Minister says Welsh Government intervention has prevented ‘wholesale huge loss of jobs’ in pandemic

The North Wales Minister is “confident” that there will be a very strong bounce back in hospitality next spring and summer, if infection rates are vastly reduced, or a vaccine is found.

Back in March at the start of lockdown Ken Skates MS, Minister for Economy, Transport and North Wales, said that anyone who had a good business in 2019, would have a good business in 2021.

However Wrexham has already seen a number of lob losses within the retail and hospitality sector, along with companies such as Tyson Foods, Wrexham Wire and Magellan announcing redundancies.

Speaking with Mr Skates we asked how he could give such a guarantee when the pandemic has changed certain sectors potentially for good.

He acknowledged that whilst people across Wales, including Wrexham, have lost their jobs as a result of the pandemic, financial support schemes from the UK Government and Welsh Government have managed to “hold back the flood of losses” so far.

He said: “People have lost their jobs and we’re going to work tirelessly to ensure that they get equally good jobs if not better, in the coming weeks and months.

“As we see the recovery take place, we’ll be investing heavily in what we call the industries of tomorrow jobs, the secure high value jobs, and that’s where we want people to be.”

“Between our interventions, UK Government investments as well, we’ve been able to hold back a wholesale huge loss of jobs.

“If you look right now at the unemployment figures in Wales, the rate is 3.1 per cent, across the UK as a whole it is 4.1 per cent. That 1 per cent represents 15,000 people who are in work and without the added value of the Welsh government’s half a billion pound investment in jobs and businesses, it’s entirely reasonable to expect that at least that 15,000 number to have been lost.”

“It’s equivalent to a quarter of all people who are in work in Wrexham, that have been saved as a result of the Welsh Government coming in investing in businesses investment and jobs alongside the UK Government with their furlough scheme and self employment support scheme.”

In Wrexham more than 19,000 workers were supported by the financial support schemes offered by the UK Government. 15,000 workers were supported through furlough and a further 4,000 self-employed individuals in the area received support via the Self-Employment Income Support Scheme.

However with the furlough scheme ending at the end of this month and restrictions being imposed in areas across the UK, there are fears that this winter could be a tipping point for many businesses.

Last week the Welsh Government announced that £140m is being made available to help businesses deal with the economic challenges of Covid-19 and the UK’s exit from the European Union at the end of the year with the latest Economic Resilience Fund (ERF) that is launching today.

Welsh Government say the funding will see wider support being provided to secure jobs and help businesses develop, as well as additional help for firms affected by local lockdowns.

To date, the first phases of the ERF has delivered almost £300m of support to more than 13,000 companies in Wales – protecting in excess of 100,000 jobs which might otherwise have been lost.

Additional packages of support have also been announced for the self-employed and creative sectors. The UK Government also announced the ‘Winter Support Package’ last month, which will replace the furlough scheme.

The package of support includes the UK Government topping up the wages of staff for employees who work a third of their normal hours.

But Mr Skates warned that “we are not out of the woods yet”, which is why it was “vitally important the UK Government recognised the need to avoid a cliff edge” at the end of October.

He said: “They’ve announced the Job Support Scheme and also the Job Retention Bonus. There are concerns that certain sectors such as hospitality and automotive, either won’t be able to benefit or the amount that’s going to be invested in individuals will not be sufficient for a business to justify keeping them on.

“I’ve said to UK Government counterparts that while we welcome the Job Support Scheme but please be alive to the fact that you may need to adjust it to save jobs.

“They’ve done it in the past with other schemes with the Coronavirus Business Interruption Loan Scheme when we said you’ve got to adjust the criteria and you’ve got to make sure that more support through High Street banks, they did just that. ”

In terms of the Welsh Government support announced last week, Mr Skates added: “We were able to announce another £140 million as part of the third phase of the Economic Resilience Fund. This is an important part of our support package for businesses that are going to be affected by local containment measures.

“£60 million will be used to support businesses in areas of Wales where there are local restrictions in place including, Wrexham.

“Businesses in Wrexham will be able to apply for grants that will enable them to survive the local restriction period, which will be reviewed very regularly. And then alongside £60 million local lockdown fund we announced £80 million for business development

Of the funding announced last week £20 million has been ring-fenced for tourism and hospitality businesses, an industry which entered lockdown first and which will likely be the last to leave, according to Mr Skates.

He also called on the UK Government to provide more support for the sector, which is facing a challenging winter with restrictions such as the 10pm curfew, the rule of six and local lockdown measures in place.

He added: “I am hearing some positive soundings from UK Government. I do hope that ministers and those in the business department will be able to convince the Treasury and the Chancellor to bring forward a specific sector package because if we don’t see one, then I fear we will see a significant loss of businesses and jobs.”

“But the £20 million that we’ve announced, will help a good number of businesses survive upcoming winter months and get through to the spring next year.”

“Provided we’ve come up with a vaccine or we’ve driven infection rates down right down, then I’m confident that there will be a very strong bounce back in hospitality next spring and summer.”

The eligibility checker, for companies to find out if they can access funding from the third phase of the ERF, will be live this week. Companies that received grant funding through phase 1 and/or 2 of the ERF, or non-domestic rate-linked grants, could also be eligible for further support through the third phase of the ERF.