We now move on to item 4, a statement by the Minister for Economy, Development Bank of Wales—investing with ambition. I call the Minister, Vaughan Gething.

Thank you, acting Presiding Officer. I know that businesses and workers are grappling with very real trauma all over again. From the many discussions that I have had with businesses in recent weeks, I recognise the enormous difficulties that they face. The Welsh Government is in no doubt about the gravity of the situation. Our economy is more reliant upon small businesses, so the risks that they face will of course hit our communities disproportionately. Many small businesses are the lifeblood of our communities and act as a meeting place, forming a part of the character of neighbourhoods across Wales. In the devolution era, I am proud that we have worked together to create support that is responsive to small and medium-sized businesses.

I know that the Development Bank is taking a proactive role in facilitating help for businesses. That came across loud and clear in our recent economic summit. There are of course differing views on how we go about securing a stronger Welsh economy in the short term and long term, but all of us want to foster an environment where we are more resilient. For me, that means an economy where people have the skills and the protections that offer security through the tough times ahead.

Now, Wales possesses natural resilience. Welsh businesses have stepped up and developed a remarkable capacity to adapt to the toughest of challenges. It’s this spirit that has kept so many businesses afloat during the recent uncertainties. In stark contrast with the UK Government, Wales has a stable, mature Government and a network of social partners that help us to make the right calls. The summit earlier this month was a prime example of team Wales working together to quantify problems and to propose solutions.

I will be meeting key stakeholders once more in early November to take their feedback on the UK Government’s attempts to stabilise the economy following the Halloween budget. Hopefully, we can then assess with more certainty the range of support required here in Wales and the practical levers available to us if the UK Government goes ahead and further cuts the Welsh Government budget.

But, today, I want to mark the fifth anniversary of the Development Bank of Wales, the UK’s first regional development bank, and to speak to my ambitions for its future. The development bank has grown to manage funds in the order of £2 billion, and in so doing has become a key part of the economic development and finance ecosystem here in Wales. The bank plays a pivotal role in financing businesses who have sound business plans but struggle to access finance from the market.  It does this by working hand in glove alongside the advice and support provided by Business Wales and through very close ties with mainstream banks and other co-investors, where it often forms only part of the total investment package. By addressing market gaps, the bank allows businesses to access the finance that they need. Over its first five years, the bank has exceeded investment targets, delivering an economic impact of £1.2 billion. Overall debt and equity investment in 2021-22 reached £110 million against a target, set in 2017, to reach £80 million by that year.

As a result of the UK Government taking direct control over the promised replacement for EU-funded programmes, the funding landscape is now far more complex than it was five years ago. The fact that we have our own now well-capitalised development bank here in Wales means we can maintain capability and stability to help drive economic development.

In planning for the next five years, we have taken into account this changing funding landscape, which includes new funds from the Cardiff capital region and the British Business Bank. Together, these funds have the potential to bring around £35 million a year of additional capital into Wales. That is a welcome development, which, when combined with the targeted annual investments by the development bank, which will rise above £120 million a year over the same period, will help to ensure that more businesses in Wales will have access to finance. The development bank will work closely with them to ensure that their investment from the Cardiff capital region and the British Business Bank is complementary and supports businesses across our country.

In our programme for government, we set out our ambition to increase the use of equity stakes in business support. Equity investment can support innovative businesses with growth potential, creating high-value jobs and driving exports. Equity stakes bring not only finance resource but also expertise to businesses, and can be a powerful catalyst for long-term economic growth.

To date, our development bank has invested £78 million of equity into Welsh businesses, which, alongside other investors, has helped them to raise over £200 million. I have tasked the development bank to pursue a total equity investment target of at least £100 million, which, alongside private sector co-investment, can deliver over £250 million of capital to innovative businesses—an injection of capital that will help to create new jobs, expand new growth sectors in our economy, and help position Wales for the future.

This new equity investment will be even more targeted, with other Welsh Government support, from business advice to innovation support, making it a complete and best-in-class offer. Going forward, businesses receiving equity investment will have unparalleled support through their investment journey. We believe that this will make a difference in supporting exciting new technology companies to take their product from early concept through to market, ambitious businesses to target high growth, and management teams wanting to buy existing businesses and keep them in Welsh ownership. And, in fact, only this lunchtime, before attending First Minister's questions, I attended an event chaired by Huw Irranca-Davies this lunchtime with the Centre for Local Economic Strategies. And for those who are interested, also in attendance was Huw Lewis, once of this parish, in his new role.

Of immediate concern to businesses are the challenges driven by increasing costs for materials, wages and, of course, energy. To help businesses, the development bank will continue to offer flexibility to its customers through forbearance and, where appropriate, repayment holidays. Whilst interest rates on development bank loans are fixed at the point of issue—that protects those customers from the current volatility—we also know rates are not the only issue, and businesses can be confident that the bank is committed to working with them through these difficult times.

The development bank has a major role in supporting business transition on an 'invest to save' principle and already has funding in place to support businesses on their journey to net zero. Right now, the bank is fast-tracking development of a new scheme that will allow businesses to take on borrowing to fund capital investment that delivers on decarbonisation. It will aim to offer more flexible repayment terms, attractive interest rates and other support, such as help towards consultancy costs, as part of this offer to enable businesses to take advantage of current generous capital allowances and to ensure that they are confident that the technologies and solutions being adopted are right for them. I am asking the development bank to do all they can to accelerate their plans so that delivery can begin this year, delivering a double win for eligible businesses by helping them cut future energy costs and progressing our shared ambition for decarbonisation.

The Development Bank of Wales is a national asset. It continues to help businesses across Wales survive, grow and prosper. I am proud of what it has achieved to date and have confidence in the plans it has to deliver on my ambitions for the future of the Welsh economy.

Can I thank the Minister for his statement this afternoon and congratulate the development bank on its fifth anniversary? Now, the Development Bank of Wales has been very open to scrutiny from the Economy, Trade, and Rural Affairs Committee, and I know Members welcome the ability to question the team on its investments and progress. Now, today's statement rightly recognises that the Welsh economy is more reliant upon small businesses, so it's crucial that the development bank is reaching out to small and medium-sized enterprises and offering support. The Minister has said that the development bank is taking a proactive role in facilitating help for businesses, but doesn't quite tell us how that work is taking place, and so perhaps the Minister could tell us exactly how the development bank is working with small businesses specifically, given the current financial climate.

Today's statement rightly highlights some really good work by the development bank. It's great to hear that it has invested £78 million of equity into Welsh businesses. Of course, we need to ensure that funding is reaching businesses in all parts of Wales, and so perhaps the Minister could tell us more about how the Welsh Government will ensure that the bank is raising awareness of its services to businesses in all parts of the country.

The Minister has already given the bank a total equity investment target of £100 million, which, alongside private sector co-investment, can deliver over £250 million of capital to businesses. Working with co-investors will be critical if the bank is to maximise the impact of its investment in Welsh businesses. Of course, to do so, the bank must continue to encourage the private sector to invest alongside itself, and so perhaps the Minister can tell us more on the work being done to increase that co-investment.

Now, we know the COVID pandemic has had an enormous impact on businesses in Wales, and the development bank has an important role in supporting economic recovery and supporting businesses. It's vital that a one-size-fits-all approach is not blanketly adopted by the bank, and I'm pleased to hear the Minister talk about offering flexibility to its customers through forbearance and repayment holidays. Today’s statement acknowledges that businesses are facing challenges due to increasing costs for materials, wages and, of course, energy, and therefore perhaps the Minister could tell us a bit more about how the bank can provide tailored support to businesses in relation to these specific challenges.

It's vital that we recognise the jobs that are being created by the development bank, and there has been some good work taking place to identify and measure productivity too. According to the bank's corporate plan, its baseline jobs target for 2022 to 2027 is 20,000 jobs, but it's vital that there is some measure of the quality of jobs. And, so, I'd be grateful if the Minister could tell us how the Welsh Government recognises success in terms of jobs, and what does success look like to the Welsh Government in this specific area.

The Minister has made it clear today that, going forward, businesses receiving equity investment will have unparalleled support throughout their investment journey. Today's statement confirms that the bank will be supporting new technology companies to take their products from early concept through to market, as well as businesses targeting high growth, and management teams to buy existing businesses and keep them in Welsh ownership.

I, of course, welcome this ambition, and perhaps the Minister can tell us more about how the bank is investing in new technology start-ups in particular. There has been some good work around the Wales technology seed fund, but more needs to be done, and so I'd be grateful for any further information the Minister can provide on this front.

Equally, it's important that there is support for management teams that want to buy out existing businesses and keep them in Welsh ownership. To date, the Wales flexible investment fund, which is operated by the Development Bank of Wales, has been offering a potential debt-based funding route for employee buy-outs. And I know there is support for management buy-outs available through the Wales management succession fund, but perhaps the Minister could tell us a bit more about how those funds are being evaluated and monitored, so we can ensure that the right support is out there for businesses.

And, finally, today's statement refers to the development bank's work to promote a transition in Wales to a significantly more decarbonised business environment. I'm particularly interested in the development of a new scheme that will allow businesses to take on borrowing to fund capital investment that delivers on decarbonisation. Indeed, the bank's annual report highlights that 41 per cent of its customers have indicated that they are motivated to act on climate change, but actually lack the expertise. And, so, I'd be grateful if the Minister could tell us a bit more about the new scheme that is being developed and when it's likely to become operational. 

Therefore, in closing, acting Presiding Officer, we know that one of the key themes of the bank is investing in businesses that reflect the diversity in our communities, and we must remember that the bank, at its core, is an impact investor with a social purpose. And, so, can I thank the Minister for his statement this afternoon, and say that I look forward to hearing more about the development bank's work in the coming weeks and months? Thank you. 

Thank you for the series of questions. It's a good place to be making a statement, five years after Ken Skates launched the development bank. It's fair to say that, at the time, not everyone was as optimistic that we'd be at this point celebrating its successful journey, with it overachieving its investment targets.

On your point around small businesses and how aware they are, actually, the Federation of Small Businesses undertook their own survey, which was published in February of this year, and it found that two thirds of their members were already aware of the development bank, and, also, there had been a significant increase in brand perception of the development bank over that five years since it was introduced, and that, actually, 92 per cent of customers had stated that they would use the development bank for future funding needs, and, again, that nine in 10 associated the development bank with being honest and trustworthy. And, I think, actually, when you think about financial institutions, that does show that not only has it got a significant amount of penetration and awareness within just five years, but that it also has a good reputation among its existing customers as well. We're interested in getting more of those people in that final third more aware of what the bank does and taking advantage of the products that it has to offer.

As I said in my statement, the investment that can take place from the development bank, whether loan or equity, or a combination of both, is often part of the package of investment support, and that, I think, goes into your point around co-investment. Recently, I met with high-street banks and the development bank to talk about some of the challenges for the economy in Wales, the challenges that we've been seeing with the rise in interest rates, and what the investment climate looked like. Now, there is always a challenge in that some businesses are retrenching and not making investment choices, which is understandable given what's happened in the last six or seven weeks. But there are still businesses that are looking to invest.

What we're talking about today is the launch, or the indication that we're going to be able launch within the turn of this year—that's my target; if not, then early in the new year—a new product to help people to invest in their future, to decarbonise and help with energy costs as well. So, we are looking to acquire more people to come into that area. And that's also an area where lots of high-street banks say that they have funds available for further investment. So, the challenge will be on co-investment, what DBW can do, what businesses themselves often put up—they're often looking for someone to bridge the gap between their finance and someone else—but also other potential investors, not just high-street banks. It does include, as I have mentioned, other equity investors.

Part of our challenge is that most of the equity investment that takes place across the UK is concentrated in London and the south-east. If you were having this conversation with the south-west of England or the north of England, they would be looking on and saying, 'The problem is, there's too much in the over-heating south-east corner of England.' And they themselves—and if you talk to the FSB—would say, 'We would like to have a regional development bank like the Development Bank of Wales.' It's a positive advantage that people and business recognise, but we also do need to make sure that other equity investors look at Wales, to add to what we're doing in the development bank.

Now, I mentioned the Cardiff capital region and their investment, but also the British Business Bank. They're unlikely to have their funds ready until next year. When the investment was announced by the former Chancellor, who's now the Prime Minister, he announced there would be a fund in Wales. It's fair to say that, at that time, there wasn't a plan. There is now something that looks more like a plan, and the development bank, as I say, have been engaging and really constructing what that would look like. It will still take time for that to get up and running, so I'm looking forward to that extra investment coming in to add to the picture. And, in addition, there are also not just individual private investors, but a number of sovereign wealth investors—from Europe and beyond—who are looking at opportunities in Wales. And part of the balance that we have to strike is, where is that a real opportunity, and how can we make sure that we get a deal that doesn't mean that those assets are taken out of Wales, but are grown here as well.

I think that it goes on to your point about the tech sector. Both fintech and cyber are really good examples of where we have a strong sector in Wales and the opportunity to grow more—certainly in parts of the conversations I've had with banking institutions, with other sovereign wealth funds, and indeed with the sectors themselves. We really do have a very positive group of sectors within Wales. I think that it's one of the things we under-appreciate, that the rest of the world is looking at what we're doing and is very positive about it, both in terms of learning how we've got here, but also looking at whether they can invest in helping to grow the sector here as well. And in each of those sectors, we're likely to see high-value employment.

The offer from both DBW and Business Wales includes tailored support, which I've mentioned in my statement, so it won't just be you'll get money—you'll get some support and consultancy around that. We've indicated that, in the new fund on investing in decarbonisation, consultancy support could be part of what's created, to understand the specific needs of an individual business. I'm very pleased to reiterate what I said about employee ownership, not just the management buy-out funds, but what we're already doing with groups like Cwmpas Cymru and the funds that they are running, to try to increase the number of employee-owned businesses across Wales and meet our manifesto pledge to double the sector.

And finally, on your point about how we'll make sure that this is well known around Wales, of course, the development bank has five offices, located in Cardiff, Llanelli, Llandudno Junction, Newtown, and the headquarters, of course, in Wrexham.

I thank the Minister for the statement. And of course, there is an important role for the bank to play in the future of the Welsh economy.

The Development Bank of Wales offers support to its customers through a number of organisations, including Business Wales. Business Wales offers a range of free services to Welsh companies and sole traders. Nearly a year ago now, there were discussions in committee and Plenary over funding concerns for Business Wales, much of which goes to supporting those businesses. On 11 December 2021, you, Minister, noted that over a third of Business Wales funding comes from European sources. A year on, how has this impacted the Development Bank of Wales and Business Wales, and has an impact assessment been done? Around the same time, I also asked the Minister about the courses on offer from Business Wales, and I was grateful for the follow-up meeting we had on this topic. Since then, has there been any growth in the number and availability of courses provided?

Now, co-operatives and social partnerships allow the Welsh economy to grow in a more sustainable way, and will play a huge role in tackling the cost-of-living crisis. And I'll take this opportunity to plug the cross-party group on co-operatives and mutuals tomorrow, where we'll be looking at exactly this issue. In June 2021, the Welsh Government committed to doubling the number of employee-owned businesses in Wales. Earlier this year, I asked the Minister about funding available for co-operatives, to help reach the Welsh Government's target of doubling the number of employee-owned businesses in Wales. I'd be keen to know what progress has been made to reach that target. I did note that, in his statement, there was talk of supporting management buy-outs. Is that rather than worker buy-outs in that particular context? There is an important distinction to make between manager and worker buy-outs. Both groups will have different priorities and intentions going forward.

Finally, the net-zero business incentive next year. The initiative hopes to incentivise businesses to lower their carbon footprint based on an invest-to-save principle that should reduce energy consumption and lower businesses' bills in the long term. That, of course, is to be welcomed. Businesses looking at investing in renewables or energy-efficiency measures will be offered more favourable terms. Businesses can take on borrowing to fund capital investment that delivers on decarbonisation through more flexible repayment terms, attractive interest rates and wider support, such as help towards consultancy costs. The Minister is also tasking the bank with pursuing an ambitious equity investment target of £100 million over the next five to seven years.

While this announcement to help towards net-zero targets in Wales is welcome, it's something I recently questioned you and the First Minister on, and it has been called for by many in this Chamber. How does this increased investment fit in with the principle of the just transition? In my line of questioning, I referred to businesses, specifically small independent breweries, that have stretched their finances further than they thought possible during the pandemic, and now, during the cost-of-living crisis, they may be reluctant to take on more debt. What would you say to them as well as those who would not be potentially eligible for this scheme?

Also, would the Development Bank of Wales, within this initiative, be able to operate a fabric-first approach to energy efficiency, with the most favourable terms prioritising it? The fabric-first approach to building energy efficiency looks at maximising the performance of components and materials that make up a building itself, before the use of mechanical or electrical systems. Diolch yn fawr.

To start with, on your point about the individual courses available, I'm not in a position to answer that individual point now, but I will make sure I come back to you with the detail on that particular point.

On your final point around net-zero investment and the announcement that we've made today on the new support that should be available to help with decarbonisation and energy efficiency and reducing energy costs, the last time we spoke I did indicate I'd have more to say in the coming weeks, and here we are. We've been working on this for a period of time. It isn't something that's been created in the last week or so.

Part of this is about trying to generate a just transition, to make sure that, as we decarbonise, we don't simply keep the jobs we have, but we actually help to de-risk some of the future, not just from a broader climate perspective, but from the business costs that exist now. It's something that I think a number of businesses will want to look very closely at. And, as I say, on the point about the individual circumstances you mentioned for each business, well, they vary from one business to another. Individual businesses in the same sector will have different needs, they may have different opportunities to take advantage of that. That is, both looking at the fabric of their own institutions as they are now and their opportunities to maximise that. It's why I pointed out that the opportunity is to look at what's possible for that individual business. It's also possible we may end up being able to support district energy schemes as well, if you think about the number of businesses that may share a common broad footprint around a business park or an area and would want to have a look at whether it's possible to do more within a particular setting and not simply on each individual business. So, there'll be a range of circumstances that will be individual. 

The other reality we have to confront is that, even with the support that is available, and this is from the bank and its lending, whether it's equity or loan finance individually or a combination thereof, the Welsh Government doesn't, as we've talked about today, have the firepower to provide a grants based scheme to reach into every area of the economy. I know there are more businesses with challenges that I do think would otherwise be viable businesses than we have the means to support. It's why we await so keenly the outcome of the Halloween budget. I don't know if you had an opportunity to listen to the finance Minister in today's Welsh Government press conference, but the reality of our budget is one where we simply don't have additional money that is being kept back in the hope that we can then invest it over the coming weeks and months. It's a very, very difficult financial picture that we face, and businesses themselves know that.

In the conversations I've had with a variety of business groups of different sizes in different sectors, they all know that we don't have the money waiting for them. In fact, manufacturing businesses were very clear that they were anxious about the future, not because they didn't have full order books, but because they knew about the rising costs and prices for goods, the challenges in inflation, and they know that really it requires the UK Government to act like they are really on their side to help them through what's coming. We're all going to find out fairly soon what that really looks like. I'd be delighted to be proven wrong and that there is going to be a generous package available to help businesses to not just survive where they are, but to genuinely prosper in the future. Here in Wales, though, we will make the most of the advantages we do have, and DBW is one of those. But I can't tell you or anyone else that we can save every single business that we would otherwise want to.

When it comes to DBW and Business Wales and the reality of where we are with post-European funding, as I've indicated—and I've been absolutely upfront from the outset—there is a real and significant impact from European funds disappearing and not being replaced on a like-for-like basis in terms of the value or, indeed, how they're then purposed. What it does mean, though, is that to maintain Business Wales, which is what I have done, I've had to make really difficult choices in the rest of my departmental budget. That means other areas I would otherwise have wanted to invest in to help support the future of the Welsh economy I haven't been able to, because I think the Business Wales service is really important across the whole of Wales, and you can see that from the outcomes and the numbers of businesses that have had help, support and advice from Business Wales. Again, the Federation of Small Businesses regularly tell their counterparts in the rest of the UK that what we have in Wales is really worthwhile. Actually, the FSB in England would like to see a service like Business Wales in regions across England. That explains why I protected the budgets for the future for the services they provide. If we did have the same amount of money to invest in different choices, it would mean I could do more, and, indeed, that DBW could grow more as well.

Finally, when it comes to support practically for employee-owned businesses—and I recognise the point that management buy-outs aren't necessarily exactly the same—we're now up to 40 employee-owned businesses, and I've recently confirmed that extra £170,000 to Cwmpas Cymru to help with that practical support to move businesses from one ownership model into another. There are really good examples of new employee-owned businesses in Wales, and I look forward to announcing when we have, as I'm confident that we will do, achieved our manifesto goal of doubling the size of the sector.

I very much welcome the statement. I agree with the Minister that the development bank here in Wales means we can maintain capability and stability to drive economic development. I, like Paul Davies, am pleased that the development bank is taking a proactive role in facilitating help for businesses. I have three questions. How is it intended to help businesses move from small to medium-sized enterprises, which is one of the weaknesses of the Welsh economy? Is it the Minister's intention to prioritise the three growth sectors of life sciences, ICT and financial services? And, perhaps, most importantly to me, from Swansea, will the bank further support the Swansea bay city region projects? 

Thank you for the questions. You're right; growth from small to medium and then from medium to large is one of our big challenges in the economy. Actually, it is exactly part of what DBW can do, because, often, it is the access to finance that holds people back. It's where high-street banks have seen a gap in what they do and DBW has been able to plug that gap. When it comes to the jobs and investment choices, it isn't just the funds that have helped to create about 2,600 jobs—to either safeguard or create those from the investment that's been made from the last financial year—but, actually, that adds to an increase in Welsh GVA of around £85.8 million within that year, and you expect that to carry on growing as we move forward. So, it is one of the things that I am genuinely concerned about.

Yes, there is activity in life sciences, and there's activity in financial services, especially in the growing fintech sector we have. And on your broader point around the broader technology sector and what that looks like, actually these services go into most businesses now, and so there is something about what our broader tech sector is doing. On a recent trip, the trade mission that I led to the United Arab Emirates, we had lots and lots of tech businesses, small and medium-sized businesses, looking for investment and recognising that they had an opportunity, including businesses based in Swansea, you'll be very pleased to hear.

And, yes, on your point around the Swansea bay city deal, we are looking at what DBW can do; how it can help to work with that and other growth deals in Wales to advance the projects they've got. I'm actually very positive about the practical progress that the Swansea bay city deal group is making on not just having a portfolio of projects, but on the investment that is already being made. 

Last week, Mervyn King, the former governor of the Bank of England, gave various interviews, including on the fact that we still haven't cracked the ongoing moral hazard of organisations that are too big to fail, which is why the Bank of England had to intervene in the markets following Liz Truss's disastrous mini-budget, to rescue pension funds that had dabbled in risky investments to increase the dividends they dish up. So, I very much welcome the role of the Development Bank of Wales, and we need many more organisations like that to provide a bit more stability in the financial markets. I very much welcome all the information you've provided about the equity investment that the development bank is providing for companies who want to decarbonise; that seems absolutely a win-win for those companies, as well as for our net-zero targets across the whole of Wales.

Last week, I attended a conference organised by the Landworkers' Alliance and heard about the successful development of small-scale horticulture businesses that are profitable and require no subsidy. Both of them are based reasonably locally in south-east Wales, in both the Gower and the Vale of Glamorgan. You talk about wanting an economy where people have the skills and the protections that offer security through tough times. Did the recent economic summit discuss food security in the context of the fact that—

Could the Member ask her question, please?

—food is not coming into the wholesale market? And what investments are you aware of that the Development Bank of Wales may be investing in increasing the amount of food we are growing in Wales?

It's not a specific objective of the development bank to increase food security in the country. It's not a specific objective that we've set. However, we have set objectives around helping to transition Wales to a more sustainable economy and plans around net zero. Lesley Griffiths, as you know, is the Minister who leads on the food sector. I mentioned this last week, and Alun Davies noted his lifetime's work in supporting the food and drink sector, sometimes personally—that actually we have seen a real growth in the sector from an export point of view. But there is something also about what we do need to do, and we recognise this within the Government, in broader food security for how food is produced, where it's produced, and how local it is as well.

I'm not trying to avoid the issue; I just think that it's not the development bank that is the primary lever in doing that. It doesn't mean that projects that will help food security will not be supported. In fact, in the food and drink sector we have supported a number of projects to grow and to expand. At the economic summit it was much more about businesses in survival mode and wanting to understand what is likely to happen, and trade unions being interested in the terms and conditions of workers moving forward and what that means, but positively wanting to support businesses to have a good future. So, I think we're potentially talking at cross purposes about what the point and purpose of the summit was, because there wasn't a particular business that talked about food security in that event, and I wouldn't have necessarily expected there to be.

I do take on board your point around pension funds, both the level of debt that they had and the level of risk they had. And of course what really changed and was very unexpected just a few weeks ago is actually that Government debt changed its profile as well. So, the value of that Government debt and that Government investment was a real factor for pension funds that were looking to provide a stable return for pension holders. I certainly hope, from the point of view of businesses, pensioners, and indeed householders, that we will see more stability from the UK market. It has a real impact not just on individual families but on individual businesses, because the terms of debt available are a real factor in holding off investment in the Welsh economy.

I enjoy the Minister's statements and I enjoy the conversations that he embarks upon across the Chamber. In discussing a lot of his different priorities for the investment bank he's made it very clear that he wants to see the development bank acting in a very agile way, looking for opportunities, and also investing in a creative way, and I very much welcome what he said this afternoon about decarbonisation.

What I worry sometimes, Minister, is that there are not very clear objectives and targets set for this activity. For example, one of the biggest issues facing us in the Welsh economy is that of productivity. What guidance or advice have you given the development bank to address issues of productivity in the economy, and how will you measure whether the development bank is having an impact on that?

The constituency I represent in Blaenau Gwent, of course, is one of the areas where we need greater investment, not only in productivity but in economic activity. Do you give the development bank clear guidance on a spatial aspect to their investment, so that you look and you set targets for investment in the Heads of the Valleys, for example, to ensure that you actually are investing not simply in businesses to achieve global outcomes, which would drive investment to places like Cardiff and the M4 corridor, but to drive investment into some of the more difficult parts of Wales, which are suffering from significant market failure?

There are two broad points there. The first is that, yes, when I do talk to the development bank I do take an interest in where that investment goes. If it was only going neatly in and around the centre of the Cardiff capital region, then that would not be what I think is appropriate, because it was partly set up to deal with the gap that has been mentioned about small to medium companies, as Mike Hedges mentioned, about access to capital for some of those businesses, which was often a problem from traditional lenders. Now, it doesn't mean that high-street lenders don't do anything for people on that growth journey, but actually it's where there's been a real call for further action. And also the different parts of the country that people are in, and I recognise with your own constituency it's a real factor. So, yes, we do look at that, but it's not just the development bank.

I haven't set them a particular target or measure. I'm more than happy to discuss this with the Member and others—and we're due to have a broader meeting to talk about some of these points—about the remit that I set them and when and how we expect to see progress. But it is then also part of the conversation we have with the capital region, for example. What we're talking about with them and what we want to see and expect to see as the capital region invests more funds is to make sure that, again, it doesn't simply happen around Cardiff and Newport but that it's the whole capital region that needs to see the benefit—and not simply to get people quickly from other parts of the capital region into Cardiff or Newport or other major urban centres but actually to drive some growth in other parts of the region, too. It can't be all one way, taking people from the Valleys into Cardiff and Newport. 

I think that's really important in terms of the metrics we set ourselves, and that goes into the productivity puzzle as well, because often a lot of that is the levers we have to invest in human capital, in the skills and in the people, and then to make sure we're getting people to invest in areas where those people themselves live and are able to work. So, it's part of the reason why we have the employability and skills plan, setting out what we will do. We'll need to look again to see if there's a different change in direction from the latest iteration of the UK Government, because that plan was set out when DWP were more active and people were closer to the market. We may well need to review again earlier than I thought we would do whether we're still doing enough and in the right place because, I'm afraid, we'll face a more difficult economic picture, with potentially more people out of work in the coming months.

So, our interventions, like the ReAct+ programme—are they going to be doing enough to get people back into work rapidly, and are we doing enough to get people who have been in long-term economic inactivity back on a path to become active and to have the skills to not just get into work but then to succeed in work as well? It's also why we're looking at what we're doing in our skills policy place, not just in apprenticeships but also in in-work training as well. For the current workforce, the future of work is here already in very large number. In 10 years' time, most of the people in work will already be in work already. What we need to do is to make sure they have skills that are appropriate for the world of work in 10 years' time. So, much of this is going to be about investing in the current workforce, and that will definitely make a difference to productivity. 

And the final point on this is investing in the quality of leadership and management within businesses. It isn't just workers on the shop floor, if you like, it is also about those leaders and managers who make a big difference to the effectiveness and productivity of a business as well. But, as I said, I'm very confident we'll talk about this more in the Chamber and outside it in the months ahead. 

I'll allow one more question, if it's brief, and one more answer, if it's brief. Huw Irranca-Davies. 

Thank you. Indeed, I will be brief. Minister, thank you for the statement and also for attending the lunchtime launch of the Centre for Local Economic Strategies report, 'Owning the workplace, securing the future', on how we increase the amount of employee ownership here in Wales. We're doing well already, we think we can go further. How can the Development Bank of Wales play a role within this, increasing employee ownership? Is there a role particularly for them to play when you have a problem of succession and changing over to employee ownership in the workplace, some sort of holding facility, some funding that would allow those discussions to happen with employees in the workplace so that it's not a rush of six months to all or bust, that we can actually pause and go through that process with them? What role does the Development Bank of Wales have in employee ownership?

The development bank is already active in this space, in supporting employee ownership, but it also has to work alongside others like Cwmpas Cymru, as you're aware. I'd be happy to have more of a conversation with you. As you know, at today's event, I committed to having a conversation with you and other actors in this space to not just look at the ideas from this lunchtime but to see how different institutions can play a part. I think it will be an interesting point to raise and to work through with the development bank itself. 

Thank you, Minister.