Okay. We resume, then, with item 5 on our agenda this afternoon, which is a statement by the Minister for Finance and Trefnydd—the fiscal implications for Wales of the impact of and the response to COVID-19. And I call on the Minister for Finance and Trefnydd, Rebecca Evans.

Thank you. It was on 3 March that the 2020-21 final budget was passed by the Senedd, and so much has happened in the 10 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 Government 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 the 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 Office for Budget Responsibility, the UK's fiscal deficit could be £273 billion this year. That is five times higher than expected just two 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. 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 that 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's unprecedented in living memory.

Unemployment in Wales will certainly rise sharply, despite the measures that have been 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 impacts on their incomes, health, well-being and even life expectancy.

To fund the action we've 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're expecting over £2.1 billion, which is well over 10 per cent 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're not fully required. We have also taken decisive action to free up, through reprioritising and repurposing, more than £0.5 billion 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 £300 million to the NHS to support priorities including the supply of PPE, field hospital provision, investment in testing and tracing, and NHS recruitment.

We're also taking decisive action to protect the most disadvantaged people in society. We've provided an extra £11 million of immediate support for those facing hardship as a result of the pandemic, £15 million to establish weekly food parcels for those who are shielded, and £24 million for a third sector COVID-19 response fund, targeted at the pressures that charities and the third sector are facing. We have also announced additional support of up to £6.3 million for hospices in Wales.

Alongside these actions, we're also giving 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 £110 million local authority hardship fund, and this includes £40 million to get food to families entitled to free school meals while schools are closed, £40 million to support the extra costs adult social care services are now facing, in addition to the £500 payment I have just referred to, and £10 million to help councils take immediate action to protect the homeless and those who are sleeping rough.

We've also deployed an unprecedented package of measures to support the economy and protect jobs. We're investing £1.7 billion 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've also established a £500 million economic resilience fund to offer vital support for businesses, charities and social enterprises, over and above that which is available in England. Of this £500 million, the £100 million Development Bank of Wales loan fund has already approved over 1,300 loans, totalling over £100 million, safeguarding 15,000 jobs. 

The remaining £400 million grant fund is offering support particularly to those small and medium-sized firms that are crucial to the Welsh economy, alongside our charities and social enterprises. The application process for this fund saw an incredible 9,500 claims submitted in little more than a week. As of today, £70 million 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 across Wales. As a result of the actions we've taken, Welsh businesses, charities and social enterprises can access the most generous business support offer in the whole of the UK.

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 that we need to protect people and businesses from the worst excesses of the 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 on 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 the 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 seeking 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.

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 decisions, we will continue to make the right choices, based on the best evidence, and on our values. Thank you very much.

Thank you. Nick Ramsay.

Diolch, Dirprwy Lywydd, and thank you, Minister, for your statement this afternoon. These are, clearly, dark days for the economy as the lockdown inevitably sees the reduction in economic growth and GDP that you've outlined. So, the role of the Welsh Government in supporting business and preparing for the future at this time is, indeed, vital.

With this in mind, you'll be aware that there's been great concern, over the last couple of days, at the announcement by Debenhams that it'll be forced to close all five of its stores in Wales, including flagships in Newport and Cardiff, if the Welsh Government doesn't reverse its decision to cap business rate relief. I think this is a clear warning sign. If these stores don't reopen after the pandemic, there will be significant knock-on effects for the economy. Many of my constituents rely on the Newport store—there are jobs provided there, customers are going there. Now, I understand that you are meeting with Debenhams, or you might already have had discussions with them and with their bosses. I wonder if you can update us on any discussions, and will you listen to them and review your decision to exclude shops with a rateable value over £500,000 from being able to access support? I know that you've said in the past that that policy allows you to support other businesses, but I think it's very important that larger businesses are also supported.

Can I secondly ask you—you've mentioned the supplementary budget you're planning on bringing forward—how are you reprioritising Welsh Government spending at this time? Can you say a little bit more about your supplementary budget? My party have called for a full emergency budget where you will give greater transparency, a greater opportunity for scrutiny of Welsh Government's spending decisions at this time.

Can I finally ask you about the implications for tax policy? You've previously said that you don't anticipate there being changes to tax rates before the next Senedd elections. Is that still the Government policy, particularly if there are changes at UK tax level later in this year? I think it's very important that the public and our constituents do have clarity on budget decisions at this time.

I'm grateful for that set of questions, and Nick Ramsay is right that I did have the opportunity to meet with the chairman of Debenhams yesterday. But, just to provide the background to the thinking on the Welsh Government's decision to limit rate relief to those businesses with a rateable value of under £0.5 million, we did so because we're very keen to ensure that that funding, which freed up £100 million of funding, could be redeployed to support small and medium-sized enterprises across Wales, which are the backbone of our economy. So, we're able to support, for example, 2,000 businesses with grants of up to £50,000 as a result of that decision. But, as I said to the chairman of Debenhams yesterday, Welsh Government really wants Debenhams to succeed. It is really important in terms of supporting some of our high streets in particular, as one of those anchor stores. So, I have said I will reflect on the discussions we had yesterday. I don't think it would be fair on Debenhams if I were to go into too much of the detail of those discussions, but I've certainly undertaken to write them in the next couple of days, following those discussions.

I will also say on the matter of the supplementary budget, it's my intention, as I say, to publish that at the end of this month, but I'll certainly be providing a greater level of detail. As Nick Ramsay knows, supplementary budgets are normally quite technical exercises, just detailing funding as it moves between or within main expenditure groups and the funding that comes from UK Government and so on, but the level of change on this occasion has been extraordinary. So, I set out at the start that we've had an allocation so far, or expect an allocation of over £2 billion, which is around 10 per cent of our budget. So, I will be providing a greater level of detail with the supplementary budget than we would normally do, describing in some more detail the allocations that we've made, but also those areas where we've had to free up that funding where activity will no longer take place, because I think it's important to give that kind of clarity as well.

We did that work by discussing with colleagues across Government on a MEG-by-MEG basis, looking through every line of their budget to explore what could be freed up this first time round. But I'll say to you what I've said to colleagues, and that is that it's probably not the first time that we're going to have to do that exercise. I think we'll have to repeat it again to explore what further funding could be freed up for the COVID response and for recovery.

And on the matter of Welsh rates of income tax, it is still our intention not to raise Welsh rates of income tax over the course of this Assembly, and, of course, we voted on our Welsh rates of income tax for this financial year just a few weeks ago, and it's not the intention to change that. I think people are having a tough enough time as it is at the moment, so I don't think that we would be looking to ask them to contribute more at what is a really, really difficult time.

Thank you, Minister, and, as you say, I am used to the technicality of the supplementary budgets, but this one will be more important than ever, for obvious reasons, so we look forward to that.

In terms of the business rates answer that you've just given as well, as I say, I appreciate there are certain reasons for the policy, but I think there are really strong arguments for giving that support to larger companies like Debenhams to make sure that those big anchor stores are still there at the end of this to provide the knock-on effects for the rest of the economy—the positive knock-on effects that we're used to receiving from them.

In terms of borrowing and taxation, you did touch on borrowing in your statement, and I think you said that the anticipated current budget deficit, UK wide, is looking at around £263 billion. That's around £100 billion more, I think, than the budget deficit was at the peak of the financial crisis back over 10 years ago. So, given that that involves a significant amount of borrowing already, how realistic is it to put the eggs in the basket of looking for huge flexibility in Welsh Government borrowing powers, given that money is clearly going to be tight over the next year?

Secondly, in terms of taxation, I've discussed income taxation. Of course, the other major taxes under the remit of the Welsh Government—landfill disposals tax, stamp duty—in terms of landfill disposals tax, I imagine that revenues there have fallen off significantly. It doesn't include fly-tipping, which has been going on at quite a rate in some areas, as we know. In terms of stamp duty, there's been a total slowdown in the housing market. I know that, in the UK, there are attempts to try and kick-start the housing market, so I think it would be good if we could look at ways to support that and estate agents here. Would it be a good idea for us to have a dedicated statement, maybe, on the devolved taxes in Wales and the amount of revenue that we're expected to lose, so that we can plan for the future?

Very finally, on the future generations report—a very hefty document that I've just been leafing through it here—there's a lot of stuff in there that I'm sure you're going to be taking account of as we come out of the pandemic. Procurement is mentioned in there and the possibility of allowing greater stability, maybe five-term contracts for bodies when the Welsh Government looks to procure in future. Are you looking at all of these aspects to make sure that businesses in the future will have as much stability as they possibly can to put money back into the economy and to get things moving?

Thank you for those questions. The first related to borrowing, and of course Welsh Government has very, very limited borrowing powers in any case, so the kind of flexibilities that we're asking UK Government to think about would be to just increase our borrowing on that annual basis—so, potentially not even looking to an aggregate increase in our borrowing, which stands at £1 billion, but just to give us some more flexibility to respond in a more urgent and agile way through borrowing should we need to. Also, we're looking for some greater flexibility to use the Wales reserve this year, so, accessing everything that is in the reserve should we need to. I think that that seems like a reasonable request in the circumstances. And we're also seeking some agreement with the UK Government to switch capital to revenue, because of course that doesn't change the overall size of the Welsh Government's budget. So, that is something that I hope the UK Government will look on favourably in the discussions that we'll be having. I know that colleagues across the other devolved administrations are also having those discussions and giving that thought as to what kind of flexibilities they would wish to see.

In terms of the fully devolved taxes, land transaction tax and landfill disposals tax will be inevitably, I think, affected by the COVID crisis. The extent to which it affects our budget, however, depends on the block grant adjustment, so it depends on whether things move in Wales and across the UK in a similar kind of way, and that will show up whether there is a gap or not. On Welsh rates of income tax, of course, revenues from the Welsh rates of income tax and block grant adjustment will be affected by the current crisis. We expect it to be small at the moment, but I think we need to keep an eye on what's happening with the economy; if we are worse affected than other areas, for example, that could become significant. But, of course, we'll only have the outturn information in the summer of 2022, so this will certainly be an issue of ongoing concern for myself and potentially for future finance Ministers as well.

On the last point, about the future generations commissioner's report—it certainly is a thorough and comprehensive document—and that issue of longer term contracts and longer term budgets, I'm always very sympathetic to it, but, as you know, we only have a one-year budget at the moment, and we were expecting that comprehensive spending review later this year. Now, to what extent we can guarantee or count on that, it will remain to be seen, I think.

As this is the first opportunity I've had to question the Minister during this crisis, I want to pursue a few fundamental issues. I will ask first of all for a little more information about the issue you just mentioned in terms of persuading the Treasury to look differently at how the Welsh Government can use its borrowing powers. I appreciate the clarity in terms of what you're seeking as a Government, but may I ask you whether there's been any indication from the Treasury as to how willing they might be to respond positively to this request made by the Welsh Government so that we can try and assess where we stand at the moment?

There are other elements in terms of flexibility that are required, too. I agree with the Minister when she said that flexibility is required at the moment. The Barnett formula is one such element. This is a formula that's entirely inappropriate, and it's been criticised over a period of decades now for failing to respond to need. If we look at a number of factors here in Wales, we know that COVID-19 hits the elderly more than young people. Our population in Wales is older than the UK average. It hits the less privileged economically and more of our population is in that category. So, what discussions have taken place in terms of introducing a new system at this time? It's an exceptional time, and therefore we do need exceptional fiscal arrangements. We could have very intense pockets of cases of COVID-19 either in Wales or in parts of England, and we will need flexibility in the system, including the fiscal system, in order to secure cashflow.

I have regular discussions both with my counterparts in the other devolved nations and then also on a quadrilateral basis with the Chief Secretary to the Treasury, and at our most recent meeting we all talked about the importance of flexibilities, and the Chief Secretary agreed that he would give serious consideration to the proposals that we put forward. So we're having those discussions amongst the three nations. Now, given our different situations and the different settlements that we have, we'll be seeking different kinds of flexibilities, but nonetheless we've undertaken to work together because this is an important issue for the whole of the UK. Those discussions are going on at the moment. I'm hoping that they will lead to some successful outcomes. I don't think that what we're asking is unreasonable by any stretch of the imagination and I think that, actually, some of it will help the UK Government in terms of managing its finances because what we're not asking for is more, we're just asking for more flexibility to access what we already have and what we already plan that we will have as well.

The point about the Barnett formula is well made. We are in complete agreement that it isn't based on need. In the first discussion I had with the Chief Secretary to the Treasury at the start of this crisis, I was very keen to make the points that Rhun ap Iorwerth has just made in terms of our population having a greater need: that point about having a generally older population or a larger proportion of older population within our population in Wales; and that point about the virus having an impact in the communities that are less prosperous. But, also, I think it's important to recognise that there are economic reasons as well why the response should be based on need, one of which is about our economy: we have a larger proportion of small and medium-sized enterprises; we have a larger proportion of manufacturing industries, which, again, are all hard hit; and, of course, the tourism industry is a larger proportion of our economy here in Wales as well. So, all of these factors point to the need to recognise need and recognise the fact that Barnett isn't sufficient in this case. 

These are arguments that we continue to make. There's been no movement on the fundamental of using Barnett as a starting point for this, but I feel more hopeful about having some movement on the flexibilities issue.

That is good news, I think. I should have mentioned the figures from the Wales Governance Centre. I think they estimated a month ago that the additional funding provided to Wales through Barnett was some £500 million less than the cost of coronavirus to Wales, so that gives us some sort of context. In addition to that, there are other areas where we could look for flexibility from the Treasury. Can I ask what discussions the Minister’s had with the UK Treasury on providing clarity on the shared prosperity fund, for example, which will be crucial as we move forward, and also to ensure the flow of funds for the city deals more swiftly? The north Wales growth deal is an area where swift action from the Welsh and UK Governments would be very beneficial indeed now. But, of course, within the direct expenditure plans of the Welsh Government, funding needs to flow quickly through the system as well. Can I ask what plans are in place to hasten the usual fiscal processes to ensure that local government, for example, receives funds in a timely manner so that they can cope with the huge pressures upon them at this time?

The shared prosperity fund and the city deal—both city deals—will be crucial in terms of the recovery as we move out of the immediate impacts of the crisis, and those discussions of course are ongoing. The Federation of Small Businesses today published an important document about how we can support small businesses, and they recognise actually the huge potential of the shared prosperity fund as well. We're having those discussions with the UK Government, or at least trying to. We don't seem to have any clarity on information, but we're certainly making the cases that we've discussed many times before, and also continuing those discussions and continuing to listen to stakeholders, who see the shared prosperity fund as being an important lever for the future as well. 

In terms of local government, we're really aware that cash flow is a particular issue for them, so the Minister for Housing and Local Government has been providing advanced payments and early payments to local authorities to help them with some of that cash flow that they're facing. We also have put in place the £110 million hardship fund for local authorities, and they will draw down that funding as they spend it, but it does give those local authorities the confidence to spend in those areas of free school meal provision, for example, additional funding for social care and the other areas where we've agreed funding, so that they can have the confidence and the freedom to make the decisions that they need to without having to undertake onerous paperwork before accessing that funding. 

I want to make three very quick points on the Barnett formula and Barnett consequentials. Of course, the Barnett consequential is the minimum amount that we have to have; there's no reason why we cannot be given more than the Barnett formula, and we know that Northern Ireland quite regularly gets more than the Barnett formula. On the consequentials of English-only expenditure in devolved areas, where the money has not come from within the devolved areas, has the Minister actually had her officials do the calculations to make sure we're getting the right amount? And if I go on to one specific position, England has written off health board expenditure that is over 10 per cent of their total expenditure for the year. Can the Minister explain how that was achieved without triggering a Barnett consequential increase for Wales?  

So, those questions, I completely agree with Mike that Barnett consequentials is the minimum and there's no reason why we shouldn't have additional funding, and that fact was, I think, well recognised by the fact that the UK Government has said that it will provide additional funding to help us deal with the February floods, for example. So, that recognises that there will be special circumstances in parts of the United Kingdom that do require funding over and above the Barnett consequentials. And, again, that precedent is there that funding should be based on need; so, the funding for flooding was certainly in response to need. So, I think that we can continue to press those arguments.

And clearly, before the coronavirus outbreak, we were starting to make a bit of progress in terms of the fiscal framework and to explore how it can better work, and the statement of funding policy can better work for Wales alongside the other devolved nations. And I hope that work will pick up again as soon as we're able to and as soon as appropriate to take that forward. 

I also got excited when I heard about the write-off of the funding in the UK Government, but officials very quickly made some enquiries and that funding was actually accounted for within the budgets of the health department in previous years. So, unfortunately, there was no additional funding for us on that occasion. 

Thank you for your statement, Minister, and it's good to see you and good to—. We're seeing you again on 27 May for the supplementary budget. Could I ask in the meantime—? You emphasised, certainly with the £500 million for the economic resilience fund, spending in Wales is over and above what the UK Government is doing for England. We know that about £100 million of that you're able to fund because of exempting the largest retailers from the business rates comeback. Can you give me any idea of what the other £400 million is in terms of what the UK Government is doing in England to deal with this crisis that you're not doing in Wales, for whatever reason we've taken those choices? 

Can I also ask you about the furlough scheme? I saw figures earlier saying that 74 per cent of businesses in Wales had taken it up compared to 67 per cent in England, and you mentioned some of the sectoral differences as well. I'm concerned that come now perhaps mid July, given that the UK Chancellor's looking for funds to contribute towards that furlough, perhaps 20 per cent of the cost of the wages from the beginning of August, and there's this need for a consultation if firms are going to make redundancies, do you share my concern that there may be significant job losses and that they may be greater in Wales from mid July onwards, as that's anticipated? And is it inevitable that that happens at some point? I mean, the cost of this scheme is greater than funding the NHS, and even the UK Government will struggle to fund that for very long. I don't know what the Minister's expectation is for how that huge £270 billion-odd deficit is dealt with. Presumably, she doesn't want to see renewed austerity. Does she anticipate substantial tax rises across the UK, or does she think it's more likely that that debt and borrowing will be inflated away as money is printed? That choice will make quite a difference to our finances in Wales.

And, finally, can I ask around land transaction tax in particular? She says that we're protected from UK-wide shocks like this, but surely, if we're choosing in Wales to keep the property market shut down, while it reopens in England today, and there are fiscal consequences of that, is she saying that the UK Government should compensate Wales for that decision, or is she expecting to have to find extra money in her budget to make up for the land transaction tax that we won't be receiving for at least a period?

Thank you for those questions. It's always nice to see you as well, Mark Reckless. The £500 million spend that we put in place for the economic resilience fund was brought together as a package of funding from different parts of Government. So, it included financial transactions capital, for example—£100 million of that. It also included funding that we were able to free up from elsewhere in Government, so I'm not aware that there is a great deal that the UK Government is doing to support businesses that Welsh Government isn't. However, I'd be keen to explore that.

One thing that we've been trying to do is use our additional funding to close the gaps in support. So, there are some significant gaps in support for business by the UK Government, which the economic resilience fund seeks to do. I'm really aware that there continues to be gaps, which is why the fund has been paused, so that we can consider how we can potentially look to fill some of those existing gaps, whilst also considering how we can focus some of that additional funding on the recovery as well. 

In terms of furloughing, Welsh Government wrote earlier this week, actually, to the Chancellor on the issue of furloughing, and we really welcome the fact that the scheme has been extended. Some of our concern really though is that the scheme shouldn't have any reduction of support for businesses that can't legally open. So, there could be a time when businesses in certain sectors still can't open. So, those businesses, I think, should continue to be protected. And the scheme should continue to offer the same kind of level of intensity of support to tourism businesses, I think, in particular, because we have a larger proportion of them here in Wales. Obviously they have been hard hit and they are telling us that they're facing what's effectively three winters, one after the other, in terms of the kind of profits that they will be able to make. 

We're also keen that the job retention scheme in future has some more flexibility built into it. So, the Wales TUC has asked for businesses to be able potentially to claim as workers come back on a part-time basis, and so on. So, all of those things, I think, are important considerations. The UK Government has agreed that it will be discussing with the devolved nations the next steps for the scheme, and I understand that a meeting with the Chief Secretary to the Treasury is being arranged for next week, so I look forward to continuing those discussions then. 

In terms of how it will all be paid for, I think that is really going to be quite a difficult challenge for the Chancellor, moving ahead with various different options, of course, in terms of whether it means long and sustained austerity. We saw the leaked report earlier on today. So, I think the most important thing—really that has to guide us—is that it can't be the people who are on lowest pay and the poorest people who continue to bear the brunt of this. It seems incongruous that you would be looking to freeze public sector pay at a time when we're all celebrating how important our public sectors workers are to us, and these are the people who are keeping us going at this time. I wish I had a crystal ball, but I think that there are going to be very, very difficult challenges ahead, and difficult times for the economy, as we've seen in lots of the commentary and the projections that have been published. 

On land transaction tax, I don't think that we will see a great divergence. I've asked officials recently, actually, to look at how we can safely reopen the housing market here in Wales, but clearly we won't undertake those steps until we are confident that it is safe for us to do so here. But, this is one of the features of the fiscal framework that we have. Potentially, we could see a negative adjustment were we to have a larger impact on that here in Wales, but we'll keep that under close review.

Although the top-up business grant announced by the UK Government for England includes grants to bed and breakfast businesses that pay domestic rates rather than business rates, the Welsh Government omitted this when it extended its COVID-19 grant scheme. How do you therefore respond to the bed and breakfast owners in north Wales who have asked me to tell you that if they don't receive the grant, their businesses will cease trading this month?

And the Welsh Government is receiving £35 million of the £750 million charity support announced by the UK Government, including £1.7 million from the extra £76 million announced to support survivors of domestic abuse, sexual violence and modern slavery, and ensure that vulnerable children and young people receive the help they need, and is receiving £12 million in consequence of the £200 million for hospices in England—a lot more than the £6.3 million it's announced for hospices in Wales. So how much of this will the voluntary sector providers in Wales delivering these specialist services, taking pressure of statutory health and care services, receive?

I'll start with the issue of hospices in Wales, which you've described. You're correct that the amount that we have allocated to hospices in Wales is less than the amount that we received as a Barnett consequential, but that is simply a reflection of the fact that we have fewer hospices here in Wales. So, we have worked closely, actually, with the hospices to find a way in which we can fairly meet the income that they're unable to generate at the moment through their various activities, and so on. But, as I say, we've worked with that sector, and I think that we've provided a settlement that does enable them to continue to do the vital work that they're doing at this moment. I haven't heard that the funding has not been sufficient for that, but certainly if Mark Isherwood has evidence or representations to make on that I'd be happy, of course, to listen to them.

The funding that we announced very early on was over and above the funding that then came from the UK Government for the third sector. But I do have to be clear here that we're not just a halfway house for UK Government funding, where we just administer it to the same projects; we will take decisions based on the needs of our society and of our economy. So, it won't always be the case that exactly the same amount of money goes to exactly the same project or group of stakeholders, because of the nature of devolution and our ability to be more responsive to the particular needs that we have here.

On the issue of B&Bs, I'm very aware that they're not currently able to access support, and I did say that the economic resilience fund has currently been paused in order for us to continue to consider where the gaps remain in terms of the support that people are able to access at the moment, and also to consider the balance that we've put on continuing to respond to the immediate crisis, but then also turning our focus onto the recovery and the reopening of the economy. So that work is continuing in terms of the next phase of the economic resilience fund, and I know that my colleague, Ken Skates, looks forward to making an announcement as soon as he is able to.

Minister, a leaked internal Treasury report contains reference to freezing public sector pay for two years as one measure that's being considered as a response to coronavirus expenditure. That would be a betrayal of the sacrifices made by dedicated public servants during the crisis—a point that was made by the chair of the Police Federation today. And if there's one lesson that we should learn from the pandemic, it's that austerity left us under-prepared to deal with a crisis of this magnitude. Minister, we don't yet know what the UK Government's plans are for certain, so this is only speculation at this point. But I'd like to ask you, do you agree that further austerity should be ruled out as a response to the pandemic, and, if so, what economic and fiscal levers does the Welsh Government think should be devolved so that we in Wales have the option of taking a different financial route from England?

Unfortunately, I missed the start of your question, Delyth—in fact I only picked up from 'considered'. I think there was an issue with the sound. But if you're asking if I think further austerity should be avoided and is a bad thing, then absolutely, I would agree with you on that count.

In terms of what should be further devolved, of course, Welsh Government has had that programme of work that asked the people of Wales what they would like to see in terms of additional tax-raising powers for Wales, as we set out the taxes that we would seek to explore in the first instance. I think perhaps, as we move through the crisis, it probably will give us pause for thought in terms of the future of those taxes and those areas where we would like to focus our attention. So, at the moment, within Government, we've paused the work on developing those tax ideas and pursuing those tax ideas. The staff involved in that are now working on the coronavirus response. So, I think, I don't have any answer for Delyth on this today, but she raises an important point that this is an area where, I think, fresh thinking will be required as a result of coronavirus and everything that it's taught us.

Thank you for your report, Minister, but there is definitely fresh thinking that is required by the UK Government because what the leaked report showed was that one of their first ways of thinking was to freeze public sector pay for two years, at the same time, raising income tax across the board, I presume, by 1 per cent. So, we've gone back to exactly the same place that led us into this crisis, as you've already said. That austerity left us ill-prepared, but more than that, we've seen public sector workers in the care sector, in nursing, really putting their own lives and those of their families, on the line for everybody else, and we've seen people, quite rightly, outside their homes at 8 o'clock every Thursday night paying tribute by clapping in honour of their sacrifice. So, I hope that you will make serious recommendations to the Chancellor when you next speak to him, that, in Wales, at least, most people would find that absolutely appalling—that they would take that pay away from the people who've given so much to this country.

I can absolutely give Joyce that guarantee—that those will be the nature of the discussions that I do have when I have the opportunity to speak to the Chancellor or the chief secretary very, very shortly. 

I can imagine that it must be extremely demoralising for people in the public sector at the moment, who are giving absolutely everything to provide an excellent response to the coronavirus, to hear that that's the first place that the Government would look to go in order to pay for the measures that have necessarily been taken. So, yes, I give Joyce that undertaking that I will be that voice for our public sector workers here in Wales in those discussions.

Thank you, Minister, for you statement. My point is, our charities are playing a crucial role in Wales in this current emergency, backed up by an army of volunteers who support those most in need here in Wales. Fundraisers across Wales face a challenging time and while all the measures such as economic resilience fund and the COVID-19 funds for voluntary services are welcome, many charities are still not getting the support they need in the current crisis. Furloughing service delivery staff is not an option, Minister, as services are still required to run to meet the needs of the beneficiaries. Charities need longer term funding support to safeguard services in the future, so can I ask, Minister, what further support you can provide for this sector during this difficult time to help the work in our communities to take the pressure off our NHS? Thank you.

Charities are playing an absolutely crucial role in our response to the COVID-19 crisis. We'll all be aware of charities operating in our local areas doing incredible work to support people in need at this time. I was really pleased that we were able to provide £24 million from our COVID response fund for the Welsh Government third sector response fund to support them through the crisis. That has several different streams to it, whereby charities can seek to find support from the Welsh Government and, of course, only the week before last, I made an announcement that would allow the charities—charity shops— sports clubs' operating premises and others to be eligible for that £10,000 grant, which I think has been very much welcomed by charities, community centres and sports groups here in Wales. So, I share Mohammad Asghar's admiration for the work that they're doing and recognise their importance as part of our communities' response. 

Helen Mary Jones. Helen, yes?

Sorry. May I start again? I'm sorry, Dirprwy Lywydd. 

Yes, we can just—. Yes, start again. 

My microphone must have been in the wrong place. 

Yes. 

Trefnydd, I'm very grateful that you've raised the situation with regard to the tourism industry and you've referred to it on a number of occasions in the discussion of your statement. I'm sure that you're very well aware that tourism and hospitality are the business sectors that are likely to need longer term support than other sectors that may be able to get back to work much more quickly, and it's my understanding that there is discussion going on between the four Governments across these islands thinking about what longer term support might be provided and understanding that there may be a need for the UK Government to play a larger part in that.

Can you give us assurances today, Trefnydd, that, in those discussions, you will continue to make the case for Wales to get, not a Barnettised, but a fair share of any of that UK resource? Because it is—as you've already mentioned today, tourism is a much bigger part of our economy than it would be true, for example, of most of England. And if there is to be UK-wide support, it needs to be distributed on the basis of how important a part tourism plays in the economy of the nations and regions and not on the outdated formula that we all know doesn't work very well anyway. 

Yes, I'm happy to take that forward in terms of making those representations to secure Wales a fair share of any resource that goes towards the tourism industry. As I mentioned earlier, and as Helen Mary Jones has alluded to as well, it is a larger and more important part of our offer that we have here in Wales. Of course, whilst we're closed to tourists at the moment, we absolutely look forward to welcoming people back, in due course, with our warm Welsh welcome. 

Minister, Professor Cameron Hepburn of Oxford University recently brought together a team of world-renowned experts, including the Nobel prize winner, Professor Joseph Stiglitz and the well-known climate economist, Lord Nicholas Stern to examine the possible global COVID-19 economic recovery packages. Now, their analysis showed the potential for really powerful alignment between the economy and the environment, and they drew on evidence that showed that green projects in renewable energy and labour intensive clean energy infrastructure can create twice as many jobs per dollar invested as fossil fuel investments, and deliver higher short-term returns per dollar spent and increase long-term cost savings by comparison with traditional fiscal stimuluses.

So, Minister, could I ask you, what discussions are you having with other Welsh Government Ministers and the First Minister to use our financial powers to seize these opportunities to build back better and stronger in Wales: boost employment; create immediate and longer term benefits for economic growth and for the environment; help reduce carbon emissions; and tackle the climate and the biodiversity emergencies we face?

So, what Huw Irranca-Davies is describing is very much the thinking that was behind the Welsh Government's publication of our budget that we voted on back in March, which seems like an awful long time ago now, but it's only a matter of weeks. And, as part of that budget, we undertook that cross-Government piece of work where we identified particular areas where we wanted to see increased investment and an increased pace and scale of change and improvement, and biodiversity and decarbonisation were both crucial parts of that. So, there was a package of, if I recall correctly, £140 million aimed at decarbonisation and biodiversity, and I think it's really important that, when we start to look towards the recovery, we very much consider how our capital investment in particular can support those kinds of initiatives and investments.

I know that there's a lot of thinking going on across Welsh Government at the moment as to how we can lock in some of the more positive things that we have seen as a result of the coronavirus, so, for example, people looking towards active travel more—you know, what incentives and how can we convince local authorities to make changes to their town centres and so on, so that, when society does start to move forward and into recovery, it's actually much easier to continue with the active travel and other things. So, Lee Waters has put down a bit of a challenge to local authorities in that particular area. And, again, air pollution—what more can we do now that we've all started to embrace working from home and we've proven that it is possible? Do we change the way that we work in a much more fundamental way? So, I think that there are big questions for us as we emerge from the crisis, and things won't ever be the same again, but we can certainly try and ensure that things are better.

Thank you very much, Minister.