The Economy

Part of the debate – in the House of Commons at 4:33 pm on 8th July 2020.

Alert me about debates like this

Photo of Ben Lake Ben Lake Plaid Cymru, Ceredigion 4:33 pm, 8th July 2020

Diolch yn fawr, Madam Deputy Speaker, for calling me to speak in this important debate.

It is a pleasure to follow Robert Largan. I agree with him that some of the measures in today’s statement were bold. I would highlight the cut in VAT to 5% for the tourism and hospitality sectors. That is, of course, a long-standing Plaid Cymru policy. I never thought I would stand in this place and thank a Conservative Chancellor for the temporary implementation of Plaid Cymru policy, but there we are. I do thank him nevertheless.

I also put on the record my support for the measures on youth employment. They are particularly important for Wales, where employees under the age of 25 were almost three times as likely to be working in sectors that were shut down than those of any other age group. Of course, 18% of female employees worked in shut-down sectors, compared with 14% of male employees. In welcoming those measures, I note that the fundamental challenges facing the UK economy, including low productivity and regional inequality, have been exacerbated by the covid-19 crisis.

To address those long-term problems, I pressed the case for a review of existing tax reliefs and further innovation funding during the Finance Bill debate. Today, I fear that an opportunity has been missed to increase R&D credit, as well as to review reliefs such as the enterprise investment scheme to ensure that taxpayers’ money is adequately supporting private investment in the marginalised areas of the UK. I note only that 46% of public R&D funding is spent between London, Oxford and Cambridge.

I had hoped to see some measures to address that issue. What is more, the statement might have talked a little more about the future shape of the economy. Despite the ravages of covid-19, we have an opportunity to facilitate a green transition and to address some of the fundamental issues of the pre-covid economy that I mentioned earlier—low productivity, low wages and low growth.

What I would argue is the long overdue support for home insulation is another measure that I welcome. In doing so, I say to the Minister that I hope the measure will utilise the fantastic nature of Welsh wool, particularly given the difficulties that the British wool industry is facing.

With research showing that just 1% of the global fiscal response to covid-19 is going to green projects, today was a clear opportunity for the Government to set out their environmental credentials and to lead by example. Instead, the £3 billion promised pales in comparison with the example of Germany, where a third of its €130 billion stimulus is targeted directly at lowering emissions. I am conscious that the Chancellor suggested in his speech that a third phase to the economic response will focus on efforts to rebuild the economy, so I very much hope that such issues will be addressed at that point.

To conclude, the Chancellor explained that the current phase—the second phase, which we are addressing today—is about jobs, and measures on jobs being placed at the heart of the economic recovery. In that respect, I note that economic recovery is intertwined with the success of containing any outbreaks of the virus. As such, we need to explore ways to introduce targeted furlough schemes and business support schemes to support local lockdowns, which recent events suggest will become the norm.

My concern is that with statutory sick pay at less than £100 a week at the moment, many people will face a difficult decision if they are asked to self-isolate—a choice between doing the right thing for public health and putting enough food on the table for their family. That is an unnecessary risk, which could undermine not only the efficacy of local lockdowns but any wider economic recovery. I hope that the Minister and the Government will give further consideration to those points.