6. Debate on the Economy, Trade, and Rural Affairs Committee Report — 'Raising the Bar: Securing the future of Hospitality, Tourism and Retail'

Part of the debate – in the Senedd at 4:35 pm on 9 November 2022.

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Photo of Vaughan Gething Vaughan Gething Labour 4:35, 9 November 2022

Thank you, Dirprwy Lywydd, and I too would like to thank members of the Economy, Trade, and Rural Affairs Committee for their in-depth inquiry and report into the future of hospitality, tourism and retail, leading to this debate today.

As we all know, the experience of recent years has been a significant challenge for most businesses in most sectors here in Wales, including, of course, the hospitality, tourism and retail sectors. Now, I won't follow Luke Fletcher in recounting some of my own personal experiences working in the hospitality sector, but I do recognise that not everyone that I dealt with was kind or decent. And actually, we've seen that trend, unfortunately, increase; it's been mentioned by a number of Members, especially given the significant labour shortages that exist in lots of these sectors and, indeed, more broadly. And I'm regularly reminded that whilst, at the moment, most of the world is short-staffed, please be kind and decent to the people who've showed up, and that's really important for the kind of atmosphere we want to create for working people in this and every other sector.

Now, during and since the pandemic, this Government has worked relentlessly to try and support businesses impacted, not just the support that's been provided by the UK Government in furlough—and it was, I think, one of the better measures the UK Government introduced during the pandemic, and I certainly welcomed it—but also the Welsh Government then provided the economic resilience fund and, indeed, additional business rates relief, and that has made a difference in those businesses that have survived and actually managed to end the pandemic in relatively optimistic shape. But, of course, our economy faces significant short- and long-term challenges: the current cost-of-living crisis, increased energy costs, and, of course, skill and recruitment shortages that have not gone away. I do fully recognise the scale and the number of challenges facing businesses. I understand why people who lead, manage and work in those businesses are concerned, and the Welsh Government is in no doubt about the gravity of the situation. We need to recover both from the economic damage of the pandemic, the fact that many businesses are now cash-depleted in having survived; we need to address the realities of our new trading relationships post Brexit and the impact that has on many businesses in these sectors, and, of course, the cost-of-living and the cost-of-business crisis.

So, our renewed economic mission that I published last year sets out clearly the values and priorities that will shape the choices that I will make to support the future of our economy. But, Dirprwy Lywydd, we've already heard from a number of speakers the impact of the turmoil in Westminster and what that has done to the broader economic picture, and, frankly, the relationships we're able to have with the UK Government with so many ministerial changes. And I don't think I can open this debate today without acknowledging the extraordinary challenge that the last two months in particular has created for businesses and, indeed, as Vikki Howells recognised, the fact—and it's an undeniable fact—that the value of the Welsh Government budget, in this spending review period, has decreased by about £4 billion in real terms. And Vikki Howells also recognised that significant worsening in the economic picture since the report was completed, and that's an undeniable reality. It will change the focus of businesses; it will change the ability of this Government and others to support businesses not just to survive but to thrive in the future.

The challenges of customers having less disposable income are especially felt within these sectors. The challenges of working people coming in, and, again, the Union of Shop, Distributive and Allied Workers' report has been recognised—the impact on workers not just of having less money in their own pay packets, but the impact again on customers coming in. And I certainly would welcome a future inquiry from this committee on looking at the shifting economic picture, and, when the UK Government has finalised some more of its opportunities and the choices not just in the budget, but the future energy support scheme, what that will mean for sectors in the economy moving forwards in the future. And that certainly would help to inform choices that the Welsh Government needs to make here in Wales.

Now, I recognise that recent UK Government budget announcements have provided some support. The energy bill relief scheme that was announced in September provides some short-term relief for businesses, but there is a need, which I'm sure is recognised on a cross-party basis, for a longer term view for businesses to be able to plan. You can't plan to make choices over the next year if you're only certain of an element of support that will end in March, and also not just the clarity in what will happen after that, but when that clarity will be provided. And as I say, I'm sure there will be cross-party recognition of the need for not just clarity on what the future is, but actually for the discounts to be passed on swiftly to businesses to make sure they can survive to look forward to the new year. We also, of course, need to understand what will happen on 17 November. The reality of those choices won't just affect public services; they'll affect what we're able to do to support the economy, they'll affect customers, they'll affect workers, they'll affect businesses and jobs.

But, of course, when I look forward to our ability to support businesses, we regularly discuss these matters with businesses themselves. The visitor economy forum regularly meets; I'm due to meet them in the coming weeks. I'm due to meet more individual businesses not just with regard to the immediate challenges, but, immediately after 17 November, we'll be meeting again. We had a recent economic summit, again to listen to sectors across the economy and then to try to tailor our response and to have that honest conversation. What is different, of course, about Wales is that we do that in a spirit of social partnership, with our trade union representatives. In fact, yesterday, I met with the retail sector to take forward the vision that has been co-produced by the Government, businesses and trade unions, led by our colleagues in USDAW, and to look at the delivery plan to understand what, collectively, we can do together to maintain that sector and to see it have a decent future, with decent work as well as decent services that are valued in each of our communities. So, I continue to not just want to see a thriving group of businesses within the sectors we're discussing today, but how we can do that within the reality of the context. Our ambition remains, for example, in tourism, to grow the sector for the good of Wales. That means economic growth that delivers benefits for people and places, including environmental sustainability, social and cultural enrichment, and the health benefits that come from good work.

I think, turning to the committee's recommendations, it's pleasing to hear a broad welcome for the Government's response to the recommendations and how we will look to work alongside those and, of course, provide an update to the committee in due course of the progress we're making against those recommendations. 

In terms of some of our response on business rates, of course, with recommendations 1 and 2, we're providing that additional £116 million package. That will be available until the end of the financial year. However, we do need to see the realities of what is going to come in the budget on 17 November and whether there is a future fiscal event in the spring as well. But there is a consultation seeking views on reforming non-domestic rates, and that will be open until 14 December, and I'd encourage people to get involved in that consultation. 

On capital investment, Visit Wales, of course, provides capital investment to support businesses operating in tourism and hospitality, with three particular channels: that's the Wales tourism investment fund of £50 million; the £2.5 million strategic capital investment; and, of course, the annual Brilliant Basics programme.

On recommendation 8, we have recently made changes to self-catering thresholds. These are designed to incentivise the use of properties and help bring empty and under-used properties back into use. If a property is not operated as a business, it will be liable for council tax.

With regards to recommendations 9 and 10, we're consulting on giving local authorities the power to introduce a visitor levy, and a full consultation started on 20 September. It's pleasing to hear not just one side of this debate, but Sarah Murphy, obviously, outlining different views within her own constituency and international evidence of this. I appreciate some contributors would like to see this Government join others in having regular u-turns and avoiding commitments in their manifesto, but we're determined to do what we told the people of Wales we would do in designing, delivering and consulting on a levy.

I can see time is nearly against me, but I just want to finish—