F.O.I reveals WAG inaction over help to struggling businesses

F.O.I reveals WAG inaction over help to struggling businesses - Kirsty

June 9, 2009 12:00 AM

Information obtained by the Welsh Liberal Democrats has revealed that it took nearly a year for the Labour-Plaid government to meet with the banking sector to discuss lending to struggling businesses in Wales, proving that the Welsh government is 'no talk as well as no action'.

As Wales was deep in recession and businesses were going bust all across Wales, the Labour-Plaid government only arranged a meeting with the banks to discuss lending after insistence by Welsh Lib Dem opposition leader Kirsty Williams.

It was only in March 2009, nearly a year after a major bank had been nationalised, that the Deputy First Minister met with banks to discuss lending to struggling businesses in Wales.

Kirsty Williams, leader of the Welsh Liberal Democrats said:

"I am appalled to discover what I had been suspecting for a long time. It is only in the last three months that this Labour-Plaid government met with the banks to discuss lending to struggling businesses in Wales. This should have been one of their main priorities when they saw banks like Northern Rock and Bradford and Bingley nationalised.

"Having spoken to many companies over the last year about the economic downturn and the effect its having on their businesses, I know that having access to credit is vital for some them to survive. Having access to this flow of credit could have made the difference between sink or swim for some businesses.

"The flow of credit in Wales is key to getting us out of this financial mess that's crippling the Welsh economy.

"I am deeply concerned that the Labour-Plaid government and particularly Ieuan Wyn Jones have been slow in approaching the banks to discuss lending to businesses.

"It seems that only after my insistence on this issue that the Labour-Plaid government decided to take action. While I am flattered that they saw fit to implement a suggestion from the opposition, this should have been one of priorities a long time ago. The people and businesses of Wales expects the Economy Department to be way ahead of the game, not waiting to be prodded by the opposition.

"I am reiterating my concerns that Ieuan Wyn Jones is incapable of running the Transport and Economic departments of the Welsh government at this difficult time in the Welsh economy."

Ends.

ECONOMIC TIMELINE:

17 February

After considering a number of private sector rescue proposals, including one from Richard Branson's Virgin Group, the government announces that struggling Northern Rock is to be nationalised.

29 September

In Britain, the mortgage lender Bradford & Bingley is nationalised. The British government takes control of the bank's £50bn mortgages and loans, while its savings operations and branches are sold to Spain's Santander.

8 October

The UK government announces details of a rescue package for the banking system worth at least £50bn ($88bn).

The government is also offering up to £200bn ($350bn) in short-term lending support.

8 January

The Bank of England cuts interest rates to 1.5%, the lowest level in its 315-year history, as it continues efforts to aid an economic recovery in the UK.

14 January

The UK government unveils a plan to guarantee up to £20bn of loans to small and medium-sized firms, to help them survive the downturn.

23 January

The UK has officially entered a recession as fourth quarter GDP falls by 1.5% compared to the previous three months.

5 February

The Bank of England cuts interest rates to a record low of 1% from 1.5% - the fifth interest rate cut since October.

February 10th

Kirsty asks whether the Labour-Plaid government has met with banks to discuss lending. Rhodri Morgan says that they have.

February 18th

Deputy First Minister invites major banks in Wales to discuss lending to businesses.

March 4th

WAG meets with businesses to discuss lending.

Kirsty Williams AM