Plenary Statement by the Minister for Economy, Transport and North Wales
|DATE||Wednesday, 22 April 2020|
|BY||Minister for Economy, Transport and North Wales|
Llywydd, I’d like to start by thanking members across the chamber for the positive discussions I have had with colleagues of all parties over the last few weeks.
Some very constructive ideas have come from those discussions – many of which we have used to shape the support we are providing to businesses and individuals – and I want members to know how very grateful I am for that advice and counsel.
There can be no doubt now of the scale of the economic challenge that lays ahead of us.
The OBR’s reference scenario depicts UK GDP falling by 35% in the second quarter of this year.
There is no avoiding a recession, but if we are to avert a major depression, it is imperative that governments across the UK do everything in their power to shelter businesses through this storm – and protect workers from the very great threat of unemployment.
As a Welsh Government, we have made a commitment to play our part in that work. It is why we have re-examined our budgets and made tough decisions, across government, to put in place a new £500m Economic Resilience Fund.
Our fund provides significant financial support that is additional to that provided by the UK Government. It provides vital support for businesses – particularly those small and medium sized firms so critical to the Welsh economy – that isn’t available to firms in England.
We have done this because we want to support good businesses in 2019 to be a good business in 2021. We want to support people who had good job in 2019 have a good job in 2021.
Last Friday we opened the application process for the Fund. The rate of applications in the days since has been unprecedented.
More than 6,000 grant applications were received within 24 hours of launch.
As of 6am this morning (22 April), the Economic Resilience Fund had received 5,842 micro-business applications totalling £56.7m, and 2,267 SME applications totalling £127.3m.
The overall total is 8,109 applications totalling £184m.
That demand speaks to the scale of the crisis we now find ourselves in.
And it is why I was pleased on Monday of this week to have responded with pace to release a further £100m into this phase of the Economic Resilience Fund.
This work builds on the more than £440m worth of business relief grants that have now reached nearly 35,000 businesses across Wales (21 April).
Local Authorities have worked with urgency and with skill to process payments and are doing a fantastic job getting funding to businesses as quickly as possible. I want to thank every single local authority who has played a part in this work.
I also want to pay further tribute to the staff at both Business Wales, the Development Bank of Wales and my officials who have worked tirelessly, often in difficult personal circumstances, to develop the most comprehensive package of support for business anywhere in the UK.
We have sought to strike the balance between supporting as many enterprises as possible and making a meaningful contribution to each one’s survival.
But in doing so we are not losing sight of our longer term ambitions. The need to decarbonise the Welsh economy; the need to increase the incidence of fair work and the need to raise the skill levels of individuals across Wales.
That is why we have asked each recipient of our support to sign up to the principles of the economic contract.
The fund and criteria will be reviewed before the next phase is released.
I want to welcome the action the UK Government has undertaken. The Job Retention Scheme has now opened and I welcome the extension of the scheme until at least the end of June.
On Monday, the UK Government announced a package to support innovative new companies that are not eligible for existing coronavirus rescue schemes. To qualify, a company must have raised £250,000 privately in the last five years.
It’s important the UK Government monitors progress of the scheme to ensure that this threshold does not deter vibrant and viable businesses from accessing support.
In Wales, start-ups that were established prior to 1 March 2020, will be able to apply for the Economic Resilience Fund – if they meet the eligibility criteria. This sits alongside the already well-established and high quality package of pre-Covid support for small businesses that is available through the Development Bank of Wales and of course Business Wales’ start up loans and comprehensive advice.
While a lot has been done, there is still a lot to do.
There is an urgent need to see more of the promised lending guaranteed by the UK Government, getting to the front line.
The UK Government must continue to support and press the high street banks to be much more responsive to the needs of our businesses at this difficult time.
I believe that there is a lot that they could learn from our own Development Bank of Wales in the way it has adapted its own policies and processes to get funding and support to businesses quickly Llwydd, we are all incredibly proud of businesses all over Wales who are stepping up to support the fight against Covid and to assist our NHS.
There has been an overwhelmingly positive response from the business community to our call to action on PPE. Through it, we are seeing new and innovative ways of working as businesses switch to making devices and products, which will make a real difference to our health and social care staff.
Those currently furloughed or out of work need our support, too.
That is why on Monday I launched our new e-learning provision aimed at improving skills and supporting mental wellbeing by helping individuals to prepare positively for the future, whatever it may bring.
Through our new offer we have made available a range of high quality and free online learning resources, from trusted providers like The Open University.
This provision is supported by online careers advice and guidance, available for use by individuals across Wales via the Working Wales website.