Intervention must support all the companies, large and small
Labour AM for Blaenau Gwent, Alun Davies, on the business support from the UK and Welsh Government during the pandemic and where gaps still remain
THERE’S been much gossip and talk over the last few days about the differences between the Welsh Government and the UK Government. Many innocent souls in London have discovered that the British Prime Minister’s writ runs no further than the English border. Something that many of us have taken for granted for a generation or more. They have also discovered that bluster, and public school arrogance provide no protection against the highest death rates anywhere in Europe.
There has been less coverage of those areas where the two governments are working well together and where that more cooperative approach has helped deliver real benefits for people on both sides of Offa’s Dyke. Perhaps the best example is the cooperation over business support.
The approach of the new UK Chancellor of the Exchequer has been in marked contrast to his predecessors. Rishi Sunak has taken a proactive interventionist approach to business support with a real recognition and understanding in today’s UK Treasury that if we are to minimise the economic damage, especially in communities such as Blaenau Gwent, then this intervention has to be muscular and significant. The extension to the furlough scheme – whatever the details which may cause problems for some – is to be welcomed. We have even seen echoes of our own Heseltine in his pomp whenever Sunak takes to the rostrum.
At the same our own Economy Minister in the Welsh Government, Ken Skates, has been hands-on and assured in his understanding of the needs of Wales, our communities and our economy. The delivery of economic support from the Welsh Government has largely been smooth and has, in the main, reached many of those businesses, people and regions which need it most. The £500m Economic Resilience Fund is providing vital support for businesses – particularly those small and medium sized firms so critical to the Welsh economy – support that isn’t available to SMEs in
England.
The decision to link business support to the wider fair work agenda and protection of employees’ rights also demonstrated that this is neither a carbon-copy of the UK approach but emergency support rooted in our values and vision of the country we want to see emerge from this crisis.
So these are three areas where I believe that the Welsh Government needs to focus its support over the coming months – social enterprises, self-employed people and children’s play centres.
In many place it is those charities and social enterprises that provide those services that families rely upon from week to week. In the valleys it is the local club that is often at the heart of the community. And Wales has led the way in supporting the development of a network of local cooperatives and social enterprises who provide those services, often to the poorest and most vulnerable people, that are neither economically viable for a business or which are not provided by the local authority. It is therefore critical that these social enterprises are included in the next round of support from the Welsh Government. It is these locally-rooted organisations that will be the glue that holds together our communities as we emerge from this crisis. And it is these people and organisations that we need to support today.
At the same time we will all know people who are self-employed who may not have a shop or a business but who may work from home. From painters and decorators to plumbers or electricians, there are thousands of people whose incomes have been lost but who are finding it difficult to know to whom to turn and what support is out there for them. At the same time it is the micro-businesses – the much-fabled foundational economy – that provides the economic backbone of much of Wales. Many, if not most, of these businesses are not registered for VAT nor pay business rates and therefore not eligible for much of the current support. This also affects those people who are directors of limited companies. Taken together many thousands of people are affected by these gaps in support. Unless we are able to provide directed and tailored support for these people then it is difficult to see how the local economies of many towns will recover over the coming months.
Finally children’s play centres are a critical part of our social infrastructure in many communities and provide a fantastic service for families. It is unfathomable why the Welsh Government has declared that a play centre is not eligible for support if it has a rateable value over £12,000 per annum There are a number of larger children’s centres who have lost all of their income and face closure unless support is forthcoming. An exclusion for play centres is bizarre and inexplicable. It is right and proper that we continue to support all sorts of business activities such as cafes, coffee shops, gyms, sport and leisure facilities and even smaller supermarkets. But it is also right that we support play centres. It happens in Northern Ireland and in Scotland and it should happen in Wales as well.
The Welsh Government’s Economic Resilience Fund has already provided the support that many need to get through these days. In Blaenau Gwent more than £12m has been distributed to over 1,000 different businesses in the past few weeks. This is the real support that we need to get through this time and then back on our feet. The renewed business support programme, filling the gaps and targeting the economic backbone of communities like Blaenau Gwent, will make the difference that we need.