MINISTER ACCEPTS ÖPIK INVITE TO HOLD MONTGOMERYSHIRE BANK LENDING SUMMIT (Montgomeryshire Liberal Democrats)

MINISTER ACCEPTS ÖPIK INVITE TO HOLD MONTGOMERYSHIRE BANK LENDING SUMMIT

January 29, 2009 12:29 PM

Lembit Öpik, Liberal Democrat MP for Montgomeryshire, yesterday secured a commitment from Under Secretary of State for Wales Wayne David MP to meet with Montgomeryshire businesses to discuss the suffocating lending squeeze being felt by local companies.

Speaking in the House of Commons, he said:

"The Minister knows Montgomeryshire has seen shops like Woolworth's close and businesses like Stadco preparing to lay off scores of staff. Indeed Job losses have risen by more than 60% in the last year.

"While the new assistance package is welcome, is he aware banks are putting such a tight squeeze on local firms that this threatens their viability?

"Will he meet local businesses in Montgomeryshire to hear the effect of reduced bank lending, as such dialogue helps both firms and the Government?"

Responding to Lembit, the Minister Wayne David MP agreed to visit Montgomeryshire at a date agreed between them. He also expressed real concern over the planned job losses at the firm Stadco and also that High Street Banks are turning down local businesses looking for loans.

Commenting on the exchange, Lembit said:

"I am extremely pleased that this Government is taking seriously the problems facing local firms in Montgomeryshire. He acknowledged the large job losses and demise of shops and businesses in Wales and the effect bank lending is having on this.

"We must not allow the economic downturn to destroy rural communities so reliant on small businesses. I'm arranging details of the public meeting with the Minister and will keep everyone posted. We can also cover the new assistance package as well as Government plans to make banks help businesses as much as possible. This is a very important meeting for Montgomeryshire, and to inform Government of the real rural economic situation."

Ends/diwedd

Notes to Editor:

Full text of Lembit's question and the Minister's Answer:

1. Lembit Öpik (Montgomeryshire) (LD): What assessment he has made of the contribution of the rural economy to economic performance in Wales; and if he will make a statement. [250633]

The Parliamentary Under-Secretary of State for Wales (Mr. Wayne David): A strong rural economy is vital for Wales as a whole, particularly during the present challenging economic conditions. We and the Welsh Assembly Government are committed to supporting rural businesses with the range of packages that were announced recently, which are designed to help all businesses.

Lembit Öpik: As the Minister knows, Montgomeryshire has seen shops such as Woolworth's closing and businesses such as Stadco preparing to lay off scores of staff. Indeed, the number of job losses has risen by more than 60 per cent. in the last year. While the new assistance package is welcome, is the Minister aware that banks are putting such a tight squeeze on local firms that their viability is threatened? Will he meet local business representatives in Montgomeryshire to hear about the effect of reduced bank lending? Such a dialogue would undoubtedly help firms, and also the Government.

Mr. David: We are, of course, aware of the situation in mid-Wales, and in the hon. Gentleman's constituency in particular. We are especially concerned about what has been happening to Stadco, where the loss of 100 jobs was announced recently. The important point is that we are essentially on the side of people who are suffering in this way, and totally understand their predicament. As Members will know, the proposals announced recently by the Government are designed to promote cash flow and to help small and medium-sized enterprises. In Wales in particular, high street banks have been turning down applications for loans, and Finance Wales has stepped in successfully to help. We are certainly aware of the problems, and we want to see the position improve.

I should be delighted to visit the hon. Gentleman's constituency. Perhaps we can discuss an appropriate time later.

Montgomeryshire Liberal Democrats

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