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The Welsh election next week marks a moment to reflect on the increasing power and influence of the Welsh Senedd, and consider what’s next for the devolved administration.
With Plaid Cymru leading polling, this election presents the possibility of an approach to Welsh policymaking that is more willing to diverge from the UK. For businesses operating across the UK, this means engagement in Wales will require a whole new set of considerations.
The political conversation is dominated by competing promises across healthcare, sustainability, and infrastructure. This has come as certain sectors are increasingly under fire. Traditional industries like agriculture and steel are navigating a difficult transition toward net zero, while others, such as digital infrastructure and tech innovation, have been largely ignored in favour of the more immediate cost-of-living crisis.
However, for any business with long-term interests in Wales, the most significant factor is not just the parties’ manifesto promises, but the evolution of the system that will deliver them, and the shifting priorities of the people who will lead it.
This election will see the expansion from 60 to 96-members of Senedd, combined with a move to a “closed list” voting system, representing a reset of how power works in Cardiff Bay.
Previously, businesses could often focus on building a relationship with a single local member of the Senedd or a specific Minister. However, under the new rules, voters will choose a party list, rather than an individual person, moving power away from individual personalities and placing it firmly in the hands of the political parties.
At the same time, having 36 extra members means there are members of the Senedd available to sit on committees, scrutinise the work of the Government, as well as of businesses operating in areas of national relevance. We can expect to see more formal channels for engagement, as well as increasing capacity to question businesses.
For businesses, this means there are more representatives to brief, but also a greater need for an evidence-based narrative. Ensuring your business can withstand the collective scrutiny of a more professionalised and resourced chamber, will be critical.
The relationship between the Welsh and UK governments is another central theme of the 2026 campaign, with diverging visions offered by the parties set to dictate the regulatory landscape for years to come. For businesses the question is if Wales will continue to pull away from Westminster, or if it will seek closer alignment.
The parties are currently split on this question. While Welsh Labour is banking on partnering with Westminster to unlock delivery, Plaid Cymru is pushing for the devolution of major new powers, including the Crown Estate and policing, to create a custom-built Welsh settlement. Conversely, the Welsh Conservatives and Reform UK are campaigning on the premise that “devolution divergence” has gone too far, promising to reverse flagship Welsh policies like the 20mph default speed limit to bring Wales back into line with UK-wide norms.
Operating across the UK is becoming more administratively complex. The Senedd is no longer just a place for tweaking UK law, but a body with its own distinct approach. A prime example of this headline-grabbing divergence is the 20mph limit, which has split public opinion and become a flashpoint for sectors like logistics and home care. This policy highlights a wider trend; Wales is willing to take a radically different path even when it creates friction with UK-wide norms.
There is a growing consensus among the business community that the next Senedd term must see productivity become the focus of Welsh economic policy. Bodies such as the Wales Productivity Forum and the Federation of Small Businesses Wales are pushing for a national productivity plan with measurable targets, citing that Wales currently lacks the formal benchmarks seen in other UK nations.
This demand for efficiency comes as the next Welsh Government faces a severe fiscal challenge, with capital spending potentially falling by 9% in real terms from 2026-27 over the course of the next Senedd term.
If the government cannot fund its ambitions, there will potentially be a shift toward seeking private sector solutions to fill the funding gap. Businesses that frame their engagement around resilience and scaling, and pitching themselves as the engine for national productivity growth, will likely find a more receptive audience to engage.
This election represents more than a structural reform, but a potential reset for businesses engaging with the Welsh government.
A larger, more politically centralised, and more scrutinised Senedd will change how decisions are shaped and tested from the outset of the new term. With manifesto positions already set, the immediate opportunity for business is not to shape commitments, but to influence how they are interpreted, prioritised, and delivered.
As policy positions are translated into delivery, businesses that move quickly, and align their offer to the incoming government’s priorities, will be best placed to shape implementation and secure a role in delivery.
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