Support for People and Businesses in Wales: Covid-19

Stephen Kinnock Excerpts

Wednesday 21st October 2020 Westminster Hall

[Fay Jones (Brecon and Radnorshire) (Con)]

It is a pleasure to see you in the Chair, Sir Edward. I congratulate the hon. Member for Islwyn (Chris Evans) on securing this important debate. The last time he and I were in Westminster Hall, he reminded me of a day we spent in Blackwood, walking to raise funds for Velindre Cancer Care, which at that time was treating the late Steffan Lewis, a great man and a Plaid Cymru Member of the Senedd. We have sadly lost Steffan now, but every time I see the hon. Gentleman, I am reminded of that uplifting day and the collegiate, cross-party support that came with it, which I hope will seep into this debate.

Coronavirus has devastated businesses across Wales. I am incredibly proud and thankful for the level of support that both Governments have made available. Schemes such as the coronavirus business interruption loan scheme and the bounce back loan have directly supported businesses of all sizes right across Wales. Some 11,000 jobs in Brecon and Radnorshire have been protected through the UK Government’s furlough scheme. These schemes have been a lifeline to businesses that have lost the ability to trade for the better half of a year, with no clear end in sight.

Every sector in Brecon and Radnorshire has lost out, but I want to speak in particular for the tourism and hospitality sector. Many of the most beautiful parts of Wales can be found in my constituency. In a normal year, they would draw hundreds of thousands of tourists from all corners of the United Kingdom and, indeed, from around the world. For example, the small, independent book shops in Hay-on-Wye attract thousands of visitors each year, with the Hay festival being one of the world’s foremost literary events—yet another example of a loss to our community during this pandemic.

Following the easing of restrictions in Powys, pubs, restaurants and hotels were slowly coming back to life. Supported by the unique eat out to help out scheme, demand picked up in August. Many restaurant and café owners have told me how much they valued this scheme, which resulted in more than 77,000 meals being enjoyed in the constituency. The argument that it contributed to increasing rates of the virus in September is simply not borne out in Brecon and Radnorshire, where coronavirus rates have stayed mercifully low.

The First Minister’s decision on Monday to put the entire country into lockdown once again is, to use the words of the hon. Member for Islwyn, a hammer blow for those businesses that were just starting to recover. The decision penalises everyone across Wales, irrespective of the number of virus cases in a certain area. To make the problem worse, businesses have no foresight as to what comes next. The businesses in my constituency, which have relied on customers being able to travel up from the south Wales valleys, have no idea whether those people might be allowed back after the lockdown is lifted.

Like the hon. Gentleman, since Monday I have been flooded with emails from businesses and workers who are now deeply uncertain about their future. I was saddened to read on Facebook this morning that Aroma, a café in Llandrindod Wells, has announced that it cannot survive lockdown 2 and will be closing its doors permanently.

[Stephen Kinnock (Aberavon) (Lab)]

The hon. Lady is making an excellent speech. Is there not more certainty around the idea of a firebreak, or a circuit breaker, because it is time-limited, with a specific deadline of 9 November, whereas a very open-ended tier-based system leaves people in a vacuum for an indefinite period of time? Surely the Welsh approach provides far more certainty than the UK Government’s approach.

[Fay Jones]

The hon. Gentleman makes a good point, but we do not know what will happen after 9 November, as I will address in my speech.

It is clear to me that businesses do not want to be kept on life support through Government grants and loans. They want to be open and busy, serving customers and playing an important role in our communities. Throughout coronavirus, the tourism and hospitality sectors in Brecon and Radnorshire have reacted admirably and have done everything they can to stay open, while ensuring that their customers are safe.

I was pleased to visit Cantref activity centre in Brecon in the summer, which has worked incredibly hard to implement social-distancing measures and limit capacity, as have Dan yr Ogof caves, a 60-year-old underground caving attraction in Abercrave. They have all now been told by the Welsh Government that that work was for nothing and that they are to lose their half-term revenue—the only glimmer of hope in an otherwise dreadful year.

The lockdown is being imposed, and we will all have to comply, businesses included. I welcome that the Welsh Government have made £300 million available, but I hope that that can be targeted at businesses in the tourism and hospitality sectors, which are now facing their third winter of 2020. I will play my part by urging the Chancellor and the Treasury to maintain the 5% VAT rate, but I urge the Welsh Government to commit to scrapping business rates for tourism and hospitality businesses for another year. Above all, in answer to the point made by the hon. Member for Aberavon (Stephen Kinnock), the Welsh Government need to explain what happens next. It is vital that we avoid an endless cycle of rolling lockdowns, as trailed by the hon. Member for Leeds West (Rachel Reeves) on Sunday morning.

Before I conclude, I want to highlight the plight of the events sector, which is another important employer in my constituency. The Royal Welsh show is the largest agricultural show in Europe. Each year, it welcomes a quarter of a million visitors to Llanelwedd, just outside Builth Wells. It creates £45 million for the UK economy and, more than that, it is a rich seam in our cultural fabric. For many, it is the highlight of the year—an annual holiday and a chance to catch up with friends right across the agricultural sector. Just before the Royal Welsh show was cancelled for 2020, the Department for Digital, Culture, Media and Sport provided the Welsh Government with £59 million to support cultural activities in Wales hit by the pandemic. I find it curious that only £53 million of that money has been made available so far. The Royal Welsh show is one of the biggest cultural events in Wales. It is on a par with the Urdd eisteddfod, which received £3.1 million in support from the Welsh Government. The Royal Welsh show has received next to nothing in comparison. I implore the Welsh Government to consider the rural economy and find some extra funding for the show, which faces an uncertain future.

Support for businesses comes in many forms, not just lifeline funding. Businesses need to know what comes next. We in Wales know that half-term, Halloween and bonfire night are all cancelled. Valuable chances to recover are gone. Where do we go from here? How do we fight the virus on an economic and a public health front after 9 November? The Welsh Government need to come forward with a plan urgently.

--- Later in debate ---

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing this vital debate.

To start, I pay tribute to all those across my constituency and, indeed, across Wales and the UK for doing their bit to fight this pandemic. Community groups in Aberavon sprang into action to help residents across our community, to help with food shopping, prescription pick-ups and so many other forms of support, and often just with acts of human kindness. Demand on our food banks has increased dramatically. I thank the Port Talbot, Briton Ferry, Cwmafan and the Skewen Salvation Army food banks, as well as Age Cymru West Glamorgan for ensuring that those most in need in our community do not go without.

Our key workers have, of course, played an absolutely pivotal role. Our health and social care workers have been right on the frontline of this fight, working so hard in the toughest of conditions. However, so have many of our other unsung heroes, such as our transport workers, waste disposal men and women, food producers, steelworkers and many more who have kept our economy going even during the national lockdown.

Manufacturers have also played a critical role. I visited local Aberavon firms which have shown incredible innovation, flexibility and adaptability in producing essential frontline equipment: BOC kept our Welsh NHS stocked with oxygen; Ministry of Furniture, also in my constituency, flipped on a sixpence to start producing shields and screens for frontline workers; and a company called RotaTherm, which turned its hand to PPE, also moved from its core business to a very different type of activity almost in the blink of an eye. It has been truly inspirational to witness such a community effort.

I have also been profoundly impressed by the response of my local authority, Neath Port Talbot, and of course by the Welsh Government, as many of my hon. Friends have pointed out. Our First Minister has led by example. He has followed the science and provided adequate support for businesses and individuals, where it is the Welsh Government’s responsibility and capability to do so. The £300 million of financial support to firms and workers, to help them through the upcoming firebreak lockdown, is a case in point. That is leadership, and it is truly welcome and much needed.

Contrast that—as a number of my hon. Friends have already observed—with the events in Greater Manchester, where the UK Conservative Government are certainly failing to deliver on their levelling-up rhetoric. One specific issue that my constituents regularly raise is the need for more support from the Chancellor for the self-employed. Creative industry workers have told me that their work has dropped off a cliff, and because of the nature of their employment—short-term pay-as-you-earn contracts, freelance work and so on—many of them fall outside the income support schemes.

We also need far more support for our steelworkers. The Port Talbot steelworks is the biggest employer in my constituency by far, but Tata Steel has fallen through the cracks in the UK Government’s schemes and has yet to receive any emergency funding or loans. It took the French and German Governments just weeks to provide their major steel producers with the finance to cover their short-term cash flow issues—issues that are, of course, due to the impact of the pandemic—yet there still has not been a penny for the British steel industry from the UK Government. They continue to sit on their hands.

Steelworkers are key workers. The steel industry continues to operate and serve our country through the current crisis, and will be critical to rebuilding our economy after it. It is the backbone of modern manufacturing, and it should be noted that every other sizeable economic power in the world has a significant steel industry. It is also far greener to make steel in the UK than it is to import it, and lots of incredible work is taking place in this sector, including the SPECIFIC project at the Innovation and Knowledge Centre on Swansea Bay campus, in partnership with Tata Steel. That project is making steel-based materials that form the basis for photovoltaic cells, potentially turning every building in our country into a power station.

Steel is very much a 21st-century industry, and it is the backbone of our economy and our manufacturing sector. We need our steel industry, yet because of the extraordinary nature of the situation we find ourselves in, that industry can only get through this crisis with Government support. Of course, part of the reason why the steelworks needs this short-term support is that over the past 10 years, the Government have consistently failed to back the UK steel industry with the long-term support it requires. The UK Government have not offered a sector deal similar to those that are in place with industries such as aerospace and construction, and have not done enough to create the policy framework around energy prices, procurement, and dealing with the dumping of steel by countries such as China that is needed to form the foundation for a strong and healthy steel industry. The message to the UK Government is clear: we need our steel. There can be no post-pandemic economic recovery without a strong and healthy steel industry, and the Government should be backing this industry to the hilt.

It is not just the steel industry that the UK Government have failed to back in the long term. The impact of 10 years of austerity on public services in Wales, including a reduction in the Welsh Government’s grant, has affected the ability of local services to meet the challenge that this pandemic poses. Neath Port Talbot Council has had to remove £90 million from its budget since 2010, and is expected to find another £50 million reduction by 2025. Now coronavirus has hit, meaning that like other councils across the UK, both the extra spend and the loss of revenue for Neath Port Talbot Council will run into the millions. This really is going to be a test for public services whose resilience has been undermined over the past decade.

Local councillors need the Chancellor to heed the words of the Secretary of State for Housing, Communities and Local Government, who promised in May that the Government

“stands with local councils at this difficult time”

and that they would do “whatever is necessary”. So far, there is scant evidence of the UK Government making good on that pledge, but they need to, because “whatever is necessary” needs to mean what it says.

Take also the long-term issue of strategic independence. I recently visited one local company, which has turned its hand to manufacturing PPE for the Welsh NHS in a truly flexible and inspirational way, but what came home to me during that visit was that at that point, there were no Welsh companies making PPE for the Welsh NHS. That is because the whole supply chain had been moved offshore to countries such as China.

Every single one of the firm’s employees who I spoke to expressed their profound concerns about the way in which our sovereign capability had been eroded, to the point where we are left dangerously exposed and over-reliant on other countries. Frequently, those countries are not allies of ours or our national interest and security. The UK Government must understand that when we talk about supporting UK businesses through covid-19, we also need to have an eye to the future, and the reliance and resilience that UK manufacturers would bring to the economy. We cannot go on in a situation where so much of our critical infrastructure is exposed to forces that we cannot control.

Finally, Sir Edward, I want to touch on skilling and reskilling. After the pandemic we are going to need significant investment in vocational training for my constituents and for people across the country, to help them get back into the job market, because, I am afraid, there will be a huge shift of people losing their jobs. We are going to need to retrain those people and bring them back into the labour market.

Skilling and reskilling programmes have frequently been funded through European structural funds in Wales and other economically challenged parts of the United Kingdom. That money will disappear in January, when the transition period ends, leaving a huge black hole. The UK Government have promised that a UK shared prosperity fund will replace EU development funding, but we still know next to nothing about the SPF. How much money will be in the envelope? What development programmes will it cover? What will be the focus of those programmes? Who will be in charge of administering the scheme? There is a tremendous risk that the UK Government will undertake both a money grab and a power grab from the devolved nations with regard to how that development funding is spent. We have even recently heard suggestions that the UK Government plan to funnel money directly into marginal or Conservative-held seats in what can only be described as the worst sort of pork barrel politics.

It is frankly unacceptable that we are just two months away from the day on which the shared prosperity fund is supposed to be launched, yet we have no idea about its overall size, focus or governance. That is yet another example of the UK Conservative Government treating the regions and local areas of our United Kingdom with contempt. As chair of the all-party parliamentary group on post-Brexit funding for regions, nations and local areas, I will be working closely with colleagues to hold the Government to account and to ensure that they deliver on their promises.

With those words I close, and simply add that we have seen some inspiring examples in all our local communities. In this time of crisis, we all need to pull together in the interests of those communities, our constituents and our entire country. That will require leadership, investment and a new way of working across our United Kingdom. I look forward to the Minister’s comments on all those issues.