Facing up to an uncertain future
August has come and gone, moving at breakneck speed for Wales and the United Kingdom economy as a whole.
Putting proroguing and prime ministerial visits to one side – what we have learned is that the picture for the Welsh economy in particular is showing strong resilience, and is arguably better placed than other home nations.
The Office of National Statistics reveals Wales’ economy grew by 2.3% in 2018, showing Wales is the fastest growing UK nation.
Recent figures released by the Welsh Government showed the value of exports for Wales for the year ending June 2019 was £17.7 billion, up £1.1bn (6.8%) compared with the same period the previous year.
A further good news story was the launch of the next cohort of the Welsh Financial Services Graduate Programme; this is a two-year programme attracting graduates with the chance of progressing their careers in roles with some of industry’s most well-known employers, whilst studying for a fully funded Master’s in Financial Services Management at the University of South Wales.
Since 2013, more than 105 graduates have been recruited on to the programme and it has enabled 98%
of them to secure permanent roles in their chosen career path. Its success has been made possible in part due to support from the European Social Development Fund (ESDF).
Yet despite the growth seen in the Welsh economy, few will deny that fragility persists in these uncertain times.
The reaction following announced closures of Ford’s Bridgend plant and Tata Steel in Newport exemplifies concerns for the future of manufacturing in Wales.
For Wales to continue to prosper Ford and Tata are hurdles that must be overcome – if reports are to be believed, those affected by the former could be handed an unexpected lifeline by Ineos Automotive founder Sir Jim Ratcliffe
In previous columns, I have outlined that Wales’ farming sector, digital and physical infrastructure and skills are all areas that need continued support. Their development is crucial for Wales to prosper, regardless of the outcome of Brexit. Recent reports around the eye-wateringly high number of empty homes and the closures on the high streets cannot be ignored, for the impact that they have on communities across Wales, and on the economic and social health of the country.
And then, there’s Brexit. The United Kingdom is moving ever closer to the 31st October, in the absence of ratified Withdrawal Agreement we face up to the prospect of a no-deal Brexit.
Stephen Kinnock, Labour MP for Aberavon, suggested a version of Theresa May’s Withdrawal Agreement could ultimately break the Brexit deadlock.
However there is a lingering feeling that this arrives so late in the day, and some may question resurrecting an agreement that failed to pass through Westminster three times.
In the meantime, recent events in Westminster have created a new source of uncertainty and raft of potential outcomes.
A no-deal Brexit will create even greater ambiguity over the long-term economic partnership between the UK and EU. This uncertainty has an impact, not only on the thousands of British businesses seeking professional advice on the continuity of their cross-border business, but also on the confidence of the overseas customers in their supply chains.
ACCA maintains that a transition period is desirable in the event of an exit from the EU, and necessary for the purposes of business continuity. Several of our members recently attended a round table meeting with two Welsh Government Ministers – the Minister for Economy & Transport, Ken Skates AM and the Counsel General & Brexit Minister, Jeremy Miles AM.
The discussion provided an opportunity for views to be shared on the issues and opportunities faced by the accountancy sector as it undergoes significant change, and the areas of concern for businesses supported by accountants in practice around a possible no-deal Brexit. The Ministers also highlighted the support and resources available.
■ Lloyd Powell is head of ACCA Cymru Wales