Welsh Affairs

Part of Business of the House – in the House of Commons at 1:51 pm on 26th February 2009.

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Photo of Paul Murphy Paul Murphy The Secretary of State for Wales 1:51 pm, 26th February 2009

I am aware of that. A week or two ago, the hon. Gentleman and I met to discuss those issues with business people from Montgomeryshire. Unquestionably, banks are not doing what they should do—that is, lend to businesses. I am thinking particularly, of course, of viable businesses. We can understand a bank being reluctant to help out a business that is far too risky and has no future, but stories reaching me from all parts of Wales show that some banks are not lending as they ought to. There is a significant issue of delivery following announcements from the Government here and in Cardiff. I shall return to it in a few moments.

Figures show that the VAT reduction has already helped to bring inflation and prices down, putting more money into the pockets of Welsh families—about £275 a year for the average family—and assisting businesses. Our legislative programme for the fourth Session demonstrates our determination to equip people and businesses to deal with the economic challenges too. Taken together, the initiatives and the legislative programme represent decisive action. As the Prime Minister has said, we simply cannot walk by on the other side when decent, hard-working people are facing tough times. That is why it is important that today real help should go to our businesses, our trainers and those who face the possible repossession of their homes.

It is so important to stress that we in Wales have a unique opportunity. The Welsh Assembly Government are taking action—more than £1 billion is coming from Cardiff and going into businesses and helping families. That action and the measures that this Government have brought forward show that the way to tackle the problems is through the devolved Administration and the Government working together.

That has been seen in the all-Wales economic summits, which I attend with Rhodri Morgan and Ieuan Wyn Jones and which are leading the way in dealing with the global problems affecting Wales's economy. My hon. Friend the Under-Secretary of State and I have visited businesses right across Wales to listen to accounts of the impact that the recession is having. In addition, I sit on the National Economic Council, which means that I can put the Welsh view there and go back to Wales to discuss the important issues with colleagues.

The measures in the pre-Budget report, such as business rate exemptions on vacant business properties and additional time for firms facing cash-flow problems to pay their tax bills, came from the meeting of the first all-Wales economic summit in Cardiff some months ago. The request was made at the summit and the Governments in London and Cardiff acted. Some 2,600 businesses in Wales have been given extra time to pay tax; that amounts to about £38 million of deferred payments in Wales alone. In addition, we have taken a series of actions to unblock bank lending to small and medium-sized enterprises—the point that Lembit Öpik made—although I believe that more is still to be done on that. Nevertheless, figures show the effect that the global economic slowdown is having on our labour market. Every time a worker loses their job, it is a personal tragedy, and we are doing all that we can to support people through these tough times.

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