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Welsh Development Agency (Financial Support Policy)

Volume 981: debated on Monday 17 March 1980

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13.

asked the Secretary of State for Wales what guidance he has given the Welsh Development Agency as regards withdrawing financial support from companies previously supported by it.

None, Sir. It is a matter for the agency's commercial judgment to decide when to invest in a company and when to take action to protect its existing investments.

Will the Minister tell the House when, during the past four months, a company in which the agency had a majority shareholding, has had a receiver called in, following which an associated company, on the strength of its commercial prospects, has been able to attract substantial financial support from agencies outside the United Kingdom with a view to establishing a major manufacturing plant employing several hundreds of people in another country?

I think that that question would be properly directed to the Welsh Development Agency, but if the hon. Member tables a specific question I will see that he gets the information that he requires.

Will the Secretary of State clarify reports in Wales this morning that the WDA will not go ahead with 30 advance factories in Wales because it has not enough funds available? Will he confirm that he wrote to the Dyfed county council recently telling it that the whole programme of advance factories would be held back because of a lack of funds for this work?

I have not seen the report to which the hon. Member refers. There is a programme of small starter units going ahead under WDA control in his part of Wales. I confirm that that is not being held back. The remaining factory programme of the WDA is being concentrated in areas which have suffered from steel closures and the running down of the steel industry.

Will my right hon. Friend review the requirement of a 15 per cent. to 20 per cent. return on equity undertakings by the WDA, in order to stimulate further such investment in firms in Wales and thereby stimulate the economy?

I am not sure whether my hon. Friend is suggesting that the agency should look for a lower return than in the past. If so, I am not sure that I could go along with him. It ought to set its sights high, rather than low. To date, its overall return has not reached the target that has been set.