Questions Without Notice from Party Spokespeople

1. Questions to the Minister for Economy, Transport and North Wales – in the Senedd at 1:35 pm on 3 March 2021.

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Photo of Elin Jones Elin Jones Plaid Cymru 1:35, 3 March 2021

(Translated)

Questions now from the party spokespeople. The Plaid Cymru spokesperson, Helen Mary Jones

Photo of Helen Mary Jones Helen Mary Jones Plaid Cymru

Diolch, Llywydd. I'd like to begin my set of questions, since this is the final set of questions that I will be asking the Minister, by once again thanking him for the constructive way in which he's engaged with me and with other opposition parties through the time of the crisis. It's certainly been greatly appreciated by me, and I feel that it has helped us to engage constructively and to help support business as best we can at this very difficult time. 

If I can begin with some points with regard to current business support, the Minister mentioned in his response to Paul Davies the local government discretionary fund. He'll be aware that it has been put to me by some colleagues in local government that there are some concerns from their finance department about fully exercising discretion in case this raises issues further down the line through the audit process. I wonder if the Minister can update us on any further conversations that he's had with local government to assure them that they will not be negatively impacted by the audit process if they do fully exercise discretion to reach as many businesses as possible. 

If I can now turn to the new fund for hospitality businesses that will be opening next week, I obviously welcome the targeted support for those businesses most badly affected, but I am concerned that it appears that this fund is only available to those businesses employing 10 employees or more. I wonder if the Minister can tell us today whether that is 10 full-time equivalents or 10 individuals, because he'll be very aware that many people who work in hospitality work in part-time roles. And can he explain what the plans are for smaller businesses, because many hospitality businesses do not employ, certainly, 10 full-time equivalents?

And, finally, is there any risk that some of the money currently available for business support will be lost if it's not spent by the end of the financial year, and is the Minister confident that his department has the capacity to get those funds out to ensure that businesses are helped in a timely way, but also to ensure that no funding intended for Welsh businesses is lost?

Photo of Ken Skates Ken Skates Labour 1:37, 3 March 2021

Can I thank Helen Mary Jones for her questions? And, first of all, I very much welcome the very kind words that she began her line of questions with today. I've been very fortunate, I believe, during my time in this role, to have had incredibly constructive opposition spokespeople, including Helen Mary Jones. I'm really grateful for the constructive way in which opposition spokespeople, and, indeed, Members across the Chamber, have been able to work with me and with my officials over the past five years, and we've tried to reach out, just as I know that other Ministers have tried to reach out, to get the best possible ideas from across the Chamber, because we have no monopoly on good ideas, and sometimes the finest results come when we work together. So, I'd like to thank everybody, including Helen Mary Jones, for such a constructive relationship during my time in this post.

And if I can just answer the last question first, and that regards the speed at which money needs to get to businesses to avoid any unspent investment. Speed has been a key determining factor in the way that we've developed support systems, and local authorities, along with Welsh Government and Business Wales, have done a remarkable job in ensuring that money is in the accounts of businesses as soon as possible. So, it gives us confidence to say that we will be spending the money that has been allocated to business support, which of course amounts to approximately £400 million more than we've received in business-related consequentials, demonstrating just how seriously we've taken the economic harms of the pandemic. 

I'd also very much welcome the opportunity that Helen Mary Jones has given me to clarify the £30 million of additional support for businesses that is aligned to full-time equivalents. But, of course, it shouldn't be seen in isolation, because should restrictions be extended in the March 12 review, then the £150 million that's been made available will see all businesses in the hospitality, tourism and leisure, and non-essential sectors, receive up to an additional payment of £5,000 regardless of the number of employees they have. So, there will be protection and support for businesses of all sizes. 

And then, finally, we're supporting local government across Wales in exercising the discretion that they need in order to support businesses. So, I would give assurance to local authorities that they should be able to apply the criteria and use their discretion in every circumstance to ensure that businesses are supported through this terrible episode. 

Photo of Helen Mary Jones Helen Mary Jones Plaid Cymru 1:40, 3 March 2021

I'm grateful to the Minister for his answers. Of course, sadly and, I suppose, inevitably, we are beginning to hear of jobs being lost to Wales. The Minister will have heard what my colleague Rhun ap Iorwerth said yesterday about the 27 jobs at Joloda Hydraroll Ltd that may be transferred out of Gaerwen and Ynys Môn. He will also be aware of the 99 manufacturing jobs at risk at the AIM Altitude aircraft cabin interiors manufacturer in Llanelli. These are obviously just examples. Can the Minister provide us today with reassurances that, while dealing with the COVID emergency response, his department still has the capacity to respond to these kinds of situations? The number of the job losses that I've mentioned today may not seem huge, but in the communities impacted they are really significant, and there are supply line issues as well.

And, looking forward, does the Minister believe that his department will be able to develop the capacity to take an intelligence-led approach in identifying, as we come out of the COVID crisis, those companies in Wales where we are at the risk of redundancies so that the next Welsh Government will be able to step in at an earlier stage and perhaps intervene to support those businesses, and to encourage them to keep work here in Wales, before they reach the crisis point, where people often feel that, although there is a consultation, decisions have already been made? 

Photo of Ken Skates Ken Skates Labour 1:41, 3 March 2021

Can I thank Helen Mary Jones for her questions again, and say that I would agree entirely that a small or medium-sized employer in a very small community is a hugely significant employer? So, in working to make sure that we support business of all sizes across Wales, the resilience and reconstruction mission, which was unveiled just last week, highlights how we're going to be investing through the Development Bank of Wales a further £270 million in the medium- and long-term growth of businesses, primarily small and medium-sized enterprises, in Wales.

And I can assure all Members that we have the capacity within Government to deal with the immediate necessity to respond to business closures and businesses in crisis, not just individually, but because we are now working so collaboratively with our regional partners as well. And Members will be aware, for example, that we have regional response teams looking at employment prospects and business crises across Wales, and they're doing an incredible job in the most challenging of times. And we also utilise the Development Bank of Wales's intelligence unit, which is proving to be incredibly helpful in highlighting challenges that certain sectors and individual businesses are facing, so that we can apply that early intervention as soon as possible.

Photo of Helen Mary Jones Helen Mary Jones Plaid Cymru 1:42, 3 March 2021

I'm grateful again to the Minister for his answers. Looking a little bit further forward now, we, in my party, strongly support the emphasis in the mission document on decarbonisation and, indeed, we'd like to see the Minister go further. It's going to be crucial as we rebuild our economy. But he will be aware that there are real fears that, through that process of decarbonising industry, there will be losers as well as winners. For example, he will know about the concerns of workers in the steel industry. Now, this change must come, but I am sure that the Minister would agree with me that the transition—the decarbonisation transition—must be just and socially progressive.

I wonder if he can provide an update today on any further discussions he's been able to have with the UK Government about the future of steel in Wales and how investment can be made to enable our steel industry to decarbonise. And would he support the creation in the next Senedd of a just transition committee to scrutinise the next Welsh Government to ensure that there are no unintended consequences, particularly for the most those economically vulnerable in our communities, of the actions that the next Welsh Government must take to decarbonise our economy?   

Photo of Ken Skates Ken Skates Labour 1:43, 3 March 2021

Well, I think that final suggestion is most certainly worth considering. It will be a decision for the next administration, but I think it's an excellent idea, because it recognises that we have to ensure that we have a green and just and fair recovery, and, therefore, scrutinising the Government on that basis would make sense.

I'm pleased to be able to inform Members today that a UK steel council has been scheduled for later this week. I spoke with the new Secretary of State for Business, Energy and Industrial Strategy earlier this week regarding steel and the need to make sure that UK Government supports UK steel businesses in a safe transition to a low-carbon economy, and the emphasis is on 'safe'—we don't want to see a haemorrhaging of jobs within the steel industry. We want to make sure that change, which is necessary, as Helen Mary Jones has said, is conducted safely in regard to employment security, and that we ensure as many people with those high skills that are currently employed in the steel industries of Wales are retained in the future and, if necessary, upskilled or reskilled.  

Photo of Elin Jones Elin Jones Plaid Cymru 1:45, 3 March 2021

(Translated)

Now the Conservative spokesperson, Russell George.

Photo of Russell George Russell George Conservative

Diolch, Llywydd. Minister, can I also say that it's been five years of bringing forward questions to you during spokespersons' questions and can I thank you, in the same way that Helen Mary did, in terms of the constructive way that we've worked together, especially during the pandemic? I think that's what the public would expect us to do and I thank you for that. 

With that, Minister, I'm going to use my last set of questions to do what I have been doing in terms of scrutinising your decisions and the Government's. This morning, you announced a huge sum of taxpayers' money to be provided to Cardiff Airport to the tune of £130 million. Now, from my perspective, the aviation sector has been hugely hit by the pandemic, and governments across the world need to support the industry—I have no doubt about that. But from my perspective, we've seen thousands of pounds of taxpayers' money already invested by your Government and much of that has been written off to Cardiff Airport and that was before the pandemic even hit.

So, I think the question that small businesses will have across Wales is: have you got the balance correct in terms of support for them versus the huge sums of money that have been put into the airport and have been written off in that vein as well? I ask the question in the spirit of this—I asked you a written question last week: when is the fourth phase of the economic relief fund expected to open? And I had an answer back at the end of last week that said that the Welsh Government is currently exploring further options for supporting businesses. Well, businesses will need to know when that next round of the economic resilience fund is coming forward. That's the information that they will need to know.

And finally, if I can ask you in terms of this first question, I've got your 2016 manifesto in front of me: what commitments that sit in your portfolio area have not been achieved during this five-year term?

Photo of Ken Skates Ken Skates Labour 1:47, 3 March 2021

Can I thank Russell George for his questions? I can't quite believe that it's five years that I've been scrutinised by Russell, as the Conservative spokesperson. Time truly has flown by, but his scrutiny has been consistently tough but fair and constructive. So, I'd like to thank him for the role that he has played in ensuring that Welsh Government is held to account for the decisions that it has made and me, as the Minister for economy and transport.

Russell George and other Members will be aware of the devastating impact globally that the pandemic has had on the aviation industry. Just recently, Heathrow Airport reported a £2 billion loss. We've seen the UK Government make available £100 million to some English regional airports. We've seen the Scottish Government make available £17 million to Scottish airports and Northern Ireland, likewise, are making available £10 million to its airports. So, it demonstrates how all governments are intervening. The difference, of course, is that the Welsh Government—the Welsh people—own Cardiff international airport. It is a national asset for the people of Wales. 

In answering the question of whether or not the balance of support is appropriate, I'd just like to remind Members that Cardiff international airport supports more than 5,000 jobs indirectly and supports 2,400 aviation jobs. That amounts to about 4.4 per cent of employment within south-east Wales. It is a huge, huge economic asset and without the Welsh Government support, it would, in my view, have fallen over. And so, it's right and proper that as an enabler for growth for small and medium-sized enterprises, we support the airport. And the airport does have excellent prospects for the future, once we are beyond this pandemic.

If we just go back to the period prior to the pandemic, the growth at the airport was quite astonishing. Passenger growth had increased by over 50 per cent during the period in which Welsh Government Ministers were in ownership of, or the Welsh people were in ownership of the airport. And I believe that, with the ambitious plans that were set out under the master plan, and in particular with the ambitious plans concerning carbon reduction, the airport will be an exemplary airport in the United Kingdom and further afield in terms of low-carbon air travel.

And finally, responding to the last question that Russell George asked me, the obvious answer is the M4 relief road was not proceeded—. We did not proceed with the M4 relief road for reasons that the First Minister, I and others have regularly reminded Members, which is that circumstances have changed quite dramatically in recent years. There was a declaration of a climate emergency, which we across the Chamber are responsible for acknowledging and responding to, and of course we were able to set up the Burns commission to produce an alternative set of recommendations and work, primarily focused on rail infrastructure improvements, to ensure that people have an opportunity to travel other than by private motor vehicle.

Photo of Russell George Russell George Conservative 1:50, 3 March 2021

Thank you for your answers. Minister, in terms of that last question I asked you, you addressed the issue in terms of the M4 relief road. That was a commitment in the 2016 Labour manifesto, which, of course, you were the author of. But I've got this manifesto in front of me now and I can see it says,

'We will deliver fast broadband to every property in Wales'.

Your Deputy Minister continually reminds us when it suits him that this is not a matter for the Welsh Government, yet it sits here in the Welsh Government's manifesto. It talks about the metro schemes in north and south Wales. We talk about the M4 relief road not going ahead, but there's also a commitment there for the A55 improvements and the A40 improvements as well, which we haven't seen also. And it also talks about 4G masts and it also talks about integrated ticketing. There's just so much in the manifesto that sits under your portfolio area that has not been achieved, and I understand that some things change. You changed you position on the M4 relief road; I don't agree with that, but that's a decision that you as a Government have made. My question is: how can the people of Wales and the small businesses trust your approach now going forward, during the pandemic and into your next manifesto as you develop that ahead of the elections coming up in May, when so much hasn't been achieved in terms of your 2016 manifesto?

Photo of Ken Skates Ken Skates Labour 1:52, 3 March 2021

Well, can I first of all say that it's only fair that I get an opportunity to highlight some of the great successes of the Welsh Government in the last five years in regard to transport and infrastructure and the economy? Prior to the pandemic, we had the highest rate of employment on record. We had the highest number of businesses in existence in Wales since devolution, and before devolution, it has to be said. Economic inactivity, quite phenomenally, was fast approaching UK average, and our GVA, our productivity, was improving faster than the UK average as well.

During the course of the pandemic, our focus has been on jobs and jobs and more jobs, and, as a result of that focus, we now have an unemployment rate in Wales that is lower than the UK average. There is still a long journey to be tread, but we have an unemployment rate that is below the UK average, and that is precisely because we've got a devolved Government that is focusing on employment. The difference between the UK average and the Welsh rate of unemployment demonstrates the value of our £2 billion investment in businesses, and that, in turn, through securing more than 140,000 jobs, represents 10 per cent of the Welsh workforce. It's a staggering success.

We've also established the Development Bank of Wales, which was promised in the manifesto and I think is now recognised as one of the most important assets we have in Wales. We also established Transport for Wales. We've nationalised the railways. We are steadily progressing metro programmes, but the metro programmes were never intended to be delivered in a single term; these are long-term objectives. Rome wasn't built in a day and the metros of Wales won't be built within a single administration term. But we are beginning the process of delivering them, both in north Wales and south Wales, and steadily as well in south-west Wales. 

In terms of fast broadband, it's absolutely right to point out that this is a reserved matter, but we have been intervening with investment above and beyond what we receive from UK Government, and there have been significant improvements. And there continue to be significant improvements for our trunk road network, including on the A55. Many Members in north Wales will recognise the investment that's taken place there, with more to follow. But our focus in terms of transport, as highlighted by the Welsh transport strategy, will shift towards promoting active travel and public transport, making sure that as we invest in transport-related infrastructure, we do so in a way that grows a fair and more equal economy.

Photo of Russell George Russell George Conservative 1:54, 3 March 2021

Thank you, Minister. You've skilfully shifted the answer there away from the questions that I asked, pointing towards some of the areas that were not delivered in the 2016 manifesto.

In terms of the UK Government's announcements today and over the last couple of days, we've seen huge sums of money announced by the Chancellor that will be able to support the economic growth here in Wales from Holyhead to Port Talbot, and we've seen announcements made in terms of business support. So, I'm hoping that you'll be able to confirm that that business rates holiday will now apply in Wales, and that that's what you will implement also. We've also seen huge sums of money in terms of £12 billion from the UK infrastructure bank, which will, of course, benefit Wales as well. So, huge sums of support that the UK Government Chancellor has announced.

In terms of getting the Welsh economy firing on all cylinders, I go back to my earlier points about being constructive here and parties working together, and the Organisation for Economic Co-operation and Development report suggested that we should have an arm's-length body so that decisions are made not by Welsh Government Ministers, but by promoting Wales around the world by a third-party organisation, such as the Welsh Development Agency. You've previously been open to that suggestion before; that's something I firmly believe is the right approach, because I just think that we need to be doing everything we can to get our economy firing on all cylinders. I wonder whether you would also agree that this is an important area to move forward as we move the Welsh economy forward. We've got these billions of pounds that the UK Government has provided for the UK, including Wales, and one way to do that is through the arm's-length body that's been talked about in the OECD report.

Photo of Ken Skates Ken Skates Labour 1:56, 3 March 2021

Can I thank Russell George for his final set of questions and say that we have been hugely ambitious during this current administration term? We established the Development Bank of Wales—the first major regional development bank in the United Kingdom—and that's been a huge success. So, we do not fear establishing new bodies to drive prosperity. I do welcome the OECD's work in scrutinising the Welsh economy and structures for investment and economic development.

We're going to be working with the OECD in the months to come with a view to responding in detail to the recommendations. I'm open to ideas and I have been open to ideas during the past five years, but we have to ensure that the development of any new agencies or bodies does not duplicate what is currently being delivered and will be delivered into the future. We must consider, I think, therefore, the role of the corporate joint committees that are being established, which bring together local authorities on a regional basis. They are a very, very significant development and I would not wish to see their success impaired or put in harm's way by the accelerated development of a half-baked idea concerning regional development agencies. And that's why it's absolutely essential that we carefully consider what the OECD have recommended, and consider whether, in light of the creation of CJCs, such agencies would be required and if so, whether they would be desirable. And we have to do that in social partnership with local authorities, with business, with the unions and with key stakeholders.