ÖPIK MEETS WITH SECRETARY OF STATE FOR WALES OVER MID-WALES ECONOMY

5.52.01pm GMT Thu 12th Feb 2009

Lembit Öpik, Liberal Democrat MP for Montgomeryshire, has met the Secretary of State for Wales to discuss job cuts, and problems nationwide concerning overdrafts.

In a high level meeting, Secretary of State Paul Murphy identified options available to Stadco in the light of over 100 potential job cuts. He suggested that Stadco explore both the ProAct and the ReAct schemes that outlined recently by the Wales Office for businesses in trouble.

The ProAct scheme will allow companies to provide additional training for employees. They would be put on short time working or made redundant, enabling employers to retain skilled workers and enhance skills ready for the upturn.

Also, the Working Capital Scheme has provided banks with guarantees covering half the risk on existing and new working capital portfolios. This should enable banks to maintain existing overdrafts instead of reducing them.

Local businessman Gareth Pugh who attended the meeting with the Secretary of State, explained the difficulties small business face with the banks.

Commenting on the meeting, Gareth said

"Many companies haven't asked for more from the banks, but at a time like this they don't want to have less.

"Local bank managers seem to have been instructed to reduce lending, and pull in overdrafts from existing customers. It looks like they aim to lend with tighter restrictions to make the banks more profitable.

"If that's the case, the banks are looking after themselves. They've panicked and have caused a lot of harm to businesses who thought the bank had the ultimate say-so. By contrast, the businesses that challenged the banks are still in negotiation.

"The Secretary of State of Wales quite categorically pointed out that the Government has put in place measures to help banks and yet the banks remain unwilling to use the help given to them to help out their existing customers."

Commenting on the meeting, Lembit said

"This is a message for the banks. I fully understand that they're under the pump, but to harm existing and viable businesses by reducing the overdraft facilities simply hurts good companies at a time when they need it least.

"I'm very encouraged that Secretary of State Paul Murphy has taken such a "hands on" approach to our problems in Montgomeryshire. I feel that the guidance he has given us, and hopefully to local companies as well, will make a real difference to the viability of firms which might otherwise go under. Some things are more important than Party politics, and that includes defending people's jobs."

Notes to Editors:

For more information on help available to small businesses please visit:

http://www.financewales.co.uk/

or

www.business-support-wales.gov.uk

Please find attached a photo of Lembit and Gareth with the Secretary of State.