5. Member Debate under Standing Order 11.21(iv): Small businesses and tourism

Part of the debate – in the Senedd at 3:50 pm on 7 July 2021.

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Photo of Hefin David Hefin David Labour 3:50, 7 July 2021

On the nature and the role of the small business, I think we often misunderstand the role of small businesses. They aren't engines of employment. In fact, the number of small businesses relative to population size is fairly static over time. I think we've got something like 6 million small businesses in the UK at this point in time—heading towards 6 million—and of those, the vast majority of them, more than half, employ fewer than 10 people. So, we cannot expect small businesses to be this engine of employment. I hear people say small businesses are the lifeblood of the economy, but, actually, they are a fairly foundational part of the economy. They exist, but they don't provide an engine of rapid growth. They provide stability. They used to say in the 1970s that if every small business takes on an extra employee, the unemployment problem would be solved. Well, if that was going to happen, it would have happened by now, and it just isn't going to happen. But neither is employment the sole objective, because we know about in-work poverty too. 

I think one of the key things that small businesses have is social capital. It's one of the key options they've got when it comes to the alternative to employment. Social capital is key because that is where the creative spark happens, when people interact. That's where businesses that are sustainable are created. When people have interactions with their family and friends, that's called bonding social capital. That's when small businesses find their feet and find their foundation. But the growth of small businesses happens through bridging social capital. That's when we talk to other small businesses, other networks. My concern about the pandemic is that it has shrunk networks right down in a way that will take a long time to rebuild. So, rebuilding those business networks over time is really, really important. I would like to see that as a key part of the Welsh Government's economic strategy, not only creating business but creating business networks. I think if businesses are to grow and succeed, that will be absolutely key.

It won't just be the SMEs on their own in the tourism sector itself that will enable us to recover; we aren't naive enough to think that that is simply going to be enough. We need to see the tourism sector play a part in the recovery, and a bigger role than it did pre pandemic. I think that is important. We often think of tourism as being the seaside in Wales, the Brecon Beacons, Yr Wyddfa, Snowdonia. We see those as the key tourism areas. But you will know that the south Wales Valleys—and I can that see the Minister, Dawn Bowden, will agree—have a huge amount to offer. Our community in Caerphilly borough has a huge amount to offer, and I think it's underplayed as a tourism venue. We talk about day trips to Caerphilly castle, but it's so much more than that. There is so much more that Caerphilly has to offer. I met the Minister at Caerphilly castle—when was it, three weeks ago—and we were welcoming £5 million of Welsh Government investment that Cadw is going to put into Caerphilly castle to transform the castle as a venue next year. But what we also want to see is the streetscapes improved, we want to see the tourism trail improved, because those social networks that small businesses rely on are also dependent upon the society in which they operate. Therefore, it's not just about improving one venue, but improving the environment as a whole. 

We've also got Llancaiach Fawr seventeenth century manor house. That was actually brought into operation by my father when he was chair of the planning committee of Rhymney Valley District Council in 1982, and I can prove it to you. If you don't believe me—I see that the frontbench is looking sceptical—I can prove it to you, because there's a plaque there with his name on it. And if the Deputy Minister wants to come and visit, I'll show her the plaque as well, although it could do with a clean if the Welsh Government's got some money for that. We've also got Penallta park and we've got Parc Cwm Darran. We've got the Welsh national mining memorial and gardens in Senghenydd. That is well worth a visit, and I know it's had royal visits from the Prince of Wales in the past; I've seen the signature in the visitors book. We've also got Cwmcarn forest and scenic drive; that's actually in Rhianon Passmore's constituency, but she wouldn't forgive me if I didn't mention that. We've got golf courses such as Bryn Meadows and Bargoed. We've got accommodation like Llechwen Hall. Murray's pub in Bargoed is pretty amazing, and the Aber Hotel is now serving food. I have to say these things because I've seen them, they exist and they're amazing. And also, by the way, if you want to treat yourself to a spa, you can go to Pwllypant Captiva spa, reflexology provided by Emma Burns Complementary Therapies, or to Lisa Morgan Beauty at the Caerphilly Miners Centre.

So, we are looking at the challenges—[Interruption.] This is all going on Facebook; you are right. We are thinking about the challenges that we are facing in our communities as a result of COVID. One of the things that somebody said to me on my Facebook page when I told them about the announcement in England not applying to Wales was, 'I have very large groups of friends now booking hotels and travelling to England. I also have plenty of friends in London who are now travelling for holidays in Devon and Cornwall. Welsh tourism will not get any bookings under the current restrictions. Jobs will be lost sadly'. Well, I did a search. Actually, it's incredibly difficult to find somewhere to stay in Wales this summer. People are holidaying at home, and I don't think this year we have to worry about the tourism sector not having visitors. 

I want to say something about the relaxation of rules as well. Polls show that the majority of us don't want the rules to be relaxed too radically, particularly with regard to masks. There is a very real danger that the majority of us will stay away from hospitality venues when mask wearing is no longer compulsory. This would have a damaging effect on the tourism sector. I'd be interested to hear what the Conservatives would say about that. But I think there are consequences, and I would like the Government to consider that in part of their review next week. I know it's about clinical evidence and I know it's exactly about what the medical officer says, but there will be consequences of withdrawing compulsory mask wearing that may be unintended by the Prime Minister.

Finally, I'd like to mention the tourism levy, because undoubtedly I'm sure the Conservatives are going to mention this, and I'd like to hear what Plaid Cymru have as a view on this too. I am supportive, actually, of a tourism levy in the way that it's being proposed via local authorities by the Welsh Government. But we do need, Minister, more clarity on the purpose of the levy, as it's been said that it won't be hypothecated. So, how will that work? How is the proposed levy going to work? The Federation of Small Businesses has told us that the Welsh Government needs to recognise the caution and concern of many in the sector about the proposal. We wouldn't want to see it threaten viability, but at the same time, I've already mentioned the street scene in Caerphilly. If Caerphilly council had an extra source of funding to resolve some of those issues that can be directly targeted towards tourism, I think that would be something we should welcome. As a result, I think a tourism levy, if properly done, is not going to damage tourism. It might actually enhance tourism in that sense. But I think what we really want is more detail about that. I think we need to hear how that is going to be done. I notice Adam Price said in 2017 that it was an idea that deserved to be explored. So, I would like to know Plaid Cymru's position, and I'm more than happy to hear more from the Conservatives about why it shouldn't be done. Perhaps I'll come back to it, then, in my summing up at the end.

Finally, a key part of our motion is about stakeholders, and I think you need, in a recovery that's going to work, the voice of small businesses playing a part in what comes next. The tourism sector has a huge voice in what they want to see. I would be concerned if this year we are seeing a boom that is followed by, next year, a bust, when everybody decides to go abroad again. I think tourism venues have to be careful, because if they're overpricing this year they will put people off next year, but at the same time we also need to look at the consequences of an inflated market this year that is then reduced next year. I wonder what the Welsh Government's strategy is to deal with that issue. How are they planning ahead, not for 2021, but 2022, and what stakeholders will they speak to in order to resolve that issue and plan for that cyclical eventuality?

So, it's over to you—over to Members. I want to hear what's going to be said today. I'm going to make furious notes, and hopefully I will do justice to what has been said at the end of the debate.