3. What steps is the Minister taking to ensure that the Welsh Government's economic policy includes a strategy to tackle the cost-of-living crisis? OQ57644

Our economic policies span all ministerial responsibilities, including those related to energy, housing and social justice. I continue to work with Cabinet colleagues to make sure that every pound available goes out to deliver for those who are at the sharpest end facing the Conservative cost-of-living crisis.

Diolch, Weinidog. More than three in 10 households with a net income of less than £40,000 have seen their income drop since May 2021, and for households with a net income of more than £40,000, more than one in five have seen their incomes increase. Wage growth stagnated in October, fell in November, and is unlikely to start growing again until the final quarter of this year, disproportionately affecting those on low income. By the end of 2024, real wages are set to be £740 a year lower than they would have been, had pre-pandemic pay growth continued. This is clearly a crisis that is worsening an already deep economic disparity. Figures revealed just today show that we are experiencing record levels of inflation, which are outstripping wages while pushing living costs up higher. The scale of the problem means it's more important than ever that Wales's economic strategy is primarily focused on tackling economic inequality. So, what discussions has the Minister had with the social justice Minister and other colleagues in Government on this, and what further economic powers does he think should be devolved to Wales, so that we can properly get to grips with this crisis and alleviate its negative effects on our society? Diolch.

Thank you for the points and the series of questions. I think it's interesting, the point about wage growth, because even at the start of this week, there was a suggestion that we would see significant wage growth figures coming through, and yet the figures actually showed that wages had not kept pace with inflation. And I think the previous comments of the Governor of the Bank of England about needing to suppress wages to try to keep control of inflation—there were commentators and economists on both the left and the right, as it were, who both thought those were rather odd remarks and not borne out by what is actually driving inflation at present: it isn't wages.

The Resolution Foundation said we can expect a cost-of-living catastrophe in April without further action. Now, that's part of the reason why Rebecca Evans unveiled a £330 million package for Wales yesterday. It goes beyond the UK Government package announced for England, but, of course, that has been delivered here in Wales without any extra funding coming to Wales.

I think, on your point about powers, actually it's the resource that we need to be able to address the cost-of-living crisis, and it's also the willingness of the UK Government to do something about it. I just think that, for businesses as well as for households, thinking that the current fix that's been announced to date is going to get us through till the end of April I think is fanciful. I think many families and businesses will find the increase in costs that are coming very hard to deal with. And for many of my constituents and many people across Wales, that means even more people choosing between heating and eating. It means even more parents going hungry to try to make sure their children are fed. So, there are changes we want to see: we want to see the cut to universal credit restored; we want to see further action. And, yes, we do support the cause for a windfall levy on energy companies who are making eye-watering sums of money. When you have Shell and BP talking about their businesses as cash machines, and they can't spend the money quick enough, I don't think that this is something where a UK Government could simply say that it will refuse to act and leave people to their fate. I certainly hope that the Chancellor is listening, because I've certainly had those conversations with the Minister for Social Justice, the Minister for Climate Change, and, indeed, the finance Minister and others, about what we could and should do here in Wales with the resources available to us.

Minister, a vital component of any strategy to help tackle the cost of living is to ensure the Welsh Government's economic policy supports businesses, allowing them to keep people in jobs. The latest tracker survey of small and medium enterprises in Wales, conducted by the Association of Chartered Certified Accountants, shows that over one third of Welsh SMEs are hopeful about growth ambitions in the next six months. However, Minister, 81 per cent of Welsh SMEs are unaware of the finance options available to them.  So, Minister, what action will you be taking to ensure SMEs in Wales are aware of the support available to provide them with the resources that they need to overcome the current pressure on their cash flows? Thank you. 

Well, it depends where businesses are, in which sector they're operating, as to the particular pressures they've got, but everyone is going to face some of the challenges about the increases in energy prices, for example. So, there is a really significant challenge.

As we're, hopefully, coming out of the emergency phase of the pandemic, businesses are looking from survival to the future, and I am looking forward to having more regular conversations with stakeholders from those business groups, whether it's in retail, the visitor economy, the rest of the economy, about what we can do to support them with the plans that they will have for growth of their business and what that means in terms of the jobs and keeping the staff they've got, because one of the big challenges, again, every sector faces is the challenge for labour. As the labour market has become tighter, there's a greater premium on skills, there's a greater premium on keeping experienced and good staff, because other businesses are looking to recruit those people. In many ways, lots of the wage growth that we have seen in the sectors where it's existed has been because of the competition for people already in work, with other companies looking to pay a premium to get those people to move across. But you can expect me to have those regular conversations with business groups and individual businesses to see what we can do to help them to find the sources of business support and capital that may help them to see their businesses sustained in the future. 

I know how busy the Minister is, so I'm not sure he had a chance to watch the clip on Channel 4 News last week, covering how the cost-of-living crisis is affecting residents in communities like Penrhys in my constituency. I know, just from the e-mails and messages I received yesterday, that the £330 million package of support the Welsh Government has announced has been welcomed with open arms and will make a world of difference to some of the families most in need in Rhondda. This is in stark contrast to the actions of the UK Conservative Government who have failed to effectively use the levers available to them, offering only a £200 loan. As my colleague Sarah Murphy said yesterday, those most affected by the cost-of-living crisis aren't the ones at fault here. Does the Minister agree that the UK Government needs to step up and support residents across Wales, not leave us out in the cold?

I completely agree, and I did see some of the report on Channel 4, and it was deeply upsetting, not just because of the people facing that position, because I know that I will have constituents in the southern part of the city of Cardiff who are equally facing really significant challenge in how they're going to meet their own household incomings and outgoings and are genuinely fearful for their future. And they're fearful with good reason, because, for many families, it comes down to pounds and pennies. For many families, having the energy increases that are coming will be a very real challenge for an even greater number of people. It's why the further rises we expect to see in April are such bad news, and people know that's coming as well.

The UK Government need to look again, because the loan they're providing will add on to future bills for people who are least likely to be able to afford them. They also do need to look again at the support they've provided, because the scheme in Wales is a much more generous package, with everyone who receives a council tax reduction benefit also receiving part of the package that we have announced, but I don't think the current package is in any way going to be adequate, and it's a test for whether the Government is prepared to do the right thing to spend money on families who are not responsible for the cost-of-living crisis, or whether they will simply leave them to their fate. I know what this Government would do if we had the means to provide more help, and I know what a Government led by our party in the UK would do to make sure that people are not left to their fate but are properly supported through a crisis that is not of their making.