone who shows an interest in Wales, and this would be considerably cheaper than locating offices all over the place and having staff to man them permanently when there may not be much to do from month to month?

Sir Roger Jones: I believe so. The management of those staff is the difficult thing. They are far, far away.

Q285 Chair: If we did that, presumably we would have to be honest with the public and say it will mean that a lot of people fly off in planes and do not get any business, but it is still a lot cheaper than having them going off in a plane once a year, not seeing them for a year, having to pay their wages and create an office for them.

Sir Roger Jones: Yes.

Q286 Guto Bebb: I was very supportive of the WDA and I think that the loss of the WDA has been problematic in the Welsh context. You said that the end results were more important than the process, but is it not true that when, for a period of time, the WDA was very concerned about the end result and not so concerned about the process it got itself into hot water? Because we are dealing with public money, the process will always be important in the context of a body that is fully funded by the taxpayer.

Sir Roger Jones: That is the dilemma. What you have to have are individuals within a board who accept total responsibility. If they get it wrong, they are the ones who face the sanction. Fire them.

Q287 Jonathan Edwards: On the job of selling Wales and the discussion about UKTI, should it be for UKTI to sell the Welsh economy abroad, or should it be a matter for the Welsh Government?

Sir Roger Jones: I think it is for the people of Wales to ensure that the representation they get in the large cities of the world is the right kind of stuff. We have missed out on a really big opportunity. If you look at the Joneses and Williamses in North America, we do not do anything to try to pull in these people. Why do we not have a Jones day at some time?

Q288 Chair: Or a Davies day.

Sir Roger Jones: Yes; a Davies day would be better. There is no ambition; there is nothing there at all. One morning in Chicago the announcer on ZF Radio said, "This is March 1; it is St David’s Day. St David is the patron saint of Wales, dolphins and other marine animals." There rests the case for the defence, m’lud.

Q289 Owen Smith: You seem to be saying that one of the problems is that the Government, whether it is the Welsh Government or another Government, do not really have insight into what industry needs and what the trends are in order to direct investment. How do Government do that better?

Sir Roger Jones: By talking to a man or woman who knows and being prepared to listen. We have the expertise; there is enough experience. There are some very successful businessmen and women in Wales. Why do politicians think they know better than anybody else? I am sorry; that is a rhetorical question.

Q290 Owen Smith: That is very clear. Once these know-nothing politicians or their envoys have listened, what should they do, because I cannot see that you are saying anything beyond, "Get out the way"?

Sir Roger Jones: A good start.

Q291 Owen Smith: Clearly, that is what you are suggesting, but is that always necessarily the case? If markets are key, Government can in part make markets or help to make markets, or certainly inspire them, and there are other things Government can do. What should we be doing? What should the strategic vision be?

Sir Roger Jones: The strategic vision should be for Government to sign up to agreements on markets, market sizes, products that are required and costs, and then you can get the product into that market with the Government. To give an example, I had a company called Zymed in St Asaph. It made a fantastic device that monitored the drips in a bag in hospital. It did not need pumps; you just hung up the bag and it would count the drips. Every single trust in the UK bought that equipment, with one exception. Guess which one that was: Wales. We could not sell one in Wales. They said, "No, no, no. We haven’t approved it." We can work with Government. You are quite right. Working with the big spending departments is a great opportunity.

Q292 Susan Elan Jones: Probably our next inquiry will be into the validity of international Jones day. It is a rather good idea. Do you have any concerns about the restructuring that is currently taking place in the Department for Business, Enterprise, Technology and Science and the abolition of International Business Wales, with the proviso that some members of this Committee recently visited Germany and spoke to staff at UKTI who said that, because of that organisation, there had been little or no communication with International Business Wales? How do you think this will affect the ability of Wales, if indeed at all, to attract inward investors?

Sir Roger Jones: I am out of touch; I have had no contact whatsoever with that Department for the last four or five years. I do not know what is happening there. What I asked for and the Welsh Assembly Government promised was a heritage document. I asked to get all the facts about the history and performance of the WDA. Yes, you scrap it, but let’s get all the numbers down in a single document so that we can have something to compare it with. Guess what? Nothing happened. They absolutely refused. I did follow it up but they refused to provide us with a heritage document. As I said, they do not like outcomes; they stay with the process.

Q293 Susan Elan Jones: I am thinking of a subtle way of putting this. Do you think that, with the abolition of the RDAs in England, there is any way that Wales could benefit from that?

Sir Roger Jones: I think so. If we get our act together and can get a proper, effective arm’s length operation, we can take on anywhere in the UK.

Q294 Geraint Davies: When we were in Düsseldorf and Berlin talking to UK Trade and Industry, their function, in part, was basically to get prospective inward investment from Germany. They would have a list of factories that wanted to come to Britain, and then RDAs would draw down those and bid for them in terms of skills, location and all the rest of it. Because the RDAs had been abolished, all of these bids were available that Wales could have taken advantage of, but we were told that they were restructuring and essentially that opportunity was not being taken. I was wondering how in your view an arm’s length body should be structured to take advantage of the infrastructure of UK Trade and Industry and to organise Welsh industry to take best advantage of the Olympics, for example, where we did very badly in bidding for the £6.2 billion. I think we got £0.5 million of business. How should we have an arm’s length, or quasi-arm’s length, structure that can take advantage of big trading or procurement or inward investment opportunities? How would it look? Presumably, it would not just be WDA2, would it?

Sir Roger Jones: Do you know what the value of that brand was? We spent at least £50 million in establishing the WDA brand, and these people just said, "No, no. We want a little white dragon now; we don’t want that one. Throw it away." I would argue that really belongs to the people of Wales, not some folk in the Assembly building. My personal view is that it is a complete mess. Your question was: how do we establish this?

Q295 Geraint Davies: Do we work with UK Trade and Industry and what does the arm’s length body that is accessible look like?

Sir Roger Jones: If they do not pay us, then we just go home. All of this world is competitive. Let’s go and play. I do not think we should divvy it up so the north-east has that one and the south-west that one. Let’s get in there, because the decision will be taken by the German investor.

Q296 Geraint Davies: But what would the arm’s length successor to the WDA look like as an organisation?

Sir Roger Jones: I would encourage them to get in there and become competitive.

Q297 Stuart Andrew: Six key sectors have been identified by the Welsh Government for investment. Are they the right ones?

Sir Roger Jones: The short answer to that is that I do not know. I suspect not. Certainly, life sciences have to be in there. As to high-value tourism, we were doing very badly with that. I think we can do much, much more with high-value tourism.

Q298 Chair: Do you agree with things like gamekeeping courses? Is there a lack of this?

Sir Roger Jones: That is why I am partly deaf; I have been doing too much shooting in my life.

Q299 Chair: In all seriousness, we run courses for surf studies on the basis that lots of surfing goes on in Wales, but there are no gamekeeping courses-

Sir Roger Jones: Not one.

Q300 Chair: -because it is politically incorrect, but am I right in thinking that some Americans will pay thousands of pounds for a weekend in Wales?

Sir Roger Jones: I did a calculation. The political correctness that we have in Cardiff Bay is palpable. The value of shooting to the Welsh economy was about £80 million throughout the season. That was about the same size as the lamb export business. That could be doubled ever so easily if only there was a bit of focus. We could have done it. We still choose not to do it; we do not train. It is the Department for Education that chooses what skills people are to be taught. It is the guy who employs them who needs the gamekeepers, so we go to Scotland for them, don’t we?

Chair: Thank you very much. I see lots of pens scribbling furiously in the back.

Q301 Owen Smith: As a keen and committed fisherman, I completely agree with you.

Sir Roger Jones: There you go.

Q302 Owen Smith: Would you add, I take it, that training gillies and capitalising on our fantastic rivers and fishing is another area where we fail to come up to the mark as yet?

Sir Roger Jones: Absolutely, yes. The river Towy is excellent; it provides the best sea trout in the world, and yet we have never trained a gillie, as far as I know.

Q303 Guto Bebb: I also agree with you entirely when you say that tourism should be one of the six key sectors. It is inexplicable that tourism is not seen as a priority area for economic development in Wales, but that is an aside. The evidence we have collected so far in this inquiry has identified the fact that there has been a lack of cooperation between UKTI, the Welsh Assembly and even the Welsh Office. You stated that you had not been involved in the past four years, but, if you were given a magic wand, how would you try to develop a working relationship between the Welsh Assembly and UKTI to try to ensure that the image of Wales was made available to investors in all parts of the world?

Sir Roger Jones: It is an awful thing to say, but when this subject has been broached with me by well-meaning individuals I have made the comment that not enough time has passed yet and there is not enough pain yet to go back and re-engage. They will make the same mistake again unless they understand the pain it has caused them. I am sorry. That may be small-minded but I feel that way. For me, re-engaging is probably not an option.

Q304 Guto Bebb: Even if you are not going to re-engage but you were in a position to influence, how would you see the Welsh Assembly working with the UK Government to try to ensure that Wales had a fair crack of the whip when it came to attracting inward investment? Granted that in my view the decisions made have been problematic, how can we try to improve the situation?

Sir Roger Jones: By establishing a new organisation that requires a strong board with some really good people, explaining what is required and letting them get on and do it.

Q305 Guto Bebb: And take responsibility for it.

Sir Roger Jones: And take responsibility, yes-every penny.

Q306 Chair: Sir Roger, we are about a minute away from our allocated time. I feel that we ought to end on that high note. I thank you particularly for the way you have given evidence, which is far more entertaining, frank and direct than many, and also for the written evidence. As far as I am concerned, those who are submitting written evidence may follow your example, because that kind of evidence gets read, even if some people would disagree with it. Diolch yn fawr iawn.

Sir Roger Jones: You are all very kind. Diolch yn fawr iawn i chi.

Examination of Witness

Witness: Glenn Massey, author of Review of International Wales, a report for the Welsh Assembly published in August 2009, gave evidence.

Q307 Chair: Good morning, Mr Massey. Thank you very much indeed for coming along today and for the report you sent us. Perhaps you would elucidate why you believe Wales lost its competitive edge after the WDA went and whether or not that had anything to do with it.

Glenn Massey: Before coming specifically to the WDA in Wales, I think it is true to say that in about 2000 the UK-in those days it was the DTI-took the view that manufacturing was not particularly important, that we were almost a post-industrial society and that there were far more interesting sectors on which to focus. As a result, the UK as a whole, not just Wales, lost its way in terms of inward investment. I think that is the starting point for this. If you look at the statistics, in relative terms Wales has gone backwards rather than forwards over the last 10 years or so. I suspect there are quite a number of reasons for that. If you go back to the 1970s, 1980s and up to the late 1990s, Wales had a very competitive package in terms of being attractive to inward investment.

If you think back to the types of investment that were around at that time, it was mainly consumer electronics. There were a few exceptions to that. They tended to be large scale, not particularly capital intensive, with a few exceptions, but very job-oriented. Wales had a very compelling package at that time. We had a lot of unemployment, relatively low wages compared with Western Europe, an open-house policy towards inward investment, a grant regime that was pretty attractive, going back to the early 1980s when regional selective assistance came in. At that time in the development areas it was based on five times someone’s annual salary. It was a pretty attractive package.

What happened? Lots of inwards investment came in. There was not much competition around at the time. The RDAs did not exist at that time. Wales and Scotland basically had a free run at all those inward investment projects and were very successful. Obviously, things changed during the 1980s and 1990s. England got its act together and became much more competitive. By the time we got to the late 1990s and into the early 2000s
eastern Europe was now part of the EU. They had by and large highly educated work forces, with big grant regimes and much lower taxes than the UK. Suddenly, the UK fell off a cliff for those large types of inward investment projects. That is not to say the UK was not successful for FDI; it was. It still remained No.1 in Europe, and that was likely to continue. However, there was a shift away from the regions. Scotland, Wales and parts of northern England were very successful in the 1990s. From 2000 onwards, most of the FDI, with a few exceptions, is now in London and the south-east of England. The centre of gravity has changed.

Q308 Chair: That is probably because most of the FDI in terms of money now goes into financial services which tend to cluster around London. Is that right?

Glenn Massey: Technology and life sciences. It is not just financial.

Q309 Mrs James: You have given a very good overview of what happened and your report, etcetera. You have covered a lot of the questions I wanted to ask you. I want to tease out a little further what you have just said. You talked about going backwards, not forwards. Obviously, we have all got our eye on the prize. Everybody is chasing the same investments and jobs. What do you think is the offer in Wales that can put us back in the position where we are competing?

Glenn Massey: When I did this study back in 2009, it became pretty clear that the business proposition Wales was selling overseas was regional selective assistance grants, which had been around since 1982. Sadly, that was fine when you had the type of projects around that I mentioned earlier in the 1970s, 1980s and up to the mid-1990s, where that was a very attractive proposition, but inward investment is not like that now. Those types of consumer electronics and automotive-type projects and many jobs tend to gravitate towards eastern Europe or China and the Far East. We have to recognise that we are no longer in that game. The problem Wales had was that the toolset it developed to attract that type of investment did not change to reflect the new world economy. The FDI that is coming into the UK now is not really looking for regional selective assistance; that is inappropriate. As a consequence of that, we should have developed a suite of other instruments-whether it be skills, a property proposition or R and D through universities, a whole raft of things-to make things attractive to inward investment companies. We have not done so. I think there is a recognition in Wales that something needs to be done, and I still think it is in the process of trying to figure out what it is. Sadly, that has been going on for a long time.

Q310 Mrs James: When I speak to the public, this is the question that I get asked day after day, and I am sure many of my colleagues do. When are we going to go back to attracting big industry? When are we going to go back to manufacturing? We have heard lots of experts speak here in this inquiry.

Glenn Massey: We are never going to go back and be attractive to low-value manufacturing. That has gone, unless we become a low-wage economy again, and I do not think any of us want that. What we have to do in terms of manufacturing is attract high added-value projects, and there are still lots of them around. Roger Jones touched upon the problems we have in terms of a skilled economy. We have a few very high quality companies in Wales which have very well-trained work forces that are world class. Sadly, you can count them on one hand. A major investment needs to be made to upskill the work force. It is not necessarily at the bottom end; it is at the top end where management are concerned. Management skills in Wales by and large are not great. One of the jobs I had with PricewaterhouseCoopers, or PwC as it is now known, is that, for my sins, I was on the listening end of lots of presentations from development agencies around the world. I used to spend my life listening to them, so I know what to look for in a presentation. I think that over the last 10 years Wales has not had a compelling presentation.

Q311 Chair: Do you think that the merger of the international division of the WDA and Wales Trade International was good or bad?

Glenn Massey: I do not honestly know because I have never dealt with the trade side of it. It would be unfair of me to comment on that.

Q312 Chair: Your report undertook a benchmarking exercise of International Business Wales. What were the key findings of that particular study? What do you think? Were they doing a good job or a bad job?

Glenn Massey: You have to look at this in context. You cannot look at IBW in isolation; that is unfair on the management and staff. You have to look at the department as a whole. What seems to have happened over the last few years-it was even true of the WDA-is that it was a big organisation and people operated in silos. You had a budget for which you were responsible but you did not look left or right. If you were the grants team, you had a budget; if you were IBW, you had a budget; if you had a property budget, you were over here. Very rarely was this ever integrated into a coherent package.

Q313 Chair: You heard the comments made by Sir Roger and echoed by some here, including myself. Do you think there is a case for saying that IBW should not have offices all over the place?

Glenn Massey: Roger probably went too far, so I do not agree with him on that. One thing I have found out doing business in the world is that you have to be in front of the decision makers; you cannot do that over the telephone or by Skype. You have to be there. You can argue about whether that means people actually flying out to do the business or having an office out there. I think you have to have some representation overseas. About half of FDI coming into the UK comes from the US. To me, it would seem unusual if Wales did not have some representation in this major market.

Q314 Karen Lumley: How would you judge a successful investment policy?

Glenn Massey: Something that Roger touched upon several times was outcomes. Roger is quite right that it has been a process-driven activity. It is changing. If you look at the success of the overseas offices over the last 10 years or so, it has involved lots of people, resource and cost. Bear in mind that Wales was costing twice as much as any other region in the UK with the exception of Scotland to deliver very little. So the costs were there, the budget must have been there to pay for all this, but the outcomes were not.

Q315 Karen Lumley: If we are delivering very little, how do we get to the stage where we are delivering good stuff for Wales?

Glenn Massey: Expensively delivering very little.

Q316 Karen Lumley: A reduction from 25% to almost 6% or 7% in the last few years is not good news, is it?

Glenn Massey: Some would argue, given the population base of Wales, that is a reasonable performance. Personally, I do not think it is but some would argue that. Given the fact that Wales has the biggest budget other than Scotland and it has more staff than anyone else, it should be getting at least 10%.

Q317 Geraint Davies: To what extent do you think the strategy for inward investment should build on existing clusters rather than go outside them? I am thinking specifically of a conversation we had with GE Aviation who said they would be happy to host a joint meeting with Boeing to get them into Wales. In your paper you mention that Boeing has a joint venture in Yorkshire. Given we are a small country, rather than going out and doing everything, do you think we should say, "Where are our strengths?", build on those and use the universities as part of that mix?

Glenn Massey: Yes. We have a few world-class companies in Wales and we should leverage those as much as we possibly can. I do not think we have world-class universities in Wales, but we have some reasonable ones. One of the disappointments for me over the years has been the fact that the Welsh universities have not spun out lots of exciting new projects, or not enough. They have spun out one or two but not many. Why that is so needs to be looked at. There is lots of research going on in Wales. There is a lot of very high quality research going into Wales. Again, unless that moves into some kind of business, personally I would challenge why we are doing it, but I have a very business-oriented viewpoint on these things.

Q318 Geraint Davies: How do you translate a good idea into a commercial product? What are the best examples of that, and where are we going wrong in doing that?

Glenn Massey: We should look at MIT, which is an obvious example of how lecturers are basically entrepreneurs; they mix the two. Unfortunately, not enough people are doing that in Wales. As to the way Welsh universities are funded, you should get more money if you can spin out companies and ideas rather than pure research; in other words, there has to be an outcome.

Q319 Owen Smith: To continue that theme and return to the question I asked Roger about the extent to which Government can act to try to create markets, one area in which universities in Wales are very good is research in respect of hydrogen, in particular hydrogen fuel cells for motor vehicles. The universities of Glamorgan and Swansea are working hard on that. It struck me that the difference between the UK, not just Wales, and Europe and places like Japan is that Governments there are investing, for example, in creating a network of hydrogen fuelling centres to allow hydrogen fuel cell cars to become a reality. They are spending billions of pounds to do that. Japan and Germany are doing it. Are those the kinds of big, bold things Government across the UK should be thinking about? Is it feasible that Wales could take a lead in trying to come up with something like that?

Glenn Massey: Not for billions of pounds, but Wales can take the lead in creating the right environment. I do not think Government creates jobs, but it can create an environment in which business can flourish and pump prime various initiatives; it can help businesses feel secure and also want to grow in Wales. I think that is the role of Government, but those initiatives at the moment are lacking and they need to be worked on.

Q320 Owen Smith: You implied earlier that over the last 10 years Wales had got worse at attracting FDI versus the south-east of England. You also said you thought that was not all related to financial services or other services. What is the mix? How much of that FDI that the south-east has attracted is services or financial services-related and how much is advanced manufacturing?

Glenn Massey: When I drive along the M4 I see Microsoft all over the place. They must have half a dozen very large facilities around Heathrow and Reading. I can understand that, when they dipped their toe into the UK market, they wanted to be near Heathrow and be able to jump on an aircraft and go to and fro. But they have been here for more than 20 years now and they still have a huge amount of investment in that area. I do not see why Wales cannot compete for that kind of business. It needs to have a proposition that Microsoft want to buy, like a skilled work force or some relationship with universities that they do not currently get from Reading or London. What we have to do is to go and talk to these companies at a very senior level-this is the real knack-and say to Mr Microsoft, "What do we need to do in Wales to get one of your big R and D or software facilities down there? Tell us." I am not certain that anyone has ever had that discussion with them. We guess. We try to sell them quality of life; we say there is a factory over here and a site there and we have fantastic universities. I can tell you that I have heard that a thousand times from every region of Europe, so why are you different?

Q321 Jessica Morden: You have touched on what you think the Welsh Government are not doing. If you do not think it is enough, is there an argument for setting up a body similar to the WDA?

Glenn Massey: I have never been a big fan of structures, by which I mean that it is really about management and people. Management and people can work within any structure if they are good. I am not hung up on reinventing the WDA. What I am hung up on is having a delivery team that can actually deliver something, and I am not bothered where it is.

Q322 Jessica Morden: Do you think that Wales is taking full advantage of the abolition of the RDAs, or could it do more?

Glenn Massey: For the last 18 months it has been inward looking, for obvious reasons. We have had the economic renewal programme and the abolition of IBW. A lot of staff, not all, have become very disillusioned and morale is quite low. If you are working in that kind of environment, motivation is hard.

Q323 Jessica Morden: Is that a no then?

Glenn Massey: I think it is a no. Take it as a no.

Q324 Chair: Is there an argument for saying that all these things-IBW, WDA and UKTI-are a waste of time and any company wanting to come to Wales or any region of England, to Europe or anywhere at all will look at utilities, tax rates and employment costs, and if somebody will give them a little extra that is fine but it will just be the icing on the cake? All we are doing is throwing money away which we could be spending on improving the utilities, the transport infrastructure and broadband or reducing taxes and that would have more effect.

Glenn Massey: The truth of the matter is that probably 90% of FDI would come to the UK regardless of anyone’s involvement. Why? Because there is a market opportunity that a company wants to exploit and so they will come. The other 10% are genuinely footloose and are looking at Ireland, France, Germany and the UK. Those are the ones on which we should focus. The other 90% will come anyway. When I read all these FDI statistics that UKTI put out every year, I take them with a pinch of salt because most of them would have come anyway. The first port of call for most companies coming from America is not UKTI. They phone up their lawyer or accountant and ask for some advice about how to structure the business or what they should do. The first port of call is not UKTI, the regional development agency and the Welsh Government. People tend to forget that.

Q325 Chair: It sounds like you half agree with my deliberately slightly outrageous statement.

Glenn Massey: No. I am half agreeing with you that the 90% will come and, therefore, Government or any development agency have no role to play in those whatsoever; for the other 10% they do.

Q326 Geraint Davies: As to those who are concerned about the decision to scrap the WDA, the reasoning behind it is that a recognised brand was lost. In terms of your previous answer, you do not think that is an issue at all.

Glenn Massey: It is for those 10% of companies that are looking and are genuinely mobile. There is no doubt that the WDA had a brand name around the world. Roger Jones is quite correct that they spent a lot of money on that, and it was a shame that it was lost. Despite all that investment, Wales, frankly and sadly, is not a well-known brand in many parts of the world even now, and it certainly was not when the WDA was there as well, so it is not quite right.

Q327 Geraint Davies: I want to ask a couple of related questions. First, are the six key sectors for investment that have been identified by the Welsh Assembly the correct ones? We have already heard that people think high-value tourism might be included. I have mentioned aerospace. Given the size of Wales, do you think that maybe the marketing strategy should be much more targeted on particular sectors in particular countries for inward investment to match what we have got, and to have insight that most big companies will decide to go to Britain as opposed to Wales and look at our competitive offer versus other regions that are at that point taking prospective inward investment decisions?

Glenn Massey: What I can tell you from my experience of how this tends to work is that I am sitting with a company looking at half a dozen countries in Europe, so we are one of the 10% that is genuinely mobile. We will look through a whole raft of things that you would naturally consider: taxation; ease of doing business; regulation; salary costs; and skill levels. At the end of the day, you will come down to a few regions. As to where you go, it is almost decided by the flick of a coin. If you are sitting in California, you have probably never been to Wales; you have never been to Saxony. How do you make that call? It is very difficult. It often comes down to soft things that never get on a list. Long ago in the annals of history-it was 12 years ago so I can tell you the story-MBNA was going to come to Wales. It was all set up. At the final minute the managing director of the company came over with his wife and she did not like Cardiff, so they went to Chester. There was no business reason for that whatsoever; it was what I would call a soft issue and that made the choice.

Q328 Owen Smith: I think there is a lot of truth in what you say. Before I came into this place, I was UK director on the board of the world’s biggest biotech company. The difficulties of getting those companies to make big decisions about relocation are legion and I will not go into them. Is not one of the quick wins we could have in Wales massive improvement of infrastructure and connectivity down the M4 corridor and the rail infrastructure? Fortunately, we now have some investment in rail. Is not the other quick win far better marketing of the lifestyle benefits of coming to Wales-the beauty of the country and the lifestyle opportunities it provides? Looking at northern California, the success of that part of the world in attracting companies out of other parts of America was predicated very much on lifestyle opportunities. Should we not be thinking about that in the short term?

Glenn Massey: The infrastructure problems in Wales are not a short-term fix, are they? We are talking about a 20-year investment programme. I used to travel to London two or three times a week. I came up again this morning, and it is still difficult. Trains are slower than they were 25 years ago. They are more comfortable and more expensive. I do not think there is a quick fix on infrastructure, but it certainly needs to be put in place and I would put road, rail and air infrastructure way above broadband.

Q329 Susan Elan Jones: I want to tease out some sort of answer about overseas offices. A number of times people have been in front of us answering questions on this subject and we seem to get totally divergent answers. Is it true that overseas offices may be absolutely key in certain cultures where it is about building those long-term links but in other cultures it might not matter at all? Do you think that could be?

Glenn Massey: Bear in mind that often these projects can take five years to happen. Therefore, you have to build up a relationship over a period of time with them. Whether it is cheaper to have someone who is local and pops in once a week, has a cup of coffee and discusses where they are in terms of the project, that can be one way; or it could be, as tends to happen with most companies, that they do not involve the public sector until they are very close to making the decision. They have done all the work in terms of where the market opportunity is, whether they will buy a company, whether it will be a greenfield site, how they will structure it in terms of taxation, etcetera. Once they have done all that, they will engage. I would say that, if you could have a delivery team made up mainly of people experienced in business rather than the public sector, who can fly out at a moment’s notice and try to win the project, that is probably as good as having somebody in an overseas office who is not quite as effective.

Q330 Susan Elan Jones: But how do you marry that idea with the fact that you say that brand Wales often is not heard of in certain places?

Glenn Massey: All I am saying is that, after 20 years of trying, it still has not worked and we have had lots of overseas offices with lots of people in them.

Q331 Chair: I must be careful how I suggest this. It is the kind of question that can easily get me into trouble. There was a row about the Duke of York in his role as ambassador. The argument was that, on the one hand, he should not have the job; there was no application. On the other hand, it was said he could always get in to see the top people and, whether or not we like it, the top people are always willing to see a member of the royal family. In some cultures, the top people are more willing to see a British Member of Parliament than somebody who works in an office for an overseas development agency. Is there not likely to be a problem in some countries and some cultures that the people who work in the offices for IBW will not have access to the top decision makers? In some cultures there is an issue about face and seniority, and people who possibly would be willing to see somebody possibly like Sir Roger Jones, the head of an agency from the UK, a British MP, a Cabinet member, or a member of the royal family, might not be quite so willing to see the guy who sits in that office for three months of the year sending back a postcard, as Sir Roger said. Do you see what I am getting at? Have I put that in a way that will not offend everyone?

Glenn Massey: It is correct. It is true of every culture. Every culture is the same. They want to see the decision makers or the people who can influence a decision. If the person they see has no influence and has not got much to say by way of a proposition, why do they want to waste time? The average meeting for an inward investment agency talking to a company like Intel is 20 minutes. You have got 20 minutes to make a proposition for Wales, and that is it. Bear in mind that they have another 150 to see after you.

Q332 Owen Smith: This has been a personal view of mine for years. Could we do better at desk-based analysis of which companies and sectors are likely to want to invest next in the UK? Take, for example, a Japanese pharma firm that does not have a location anywhere in Europe. They will always want a location in Europe at some point. Why do we not target them better?

Glenn Massey: It is a bit like investing your money with a fund manager, is it not? You are relying on the fund manager’s research to get it right. Sometimes they do and sometimes they don’t. Looking at my personal position, they do not always get it right; certainly, they get it wrong more often than they get it right. Obviously, there is a case for that, but it is a question of whether you know the industry sufficiently well to draw out the conclusions you want. Often I find that talking to senior executives in companies is a much easier route than that.

Q333 Geraint Davies: One thing that seems to come out of this is that you need the right person at the right time to make the decisions. You have intimated that some of the decisions are about knowing the prospective buyer for inward investment and perhaps forming a relationship, whether that is short term or long term, or, as the Chair said, it may be the case that certain doors are opened by certain people at the right moment, whether they be MPs or whatever. The question that follows from what Owen said is: how do you map out some of the likely new opportunities and flexibly arrange yourself in such a way that you can present yourself preferentially to get that win? Would you agree with that?

Glenn Massey: Yes. One of the things I found out working for PwC is that people are often prepared to share information with you because it is mutually advantageous. I am dealing now with a project that involves aluminium cans. It is a pretty standard product, but I discovered from talking to the chairman of the company that, because there is a worldwide shortage of tinplate, manufacturers of tinplate have told the people who make aerosol cans with tin that in two years’ time they will cut them off. Whether they like it or not, they will be forced to go to aluminium. Half the market currently with tin will change in two years to aluminium. That is a huge marketing opportunity. It is uncovering things like which you do through discussion. It is through talking to people and captains of industry. One of the problems that many development agencies have, not just Wales, is how to get access to these people to find this out. A lot of the time you can do it through intermediaries like accountants and lawyers, who are dealing with some of these big issues.

Q334 Geraint Davies: One of our previous witnesses suggested that events like the Ryder Cup could provide those scenarios. People who move around picking up these titbits are in the right place at the right time to take action to deliver those. I want to ask a separate question about India and China. How do you think we could do better there? Do you agree with me that foreign university students, particularly from places like India and China, are not ordinary people? They are all from rich backgrounds and are probably prospective inward investors, who could at least become high-value tourists in Wales. Is there an opportunity to take advantage of people from emerging markets to make those links and bring in tourism and inward investment, or should we do something else?

Glenn Massey: I think there are big opportunities, for the reason that if you had made a lot of money in China-lots of people have made a lot of money in China-you would want to get some of it out of the country. Where do you put it? We are talking now about people with serious money. If you look round London, they are buying property and infrastructure; they are also probably starting to think about buying companies. The next stage on from that is to do greenfield developments. This will not be in consumer electronics but in high added- value-type technology projects. If you think about it downstream, we are educating a lot of overseas students in Wales, who, hopefully, go away with a great impression of Wales. They are probably from moneyed backgrounds, as you say, they will want to do something with their own careers, which may or may not be in China; they may want to go overseas and do things. I think there are big opportunities there.

Q335 Owen Smith: To go back to your point about the opportunity relating to aluminium cans, are we employing the right kind of people either to pick those things up in conversation or conduct the analysis that will allow them to see those opportunities from their desk?

Glenn Massey: No.

Q336 Owen Smith: Why not?

Glenn Massey: It is a good question. I think it comes back to money at the end of the day. If you can earn £100,000 or £150,000 a year working in London, that is what you will do. Why would you want to work as a civil servant in Cardiff?

Owen Smith: For the good of the people.

Chair: Most of us would absolutely agree with Owen.

Q337 Jonathan Edwards: I know that you are not obsessed with structures, but perhaps one of the key areas of debate between us on the Committee is about who should be responsible for promoting Wales abroad. Should it be a matter for the Welsh Government, should we go solely through UKTI, or do you see a role for both?

Glenn Massey: I see a role for both. I think Wales has missed an opportunity over the last 10 years in paddling its own canoe. UKTI has recognised that, and most of the inward investment projects that it handles which are genuinely mobile go to England.

Q338 Jonathan Edwards: From my understanding, Wales is the only nation or region that has no UKTI presence domestically. Should UKTI have a presence in Wales to work closely with the Welsh Government, or is that not necessary?

Glenn Massey: I do not think so. What I think Wales should do is second people to UKTI.

Q339 Geraint Davies: Interestingly, you mentioned that Wales makes a presentation and so does everybody else, and it is difficult to differentiate. Maybe the best idea would be to go to the managing director of Microsoft, or whoever it is, and say, "Well, what do you want?", and then restructure or offer to fit that. For example, do you think that in this particular forum possibly we should be inviting big prospective investors to our hearings to ask them what they want, helping that process and literally getting jobs into Wales?

Glenn Massey: Yes.

Geraint Davies: Let’s do that, Chair.

Q340 Guto Bebb: I am intrigued by your reasons why you do not think the staff are appropriate for the work being undertaken. In view of the fact that the whole structure in Wales has been restructured, should the Welsh Assembly Government consider just privatising the whole issue and offering the contract to a private sector company in a performance-related deal?

Glenn Massey: No.

Q341 Guto Bebb: Why is that? If we agree that the quality of staff cannot be recruited to the public sector, how do we get across that?

Glenn Massey: When I was in PwC I remember that one of the development agencies spoke to us about that very thing, but there were so many conflicts of interest we had with clients that it just was not worth it.

Q342 Guto Bebb: I am not sure where the answer is taking us. You are saying that we cannot get the quality of the individual in the public sector, nor can we go out and privatise the contract.

Glenn Massey: I did not say you can’t get them.

Owen Smith: You have to pay for them.

Q343 Guto Bebb: You have to pay for them.

Glenn Massey: Yes. I would have a delivery unit largely drawn from the private sector with annual contracts. If they perform you keep them; if they do not perform you kick them out.

Q344 Guto Bebb: The problem is that we will say we will not employ anybody who earns more than the Prime Minister. That might be a problem.

Glenn Massey: If you take into account the Prime Minister’s stately homes at weekends, I do not think that is a problem, is it?

Chair: I think I shall move swiftly on.

Owen Smith: A creative accountant to the last.

Q345 Karen Lumley: If you were in charge of bringing companies into Wales, what would you do? What would be the one thing you would do to help us?

Glenn Massey: I would develop some propositions which were attractive to companies who might be interested in Wales, and at the moment we do not have any.

Q346 Geraint Davies: On the issue of getting the best officials in place, do you think the problem is that, basically, you have to say you can speak Welsh before you can be a top civil servant in Wales and therefore a lot of civil servants will not apply? Similarly, do you think Welsh is an obstruction to inward investment generally?

Glenn Massey: It has never been an issue with any company that I have dealt with.

Q347 Geraint Davies: What about people who are applying for jobs there?

Glenn Massey: I do not know. I do not think I am the right person to ask.

Q348 Chair: If you want to attract the best people to work for an inward investment agency, presumably you would not want to stipulate that Welsh would have to be spoken, because the people they would be dealing with, by definition, would not speak Welsh, would they?

Glenn Massey: No.

Chair: On that slight note of controversy, does anyone want to come back to it?

Susan Elan Jones: Mr Massey’s answer was not remotely controversial. It would seem to have good sense in it.

Owen Smith: I am more worried about going to Germany and not speaking German.

Q349 Chair: Lunch is beckoning. Thank you very much indeed, Mr Massey. It has been a most entertaining session.

Glenn Massey: I enjoyed it.

Chair: All these people who do not turn up to the Welsh Affairs Select Committee don’t know what they are missing out on. It has been good. Thank you very much.