4. Will the Minister make a statement on financial returns accruing from the Wales Development Bank? OAQ53405

Yes. The Development Bank of Wales manages a number of funds for the Welsh Government, which it invests in Welsh businesses to enable them to grow and to prosper. The returns received from these investments are either recycled within the fund for future investments or repaid back to Welsh Government.

We were delighted on the Economy, Infrastructure and Skills Committee to conduct our annual scrutiny of the Wales development bank last week. Last year, I hosted a lunch at the Assembly for Giles Thorley and a number of his senior team. I've been very impressed with their capability, and optimistic as to what the bank is going to achieve, building on Finance Wales. The Minister set out the two possible things that might happen if the bank, as we hope, makes more money from interest and equity investments than it may lose on those loans where there's a degree of risk, and not all will succeed. However, what is the Government's policy as to what proportion of those moneys are going to stay with the bank versus come back to Government to fund other priorities, and will that depend on how successful the bank is?  

Can I thank the Member for his question, and also say how grateful I am for his support of the development bank? As an opposition Member, it would be very easy—and I'm sure it's very tempting at times—for him to be critical, simply because he's an opposition Member, of anything that the Welsh Government does. I do recognise his support for the good work of the development bank, and I look forward to seeing the EIS committee carry out a thorough investigation or inquiry into the work of the development bank and the benefits that have been accrued so far.

The Member raises a very important point about how we use money, what proportion is recycled and what proportion is returned to the Welsh Government. And when an individual fund reaches the end of its life, any realised or accrued capital is generally dealt with in one of two ways. First of all, we've got financial transactions capital. That has to be paid back to central finance and, ultimately, back to Her Majesty's Treasury, and repayment schedules are agreed with the Development Bank of Wales to this effect. However, on the other hand, we have core capital that can be recycled within the fund on an evergreen basis, and it's our desire to see as much of that recycled as possible. But it should be stated—and this may sound obvious, but it should be restated—that there are rules relating to the use of returns from EU funding, which state that it must be used for similar purposes as originally intended. So, again, it can be continued to be used for ongoing investment in small and medium-sized enterprises. 

Can the Minister state how much of the investment in the Welsh development bank comes form transaction capital, Europe, borrowing on the open market and other sources, including recycling money?  

Well, since the launch in October 2017, the Member will be aware of various new funds that have been announced. There was the Wales flexible investment fund, which is a massive boost—a £130 million boost. Then, in May, I launched Angels Invest Wales, which is the Development Bank of Wales's new business angel network. And alongside this, I launched the new £8 million Wales angel co-investment fund. I think the point that the Member raises about the proportion of money that is raised through financial transaction capital can be answered. I will write to the Member and provide a copy of the statement to all Members in the Chamber.FootnoteLink  

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