Statement by the Minister for the Economy – 6th May 2020
|DATE||6 May 2020|
|BY||Ken Skates MS, Minister for Economy, Transport and North Wales|
Llywydd, I want to begin by thanking members across this chamber as well as our social partners and colleagues in every area of our public service in Wales for the huge amount of work they have done contributing to, and supporting, the economic response to coronavirus.
As I will come on to outline, we have made a great deal of progress delivering rapid support through our Economic Resilience Fund, the Development Bank of Wales and through business rate relief being administered by local authorities – and I want to pay tribute to everyone who has helped in that effort.
I say this because the need for this support could not be greater. Economies around the world are showing signs of record contractions and significant unemployment.
At least 30 million Americans have lost their jobs since mid-March. The eurozone economy shrank at the sharpest pace on record in the first quarter and even the strongest economy, Germany, recorded unemployment rising by 373,000 in April.
There are many businesses in Wales that have already had to take tough decisions. Of those businesses and venues that must currently remain closed, there are over 200,000 employees within those industries in Wales.
Over a third of those work within the food and drink industries and over a quarter in retail. This is before we take into account the supply chain impact.
Our priority is public health and controlling the pandemic.
Without public confidence in that, consumers will not go to shops, people will not travel and workers will not return to offices.
In the meantime, as thousands of individuals and businesses put their livelihoods on hold to save lives, the Welsh Government is taking decisive action to help all those businesses and individuals who have been impacted.
As it stands, we have invested £1.7 billion in support packages, equivalent to 2.7% GDP in Wales.
This is a truly unprecedented commitment and a clear demonstration that we are standing up for businesses in all parts of Wales.
Just last week, the Minister for Finance and I announced that over half a billion pounds worth of relief grants had moved from government to businesses – reaching 41,000 small businesses in Wales in the space of just a few weeks.
All eligible businesses in the tourism, retail and hospitality sector are now benefiting from a year-long rates holiday.
During my last statement, I told you we had added an extra £100m to the amount of funding for the first phase of the Wales only Economic Resilience Fund – which totals half a billion pounds (£500m) overall.
That fund was paused at midday on Monday 27th April following the very large number of applications – worth over £255 million in total
Funding is now flowing to businesses, with over 700 applications being appraised and approved daily.
The rate of applications has been unprecedented and I want to thank the team of Welsh Government officials who have worked at pace to process applications and get money into the accounts of those businesses and organisations which needed that support quickly.
We are reviewing how we can utilise the remaining funding to support those firms who need it most and to protect our economy.
I want to reiterate that this is not support that is being made available to small and medium sized businesses in England – it is financed from our own budgets here in Wales. I know there are many firms here in Wales that are still in business because of our support that would have closed had they been set up in England.
I have had some excellent discussions with colleagues across the Chamber about the next steps with our ERF fund and additional finance through the Development Bank of Wales could be used.
The Development Bank’s COVID-19 loan scheme was fully subscribed in little more than 7 days after 1,600 applications submitted. In an average year the DBW processes around 400 applications.
It is anticipated that the DBW will have processed all applications very shortly. 567 of these loans have gone to small and micro businesses safeguarding 4,571 jobs.
Last week’s announcement about the UK Government’s Bounce Back Loans scheme, which is available in Wales, was welcome and we continue to work with the UK Government to identify the gaps in provision for businesses in Wales.
As I have said repeatedly, 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 to have a good job in 2021.
But there is a real need for the Chancellor to learn lessons quickly from the schemes implemented so far, not least on getting funds out to businesses faster. There is a lot that he can learn from our own Development Bank in this regard.
It is essential the UK Government now goes further by providing the financial support needed for firms of all sizes to survive and recover to the levels of growth and prosperity that were seen before this pandemic. It must also look at how the furlough scheme is landing with businesses – and heed their call for it not to be withdrawn before the crisis has ended.
The Economic Resilience Fund will support a significant number of businesses and enterprises facing cash flow pressures – but the Welsh Government has always been clear, it will not reach all of them.
This includes support for the Port of Holyhead. After the UK Governments announcement of 24 April that its support for ferry services and routes does not include the vital route between Dublin and Holyhead, I pressed the UK Government to look again. I am glad that they are.
We look forward to working together constructively to support the port which is second busiest in the UK and is vital to the economy of North Wales. It is also a vital link, transporting critical goods, such food and oxygen supply for the NHS, for the UK mainland, Northern Ireland and the Republic of Ireland.
As I said earlier, for now, the priority remains public health and controlling the pandemic.
That doesn’t mean we are not thinking about the future for the economy and the ‘pathway to recovery’.
It is essential we look across all areas of Government – not just economic levers.
I am in regular contact with UK Government and Devolved Administration colleagues on this matter as we work to make our countries safer places to live and work again.
We are giving careful consideration to how we exit lockdown and we remain committed to working across the four Administrations on developing the right policy on this.
Just yesterday I joined my devolved colleagues in Scotland and Northern Ireland in setting out common concerns we shared in relation to the UK Government’s Safer Workplaces guidance.
As the First Minister has said, we are keen to avoid divergence wherever possible – and we have published our recovery framework for how we will lead Wales out of the crisis in a way that keeps everyone safe and revitalises our economy as quickly as possible.
We need a thriving economy that provides people with their jobs, their incomes and supports our public services. One where we have a more prosperous, equal and greener Wales.
The best way to do that is to get control of the virus now.
I’m happy to take questions.