Will the Cabinet Secretary make a statement on how the Welsh Government intends to prevent job losses at Coilcolor in Newport? TAQ(5)0198(EI)

Yes. My officials have been in dialogue with the company since the flooding of the premises occurred. On 10 July, we were notified that the company intended to enter into administration, but we stand ready to help in whatever way we can.

Thank you for the answer, Minister, but I’m sure the Cabinet Secretary shares my concern about the situation at Coilcolor and the threat presented to the jobs of over 40 workers employed there. I understand this situation has arisen from a dispute between the Welsh Government and Coilcolor over the payment of compensation after the company premises were flooded in 2016. The managing director insists a compensation payment had been promised, but the Welsh Government denies this. Will the Cabinet Secretary personally intervene to save the jobs at Coilcolor, and will he agree to investigate this matter fully to see how this dispute could have arisen and make a statement as a matter of urgency, please?

Can I thank the Member for his question and his concern, which is shared by many other Members in this Chamber? Indeed, the local Member Jayne Bryant has discussed her concerns over the future of the company with me on numerous occasions and made very strong representations. Essentially, I think it would be inappropriate for me to comment or speculate over the viability of the company were the flood not to have occurred, but in terms of what happened with the flood, normally in this sort of instance an insurance company would pay out but then pursue the parties who are liable. In this case, Welsh Government as the landowner actually had the site licenced to Tai Tirion at the time of the flooding. In turn, the land was occupied by their contractors, Walters, who were remediating the site in preparation for a housing scheme. Now, as I say, normally the claim would be processed through an insurance company and they would then pursue us if we were liable. That has not happened. Officials have been in very close dialogue with the company, and I’ve been taking a very keen interest in this matter over many months. We helped to facilitate support through Finance Wales back in December 2016, enabling the company to continue to trade without major issues, whilst also pursuing their insurance claim.

I would reject any claim that a without-prejudice payment was ever promised by the Welsh Government. What did happen was that after the flooding a letter was received from Coilcolor’s solicitors relating to a claim for £600,000. The Welsh Government instructed external solicitors, who invited details of the claim, but the company has not progressed it. We did send a second letter in April and we received notification of another claim relating to a pay-out made to the landlord of the building amounting to £58,000, but the advice from our solicitor remains that we should not take any actions or make any payments relating to the claim or the property until we have had further details, including the full basis of both claims. That is both responsible and necessary. However, I am concerned about the future of the employees in the company, and we stand ready to help the bank and Grant Thornton in any way possible, should a new buyer come forward and take over the operation. We have tried-and-tested means of intervening when there are job losses. Again, we would deploy the sort of support that we’re planning on deploying if job losses occur at Tesco in Cardiff, for example.

Cabinet Secretary, I know that you and your officials have been in discussions with Coilcolor since the flood, and made available the support of Finance Wales and Business Wales. Will you continue to do all that you can to examine if there is a way in which the company and staff can be supported at this very difficult time?

Yes, absolutely. I give my undertaking to ensure that officials continue to work with the company, with the bank and with Grant Thornton to do all that we can to save the company and also the jobs that are taken by very skilled people—approximately 50 people—who are employed at the site. I should say, as well, that the support that we were able to assist with through Finance Wales was via their rescue and restructure fund, which essentially meant that because of state aid rules we could not apply additional funding on top of that. But we will continue to work with the company to try to secure a future for it and for the 50 plus workers based at the site.

This is very concerning news that a company with a good reputation that supplies multinational companies has had some very harsh things to say about Welsh Government. I’d be very interested to hear the Cabinet Secretary’s view on why he believes the company has got some very serious things to say about the way the Welsh Government has handled this situation. Obviously, 50 families stand to be devastated if the company were to wind down. We understand that there’s been an increase in enquiries from companies in terms of being supplied by Coilcolor, despite the fact that they haven’t got the means to purchase stock at the moment. On the point of the without-prejudice payments, can he clarify again that there wasn’t such an offer made? And, perhaps, can he shed some light on what offer was made and where the misunderstanding may have arisen from? I understand that the flooding came from land that was owned by the Welsh Government, adjacent to the company. Does he believe that the Welsh Government’s got a bit more of an obligation, therefore, to intervene rather than to just point them in the direction of Finance Wales?

On the broader point, particularly when we think of Wales’s reputation as a business-friendly country, what does it say that the best we can offer Welsh small and medium-sized enterprises is a Finance Wales loan with an 11 per cent interest rate, when many people are wondering how large multinationals seem to get a better deal?

I’d reject many of the claims made by the Member. The rescue and restructure fund that was utilised in this instance did carry an interest rate of 11 per cent, but that fund was required because there was limited scope elsewhere to draw down the necessary resources to keep the company afloat during that difficult time. No without-prejudice—and I’ll state it again: no without-prejudice payment was ever promised. However, what Welsh Government was able to do was act as a broker, ensuring that support from Finance Wales was forthcoming. We examined every other option for supporting the company with financial resource but, as I have just said to Jayne Bryant, that was not possible because further support would have contravened state aid.

We work very closely with the business community to find ways of overcoming problems such as this, but I go back to the point that I made to Mohammad Asghar: it would be inappropriate for me to speculate about the extent to which the flooding event led to the company entering into the sort of problems that it has encountered. In terms of the flooding, I’ve already given details of the occupiers of the land, and the normal process that would be followed by the insurance company, seeking compensation from the liable party—. That process has not been pursued. Instead, we received, as I’ve said to two Members now, a letter from the company’s solicitors calling on us to provide £600,000. It would not be appropriate for us to progress that without the details that are required. We have not yet had the response that we have asked for, in spite of writing on two occasions.

Thirdly, I think it’s absolutely vital that we view the continued employment of the 50 workers at the site as our priority right now. For that reason, officials are continuing to engage with the company to identify means of keeping the site in operation. The Member is right: it provides an incredibly valuable service and it has many suppliers who do require the company to continue operating. I am confident that the bank and Grant Thornton are doing all they can to identify a buyer. Certainly, we stand ready to help in any way we possibly can.

Thank you, Cabinet Secretary.