Janet Finch-Saunders AM/AC speech contribution:
The fallout of 13 years of debt-fuelled boom precipitated by the UK Labour Government has left a cloud over the heads of families and businesses in Wales. For so long, market conditions have been such that some of those with a solid business idea have been quite reticent in taking that leap forward in starting the next success story here in the Welsh economy.
This lack of confidence ties in strongly with the inaccessibility of credit from banks, with figures from the second quarter of 2013 showing that net lending is still contracting, and that, as Professor Dylan Jones-Evans’s report highlighted, there is a funding gap of around £500 million to SMEs in Wales.
However, there are some signs of optimism, as lending to small, micro and medium-sized businesses fell less sharply than lending to the larger firms. As a result of the Bank of England’s funding for lending scheme, the participating banks have expended their loan books by £1.6 billion, but there is obviously still much to be done. Our small, micro and medium-sized enterprises are the backbone of this Welsh economy, comprising 99% of its almost 220,000 businesses in rural areas. These, as the motion correctly identifies, employ 73% of the population compared with 53% in urbanised regions. Therefore, it is essential to discuss the fortunes of SMEs and microbusinesses and the ways in which their growth can be sparked.
Our ‘Invest Wales’ policy, launched earlier this year, which I am really pleased that Joyce Watson has endorsed and Peter Black has hinted that he is endorsing, shows a common-sense approach by establishing local lenders with local knowledge based on local priorities. Support for SMEs must be readily available, and the Welsh Conservatives have long called for improvements in how this is delivered. Smaller businesses, as highlighted by the FSB, often lack sufficient acumen in applying for financing. These businesses need designated champions that work with them to understand the practicalities of business management and to provide support. SMEs and the owners of microbusinesses in my constituency speak of the difficulty of knowing who does what in terms of business support. This process needs streamlining to support our fledgling businesses.
The news, as Llyr rightly pointed out earlier, about HSBC closing down local branches is another thorn in the side of our small businesses, endorsing the belief that big is not always best.
The ‘Our Place in the Country’ report by the FSB illustrates the lack of uniformity among local authorities in providing discretionary rate relief to SMEs. I think that it is fair to say that there are not many in my constituency who know that that is at the discretion of the local authority. They assume that it is a responsibility that falls to the Welsh Government, and so you need to get your message across there.
In ‘A Vision for the Welsh High Street’, the Welsh Conservatives pledge to abolish business rates for those with a rateable value of up to £12,000 and provide tapered relief up to £15,000. At a minimum, the Welsh Government should provide comprehensive guidance to local authorities about providing this much-needed relief to businesses, but I would urge further support in this area, and ask Members to support amendment 7.
An investigation by Wales Online reaffirmed the regional connectivity gulf, with just 3.3% of my constituency of Aberconwy having access to superfast broadband. Indeed, there are several counties outside of Cardiff with zero coverage. The regional gap further presents itself when looking at mobile phone coverage, with Gwynedd the second lowest in 2G service, only behind the Scilly Isles. How are rural businesses meant to compete when so much of today’s business is conducted electronically? I am, of course, mindful of the work that is being done by BT to roll out superfast broadband to 96% of homes, but I am disappointed that, once again, it is north Wales that has had to wait for this long-awaited and crucial investment. To be honest, we almost still feel forgotten in this roll-out. I urge the Welsh Government to work with mobile phone operators to ensure that roaming is available in rural areas and, thereby, fully support amendment 10.
Following my question to the First Minister on interest rate hedging products last week, I attended a superb meeting, which Elin Jones AM organised, with SMEs affected by the mis-selling of these products. The stories of businesses, livelihoods and homes lost were harrowing. Bully-Banks estimates that the mis-selling of these products has cost our SMEs over 400,000 jobs, impacting disproportionately on rural areas, which are more reliant on SMEs for employment.
If we are to get a grip on this issue, the Welsh Government needs to pre-empt the economic recovery and put in place the right mechanisms for growth now. With the new opportunities for investment and trade announced by the UK Government, we must maximise every opportunity to support communities, businesses and Wales.