If those Members leaving the Chamber would do so quietly, proceedings will continue. The next item on our agenda is the short debate. I call on Neil McEvoy to speak on the topic that he has chosen. Neil McEvoy.

Diolch, Lywydd. I’ll just wait for colleagues to clear the Chamber.

You do need to leave the Chamber. Proceedings are ongoing. This is not a time for chit-chat. Carry on.

Thanks. Okay. Please feel free to interject and contribute if you wish. The idea is to float this as something that we want to do in the not-too-distant future in this city. So, I’ve called a debate to see whether or not, here in the National Assembly for Wales, we can start to advance the idea of a Welsh stock exchange. I’m really pleased to see that Plaid Cymru’s policy of establishing a Welsh development bank, a policy we’ve had for a number of years, is about to happen, which is good. With tax powers being devolved and the Welsh Revenue Authority being set up, Wales is finally taking steps towards financial sovereignty, but one thing we don’t have is a stock exchange.

Stock exchanges play a different role to a development bank. Whereas a development bank is bound by strict due diligence and means businesses take on new debts, a stock exchange allows investors to take shares in a company, so they can complement each other very well.

Before I get into that, maybe I should clarify: rather than saying ‘still not having’ a stock exchange, it’s more accurate to say that we no longer have a stock exchange. The Coal Exchange, just minutes away from the Assembly, which, thankfully, is being renovated now, or saved from collapse, and is being redeveloped as a hotel, was a market floor for trading coal in Wales. As many of us know, the coal exchange was where the world’s first £1 million cheque was signed. So, Wales does have some pedigree here.

Stock exchanges are not like other businesses. The performance of national stock exchanges is often taken as a proxy for the health of a nation’s economy, or at least investor enthusiasm for the country’s prospects. National exchanges also play an underappreciated policy role in deciding and listing compliance standards for companies that wish to go public. On top of all that, there’s a nebulous but real sense that national pride is somehow tied into stock exchanges. I do think that it would contribute to pride in Wales if we could get one up and running.

Shares are often seen as complicated things, but the principle behind them is simple and straightforward. Shares, also known as equities, provide you with part ownership of a company, so when you invest in shares, you’re buying a share of that business. Companies issue shares to raise money and investors buy shares in a business because they believe the company will do well and they want a share in its success.

I want to see more Welsh people share in the success of Welsh companies and a stock exchange would give them the opportunity to do that. Owning shares in a company means that you’re entitled to have a say in its affairs. All public limited companies have annual meetings where shareholders vote on matters such as the company’s accounts, director appointments, pay packages and so on, and this is something that I want to see more of in Wales. I think it could help us to become a more prosperous and equal country. There are many examples around the world of smaller countries having their own exchanges: Gibraltar, Armenia, Cyprus and Iceland. The Sarajevo stock exchange was set up in 2001 and by 2005, market capitalisation had risen by around 20 times to €3.3 billion. The average daily trading volumes hit €1.5 million by 2005. This could be Wales. There are 25 Welsh companies currently listed on the London stock exchange, so that shows the potential that we have here.

It’s widely acknowledged that an exchange can help increase economic activity and drive economic growth. It can be a boost to business, and simply put, stock exchanges give companies the ability to raise capital and develop their businesses. The ability to list shares on a stock exchange and thereby raise money from investors, old and new, is an important boost to economic activity.

Access to capital makes it easier for companies to expand their operations and listing might one day draw the attention of mutual funds—institutional traders and so on—to the potential of a Welsh business. They’re also a shop window; anyone in the world could invest in a Welsh exchange. Establishing one has the potential of opening up the Welsh economy to greater international investment, allowing Welsh businesses and companies to benefit from global investors. This would take time, but it could also serve to enhance a company’s credibility and public profile. Listing on the stock market can be a form of indirect advertising for a company.

The Deputy Presiding Officer took the Chair.

I suppose, really, the elephant in the room is that stock exchanges are typically private companies. There are some examples of publicly owned stock exchanges—the Shenzhen and Shanghai stock exchanges are really quasi-state institutions, as far as they were created by Government bodies in China and have leading personnel directly appointed by the China Securities Regulatory Commission.

Another example is the Tashkent republican stock exchange in Uzbekistan, which was established in 1994, three years after the collapse of the Soviet Union, and is mainly state owned, but has a form of a public corporation. But these aren’t models that I’d propose for Wales. It’s possible that the Welsh Government could play a role in a Welsh stock exchange, but the financial markets are a reserved matter, and so the regulation of listing and public offerings, securities and investments are beyond the competence of the Welsh Government. So, what we really need to think about is how we can give incentives and encourage a private company to set up a stock exchange in Wales. This could be through grants, through conferences, offices available in Cardiff or elsewhere.

I’m not going to speak any longer at this point. I would hope that others have bought into these ideas, and if anybody does want to contribute, I’d be very interested to hear what you’ve got to say. Thank you. Diolch.

Thank you very much. I call on the Cabinet Secretary for Economy and Infrastructure to reply to the debate. Ken Skates.

Thank you, Deputy Presiding Officer, and can I start by welcoming this debate today on the establishment of a stock exchange for Wales? I’ve been very interested to learn from Neil McEvoy his views and his proposals for a Welsh stock exchange. This is a valuable debate, even though it’s not a new proposition. It is a suggestion that has been considered by previous Welsh Government administrations, as I’m sure the Member is aware.

In January 2010, a report on a Welsh stock exchange by Robert Huggins and Daniel Prokop was published, and that report, which was based on a sample of 1,500 companies, of which there were 169 responses, suggested that 36 per cent expressed some interest in listing on a Wales stock exchange. Delving a little more into the data, it was found that 8 per cent had considered flotation in the previous five years, 19 per cent would consider floating in the next five years, and a further 13 per cent in the 10 years after that. Clearly, it demonstrated some appetite and interest for a stock exchange in Wales, but it was concluded by that Government that the costs of establishing a stock exchange could not be justified. This is because the cost of establishing a stock exchange can run into many millions of pounds due to the significant set-up costs, including, of course, recruitment, staff training, IT systems and so forth.

In 2008, the Welsh Government investigated a number of opportunities to set up a stock market in Wales but, again, neither project progressed due to the lack of demand to support the costs. So, it’s not clear, still, whether there is a strong enough case to set up a regional stock market in Wales. One of the main rationales for setting up a stock exchange would be, as the Member has identified, to fill a gap in funding for businesses and provide an opportunity for companies to raise capital. Now, whilst we do, of course, recognise that access to finance continues to be a concern for businesses in Wales, there’s already a range of financial support available in Wales and it’s not clear what gap or what gaps would be filled by a regional stock exchange.

Supporting businesses in Wales is vital in creating jobs, driving economic growth, increasing productivity and so forth, and the success of business is critical in the growth of the economy right across communities in Wales. Improving access to finance has been a priority, therefore, for Government for many years, over which time we’ve introduced a range of funds and products. As Members are aware, we are continuing to progress the manifesto commitment to the establishment of a development bank of Wales, and it’s clear that growing businesses need access to growth capital. The development bank will help businesses find the right finance partner to leverage in private finance with its own gap finance when necessary. It’ll have the objective of providing greater levels of funding to SMEs, whilst at the same time improving the integration of the provision and advice and support to businesses by working more closely with Business Wales.

There are a couple more examples of the steps we’ve taken to support businesses financially immediately after the EU referendum vote. Of course, we launched the Business Wales confidence plan, which contained a series of actions that we are now delivering, and all are aimed at promoting business confidence and activity across the country. The interventions included the announcement of a new growth and prosperity fund, and our repayable fund for SMEs, so that Wales remains an attractive place for businesses to invest. Our Business Wales service was, of course, aligned, again, in January of last year, to make it easier for Welsh businesses and aspiring entrepreneurs to access the information, advice and support that they need to start up and grow their businesses.

In order to make a case for a Welsh stock exchange, we therefore need to understand clearly why Welsh firms are unable or, possibly, unwilling to access existing funding sources and stock exchanges. As I said at the beginning, this issue has been visited before, and, in the past, it was concluded that the research did not provide a strong enough argument for setting up a regional stock market. There’s no clear evidence that smaller, regional stock markets are particularly successful when in competition with larger markets and alternative funding sources, but, of course, I remain open to the idea of a stock exchange if demand for such a service were to increase. Currently, if there are barriers to accessing existing stock markets for Welsh firms, then, perhaps, an alternative solution could be to work on reducing such barriers, rather than attempting to set up a competitor.

But if there is a case for a stock market in Wales, I believe that the private sector should lead. It’s not clear what role the public sector could or even should play in private equity markets, but I can assure Members that, as a pro-business Government, our priority remains to deliver on a range of actions to help new and existing companies to develop, grow and prosper.

Thank you very much. That brings today’s proceedings to a close. Thank you.

The meeting ended at 18:06.