The Finance Wales farce continues

The welsh media duly reported on the 2% reduction in Finance Wales loans to Small and Medium Enterprises (SMEs) in Enterprise Zones as part of the Welsh Government’s Enterprise Zone announcement today, but while it sounds superficially good as the Western Mail reported ‘Its (Finance Wales) interest rates range from 7% to 12% which is higher than rates being offered by high street lenders.’

Now Finance Wales and Welsh Ministers have always claimed when challenged over the years that those high rates are to do with the fact the money comes from the EU’s Jeremie Fund and are subject to EU rules, yet today Carwyn Jones finds room for manoeuvre – how convenient!    

The sudden about turn isn’t the only question arising from the announcement the other is why restrict the rate cut to only enterprise zones.

Surely all SME’s should be benefitting from cheaper loans especially with the banks not lending as much the continually high unemployment rate and there’s the small matter of SME’s making up 95% of the welsh economy, access to finance to create jobs and wealth should be more than a sound bite on days like today.

But the last word goes to FSB Welsh Policy Unit chair Janet Jones who sums up the about turn well she said: "The announcement of a 2% cut in rates from Finance Wales for businesses in Welsh enterprise zones is welcome, but rather perplexing.

"The Welsh government's own report into access to finance by Professor Dylan Jones-Evans noted that Finance Wales' interest rates were often well above their regulatory requirements.

"FSB Wales agrees with that assessment, and this announcement suggests that there is more flexibility in Finance Wales' setting of its interest rates than was previously stated.

"In the light of this announcement we would call for Finance Wales to re-examine its rates as it appears that state aid rules do not require rates to be as high as they are at present," she added.

I suspect this isn’t the last we’ve heard of Finance Wales or it’s loans and interest rates and that’s to be welcomed, but it highlights yet another pot of European money that has been misused by mainly Welsh Labour Government's since devolution began and yet another farce that no one will be held to account for.   

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