Covid exploits the scars of poverty

From time to time I like to provide blog pieces that offer discussion on issues catching my attention.

Recently I have been taking an interest in the relationship between the virus, poverty and inequality in our communities.

So following on from a question to the First Minister yesterday the link here is a piece now published by the Hiraeth blog.

In this think about the clear evidence on the impact of the virus on those communities in the UK suffering the highest levels of poverty and inequality. I reviews some of the evidence from bodies like the ONS, Bevan Foundation and Citizens Advice Cymru.

I express fears about the tsunami of further debt that may yet be coming down the track.

I conclude “that while there may be some variations in ‘covid and policy’ across the four nations of the UK but we can be reasonably sure that the relationship between ‘covid and poverty’ seems consistent!”

 

 

 

Statement by the Minister for Environment, Energy and Rural Affairs

The final statement in today’s Plenary meeting was by the Finance Minister.

TITLE Coronavirus (Covid-19)
DATE 13th May 2020
BY Lesley Griffiths MS, Minister for Environment, Energy and Rural Affairs

 

Since my last statement of 8 April, Welsh Government has focussed on support for our food producers, protection of our environment and the maintenance of critical infrastructure and infection control.

Our top priority has been to address the immediate hardship caused by the pandemic.

Welsh Government has worked with Local Authorities in every part of Wales to deliver over 40,000 food parcels to households who are most at-risk from Covid-19 and who have been advised by the Chief Medical Officer not to leave their home. This partnership between Welsh Government and Local Authorities has been a huge success and I want to thank everyone involved.

From 23rd April fishing businesses have been able to apply for the Welsh Fisheries Hardship Grant. As of last week, 124 applications have been received with more than £250,000 of grant aid already paid. So far, all applications have being processed within 10 working days.

On Saturday, I announced dairy farmers who have lost more than 25% of their income in April and May will be entitled to up to £10,000, to cover 70% of their lost income.

Hybu Cig Cymru have launched a campaign involving high-profile chefs and other celebrities to produce recipe videos to encourage people in Wales to help our farmers by buying Welsh produce. My officials have also worked closely with the Governments in all parts of the UK to collaborate on promotional campaigns for the dairy, beef and lamb sectors.

I and my officials are in constant contact with representatives from all sectors of the rural economy to monitor the significant challenges still ahead and further support needed.

As well as supporting those facing hardship as a result of the pandemic we have ensured critical work to support Wales’ rural economy and responding to the climate and nature emergency continues safely.

I have written to all households affected by the February floods to outline the support available to them, including the support they are able to access through their Local Authorities and to notify them of the extension to the deadline to claim the financial support made available from Welsh Government.

I have made public statements reminding people to respect the workers in the water and energy sectors who continue to maintain our critical infrastructure whilst observing social distancing measures.

My officials have been supporting the veterinary profession to work closely with our farmers to find ways to manage their role in supporting disease control and biosecurity on farms and at livestock markets. We cannot afford to ease off fighting animal disease and promoting the highest standards of animal welfare.

I would like to bring colleagues’ attention to the work of Natural Resources Wales, who have been dealing with immense challenges during the current pandemic. At the same time as continuing their vital regulatory work and managing our peatlands and forests, they have dealt with devastating fires and pollution incidents. I am especially pleased NRW have been able to visit sites belonging to those environmental NGOs who have had to furlough their staff, to help make sure any action necessary to protect those sites can be taken.

I have been hugely impressed by the efforts of our Welsh food and drinks businesses not only to find ways to trade safely but also to directly support the efforts to tackle Covid-19 and support our critical workers. Our food and drink cluster initiative has sought to support these businesses further by creating a directory of those Welsh producers offering online deliveries, available on the Cywain website. I hope all members will encourage their constituents to buy from those fantastic food and drink businesses in their area.

Finally, I would like to turn to recovery.

Last week I published the summary of responses to our Sustainable Farming consultation. Welsh Government’s proposals are that all future financial support to farmers will be to enable them to manage their land so they can produce food to the highest quality and welfare standards whilst expanding the role they play in responding to the climate emergency and the loss of biodiversity in Wales. I believe the responses clearly show the sector are more than ready to rise to this challenge.

The next stage of co-design will now be undertaken remotely with additional support for those who find these methods less accessible. With the end of the EU transition period fast approaching and the extremely challenging market conditions farmers are facing, we believe there is no time to lose in working even more closely with the farming sector to establish a new scheme which can allow the sector to be more resilient for the future.

I believe, when and only when it is safe to do so, we need to prioritise the reopening of the food and hospitality sector, to reinvigorate business all along the supply chain. We must enable our vets to resume the usual breadth and pace of their work and we must get to a position when we can again encourage Welsh citizens to enjoy our beautiful countryside.

The changes to the regulations last week allowing people to exercise locally more than once a day, will provide a more opportunities to appreciate nature on our doorstep, to the benefit of our physical and mental wellbeing.

However, as the First Minister has said many times, we will proceed cautiously and carefully, guided by the science and only relaxing measures when we have confidence the evidence supports this.

We will overcome the impact of the deadly coronavirus only if we can find ways to work even more closely together, across Government, sectors and communities. I and other Ministers have already had many discussions with stakeholders about what a green recovery from Covid-19 should look like in Wales and I will update members further as these plans develop. I am determined the recovery from the Covid-19 pandemic will accelerate, and not deter us from, the transition to a low carbon economy and a healthier, more equal Wales.

 

Statement by the Minister for Finance

The third statement in today’s Plenary session of the Senedd was by the Finance Minister.

 

TITLE Fiscal implications for Wales of the impact of, and response to, COVID-19)
DATE 13th May 2020
BY Rebecca Evans MS, Minister for Finance and Trefnydd

 

It was on the 3rd of March that the 2020-21 final Budget was passed by the Senedd.  So much has happened in the ten weeks since then.

We had already faced an unprecedented set of circumstances in setting our 2020-21 budget plans against the backdrop of ongoing UK driven austerity, continued Brexit uncertainty and the devastating impacts of the recent flooding.

The delayed UK Budget of 11 March also meant further changes to our settlement.  Members will recall that, as a result, I made a commitment to make a statement to provide an update on forecasts and any other changes to funding for Wales.

I am providing that detail today, but obviously we now find ourselves in a dramatically different situation.  We are now responding to the evolving and devastating impacts of the coronavirus pandemic, which is requiring unprecedented levels of Government spending at a pace and scale without rival in the post-war era.

I will therefore focus today on the extraordinary efforts that the Welsh Government is making to use our budget in the best possible way to respond to the coronavirus crisis; and to show how the decisions we have made reflect our values as a Government.

The outlook for public finances is stark. According to the OBR the UK’s fiscal deficit could be £273bn this year. That is 5 times higher than expected just 2 months ago at the time of the UK Budget, and significantly higher than at the peak of borrowing during the financial crisis a decade or so ago. This increase will be partly due to higher public expenditure, to deal with the current crisis, but also to much lower tax receipts arising from the reduction in economic activity.

Devolved tax revenues will be affected by the lockdown in the same way as other taxes – we can expect a substantial hit in the current year. However, the fiscal framework protects our budget from UK-wide economic shocks. As a result, the net impact of reduced economic activity and tax receipts on our budget this year should be small but we will of course be monitoring this situation carefully.

In terms of the wider economic context, both the OBR and the Bank of England have acknowledged it is virtually certain that the epidemic, and the necessary measures put in place to contain it, will result in an immediate reduction of economic activity to a degree that is unprecedented in living memory.

Unemployment in Wales will certainly rise sharply, despite the measures put in place by both the UK and Welsh Governments.  The most disadvantaged – those on low pay, in insecure employment, and people with poor health – will be most at risk.  Young people entering the labour market will face a particularly tough time, and the evidence from previous recessions shows that this could result in lasting negative effects on their incomes, health, wellbeing and even life expectancy.

Llywydd, to fund the action we have taken we have received an increase in our budget in the form of consequentials from spending by the UK Government on measures in England. To date, we are expecting over £2.1bn, which is well over 10% of our planned budget.

In order to protect the NHS and save lives, we have needed to take difficult decisions to fund activities that prepare us for the worst in the hope that they are not fully required.

We have also taken decisive action to free up – through reprioritising and repurposing –  more than half a billion pounds from our own budget and European funding to support the Welsh economy and ensure our public services are equipped to deal with the Coronavirus pandemic.

From this Coronavirus response reserve, we have already provided over £300m to the NHS to support priorities including the supply of PPE, field hospital provision, investment in testing and tracing and NHS recruitment.

We are also taking decisive taking action to protect the most disadvantage people in society. We have provided

  • an extra £11m of immediate support for those facing hardship as a result of the pandemic
  • £15m to establish weekly food parcels for those who are shielded.
  • and £24m for a Third Sector Covid-19 Response Fund, targeted at the pressures charities and the third sector are facing. We have also announced additional support of up to £6.3m for hospices in Wales;

Alongside these actions we have also given an extra £500 to everyone working on the front line in social care, recognising that the ‘market rate’ for the job in no way reflects the huge importance of the work that they do.

We have acted to protect the vital public services provided by our local authorities through a £110m Local Authority Hardship Fund, which includes:

  • £40m to get food to families entitled to free school meals while schools are closed.
  • £40m to support the extra costs adult social care services are now facing, in addition to the £500 payment I have just referred to, and
  • £10m to help councils take immediate action to protect the homeless and those sleeping rough.

We have also deployed an unprecedented package of measures to support the economy and protect jobs. We are investing £1.7bn in addition to vital measures launched by the UK Government – such as the Job Retention Scheme.

Our support includes more than £1 billion that local government is distributing on our behalf in business rate relief and associated grants to businesses in the hospitality leisure and tourism sectors.

We have also established a £500m Economic Resilience Fund to offer vital support for businesses, charities and social enterprises over and above that which is available in England.

Of this £500m, the £100m Development Bank of Wales loan fund has already approved over 1,300 loans, totalling over £100m, safeguarding 15,000 jobs.

The remaining £400m grant fund is offering support, particularly for those small and medium sized firms which are critical to the Welsh economy, alongside our charities and social enterprises.

The applications process for this fund saw an incredible 9,500 claims submitted in little more than a week. As of today, £70m of support from this Fund has already been offered to more than 5,000 businesses, charities and social enterprises and is starting to land in bank accounts right across Wales.

As a result of the actions we have taken, Welsh businesses charities and social enterprises can access the most generous business support offer in the UK.

Llywydd, the Minister for Economy and Transport and I urged the UK Government to extend the Job Retention Scheme and I welcome the announcement made by the Chancellor yesterday. Only the UK Government has the fiscal capacity to operate the major schemes we need to protect people and businesses from the worst excesses of this crisis.

As is the case with other devolved nations, this means that the major funding we deploy as a Welsh Government would be severely undermined if the Job Retention Scheme was weakened or terminated at the wrong time.

The UK Treasury did not consult devolved nations on the latest decision but the Chancellor can improve upon this and work now to engage with us before major decisions are taken in the coming weeks.

I will be publishing a supplementary budget on 27 May providing greater clarity on the changes to our budget since March, which will focus on providing more detail on the actions we have taken to respond to Coronavirus.

As our focus shifts from the immediate impacts of this crisis towards recovery, there are many remaining uncertainties ahead. We may need to find more funding to deal with the immediate crisis, and fund restart and recovery efforts – and we also face the risk of further changes to our budget by the UK Government later in the year.

I will also continue to press the UK Government to provide greater fiscal flexibility to help us manage in these unprecedented times.  In particular, I am asking for greater access to the Wales Reserve this year, relaxation of our borrowing limits and greater scope to switch between revenue and capital budgets.  The independent Institute for Fiscal Studies has also recently argued for such changes to be made to help Wales respond to the crisis.

Llywydd, in conclusion every day we are facing tough choices about using our stretched and limited resources.  While these circumstances will continue to require further difficult choices, we will continue to make the right choices, based on the best evidence and our values.