‘Welsh economy could be hardest hit by Covid-19’
THE Welsh economy is likely to be harder hit by the effects of the Covid19 pandemic than other parts of the UK, according to the Bevan Foundation think tank.
The expected impact is on top of pre-existing challenges including Brexit, climate change and automation, the body says in a submission to an inquiry being carried out by the House of Commons Welsh Affairs Committee.
The submission says the pandemic has underlined the critical role governments can play in intervening in and managing the economy, and in providing a minimum income for people unable to work.
It has also shown that some groups in the economy have been at greater risk from Covid-19 than others.
The submission says: “In our evidence we advocate a period of major economic restructuring and largescale economic stimulus to support adjustment, encourage new investment and help to maintain strategically important but vulnerable industries.
“This requires a much bigger and more comprehensive response than simply restart and recovery and should include investment in green, social and digital infrastructure; support for new ways of working, including more flexible and agile working; and action to support businesses themselves complemented by action to encourage consumer spending.
The Bevan Foundation outlines key actions to make the Welsh economy more resilient, in which both the UK and Welsh Governments should take a firm lead.
It says there is a need to diversify and strengthen the economy, with a wider range and better geographic spread of economic activity.
The UK Government should adopt a regional policy which balances and “levels up” all parts of the UK, and the Welsh Government must focus on developing the weakest local economies.
The submission also advocates a substantial investment in up-skilling the workforce, and in particular, the up-skilling workers with lower-level qualifications and skills.
It also wants greater protections for people in employment, as well as strict enforcement of health and safety at work measures.
Adequate support should also be provided for people who are unable to work and those who are out of work.
The submission states: “We also outline how vital it is that the social security system provides an adequate ‘safety net’ for all. The recent increases in the Local Housing Allowance and the base rate for Universal Credit are welcome, but these gains must not be reversed if key sections of the population are to be supported in the medium to long term.
“Further steps could include maintaining the increase in Universal Credit beyond March 2021 and eradicating the five week wait. Raising or removing the benefit cap would ensure that the newly-unemployed do not face arrears or eviction while they search for new work, and increasing the child element of Universal Credit and Child Tax Credits by at least £20 a week would be an investment in the future of thousands of families across Wales.
“The combination of a more balanced UK economy, better terms and conditions in work, and better provision for people who are out of work will provide both flexibility and security during a period of major economic adjustment and restructuring.”
Summing up what had been learned from the pandemic, the submission said: “The lessons from the pandemic are, first, that the health and safety of the population including workers is paramount. It is in our view an essential duty of governments to keep their citizens safe, and that extreme measures to help and save lives will be accepted and respected by the vast majority of people, even if that restricts their freedom and reduced their income.
“Second, the pandemic has underlined the critical importance that governments can play in intervening and managing the economy, and in providing a minimum income for people unable to work. The government can and should play a role in managing the economy during the recovery through major investment for environmental and social ‘good.’
“Third, the pandemic has shown that some groups of people in the economy have been at much greater risk from Covid-19 than others.
“These essential workers are often poorly rewarded and experience considerable job insecurity. The lesson is that inequalities at work must be reduced.”