Why liberalism is essential for a rejuvenated Welsh private sector

David Chadwick, MP for Brecon, Radnor and Cwm Tawe

This year marks a quarter of a century since devolution began in Wales. In that time, much has changed in our politics, culture and communities. Yet on one crucial front, Wales has stood still: our economy. 

That weakness underpins the challenges we face as a nation, from low wages and poor health to the persistent gap in living standards between Wales and the rest of the UK. A country with too few thriving businesses will always struggle to fund good public services or cut poverty.

The way forward for the Welsh economy is clear: we must play to our strengths. Not long ago, Wales led in industry, but those sectors have withered despite the pressing need for a manufacturing revival. The closure of Port Talbot’s blast furnaces was symbolic, but it should not mark the end of Wales’ industrial story.

Last year, when parliament was recalled to debate the nationalisation of British Steel: I spoke up for Port Talbot. Scunthorpe received billions whilst Port Talbot received millions. The frustration I expressed was personal: my grandfather worked at the steelworks and later set up his own Waste Management companies. I know what those jobs meant for south Wales, and I fear that the career ladder my grandfather climbed no longer exists. 

To rebuild our economy and protect opportunity, we must sustain and grow an industrial base that creates jobs. Welsh-owned engineering firms should be central to both UK and Welsh industrial strategies.

Offshore wind is a vital industry, one that Sir Ed Davey helped create during his time as Secretary of State for Climate Change, but if the government does not move quickly, these opportunities will pass us by. It would be a lost opportunity if this work goes to foreign companies, a betrayal a failing government cannot afford.

While other parts of the UK have attracted private investment and built clusters of innovation, we have been left reliant on the public sector and a narrow base of small firms struggling under red tape and high costs.

Business rates are a prime example. They don’t just affect shops and high streets but also offices, factories and industrial sites. For many employers, rates are one of the biggest costs after wages, yet despite devolution the system remains largely unchanged. Reliefs offer some help to small firms, but there’s little incentive for growing companies or new investors to choose Wales. It’s a tax that discourages the very expansion and innovation our economy needs.

When I speak with businesses, I hear the same refrain: the cost of premises, the difficulty of finding skilled staff, the slow planning system and the lack of clear strategy from government. Wales has talent in abundance, but opportunity too often flows elsewhere. Large firms weigh up everything when choosing a base: access to markets, infrastructure, digital connectivity, regulation and stability. On too many of those counts, Wales is falling short. 

If we want to build a confident, prosperous Wales, we need a government that treats the private sector as a partner, not a problem. That is why liberalism, with its focus on enterprise, openness and empowerment, is essential to our economic renewal.

Shifts

The Welsh Liberal Democrats believe five major shifts are needed:

First, reform business rates across all sectors to replace the outdated property-based system with one that rewards investment and productivity.

Second, rebuild our trading relationship with Europe. Cutting red tape through a new customs union would give Welsh exporters and manufacturers the certainty they need.

Third, create a Welsh Investment and Innovation Agency to revive the strategic focus that worked in the days of the Welsh Development Agency, modernised for a high-tech economy. Its mission should be to attract investors and help Welsh firms scale up.

Fourth, simplify regulation and speed up planning so Wales becomes the easiest place in Britain to start or expand a business.

Finally, invest in connectivity, both transport and digital. That means better rail links to English regions, alongside improved connections within Wales itself. Poor broadband and weak 5G still hold back rural areas that could be thriving in the post-Covid world of flexible work.

These reforms are the foundation for rebuilding the Welsh economy. By freeing businesses to grow, we widen the tax base, raise living standards and reduce long-term poverty. A stronger private sector means more successful firms and better-paid jobs contributing to the revenue that funds our schools, hospitals and local services.

For too long, economic growth has been treated in Cardiff Bay as something that just happens in the background while the government focuses on spending and services. But without growth, there is no sustainable way to fund the public sector or tackle the inequalities that scar our communities. Wales does not lack ambition; it lacks opportunity. It is time to unleash it.