|Hefin David AM|
|Helen Mary Jones AM|
|Joyce Watson AM|
|Mohammad Asghar AM|
|Russell George AM||Cadeirydd y Pwyllgor|
|Vikki Howells AM|
|Adrian Greason-Walker||Eiriolwr Polisi, Cynghrair Twristiaeth Cymru|
|Policy Advocate, Wales Tourism Alliance|
|Ian Price||Cyfarwyddwr, Cydffederasiwn Diwydiant Prydain Cymru|
|Director, Confederation of British Industry Wales|
|Joshua Miles||Rheolwr Polisi, Ffederasiwn Busnesau Bach Cymru|
|Policy Manager, Federation of Small Businesses Wales|
|Mike Payne||Uwch Drefnwr, Cymru a De Orllewin, Undeb GMB|
|Senior Organiser, Wales and South West, GMB Union|
|Peter Hughes||Ysgrifennydd Rhanbarthol, Unite Cymru|
|Regional Secretary, Unite Wales|
|Shavanah Taj||Ysgrifennydd Cyffredinol Dros Dro, Cyngres yr Undebau Llafur Cymru|
|Acting General Secretary, Trades Union Congress Wales|
|Lara Date||Ail Glerc|
|Robert Lloyd-Williams||Dirprwy Glerc|
|1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau||1. Introductions, apologies, substitutions and declarations of interest|
|2. COVID-19: Panel Cymorth Busnes a Swydd 1||2. COVID-19: Business and Job Support Panel 1|
|3. COVID-19: Panel Cymorth Busnes a Swydd 2||3. COVID-19: Business and Job Support Panel 2|
|4. Cynnig o dan Reol Sefydlog 17.42(ix) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod||4. Motion under Standing Order 17.42(ix) to resolve to exclude the public from the remainder of the meeting|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Cyfarfu'r pwyllgor drwy gynhadledd fideo.
Dechreuodd y cyfarfod am 14:00.
The committee met by video-conference.
The meeting began at 14:00.
Croeso, bawb. Prynhawn da.
Welcome, everyone. Good afternoon.
I'd like to welcome Members to the meeting this afternoon. I move to item 1. We have no apologies and there are no substitutions. If I could start this meeting by saying that I think we should just take a moment to remember those who have sadly passed away during this coronavirus pandemic. So, if we can do that now.
Thank you. I should say, at the beginning of this meeting as well, that we have excluded members of the public, under Standing Order 34.19, to protect public health. But this meeting is being broadcast on Senedd.tv so members of the public can watch proceedings. If there are any declarations of interest from Members, please do say so now. And I also would say that there are also no papers to note in today's meeting.
This is the—. As we move to item 2, this is the first session of this committee since the National Assembly for Wales took the decision to close the Senedd and pause committee meetings. So, I am pleased to say that this committee is now running firmly again.
In this session today, we'll be taking evidence from a number of organisations and interest groups, and we'll be looking at, in today's session, the response to the pandemic in regard to the economy, in regard to Welsh and UK Government support in terms of business support and employees and the wider Welsh economy. We hope to—or we will—in a few weeks' time, be taking evidence from the Minister for Economy, Infrastructure and North Wales, and so our evidence session today will enable us to take evidence ahead of that session.
We have two panels today; our second panel includes the Wales Trades Union Congress, Unite and GMB, and the first panel today includes—I'm just getting my papers in front of me—Joshua Miles from the Federation of Small Businesses, Adrian Greason-Walker, who's the policy advocate for the Wales Tourism Alliance, and Ian Price, who is the chair of the Confederation of British Industry in Wales. I should just let Members be aware that there is a change to the agenda, in terms of Ian being with us this afternoon. So, can I first of all welcome all our witnesses? If I can just check that all's in order. Ian Price, can you hear me?
Yes, I can hear you. You've promoted me. I'm the director, not the chair, but thank you for that.
That's fine. That's later in my career, perhaps.
Yes, I can hear everything fine.
There we are. And, Adrian, welcome back to committee. Is all in order as well?
Yes. Thanks a lot, Russ.
Thank you. Right. Okay. I'm going to ask a few very opening questions—very high level, so don't go into too much detail. We want the headlines, because Members will go into greater detail during the proceeding hour.
I think, from our perspective, if you could perhaps just tell us what you think are the most pressing concerns that have been raised by your members to you in the short term, and also whether there are any specific areas of concern from specific sectors, and particularly in relevance to the size of those businesses. Anyone who would like to go first, please raise your hand. Adrian.
Josh, if you want to go first, that's fine.
I'll go first. I think, first of all, we've had a great deal of contact with a wide variety of sub-sectors within the tourism industry. I think, on the face of it, the support that's been provided by Government at all levels has—on the face of it and in the round—been quite generous, but, of course, there are a number of gaps, and some businesses have fallen through those gaps, inevitably. It's particularly clear that there are some very key areas that are coming out of this into, what, week 5, week 6, and we're probably looking at areas such as those businesses that are unable to access some of that support for various reasons. That support obviously breaks down into tax breaks, loans and grants, and it very much depends on the individual business as to where they actually fit in.
One area I would like to talk about later on, in particular, is self-catering, possibly also events, and particularly wedding venues as well. I think some of these are some of the areas where businesses have definitely fallen through the ability to access support in some way or another, alongside also, particularly, bed and breakfasts, guest accommodation—
Okay. I know, Adrian, that Joyce has some specific questions around those areas, so please respond to Joyce's questions in that area. Josh.
Okay. So, you asked about the immediate challenges, the short-term challenges, and I think the headline one that we've seen from almost all businesses has been around cash flow. So, almost overnight, cash flow for a lot of businesses went from normal operating cash flow to almost nothing in a lot of sectors, and that has a lot of knock-on impacts, the first being the ability to pay their own staff and suppliers, and I think that's something we're still trying to grapple with, in a lot of ways. Also, in terms of getting paid by people they supply to—so that's been quite a challenge for a lot of businesses. One of the things we've seen anecdotally is that payment terms, particularly for companies that are further down the supply chain and perhaps a little bit smaller, have been getting worse. We've got a couple of examples of where perhaps larger companies have made payment terms a little bit more difficult there, so that's a big issue.
The next big issue is insurance. So, we've seen two things in this regard: some companies have had inadequate insurance and, as a result, they haven't been able to protect their operations, but also, where companies have believed there to be adequate insurance in place, they've struggled to get their insurer to pay out. Again, we've got quite a lot of examples of companies having to have a bit of an argument with their insurer, really, to pick up on this as an issue and to pay out. For us, that's a significant issue, because, if a company's insurance isn't covering them, then they're basically dependent on Welsh or UK Government support to keep the cash flow going into the business, so there are a lot of issues there.
Two other quick issues that I think, in the short term, are really significant: the first being adapting to social distancing rules. So, companies that have stayed open have had to adapt to new ways of working to accommodate social distancing, which we would expect, to deal with the health crisis. That has meant some companies have moved to online working, others have moved to different types of delivery mechanisms, some have even shifted markets for products. So, we've seen some companies begin to make things like hand sanitiser and other kinds of products, but, really, I think what we're going to see now, when we start to talk about reopening—and we'll get into this later—is that more companies are going to need to think about how they deal with social distancing rules.
And then the last point for me is around understanding the support that is available. In the early days, there was a lag, I think, between announcements from UK Government and what was done in Wales, and that was down to understanding the budgetary consequences of decisions made in London. I think that's been largely resolved now, but there is a little bit of confusion, sometimes, in the market between schemes that are available in England, Scotland and Wales, which we would expect—that's part of devolution—but that is a challenge, in some ways.
Just to mention quickly, for the committee's benefit, we are currently in the field on a survey on coronavirus that ends today, so, unfortunately, I don't have the data at the moment to inform some of the questions you might have, but, hopefully, I'll have something to write up and share with you as of next week. Similarly, we're working on a bit of a paper that we would want to share with the committee on some of the steps that need to be taken for the Government and companies as we look to reopen Wales after the lockdown. So, just for you to be aware of those.
That would be very helpful, Josh. If it's possible to have that at some point next week, certainly by the middle of next week, that will help us be in time to inform our discussion with the Minister when he comes before us. So, thank you, Josh. Ian.
Ironically, a lot of our concerns are similar to those of Josh, in that the challenges are there. The job retention scheme has been an absolute godsend for everybody, and huge credit to have implemented it as quickly as they did, and they're now starting to pay out, so that's really saved a lot of businesses. We are starting to see some people making redundancies now. I think that was unavoidable. I think there was a hope with the JRS that maybe we wouldn't see redundancies at this stage, but the aircraft industry clearly has some serious challenges, and we are seeing some announcements—we saw the BA announcement yesterday and we saw the Safran Seats announcement last week. So, that's challenging.
With regard to finance, I think, obviously, the UK Government has done most of the heavy lifting in respect of this in the first instance. There was a slight delay, as Joyce pointed out, to start with, when the UK Government made their announcement, as to that then going through to Welsh Government. That's improved over time, and I think that delay isn't there anymore, so huge credit to both Governments there.
On the point of insurance, we've raised this on a couple of occasions. There does seem to be a lot of confusion in the marketplace, and I think there are one or two insurers that are not playing the game, to put it mildly. I think it's not across the industry, and that point needs to be made. There are a couple of businesses that are not being fair, so I don't want the whole industry to be dragged into that.
The other issue that's come up a lot in conversations has been mental health. It's a huge challenge. With all these people working from home now it's a subject that crops up on just about every call I have with members. It's hugely challenging. It's interesting, now that we're starting to talk about going back to work, there are some people who have got used to the idea of working from home and are quite comfortable with that, but equally, there are people who are absolutely desperate to get back into the workplace and to engage with their colleagues and socialise again. So, that's a huge challenge.
There are huge differences between businesses, obviously. Quite a lot of our members are staying open throughout this crisis and have met the social distancing challenge. We had a call earlier this morning with a number of members where one of our members who had stayed open shared their experiences with others, and I think where we can learn an enormous amount at the moment is through best practice, and there are some great examples out there. I accept that there are one or two businesses that haven't covered themselves in glory, but equally, there are some businesses doing some really good stuff. Going forward, I think that's important, and I think good examples are ones we could use for everybody.
The one major concern that crops up all of the time is the fear of divergence. There's a real concern amongst our members that Wales goes in a slightly different direction in some respects to the rest of the UK. Now, there are areas where we are going to be different, and as Josh pointed out, that's about devolution. But I think we need to avoid being different for difference's sake on occasion, as well. I think there's a real danger around that. With the 2m distancing law, when the law in Wales came out it was eminently sensible, but for 48 hours there was an enormous fear that Wales was going to have a different set of rules to the rest of the UK, so we need to be careful about that. People are worried about different rules applying in Wales to those in England, and that would be a particular challenge in somewhere like north-east Wales. I'll stop there now.
Okay, thank you, Ian. Can I just ask you all, and perhaps if I ask Ian first, if you can answer this in one minute—sorry, Ian; one sentence, rather—because we're pushed for time: Ian, do you think that the Welsh and UK Governments have got a grasp of the issues and challenges that are facing businesses overall?
I think the challenge is that the businesses themselves don't entirely have a grasp of it, and they're almost learning by the week. What we've found over the six weeks is that the challenges have changed. The challenges that were there four weeks ago aren't the challenges anymore. It's a fast-moving situation, so I'd suggest that Government's doing its best to respond. Our needs are changing on an almost weekly basis, you know, it's hard for Government to be expected to be able to respond to that.
Yes, I agree with everything Ian said there about the changing needs of the crisis. But I would say that both UK and Welsh Government have been really, really keen to engage and have gone out of their way to get intel on how our members feel. So we feel they've been in listening mode, and that's been really helpful.
[Inaudible.]—with both Ian and Josh and their comments. And I would also say that we've had a great deal of engagement with both the UK and Welsh Governments, and it's all been really helpful. In fact, it's just keeping up with the sheer amount and volume of e-mail traffic and communication that's coming through.
Okay. Lovely. We're slipping a little bit behind time, but the next set of questions is from Hefin David.
Okay. Can you tell me—and I'll direct this at the panel—are you happy that the current responses to demands for support are timely and are reacting fast enough to businesses' needs?
Yes, I think the Government's done an amazing job under the circumstances—huge credit. And I think most businesses I speak to agree about that. I think they've really stepped up. As I said, there were some challenges early doors, but they seem to have been addressed and I think now, as the point was made, the engagement between UK and Welsh Government and businesses is exceptional. It would be nice if it remained like this afterwards.
Okay. Josh Miles, can I just ask about Business Wales? I've had a few businesses saying that they're finding that there's something of a queue to get in touch for support from Business Wales. Have you got any reflections on that?
Yes. I think Business Wales, at the outset, really struggled with the capacity for calls. To be fair, even we, as a membership organisation, were absolutely inundated in the first few weeks. So I think there was a backlog in the early days. To be fair to Business Wales and Welsh Government, they allocated a lot of extra resource into Business Wales and they've really stepped up to deal with those calls since.
I think, just to answer the question you asked Ian as well, where we've been really fortunate here is that we've got Business Wales and we've got the Development Bank of Wales and, as agencies in Wales, they've been able to articulate a response really quickly. So, for instance, the development bank was able to give its customers some support earlier on and develop the COVID fund, which has just been really, really helpful and got us ahead of the curve a little bit in Wales. So I think having those organisations has been really, really helpful.
Can I ask about the level of resource allocated? I had a question from a small business that was in receipt of the £10,000 grant, which was distributed through the local authority. One of the things that this owner said to me on the phone was that he was seeing businesses that didn't need it receiving allocations. Is that a concern we need to have—that there is actually an over-allocation of resource in some sectors, and, I was surprised to hear, in the SME sector?
I think it's something we need to keep an eye on. However, the problem we've got with this is that you're never going to get a perfect mechanism at this fast a pace. So, the priority has been to get money out of the door as quickly as possible, and part of that is inevitably going to be imperfect. We've seen some examples of companies giving that money back to the local authority where they've not needed it. So, you would hope companies would consider it that way, but it's difficult to see how we go about this in a way that doesn't get the money out of the door quickly without having it perfect, really.
Just before I come to Ian Price, can I just go back to Josh? Is there any way that we can get an understanding of the percentage or the proportion of money that is going to places where it may not be needed?
It's a really difficult question, to be honest. I'm not sure how you would go about doing that, other than auditing the money afterwards, which you would expect to happen, I suppose. But just the sheer volume we're talking about here is so significant that I think it's going to be really difficult to track. There are no two ways about it, it's going to be really difficult to track.
Yes, I just wanted to add that there was almost an acceptance at the beginning of this process that, sadly, because of the speed with which it was implemented, you almost had to accept there were going to be abuses. I'm not aware of that many. It doesn't appear that people are taking advantage of the system as they possibly could have, but I definitely think we had to accept that at the beginning. The job retention scheme was interesting; we had lots of people on the JRS who wanted additions for their particular sectors and for other things, and the Government response to that was, 'We're keeping it simple, because the more we complicate it, the harder it'll be for people to access'. So, as a consequence of that, you've got to accept that in some instances, you're going to get abuses.
Just very briefly, it's also worth looking at the amount of money that's been spent, So, it's going to vary by local authority areas, but from our estimation there's around a third, maybe less, in some local authorities that hasn't been given out to businesses that are currently eligible. So, there is a gap on the other side as well where there are potentially businesses that probably need the money, but aren't aware of it yet, so—
Yes. I was going to say, Josh, that there may be an issue there that you might want to talk about as well, which you just did. I understand that and that is quite talked about; the other side isn't talked about quite so much. Adrian, you wanted to say something.
Yes, it's—. I haven't heard any reports of people in the tourism industry handing the money back; what we've had reports of is where local authorities have been very slow in paying out self-catering businesses. I don't know whether we want to come back on that later on, but it has certainly been a big issue for us and I think there are repercussions, so I'd like to talk about that in a little bit more detail if possible later on.
And I suspect, Adrian, that yours is a sector that isn't affected by the question I asked anyway. So, Josh and Ian, have you finished on those points? Is there anything else you wanted to add? No, okay. And lastly, is there a clear understanding of the schemes that are available to businesses in Wales? Do those businesses that need to access schemes—do they have access to those schemes, a clear route through to access those schemes?
I think the knowledge is there now that probably wasn't there at the start. I think people have been learning as they go along. I agree with Josh on his point on Business Wales; I think it was struggling hugely at the beginning but, certainly, it's improved out of all recognition, and the advice and the guidance they're giving now is excellent. Again, I keep reiterating this, but it's such a challenging situation that people are learning as they go along and, as a consequence, you have to accept that there were some hiccups at the beginning. But I think, in general, huge credit to everybody.
Yes, just to agree with that point, and just to say that Business Wales has been really helpful for organisations like ours, because we've been able to point to somewhere for businesses to go and get that answer that they need. So, we've had lots and lots of calls, and it's just really useful in Wales to have a single point of information, if that makes sense. And then, just to flag that I think there is variability in how local authorities have pushed out the grant and the awareness there. So, that might be something we want to consider a little bit further as the time progresses.
Thank you, Josh. I have picked up that there is a divergence between local authorities giving the money out quickly; it is something that I've picked up myself. Vikki Howells.
Thank you, Chair. My questions, really, are about the flip side of the issues that you were just discussing with Hefin David. I know that, in my local area, while a huge number of businesses have received help and have received it timely as well, my inbox is really quite chock-a-block with businesses, particularly sole traders, who have fallen through the system and haven't been able to access any help at all. And it really is heartbreaking when you read about the impact that that has on them and on their families as well. So, I just wanted to ask, to start off, for an overview, really, of where you all think the gaps are within the current system.
Yes. I completely agree with that, Vikki. Support is like a lattice at the moment; it's covering lots of areas but there are gaps that relate to certain types of criteria. So, as we see it—and the same as you, we've got a very full inbox of these sorts of companies at the moment—there are people who are newly self-employed who are struggling quite a lot because they don't have the accounts. There are quite niche examples there as well; for instance, if you're self-employed and you took a period off after having children or something similar, then you won't have accounts and won't be qualified for support. So, there are issues around that. A lot of the support has been linked to having property, so businesses that don't operate out of properties have fallen through the gaps in a lot of areas.
Now, to be fair, the economic resilience fund has really helped in that regard, but it has a VAT registration threshold in there, really, that companies need to hit. So, again, companies below VAT registration threshold have fallen through the gaps there, so, that's the kind of area that I think probably needs to be addressed in phase 2. In the early days, we had a lot of issues around businesses that operate out of premises but have their rates paid by their landlords, so don't qualify for the grant directly themselves. We think the economic resilience fund has helped solve some of those issues, but, again, it's another one that needs to be kept under review.
And the last one really is company directors drawing dividends. So, a lot of people will have been advised by their accountants—and, really, for reasons of protection around taking finance and other things—to operate through a limited company. They've been able to furlough themselves as directors, but, in practice, most of their incomes have not been covered by this. So, there are a lot of issues there that need considering and are falling through the gaps at the moment.
Yes, that's right, but it's interesting to have that from you. Sorry, Adrian indicated.
Yes, just to back up some of Josh's comments there with some figures, Mid Wales Tourism and Brecon Beacons Tourism have carried out research, a piece of research, which we've just literally, today, had the results of, and some of those results back up what Josh has been saying here. I mean, 24 per cent—. With regard to the self-employment scheme, 24 per cent of respondents are waiting to hear whether they will receive income from the self-employment scheme. A further 26 per cent of businesses are not VAT registered. And this is out of a survey of 320—317 businesses, sorry. And 24 per cent do not employ staff, meaning they're not eligible for the economic resilience fund. So, those are just a few snippets there, which back up what Josh has just said.
Thank you, Adrian, as well, because I've had that information in my inbox earlier, so—. And I think other Members would have as well, but I'll make sure it's taken as part of our committee evidence correspondence as well. Ian, did you want to come in on Vikki's question?
Only just to say, obviously, this is more relevant to Josh and Adrian than it is truly to CBI members, but it's undoubtable that self-employed people and sole traders have really fallen through the cracks in this, and they need to be caught up in some of the schemes going forward. They have my sympathy; it's unfortunate. But it doesn't really—. It doesn't apply to CBI members, to be honest with you; I think most have achieved what they wanted from the schemes.
Thank you, Chair. So, my second question, then, is: what actions do you think both the UK Government and the Welsh Government need to take to try and plug these gaps? And, obviously, with phase 2 of the economic resilience fund currently being drawn up, it's very timely that we look at that within the devolved context, but I don't think there's any harm in us adding on a wish list for the UK Government as well.
Okay. So, a couple of things that I think we could do with phase 2 of the ERF directly. The first is to look at what's happened in Scotland around self-employment, where they've created a bursary scheme. Now, one of the reasons we haven't been able to do this yet is—going back to Hefin's question, really—around fraud risk. So, the VAT threshold has been there to mitigate against the fraud risk, but the Scottish Government seems to have a little bit more tolerance of that risk, and have created a bursary scheme, a kind of hardship scheme, for those people who can demonstrate hardship and are self-employed. So, we think there's a possibility there to do something similar. And we accept that part of that might mean a more onerous application process to make sure we can mitigate against any fraud risk, but getting support into that area would be really helpful.
The second issue is around the VAT test. Again, it might mean we have to change the application process, and we might need to look at other sorts of information requirements, and that might take longer, but we would really welcome a revisiting of that issue to see if we could potentially remove the VAT test and bring more companies into scope for the ERF.
And then the last bit for me is the microbusiness bounce back loans that were announced this week. I think that's a really interesting scheme and will be very helpful to a lot of businesses. It looks a lot like the development bank scheme looked before, and we know that became oversubscribed very quickly. Given there were a lot of issues with the coronavirus business interruption loan schemes in the early stages, I think one of the things we need to keep under review in Wales is the success of that particular scheme and its roll-out, and there may be a role there for the development bank to try and fill any gaps, should that scheme not play out the way we hope it to. But we hope that that scheme is able to do what it intends to do.
Vikki—did anybody else want to respond to Vikki's question? If not, I'll bring in Helen Mary, who wanted to come in. I know you wanted to come in as well, Oscar. I'll come to Helen Mary first and then I'll come to you, Oscar. Helen Mary.
Thank you. That was really useful and interesting, Josh. Just in terms of I think there's a recognition—I think probably, in fairness, in Welsh Government as well—that the new scheme ought to look for other sorts of evidence as well as, or instead of, being VAT registered, do you have any specific suggestions that we could offer to Ministers about the sorts of evidence that they could ask for? I think, in fairness, they've gone for VAT because that's very easy to verify, isn't it? Have you had any thoughts as to the sort of evidence that might be useful?
I need to have a little bit of a think about that specifically; I can't remember the discussions we've had, off the top of my head, on it. But, yes, I think it will be interesting to look at how the Scottish scheme is approaching that and look at it that way, but nothing at the moment, sorry.
Part of the question is the same as Helen just asked. Many businesses are not eligible in eligibility criteria that are set by the Welsh Government economic resilience fund—businesses that are not VAT registered, and those that have started recently are also in trouble; they are therefore unable to produce accounts, if they set up businesses last year. So, FSB, have they contacted such members?
Yes, so, companies that are new starts have definitely fallen through the gaps here, and we've had a lot of that come through as well. Again, it's going to come down to some sort of discretion, I suppose, and looking at what accounts are available with these sorts of things. It's not an easy thing to do, because there is that forward risk there that needs to be controlled, but it's something that we would definitely welcome more detailed examination of, I think.
Just one final question then, which is: if these kinds of gaps aren't plugged, then, what do the witnesses think would be the potential economic and social consequences of that?
Do you want me to—?
So, I think, going back to what I said at the start about suppliers and the kind of environment that an SME works in—so, we were talking to a business in Swansea about this, and they were saying that they had 15 suppliers that, at the moment, they couldn't pay because they had no cash flow going into the business. So, I think the—. You can imagine that in your mind's eye, when you think of 15 companies around an individual company that might not get support that will then have further cash flow worries as a result of that. And, as that happens across the Welsh economy, we're talking about quite a lot of economic activity that's going to cause challenges. So, I think that's the way it's going to play out, where we have gaps.
The other bit to say is that we're talking about large sums of money here. There are going to be distributional impacts and spatial impacts on this sort of spending, and it's just too early to say what those will be yet, but it is absolutely something we need to keep an eye on, because we're going to need to plug those gaps as much as we can to make sure that there are not equality issues or anything else around this.
Yes, quickly, just to say that the impact could be hugely damaging, and to some of our small towns especially, because these are the sorts of businesses we use on a daily basis. I know some of them are managing to trade, but quite a lot of them are hibernating at the moment and have no income and they live from week to week. So, I think the longer this goes on and the longer they're not able to access any funding, more and more of these businesses are going to disappear.
Going back to your point, I think there is a real challenge here with respect to doing more for these people, and going back to Hefin's question about abuse and such like, this is the one area where, potentially, the greatest abuse could occur, so I think a slightly more sophisticated system, allowing them to access money, would be needed. But, yes, it is concerning. And, even though they're small businesses, they impact on the larger businesses if they buy their goods from them—in some instances anyway—so, it's a knock-on impact for everybody.
Adrian, I'll avoid coming to you, because I think you're going to be speaking a lot in this next set of questions, if that's all right.
Yes, that's fine.
Good afternoon, everybody. I'm obviously going to talk now about the tourism sector—it’s a sector that dominates in most of our areas—and your view particularly, Adrian, on the additional eligibility criteria placed on self-catering accommodation in relation to the business rates grant. Now, I've had no end of e-mails with people who are, quite frankly, struggling, suffering and wondering what's around the corner for them, and, as you're the representative body, I really want to hear from you.
Well, it's complex and there are a number of issues surrounding this particular issue. We're quite—. As an industry, and particularly with regard to the self-catering sector, we are quite upset, really, about the fact that this secondary level of eligibility was brought in. It was as a result of—. I believe Julie James sent out a letter to the local authorities amending, in effect, what the Valuation Office Agency criteria are for evaluating a self-catering or a furnished holiday letting business. In effect, if you're a furnished holiday letting business, under that criteria, to be able to be eligible for the non-domestic business rates, you have to be open for—open that is—for 140 days, and you have to let for a minimum of 70 days. That threshold was raised. We don't know for what reason at all. But what it's meant is there's been some confusion, I think, and it's also allowed—or some local authorities, maybe not because they particularly wanted to, but, because of that criteria, they're now having to do greater analysis of self-catering units to establish whether they are actually businesses or not. We believe that that's wrong, because this is money that has come from central Government at a time of greatest need, and a lot of these businesses are actually suffering hardship at the moment, and, six weeks in, they still haven't had that cash.
There were questions to the Minister yesterday—I don't know whether you watched that on Senedd.tv—in terms of exactly what we're talking about now. What she said in answer to that—so, it's a question I want to give back to you—was that there is discretion within local authorities that they can use to ease that hardship. Are you finding, therefore, that some are applying that discretion where others are being more rigid?
Absolutely. The money was granted under section 47, I think, of the Local Government Act 1988, and there is discretion, I believe, in there, for local authorities to do that, and it's unfair that that's being used, really, to penalise bona fide businesses. Local authorities, all of them, have lists of non-domestic business rated properties. They will have sent out their bills, as it were, or invoices, for this year, and all those businesses they've sent them out to on those lists should be eligible for that funding.
In answer to your question directly, yes, some local authorities have been very upstanding in this and been very good—Powys, I believe, and so have Wrexham, for example. But, other local authorities, we're certainly getting the impression that they are dragging their feet on this and using those discretionary powers to slow things down. And, as I say, it may be through due process—we don't know exactly—but they have been slow in paying out in some local authorities and not others.
Yes, just to agree that we've seen similar issues on this, and I think that there are two things in particular that need to be considered. One is that, because the eligibility criteria are more complex, it means there's more work for local authorities to do in order to issue the grant. The practical implication of that has been that they've put them to the back of the cue. So, we've seen some instances where business aren’t able to access the grant because they've been told, 'Well, we're going to process the easier applications first, and we're going to deal with the self-catering ones afterwards.' So, that's a real concern. And then the other bit is that, the local authority discretion, it is very variable, and some local authorities have been sending e-mails out saying, 'This isn't discretionary; we've been mandated to do this by Welsh Government.' So, there is a tonal issue there as well, where that discretion, perhaps, is being misinterpreted. So, there are quite a lot of issues there, I think.
I've come across exactly that, because I've been making representations on people's behalf and I've seen evidence of local authorities saying, 'This isn't discretionary; this is coming from Welsh Government.' So, I understand—. So, I suppose what we're looking for are ways forward. So, in terms of—on just this in particular, because I've got other issues—what do you think needs to happen to try and sort this out?
Basically, the guidance that was issued by Julie James could do with being withdrawn.
And go back to using the VOA criteria.
Okay. So, I'm going to move on to—. Obviously, tourism, by its very nature, is mostly seasonal and we all know that the Easter has been lost; it looks like it's probably definitely the case that the May bank holiday is going to be lost, and we also know that people have spent their money in anticipation of gaining that back in terms of profit and living through the coming season. So, those challenges are real and we understand that. So, understanding that, what do you think that the Government can do—or we can ask them, at least, to do—to help in those situations?
Well, I think, firstly, what we're all looking for is a timetable as to when we can get back to some normality. We obviously appreciate the real difficulties that this is going to—the ability for us to be able to do that. But as soon as we believe that we can do something in order to start trickling back some sort of business for our industry, the sooner the better.
I think what we do need to start doing is prioritising which businesses can actually cope with starting straight away, because it has been indicated, and, I think, perhaps, a little bit unfairly, that tourism and hospitality will be amongst the last, but we do have a lot of rural businesses, we do have a lot of—as we've just discussed—self-catering businesses, we've got large rural hotels. They're capable, potentially, of being able to meet social isolation—or social distancing, I should say—measures fairly quickly with some fairly minor infrastructure amendments. So, there's no reason why we can't start looking at the moment as to what we do when we do start moving out of the lockdown phase.
Yes, just to say I agree with what you were saying, Joyce, around this season being particularly challenging. I think it's worth pointing out that social distancing rules are going to have an impact on profitability in this sector for the rest of this season, anyway. It's not a tourism business, but the same would apply: we were chatting to a restaurant that had 120 covers on a normal operating time—we'd probably be looking at about 40 covers in order to keep staff and customers safe. At that point, it becomes a question of, 'Is it more costly to stay closed than to open because your overheads aren't being made up by your profits and turnover there?' So, there's going to be all sorts of considerations in this area that will apply to sectors like tourism and also to hospitality.
I think one of the things we're actively considering and would suggest at the moment is some sort of tourism hibernation scheme. So, that might mean helping tourism businesses to, perhaps, partially furlough workers to try and keep costs down while they are dealing with social distancing, so they can part-operate through the remainder of this season. It might mean extending some of the existing financial schemes, with interest holidays until the season kicks in next year where these sorts of businesses will return to profitability and will be able to start paying those loans back. But we need to look at something that will basically hold them through this season and make sure that when we get to March and April next year, these sorts of businesses are ready to pick up and go again.
It's interesting—I was in a call with Celtic Manor this morning, and I've spoken to the Vale and to Bluestone and Zip World in the last few days. So, these challenges aren't just unique to the smaller tourism operators. So, I think something that would help is a sectoral approach to the exit through the job retention scheme. I think that would allow certain sectors to be treated differently, and I think that would be quite a positive way of addressing some of the challenges. And I think if you took that approach as well, it probably would allow you the level of flexibility that Josh was suggesting as well. Because we've been operating a blanket system at the moment, it's very hard to be flexible, but if we take a sectoral approach as we exit, I think it will enable us to look at some of the anomalies where people have lost out under the current system. I think that is something that the bigger tourism operators were asking for, and I think it's under consideration—my understanding is that it is, anyway.
Okay. We're really pressed for time. Do you have any further questions, Joyce?
Only one, very quickly. You're all in the sector together. I'm assuming you're all speaking to each other, and I think what would be very useful to us, assuming that that's the case, and assuming that we're talking about this particular sector. And I've seen a paper that has been put together by—it's the caves of Wales. I can't think of the business, but, anyway, if you've got a paper that's useful to us—that's what I'm really trying to say—that would cover the sector with some key points, it would be really helpful.
Following Joyce's question, I'd like to ask the panel: we actually should encourage, through your departments, that people in the United Kingdom should go on tourism holidays within the United Kingdom while this coronavirus eases out, rather than people thinking to go abroad, because we don't know what the situation is in different parts of the world. So, you must work very vigorously within Government corporations, so that people should use their money here, because, don't forget, they've got to—you just said—they've got to pay back the loans et cetera, so they must make money here first.
Okay. So, we're short of time. If anybody wants to very quickly address both of those points, please do. Josh.
Yes, just very quickly, I think this raises a broader issue on public confidence, and I think with all these things, we have to be led by the public health advice for this. It's very important that businesses and their staff are kept safe, but one of the challenges I think we're going to see is that consumers are going to change their behaviour as a result of this. People are going to want to know that they're safe and they're not going to be contributing to the spread of coronavirus when they go about their daily business. If they want to go to a restaurant, they're going to want to know that that restaurant is safe or if they go to a shop, likewise. So, I think there's a space here for Welsh Government, particularly through Business Wales, to make sure that, first of all, they're having that conversation with businesses to help them work out what 'good' looks like, and how they can protect their staff and their customers. And then on the other side, perhaps there needs to be some sort of communication campaign about—and this ties in to your point about Visit Wales and other things as Wales, around what 'safe' looks like in this new environment. So, it might be, 'Come to see Wales, come to visit these businesses', and, 'We're safe, because we're doing it this way', just so that the public can have confidence where there are good operations doing things the right way within social distancing rules.
Okay. If anybody else is desperate to come in—we do need to press on. Helen Mary Jones.
Thank you, Chair, and thank you all for being here and for your evidence. I want to look a little bit around how the success of these schemes should be measured, and how transparent they are; what information you ought to be collecting. So, I wonder if any of you have got any ideas about what should be the indicators that Welsh Government, the development bank, local authorities should be reporting on. What sort of information do we need to be collecting so we can see whether the support going in the right direction—is it working?
It's an interesting question. It's a question we've been asking Welsh Government as well. It's a challenge on how to measure at the moment, unfortunately, and what metrics you use. I suppose that the crudest measure is unemployment, in truth. A measure of success would be how many people lose their jobs as a consequence of this, and I think, looking at Josh's members, how many of those survive is another—. There needs to be a conversation about the metrics that we use to measure the success of everything at the end of this. I think at the moment, it's very hard to come up with some metrics that would give you the sort of information you need. But crudely, unemployment is a key one, and, sadly, insolvency is also a measure, but I think, in time, we've got to come up with some sensible metrics that allows us to see how successful the schemes have been, and what's worked and what hasn't.
Just to say that I agree with what Ian said, to be honest. 'Success' is a difficult word in this context, isn't it? And I don't know how we measure some of that. Certainly, there's going to be a lag with statistics like insolvencies, so maybe we won't see the impact for a little while yet, but that's definitely the kind of area we think would need to be scrutinised in this.
I don't know—. I'm having a bit of trouble with my video at the moment. Can you hear me?
We can hear you, Adrian. Your face is frozen, but we can hear you, so go ahead. [Laughter.]
I don't always look that bullish, but—[Laughter.] I certainly think some money and some thought needs to be put towards some sort of research programme, and I haven't seen anything along those lines yet. Because we need to be looking not just at the business level but also the impact on our communities, and it's particularly important, I think, for tourism, because tourism does reach all the parts of Wales that a lot of industries don't reach and it needs to be—. We've also got an issue as well with—particularly in some parts of Wales, where a negative attitude towards tourism has appeared and it's been very unsavoury, and I think we do need to do a bit of promotion back to the community to show actually how important tourism is to the economy and other businesses as well. If we start damaging that, we could undo 30 years of a lot of hard work that's been undertaken by the private sector, but also the public sector via Visit Wales and formerly what was the Wales Tourist Board.
That's an interesting perspective. I suppose what I would say in response to that is that some of that negativity in some of the communities that I represent across mid and west Wales has been directly caused by some very irresponsible behaviour, not by businesses, I hasten to add, but by some of the potential customers. But I think you're absolutely right that we need to rebuild that perception of how important tourism is and how positive it is for those communities.
If I can just, Chair, move on. My last set of questions was obviously—. We haven't got, from listening to all of you—we haven't got the indicators yet that we need at a Wales level, but I'm wondering if you also think that we should be advocating to the UK Government that it does some measuring of the impact of its schemes and the support that it provides here in Wales—whether we should be asking them to break some of that down. The Minister for Economy, Transport and North Wales, for example, has asked for the UK Government to publish a league table about the high street—how the high-street banks are behaving—and he wants to be able to see whether that's different in Wales and, indeed, in some parts of Wales in relation to the coronavirus business interruption loan scheme. I think, particularly in terms of the tourism sector, if we are looking for medium-term support, and I think some of that will have to come from UK Government, should we, for example, be advocating that that's—? Well, if that's allocated, it's not just allocated on the Barnett formula, because, obviously, tourism businesses play a bigger role in Wales that they would in some parts of England, and that will probably be true of Scotland too. So, I'm just wanting to see whether you have any thoughts about what sort of things we should be asking the UK Government to measure, and what sort of criteria we should be asking them to use moving forward?
Just to agree with that point that, yes, we definitely do need to see those measures broken down so we can analyse what's going on in Wales. You mentioned CBILS, I think that's a particularly interesting area because we know the banking market in Wales is more concentrated; there are definitely gaps in places where access to finance has traditionally been difficult, and the consequence of using that mechanism has been that you're reliant on a system that already has gaps. The development bank has helpfully plugged some of those, but unless we know about it, we can't see what we need to plug further. So, yes, absolutely agree with that.
Yes, I think UK Gov is doing some measuring already. My understanding is that fairly stringent key performance indicators are being put into some of these schemes. So, whether that data can be broken down into Wales, I don't know. But, certainly, I'd suggest a question to the Wales Office might help, and they may be looking at extrapolating Wales-only figures from that. So, there is some good measuring going on. I agree with Josh, there's probably—when it comes to CBILS, there are gaps in the Welsh market; hopefully those gaps will be filled now that they're opening the scheme up to other lenders as well. So, you've got some less traditional lenders coming into the marketplace, so that might address that problem as well. I think, on the whole—. I'm sure Josh speaks to his regional colleagues in England, and I think we're quite fortunate in Wales, in some respects, that we are devolved at the moment and there are some benefits in that, compared to some of the English regions. So, I'd make that point. But, as I said, I'm not aware of any measure that could indicate that, I'm sorry.
Well, that's something we could ask, because if the key performance indicators are there, we could ask that of—. Doing that through the Wales Office sounds like a sensible way to proceed. Did you want to add anything to that, Adrian, in terms of what UK support might be needed and how that should be being measured?
Well, I agree with what Ian and Josh have said, more or less. We are in a much more rural part of the UK, and I think that that needs to be recognised—the rural economy is so important to us. If some KPIs can be put into whatever formula is devised above and beyond the Barnett formula, which takes that into account, I think all the better, to be honest.
Joyce, you wanted to come in, but we are nearly over time. I need to get Oscar in as well, so very briefly, Joyce.
Very briefly. I'm sure you would all have seen the Lloyds Bank figures this morning—massive profit reductions in their banking output just in a very, very short time. So, my obvious question therefore is: we know that, following the collapse of the economy, I think it was in 2007, lots of banks foreclosed pretty quickly, particularly small businesses were hit quite badly by that, do you think that, at this stage now, there's an urgency, really, for Government, whether it's UK or Welsh Government, to plead, I suppose, with those banks not to do the same?
So, if one of you could just answer that one because we're short for time. Ian.
Yes, just quickly. I think the banks are in a far different place this time around to where they were in 2007-08. I think that happening is highly unlikely. I think the situation is hugely different, so I don't think we'll see that.
On health, safety and social distancing, Chair, I have to ask those questions?
Well, it's up to you what you ask. We have got some questions around some of the long-term issues that need to be addressed that you might want to touch on, Oscar. That's fine, don't worry.
Can I just ask the panel—? We're drawing to the end of this session now, but is there anything that you think that—in terms of us making our recommendations to Government that we think are important for the longer term in terms of when we make a recommendation to the Minister, Ken Skates? Josh, then Ian.
Yes. Just to say there are different phases of this, really. We've spoken mostly today about the initial crisis and the reopening kind of phase, but I think we are going to need to deal with the longer term issues around this. Joyce has already mentioned 2007-08, and how that went, but I think we will need to have some sort of response on those lines to deal with the recession. And likewise, there are going to be some fiscal challenges as a result of this. There's been a lot of money put in to support businesses, which has been fantastic, but that's going to have long-term consequences.
And then, the other bit, really, is the social change, because we've seen businesses go almost overnight from being office-based businesses to being online businesses. That's a massive change in the way a business operates, and I don't think we've quite come to terms with that yet. There are risks with it as well—things like cybersecurity; we're going to need to pick up on some of those issues and make sure there are not vulnerabilities there. But there are also opportunities, so we're going to need to work that through.
And then, the last point from me is: when things start to go back to normal and when staff start to return to businesses, they're not going to be going back to the businesses as they were before. There's going to be a need to re-induct staff to have new sorts of skills, and I think companies are going to need HR advice, really, particularly the smallest ones that perhaps don't have that best practice through a HR department, on how to best do this to make sure that everyone's safe, compliant with the social distancing rules, and really be able to hit the ground running in any way they can.
Ian, I know you wanted to come in, but, particularly, what Government can do to help and support businesses as we have to adapt to new ways of working and new working practices.
Yes. I think certainty is what we need, and notice; I think this is the key. I know it's been hard, through the crisis, to give certainty, and certainly to give notice, but I think we need to be going forward, we need to assure people of certain things.
The interesting thing that hasn't come up in the conversation, which is going to be a challenge for everybody, is public transport. Because quite clearly, when people return to work, there's more nervousness about using public transport at the moment then there is returning to work. Everybody we speak to is quite comfortable about the idea of their staff coming back. The staff are happy to come back, but they don't want to use public transport. Now, how we overcome that in the short term and then the long term, I really don't know, but that's something that Government needs to be focusing its efforts on: to get people back onto public transport.
Yes, I was going to ask you: how do we address that? But you haven't got an answer to how that can be addressed.
No, it's just something that keeps cropping up, because it goes back to the capacity issue that we were discussing earlier. For public transport to run safely, it would need to run at 30 per cent of the level it's running at the moment, and trains into the centre of Cardiff were fairly full before all this started to—
Just very quickly. To the panel, the FSB and the CBI, I know what you're here to tell us, because your organisations are United Kingdom-wide. Health is devolved in the United Kingdom, because we are in Wales and look after our own health issues and in England, they do. But there are so many different approaches with the different devolved areas. How do you deal with the Government in your departments where the areas are not going in the right direction—where they're going a different way in England, and we are doing something different in Wales and different in Scotland? How do you deal with it in your—because you're United Kingdom organisations, so, how do you deal with it?
So, perhaps I could add to that as well myself, in terms of, do you think, for your members, perhaps there are elements of confusion, because there are different messages from different Governments?
Yes, I think divergence sometimes can cause problems in situations like this. I think one of the rare few positives to come out of this is that people understand devolution far more now, or will understand devolution far more at the end of this than they did going into it—
—because there were lots of people in Wales who possibly didn't know what was devolved and what wasn't. But they certainly do now. So, I think, as an education exercise, it's done a lot for devolution. How they do that, I don't know, but, yes.
Just to say I think it's probably less of a challenge for our members, as they tend to operate more locally than, perhaps, Ian's members. However, there are still concerns around communication. So, the 2m rule, for example, communicating that in Wales is really important so that businesses know, when they start to reopen, where they stand. It's fine if there are differences, but they need to be communicated well.
Mohammad Asghar, you asked about how we as an organisation are dealing with that, well, we're very geared up to service our members in terms of providing advice and support. Just from our perspective, we've done everything we can to ensure that where there are Welsh differences, that's reflected in how we speak to our members.
Sorry, I didn't make the point, but we're Wales-only, so we only deal with Welsh issues.
In the same way, the Welsh Retail Consortium has called for the phased reopening of shops, how prepared are the CBI and FSB for such a move?
So, we're talking about the phased opening that the Government may bring forward.
Our members are talking about it now, and have been talking about it for weeks. I've been on two conference calls today with a discussion around how people approach it; it is being discussed. We're talking to businesses that have worked through the crisis to learn from what they've been doing, and so, we're learning from best practice at the moment, and Josh's point earlier is perfect. The first thing in anybody's mind is the welfare and well-being of your staff, and that's got to come first, and everything else is secondary. So, as long as you're bringing your people back, and as long as it's safe to do so, then that's okay. Those are the main criteria in returning to work.
Adrian, is there anything that you want to add in terms of Government support, in terms of a plan for the recovery?
If ever there was a time for Government to manage change, it's now, and I think that's going to be at all levels, to be perfectly honest. I think, in terms of being very specific, something that Josh mentioned earlier on is how we can make the furloughing scheme a little bit more flexible. For instance, if businesses are paying for that extra 20 per cent—well, not extra 20 per cent, but if they're paying the 20 per cent over the 80 per cent, then maybe workers could be allowed to come back for one day a week, particularly if it's a rural property, such as one of the British Holiday & Home Parks Association parks, to come back and cut the grass, do the very basic, or very important maintenance work that needs to take place. It's really having a bit more flexibility as we move along.
Okay. So, just finally from me, our committee doesn't want to be a talking shop. We're going to be taking evidence from the Minister, Ken Skates, and then we will be wanting to make some very clear recommendations to Government in terms of support for business. So, tell me in bullet point form your key messages, just to finish off this session in terms of what you believe Government needs to do to support business. Who would like to go first? Ian.
A sectoral approach needs to be brought in, almost certainly. There can't be a blanket approach, as we've heard from Adrian today. Tourism needs a different approach to manufacturing, services need a different approach. So everything has to be done sectorally, and that's the only sensible way to approach it.
I keep labouring on this point, but I am concerned about too much divergence. I think it's really important, as we come out of the crisis, that we're in lockstep as much as possible with what's happening across the rest of the UK. As I said, safety of the workforce is the key to all this, and if we're going to be successful in getting out of it, we've got to ensure that we put the workforce at the forefront of all our thoughts when we're doing anything. I think as long as we do that, we stand a chance of helping business to preserve itself.
As I mentioned earlier, we're working some of this stuff up and we'll send it along next week anyway.
Just quickly, if I can, that threshold on the ERF and self-employment—two very clear things that could be addressed there. Much more advice and guidance on the 2m rule when it comes to reopening, because that's a very clear area. I think that's all I can remember at the moment.
I think we need very clear guidance from Government, and as soon as we believe that we can start coming out of lockdown and moving into a phased approach of opening businesses, the sooner the better. As I said, a bit more flexibility as well as we move out of the situation. But I also think that there needs to be not just an emphasis on the economy, but we also need, in parallel, to look at the social aspects of this as well, because it does touch all aspects of our community as well. Also, finally, I think we need to bear in mind the environmental impact and consequences of everything that's happened.
Okay, thank you, Adrian. I'm just checking you're not still speaking because there's a time lag. I think you've finished speaking, Adrian. Thank you.
Look, you're all extremely busy people, especially at this time, so we're ever so grateful for you taking time out of your day for this session, and preparing for it. It's invaluable that we've got your input, so thank you ever so much. This is treated as a formal committee of the Assembly, so we will send you a copy of the Record of Proceedings. By all means, look over it and if you want to change or you think something's not appropriate or you want to add to anything, we'd welcome that as well. So, thank you ever so much for your time this afternoon. Diolch yn fawr.
We'll take a seven-minute break and we'll be back at 3.15 p.m.
Gohiriwyd y cyfarfod rhwng 15:08 ac 15:16.
The meeting adjourned between 15:08 and 15:16.
I'd like to welcome you back to the Economy, Infrastructure and Skills Committee. This is our second panel session this afternoon with regard to business support, and I'm pleased to welcome a number of people to our next panel this afternoon: Shavanah Taj, who is the acting general secretary for the Trade Unions Congress Wales; we have Mike Payne who is the senior organiser for Wales and the south-west for the GMB union; and we have Peter Hughes who is the regional secretary for Unite in Wales. So, I'd like to welcome you all this afternoon to the meeting. If you could just indicate to me that you're all hearing this okay—to the witnesses. Thank you very much.
In that case, I'll ask some very general questions and then if you can just give an—. Sorry, Joyce Watson, did you want to come in?
I need to declare I'm a member of Unison if the TUC are here. [Laughter.]
Is there anybody else that wants to make any declarations of interest? There we are. Lovely, thank you.
Okay. So, I'll give some very high-level questions. Just a brief answer, please, because Members will dig into some specifics later on. Perhaps you could just start with bullet pointing the most pressing issues that your members are raising with you, and your view in terms of the Welsh Government and the UK Government having a grasp of some of the issues that are relevant to your organisations. Who would like to go first? Just please raise your hand if you'd like to come in. Shavanah.
So, we would say that the No. 1 concern for workers at the moment is how do they keep themselves and their families and their colleagues safe, and that no-one should have their health and safety put at risk at work. We would say that, in terms of the way that the virus has been sweeping, the steps that have been taken by Government have been welcomed and they've been good and they've been necessary. But now we need to start paying some attention to what happens next and start looking at those sections of the economy that are currently closed that are going to need to be reopened, and to make sure that safety remains the most important single issue.
This week, the TUC has put out some research and a report on this issue, and from the trade union perspective, it is very important that every employer is told and is required to carry out a specific COVID-19 risk assessment that's developed in consultation with unions and with workers.
Okay. And, Shavanah, in terms of the Welsh and UK Governments' support, have they got a grasp of the issues?
So, I would say that the Welsh Government—the crisis has really demonstrated the value of having established social partnership structures in Wales. It's meant that we haven't been scrabbling around in an ad hoc manner. We've had regular engagement with Ministers and we've been able to highlight our key concerns, including concerns about employers who haven't actually introduced adequate social distancing measures, or have sought to pressurise their workers to continue working in non-essential businesses. We've also had a lot of engagement. The trade unions have had engagement directly with Ministers and Welsh Government on a sectoral basis as well, which is good. And we've also been working with the newly established fair work directorate.
At a UK level, I would say that they've actually learned something from Wales, which is good. It is always good to hear that. They have been working very closely with the TUC, rather than directly, obviously, with the Wales TUC. And we've seen that, whilst they have been ideologically opposed to the idea of social partnership and they've actually worked to reduce, I would say, the worker voice over the last decade, they've now understood that it is really important to engage with trade unions and the workforce. They've done some good work around the job retention scheme that we've all benefited from here in Wales too.
Well, Chair, just to build on that, I think social partnership in Wales is a beacon of light, I guess, across the UK. It needs to be developed further. There are lots of good examples where we've developed strategies that have helped to maintain jobs and to support businesses. I still think there's a lot more that we can do. There are good examples and bad examples where employers have taken advantage of the job retention scheme. There are others, because they're not willing to wait for the repayments from central Government, that have refused to furlough staff, despite the fact that they're not in essential workplaces. And as a result of that—that's where we've found most of the health and safety breaches, most of the health and safety concerns. I know that we'll go on to this later on in the agenda, Chair, but I think that's where there's a need for us to bolster the enforcement regime around the legislation with the social distancing rules.
Thanks, Chair. You're asking us what are the biggest concerns for our members in Wales, and I think the biggest—. Obviously, Shavanah's touched on health and safety, which is a natural here-and-now topic. I think the long-term thing is, basically, they want job security and, after the furlough situation, they want well-paid jobs to go back to. Obviously, we've got to put things in place like the infrastructure to make sure they've got well-paid jobs to go back to. We know already there have been massive job redundancies, and we can talk about that later in the agenda, which I'm sure we will do, and what sectors and what they look like, to be honest with you.
What has been very welcome by the members that I talk to and the reps that I talk to is the fact that Welsh Government had legislated about the 2m rule. The Welsh Government are looking after workers in the UK better than any other Government in the UK, including the UK Government. So, that's a massive positive for the Welsh Government, which we should be really proud about.
The flip side of that: the UK Government has actually stepped up to the plate about the furlough situation and making sure that repayments and, obviously, the business rates and stuff like that are dropped, but I think the big issue for us now is what does furlough mark 2 look like, when we're looking to protect jobs. That's what's coming through with my members now. They might be going back to work, but they might be going back to reduced hours, they might be going back to a week on, week off, reduced productivity. Obviously, the announcements this week included the aviation industry, which Wales is massively involved in, both manufacturing the planes and the maintenance of planes in Cardiff Airport, Llantrisant and Blackwood. And up here in north Wales, where obviously Airbus is and all the supply chain is, that is a massive concern to our members here, and what we want to do is make sure they don't throw away good skills and we lose that skill set and we'll never be able to build the wings of the future and make sure that we're the No. 1 choice for the likes of BA to have their planes maintained. So, that's what we're hearing loud and clear at the moment, Chair, and that's where, obviously, we'll take up—[Inaudible.]
Thank you. I think we'll go straight into question now from Members. I may have forgotten to say that, if you do want to come in, witnesses, just raise your hand like that. I will raise my hand once to indicate that I've seen you as well. Hefin David.
Peter Hughes, you mentioned furloughing mark 2; can I ask the panel, and start with Peter, as you mentioned it first: what is that supposed to look like? What do you expect that to look like in good practice?
I think the furlough situation is positive at the moment, because, obviously, it's keeping a lot of people in work. I think, obviously, when they return to work—for instance, we know Airbus's order book has dropped by 50 per cent. Therefore, that's got a knock-on effect on the likes of Magellan, Qioptiq, and all the supply chains that employ thousands and thousands of workers in Wales. So, what mark 2, I would suggest, would look like, Hefin, would be, say, if we're returning to work on a 25-hour week, or a 20-hour week—what does the difference in pay look like? Would the UK Government or the Welsh Government be able to top that up somehow with a subsidy from the company rather than actually physically making long-term redundancies, knowing full well, in Airbus's case—we've already had the forecast for the next 12 months—it's going to be a downturn—[Inaudible.]—rates back up from 30, back up to 55, probably some time middle of next year, and making sure that that workforce isn't on the scrapheap? I think that's the mark 2 we're looking for, Hefin: how can we actually get that gap where we can actually keep people in work, maybe on a reduced working week, because we know the downturn is coming, and, therefore, on the back of that, how can we do that? I think that's what the unions are looking for and that's what we're pushing through the national TUC and the—[Inaudible.] But I think if the Welsh Government can come out positively and say something—. Realistically, we want to keep as many people in work, even if it's on shorter hours, and make up a bit of the pay on the back of it, to be honest with you.
So, just before I come to Mike Payne, I'd like to go to Shavanah Taj. I'd like to just ask the question: do you expect—? Some of the things that Peter Hughes has mentioned, do you expect that to happen in the coming weeks, or do you think we're going to move into a more difficult situation?
Well, I think that the discussions that we've been having with the UK Government at a TUC level have been positive, in terms of the need to have some kind of job retention scheme. But, additionally, we are also having some wider discussions around sick pay, for example. There are clear issues around self-employment, and those individuals that have no choice but to rely on universal credit. So, we're saying that the amount that you would receive under universal credit needs to be increased, and, as far as the job retention scheme is concerned, we know that there's also going to be gaps in that—yes, of course—you're going to have to look at industry area by area, but there's also going to be those workers that are going to have to continue shielding, but are going to still be in a position where they are caring for others. And those are the individuals, in particular, then, again, that we're going to have make sure are protected. So, any kind of support mechanism that is put in place—as Peter says, furlough part 2—all of these additional elements are going to have to be looked at. So, sick pay, universal credit, and some kind of job retention scheme. And there are lots of good examples already across Europe that exist.
Just before I come to Mike Payne, you mentioned the fact that the value of social partnerships is being recognised across the UK. Are you optimistic that that can be sustained, or do you feel that we're going to start to move backwards, back to where we might have been previously with regard to the relationship with the Westminster Government?
I would say that, at the moment, the indications are pretty strong. We have been calling for a national council, in terms of a recovery council, and we've called for either Michael Gove, or the Prime Minister himself, to actually chair that. That would be a bigger group of the TUC, the affiliated sector leaders for the various different trade unions, and employer organisations. And I think that, at the moment, the soundings are good; they are positive, and, actually, over the last weekend, they've already begun having discussions sector by sector—and, again, this has never been seen before—to start having those discussions about what it's going to take to return to work and what measures, safety measures, need to be put in place, and what additional elements are needed to protect workers' pay going forward.
Okay. And Mike's being very patient. Mike Payne, you wanted to come in, so I'll just hand over to you.
Yes, thank you, Hefin. I'm always patient, as you know. I'm happy to listen to my colleagues. But I just wanted to say, building on what Peter was saying: the main thrust for me is about job protection—job protection for the future for our members, and the introduction of safe working practices to allow them to be able to go back into the workplace in a safe manner. And again, I'm sure we'll touch on that later.
Orders have dropped massively for a lot of manufacturing in Wales, supply chains have been massively disrupted and could take many months to get back to anywhere near normal. So, those types of things. There's going to be a lag between people going back to work and getting back to some type of full order book and full production.
In addition to that, because not everything is going to be able to open at the same time—schools could still be closed, childcare could still be an issue for many of our members—we're going to need to look at how we allow people to work flexibly, so that they can get back into the workforce without that giving them the dilemma of, 'What happens to my family whilst I'm there?' And again, just to reinforce Shavanah's point, too many of our members have been forced to stay in work even though in lots of cases they've had letters to say they fall into high-risk categories and should be shielding, or they're in high-risk categories where they should be self-isolating or they're shielding other members of the family. Because those employers will only pay them statutory sick pay, those people have been forced to take a decision over their health and the health of their families and their financial position. So, that is something that, again, there is going to be a time lag with people being able to come back into the workplace, especially if they've been shielding for 12 weeks.
I think the helpful thing, Mike Payne, there would be to understand the extent to which this is happening across the workforce in Wales, both with regard to that issue and the approach to good practice with regard to distancing in the workplace as well. I get individual cases by e-mail, but it's very difficult to judge the extent to which this is a national picture and the extent to which it's an issue. Have you got any reflection on that proportionality in the economy, in the market?
I have. Sorry, I didn't mean to cut across you then. Sorry. There are examples. They differ in different sectors of industry, but I can give you one example of a national care company that had estimated that they would have about 150 people that would need to shield or to self-isolate. As soon as they introduced the job retention scheme that put people up to 80 per cent, they had 1,200 people who fell into the category of either having those letters or were forced to stay at home. So, that shows to me that they were coming to work when they shouldn’t have been in work and that finance was the main drive to that.
I just wanted to ask our witnesses about some of the issues with the current furlough scheme, and particularly the issues around people who were changing jobs and were not covered because the cut-off date is so rigid. So, would you welcome, in the short term, some flexibility there, so that if people had been taken on before, that they should be able to be furloughed? It's certainly come across to me that the option to go back to your previous employer just doesn't work for a lot of people.
And the other question that I have, if I may, Chair, is: one of the issues that's been for me is whether—. It's entirely optional, isn't it, as to whether companies take up the offer of the furlough scheme and they can decide not to? I'm just thinking about the points that Peter and others raised around furlough mark 2. Would you welcome there to be a bit more of a requirement on employers, if the support was there, to make use of it unless they could make very strong business reasons as to why they shouldn't?
Okay, I suspect everybody wants to come in on this. I'll take Peter, Shavanah and Mike. Peter.
Thanks, Helen. Good questions. I think the Transfer of Undertakings (Protection of Employment) Regulations 2006 issue about being TUPE transferred over on 28 February helped, because, obviously, they said, obviously, that legislation changed with that, which was really helpful. But I think the cut-off date should be more flexible with people, especially in a furlough situation, because otherwise we're going to get into a situation where people are being refused furlough. So, that's the problem.
But the biggest issue I've got with furlough is when companies know full well they're going to be making people redundant, and using Government money all the way through it, not entering proper consultations and then using Government money where they shouldn't, at 80 per cent—paying people 80 per cent Government money—and then at the end of the furlough situation looking to lay them off or making redundancies. And I think that is an abuse of the system. The name is in the title: the job retention scheme. A job retention scheme, for me, Helen, is definitely a job retention scheme, and to be honest with you, I think those sorts of companies should be more taken to task on this.
You're on about mark 2. These are the companies now who are quite willingly taking Government money, entering consultation periods knowing full well that they're going to be getting rid of people. I think, realistically, is that a retention scheme or is that just giving a company money, a bit of a bail out, rather than taking a loan? Because, to me, if a company's in that situation, they should be going to Government and saying, 'Can I have a loan, but I'm going to make these people redundant?', rather than saying, 'I'm going to pay everybody 80 per cent, then I'm going to finish them anyway.' So, there are abuses of it, Helen, but I think mark 2 should be very clear and precise what it looks like: are they going to protect jobs in the long term; is it not just a case of, 'We're just going to short-time work and gain money on the back of it'; and what does my long-term business plan look like? They've got to be held to account on all of those three things.
To be honest with you, I think the best people who deal with them are union reps who, actually, when they enter a consultation with people, they're at the forefront of everything, so realistically, industrially, we need to be in those negotiations. For instance, a very good practice is Tata at the moment. Every one of them is on a 95 per cent furlough agreement. So, 95 per cent of their full money. The Tata corporation have gone to the UK Government and asked for the £500 million loan. They've done the same in Holland; they've done the same around Europe to make sure that the business is still there. Not basically put people on 80 per cent, save them money—. Therefore, they're doing their extra bit. So, realistically, what they're doing is paying their employees a proper wage so, therefore, they can go back out into the local economy and support the local economy where all our members and all your constituents are. So, that's a practice of good practice. So, companies like Tata, realistically, mark 2, if they come to you and say, 'Well, we can only work 50 per cent of the time', you can say, 'Well, yes, but during the furlough situation, you did this, this and this', or a company that comes to you and says it, 'Well, during the furlough situation, you cut your workforce in half, got rid of over 100 employees or something and then you want mark 2.' So, that's where I would be with it, Helen, to be concise, but it's an industrial argument where realistically industrially we should be looking at.
I apologise in advance: we're going—we're heading to go well out of time, which we can't do, so if there's—.
I'm awful sorry. [Inaudible.]
No, not at all. [Laughter.] Also, there is an opportunity to add to what you say after the meeting as well, in verbal or written form afterwards.
Okay. Rant over, Chair.
No problem at all. Shavanah or Mike, did you want to come in on that ever so briefly to pick up on anything that Peter didn't say?
Just to say that we believe that, judging on the fact that at a UK level 8 million workers are currently benefiting from the furlough scheme, and that there's in the region of 400,000 workers in Wales that benefit, I think that what Pete says is absolutely correct. This ties into the support that some organisations and businesses are now going to be receiving from the Welsh Government resilience fund too, and we are currently particularly concerned about those businesses that will be in receipt of Government funding—Welsh Government funding additionally through this fund—that are non-unionised. So, if there is no union recognition and if there is no collective bargaining involved, then how can we ensure that these businesses that are in receipt of Government money, of public money, are going to do the right thing by those workers in the long term? That is not going to happen if we don't actually have access into those workplaces, be that for the purposes of collective bargaining or for the purposes of ensuring that those workplaces are safe.
Yes, just quickly, Chair, building on that, we can't allow public money to reward bad employers. That can't happen. We need to look at and maybe learn some lessons from Welsh Government's economic contract that they've introduced with the private sector, where we actually build in minimum standards, so if you're going to get this public money, there are minimum standards that we expect to be introduced.
Peter's mentioned Tata and that's a fantastic furlough arrangement that's been introduced there with the three recognised unions, but there is one company on the Tata site in Port Talbot that actually laid off its staff on £29 a day guaranteed statutory payment, rather than furlough. I can't for the life of me understand why they wouldn't furlough those staff, but as Helen Mary Jones has said, there is no compulsion for them to do that and so the only people that will lose out on that are our members. And £29 a day. One example of a member on that site: his wife had just given birth and was at home on maternity; he lost his complete income, down to £29 a day.
So, those are the types of things, but again, just to answer Helen Mary Jones's absolute point on whether there will be flexibility around the dates used for when furlough could cover staff: originally it was 28 April, you had to be employed before that; then it was moved to the nineteenth. We actually had a number of people who were reinstated back into the workplace because that date had just moved by a couple of weeks, and that is something that we might want to learn from for furlough mark 2.
Okay, thank you, Mike. I might not be able to bring every single witness in on every question, just to keep to time. Joyce Watson.
Thank you. I want to ask whether you think the speed of action from the Welsh Government and the UK Government was adequate to the task that was facing all of us, and whether you think that the resources—because the resources aren't always just money, of course, they're much wider than that—the resources that were put forward to help you and also all those people facing the situation, whether you think that they were adequate.
I think the short answer is that Welsh Government have stepped into this and done as much as they possibly could as quickly as they could. I think the honest answer, though, is that there was a gap and we needed to set the systems up where there was a—. All Governments were blindsided by this to a large degree, but there was a massive delay in both financial support and also just getting information out to business to be able to apply for the types of grants that Welsh Government had put in. I have to say, the type of financial support and the type of individual day-to-day information that has been given to businesses through Business Wales has been first class. I'm sure people will agree that where we've got companies that were struggling to understand how they would make applications, first to the job retention scheme and then through the resilience fund, we were able to get Business Wales to take them step by step through how they did that, and as a result, managed to implement furlough arrangements that were probably far more beneficial than they would have been without that support.
So, the short answer is: no, we weren't ready. It took us a while to get it up to date, but once it was in place, we have provided a first-class support to businesses and to members.
Shavanah, did you want to come in or not, or has that been addressed?
I would say, yes, it's been addressed, but the fact of the matter is that the UK Government eventually got there, but they did take their jolly time. When you look at other countries, particularly some of the Scandinavian countries, and you look at the impact of COVID-19 in terms of the number of deaths and how quickly they moved, there is something there, and if social partnership mechanisms had been put in place right from the start and the normal practice at a UK level, then things may have been different today.
I just want to ask again about the level of understanding that currently exists, with employers and the workforce, of all of the schemes that are currently up and running.
Yes. Thanks for that, Joyce. I think one of the things our members would look to is the Wales Union Learning Fund, which potentially the Welsh Government set up and the funding of that. Obviously, we didn't expect this to be around the corner. I think it's a positive thing we've got going, but I think the fact now is that it's probably slightly underfunded and something that we can build on. Obviously, it's about getting people back in work, but I think employers are probably listening more to us now than they've ever done. [Interruption.]—I don't know what’s happening there. But people are joining and listening more to us now; they understand the grants available. I think the employees understand what's available to them—the training and the retraining. But I think the Wales Union Learning Fund, the WULF project, is a massive thing that we've always built on; it's £200 per employee, potentially, but it's got a cap on it. So, there is an issue where we can actually, potentially, put more money into that to retrain people. And, part of that might be, if they're on a shorter working week or on furlough, they might actually have to go on training courses to actually upskill, which might actually help the business in the long term. So, that is probably something we can do together, Joyce, and I think it's a really positive thing, if we look to do that.
I just want to ask—it's not on the paper, you won't be surprised. But the one area that I'm really focused on—and everybody talks about going shopping, and I know USDAW's not in the room, but you're all in the room, and you have members in that field. I've become increasingly concerned about the safety of shop workers, and the fact that—. I find going shopping a daunting experience, and I don't go very often, I have to be honest. But I'm not working there every single day, and I find it somewhat scary that you've got your night staff filling shelves, you've got people going to pick things alongside people trying to shop, you know, and everybody talks about that being a good thing, but I can't see people wearing protective masks or gloves, even, in every case. Some are good; some are just appalling. Are you having any representation, or making any representation, on behalf of the shop workers?
Yes. So, this is a huge area of concern for retail workers in USDAW, which has been mentioned, and GMB as well. There are good and bad practices in this area, but, overall, USDAW have just done a bit of research with retail workers specifically, and the fact of the matter is that a lot of those individuals are low-paid workers. Many of them are only able to access statutory sick pay; many are in receipt of in-work benefits as well—universal credit being one of those. In many instances, regardless of whether or not they are unwell, they have no choice but to go into work as well.
So, Joyce, in terms of what you say about PPE and not having masks and gloves, there were—. To begin with, we were getting extreme horror—like, really unnecessary—stories, where staff were coming in with their own PPE and managers were pulling them up and disciplining them for the fact that they had—they were wearing masks and they had gloves. Then, things started—. You know, it became a national issue, and then, gradually, workers were provided with masks and gloves. But what we have found is, over the last few weeks, as PPE shortage becomes a national, scandalous issue, more and more workers are reporting in that they haven't got masks, they haven't got gloves.
And, actually, the social distancing in retail is very, very difficult and is not being enforced inside. So, you'll see the queues outside, everyone is nicely socially distanced, but, when you go inside—. And also, because supermarkets, in particular, have now lifted—. You know there was a period where you could only buy so many items of the same product. That's now been lifted, so workers are having to restock shelves at a quicker level again, and, even though many supermarkets have now employed more workers, the fact of the matter is that, the more workers that you then have, it's difficult to socially distance between the workers as they're stocking shelves, and also it's very difficult to control the actual shopping aisles themselves. People—. The amount of abuse that's being reported is shocking—some really, really terrible stories that we're getting—and, actually, this was a matter that Ken Skates, the economy and skills Minister, raised with us in a meeting last week as well, and we are in the process of agreeing a statement that would go out, and he's looking to raise it with the retail consortium too.
Shavanah, just before I bring in Mike, Joyce, did you ask your last question?
In that case, Mike, over to you, and then I'll come on to Vikki Howells next. Mike.
Chair, briefly, I think that Shavanah has answered most of the points on that. The companies that we have recognition agreements with have actually stepped up to the plate with regard to things like sickness and shielding staff. But PPE has been an issue, most definitely, and also the threats of violence and abuse that staff are subjected to on a daily basis have been absolutely appalling.
Thank you, Chair. I might help to speed this up, because I think that some of my questions may have been touched on by some of the witnesses earlier on in the session. So, I was going to ask about gaps in the current business and employment support schemes. While we all recognise that there are huge numbers of businesses who have been supported, I know I'm not the only Assembly Member whose mailbag is rather full of those who have slipped through the net, both in terms of UK Government support and Welsh Government support as well. So, if I could ask, first of all, what gaps you see are the main gaps and people affected by that, and, perhaps, in answer to that, you could also state how you would like to see the Welsh Government and the UK Government address those gaps, please.
Yes. Thanks, Vikki. I think one of the main areas of concern of ours is the self-employed, i.e. taxi drivers and stuff like that. We've seen, on a regular basis—and there have been many demonstrations about it, and we in the GMB have led those demonstrations—realistically, these people, the self-employed taxi drivers, have not had any money, probably, since this started. Because of the furlough scheme, because of them being self-employed, they won't get any money until June. How can you support people, how can you support your family, when you're not actually being able to do that? So, how they're being treated is the same as a massive employer in Wales. So, a massive employer in Wales will get the money from the Welsh Government in June, whereas an individual self-employed taxi driver will get it in June as well. So, that's the difference, realistically, which should be addressed, Vikki. I think there are issues with that—it's an issue that's affecting a lot of our members in workplaces, and I think that's the bit of the gap that probably needs touching on. So, that, for me, is one of the key areas we should be looking at, and how we're going to address that, Vikki.
Chair, just, again, to add on top of that, there are other industries, creative industries, things like tourism, restaurants. If we want to see the great British pub return to the way it was before, there is going to need to be a lot of support for that. Because, in lots of cases, those are centres of a community that builds around them and community spirit. But we have lots of members in that industry who, currently, have either been laid off or put on really poor amounts of leave, because they just can't afford to take the loans and give themselves the overheads that they still have to pay back. There are too many stories, for example, where the big six breweries in the UK are not allowing pub landlords who are leasing those pubs from them to stop having to keep paying while all of their pubs are closed down. So, the amount of debt that a lot of our members, and the companies in which they work, are going to be subjected to when they return is going to be massive, and that is something, Vikki, I think the Welsh Government need to be mindful of, because, in Wales, tourism is a massive industry that we rely upon, and certain areas, especially rural areas of Wales—. We're a very beautiful country, people want to come here. We need to still have an industry that can support that when we reopen.
Okay—[Inaudible.] So, as far as the—. For us, I would say sick pay is extremely important. I keep going back to that, and the reason being is that the current situation has exposed the realities and the scandalous practices around zero-hours contracts, bogus self-employment, and all of these types of issues. Statutory sick pay, I would say, needs to be raised to the equivalent of a week's pay and a real living wage. If Welsh Government was to push that, I think that would go down well, because, actually, the UK Government is telling us that the redeployment scheme that they would like to go ahead with—they are finding that, because of the different types of alternative contracts that currently exist, it's proving to be quite difficult. The other thing I would say is that, again, the job retention scheme at the moment—we need to maintain that scheme for as long as we possibly can, for at least the duration of the lockdown period. But also our entire social security system in this country needs to be looked at. It needs to be overhauled.
Thank you. So, just one final question: maybe if I could ask each of the witnesses to sum up in a sentence, really, if these gaps aren't plugged, what do you think the consequences of that will be?
I'll do it in 28 words; I don't know how many characters. It would be catastrophic, to be honest with you. I think that there are going to be a lot of people with mental health issues, there are going to be a lot of people in debt, and there are going to be a lot of families living in real poverty. On the back of that then, they're going to have to be coming to the Welsh Government and UK Government to, basically, bail them out. It's going to cost the NHS, it's going to cost the public sector, a lot more money, to be honest with you. So, one sentence: it's going to be devastating if we don't do anything about this.
One sentence is difficult for me. I would—
I'd say that, adding on to what Peter said, we know that COVID-19 has had a disproportionate impact on those communities in particular that are already living in poverty. Many people from—it's disproportionately impacted black, Asian and minority ethnic communities in particular, who are already socioeconomically disadvantaged. I would say that, without a commitment to link public funding to fair work practices, we're at a real risk of a further erosion of employment standards and an increase in poor quality and precarious work. We've got to make sure that we go forward with workers in mind, and not just with business in mind.
Well, I'll use the tweet. We either use public money now to support businesses and maintain jobs, or we use that same public money to make people sit at home.
Thank you, all. It was almost an impossible question to answer in one sentence, so thank you for keeping that so short and to the point. Helen Mary Jones.
I wanted to ask some questions about the health and safety issues, and you've touched on some of these already, but, to begin with: to what extent do you think employers and workers understand the workplace health and safety measures that have had to be developed? I think one of you, it might have been Peter, said you very much welcomed the fact that the 2m rule is on a statutory footing here. So, to what extent do people understand those measures and are the mechanisms and penalties for enforcement enough? If a worker is in a situation where they feel they're not being properly—. Do people know what to do? Obviously, it's different where you've got the unions, but there are also issues, I guess, even where you have got unions, where the best practice might not be being adhered to.
Chair, I think the mixed messages that came out of central Government initially didn't help. The fact that the Welsh Government clarified that by introducing legislation was a massive step forward for us, and colleagues of ours across the whole of the UK have commended Welsh Government on that.
I think the problem has been that we've had to change the way that people have worked for quite a long time. In lots of cases, we've had to introduce shift patterns, we've had to introduce the 2m distancing. That meant, in some cases, having to modify the lay-out of factories and the way that even production lines—the speed of production lines—work. So, it's been a massive learning curve for lots of people, and they've had to change from traditional styles of working and methods to a new way of working. I think they're getting there. I think there was a learning curve, but I think we're getting there. But we just have to keep on top of that, and that's why we've called for this legislation to have more teeth, to give trade union representatives more of an opportunity to oversee and to monitor that that legislation is actually being implemented properly. It's clear that the Health and Safety Executive, after 10 years of austerity, does not have enough capacity and resilience to be able to do that, and neither does public protection in local government. So, it would make perfect sense to me—and you'd expect me to say this—that trade union representatives who are trained to a high level in health and safety should actually be used to assist, to make sure safe working practices are in place.
I think what's been helpful, I've got to be honest with you, is the communication the Welsh Government's actually sent out to employers. I think that that's been really helpful, to be honest. I think it's focused their minds. Some of my reps have been sending me videos about how it looks in certain big factories, and how they're split up, and how the—[Inaudible.]—is the same, and how you can only have so many people working on so many things at the same time. That's helpful, when your health and safety reps are involved in it, because obviously they can manage and monitor that. I think the problem we all have is the employers where no trade unions are recognised, which, realistically—how can there be checks and balances in place for them? We understand, obviously, that the confidence an employee will have under the Health and Safety at Work etc. Act 1974—we understand he's got powers, but will that individual come forward and actually whistleblow on a company during that time? That's the problem we're really having now, although I think the bigger companies and the well-established trade union companies with trade union relationships are working well with our reps on the ground and making sure that everybody fully understands it, but that's a credit to you as a Welsh Government as well, to make sure that communication's been sent out and sent out well.
That's positive to hear. I guess, as you say, it's in some places where the workers just aren't unionised, or whatever, and where there might not be that visibility, that we've had concerns. But with the existing law, are there any gaps in the existing laws and guidance around good coronavirus workplace health and safety, and if there are any gaps, how would you like to see those addressed? I guess it picks up a bit on the point, Mike, you've already made about enforcement, because there's no point having rules unless you can enforce them. Other than that, are there any gaps in the actual guidance and legislation itself, and if so, what do you recommend is done about them?
I think the big gaps are that there still needs to be more definition about the difference between essential and non-essential. That would help. There are industries where it is physically impossible for people to be more than 2m apart. The GMB is the largest union in care in the UK—we are having lots of problems with that, and that's where PPE comes in. At the moment, that's been a massive issue. On construction sites—construction sites have reopened and yet people are working alongside each other without having that necessary PPE. That's a worry for us. And it's where those bad employers, and there are a few out there, are—I wouldn't say 'happy to', but turn a blind eye to the fact that they're not implementing that legislation as they should be. We can't wait six months for the Health and Safety Executive to go in and make sure it's being implemented. By that time it could be too late for a number of our members. Sadly, like all trade unions across the UK, we're already losing comrades across all industries, because of this horrible virus.
Can I just ask, Mike, is it always the—you mentioned the Health and Safety Executive, but it's my understanding that, obviously, it's the local authorities who have enforcement powers as well; am I right in that thinking?
You are right in that thinking, Chair. It's either public protection or trading standards. Again, because of 10 years on of austerity, those departments are not big enough in my opinion—just my humble opinion—to be able to deal with the volume of monitoring and enforcement that needs to be taking place. One thing that Vikki did ask earlier—one gap is that the amount people are fined for breaches is an absolute joke. It's a joke. Companies will absolutely pay £60 and £120 because they're making more than that by turning a blind eye. That needs to be far more draconian than it currently is.
Do you think, Mike, that local authorities need more resource provided to them to enable them to enforce?
The current legislation does give powers to the police, to local authorities and, of course, to HSE as well. We keep pressing the point that there needs to be a specific role for health and safety trade union reps as well. We're particularly concerned about the non-unionised workforces. The Wales TUC whistleblowing site—there are numerous examples of areas, particularly in food production, manufacturing, that type of thing, retail, again in construction. And, of course, what we have to remember is that, on paper, there might be the one particular company who's responsible and has that contract; in reality, it could be another. So, unless you actually have access for trade unions to be able to go in and talk to the workforce in an open fashion, nothing is really going to change. So, there are gaps there. There are gaps in terms of the funding.
The other thing I would say is that, as we gradually start reopening other sectors that are currently being closed, if the responsibility is going to be on the local authorities, they're already struggling, and HSE is struggling; there's only about 120-odd HSE staff in Wales. I can tell you that because, as an ex-officer of PCS, it's the area that we unionised and organised. And they are struggling already, and a lot of the advice that they tend to provide tends to be over-the-phone advice. So, if things are going to change, you need to have workers to feel confident enough to report things and that something gets done as a result of it, and they don't end up being blacklisted and be out of a job because of the fact that they spoke up. And the only way that you can do that properly is to make sure that there's access to trade unions and they're unionised.
Helen Mary, we've just a few minutes left in that session, so if you've got more—
Thank you, Chair, and welcome to the witnesses here. So, my question to you is: what thinking needs to be done in order to prepare employers and employees for potential new work practices that may need to be adopted as the lockdown eases?
Some of these may have been covered, but if there are any other points that you want to be added to that. Mike.
Chair, I would just say that we need to start getting employers to embrace social partnership in all its glory. The opportunities that employers can draw on from trade unions, with their experience around health and safety and working practices across a number of industries, would be invaluable to them, if they would only embrace that. And that's why the Fair Work Commission actually suggested that greater access to workplaces would be of benefit here in Wales. I think there are lots of examples of where we can show that that has worked in the last few weeks, but if there was one thing that I would be asking employers to consider, that would be it.
Okay, thank you. And how and when should Governments be starting to plan for an economic recovery from the impact of this coronavirus?
So, this is about coming out of the current situation as well, Peter, if you want to address that.
I think it's imperative we do that, to be honest with you, Mohammad. I think the problem we do have is we're in great danger in Wales of losing the majority of our manufacturing sectors, and that's realistically where we are. I think we should be in a place—we should be working with companies, like you're having with Airbus with the new building you've put up there, which is now fantastically making 15,000 ventilators. I think we should be looking to do more things like that, innovating. Realistically, we want the next wing of the future to be built in Broughton, because if that's built in Broughton that secures tens of thousands of Welsh jobs.
I think it's how we're working and linking with the bigger companies and the smaller companies and the medium-sized businesses—how we can link in with them to make sure we've got a manufacturing sector with a highly skilled workforce in Wales. Unfortunately, we've got firms closing at the end of this year. That's another 1,500 highly skilled jobs out there. There are not going to be as many jobs if we're not careful, so we need to be planning, we need to be training, and also, maybe, we need to be the Welsh voice of making sure that bigger companies want to stay in Wales. British Airways made an announcement that they're making 12,000 people redundant. We don't want that new hangar that has just been built in Cardiff not to have the maintenance there any more. Obviously, that's got a knock-on effect in Blackwood, it would add a knock-on effect in Llantrisant, and with GE Aviation as well on the back of it.
So, ultimately, we've got to be planning and going to talk to those bigger companies to make sure maybe we can give relief or maybe we can give them more tax breaks—whatever it is—but we need to be making sure that Wales looks the most attractive place, and where we've got the best, highly skilled workforce in Europe so that companies want to come and base their products here in Wales. That's where I would be, and make sure we're singing that loud and proud, because if we don't do that, there won't be any manufacturing jobs left in Wales for our kids and our kids' kids if we're not careful.
Thank you, Peter. I admire your feeling on that. My final question is: what long-term changes would you seek to the economic approaches of the Welsh and United Kingdom Governments in order to respond to issues highlighted during the coronavirus pandemic?
Chair, I think the last five to six weeks has pushed us into embracing a lot of the working practices that both the TUC and individual unions have been asking employers to embrace for a long time: flexible working and the use of new technology like this. I actually said to my boss recently, 'I won’t be heading any time time soon up the M4 to London for an hour's meeting any longer. This is the way that we should be working.' The impact on the environment has been beneficial because of the way that we've adopted new working practices. So, I think flexibility and the introduction of new technology are just two things that I think have been forced upon us to a large degree, but we should be embracing them for the future.
Sorry, I think, realistically—. If you look at greener energy, a few years ago the UK Government decided not to build the Swansea tidal lagoon. Realistically, I think we should be looking—. Maybe that should be back on the table. We know oil prices are dropping through the roof. We've got grave concerns about what's going to be happening in Milford Haven and the economy down there. I think it's about time we took responsibility back as a Welsh Government in saying, 'Look what potentially we could have'—especially to be green in future, to be honest with you.
Do any of the witnesses want to make any final comments that perhaps have not been drawn out through the questions today at all?
I just wanted to add that whatever happens going forward, there's been a lot of discussion about being flexible and then having this sort of approach. Some people are talking about simply freezing and then unfreezing the economy, and I think that's wrong. The economy at the start of the year is not going to come back, and even in the best-case scenario, the damage done at the moment is going to be pretty incredible and we really need to be quite—. Our planning should be characterised by us showing some humility, we need to be flexible, and there needs to be a willingness to act creatively to make sure that we're guided properly at all times by safety and the livelihoods of Welsh workers. That's what, fundamentally, we've got to do going forward.
Thank you all. If there are no other questions—. Peter, you want the last word. Peter.
[Inaudible.] To be honest with you, I think the Welsh Government should take a massive pat on the back here. I think through where you've been and the fact you're actually trying to make health workers in Wales safer than anyone else—. I've said it before and I'll say it again: that is a massive thank you from all the unions, to be honest with you, Russ.
Okay. Thank you, Peter. That's really, really good. If there are no other comments or questions, it leaves me to thank you all ever so much, because I know that you're all really busy and your evidence to us has been invaluable as we prepare our scrutiny session for the Minister for Economy, Transport and North Wales shortly. So, thank you ever so much for that.
We will send you a transcript of proceedings, so please do have a look at that, and if there's anything you feel you want to add to your evidence, then we welcome receiving that as well. So, thank you all and stay well and stay safe. Thank you.
Thank you too.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(ix).
that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(ix).
Cynigiwyd y cynnig.
In that case, I move to item 4, and under Standing Order 17.42 would resolve to exclude the members of the public from the next item. Are Members content? Thank you. In that case I'll pause to allow that to happen.
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 16:14.
The public part of the meeting ended at 16:14.