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| Version 1 | Version 2 |
|---|---|
| State-owned commercial bank for Wales idea investigated | State-owned commercial bank for Wales idea investigated |
| (about 1 hour later) | |
| Economy Minister Edwina Hart has approved plans to investigate the possibility of creating a new state-owned commercial bank in Wales. | |
| The Development Bank for Wales would act as a one-stop shop offering financial support for companies. | The Development Bank for Wales would act as a one-stop shop offering financial support for companies. |
| It was proposed in a review last year by the economist Dylan Jones-Evans. | It was proposed in a review last year by the economist Dylan Jones-Evans. |
| It would take over part or all of the Welsh government's investment bank Finance Wales, which he said was "not fit for purpose". | |
| Finance Wales was set up in 2001 to lend money to or buy shares in Welsh companies. | Finance Wales was set up in 2001 to lend money to or buy shares in Welsh companies. |
| But last year's review said it was too focused on generating profits rather than helping businesses and developing the Welsh economy. | But last year's review said it was too focused on generating profits rather than helping businesses and developing the Welsh economy. |
| The report said there was confusion over the bank's exact role and concerns about the cost of loans to small firms. | The report said there was confusion over the bank's exact role and concerns about the cost of loans to small firms. |
| Prof Jones-Evans, an academic at the University of the West of England, said Finance Wales was offering higher rates of interest on borrowing than it needed to under EU state aid guidelines. | Prof Jones-Evans, an academic at the University of the West of England, said Finance Wales was offering higher rates of interest on borrowing than it needed to under EU state aid guidelines. |
| The plans to consider creating the new bank were revealed on the Welsh government website. | The plans to consider creating the new bank were revealed on the Welsh government website. |
| A line in a section on cabinet decisions said: "The minister for economy, science and transport is being asked to approve work to explore the idea of a Development Bank for Wales." | A line in a section on cabinet decisions said: "The minister for economy, science and transport is being asked to approve work to explore the idea of a Development Bank for Wales." |
| The Federation of Small Businesses welcomed the announcement. | |
| Iestyn Davies from FSB Wales said Prof Jones-Evans report had "shone a stark light on Finance Wales, and the inflated interest rates that it has been charging our members". | |
| "We are very much in favour of reform to Finance Wales to ensure that it provides affordable loans to small business and is properly accountable with a far higher degree of transparency and opportunity for scrutiny than exists at present. | |
| "We believe that the notion of a Development Bank of Wales is worthy of serious consideration, and we welcome a review into how such a bank would operate in practice." | |
| Plaid Cymru's economy spokesman Rhun ap Iorwerth claimed ministers were adopting his party's proposals. | |
| "Access to finance has consistently been cited as a barrier to growth for many SMEs (small to medium size enterprises) and much more needs to be done to tackle this problem. | |
| "That's why Plaid Cymru proposed to establish a new body, owned by the public but at arm's length from government to lend money to small businesses at competitive rates and to offer finance services. | |
| "A Welsh public bank is the boost that Welsh businesses need and Plaid Cymru will continue to make the case for it." | |
| 'Shortcomings' | |
| But the Liberal Democrats said it was important that Mrs Hart "keeps her options open". | |
| Their economy spokeswoman Eluned Parrott said: "The Welsh Labour government's record of acting as financier for businesses is mixed at best. | |
| "The recent Access to Finance Review identified shortcomings in the government-backed Finance Wales. | |
| "Having spoken to many businesses across Wales, Finance Wales seems to be offering higher interest rates and less favourable terms compared to commercial banks - this is not a way of encouraging businesses in Wales to grow." | |
| Ministers have been asked to comment. |