ECONOMY ‘MUST GET MOVING’
GETTING the economy moving again with investment after the easing of lockdown must be the priority, rather than the imposition of more austerity, according to Welsh Secretary Simon Hart.
Speaking on BBC Radio Wales’ Sunday Supplement programme, Mr Hart said: “The current interventions [most importantly the furlough scheme] are not there for the long term.
“We’ve borrowed as a nation a phenomenal amount of money to get the country through this. We do have to return to economic activity safely at some stage, disease permitting.
“This is going to be making sure there are some big-ticket ideas, some exciting investments: reasons to give business and individuals hope that there’s actually going to be an economy there to go back to, just as soon as we beat Covid. It’s a really important part of this.
“It’s been put to me that the choice is either long periods of austerity or, in fact, long periods of investment and activity. The PM’s view is enthusiastically in favour of activity and movement and positivity.”
Asked by presenter Vaughan Roderick whether tax rises would be needed for such investment, Mr Hart said: “I’m not aware of any speculation around tax rises or anything like that.
“But what we do have to reflect is that if the economy has taken a massive hit, which it has, giving it another massive hit is not necessarily going to be the answer to its speedy recovery.
“More likely, in terms of job creation and sustaining jobs is to create the circumstances in which people feel that they’ve got confidence and money to go out, spend, invest, save – all of those things which make the economy tick.
“So that’s where the effort is, and I can tell you with both hands on my heart that the effort going into making sure that applies evenly across the whole UK – and that means Wales, Scotland, Northern Ireland and England – is a daily task in the Wales Office and across the rest of government at the moment.”
Asked whether the Welsh Government had broadly taken the right approach to handling the Covid-19 crisis, Mr Hart said: “In eight out of 10 cases we’ve pretty well followed the same route right from the outset.
“We went into lockdown on the same day and changed policy as we felt safe as we went along.
“So in most cases it has gone OK. I don’t think anybody objects to there being a precautionary element to this.
“It does have to be supported by evidence is our argument, but it also has to reflect the fact that an economy which can’t recover has as many complications attached to it as Covid-19 has.”
Setting out his view on whether the Welsh Government had the balance right between healthy and economic concerns, and whether there was scope for greater easing of the lockdown in Wales, Mr Hart said: “I think with the R number by the First Minister’s estimation being between 0.7 and 0.9 now [in fact last Friday Mark Drakeford said the best estimate was 0.7, down from the previous figure of 0.8] I think there is more headroom than there was before.
“But I think what we’re seeing particularly in tourism and hospitality is a really critical moment for 43,000 people – I think I read a letter – in north Wales alone this week whose jobs are threatened by the inability to have any kind of a summer season at all.
“What they’ve been saying is that if the evidence enables it, which we believe it does, at least start the preparation process to give these guys some chance of being able to sustain their businesses in the next few weeks.”
Mr Hart’s constituency is Carmarthen West and South Pembrokeshire, covering one of Wales’ most popular tourist areas.
Asked about the balance of opinion between those who wanted to see tourism return and those who were concerned about the potential for a harmful health impact, he said: “There’s a bit of both, but I do think there’s a bit of a shift now.
“I remember that almost on day one of this the behavioural scientists saying that people’s patience would get stretched after a certain period of time in lockdown.
“I think that’s proving to be the case now.
“I think the message from the tourism and leisure sector in particular is that we can do this safely, we don’t want to take any risks, we can observe social distancing.
“But instead of the First Minister saying there’s not going to be much happening this year, so you’re going to have to stake your hopes on 2021, at least start giving us some indication of what the evidence
is behind that or whether there is some means by which through the Welsh Government we can start opening our businesses towards the back end of this year.
“That isn’t happening, and that’s what’s putting these jobs and these livelihoods at risk.”
In fact, Mr Drakeford told journalists on Friday: “We are hopeful to be in a position to offer the industry some future prospects of opening it up to a safe extent during this summer season.
“But there’s a lot of work to do to make sure that can be done successfully.”
It was pointed out to Mr Hart that while some elements of the tourism industry, like self-catering accommodation and open-air attractions could be opened up relatively easily, others like coach holidays would be more difficult to open for some time.
Asked whether there should be an extension of the furlough scheme to stop such tourism companies from going bust, he said: “There are opportunities.
“It’s not going to work for everybody. The furlough scheme has been extended once.
“It’s meant to be flexible, and I’m quite certain that the Chancellor is going to look at all of these arguments as we go on.
“But it is fair to say that the furlough scheme is not going to be something which can be there forever, and the Chancellor has been very clear about that.
“One-)third of us are now on furlough provided by the UK Government. This is a bigger contribution to sustaining people’s jobs than any other, I think, in the world at the moment.”
Taking on board the fact that the UK Government holds most of the big economic levers, Mr Hart said a lot of planning was going on to plan for a recovery.
“In fact I think it’s probably the dominant element of all the work we are currently doing, “he said.
“We’re trying to work our way through some plans to get the economy back as safely and as quickly as possible.”
The PM’s view is enthusiastically in favour of activity and movement and positivity WELSH SECRETARY SIMON HART