Paul Davies
Group Ceredigion Penfro · Welsh Conservative · Wales
“Croeso nôl i gyfarfod o Bwyllgor yr Economi, Masnach a Materion Gwledig y Senedd. Fe symudwn ni ymlaen nawr i eitem 6. Ac yn ymuno â ni fel dirprwy i Hannah Blythyn mae Alun Davies—croeso cynnes i chi, Alun; rŷn ni’n falch o gael eich cwmni chi y prynhawn yma.”
“Croeso nôl i gyfarfod o Bwyllgor yr Economi, Masnach a Materion Gwledig y Senedd. Symudwn ni ymlaen nawr i eitem 5 ar ein hagenda, a dyma'r trydydd panel, a'r panel olaf, o ymchwiliad undydd y pwyllgor i ddeallusrwydd artiffisial ac economi Cymru. Gaf i groesawu'n tystion i'r sesiwn yma?”
“Wel, croeso nôl i gyfarfod o Bwyllgor yr Economi, Masnach a Materion Gwledig. Fe symudwn ni ymlaen nawr i eitem 4 ar ein hagenda. Dyma ail banel ymchwiliad un dydd y pwyllgor i ddeallusrwydd artiffisial ac economi Cymru. Gaf i groesawu ein tystion i'r sesiwn yma?”
“Symudwn ni ymlaen, felly, i eitem 3, a dyma'r panel cyntaf ar ymchwiliad undydd y pwyllgor i ddeallusrwydd artiffisial ac economi Cymru. Gaf i felly estyn croeso cynnes i'n tystion ni heddiw i'r sesiwn yma? Cyn ein bod ni yn symud yn syth i gwestiynau, gaf i ofyn iddyn nhw gyflwyno eu hunain i'r record?”
“Symudwn ni ymlaen, felly, i eitem 2, sef papurau i'w nodi. Mae yna chwe phapur i'w nodi. O ran eitem 2.1, bydd y pwyllgor yn ystyried drafft cychwynnol ei adroddiad ar y memorandwm cydsyniad deddfwriaethol yn y sesiwn breifat. Ond oes yna unrhyw faterion yn codi o'r papurau yma o gwbl? Na.”
“Croeso, bawb, i'r cyfarfod hwn o Bwyllgor yr Economi, Masnach a Materion Gwledig. Mae Hannah Blythyn wedi anfon ei hymddiheuriadau ar gyfer y cyfarfod heddiw, a bydd Alun Davies yn dirprwyo ar gyfer eitem 6. A oes yna unrhyw fuddiannau hoffai Aelodau eu datgan o gwbl? Na.”
The complete record
Every one of 43 lines we hold for Paul Davies, in date order, each linked to its source. Free to read, in full, without an account.
“Fe symudwn ymlaen nawr i eitem 7, a dwi'n cynnig o dan Reol Sefydlog 17.42 ein bod ni'n penderfynu gwahardd y cyhoedd o weddill y cyfarfod. A yw'r Aelodau'n fodlon? Ydyn. Dwi'n gweld bod Aelodau'n fodlon. Felly, derbyniwyd y cynnig ac fe symudwn ni i'n sesiwn preifat ni.”
“Croeso nôl i gyfarfod o Bwyllgor yr Economi, Masnach a Materion Gwledig y Senedd. Fe symudwn ni ymlaen nawr i eitem 6. Ac yn ymuno â ni fel dirprwy i Hannah Blythyn mae Alun Davies—croeso cynnes i chi, Alun; rŷn ni’n falch o gael eich cwmni chi y prynhawn yma. Symudwn ni, felly, ymlaen i’r sesiwn yma, a sesiwn dystiolaeth gyffredinol yw hon gyda’r Dirprwy Brif Weinidog ac Ysgrifennydd y Cabinet dros Newid Hinsawdd a Materion Gwledig. Croeso cynnes i chi, ac i’ch swyddogion. Cyn ein bod ni yn symud yn syth i gwestiynau, a gaf i ofyn i chi gyflwyno eich hunain i’r record?”
“Croeso nôl i gyfarfod o Bwyllgor yr Economi, Masnach a Materion Gwledig y Senedd. Symudwn ni ymlaen nawr i eitem 5 ar ein hagenda, a dyma'r trydydd panel, a'r panel olaf, o ymchwiliad undydd y pwyllgor i ddeallusrwydd artiffisial ac economi Cymru. Gaf i groesawu'n tystion i'r sesiwn yma? Cyn ein bod ni yn symud yn syth i gwestiynau, efallai gallaf ofyn iddyn nhw i gyflwyno'u hunain i'r record. Efallai gallaf ddechrau gyda Lina Dencik.”
“Wel, croeso nôl i gyfarfod o Bwyllgor yr Economi, Masnach a Materion Gwledig. Fe symudwn ni ymlaen nawr i eitem 4 ar ein hagenda. Dyma ail banel ymchwiliad un dydd y pwyllgor i ddeallusrwydd artiffisial ac economi Cymru. Gaf i groesawu ein tystion i'r sesiwn yma? Cyn ein bod ni yn symud yn syth i gwestiynau, gaf i ofyn iddyn nhw gyflwyno'u hunain i'r record? Efallai gallaf ddechrau gyda Klaire Tanner.”
“Symudwn ni ymlaen, felly, i eitem 3, a dyma'r panel cyntaf ar ymchwiliad undydd y pwyllgor i ddeallusrwydd artiffisial ac economi Cymru. Gaf i felly estyn croeso cynnes i'n tystion ni heddiw i'r sesiwn yma? Cyn ein bod ni yn symud yn syth i gwestiynau, gaf i ofyn iddyn nhw gyflwyno eu hunain i'r record? Efallai gallaf i ddechrau gyda'r Athro Alun Preece.”
“Symudwn ni ymlaen, felly, i eitem 2, sef papurau i'w nodi. Mae yna chwe phapur i'w nodi. O ran eitem 2.1, bydd y pwyllgor yn ystyried drafft cychwynnol ei adroddiad ar y memorandwm cydsyniad deddfwriaethol yn y sesiwn breifat. Ond oes yna unrhyw faterion yn codi o'r papurau yma o gwbl? Na.”
“Croeso, bawb, i'r cyfarfod hwn o Bwyllgor yr Economi, Masnach a Materion Gwledig. Mae Hannah Blythyn wedi anfon ei hymddiheuriadau ar gyfer y cyfarfod heddiw, a bydd Alun Davies yn dirprwyo ar gyfer eitem 6. A oes yna unrhyw fuddiannau hoffai Aelodau eu datgan o gwbl? Na.”
“I hope the outcomes will help the bank build on the broadly good job it is doing at the moment and improve its performance, which will, in turn, support further development of the Welsh economy. So, in closing, may I thank all those who have taken part in this debate this afternoon? I want to reassure Members that the committee will continue to monitor progress against our recommendations and work with the Welsh Government and the bank to ensure the issues we have identified can be addressed, and that the bank can be put in the best possible position to deliver for Wales’s businesses and our economy. Diolch.”
“During our inquiry, we were pleased to see that, while the bank takes its strategic instructions from Government, it operates separately. However, it is important that it operates in line with the expectations the general public will have about the use of public funds, and this is why it must set higher fit-and-proper-person-style requirements for lending than the average commercial bank. As I said in my opening remarks, the bank seems to have taken this on, and I look forward to seeing the outcomes of their new approach in due course. So, with that, Dirprwy Lywydd, I'd like to reiterate my thanks to the bank and its staff for engaging with this work. As I said earlier, I know it will not have been easy.”
“Whilst the bank has refuted these claims, it is the duty of this committee to take these sorts of allegations seriously, because it only takes a brief look on a news website to find situations where allegations such as bullying have been made against other public institutions where, in some cases, they have been ignored, and, as we know, sometimes these cases do not end well in the long run. As I'm sure you'll appreciate, as Chair of the committee, I'll discuss what the other Members and the Cabinet Secretary have said in today’s debate with the rest of the committee, and we will make a decision on our next steps regarding these complaints in the very near future. Now, I was interested to hear Members' views on the issue of due diligence.”
“I think it is important that this review helps the bank to ensure its complaints process works not just for its regulators but for the bank itself and its customers, including those it has rejected. I also look forward to hearing perhaps more from the Cabinet Secretary regarding the work to encourage anonymous feedback on the bank. This is an area that, again, might greatly help the bank to understand its customers and nip any issues in the bud in the future. I was interested to hear the Cabinet Secretary's views on the complaints we have received regarding the development bank’s equity investments. As I mentioned in my opening remarks, we received these complaints anonymously, which has limited our ability to integrate them.”
“Diolch, Dirprwy Lywydd, and may I thank Members for taking part in this very important debate this afternoon? We've heard some really interesting contributions from Members today, as well as a constructive response from the Cabinet Secretary. I was pleased to hear examples of the good work being undertaken by the bank and support for the recommendations we put forward, which I believe will make it an even better institution. I'd also like to thank the Cabinet Secretary for her update on the classification issue, and I'm pleased that the Cabinet Secretary for finance is having further discussions on this issue. This is an area where the committee, of course, will continue to keep a watching brief. Now, I didn't hear the Cabinet Secretary mention anything or give us an update on the project assessment review.”
“Dirprwy Lywydd, before I end, I'd like to thank everyone who engaged with the committee on this important inquiry and the clerking, research and legal team who supported us through this important work. I'd also like to specifically thank the development bank and their staff for their engagement. I know it will not have been a comfortable process to be subject to this inquiry, but I'm pleased that the bank engaged with it and continues to engage with the committee. Broadly, the majority of the evidence that we received was supportive of the bank and its operations, which is something the bank’s staff should be proud of. I look forward to hearing views from the other Members this afternoon. Diolch yn fawr iawn.”
“Our recommendation 6 encourages the Welsh Government to conclude negotiations with the Treasury around the reclassification as promptly as possible. We're also of the view that any agreement should protect the bank’s role and not have a detrimental impact on the Welsh Government’s budgetary position in the future. The Welsh Government accepted this in principle and said that they would continue to work with the Treasury, with the goal of concluding an outcome to the reclassification of the development bank that is budget neutral on the bank and on the Welsh Government. Again, perhaps, in her response to this debate, the Cabinet Secretary can update us on the progress of these negotiations.”
“This is a technical change, but the reclassification creates an issue that the then Cabinet Secretary described as 'double counting', where the Welsh Government have to keep money in reserve to cover any money it has given to the bank to invest, but that hasn’t been invested yet. As a committee, we are concerned that this double counting will limit the amount of money that can be given to the bank for investments. The then Cabinet Secretary agreed that this was an issue and told us, and I quote: 'We are trying to find a solution to that with the Treasury at the moment. We haven’t yet found a solution. It is important that we do, because it creates a double exposure in our accounts.' He also said that the Welsh Government were seeking funds from the Treasury to cover this double exposure.”
“Last week we held our annual scrutiny session with the bank and I am also pleased to say that they discussed their new enhanced due diligence processes, and we were generally satisfied with progress on this issue. We will of course monitor, and continue to monitor, the bank's enhanced due diligence processes and their effectiveness going forward. Before I bring my remarks to a close, Dirprwy Lywydd, I would like to focus on a slightly technical point that really needs addressing if the development bank is to carry on fulfilling its role. In August 2021 the Office for National Statistics reclassified the bank, with the exception of its FW Capital arm, as central Government.”
“Another aspect of the bank’s operations that gave rise to some concern was its due diligence processes. Whilst the bank seemed to have a good hold on assessing the ability of those receiving loans to repay, given that the bank lends public money, we felt that there needed to be a higher bar around assessing the appropriateness of an applicant to receive this funding in the first place, for example did they have any history of criminal activity? Recommendation 8 in our report suggested that the Welsh Government task the bank with reviewing its due diligence processes—a recommendation I'm pleased to say that the Welsh Government accepted.”
“I am pleased to say that the Welsh Government accepted recommendation 10 in principle and fully accepted recommendation 11. For recommendation 10, the Government said that the bank's complaints procedure would be included in an independently led project assessment review on aspects of delivery and assurance provided by the bank, due to be held in 2025. Perhaps in her response, the Cabinet Secretary can tell us exactly when in 2025 this review is expected to begin and if there is an anticipated time frame for it to report. In response to recommendation 11, the Welsh Government said that the bank would give further consideration as to how it may use other methods to encourage and gather feedback in a confidential way. I would also be keen to hear if the Cabinet Secretary is content with progress on this matter.”
“The bank told us that investor directors were common in venture capital and they would always work in the interests of the company itself as a matter of company law. The bank also explained they have a comprehensive complaints procedure and seek to deal with all complaints openly and fairly, and that they have opened up a new route so complaints can be made directly to the bank's general counsel if the complainant wishes the matter to be kept confidential. We made two recommendations as a result of this evidence: recommendation 10, which called for the bank’s complaints process to be included in a full review undertaken of the bank by Welsh Government, and recommendation 11, which said the bank and the Welsh Government should give consideration as to how they can collect views from businesses confidentially.”
“Following our session with Professor Jones-Evans, we received a number of e-mails from people who had had dealings with the bank and felt they had been bullied out or in fact had their businesses essentially stolen. Unfortunately, much of this testimony was supplied anonymously, which limited our ability as a committee to scrutinise it. As you would expect, I arranged these complaints via a letter with the then Cabinet Secretary, Jeremy Miles. However, Dirprwy Lywydd, as these allegations are so strong, perhaps the Cabinet Secretary can confirm she has seen this document, and as a committee we would be very interested in her views. I just want to be clear: I have discussed these accusations with the bank via correspondence and in a private meeting, and they absolutely refute them.”
“Worst still, there have been instances where some have been bullied by the directors imposed on them, where they have been forced out by dubious means and where founders feel they have not been supported by the Bank.’ He went on to tell us that this has happened to several young, inexperienced founders who should have been given far greater support at the time by the development bank as their business's main funder. I am sure everyone in this Chamber will be concerned by the professor's allegations and agree young entrepreneurs are exactly the sort of people we want to encourage to do business here in Wales. And if these reports are accurate, those actions may well have extinguished that entrepreneurial spirit, which would be an absolute tragedy, and exactly the opposite of what the bank was established to do.”
“However, I hope the Cabinet Secretary will reflect on this matter and ensure that regular remit letters are now issued to the bank in future. I mentioned earlier we received some extremely worrying evidence regarding the bank's equity investment work, and I will come on to that now. Professor Dylan Jones-Evans told us—and I am reading this out verbatim as it contains some very serious allegations— ‘Unfortunately, I have been approached by a range of businesses prior to this review who feel that they have not been treated fairly with valuations being too low, where decisions have taken far too long, and where terms are unacceptable with a “take it or leave it” attitude.”
“Whilst the Welsh Government does seem to have strong strategic links with the bank, including civil servants sitting as observers on its board, it is important the bank keeps up with the Government's economic ambition. However, as economic priorities can change, the committee recommended in recommendation 2 of its report that the Welsh Government should set out the mechanism for reflecting changes to its economic priorities over the course of a Senedd term, and we hoped the response to this specific recommendation would have led to more regular remit letters. Nevertheless, the Welsh Government responded to this with the dreaded ‘accept in principle’ and said they would take this recommendation forward via an update to the development bank's framework document.”
“And the CEO of Nutrivent told us the bank had ‘undoubtedly been a catalyst for economic development and growth.’ So we received some very positive comments during our inquiry. That said, as you would expect from undertaking an inquiry, I will now focus on areas we believe as a committee the Welsh Government and/or the development bank need to work on to ensure the bank can achieve its overall aims. The committee's report makes 13 recommendations covering, amongst other issues, the bank's remit, its operations, its relationship with the Welsh Government and how it handles complaints and due diligence. Of course, the bank is charged with its responsibilities by the Welsh Government. The main route for this is via a term of government remit letter.”
“I will focus the majority of this opening address on the areas where we believe there are important actions that need to be taken to improve the bank's performance. However, Dirprwy Lywydd, I would not like you or the other Members here to assume this means the bank is in terrible shape, or I believe it is not doing good work. Neither of these are the case. In their strategic asset document, the bank said they would be a ‘cornerstone for delivering Welsh Government priorities, driving up long-term growth and creating and safeguarding higher quality jobs.’ And many people we spoke to were of the view they were achieving that aim. The CEO of Laser Wire Solutions told us the bank was on a bigger mission than other lenders and that they were looking to develop the Welsh economy.”
“Much of this evidence was provided anonymously, which presented us with a level of difficulty in how we handled this information and how we could use the evidence to build our recommendations.”
“Cardiff Business School highlighted the bank’s important role in helping businesses recover from the pandemic, and the Federation of Small Businesses Wales said the bank was an effective, well-known and useful tool in the armoury of the Welsh Government, and one that has been quickly accepted as a good part of the business environment by smaller businesses. We also heard about some issues and challenges faced by the bank, and, indeed, by the Welsh Government, due to some issues around the bank’s classification, which I will come on to later on. Nevertheless, we heard a lot of constructive suggestions for improvements, which is what we started this inquiry looking for. However, worryingly, we also heard some very negative evidence and criticism, particularly around the bank's equity investments.”
“However, this year, as Members felt that the bank had reached an appropriate maturity, the committee decided to undertake a full inquiry into the Development Bank of Wales. This inquiry looked at the bank’s overall performance since its establishment in 2017, how it is meeting the objectives the Welsh Government has set it, and we looked at how it compares with international best practice, so we could see how the bank compares to its peers around the world. During this inquiry, we received a lot of positive evidence regarding the bank’s activities and its approach as a lender and as an investor.”
“Diolch, Llywydd, and I move the motion tabled in my name. As I'm sure we all appreciate, the Development Bank of Wales plays an important role in the Welsh economy. It exists to support businesses who have good prospects but may struggle to access all the finance they need, and it exists to also help support some of the Welsh Government’s key economic aims. As we know, the bank is responsible for spending, lending and investing a considerable amount of public money. This means the bank’s performance really matters. The committee normally holds an annual scrutiny session with the bank to examine its annual report, its progress and what it is delivering against the Welsh Government’s objectives.”
“So, Cabinet Secretary, will you now support the industry’s call for an economic impact assessment and a formal review of the 182-day policy, conducted with representatives from the visitor economy, to establish a much fairer threshold?”
“Cabinet Secretary, one way of supporting the tourism industry in my constituency is to once again look at the 182-day threshold on holiday lets. I've received many e-mails in the last few weeks from self-catering businesses in my constituency, who tell me that this policy is ruinous for a small business. They make the point that no other business sector in the UK has such an onerous target to achieve to qualify as a business for local taxation purposes. This year has been particularly difficult for the tourism sector, as the weather has been an enormous factor, as has the cost-of-living crisis and increased running costs. Achieving the 182-day threshold is getting more impossible each day for many of the businesses that I represent.”
“I appreciate that the final scheme is expected to be published in the summer of next year, ahead of the scheme starting on 1 January 2026, but can you tell us, Deputy First Minister, what you will do if the economic analysis and impact assessment of the SFS outline show worrying impacts for farmers and wider society, given the planned introduction in 2026? And are you, therefore, confident that, at the moment, you are still on track with your planned timetable for the scheme's development?”
“During the Economy, Trade and Rural Affairs Committee's sustainable farming scheme inquiry, the committee heard wide concerns that insufficient reward could result in a lack of scheme take-up. So, I hope very much that, Cabinet Secretary, you will take on board those concerns, especially with regard to payment methodology, to ensure that as many farmers as possible take up the scheme in 2026. Of course, yesterday, you published an adapted scheme outline, following further development on the sustainable farming scheme. This is an interim position—you've made that quite clear—and it's not the final scheme. And you've also made it clear that you will now carry out an economic analysis and impact assessment of the scheme outline before making any final decisions.”
“When residents are actually exposed to odours at levels above the World Health Organization guidelines, then they can experience headaches, dizziness and watery eyes. I'm sure you'll agree with me that this is unacceptable, and you know that I've consistently called for this landfill site to be permanently closed. So, given this latest development, I believe it’s crucial that we have a statement now from the Welsh Government telling us what it’s doing to prevent these high concentrations, especially given that this was recorded at a primary school, and I’m sure you’ll agree with me that we cannot be exposing children to these kinds of odours.”
“Diolch, Dirprwy Lywydd. Trefnydd, you'll be aware that I've raised the issue of the Withyhedge landfill site in my constituency on many occasions in this Chamber. You will also know that I've had grave concerns about this facility, where many of my constituents have had to suffer terrible odours, and some of the people I represent have suffered headaches, nausea, dizziness and watery eyes because of this landfill site. Now, even though things have improved recently, it's now been reported in the local press that Public Health Wales have said that its most recent risk assessment relating to air quality data collected at Spittal school monitoring station between 1 October and 3 November showed that there were occasions when hydrogen sulphide concentrations in the air were above the World Health Organization odour annoyance guideline values.”
“Fe symudwn ni ymlaen nawr i eitem 8, sef dadl ar ddeiseb P-06-1400, 'Adnoddau Teg a Digonol ar gyfer Practisau Cyffredinol yng Nghymru'. Mae'r Dirprwy Lywydd wedi penderfynu cyfyngu cyfraniadau gan Aelodau i dair munud er mwyn caniatáu i gynifer â phosib i gael eu galw o fewn yr amser sydd ar gael. Dyw'r terfynau ar gyfer y Cadeirydd ac Ysgrifennydd y Cabinet ddim wedi newid, felly byddwn i'n ddiolchgar os gallai Aelodau gadw tu fewn yr amser er mwyn i fi allu galw pawb. Felly, dwi nawr yn galw ar Gadeirydd y pwyllgor i wneud y cynnig. Carolyn Thomas.”
“Y cwestiwn yw: a ddylid nodi adroddiad y pwyllgor? A oes unrhyw Aelod yn gwrthwynebu? Nac oes. Felly, derbynnir y cynnig yn unol â Rheol Sefydlog 12.36.”
“Dwi nawr yn galw ar Delyth Jewell fel Cadeirydd y Pwyllgor Diwylliant, Cyfathrebu, y Gymraeg, Chwaraeon a Chysylltiadau Rhyngwladol.”
“Fe symudwn ni ymlaen at eitem 5, sef datganiad gan Ysgrifennydd y Cabinet dros Addysg, gwella safonau addysgol yng Nghymru, a dwi'n galw ar Ysgrifennydd y Cabinet dros Addysg, Lynne Neagle.”
“Y cwestiwn felly yw: a ddylid derbyn y cynnig? A oes unrhyw Aelod yn gwrthwynebu? [ Gwrthwynebiad. ] Oes, mae yna wrthwynebiad. Gohiriaf y bleidlais felly o dan yr eitem hon tan y cyfnod pleidleisio.”
“Fe symudwn ni ymlaen nawr i eitem 4 ar ein agenda, sef cynnig cydsyniad deddfwriaethol ar y Bil Gwasanaethau Rheilffordd i Deithwyr (Perchnogaeth Gyhoeddus). Dwi’n galw ar Ysgrifennydd y Cabinet dros Drafnidiaeth a Gogledd Cymru i wneud y cynnig. Ken Skates.”
“Fe symudwn ni ymlaen nawr at eitem 3 ar ein hagenda, sef y datganiad a chyhoeddiad busnes. Dwi'n galw ar y Trefnydd, Jane Hutt.”
“First Minister, you mentioned Withybush hospital in my constituency, and there have been RAAC problems at the hospital for some time. Now, Hywel Dda University Health Board has said that whilst it’s something that will have to be managed, Withybush hospital is definitely over the worst of the RAAC issue. Now, at the same time, you’ll also be aware that the health board is in targeted intervention status because of its shortcomings in planning and finance, and is under enhanced monitoring arrangements for performance and quality. Therefore, given the challenges that the health board is facing in key areas like finance and planning, how confident are you that the management will actually be able to get on top of this matter?”