Item 7 is a debate on the Economy, Trade, and Rural Affairs Committee report, 'Cost of living pressures'. I call on the Chair of the committee to move the motion. Paul Davies.

Motion NDM8129 Paul Davies

To propose that the Senedd:

Notes the report of the Economy, Trade, and Rural Affairs Committee: 'Cost of living pressures' which was laid in the Table Office on 28 July 2022.

Motion moved.

Diolch, Dirprwy Lywydd. I move the motion tabled in my name.

Dirprwy Lywydd, last week we debated our report on the recovery of the tourism, hospitality and retail sectors in Wales, and how the cost of living and the cost of doing business was affecting them. This week, we debate our report into some of the most pressing issues our communities face: how cost-of-living pressures have been affecting households and workers; the impact of rising costs of doing business; and the particular needs of our rural communities.

In this inquiry, we examined the effectiveness of the support measures that the Welsh and UK Governments have put in place, and what further support might be needed over the coming months. We were clear that we wanted to build on the work of other Senedd committees rather than reinventing the wheel, and the committee is very grateful to all those who gave evidence to our inquiry.

Back in the summer, the escalating cost of living was already being felt across Wales and affecting almost every area of public and private life. With wages and fixed incomes not stretching as far, people were tightening their belts and making difficult choices. Businesses were facing a double whammy of increased costs and consumers reducing their discretionary spending. And all of these issues are amplified in rural communities, which face a rural premium for accessing goods and services. Of course, things have moved on significantly since we reported in late July, but even then we were looking ahead to how businesses and individuals could be supported through the autumn and winter period we now find ourselves in. The Minister has provided a very comprehensive response to this report, in a timely manner, which I believe reflects the importance of action in this area.

Now, our report contains 27 recommendations in five areas. We focused on: the support that was available from the Welsh Government and the UK Government in May and June of this year, and where the gaps were; the pressures on households at that time; the pressure on the workforce; the impact on rural communities; and the pressure on businesses. I'm pleased that 23 of the recommendations were accepted, with the remaining four accepted in principle. There is a lot to welcome in the Welsh Government's response, and I thank the Minister for his positive engagement with our report and recommendations.

Our first five recommendations relate to ensuring that the Welsh Government is gathering enough data and the right kind of data to understand where the need is greatest and to ensure that the money available is being directed in the best possible way. We heard some concerning evidence about the scale of the challenge for people trying to access support, and so the fact that these five recommendations were all accepted is very welcome.

Our sixth recommendation was about maximising awareness and take-up of the benefit support out there for individuals, and Welsh Government's efforts in this regard are also welcomed. This includes the work being done through the 'Claim what's yours' campaign, and the income maximisation working group, which is referenced in response to our seventh recommendation. The committee would be grateful for any updates on this work from the Minister as we move through the winter period and into the spring of 2023, and perhaps in responding to this debate we'll hear a bit more about the work that has taken place.

I'd also like to pay tribute to those providing advice and support services to people who are feeling the pressures the most right now. Their work is not always fully recognised, and we heard the strain that they themselves are under as they try to support others in their community. Indeed, we're very grateful to a number of organisations that participated in focus groups and interviews run by the Senedd's citizen engagement team. The findings of that work are available on our website and reflected in our report.

Action in Caerau and Ely, ACE, was one of those grass-roots organisations supporting people on low incomes, and their evidence highlights a particularly important aspect of the inquiry. They made the very important point that it's only of any benefit if you know about it. Now, as well as raising awareness of what support is available, a key message from our inquiry was that more could be done to rationalise the process of applying for support. Dr Steffan Evans of the Bevan Foundation pointed out the vast amount of form filling that people are required to carry out just to get money they are entitled to, and he urged the Welsh Government to accelerate work in this area.

There is a consensus that the system needs to be more coherent, and recommendations 8, 9 and 10 call for better passporting of benefits, more co-ordination, and streamlining of services in a one-stop-shop approach. We welcome the Welsh Government's response on this point, and welcome the fact that a benefit charter is currently being developed. We also recognise that some local authorities are further ahead of the game, and we want this best practice to become the norm.

Recommendation 11 is particularly pertinent, as it refers to eligibility for support beyond means-tested benefits, and highlights the plight of those families who may be just missing out. It's vital that the Welsh Government recognises this in the criteria for its winter fuel support scheme, and I hope the Minister will take this recommendation into account with the design of future schemes.

I thank the Minister for the response to recommendation 12 on how the Welsh Government's discretionary homelessness prevention grant will help to mitigate the reduction in discretionary housing payments, and the committee notes that Ministers will continue dialogue with the UK Government on what funds will be available in the 2023-24 budget to tackle cost-of-living pressures.

Now, not all the committee's recommendations were accepted in full, and I am a little puzzled why our call for the Welsh Government to drive the accreditation of public sector employers as real living wage employers has only been accepted in principle. We also recommended that the Welsh Government should explore using its levers around public sector pay and conditions to increase fair work in Wales, including by improving sick pay, where this is needed for workers delivering public services, starting with longer term arrangements for social care workers, and supporting those with the lowest earnings via pay settlements. Nevertheless, I note that the Welsh Government's response points to the arm's-length work of Cynnal Cymru to promote the benefits of the real living wage for workers in Wales, which is particularly appropriate to recognise this week, as it's Living Wage Week.

It's also good to see, in response to recommendation 15, that the Minister and the committee are on the same page with initiatives to promote fair work. Likewise, with recommendation 16, our report highlights the importance of good labour market data to support the Welsh Government's policy response in the face of cost-of-living pressures on the Welsh economy.

Mental ill health is a huge concern in the face of these cost-of-living pressures, and the committee heard some very concerning evidence from the trade unions and grass-roots organisations about the impact that financial worries are having on people. Some of the comments that we've received through the committee's engagement work included things like, and I quote:

'I'm afraid to put the heating on',

'I feel sick and can't eat',

'We earn a good wage but can't cope with the bills', and, 'I'm a prisoner in my own home.' Therefore, encouraging employers to support their workers through these difficulties is critical, and so we rightly made a specific recommendation about this.

Dirprwy Lywydd, as I mentioned at the very start of my contribution, other Senedd committees have also done important work on cost-of-living issues. For example, the Equality and Social Justice Committee had already made important recommendations about fuel poverty and the Warm Homes programme in May, two months before the Economy, Trade, and Rural Affairs Committee report was indeed published. So, it's vital that Members recognise that this is one part of a large piece of work on scrutinising Government support to meet the rising cost of living.

Dirprwy Lywydd, another important focus of our report was on the struggles faced by off-grid households and those in rural communities, where there is a rural premium for accessing goods and services. We know there are multiple factors at play here: rurality, reliance on more expensive forms of heating fuel, increased costs of transportation, isolation, the pressures on our farming communities to meet soaring feed, fertiliser and fuel costs. Therefore, recommendations 19 to 23 cover measures to support off-grid households with fuel costs and the provision of warm hubs, which have been introduced now in Wales, and more research and analysis around the needs of rural communities. It's good to hear that rural issues are being given particular consideration for future iterations of the Warm Homes programme, and I look forward to hearing more about this work in due course.

Our last four recommendations are around support for business to cope with the increased costs of doing business. The Welsh Government pointed out that many levers sit at the UK level to provide additional financial firepower to meet the challenges, and that the Barnett consequentials used for COVID support in previous years are not there for 2022-23. I'm pleased that the Welsh Government accepted our recommendation about supporting Welsh businesses to become more energy efficient, and not to lose sight of net-zero targets in the face of the financial challenges.

Finally, with regard to ongoing non-domestic rate relief for businesses, we note the commitment to review the need for further transitional support in 2023, and the committee looks forward to hearing more about how the Welsh Government will be using business rates relief to support the most affected businesses in Wales at this very difficult time.

In closing, I'd like to repeat my thanks to everyone who engaged with the committee during our work on this important issue, and also thank the team who supported the committee to carry out this inquiry. I look forward to hearing Members' contributions to this very important debate. Diolch yn fawr iawn.

I'll start, as we always tend to in these debates, and thank the Chair for his expert way in how he chairs our committee, as well as all the work the clerks do as well, and in particular the evidence we received from various stakeholders and community action groups. I'll highlight the Caerau and Ely action group, much like the Chair did, and refer to their point around it only being of benefit if you know about it. I think that's a vitally important point. It links with my previous contribution relating to broadband social tariffs. But it also highlights the need to raise awareness of what is available to people. And of course, I fundamentally think people should receive what they're entitled to anyway as a default.

But if I could start with businesses. It is no secret that the cost-of-living crisis is tearing through Welsh high streets as warnings of a lost generation of small and independent businesses continue to loom large. The impact of soaring inflation and skyrocketing energy prices has been felt by traders, many of whom have been forced to close their doors for good or are considering doing so. The cost-of-living crisis is running in tandem with a cost-of-doing-business crisis—something that is well documented in our committee's report. Prices are surging for business at the same time that working people are having to reduce their spending. It’s very much a double-whammy.

It’s worth noting here that this spending by working people isn’t for luxuries either—many can’t afford the necessities. The considerable increases in fuel poverty, predicted to follow the energy cap rise in April, whereby 45 per cent of Welsh households are expected to contend with grinding fuel poverty, are expected to coincide with possibly the biggest fall in disposable income since records began in the 1950s. On top of this, many businesses are still recovering from the pandemic. I mentioned small, independent businesses and it’s these that are being hit the hardest in certain sectors. The Federation of Small Businesses reported that there has been an average gas bill hike of 250 per cent for small businesses and that 96 per cent of these are concerned about their rising energy bills.

Energy-intensive industries are also suffering—not just the ones that immediately come to mind, such as steel, but also ones that I’ve been vocal about, such as breweries and hospitality. For example, Bang-On Brewery, a local brewery in my region, in Bridgend, have seen their bills increase in an eye-watering way. For example, they've seen a 549 per cent increase in their new utility contract; a 68 per cent increase in their new premises lease; a 165 per cent increase in brewers grain since the beginning of 2021, with a further 70 per cent increase being introduced in January 2023, and an 80 per cent increase in vehicle running costs in the past year. If you add all that up, just to stay where they are, they will need to find an additional £198,000 after tax to survive. Under those costs, the new trade price of a bottle of beer would have to be £12.53 per bottle plus VAT. I don’t know many people, if anyone really, who would consider paying that for a bottle of beer.

Costs such as these are just some of the myriad ways that this crisis is debilitating an already hamstrung hospitality industry. Sectors like hospitality, retail and tourism are hypervulnerable to people’s discretionary spending. The report notes that sectors under significant pressures are at an increased risk of offloading cost-of-living pressures onto employees. Many working in sectors such as hospitality will have no collective bargaining beyond zero-hours contracts or no written contracts, and working hours that can be confirmed, cancelled or changed at the whim of a text message or phone call.

The executive director for Wales of UKHospitality has said that 13,000 Welsh jobs are at risk if there is no help for the industry. And from this, we can see the cyclical nature of this crisis. The cost-of-living crisis and the cost-of-doing-business crisis are intimately bound up with each other and its impact on working class people is devastating. Livelihoods are at stake.

Something noted by the Trades Union Congress in the report was the lack of an adequate understanding of these levels of precarity, and they’re absolutely right. In-work poverty, low pay and insecure employment are no longer marginal or provisional in certain sectors—it’s simply a fact of life for many. Not only does it serve to bring about a plague of mental health struggles, for many workers it can also have the effect of naturalising some of the dire employment conditions. People are having to work longer hours, some taking multiple jobs for less and less money. I spoke to a constituent at the surgery in Caerau on Monday who is working three jobs at the moment and yet still only had £3 to her name on Monday.

Luke, you need to conclude now please.

I'll conclude by saying that we must endeavour to carry out the work that denaturalises this. The reality is that this isn't normal and people shouldn't have to struggle to afford the basics. 

Again, I want to start by echoing what Paul and Luke have said. Thank you to my colleagues, the Senedd team, the Chair, and everyone who engaged with our Economy, Trade and Rural Affairs Committee in putting this timely and important report together. This crisis continues to impact many in our communities. For some, it might be about being extra careful with budgets, but for others it is about whether they will be able to put food on the table for them or their children tomorrow. 

The TUC says that one in seven people are skipping meals already or going without food. Trussell Trust figures show that one in five referrals to its centres are from households where someone works. This is impacting people who should have the security of their wages, but some working people are not able to cover the basic costs of living, let alone getting to their job. Mortgage bills are at their highest since 2008 as a result of the fallout from the mini-budget, food prices have rocketed, some by over 60 per cent, and the Office for Budget Responsibility has said that 2023 will see the biggest fall in living standards in the UK since records began. 

But, there are profits being made for a small number of people in our society. UK energy producers could make excess profits of £170 billion over the next two years. BP made profits of £7 billion in the third quarter of 2022; Shell has made record global profits of nearly £26 billion for the first three quarters of 2022, but paid nothing into the UK's energy windfall tax. At the very same time, the Government in Westminster, despite our pleas for it not to, made changes to universal credit that left three quarters of households worse off than they were the year before. The Lloyds Bank Foundation report stated explicitly that these changes were pushing people into poverty and debt. 

The Welsh Government has said that it's doing everything it can to target people needing the most support, so I am pleased that the Welsh Government has accepted, or accepted in principle, all of the recommendations in our report. The Welsh Government has already acted on several of these recommendations and provided interventions through this bleak economic period. This includes the winter fuel support scheme, which has been extended to support more than 400,000 low-income homes; the one-off £150 payment for those in council tax bands A to D; and the council tax reduction scheme. Recommendation 5 of the report stresses the need to evaluate the support and learn lessons from the cost-of-living crisis. I'm pleased that this is already taking place within Welsh Government, and this process led to the extension of the winter fuel support, after it was learned from the stakeholders that some households needing that support were not originally eligible. 

Recommendation 6 also highlights the need to build on the success of the 'Claim what's yours' campaign, with the Welsh Government recognising that there are many people who are entitled to support but are not claiming it, simply because they don't know that it's even available to them. We are in a situation now where people cannot afford to go without the support that they are entitled to, so I am glad to see that the Welsh Government has agreed to continue this work.

The reality is that the consequences of economic insecurity intersect with other aspects in people's lives. We know that health disparities, such as in mental health, are being affected by the cost-of-living crisis. That is why I'm particularly pleased that we got to cover this during the investigation by the committee and that this was reflected in recommendation 17. In my own community, many support groups across Bridgend are being impacted by the influx of people needing support for their mental health as they deal with the pressures of the crisis. The Welsh Government said it's working with its social partners, including the trade unions, to ensure that workers are not disadvantaged if suffering with their mental health. I would ask that officials in Welsh Government and local authorities engage and consult with support groups on the ground in our communities to ensure that they are provided with the tools to support people during this hardship. They are a lifeline for so many people on the edge. 

Though there are many recommendations to draw upon in this debate, I do want to mention one last one, 22, on the delivery of the warm hubs, or warm banks, in our communities for people to drop in and keep warm instead of using energy in their own households, as well as going somewhere for support and camaraderie. The number of people in my community who have reached out to me for more information on this was overwhelming. It is a reminder of that community spirit we saw during the pandemic, looking out for one another in a time of need. I am pleased that the First Minister has confirmed initial funding of £1 million to support organisations and local authorities to provide the warm banks this winter, but it is important again that we think about how we reach out to people who need to access this support. 

I recently met with the broadband company Ogi, and discussed with them the practicalities of providing Wi-Fi at the warm hubs. With people having to cut down on budgets, for the most vulnerable, their broadband could be the bill that goes. They'll probably prioritise, of course, eating and keeping the heating on over that. Wi-Fi at the warm hubs could ensure that people could access their benefits online, look up local services, do their food shopping, but also attract families and parents who may not typically consider using them. So, I'd ask that the Welsh Government consider this and see how they can provide support. Again, thank you to all my colleagues on the committee. Thank you, Minister.

I'm grateful to all those who contributed towards the formation of this committee's report. As we've heard already this afternoon, this is an issue of huge pertinence to families and households right across Wales. But as this report rightly notes, the escalation in the cost of living is being felt even more acutely in Wales's rural communities, such as those in my own constituency of Carmarthen West and South Pembrokeshire.

Rural Wales has always faced connectivity challenges, be that physically with transport, or technologically with broadband and communications infrastructure. If you combine this with older, colder and off-grid housing stock, then these pre-existing issues compound the escalating stress and damage to the cost of living. This is why I was pleased to note recommendation 20 of this report,

'Welsh Government must ensure its plans to support off-grid households through this winter are robust. This should include either extending the ability for off-grid households to access support via the Discretionary Assistance Fund or the Fuel Voucher scheme.'

It seeks to alleviate this situation, and I am pleased to learn that this recommendation has been accepted in full by the Welsh Government. That being said, it is important that we see the cost of living as an evolving situation and there could come a time when—arguably now—the existing financial support package does not go far enough. This is then exacerbated when we take into consideration the influence of connectivity and housing-stock issues, which then further escalates the crisis we have identified. And so when we talk about rural communities in this context, we are recognising that individuals are paying a higher cost to live in rural Wales, where salaries don't reflect this.

There's a higher cost to heat your home because you live in a 150-year-old cottage that isn't afforded the modern-day luxuries of thermal insulation, a higher cost to travel because you live 45 minutes away from your nearest supermarket, 55 minutes away from a hospital, or an hour and a half away from your nearest city. So, there's less efficient heating of your home and you're filling up your car with fuel more often, and pay a surcharge for the distance that your goods and services have travelled. This is the reality of the cost of rural living, and as far as I and my constituents are concerned, this is not a factor that is recognised enough.

Paragraph 76 of this report notes the rural affairs Minister's comments on this situation. She told members of the committee that

'For the off-grid properties, we'— being the Welsh Government—

'are looking at what further we can do to support.'

I should note that these comments were made in June, and yet, several months on, our rural communities are still left in the same situation. So, given the opportunity that this report has presented, I would like to ask the Welsh Government whether they have any intention of extending support to further assist our communities.

In conclusion, this report has shone an important spotlight on a matter that is ever evolving. Crucially, the current cost of living is an issue that is going to be with us for the foreseeable future, so in every decision on financial support that the Welsh Government makes, I would urge you to take into consideration the rural cost premium to ensure that communities aren't being short-changed because of their postcode.

I'd like to end by echoing the words of my fellow committee member Luke in thanking our Chair, Paul Davies, for his continued excellent chairmanship of this committee, our committee clerking team, and all of those who contributed by oral or written evidence to this report. Diolch, Dirprwy Lywydd.

As Plaid Cymru spokesperson on social justice and equalities, I welcome the recommendations of this important report. As Paul Davies mentioned, many of these recommendations echo and underline many of those that have been made by a number of reports by the Equality and Social Justice Committee into issues related to poverty and the cost-of-living crisis, as well as calls made by many anti-poverty organisations and campaigners.

The findings of this report as regards the scale of the cost-of-living crisis are stark in the context of today's inflation figures and the findings of the children's commissioner's survey released today, which found that 45 per cent of children said they worry about having enough to eat. They evidence an unprecedented crisis. We have perhaps started to become too familiar with these shocking, shameful statistics that reveal how vulnerable our citizens are to economic shocks, how our already scandalous levels of poverty have meant that too many people have been on a dangerous precipice for too long, their precarious financial situation fragile and flimsy in the face of the economic storm that is hitting them so hard. But the headlines, so bold and alarming in this report, bear repeating. Wales this summer had the highest percentage of households in serious financial difficulty of any of the devolved nations and English regions—a quarter of people cutting back on utilities, a third cutting back on food, higher numbers borrowing and getting into debt, and an unprecedented demand for crisis support. All this is having a disproportionate effect on women, exacerbated by intersectional impacts for disabled women and women from black, Asian and minority ethnic backgrounds.

The report also bears out warnings about the grim and worsening situation facing Welsh households issued in the Equalities and Social Justice Committee's first report of this sixth Senedd on debt and the pandemic, and our inquiry into the next iteration of the Warm Homes programme, during which we took a lot of evidence on fuel poverty. The report before us today tells us that every 40 seconds, a Welsh bill payer is making a call to Citizens Advice about their fuel bill. Delivery, low take-up and an awareness of support schemes are again here recognised as a challenge and a concern. Again and again, we see in report after report, both from Senedd committees and from research of policy and third sector organisations, that there is a lack of disaggregated data on the impacts of rising living costs on particular groups on indicators such as poverty, deprivation and debt.

Recommendations 1 to 13 all speak to the need for better targeting, co-ordination and delivery of the cost-of-living support that is available. It's something that Plaid Cymru have consistently advocated for. We need to make sure that every pound of Welsh support is going to the right place at the right time, and we need to know how much support is needed and where. Recommendations 5 and 6 again reiterate calls made many times around the winter fuel support scheme. We must see that the support on offer from Welsh Government is being evaluated appropriately and quickly so that subsequent schemes are made even more efficient in achieving their purpose.

Recommendation 8 calls for the Welsh Government to bring together means-tested support schemes for low-income households through a Welsh benefits system, and there's also a mention of a statutory element to local authority delivery of support payments in recommendation 10. Having brought a debate on a legislative proposal to the Senedd a couple of weeks ago on this very issue, a proposal that was passed by the Senedd, I was very pleased to see that this is again being endorsed with cross-party agreement. The recent report from Audit Wales says that, because there isn't a streamlined, simpler system for claiming payments, the help on offer isn't as effective as it could be, with people having to complete multiple applications for different payments that often ask for the same information.

That report has also shown that people in all parts of Wales are experiencing poverty and the number is growing. We know that the news from Westminster tomorrow won't be good for either those one in eight households in Wales who are struggling to afford everyday items, or the households on benefits who are struggling the most. Welsh Government has had to step in more and more with different support payments as Westminster has failed to protect those in Wales who need the support the most. There are children going hungry today. There are disabled and elderly people who can't keep their homes warm. There are families who are facing homelessness. They can't depend on those Tories in Westminster who would impose more devastating austerity policies upon them, and neither can they wait for a change of Government in Westminster. They elected a Government in Cardiff to serve them, and serve them they should by acting quickly on these important recommendations. Diolch.

'The shocking reality is that this winter, we are likely to see charities being forced to stop feeding the hungry so they can help the starving, cut back on support to the poorly housed so they can focus on the fast-rising numbers of homeless, and give up on helping the down-at-heel because their priority has to be the destitute.'

These are not my words, but those of Dr Rowan Williams and Gordon Brown in their foreward to the Theos report, which is a religious think tank that particularly focuses on the work of churches in endeavouring to relieve this level of concern and pain that our communities are going through. It echoes the latest NUS survey, which came out today, on the impact of the rising cost of living on students in Wales, because, obviously, they are not eligible for any of these benefits. Nine out of 10 of those who took part in this survey said that their mental health was being impacted by financial worries, and a quarter reported this to be significant, as well as increasing numbers cutting down on essentials, including, for example, period products, as well as not putting the heating on as much in their homes and eating less. I think, more concerning for me is that they are returning to their families, or savings, for help, but, increasingly, the cost-of-living crisis is affecting their families as well. So, there is nowhere for these people to turn to.

All those who have spoken so far have agreed that the situation is extremely serious, and we'll find out tomorrow whether public services will have even less resource to cope with, to get us through this terrible winter. So, we have to think of other ways in which we can endeavour to mitigate the pain that our communities are going through.

I was pleased to host the launch of the Enforcement Conduct Board in the Pierhead today. I'm very grateful to those Members who attended, including the Minister for Social Justice, who took the time to hear what Catherine Brown, the chair, had to say, and to agree to work with her. Catherine Brown has a long and distinguished career as a civil servant, so, as chair of this non-statutory body for Wales and England, she will bring a lot of experience of negotiating with public bodies and the enforcement of regulations. It is a non-statutory body, set up by the civil enforcement industry, otherwise known as bailiffs, and supported by several leading debt advice charities, including Money Advice Trust, Christians Against Poverty and StepChange. 

One of the expert debt advisers present today told me what happened after she moved into a new home that had previously been occupied by someone who appeared to have accumulated a large number of debts. She experienced a series of visits from bailiffs, most of whom were polite and correct in the way they conducted their business. But one in particular, acting on behalf of a local authority, had aggressive behaviour and reflected some of the testimonials that we heard in our Equality and Social Justice Committee inquiry into debt in the pandemic. This, obviously, is extremely worrying, and we need to ensure that all local authorities, when they're enforcing, for example, council tax debt, are not employing people who are cowboys in the industry and not adhering to the law. It is a sad fact that one of the growth areas in the economy in this crisis is debt collection agencies, and many of those trade in people's misery by buying up court enforcement orders in order to endeavour to make money from them. This is a very worrying situation, because once you get involved with debt collectors you're then, obviously, increasing the amount of debt that you owe, and sometimes the charges they are making are seriously unreasonable.

I just wanted to pick up on a point that Paul Davies made, which is around form filling and the difficulties that a lot of people have in doing that. I recall often the words of Lynne Neagle saying that the Healthy Start vouchers are not going to a large number of the people who are entitled to them. In an energy summit I organised in my constituency, it was very concerning to hear that health visitors report that trying to fill in the form to get the Healthy Start vouchers is so time consuming that they simply don't have the time to complete the application on behalf of these low-income women on benefits who desperately need that extra £8.25 in the first year of a child's life, and £4.25 per child up to four years. So, I think we have to look at ways in which we can help make this situation easier. I hope that we can speak to the UK Government about making this Healthy Start easier to get hold of.

I was particularly interested in the response of the Government to your report that said that the Welsh Government set up a task and finish group to look at a delivery model that will enable local authority data sources to be used to target pension credit information to households who may be missing out—

Jenny, you need to conclude now, please.

—and I think this is the model that we could be using for all manner of entitlements that people are getting.

The cost-of-living crisis is 12 years in the making, exacerbated by Brexit, the war in Ukraine and the Tory UK Government's policies, cutting public service funding, pushing productivity to an unrealistic limit and slashing social security payments. I would like to welcome recommendations 8 and 9 of this report. Having to apply for benefits and grants is confusing and messy. Residents hear snippets of information on the news, perhaps in relation to a UK Government announcement—but it's not available yet, and we are not sure how it's going to be delivered.

The Welsh Government fills in the gaps being left by UK Government funding initiatives to make sure that people are not left behind. But councils are facing huge funding gaps, and they are expected to be the delivery body, and they won't be able to step in. A one-stop portal or grant assessor would be a good idea, where the latest information can be found. But we must make sure that every contact counts. The Wellbeing Hub in Wrexham said that, when people come for long COVID consultations, they are asking them if they are okay, and if they need help with anything else, such as accessing grants. In Flintshire, there is a single point of contact number for OT grants, district nurses, making it easier to access support. So, I think every opportunity, we must make the most of it now.

Productivity and efficiencies have been pushed to the limit over the last 15 to 20 years. Shift patterns are long, and they are not family friendly; they don't fit in with childcare. This increased use of zero-hours contracts or part-time contracts with enforced overtime isn’t very good for families. Royal Mail workers’ rounds were increased last year to 13 miles as an average per day. Yet, the Royal Mail wants to cut sickness, which, you know, a worker walking 13 miles a day is going to have more health issues, but they want to cut sickness pay and increase the use of agency workers.

I’m glad that this report recognises the effect that the current labour market is having on workers, and I’m pleased to see that the Welsh Government has renewed its commitment to supporting working people through social partnership. But the problem is not just in the private sector; public service funding for councils and health has been cut, and wages have stagnated. Employees are stretched and leaving the sector. They are exhausted. If the UK Government reversed public sector cuts and invested in the wider care sector, it would create many more jobs than investment in construction. It employs more women, is green and supports people and families right across our communities. It would help invest in our communities as well, as they would just spend locally. Investing in care would be a good economic stimulus during the cost-of-living crisis, and it would also take the pressure off the NHS.

Investment in childcare would also help to address the cost-of-living crisis and support 46 per cent of single parents who experience poverty—86 per cent of whom are women. Now is not the time to cut public service spending, when it’s needed more than ever to help people in crisis. We heard this at the Local Government and Housing Committee today. Homelessness is at crisis point. 

I know that bus subsidies are back on the table, as they are looking at austerity too and more cuts, and dealing with the in-year funding gap. Redundancies are on the table. The closure of leisure facilities, swimming baths and, most importantly of all, the support services that we need councils to deliver—all this help and this aid—are on the table as well. So, we need to invest in public service funding and public spending now in order to support families through this cost-of-living crisis, and not cut them further. Thank you.

I call on the Minister for Economy, Vaughan Gething.

Thank you, Dirprwy Lywydd. I'd like to start by thanking the committee again for their work in preparing this report, which has led to the debate. We are all very well aware of the cost-of-living crisis. It is being fuelled by a range of factors. But of course, the headline inflation rate today is partly driven by energy, but of course, as I mentioned earlier, the headline rate of food inflation far outstrips the headline rate of 11.1 per cent, with more than 16 per cent in the inflation of food.

The undeniable truth is that choices made by successive UK Conservative Governments have contributed to where we are: the first period of austerity, the reductions in benefits—they've helped to create conditions that have added to very real pressures on household budgets, even before the Truss-Kwarteng regime and its brief-lived but disastrous impact on public finance, and the very real effect that that has had for families. As Sarah Murphy noted, the Office for Budget Responsibility assessment is that the next financial year will see the biggest fall in living standards across the UK since records began.

And since this report was published, unfortunately the situation has worsened. Many Members have highlighted the appalling reality for far too many families, and just to return to one of the points Jenny Rathbone made, for those people that are helping, there will be real challenges, and I think it is true that help for the hungry will be stopped to be better able to help the starving. That will be the truth in far too many of our communities.

And the instability in the UK Government has undeniably led to more uncertainty over the interventions to support families and businesses, in Wales and across the UK. The previous mini-budget that led to the collapse of the pound, the chaos in financial markets, had real consequences, not just the near-collapse of UK pension funds and the intervention of the Bank of England—it led to soaring borrowing costs and further pressure on inflation and interest rates, and that hits businesses, families, and of course all of those people with a mortgage, including the many thousands of people who every month come off a fixed price deal and go onto a standard rate that will now be much more than they expected.

Now, some help was made available. The £2,500 energy price cap—that’s the average energy price, of course; we know that it wasn’t a hard cap—that was for two years, and then backtracked to have a six-month period of time. But, even with that support, the average household energy bill has almost doubled compared to April 2021. And the energy bill relief scheme should relieve some of the pressures on businesses, but the UK Government really do need to pass the necessary legislation swiftly, to make sure payments get into the accounts of businesses so they don’t go under before the help is provided, and that they’re passed on to non-domestic customers, and that’s not just businesses, of course; lots of our key public services, including schools, are in that category, and really do need the help that has been signalled.

Now, whilst I do welcome the support that has been signalled, it may not be sufficient for some of our small and medium-sized businesses who are still facing up to sixfold increases in energy costs. A high proportion of those businesses were struggling with the pace of the recovery post pandemic. The Bank of England predicts a historic drop of 14 per cent in UK GDP this year, as well of course as a long-lasting recession that we may already be into.

I have responded formally to the recommendations, and, as has been noted, the Government agrees with the great majority of them, either in full or in principle. The Government has already established a Cabinet sub-committee specifically to discuss and address the support that we are able to provide, and we’re doing that with our partners in the third sector, in local government, and indeed a range of others. The recommendations made are part of the work that we’re taking forward, and that includes the work on warm hubs that Sarah Murphy highlighted. And we’re concerned about the need to do this. It’s extraordinary that, in a country like ours, we’re having to consider how to do it, but to do it in a way where there isn’t stigma around the provision but it does provide friendship and companionship. I certainly do recognise the point that Sarah Murphy made about making sure there’s decent Wi-Fi access—a good reason for people to go there. A range of the hubs already have that, but we will of course look, and it’s a good thing that the social justice Minister is here, at how we can ensure that those hubs do have decent Wi-Fi access.

We’re working with analysts across Government, as indeed has been mentioned, on the collection, analysis and publication of data on the cost-of-living realities, and ensuring that helps to shape Government interventions. The chief statistician will shortly provide information on how to access cost-of-living data. We’ll carry on working closely with the Office for National Statistics and Data Cymru on other user-friendly ways to access that data. The development bank continues to support Welsh businesses. We’ve also committed to invest more than £20 million a year into the Business Wales service from April 2023 to March 2025. That demonstrates our commitment to entrepreneurs, micro and SME businesses, to help provide them with the information, support and guidance they need to survive the very real challenges that we face.

We also continue to invest in our skills programme to support employers. We’ll continue with a budget of £30 million that has been allocated towards improving domestic energy efficiency in low-income households, including off-grid properties, through a range of Welsh Government programmes. And in the next financial year, we want to continue to support SMEs, and we'll continue to look at what will be available to us on non-domestic rates, but, of course, we'll have to wait to see what happens tomorrow to understand what that does to the reality of Welsh Government resources. We will do everything that we can to support people through this cost-of-living crisis in targeting help and support, but we'll have to be honest about the range of measures that are available to us, as we do, I'm afraid, expect there to be a further squeeze on the financial capability of this Government following tomorrow's statement, and potentially in the years ahead.

Many businesses in Wales are supporting their customers, and, indeed, their staff. Iceland, for example, have provided a range of services to assist their customers, including 10 per cent discounts on a Tuesday for people aged over 60, and interest-free loans for some of their customers. And Valero, an example of a different employer in Pembrokeshire, well, they're also providing extra support for Pembrokeshire foodbanks and looking at a hygiene drive to help provide goods to families and children.

As I mentioned at the start, a lot has happened since this report was published: different Prime Ministers—plural—and now we're on to our fourth Chancellor this year. The uncertainty and the lack of clarity means we don't really know what our budget position will be next year, and it affects our ability to plan for the future, as indeed it does for families, public services and businesses. We'll continue to press the UK Government to use all the levers as its disposal, including a meaningful windfall tax on energy companies, who themselves say that they should pay more to support people through the cost-of-living crisis.

We've been clear about our priorities to support people and businesses. The mini-budget 2, tomorrow, will make a huge difference. It could help, but it could well make matters even worse. The next few days will be difficult, but the next year, I'm afraid, could be even more difficult for far too many citizens and businesses in Wales and across the UK. 

I call on Paul Davies to reply to the debate. 

Diolch, Dirprwy Lywydd, and can I thank Members for contributing to this afternoon's debate? We've heard strong views from Members today on the challenges faced by workers, businesses and communities across Wales. As the Minister has rightly said, more has happened since we published our report in July than we could ever have imagined, but we all agree that we want to support our constituents through these very difficult times.

Now, Members have spoken about the lack of evidence base on how cost-of-living pressures are affecting different communities across Wales, and the need for the Welsh Government to ensure regular Wales-level data is available. We must have a more accurate picture of the impact of the cost of living on households, so that we can better understand the impact of cost-of-living pressures on different socioeconomic groups.

Of course, Members have eloquently highlighted the impact of the rising cost of living on households. We know that people are having to tighten their belts and make difficult choices, and that’s why the Welsh Government must work hard to ensure that those who are struggling are aware of the support on offer. Members have also referred to the pressures on the workforce, and we know that certain economic sectors are under more pressure than others, with an increased risk of cost-of-living pressures on employers being passed onto employees. And the Member for Bridgend, and Sioned Williams, the Member for South Wales West, have reminded us that many people and families are already facing huge challenges on a day-to-day basis. I'm also grateful to the Member for Cardiff Central for highlighting the debt some are already facing in struggling with day-to-day bills. 

Now, the Minister was absolutely right to say that the impact of energy costs on businesses, and, indeed, on public services, is just as eye-watering and just as consequential as those for consumers. Like the Member for North Wales, Carolyn Thomas, the committee welcomes efforts to lift more Welsh workers onto a real living wage and to support economic sectors and workers who are particularly vulnerable to the impact of escalating living costs, and I want to assure Members that we will continue to scrutinise this area further.

I believe we have put forward some constructive suggestions to fill what we identified as the gaps in support. We know that the pressures have increased and we have to see what tomorrow’s autumn statement brings. In the meantime, I can confirm that this committee already has plans for future scrutiny in this area. In the next few weeks, we will be holding a one-day inquiry called ‘Cost of Living 2’, where we will be listening to Welsh business representatives about what has changed for them since July and how they are coping with the increased costs of doing business. And also, very importantly, we will look at the impact of cost-of-living pressures on skills and in-work training for those trying to enter the job market or reskill. This work will include looking at the Welsh Government's employability plans, in particular the young person's guarantee and how cost-of-living pressures are impacting on those recovery efforts.

We are also intending to undertake some work on the escalating cost of doing business. Members such as Luke Fletcher, the Member for South Wales West, have also raised the impact of these pressures on businesses, many of whom still haven't fully recovered from the pandemic. And for that reason, it's more important that the Welsh Government uses the levers it has to help our businesses through business rates relief, grant support and by establishing an emergency support funding programme, using similar mechanisms to the COVID support programmes, to help the businesses mostly acutely affected through the peak of the cost-of-living pressures.

Now, Members such as the Member for Carmarthen West and South Pembrokeshire have also raised the rural premium, and we know that the rising cost of living is being more acutely felt by those living in rural communities, both in terms of accessing services and in relation to energy costs, and that is why we've called for the Welsh Government to ensure its plans to support off-grid households through this winter are robust, and we've also called for more research to be done on the rural premium and the impact that the cost of living is having on our rural communities.

Dirprwy Lywydd, the committee continues to give a high priority to examining these matters, given that they are so important for the Welsh economy. We will also be welcoming the Minister for Economy to meet with us on 7 December, where I'm sure cost-of-living pressures will feature on that agenda. And so, in closing, can I thank those who contributed to the debate this afternoon? We look forward to receiving further updates from the Welsh Government on their work in this area and in relation to the implementation of our report recommendations. Diolch yn fawr.

The proposal is to note the committee's report. Does any Member object? I haven't heard any objection. Therefore, the motion is agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.