10. Debate on the Equality, Local Government and Communities Committee report: Making the economy work for people on low incomes

Part of the debate – in the Senedd at 6:06 pm on 18 July 2018.

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Photo of Ken Skates Ken Skates Labour 6:06, 18 July 2018

Diolch, Llywydd, and can I start by expressing my appreciation to all Members who have spoken today, and to all members of the committee for an insightful report? In particular, can I thank the Chair for leading on the work of the committee? 

I think it rightly notes that whilst not all the levers to bring about any significant change in levels of poverty sit with the Welsh Government, particularly powers over the welfare system, we must do all we can to ensure that people in Wales have access to good quality work that provides a decent income. Our national strategy, 'Prosperity for All', provides clear and consistent frameworks for our whole-Government approach to increasing prosperity and addressing the root causes of poverty in a more effective and joined-up way than in the past. This is supported, of course, by our economic action plan, the employability plan, which work in tandem to increase wealth and well-being, whilst also reducing inequalities in both. 

Now, Llywydd, at the heart of the economic action plan is a new relationship between Government and business, based on the principle of public investment with a social purpose, a something-for-something relationship between business and Government. We recognise that helping people into work is only part of the solution in terms of the challenge that tackling poverty presents. We need to work with employers to improve the quality of jobs, and to support people to remain in and progress in work, just as Jenny Rathbone has indicated. The new economic contract commits the Welsh Government to investing in economic growth, but with an expectation that the investment will also support the principle of fair work and decent, secure and rewarding employment. We'll continue to promote the benefits of paying the real living wage to business, including improvements to the quality of work of their staff, reduced absenteeism and positive impacts on recruitment and retention. 

Our economic action plan provides a context in which we will work with businesses in foundational sectors, such as retail, to understand better the challenges they face, and to promote the living wage as part of sustainable growth. This includes targeted work to support growth and value in these sectors, with the aim of supporting greater opportunities for progression and for decent pay. Again, Jenny Rathbone in particular pointed to the foundational sectors as those areas of activity where women in particular have faced considerable disadvantage. In driving up the availability of higher quality and more secure jobs, we intend to drive down the gap in pay between men and women. 

Now, a number of single parents felt that they face specific challenges in finding flexible work. We recognise that increases in the national minimum and living wages alone are simply not enough and need to be set alongside a suite of policies that support improved outcomes for low-income households. For example, our childcare offer will support working parents of three and four-year-olds, and this will increase employment choices, enabling those working part time to work more hours, and to support second earners into work. Households taking up the childcare offer are more likely to benefit from an increase in wage rates, and this combination of policies has the potential to have a positive impact on household income.

Our economic action plan introduces a new regionally focused model of economic development, and I'm pleased to see the broad support for this approach in the evidence given to the committee. The approach recognises the unique circumstances of each region and commits the Welsh Government to working collaboratively across Government and with partners to address challenges, build on strengths and develop distinctive opportunities to maximise growth across Wales. Janet Finch-Saunders identified the relatively high levels of unemployment that she is witnessing in her constituency, and the regional approach is directly intended to iron out regional inequalities across Wales, identifying the key strengths for each of the regions but also making sure that we tackle the individual challenges that our regions face.

Our ambition is also to make Wales a fair work nation, one where everybody can expect decent, life-enhancing work. Earlier this month, the First Minister announced that he had appointed Professor Linda Dickens from a shortlist of suitable, independent and authoritative candidates to chair the fair work commission. The independent commission will build on the work of the fair work board and look into many of the issues raised by the committee's report and more widely by people and organisations that have given evidence.

With nearly a quarter of people in Wales living in poverty, we do not underestimate the scale of the challenge. However, by working collaboratively with partners, we can build on our foundations, futureproof our economy and empower our people and communities so that everyone has the opportunity to contribute to and benefit from economic growth. Whilst I recognise the value of The Spirit Level as a critique of the inequality that we see across western capitalist economies, I also recommend to the chair of the committee Affluenza, as it, along with The Spirit Level, influenced the national strategy and the development of the economic action plan.