'Strong Ministers' undermine enterprise in South Wales

12.00.00am BST (GMT +0100) Wed 5th Apr 2006

Cuts in Assembly Government funding to Venture Wales risks business growth in Wales most-deprived communities according to Mike German, Assembly leader of the Welsh Liberal Democrats.

Mr German, who is an AM for South Wales East, says that the pattern of the Assembly Government's economic policies means that business start-ups in areas such as the South Wales valleys are being discouraged.

Mr German said:

"Venture Wales specialised in supporting 'lifestyle businesses', those entrepreneurs who provide valuable services in our communities.

"The Assembly Government's change of policy means that up to 3,000 businesses have to be turned away by Venture Wales. They only had 10 days notice that there was a change of policy and that their budget was to be cut. High-growth companies also need support, but not the exclusion of small business. For every one high-growth business start-up there are approximately 100-150 small businesses. For value for support money, those lifestyle businesses can give a better return as they grow. Across the valleys, these are often the only business start-ups that can succeed.

"In ignoring small business, the Assembly Government's WAVE strategy is placing all its Easter eggs in one basket. Lifestyle businesses generally receive under a £1,000 worth of grant, whilst businesses requiring Regional Selective Assistance need £10,000 and those in techniums need tens of thousands pounds worth of support. The return on investment sums are obvious.

"We ignore this important sector of our economy at our peril - other parts of the UK will steal a march on us if Enterprise, Innovation and Networks department continue to be so high-handed.

"Far from greater accountability, the approach of creating 'strong ministers' and 'strong departments' is leaving those at the coal-face without a say. There is a very real threat that business support offices in South Wales will close because of WAG's lack of response to Venture Wales's concerns and questions."