[R] signifies the Member has declared an interest. [W] signifies that the question was tabled in Welsh.

I have accepted four urgent questions under Standing Order 12.66 and I call on Angela Burns to ask the first urgent question.

Will the Minister explain why Main Port Engineering in Pembrokeshire went into administration despite having received a £650,000 grant from the Welsh Government?EAQ(5)0058(EI)

Main Port Engineering was awarded £650,000 from the Welsh economic growth fund in March 2015. The funding was granted to assist with a capital investment of £1.627 million for a new purpose-built facility in the Haven Waterway enterprise zone. The terms and conditions linked to this support were fully met at the time by the company. The company entered administration following a winding-up order by Her Majesty’s Revenue and Customs, and were affected, no doubt, by the Murco oil refinery closure in 2014, which was one of their main customers.

Thank you very much for that, Cabinet Secretary, because it is a sad day for a very well-established business with an excellent reputation. Twenty-six years and 165 employees, the loss of the company carries not just financial consequences, but the human cost is tangible. Now, I’ve spoken to the founder and managing director, I’ve spoken to operational staff and to workers in the field, and the sense of shock and disbelief is overwhelming.

I do understand that there is much we cannot discuss, as the administrator is still evaluating the situation, and the questions I raise with you I’ve already raised in part with them. However, I would like your thoughts and commitment to ensuring the following: 77 employees work on a maintenance contract at the local refinery. This contract is going to be taken over by another established maintenance business. Will you ensure that support is given to both Main Port and the new company, so that those 77 employees can be transferred with the full protection of TUPE legislation, quickly and efficiently, because this will secure not just their jobs but also continuity of service for the customer and enable another local company to develop their business? The same goes for an additional five members of Main Port who are transferring to a second company for a second local maintenance contract.

Given the impact of the closure of Murco, and I think it’s very clear that, as one of their major customers, Murco going into liquidation or closing down was a real body blow. Are you able to offer the same level of additional help and support that Murco employees received to the remaining 83 Main Port staff?

I do wonder, Cabinet Secretary, if you are able to examine the role that Her Majesty’s Revenue and Customs played in this. The company are clear that they had no notice as to the winding-up order issued by HMRC. There was an ongoing dispute that appears to have been over a number of years, and, although the bulk of the debt was relatively recent, the company were in the process of putting together an official payment plan. And, to be frank, this action: nobody is a winner. HMRC aren’t going to get their money either. Finally, will you please examine whether the long-term financial viability of the company was properly examined by Welsh Government officials before the £650,000 grant was made available? I do acknowledge that business can be a risky enterprise, but, given the size of the debt and the loss of their major customer prior to that grant being awarded, I would wish the public to be satisfied that due diligence was undertaken rigorously. Thank you.

I’d like to thank the Member for her questions, and share the concern that is being expressed insofar as the future of the employees of the company is concerned. MPE employed 157 people in total, and, unfortunately, 69 of those have been made redundant. The Member is right that a significant number—I believe it to be 84—are to be retained at the Valero refinery to provide continuity of service. That includes, I believe, staff who are being retained at the main office, which could contribute to the 77, bringing the total to the 84 that I’ve been told is the case.

PricewaterhouseCoopers, as the Member is aware, has been appointed to try and seek buyers for the site assets, buildings and, importantly, linked opportunities for the affected workforce. A session with a number of organisations is being arranged for this Friday at 11.00 a.m. I’d urge the Member to advertise that fact to affected workers. That session will be attended by Jobcentre Plus, the careers advisory service, Business Wales and other local support services, but I’ve instructed my officials to do all within our power to assist those workers affected by this very unfortunate occurrence.

In terms of the history of the company, the Member has already highlighted the significant success of the company over many years. However, in recent times—. I am asking the same question of HMRC as the Member is, because, in recent times, it would appear that the company was in healthy order. I understand that in 2015 the company reported a profit, compared to a relatively small loss in 2014. So, I think it’s absolutely essential that we investigate the tax bill and why it was not obviously allowed for within the accounts. We carried out our regular due diligence. It was our understanding, based on the performance of the company, that the company was in good health, and, I think, given what the Member has said about the contact she has made with a number of people, it would appear to her and to others that the company was performing well. So, this came as a shock to many.

In terms of our support for companies such as MPE, in total only 4.9 per cent of the 1,110 companies that we’ve supported in the last four years—five years, rather—have actually gone into recovery. The proportion is far less than the total number of business failures or enterprise deaths, which, in Wales, was 9.2 per cent, which, in turn, compares favourably with the UK rate of 9.6 per cent. That said, I’m keen to make sure that we utilise all of the support that’s available from Welsh Government, and indeed from the local authority, and so I’ve asked for a meeting with the chair of the enterprise zone and the leader of the council to discuss what we can do collectively to ensure that everybody affected by this decision is supported in the right way to get back into work, if they lose their jobs, and to stay in work if they’ve been able to be retained, but, equally, what we can do in the years to come to make sure that that specific area of Wales gets the support that it needs to thrive as a strong economy.

Cabinet Secretary, I thank you for your written statement that you issued yesterday afternoon. And, as everybody here will agree, it is hugely disappointing news for the area in which I represent and live. It is a devastating blow, particularly for those families, and it's those families and those individuals who will be facing a very uncertain future that I really want to focus on here today. So, I was really encouraged when I read earlier today that you have already arranged, and you've just mentioned it, a drop-in session with Jobcentre Plus and other agencies for 11 o'clock on Friday. I think we need to stay focused that this was particularly highly skilled and highly paid work, and so the loss of that income to the local economy will be felt almost immediately, and how we can work with anybody else to ensure the viability of their businesses if they were equally dependent on these workers for their own income.

But I want to move on and think about the future, and I will ask you, First—Cabinet Secretary; nearly did it again—to look at the wider issues about the future of that area and, of course, the Haven enterprise zone and any strategy that we will need to put in place to support the well-established west Wales energy industry, because it is well-established and it is also vital to the region. But, as I say, the immediate thoughts and the immediate action have to go towards those who have now an uncertain future.

I'd like to thank the Member for her comments and, again, I share her concerns for those families who are facing considerable anxiety at this moment in time. I can say that my officials are in close dialogue with PwC and are aware that there is some developing interest in the Main Port business and, potentially, the remaining employees. So, all is not yet lost, and we will do everything we can to ensure that those people who have been working at the business have employment, either there or within the local area. I think it's essential that the enterprise zone continues to perform successfully. It’s created and secured hundreds of jobs since it was formed, but I recognise that, in the context of a post-Brexit Britain, we do need a new economic strategy for Wales, and I very much hope that, with a focus on place-based economic development, the enterprise zone area of the part of Wales that my friend so proudly represents will have a very, very strong future.

I would like to, obviously, associate myself with the comments regarding the loss of jobs and the effect on families and just ask you, Cabinet Secretary, whether the scale of loss here, though it's, relatively speaking—you know, in a national sense, it's not huge, but, of course, in a very local sense, it's impactful, and it's particularly impactful as regards the relationship with the energy industry, the Haven Waterway enterprise zone, and everyone who's interested in developing around Milford Haven itself. So, can you confirm that this is of a nature that the Government will be doing more than simply, quite rightly, bringing together the day that you've announced, and possibly even triggering a ReAct kind of approach here, because, in my mind, it's of that kind of size?

Could you say just a little more about the due diligence that the Government undertakes when it decides to invest in a company like this, or, rather, give a grant to a company like this? As has already been pointed out, the decision was taken after it lost its main customer with the closure of Murco. What, therefore—? Are you only reliant on the published accounts of a company? Surely, you talk to potential creditors like the local authority, like HMRC, to try and get a sense of what the company's future looks like, and I'd like to understand that a little more, as to why the decision was made.

The final question is the capital investment. This was part of a £1.8 million manufacturing investment, as I understand it. What was the nature of that capital investment, and does the Welsh Government have any clawback if that capital investment is either sold on or now utilised by a new company for economic purposes?

Can I thank the Member for his questions? In terms of the clawback, it will depend on where we stand vis-à-vis other debtors. So, we are trying to assess exactly where we are positioned in that regard.

Or HMRC takes it all.

Or HMRC takes it all.

I think he’s absolutely right in that, relatively speaking, this is significant, the Haven area, and therefore, and especially given what my colleague Joyce Watson said about the value of employment at the site, it’s absolutely essential that we look at a bespoke response to this. For that reason, I am going to be meeting with the chair of the enterprise zone and the leader of the council. It’s essential that we all co-ordinate our response to this and all collectively explore opportunities for employment for those affected.

In terms of the due diligence, well, undertaking due diligence is an important part of our process, and we continue to improve our approach and, indeed, learn lessons from individual cases. The Member is right to state that the decision was taken after 2014. However, the books showed that the company was in good health, and indeed the results were improving. However, I have asked my officials to report on whether a deep dive of the books was conducted. It is apparent and obvious that this has come as a major surprise to many people, and so I want to be reassured that the due diligence that was conducted was as thorough as I would wish it to be.

Finally, Neil Hamilton.

Well, as a fellow regional Member for this area, I’d like to express my personal sympathy with those who are now living with a massive uncertainty about their futures. Simon Thomas has just asked, I think, a very pertinent question, and I’m sure that the Public Accounts Committee will want to look at this grant in due course—not in any spirit of animosity towards the Cabinet Secretary, but just because we do need to ensure that due diligence has properly been undertaken here.

I’m very concerned about the role of the Inland Revenue in this area. Does the Cabinet Secretary know how big the current tax debt is that they’re owed by the company, on the basis of which it has been put into administration? Administration may not, of course, be the end of the road; there may be a viable business, or several viable businesses, that can be created out of the assets. But it’s very disappointing if a public body like HMRC has put this company into administration for a relatively small sum in comparison with what might be realised even from a fire sale of the assets. I don’t know whether the Cabinet Secretary would be able to put it into perspective for us so that we can see whether the Revenue’s decision prima facie is reasonable or not.

The Inland Revenue is no longer—the HMRC is no longer—a preferred creditor, as it used to be, so it may not be that they will scoop the pool in an administration or ultimate liquidation of the company. It would be grossly irresponsible, I think, of HMRC to have destroyed a business if it proves that a very small sum is going to be recovered. After all, if it is the case, as the Cabinet Secretary has said, that it looked as though the company was improving its performance and it was viable but for the debts that were in existence, then it would be a very short-term-ist view that the tax authorities would have, and it would be seen as an act of sabotage as well as betrayal of those who currently either have lost their jobs or have that prospect.

I thank Neil Hamilton for his questions. As I said to the local Member, the questions asked of HMRC are those that I have already raised. I wouldn’t, however, wish to reach a conclusion or to judge whether HMRC have behaved in a responsible way, and whether the action taken by HMRC was proportionate to the level of debt. I would prefer to have all of the evidence and all of the details to hand before I make judgment. However, I would like to say that HMRC needs to be more responsible in terms of the approach it takes to employers within Wales. Many employers are providing essential work in very challenging areas or in very deprived communities, and the decisions reached by HMRC should not just be on the basis of how much debt is outstanding, but equally what the potential of the company is to repay that debt, and the impact that closure would have on the community. Responsible behaviour by HMRC is absolutely essential.

I thank the Cabinet Secretary.