11. Welsh Conservatives Debate: COVID and the economy

Part of the debate – in the Senedd at 5:41 pm on 24 June 2020.

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Photo of Paul Davies Paul Davies Conservative 5:41, 24 June 2020

Thank you, Deputy Presiding Officer, and I move the motion tabled in the name of my colleague Darren Millar. The impact of COVID-19 on communities and sectors across Wales has been unlike anything we've seen, and whilst we must accept that the pandemic has been a public health crisis, it's also been an economic crisis too. The very nature of the virus has completely halted the normal day-to-day interactions of us all and, in turn, our economy has largely come to a halt.

For that reason, we welcome the economic benefits afforded to Wales, as a result of being part of the United Kingdom, during the pandemic. For example, we know that the coronavirus job retention scheme has helped protect over 316,000 livelihoods in Wales, and the self-employed income support scheme continues to help over 100,000 people in Wales—all very welcome interventions and all making an important contribution to supporting people in Wales. That's why I've been keen to push further collaboration between the UK and Welsh Governments so that no stone is left unturned in helping our people come through this pandemic period.

Of course, it's still very difficult to quantify the impact that the virus has and continues to have on our economy. In April alone, the UK economy shrank by 20 per cent. In that same month, unemployment in Wales almost doubled. Almost a third of the working-age population in Wales has been furloughed. Indeed, research conducted by the Learning and Work Institute in April found that 250,000 jobs in Wales were in shutdown sectors, and that equates to nearly one in five jobs across the country. The research found that if just one in four of these workers lost their jobs, unemployment could exceed the levels seen at the last recession, and that's still a fear that we must face, even as the Welsh Government starts to allow non-essential retail and other sectors to reopen.

Now, the First Minister's statement last Friday was a welcome one. Wales desperately needed to see economic activity resume, and so it's good to see that some businesses are now resuming operations and trading once again. However, we must remember that this doesn't mean that businesses on the high street or in our town centres are magically saved. Many are carrying substantial debt, many will not be able to take on their previous staff, and some will still struggle to stay afloat. Opening up some businesses is a step forward, but keeping those businesses alive is now the challenge.

The Centre For Towns report into COVID-19 and its impact on our towns rightly highlights that there are a number of challenges for businesses in Wales, both in the short term and in the medium and long terms. We know that the short-term crisis presented by the shutdown of large parts of the economy has disproportionately hit small and medium-sized coastal towns, but there's also a significant problem for businesses in the medium and long terms too. Of course, the continued closure of the hospitality sector means that thousands of jobs across Wales are still at risk, and businesses are still vulnerable. Towns like Abertillery and Aberystwyth are amongst some of the places in the UK with the highest percentage of people employed in pubs and restaurants. Without urgent intervention, the continued closure of this sector will lead to further instability for those businesses, further job losses, and the local landscape could be seriously transformed for the foreseeable future.

Small businesses like many pubs and restaurants across the country have been working hard to adapt their business models. They've innovated and they've significantly contributed to their local communities. Therefore, I hope, moving forward, the Welsh Government and local authorities will be doing everything in their power to procure goods and services locally, and, where they can, use small and medium-sized businesses to help build resilience in local communities. It's now time to double down on our procurement practices in Wales to best support those businesses and help support their recovery.