Support for People and Businesses in Wales: Covid-19

Like the hon. Gentleman, since Monday I have been flooded with emails from businesses and workers who are now deeply uncertain about their future. I was saddened to read on Facebook this morning that Aroma, a café in Llandrindod Wells, has announced that it cannot survive lockdown 2 and will be closing its doors permanently.

Support for businesses comes in many forms, not just lifeline funding. Businesses need to know what comes next. We in Wales know that half-term, Halloween and bonfire night are all cancelled. Valuable chances to recover are gone. Where do we go from here? How do we fight the virus on an economic and a public health front after 9 November? The Welsh Government need to come forward with a plan urgently.

It goes without saying that the past few months have been incredibly challenging for us all in Wales, and all the more so for individuals and businesses that are falling through the cracks of the support offered by the UK Government. In Welsh questions last week, I spoke up for constituents who are locked out of the Government’s new job support scheme or are deemed to be in unviable jobs. In his response, the Secretary of State invited me to raise individual examples of gaps in Government support that my constituents have encountered. Here are just a few for my constituency neighbour, the Minister.

A worryingly large amount of correspondence has come in from constituents who were denied access to the furlough scheme in the first place, including those on maternity leave; those who are shielding; those made redundant before 19 March, whose previous employer does not agree, for whatever reason, to re-employ them and place them on temporary leave; and many zero-hours contract staff, particularly agency workers. There are also those who started new jobs in March and who have been unable to access support through the furlough scheme. For example, a constituent who started a new job in south Wales in March was told to stay at home after a week in the office. He was later informed that the company could not afford to pay everyone, and he was put on eight weeks’ unpaid leave.

There are also ongoing problems with Government support schemes that affect those who have received support. They include the deeply unfair situation, which is only now becoming apparent, whereby lower paid workers who fall ill after returning to work from furlough risk losing their entitlement to statutory sick pay, as their earnings fall under the limit of £120. I thank Mike Payne of the GMB union for highlighting that, and I think the Government should sort it out.

There are also gaping holes in the Government’s support for the self-employed, including those who work on short pay-as-you-earn contracts. For example, constituents in the creative sector on local film sets have not been covered by the self-employed income support scheme or the job retention scheme. Those I have spoken up for in previous debates who serve as directors for limited companies and draw down their income in dividends currently have no support under either scheme. Those small business owners and directors are often not high earners, paying themselves a nominal salary and taking the rest as dividends.

The new job support scheme is also flawed. An Institute for Public Policy Research report estimates that only 10% of so-called viable jobs will be saved by the package. The truth is that a grant of two thirds of their salary for workers is simply not sufficient for those on the lowest wages, and will make it harder for many of my constituents to pay bills and feed their families, especially in the run-up to Christmas. Government adviser Dame Louise Casey said last week:

“It’s like you're saying to people, ‘You can only afford two-thirds of your rent, you can only afford two-thirds of the food that you need to put on the table.’ There’s this sense from Downing Street and from Westminster that people will make do. Well, they weren’t coping before Covid.”

She is absolutely right that this level of support simply will not cut it. The UK Government should reconsider the policy and listen to the Wales TUC, which has rightly stated that the wage replacement should be at least at the current furlough level of 80%.

Given that two thirds of the national minimum wage is about £800 a month, there is a strong likelihood that many of the lowest-paid workers in Wales, where the average wage is 15% lower than the UK average, will need to claim universal credit under the new job support scheme. That again illustrates the pressing need to address the in-built flaws in the universal credit system, including the five-week wait, which the Work and Pensions Select Committee highlighted yesterday, and the advance loan payment, which pushes people into debt.

Whole sectors of the Welsh and UK economy are facing an uncertain future. In my constituency—my hon. Friend the Member for Islwyn has mentioned many of these—the sectors include the exhibition and events industry and its many supply chains, driving instructors, garages, dog kennels, gyms, the wedding industry, and beauty and hair, as well as others. As chair of the all-party group on steel, may I point out the need to help out our steel industry, which we will definitely need if we are to build back greener? I urge Ministers to work with their counterparts in the Welsh Government to produce a road map for recovery for these businesses, particularly those where supply chains frequently cross borders within the UK.

My final point is about lower-paid workers, particularly women, and I draw Ministers’ attention to the excellent report by the Welsh equality charity, Chwarae Teg, “Covid-19: Women, Work and Wales”. What we are going through might be the new normal, but for lower-paid workers in unfurloughed sectors, such as care, retail and the NHS, who are keeping the country going, there is nothing normal about the contribution they are making to keep us safe in the second wave. The lowest paid—those on the living wage—deserve the Government to commit, at the very least, to giving them a raise next year. As I highlighted in Prime Minister’s questions last month, Ministers should confirm that the hourly level will still rise to £9.21 in April. Working people in Wales and across the UK should not be made to pay for this crisis.

We have the most comprehensive, nuanced and generous package of financial support, beyond the support from the UK Government, and it has protected 100,000 jobs in Wales. The package of support that was announced at the same time as the proposed measures is crucial in bringing together clarity on public health restrictions with economic support and making sure that the support gets through to businesses. Ken Skates has announced a £300 million support package for businesses and, although it contains multiple aspects, I should just mention that it provides individual payments to those who, for example, benefit from small business rate relief and—of particular concern to my constituency—those small and medium-sized enterprises in the leisure and hospitality sectors that receive individualised payments.

I wish to raise a few specific issues. I have already mentioned the wider implications of confusion. Despite the welcome BBC Wales broadcasts and coverage of statements from the First Minister, the Economy Minister and other Ministers, much of the media reporting on what is happening in England and on the chaos and confusion that we have seen in recent days filters across into Wales. Many businesses and individuals regularly come to me to talk about the tiers and the decisions that have been taken for England. I have raised that point since the start of the crisis, and I know that the Secretary of State for Wales has made attempts to try to be clearer, but that is not often matched by the Prime Minister and others getting up at UK Government press conferences to put information out there. That causes huge confusion not only for businesses and individuals along the border but for others who pick up news from England. There needs to be a real step towards greater clarity on the decisions—whether people agree with them or not—that have been made and why they have been taken. Anything that the Minister and the Secretary of State for Wales can do to help provide clarity, even if there are differences and disagreements, would be helpful. The decisions are taken in Wales, and businesses should know that there is that certainty and clarity about what is happening.

I have raised this many times, but I want to raise again the situation facing many freelancers and those in the excluded groups who have fallen through the gaps in different programmes and packages. Again, I want to praise the Welsh Government for the approach they have taken, particularly on freelancers working in the arts and creative industries, in setting up a freelancer fund. Individuals are not able to benefit in the same way from the large sums that the Chancellor keeps trumpeting as having been given to the arts and creative industries, but the freelancer fund is of course welcome. That package supports many venues and arts and creative businesses in my constituency, but individuals—often the lifeblood of our creative industries—are not eligible in England, although they are Wales, but the demand is huge. If evidence is needed about the hurt and pain going on out there, one has only to look at how quickly people have applied to the freelancer fund scheme in Cardiff and the Vale of Glamorgan in recent days. There have already been two phases, and I am arguing for a third. Many people are struggling and are absolutely desperate for payments to help get them through the next few months. The problem is not related to the lockdown that starts on Friday; it has been going on for months, and we have heard again and again from those who have fallen through the gaps.

I also want to raise the issue of the bureaucracy that businesses face and the fact that the Chancellor has not responded to the very reasonable request from the First Minister to bring forward the job support scheme package. Businesses now have to apply for the furlough scheme at its tail end and then apply for the job support scheme. I know there is a difference in approach and there are different views, and I know that politics is involved, but I am talking about plain common sense for businesses. It would have made a lot more sense for the Chancellor to have brought the scheme forward. If businesses have to continue to apply for the two separate schemes, I urge the Minister to ask his ministerial colleagues to bring forward the funding for the tail end of the furlough scheme as quickly as possible, because we all know that, for many businesses, cash is king. Many are really struggling with their cash flow, and they need the money as soon as possible.

I want to raise a related issue. I am being contacted by many constituents and others facing delays at the UK Government-run testing sites in Cardiff. I have raised the issue with the Department of Health and Social Care. The site is run as part of the Lighthouse lab system. I have had multiple cases come in over the past few weeks of people not getting tests and then having to self-isolate. They are unable to go to work, which is causing financial strain and worry for them, their families and the businesses that they work for. I have raised the matter with the DHSC Parliamentary Private Secretary and others. I urge the Minister to look into that specific case because it relates to the UK Government-run site, not the Welsh Government.

We have seen a methodical, measured, science-led and consultative approach from the Welsh First Minister, our Economy Minister and others in these very difficult circumstances. I will continue to stand available to support all of my businesses and all those who are struggling at the current time. I will continue to make sure they get the right information and access to support. I hope that we see a more measured, methodical, clear and consultative approach from the UK Government going forward. We are going to get through this only if everybody works together and if we take some of the politics out of it. We need to support our residents and our businesses and not make the cheap jibes that we have heard in recent days from the leader of the Welsh Conservatives and their health spokesperson, Andrew R. T. Davies. It is not helpful, it is deeply damaging, and it is not in line with the facts on the ground.

As we approach the short, sharp two-week firebreak this Friday, we see the difficult decisions being taken by the Welsh Labour Government, listening to the scientific advice and taking action where needed. It is at times like these that I am so proud to be Welsh—I know that this view is shared by the majority of my constituents who write and tell me—and so proud to represent a Welsh constituency. The Welsh Labour Government are ensuring a supported firebreak for a short period, rather than a slow decline towards Christmas, which we know is the time that a lot of businesses depend on to secure them throughout the year. The firebreak is absolutely necessary to get back on top of the virus, to suppress the spread of infection and to stop the NHS being overwhelmed.

The Welsh Labour Government stepping in to save lives and provide a generous financial support package is in stark contrast to what we see unfolding in England, which is the UK Government playing poker with people’s lives and livelihoods. In Wales, the Welsh Government are providing £300 million in an enhanced resilience fund for this short two-week firebreak, small business rates relief grants, funding for retail, hospitality and leisure shutting down for two weeks, and a £100 million fund for long-term business development.

The Government in Wales have swiftly provided the clear and quality support that is needed now, as well as keeping an eye on the future. Despite repeated requests from First Minister Mark Drakeford to work with the UK Government, they have continued to ignore our First Minister. The UK Government’s display yesterday towards Manchester shows the deep contempt they have for people’s lives and livelihoods. Never has there been a more important time for us to come together and govern together. This is not governing—the UK Government seem incapable. They are seeking to divide and conquer. It is politicking at best, but it is downright dangerous at a time of national emergency. We need trust and transparency.

I will make some specific requests of the Minister. I hope that the Chancellor responds swiftly to Mark Drakeford’s request to give Welsh businesses early access to the new job support scheme, cutting down paperwork that overstretched and overworked businesses must complete to access it. Will we see outlawed fire and rehire tactics under the guise of covid that few businesses—thankfully—but some practise? Usually, that affects those lowest paid and in the most precarious jobs. Many have contacted me and are desperate to see an end to the practice. Likewise, the £20 uplift for recipients of universal credit has been a lifeline for more than 5,000 people in Cardiff North, the difference between being able to cope and being cut adrift. Economic hardship shows no sign of easing, so will the UK Government extend that uplift to and throughout 2021?

This is a deeply worrying time for everyone, and we have an uncertain future until there is a vaccine. There is no easy fix right now, but I thank the people of Cardiff North and of Wales for making those tough sacrifices and for their continued co-operation. Elsewhere, we have witnessed how division leads to dithering and delay. Ultimately, that is bad for public health, and the uncertainty is bad for livelihoods and for businesses. Coming together is our best chance of defeating this virus.

Contrast that—as a number of my hon. Friends have already observed—with the events in Greater Manchester, where the UK Conservative Government are certainly failing to deliver on their levelling-up rhetoric. One specific issue that my constituents regularly raise is the need for more support from the Chancellor for the self-employed. Creative industry workers have told me that their work has dropped off a cliff, and because of the nature of their employment—short-term pay-as-you-earn contracts, freelance work and so on—many of them fall outside the income support schemes.

We also need far more support for our steelworkers. The Port Talbot steelworks is the biggest employer in my constituency by far, but Tata Steel has fallen through the cracks in the UK Government’s schemes and has yet to receive any emergency funding or loans. It took the French and German Governments just weeks to provide their major steel producers with the finance to cover their short-term cash flow issues—issues that are, of course, due to the impact of the pandemic—yet there still has not been a penny for the British steel industry from the UK Government. They continue to sit on their hands.

Steelworkers are key workers. The steel industry continues to operate and serve our country through the current crisis, and will be critical to rebuilding our economy after it. It is the backbone of modern manufacturing, and it should be noted that every other sizeable economic power in the world has a significant steel industry. It is also far greener to make steel in the UK than it is to import it, and lots of incredible work is taking place in this sector, including the SPECIFIC project at the Innovation and Knowledge Centre on Swansea Bay campus, in partnership with Tata Steel. That project is making steel-based materials that form the basis for photovoltaic cells, potentially turning every building in our country into a power station.

Steel is very much a 21st-century industry, and it is the backbone of our economy and our manufacturing sector. We need our steel industry, yet because of the extraordinary nature of the situation we find ourselves in, that industry can only get through this crisis with Government support. Of course, part of the reason why the steelworks needs this short-term support is that over the past 10 years, the Government have consistently failed to back the UK steel industry with the long-term support it requires. The UK Government have not offered a sector deal similar to those that are in place with industries such as aerospace and construction, and have not done enough to create the policy framework around energy prices, procurement, and dealing with the dumping of steel by countries such as China that is needed to form the foundation for a strong and healthy steel industry. The message to the UK Government is clear: we need our steel. There can be no post-pandemic economic recovery without a strong and healthy steel industry, and the Government should be backing this industry to the hilt.

It is not just the steel industry that the UK Government have failed to back in the long term. The impact of 10 years of austerity on public services in Wales, including a reduction in the Welsh Government’s grant, has affected the ability of local services to meet the challenge that this pandemic poses. Neath Port Talbot Council has had to remove £90 million from its budget since 2010, and is expected to find another £50 million reduction by 2025. Now coronavirus has hit, meaning that like other councils across the UK, both the extra spend and the loss of revenue for Neath Port Talbot Council will run into the millions. This really is going to be a test for public services whose resilience has been undermined over the past decade.

Local councillors need the Chancellor to heed the words of the Secretary of State for Housing, Communities and Local Government, who promised in May that the Government

“stands with local councils at this difficult time”

and that they would do “whatever is necessary”. So far, there is scant evidence of the UK Government making good on that pledge, but they need to, because “whatever is necessary” needs to mean what it says.

Take also the long-term issue of strategic independence. I recently visited one local company, which has turned its hand to manufacturing PPE for the Welsh NHS in a truly flexible and inspirational way, but what came home to me during that visit was that at that point, there were no Welsh companies making PPE for the Welsh NHS. That is because the whole supply chain had been moved offshore to countries such as China.

Every single one of the firm’s employees who I spoke to expressed their profound concerns about the way in which our sovereign capability had been eroded, to the point where we are left dangerously exposed and over-reliant on other countries. Frequently, those countries are not allies of ours or our national interest and security. The UK Government must understand that when we talk about supporting UK businesses through covid-19, we also need to have an eye to the future, and the reliance and resilience that UK manufacturers would bring to the economy. We cannot go on in a situation where so much of our critical infrastructure is exposed to forces that we cannot control.

Finally, Sir Edward, I want to touch on skilling and reskilling. After the pandemic we are going to need significant investment in vocational training for my constituents and for people across the country, to help them get back into the job market, because, I am afraid, there will be a huge shift of people losing their jobs. We are going to need to retrain those people and bring them back into the labour market.

Skilling and reskilling programmes have frequently been funded through European structural funds in Wales and other economically challenged parts of the United Kingdom. That money will disappear in January, when the transition period ends, leaving a huge black hole. The UK Government have promised that a UK shared prosperity fund will replace EU development funding, but we still know next to nothing about the SPF. How much money will be in the envelope? What development programmes will it cover? What will be the focus of those programmes? Who will be in charge of administering the scheme? There is a tremendous risk that the UK Government will undertake both a money grab and a power grab from the devolved nations with regard to how that development funding is spent. We have even recently heard suggestions that the UK Government plan to funnel money directly into marginal or Conservative-held seats in what can only be described as the worst sort of pork barrel politics.

It is frankly unacceptable that we are just two months away from the day on which the shared prosperity fund is supposed to be launched, yet we have no idea about its overall size, focus or governance. That is yet another example of the UK Conservative Government treating the regions and local areas of our United Kingdom with contempt. As chair of the all-party parliamentary group on post-Brexit funding for regions, nations and local areas, I will be working closely with colleagues to hold the Government to account and to ensure that they deliver on their promises.

With those words I close, and simply add that we have seen some inspiring examples in all our local communities. In this time of crisis, we all need to pull together in the interests of those communities, our constituents and our entire country. That will require leadership, investment and a new way of working across our United Kingdom. I look forward to the Minister’s comments on all those issues.

I do not think I shall have time today to mention all the contributions to the debate in as much detail as I should like, but I want to acknowledge some of the comments that were made by other Members. My hon. Friend the Member for Islwyn highlighted the genuine concerns of businesses in Islwyn and across the country. He also rightly highlighted support from the Welsh Government, as well as the lack of regular contact from the UK Government to the Welsh Government and the lack of co-operation from the UK Government at various times during the pandemic.

The hon. Member for Brecon and Radnorshire (Fay Jones) talked about the understandable concerns raised by businesses and the tourism sector. I am sure that she will join me in welcoming the additional funding set out in this week’s announcement dealing with the firebreak lockdown, and the additional £20 million that was ring-fenced by the Welsh Government as part of that, specifically for tourism and hospitality.

My hon. Friend the Member for Newport East (Jessica Morden) talked about her gratitude to constituents of hers who have done the right thing. I am sure that we would all echo that, as people in communities across the country have gone through a hugely difficult few months and unfortunately the end is not yet in sight. She also raised the need for early access to the job support scheme—something that was echoed by my hon. Friends the Members for Cardiff South and Penarth (Stephen Doughty) and for Cardiff North (Anna McMorrin)—and the need to combat bureaucracy as businesses deal with two schemes in the short two-week lockdown.

My hon. Friend the Member for Cardiff South and Penarth talked about taking the right decisions at the right time, which would contrast starkly with examples of what we have seen from the UK Government. He also mentioned the fact that the Welsh Government have aligned public health with the need for economic support—a crucial link. He talked about the lack of support for those who have been excluded, and contrasted the launch of the freelancers’ fund in Wales with what has happened across the UK, pointing out the huge need for that fund across the country. My hon. Friend the Member for Cardiff North talked about the need to pool resources and the measured approach of the Welsh Government. She also raised the freelancers issue, and requests for early access to the job support scheme.

Finally, my hon. Friend the Member for Aberavon (Stephen Kinnock) talked about the community action that sprang into place throughout the pandemic, of which I am sure we have all seen examples across Wales. Our communities have demonstrated a huge amount of community spirit, and I pay tribute, as I am sure we all do, to the key workers across Wales who have kept our economy going. My hon. Friend raised the need for a steel support fund and contrasted the UK Government’s approach with that of other Governments around the world, who sprang into action a lot more quickly to support their key industries. Of course, he also raised the important issue of the shared prosperity fund, highlighting the fact that in 2018 we were due to have a consultation on it, and two years later, with just two months to go, clarity about the fund is missing. That is a shocking indictment of the UK Government.

The Welsh Government’s inclusive approach has ensured that local government, the third sector and other partners have pulled together in one direction, with a shared interest, to support people across Wales. That is, unfortunately, in stark contrast to the situation we find at Westminster.

It is disappointing to hear some representatives of the Conservative party continually calling into question the justification for the firebreak lockdown, as they have done in recent days. I think that approach is both ignorant and irresponsible. Unlike the UK Government, we have followed the science in Wales. I suggest that Conservative Members actually read the advice produced by the Welsh Government’s technical advisory cell. I have a copy if Members want to pass it on to their colleagues.

We are in the middle of a national and global crisis, and the responsible thing for us all to do is to reinforce the clear public health messages that are designed to regain control of the virus and to save lives. It has not been a happy 24 hours for the Government in their dealings with the nations and regions across the UK. I hope that, when the Minister gets to his feet, he will address some of the genuine concerns and questions that Members have raised on behalf of our constituents. I hope that we will achieve some unity as we work to tackle this dreadful virus and support Welsh businesses and families who are affected at this hugely difficult time.