Support for People and Businesses in Wales: Covid-19

Jessica Morden Excerpts

Wednesday 21st October 2020 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing this debate and on the excellent speech he made. I apologise profusely for having to leave before the winding-up speeches, as I must go and chair a Committee.

As my hon. Friend said, this debate on support for people and businesses in Wales during covid-19 comes in the context of the Welsh Government’s announcement that Wales will enter a national firebreak for a fortnight from the end of this week. That is a sensible, proportionate response to the national rise in cases we have seen over recent weeks—we only have to listen, for instance, to national health service staff from the Aneurin Bevan health board on social media to know that. I know it is also something that many of my constituents, while accepting the challenges it will pose—and it will be hard —will understand.

The First Minister’s tone, which encouraged the people of Wales to come together to look after each other and ease the burden on our NHS, was well judged. That is not least because in Newport, which has been under local lockdown since 22 September, we saw our cases drop yesterday to the joint lowest figure in the Aneurin Bevan health board area, along with Monmouthshire, part of which I represent. People in Newport have stuck to the rules, and there are some signs that that is now having an effect, even against the backdrop of a worrying national picture. We thank them for their efforts and their sacrifices at this time, and we also thank those working hard on the frontline during the second wave, who must be exhausted but who are keeping going. We are eternally grateful.

In his announcement on Monday, the First Minister, Mark Drakeford, highlighted the challenges that businesses across Wales are continuing to face. That is why it is good to hear that businesses affected by the firebreak will be supported with the new £300 million fund, which opens next week, on top of the economic resilience fund that has safeguarded 100,000 jobs. It will include payments for businesses covered by small business rates relief; small and medium-sized retail, leisure and hospitality business; and targeted support for struggling businesses, for which it cannot come soon enough. We need to repeat the First Minister’s ask: the Chancellor must give Welsh businesses early access to the new, expanded job support scheme from Friday. The Welsh Government are offering to pay the extra costs to retain staff. I hope that can be resolved quickly.

It goes without saying that the past few months have been incredibly challenging for us all in Wales, and all the more so for individuals and businesses that are falling through the cracks of the support offered by the UK Government. In Welsh questions last week, I spoke up for constituents who are locked out of the Government’s new job support scheme or are deemed to be in unviable jobs. In his response, the Secretary of State invited me to raise individual examples of gaps in Government support that my constituents have encountered. Here are just a few for my constituency neighbour, the Minister.

A worryingly large amount of correspondence has come in from constituents who were denied access to the furlough scheme in the first place, including those on maternity leave; those who are shielding; those made redundant before 19 March, whose previous employer does not agree, for whatever reason, to re-employ them and place them on temporary leave; and many zero-hours contract staff, particularly agency workers. There are also those who started new jobs in March and who have been unable to access support through the furlough scheme. For example, a constituent who started a new job in south Wales in March was told to stay at home after a week in the office. He was later informed that the company could not afford to pay everyone, and he was put on eight weeks’ unpaid leave.

There are also ongoing problems with Government support schemes that affect those who have received support. They include the deeply unfair situation, which is only now becoming apparent, whereby lower paid workers who fall ill after returning to work from furlough risk losing their entitlement to statutory sick pay, as their earnings fall under the limit of £120. I thank Mike Payne of the GMB union for highlighting that, and I think the Government should sort it out.

There are also gaping holes in the Government’s support for the self-employed, including those who work on short pay-as-you-earn contracts. For example, constituents in the creative sector on local film sets have not been covered by the self-employed income support scheme or the job retention scheme. Those I have spoken up for in previous debates who serve as directors for limited companies and draw down their income in dividends currently have no support under either scheme. Those small business owners and directors are often not high earners, paying themselves a nominal salary and taking the rest as dividends.

The new job support scheme is also flawed. An Institute for Public Policy Research report estimates that only 10% of so-called viable jobs will be saved by the package. The truth is that a grant of two thirds of their salary for workers is simply not sufficient for those on the lowest wages, and will make it harder for many of my constituents to pay bills and feed their families, especially in the run-up to Christmas. Government adviser Dame Louise Casey said last week:

“It’s like you're saying to people, ‘You can only afford two-thirds of your rent, you can only afford two-thirds of the food that you need to put on the table.’ There’s this sense from Downing Street and from Westminster that people will make do. Well, they weren’t coping before Covid.”

She is absolutely right that this level of support simply will not cut it. The UK Government should reconsider the policy and listen to the Wales TUC, which has rightly stated that the wage replacement should be at least at the current furlough level of 80%.

Given that two thirds of the national minimum wage is about £800 a month, there is a strong likelihood that many of the lowest-paid workers in Wales, where the average wage is 15% lower than the UK average, will need to claim universal credit under the new job support scheme. That again illustrates the pressing need to address the in-built flaws in the universal credit system, including the five-week wait, which the Work and Pensions Select Committee highlighted yesterday, and the advance loan payment, which pushes people into debt.

Whole sectors of the Welsh and UK economy are facing an uncertain future. In my constituency—my hon. Friend the Member for Islwyn has mentioned many of these—the sectors include the exhibition and events industry and its many supply chains, driving instructors, garages, dog kennels, gyms, the wedding industry, and beauty and hair, as well as others. As chair of the all-party group on steel, may I point out the need to help out our steel industry, which we will definitely need if we are to build back greener? I urge Ministers to work with their counterparts in the Welsh Government to produce a road map for recovery for these businesses, particularly those where supply chains frequently cross borders within the UK.

My final point is about lower-paid workers, particularly women, and I draw Ministers’ attention to the excellent report by the Welsh equality charity, Chwarae Teg, “Covid-19: Women, Work and Wales”. What we are going through might be the new normal, but for lower-paid workers in unfurloughed sectors, such as care, retail and the NHS, who are keeping the country going, there is nothing normal about the contribution they are making to keep us safe in the second wave. The lowest paid—those on the living wage—deserve the Government to commit, at the very least, to giving them a raise next year. As I highlighted in Prime Minister’s questions last month, Ministers should confirm that the hourly level will still rise to £9.21 in April. Working people in Wales and across the UK should not be made to pay for this crisis.