1. How will the Welsh Government use economic development to tackle the UK-wide cost-of-living crisis in Wales? OQ57477

Thank you for the question. Our economic mission, alongside our upcoming employability strategy, sets out our policies to increase skills, productivity and earnings to help boost living standards here in Wales. Many of the key levers, of course, and responsibility around the cost-of-living crisis, rest with the UK Government, but the Welsh Government has already announced a £51 million household support fund and the £10 million tenancy hardship grant, which shows this Welsh Government’s commitment to support the people of Wales.

Thank you for that answer, Minister. The cost of living in the UK is dramatically increasing. Worryingly, energy price rises are only the tip of the iceberg with the news today that inflation has hit a 30-year high and still set to increase. Financial pressures will become very real to very many people. Thousands more will be driven into poverty, forced into stark choices of heating or eating. The Westminster Tory Government have all the powers and the finance to address this, but at a time when they should be doing all they can to protect people, they're into diverting more of their energy into propping up their leader. I'm glad to hear of the measures you've mentioned here in Wales, Minister, but it's imperative that we use every lever at our disposal to help those who need it, from supporting local food supply chains to ensuring that people have the skills and employment opportunities. Can you ensure that no stone is left unturned to protect the residents of Newport West and Wales throughout this difficult time?

Yes, thank you. I certainly can give you that assurance. I worry a great deal about my own constituents, as indeed I know Members in constituencies and regions will do as well, in particular due to the stark warning from the Resolution Foundation of a cost-of-living catastrophe coming up in April that would affect over half of households in the country. And of course, pre pandemic we really had made progress. So, the Resolution Foundation report in November 2020 highlighted that, before the pandemic, Wales had halved the employment gap with the UK over the devolution period and we had more jobs in the top half of the income spectrum rather than in the bottom half. So, we were already making progress.

Of course, now we are undertaking a number of measures. So, from the backing local firms fund to supporting people to gain more from their local economies, the work we're doing more broadly on the foundational economy, on supply chains, is going to create more jobs closer to home, in addition to, of course, the young person's guarantee and the employability strategy. This Welsh Government will continue to act to try to protect the citizens of Wales and to give people real hope for the future so that people really can plan a prosperous future here in Wales.

Minister, what we've heard the last couple of weeks from Members and you is that you like to berate the UK Government with the usual mantra of, 'We don't get enough money', but the fact of the matter is you've had more money than ever before. The UK Government provided furlough for workers during COVID. The UK Government is increasing the national living wage by 6.6 per cent this April. The real issue here is that the economy in Wales has been failing for over 20 years. Wales has the lowest gross disposable income in the UK. Wales lost 6 per cent of its businesses whilst Scotland and Northern Ireland went up by 10 per cent and 19 per cent respectively. We have the worst gross value added growth out of all of the four nations across the United Kingdom since 1999 and just one business in the FTSE 100. So, Minister, with the cost-of-living crisis coming, and we all are concerned about that, what further economic levers can you and the Welsh Government use to ensure that, in Wales, we're creating a high-wage, high-skilled economy?

Well, yet again, another Conservative politician who wants to divest the Conservative Government of any responsibility for the UK-wide cost-of-living crisis. The near 30-year high in inflation figures are not matters that rest with the Welsh Government. You'd have to take an extraordinary view on matters to say that that's our direct responsibility. And, as you recognise in talking about interventions like furlough, which I do think is one of the better things that the UK Government has done during the pandemic, the biggest levers and the biggest firepower rest with the UK Government. They could resolve issues around VAT. They could resolve issues to better support families rather than choose to take money out of the pockets of our hardest hit families, as they did in cutting universal credit. Each and every choice thus far has made life harder for normal working people and, actually, I think it's high time the UK Government looked again at what it could and should do. And I remind you of what I said to Jayne Bryant: pre the pandemic, Wales had halved the employment gap with the UK—still more to do, but halved the employment gap—during the devolution period, and more jobs in the top half of the income spectrum rather than at the bottom half. So real progress has been made and is being made. As you know from me yesterday, we could do so much more if we were able to have money to invest in skills rather than having it taken away from us. It's not just an issue in Wales; you might want to pay attention to the Committee for the Economy scrutiny in the Northern Ireland Assembly, which highlighted the problems they have because of the significant funding gap they too have on skills and innovation because of the broken manifesto promise in 2019.

Thank you to the Minister, and to Jayne Bryant for posing this important question.

I'm sure we're all increasingly concerned about the situation in Wales, and particularly about the pressures faced by small businesses. The pile-up of the effects of COVID, Brexit and now of rising energy costs, national insurance increases and inflation is putting huge pressures on small businesses. Labour market statistics out today show that wage increases have been far outstripped by inflation, leading to a fall in actual wages. A 2021 survey by the Federation of Small Businesses found that energy costs are the biggest concern facing its members and warned that they could pose an existential threat to small firms. Just two points from me. Minister, what support could be given to businesses to enable them to invest in energy efficiency and decarbonisation measures? The Welsh Liberal Democrats have put forward plans for a business rate investment relief fund, and I wondered if you had given any consideration to introducing similar financial relief to aid businesses during the energy crisis. Diolch.

Thank you. I agree with you—the challenges of the rise in energy costs, with further rises to come, are a really significant factor in the impact on pretty much all other commodities and goods as well, so, food, and then the national insurance rise on top. All of those link back to a real crisis for homes as well as for businesses. And we've all seen regular coverage now in pretty much all mainstream media of the cost-of-living crisis here, due to get worse.

On your point about a business rate relief fund, the finance Minister has already announced there will be significant business rate relief for the first half of next year. Again, we need to look creatively at what provision there is, because, regardless of the initial spin about the three-year budget settlement, that actually isn't quite as generous as the first headlines might have seemed. Actually, the value of that money will be further denuded by the rises in inflation, having reached a near 30-year high.

And when it comes to what we're looking to do to help businesses move to more energy-efficient ways of working, actually, the investment fund that I announced before the pandemic reappeared in the form of omicron and the latest wave, part of it was actually about how we can help invest alongside businesses to improve energy efficiency. So, I'm keen to get out of this phase in the pandemic and to talk again about how we can work alongside businesses and provide incentives for them to do just that. And it's part of this point about managing a transition to decarbonise our economy. There are gains to be made from greater efficiency as well, but we will need to help businesses and families through that transition.