National Assembly for Wales

Bore da. Good morning. I'd like to welcome Members, and Members watching, to committee this morning. I move to item 1. In accordance with Standing Order 34.19, I've determined that the public are excluded from this committee meeting in order to protect public health, although this meeting is broadcast live on Senedd.tv and can be watched back. A Record of Proceedings is available in the normal way. If there are any technical issues with my connection, then we've previously agreed that Joyce Watson will stand in until those issues are resolved. We don't have any apologies this morning; we have a full house of Members. Suzy Davies is due to join us again shortly. If there are any declarations of interest, please say so now.

In that case, I move to item 2, and this is the third session of our inquiry into COVID recovery, and it follows on from earlier work that we did before the summer on the initial impact of the pandemic. This morning we have business representatives, and I will ask them to introduce themselves. The first on my screen is Amy. Would you like to introduce yourself?

Yes. Good morning. I'm Amy Bainton, external affairs adviser for the Federation of Small Businesses.

And Leighton.

Leighton Jenkins, head of policy for the Confederation of British Industry Wales.

Lovely. I don't know if you've prepared anything just to give us a broad overview to start with, before we go into some lines of questioning. If you have got something you would like to say at the beginning, then perhaps set that out now. Amy, would you like to go—? Leighton, you go first.

Okay. Thank you so much for inviting us to give evidence this morning. I think it's fair to say that it's been an exceptionally challenging time for everyone, and the CBI's thoughts are with the health service and front-line workers. It's also fair to say that the CBI's work has been completely dominated by the immediate needs of members. Our horizon is today, to prepare for tomorrow. So, medium and long-term thinking has taken place, but it's not as granular as we'd like it to be, and I think that's a genuine issue around the bandwidth of our members in terms of your and other Government engagement.

Briefly, on the new announcements by the Prime Minister and the First Minister, I think they're absolutely right; the CBI supports that. Anything that limits the spread of the virus is obviously a priority, and public health and the economy are different sides of the same coin. Consumer confidence won't return until there is confidence that the economy is safe. But we need to, obviously, avoid a second lockdown at all costs—that would be devastating for the UK economy, and particularly for Wales. The £500 support that the First Minister announced last evening was very welcome, and we would just encourage, as we have been doing for several months now, UK Government to move on statutory sick pay, because that is a critical issue for those businesses who cannot afford to provide their staff with money to self-isolate.

I would just finish by saying the biggest concern we had with the announcement yesterday is the six-month timetable. We need to, obviously, put health first, but minimise that as much as possible, because that is a great worry for us in terms of the consequences, the recession and the impact of Brexit. I'll stop there—I could go on, but I'll stop.

That's a really helpful overview, Leighton. There are a few questions I've even got myself on that, but I know that other Members will probably want to jump in. I wonder, could you, before I come to Amy as well—? Do you think we fully understand the economic consequences of the pandemic yet, or are we at too early a stage to make that assessment?

There are certain things we do know. So, the 20 per cent shortfall in gross domestic product in quarter 2 was, we know, unprecedented. I think the 1700s was the last time that it was worse. The CBI's economists have seen an initial increase in consumer spending in April through to August, but we're seeing it flatline again, so we don't know what that will mean in the future. But, frankly, beyond that, the outlook depends on the path of the pandemic. We're a little bit in uncharted territory. Social distancing will obviously mean firms are operating below capacity, and low consumer confidence will restrain demand. So, the consensus forecasts that we've reached out to economists across the world to look at the UK's unemployment forecasts—. It looks around 7 per cent by the end of 2020—unemployment levels—and then falling gradually thereafter.

I think this heightened uncertainty implies a risk of economic scarring, a long-lasting legacy of higher household spending and saving, and what does that mean for the labour market? I think there are also the concerns around trade friction and how that could impact the economy if we don't get a deal. But probably speaking in terms of productivity of firms, which is a critical issue for Wales, as we know, there are just too many unknown unknowns, if you like, for us to predict at this stage how that will be impacted. 

Thank you, Leighton. I know others will want to come in on some of that as well. Amy, would you like to give an overview from your perspective?

Yes, absolutely. Thank you for inviting us to take part today, and, obviously, I'd actually echo Leighton's points about how, during the course of the pandemic so far, our thoughts are continuing to be with key workers and everything that they have done.

I think we all know that the biggest challenge that businesses and the economy in general are facing is just the massive amounts of uncertainty that are facing us over the coming winter, which predominantly does come from the fact that we don't really know what impact COVID is going to have over the coming months and the extent to which measures might need to be increased in certain areas and the impact that that will have on business.

That does take place in a wider context also, because businesses might also be looking ahead to any uncertainty around Brexit and what that could mean for them, but the much more immediate impact much more close to home is the idea that furlough schemes are ending in six weeks' time. So, there is a huge amount of uncertainty facing a lot of businesses, who will be facing some very significant and quite difficult decisions in the coming weeks.

All of this creates a real danger that businesses will feel they need to hunker down, protect what they can for as long as they can and move away from plans towards growth, and just tread water for as long as they feel that they are able to and just weather the pandemic. But, of course, the big problem with that is—and this has become a more difficult question to answer in the last 24 hours, because the shape of the recovery and the length of the recovery seem to be shifting all the time. So, something that we thought might have been a three-month recovery this year and that idea of a V-shaped recovery have clearly not been the case for many firms. But with the suggestion that some form of restrictions might be necessary for six months from the Prime Minister, that again pushes back that timeline of how businesses can view recovery and what that could look like for them. So, if we were to put it in a word, it's 'uncertainty', it's not knowing what to do, and the difficult decisions that businesses will make for their firms as a result.

Just before I come on to Helen Mary, there's a point about the six-month period that I think certainly the Prime Minister, possibly the First Minister, alluded to—I think there is an expectation that we've got a six-month period of more restrictions, and in one sense, I suppose Leighton was pointing out that that could be difficult, and then, Amy, I noticed you pointed out that there's a lot of uncertainty. I'm just wondering whether saying six months, and Government perhaps believing they were being upfront with people and saying, 'Look, we're in for the long haul here'—it does bring certainty, but that also perhaps brings a challenge as well. 

I'm with you on that. For businesses, it's never been more difficult to plan your next six months, your next year, your next month, frankly. If you're a business in Caerphilly or one of the other areas in south Wales that's had a local lockdown implemented, you've had a massive change in the last few weeks. So, that idea of planning and that idea of certainty that we all know businesses really do need in order to not just survive, but, as I said, try to grow, try to create more jobs, try to invest—I think many businesses would feel that that's just not on the table for them at the moment, and it is about consolidation and protecting what currently exists rather than seeking to grow it any further.

Sure. Right, I'll come on to questions from Members. I should say that this is a free-flowing discussion, so this is all about drawing out what you want to tell us, really. So, the floor is really yours this morning. We're not here to challenge you, we're here to understand your views and ideas, so thank you for that. Helen Mary.

Thank you, Russ. Good morning to you both. I want to focus in my questions on what you think the Welsh Government can or should be doing at the moment. So, what is the next phase? Whether the six months is official Welsh Government policy or not, it's context, isn't it? What assistance do you think the Welsh Government should now be providing for businesses? Of course, we have got the £500 for low-income workers if they have to isolate, which I'm sure we'd all welcome. Do you think they should be targeting particular sectors or sizes of business, accepting that their budget is limited? What sort of support do you think would have the most positive impact?

Leighton.

I think there are three immediate challenges that we need help with. There's the economic support, there's workplace safety—and I can send you a note on this if this is easier; apologies for not giving it to you earlier—and then the third one is the economic enabler, which is what we're calling it.

So, economic support, really simple—we need a successor to the furlough scheme, otherwise it's going to be potentially grim, the next few months, in terms of job losses. That's what our initial Welsh survey data suggests, but only time will tell for sure. And that's particularly around Alyn and Deeside and Aberconwy. The second thing is around viable support for anchor companies, so Project Birch. I know this is UK, but these are the pillars that we can't do without. Welsh Government support is welcome, but without furlough, without Birch, I think we'd be in a very awkward place.

And then the other thing is around workplace safety, so I'll just say these and you can ask me more: test, track and trace, statutory sick pay, as I mentioned, local lockdown, flu vaccine. And the economic enablers: schools, childcare, public transport. And then there are the short-term requests—immediate and short term. So, for the short term there are primarily four: the top priority is job creation; investing in the green economy; kick-starting demand; and then there's a sectoral bit around how you ensure the support is sectorally and regionally balanced to ensure an equitable reopening of the economy.

Before Amy comes in, just in terms of a furlough mark 2 or—[Inaudible.]—how would the CBI like to see that work, Leighton? Are you thinking in terms of sectoral support for businesses that are most affected? Any further thoughts on that?

I think we have to work with what the UK Government are prepared to accept.

Hold on a minute. Hold on a sec.

Oh, sorry, Russell.

It's all right, carry on. Sorry. Carry on.

It's okay. So, I think we want a blanket, short, flexible working system, like 50 per cent of normal hours worked and the cost of that split in three ways, so employer, employee and Government—a bit like the German scheme, which we're all familiar with. That's what we'd like—a blanket approach if possible.

Thank you. Amy, what support do you think the Welsh Government should be providing particularly? 

I guess one thing I'd like to preface this with, and I'm afraid I'm probably going to sound like a broken record throughout this session, is to just make the point that, again, the notion of recovery has changed quite significantly, and I think the thinking on this is going to have to be as flexible as it can be, and I appreciate that's quite a tall ask in terms of getting staff out the door by Welsh Government. But I think we perhaps do need to be prepared to think about how support can be as flexible as we can make it to deal with the fact that this situation is just changing at such a rapid pace.

There are a few specific things that we've noted that we think would be necessary. The first is, in our report 'Reopening Wales' there's a tourism hibernation fund. I'm sure many of you have heard from constituents, but we've heard consistently from members that tourism firms feel that they're facing three consecutive winters, because they came out of their hibernation period in March, were made to close for a big chunk of what would have usually been their busy summer season, they'd just got back on their feet for a little while, but now we're facing the bad weather coming back in and firms looking that they would need to shut down for the winter again. Whether they've made enough money over the summer to sustain that in the normal way is a really big question, and I think we can all perhaps suspect that, in many cases, that won't be the case. And those firms, in order to be able to mothball, keep their staff and come back in March next year, are going to need support from Welsh Government. What we've suggested is a package of grants and loans—loans that could perhaps be offered through the Developmental Bank of Wales at a preferential rate than can be repaid once they're back in what would hopefully be that profitable part of 2021. And it is just about helping them see themselves through the next few months and hopefully come back at a time when they would be able to experience a much more profitable spring and summer 2021 season.

A couple of other things we've noted is the need for support for high streets. This is perhaps something we'll discuss later on, but the idea of what a healthy high street looks like is going to have to change dramatically, because in so many of the conversations we've had in recent years, the idea of a healthy high street has been of a busy, bustling place, which many people aren't going to be comfortable with in the near future. So, that's something that we need to accept—[Inaudible.]

Okay, welcome back to the Economy, Infrastructure and Skills Committee. Apologies for those who were watching; we did have an IT and broadcasting issue, but we're hoping that this is now resolved. We will review the Record of Proceedings and, if we miss something, then we'll ask our witnesses to clarify, if the connection issue dropped out. Helen Mary, you were in the middle of asking questions, so I'll come back to you. 

I think Leighton was just about to make some additional points. We were talking about pre-emptive; you were saying, Leighton, that—[Inaudible.]—might mention.

Yes. Very briefly, just to say that, in May this year, the CBI and TUC submitted a joint statement to the Welsh Government on joint areas to respond to the pandemic, and one of those was a proactive approach to health and safety enforcement of the COVID regulations, and we met last week, the first national health and safety forum of social partners, and I think we're both very keen to work together to try and look at high-risk sectors and make sure we can intervene before NHS needs to intervene. 

Thank you. 

Helen Mary, had you finished your line of questioning? Yes, lovely. Okay. In that case, I'll come to Hefin David. 

One of the things that the Welsh Government has talked about in terms of structural change in the longer term is more people working from home; in fact, it seems to be the Welsh Government's big idea. What do you think?

Who'd like to go first?

Well, Leighton, you said—[Inaudible.]

I'm trying to stop you hearing the scrap iron van in the background. This is part of the problem.

I'm happy to go to Amy, if you want to. 

No, it's fine. Just to say that we agree with hybrid working. We support that, as I've said before. Obviously, it needs to be equitable and there needs to be a discussion between the employer and employee, and there are issues around digital, and there are also social issues around people who want to come back to the office. So, it's a balance. 

[Inaudible.] Again, we're really interested in what a Welsh Government strategy as regards remote working could look like. Our experience with our members is that many of them obviously were forced to adapt very quickly in, certainly, less than ideal circumstances, but many were actually really surprised about how well it's gone, and we've heard lots of examples of businesses that might actually not return to their offices, because they've been able to help their staff transition. That said, there are also lots of other business that the working-at-home set-up just isn't for them, for whatever reason, and they will be heading back.

So, I think it's about supporting a mix. For us, it is about remote working, so that's working from home, working in hubs away from central offices and, indeed, working in offices as well, and just supporting that mix of businesses and perhaps mix in how people spend their week as well—so, it could be that one person spends a day in the office and a couple of days away—and just helping businesses to look at the skill sets and adaptations they would need in order to facilitate that successfully. 

What I'm hearing is more towards the latter of what you said, Amy—people less comfortable working from home. And the context of this is that the Welsh Government announced this encouragement of home working, looking for 30 per cent of people to be home working long term, as Caerphilly was going into what was termed a 'lockdown'; it wasn't quite a lockdown, but restrictions being introduced. I was uncomfortable with that, because the people I was speaking to were desperate to get out of their homes and to get back into work. Is there any evidence, research evidence, that's been done to estimate how many people have said that they would take up opportunities and prefer opportunities to work from home or in the community?

Sorry, I saw that Leighton put his hand up, but I wasn't sure if it was okay for me to just—

Do you want to—

Amy, you go on then. If Amy finishes her point, and then Leighton. 

I think that—. I completely agree with the point you make. If you were somebody that perhaps didn't want to work from home and were forced into it by circumstance, you're probably at a point where you feel like you've been doing it for a very long time now, and you might be really keen to get back to an office. In terms of a target from Welsh Government, I think that's not really going to resonate with business. They're looking at their own particular needs and how it could work for their staff, and what changes or skills or training they might need to provide in order—

Are you aware of any research on it, though? That's the question. 

Sorry, my next point was going to be that we have looked. It's a little bit too soon to have any kind of specific data, but it's something we're working on and looking for in the next few months. 

Okay. Leighton.

So, the—[Inaudible.]—staff surveys consistently show our employers that most people are okay with working from home, but they don't want to do it 100 per cent of the time. But there are issues that are exceptional in this period. It's a pandemic, kids at home, so it's difficult to measure remote working with those externalities. And the other thing I would say is that, actually, there are structural problems—public transport capacity is significantly down; the 2m rule, which we support, limits capacity in offices. So, even if employers wanted to, there's a limit to how many people they can have in the office. And some are doing a kind of rota system. And you have to research. We'll share with you a connection we have with a consultancy that's doing some work on this right now. They did a meta study of meta studies over the last 20 years about remote working and what works, and they're currently looking at this issue. 

Can I say, Leighton, I've spoken to different policy makers, and some of the assumptions they're making are based on a long-term assumption that there would be fewer people travelling to work? So, their transport and travel and road policy assumptions for the future—still assumptions at this point—are based on fewer people on the roads. Could they be grossly overestimating the impact of those kinds of cultural and structural changes?

In the short term, yes, because we'll have to monitor this week by week, but we've seen that the Google, Apple and TomTom mobility data has all indicated that road use, car use, has significantly increased. The information from our members—certainly car sales, second-hand car sales in, I think it was, July of this year, were 20 per cent up on July last year. So, people are saying, 'I don't want to go on public transport; I don't feel safe.' Whether that's legitimate or not, that's what was the decision seems to be, so they're shifting into the car. But it looks like, at the moment, we haven't seen traffic jams because people are working at home, so it's kind of compensated. But, if the pandemic continues, then the road will remain more dominant. But, if there's not more capacity on public transport, then people will have to work remotely. 

And what I would say on the remote working, the hub element, we would really like to see the private sector, big businesses, providing some desks for civil servants as an option as part of that hub, to have that kind of dynamic exchange between Government and business. 

And no Government has ever legislated for flexible working; they've legislated for family-friendly working, but never legislated for flexible working—of any political persuasion. So, it would be a big change for a Government to do that, wouldn't it?

Well, it depends what you mean by 'legislate'. I think, ultimately, this is an employer decision. I think Government can incentivise. It may decide to penalise. It was planning to penalise, for good reasons, in terms of the environment, with the Cardiff congestion charge. So, I wouldn't want it to mandate a 30 per cent target for all businesses. That would be wrong, because all sorts of things change from a business cycle. But incentivising, encouraging, enabling, disincentivising—that's the right role for Government, I think. 

And Amy, do you see any other significant structural changes, perhaps sectoral changes, as a result of the long-term impact of the pandemic?

Yes, there were a couple of things that I wanted to mention in addition to remote working: one that I've already touched on—the future of the high street and how that can look and what a healthy high street can look like in the future. In addition to what I've already said, one thing that we have looked at quite a lot, and we published a paper on it a little earlier in the year, was the idea of repurposing public spaces. So, we initially thought this might be a very short-term measure to help those businesses that—you know, if you're a cafe, you can't have the same number of tables or seats as usual, because you've got to make sure that social distancing can take place in your premises, but how can you still make sure that you can make the money that you need to to make your business viable? So, we talked about the temporary use of outdoor public spaces for those businesses to spill out into the street, the park, the green space around them, whatever that might be, which we do know is happening in certain places. We did think, initially, that this would be very short term, because it's not really compatible with the winter, but, if we are looking at more of a six-month timeline, then this could be something that we think about as the spring comes around again and businesses can look to make use of those outdoor spaces once more. It's not, perhaps, a permanent change, but it could be slightly more longer term than we would look at, and we've seen some really good work from the ministerial action group on towns, who have made £9 million available to look at doing that, and they've brought a really good group of stakeholders together. So, again, that's perhaps just challenging that idea of what we all thought a healthy high street or a healthy town centre might look like in the future.

And then the other one—

Can I say, one thing with doing things like that—and I'm thinking particularly of Caerphilly town and also Bargoed town centre—if you're going to start doing things like that, you've got to change the road network around it, and it's often not a simple, straightforward decision for local authorities or Welsh Government to do it, because they can generate huge public opposition in changing existing road routes. So, it's not just a bright, happy approach that will improve our town centres; there are very real consequences for connecting road networks. 

Yes, absolutely, and something we've said quite strongly is that this can't be an approach that's taken in any other way than by the local people who know the area and know what could work and what couldn't. I know that Caerphilly County Borough Council—because I live here—have undertaken a bit of a pilot. So, Risca, the town I live in, has set out areas outside of shops, taking over a little bit of the pavement and a little bit of the parking bays, to give every cafe on the high street a bit of extra space. And I think they've trialled that in a couple of other towns in the borough as well, just to see how it goes. But I think it's a really valid point, and I think the key there is that this decision can only be made by the people who know the local area and know that, 'It might work here, but it won't work there, so that's where we won't try it.'

Leighton, you wanted to come in there. 

Yes, sorry, very briefly, just to say you're exactly right. We've done some very basic, rudimentary analysis of Google mobility data at a local authority level over time—so, the beginning of the pandemic to, I'd probably say, July. I would say that, in the Heads of the Valleys—Caerphilly, Merthyr, Torfaen, Rhondda Cynon Taf—a large percentage, around 50 per cent, continue to travel to work because of the nature of the jobs they have. So, this has to be on a regional basis and respect the fact that some people will have to go to work and continue to go to work because of the nature of their job, and that will be higher in other areas than in Cardiff, for example. 

The other structural change I would just like to flag is around deglobalisation and the reshoring of supply chains to build up resilience. I think that's a big issue. The Japanese Government is incentivising that. That would be nice to see at a UK or Wales level. But, just to be aware that, when people do reshore, it won't be the old businesses we remember; there'll be high levels of automation, which we need to factor in. 

Thanks, Russ. 

Thank you. Amy, just to give you another opportunity to add to this discussion on home working, in terms of the consequences for the high street, is there anything else you would like to add in terms of the knock-on effect for small businesses that may be affected if there's a higher proportion of people working from home?

That's something we're really interested in, the idea that, if more people are working at home, and are therefore perhaps spending much more of their day and their week in the town that they live in, for example, rather than commuting into a different space—whether that is something that can benefit the businesses on the high streets that they live near. Again, it's perhaps one of those things that we're keeping a really watching brief on but it's a little too soon to say.

I suppose my question was more about the disbenefit, perhaps, to businesses that are built up around working environments where there are office blocks and offices. So, perhaps there's a shift away from those businesses to perhaps people going to businesses in their local high street. But it's going to be a huge shift, surely, in where people go out for a coffee or a bite to eat if they're moving away from their office block.

Yes, quite possibly. You've got businesses that will be really concerned about what that could mean for their future if their model is based on an office—a large office, or things like that. And that is a particular area of concern. Similarly, there could be an opportunity to exploit that, in terms of people working at home during the week, and so those businesses that wouldn't have ordinarily benefited from passing trade through the working day—perhaps spreading that out into our towns. But it really is conjecture at this point—it's just too soon to say.

And just ever so—Joyce, I'll bring you in in a moment. Just ever so briefly—no need for a long answer on this—in terms of those areas of Wales that have gone into lockdown, is any extra support needed for those particular areas, in terms of Welsh Government support?

Yes, absolutely. This is something that I was perhaps looking to bring up a little later. We think there probably is going to be a case for extra support. FSB have made that call for the new Wales-wide restrictions—that there does need to be another look at financial support for businesses. In terms of the local lockdowns, depending on what the restrictions might be in that area, I think it's very possible that we will at some stage need to ask for increased support.

Have you got any particular ideas about what kind of package that should look like in terms of areas that have specifically gone into a 'local lockdown'—in inverted commas?

If we just take the local lockdowns that we know about for the moment, there, all the focus is on earlier pub closures and travel restrictions. We're concerned that, as we head towards Christmas, there could be issues with high streets that might rely on people coming in from a slightly different area, or people that would head out to do their shopping that have been affected by consumer confidence issues. And so there could be a need for increased business support, as we've seen earlier in the year. Again, I'm sorry to be a broken record and to say that it's too soon to say. We think there's likely to be a good case that we'll need to ask for further financial support for those firms. But as for the moment, we're looking at Caerphilly businesses particularly, just to see how they've handled the first two weeks.

You haven't got anything specific in mind in terms of how those packages should look, other than saying that you think the Government needs to address some specific support for those areas—is that right?

Yes, not immediately. That's something obviously we'll be happy to share as soon as we have that.

Thank you, Amy, we'd appreciate that. Joyce Watson, you wanted to come in.

A very quick question. Of course, if we end up with lots of office blocks empty, we're also putting at risk our pension funds for the future, because lots of pension funds are invested in office blocks, and that's a fact. I don't expect answers now, but do you know of any work that's being done to look at that particular issue? Because that's a live issue that's going to affect everybody, regardless, really, of whether they've got a business or an office block on the high street or not.

Sorry, I'm not aware of anything currently, but that's certainly something we can try and find out about and share it if we do.

For the CBI, yes, we are doing some work on this. I think it's very important to remember that 60 per cent of people, we predict, are still going to work from the office, at least three days a week. And the office will change—it won't go anywhere. So, already we've got one business in Cardiff who is using the downtime to really reconfigure his office into a creative space, to allow employees to come together. I think the rent will continue to come into those businesses, but we need to support a pivot to the new normal. I think there's a balance to be reached between supporting businesses that, in the long run, are not viable, and we need to be brave about that. But in the short to medium term, I think this holding pattern until we get a vaccine is how we need to respond.

Thank you. If it's okay with our witnesses, we'll run over just by a few minutes to about 10.50 a.m. We've got three areas and three Members who want to come in with questions, so if I allocate about five minutes to each Member's section, I think that will take us up to about 10.50 a.m. So, Vikki Howells.

Thank you, Chair. So, with the redundancies that we are seeing and people also wishing to change their working patterns as well, there's likely to be a big impact on skills demand and the investment required in adult and workforce training. So, I'm interested in both of your views, really, on how you think the Welsh Government should address that, as we move forward.

Who would like to take that one? Amy.

We were both being very polite there, weren't we? I think the volatility that is in the market at the moment requires a flexibility in the skills system and it accelerates the need to perhaps fix the problems that existed before now. For example, access to digital skills and training was something that was on our radar before this, and the pandemic has really accelerated that. I think it's important, from the small business point of view, to take into account the training needs of the business owner and perhaps the skills needs of their employees, so to think about that slightly separately. Historically, we did a report called 'A Skilful Wales' last year, and we found that only a third of small and medium-sized enterprises had a formal training plan and only a fifth of SMEs had a budget attributed to that. So, again, this is going to exacerbate an issue that was already there pre-pandemic and that's something else that we need to bear in mind.

We know that management skills are going to be really important in the coming months. We've talked about remote working. If you're a manager that's previously managed a team based in an office, and you now have to manage that team at a base across Wales or working from home—that's quite a different skill set and that could be something that we'll need to support business owners and business managers with. 

When it comes to employees, obviously I've mentioned digital skills but also innovation, because that's something that we're really worried is going to slip. As I said earlier, as most businesses hunker down and don't prioritise growth, they might need some help kick-starting innovation when they feel that they're able to.

And something else that we've been discussing and concerned about recently is the loss of experiential learning in the last—. It's quite possible that this year experiential learning is going to be out of the question for the entire year, and that's a real loss, both to the learner but also to the business that benefits so much from that. So, we'd really like to see some work with further education and higher education just to look at how—is there a way we can try to fill the gaps, digitally, if possible, in the meantime, but also what can we do afterwards to pick up the pace and start accelerating to fill the gaps that are missed?

So, I'm going to say what I want to say, unless someone wants to go back to Amy—sorry.

No, that's fine, Leighton.

Great. So, there are four issues that we want to see: devolution dividends to the UK schemes like the Kickstart scheme—and I think the economy Minister has said that he would do that, which is very welcome—I think we need to expand Working Wales and ReAct and scale up the Parents, Childcare and Employment scheme to increase the speed at which people can move between roles and sectors to match emerging demand.

Thank you. And can I just say as well, and I'm wondering—and I deliberately didn't put this into the question because I've discovered that nobody ever mentions regional skills partnerships unless you throw it out there. So, now that neither of you have mentioned them, do either of you think that there is a role within this for regional skills partnerships and if not, then, candidly, why not? We'll maybe go to Amy first on that.

So, if I can respond to that. One of the structural issues that I didn't get a chance to mention was the idea that regional economic development can change and we know that there are going to be—the regions of Wales are going to be impacted differently by the effects of the pandemic, and that leaves a really important space for the RSPs to step into. We know that they're trying to move away from a one-size-fits-all approach and, actually, this is an opportunity to really work with the RSPs and empower them to make sure that they do feel able to really act truly regionally to answer some of these questions that are going to be completely different from one area of Wales to another.

Thank you. Leighton. 

Yes, several of our members are on the regional skills partnerships. They do find it of value. Again, I would agree with Amy. We're looking at the Organisation for Economic Co-operation and Development report that was launched last week, and we can send you a note on that. I think the economic governance issue needs to be embraced and the regional skills partnerships need to work within that new role. The CBI in 2016—our manifesto called for three regional development bodies for Wales with greater powers over skills. So, we'd like to see something like that. 

Thank you. That's it from me. Thank you, Chair. 

Helen Mary, you wanted to come in. 

Yes, just very briefly, Chair. I wanted to go back—Leighton mentioned the ProAct scheme, in terms of—. Do you think there might be a case for the Welsh Government revisiting the old ReAct scheme, which enabled businesses to pay workers while they were retrained, providing the business could prove it was viable? Might that be one tool that could be useful in the box, as we have to refocus the economy post COVID? 

I'm trying to be brief, so 'yes'. 

That's very helpful. Thanks, Leighton. Suzy Davies. 

Thank you, everyone. Fortunately, some of you have answered my questions already, or some of my questions have been answered. But I just want to go back to Amy's point that she made right at the beginning, and referred to just now, about this hunkering down and people drawing in the walls, rather than thinking of innovation. You mentioned it, then, later. In terms of management, and you mentioned, of course, that management skills themselves are something that need to be looked at now, what should we be expecting of our managers in our existing businesses about looking forward and learning lessons from where we are now? And who should be helping them to do that? 

If it's okay for me to come in—?

By all means. 

One of the things that we mentioned in our 'Reopening Wales' report was that there was going to be a growing need for business owners to access updated management and leadership training, and we identified a bit of a need for Business Wales to step in there and help them identify what they need and where they can access it, what kind of training providers they should be working with. Because, as we've said, as we've all identified, if you've removed your business to home working, and if you're going to be staying like that over some time, which it looks as though we are, that's going to change your role as a manager dramatically, and that might be something that a small business owner has never had any experience of before, and they don't have experience in other roles to draw on. So, I think the ability to access that—. Business Wales, in all of the research we've done, is the most well-recognised business support provider in Wales. It had about 60-something per cent of favourable recognition, and recognition that it's the first place to go. So, it makes sense to us that Business Wales is, at the very least, the first port of call to provide the signposting on that.  

Would you agree with that, Leighton? I'm thinking the risk is that businesses will focus on themselves and wonder what on earth they can do to stay afloat and possibly change for things like homeworking, but they're competing in a world of complete uncertainties, where we started this conversation today. How realistic is it for us to expect managers of private businesses of all sizes to be able to innovate when they don't know what they're going to have to innovate for? And, again, is there a space for Welsh Government, whether it's Business Wales or some other route, to help with that?

Yes, I think you're right. That is happening a lot. People want to keep—. Employers want to keep good staff, so they would rather do that and do small innovations around primary markets, than serious innovation that would require them to cut staff in order to be able to fund it. I think there is a long-standing issue around management qualifications of British senior managers. I think it was—. We don't appear favourably within the European Union rankings. So, obviously more support would be great. But what I'd like to say as well is that the CBI runs weekly chief executive officer round-tables and bi-weekly, fortnightly, human resources director calls, and there are about 50 or 60 people on each call. And they're sharing best practice, they're discussing mental health impacts on themselves and also the workforce. This is a once-in-a-century event, and it's a very complex set of responses and needs that chief executive officers and employees have.

Okay. Well, in the few minutes left, what do you think should happen to make sure that our businesses can take advantage of opportunities that they've discovered in the course of this pandemic? You may want to talk a little bit about green recovery and what you think that means. I don't mind who starts.

Okay, I'll begin; we're being too polite. So, in terms of green recovery, I think we have written to the First Minister to emphasise this a few months ago. I think we have got around six priorities, and that's around low-carbon electricity generation and investment—we're seeing Wylfa, off-shore wind and tidal—looking at electric vehicles and networks; looking at digital broadband, autonomous technologies; energy saving retrofitting; looking at carbon capture; looking at hydrogen; and supporting UK aviation to develop sustainable models of fuel. We'd also like to back the Future Generations Commissioner for Wales's five calls for shifting to a low-carbon economy.

Okay. I didn't hear the words 'foundation economy' in there, which I presume is part of this, but maybe that's something for Amy. I don't mind.

Just to say, on the foundation economy, you need an economy for which the foundation economy needs to feed off, if you like. But we support the foundational economy. It definitely has a role.

Okay. Thank you.

So, just to add a few points to what Leighton said about the green economy and the foundational economy, I think you've hit the nail on the head there—there is a danger that things that are so important, such as decarbonisation in Wales, get a bit knocked off course by the fact that businesses and the economy are just trying to survive, and that's something that—. We actually hosted a webinar with our members just last week to talk about some of these issues and trying to keep them front and centre wherever we can. There are some opportunities that we would see. Facilitating decarbonisation in existing housing stock is a really big opportunity for SMEs, and that's something we'd really like to see pushed forward.

Similarly, investment in infrastructure, which brings in some of that foundational economy bit of the conversation. We know that many of our businesses would like to look at electrifying their vehicle fleet in the next few years. That was certainly the case pre-pandemic, when we last asked them that question. But, obviously, this is only going to be possible if the charging infrastructure exists. So, there's a role for Welsh Government to step in and make some investment in how businesses can think about the future of their firms.

There's also improving the public transport networks so that that's more of an attractive proposition—so, broadband on trains and things like that—and I think some of that work has been prioritised while the networks have been a bit quieter over the last few months.

Okay. Thank you very much, both of you, for that.

Thank you, Suzy. Helen Mary Jones.

Obviously, the pandemic has affected different communities and different sectors of the community differently in Wales. How do you feel the Welsh Government's proposals for a recovery should address these differential impacts of the pandemic on people and places across Wales, particularly in relation to those hardest hit economically, people with protected characteristics and areas of social disadvantage? Whichever one of you would like to go first.

Shall I jump in on this one first? I think that's a really important question, and it's perhaps important to note that many of the areas in Wales that have been announced as being in, if not local lockdown, then increased restrictions this week, are those same areas that face some of the more economic and social impacts of the pandemic already, and so what you're doing there—. That's going to create issues that I'm not the best person to—you know, I don't have the expertise to perhaps get into too much. But what I will say is those businesses there, once again—it's kind of like that starting-line analogy; that starting line for recovery is being pushed backwards for them once again. And that's where financial support from Welsh Government—or perhaps it needs to be UK Government, perhaps the firepower needs to come from there, but, within the resources that they have, that's the kind of thing that we would look for Welsh Government to provide support on.

If I can come in, Helen Mary, I know that Joyce Watson wanted to come in on this last section as well. Is that okay, if I come to Joyce and then come back to you, Helen Mary? Thank you very much. Joyce Watson.

I want to particularly focus here on people and places and people. People have been impacted differently in different ways, and all the evidence is showing quite clearly that the minority groups have been impacted somewhat differently by COVID, and, going forward, we need to ensure that we've got a more equal work balance. And the work-life balance, there is clear evidence in homeworking—and Leighton outlined some of the reasons for that earlier on—where women have gone back to the 1950s, because of all the things that they've had to cope with: trying to teach their children, schooling them at home, doing more housework. There's a raft of evidence out there. So, going forward and looking at how we realign our workforce in a way that doesn't add in even further inequality, what are your thoughts around that? 

I can go first, if you like. So, in terms of minority groups, absolutely, a vital question. We have encouraged our employers—but, to be fair, they haven't needed any encouragement—to support Black, Asian and minority ethnic people and more vulnerable groups more than normal, more than usual, and we can give you some great case studies around businesses that have intervened where they have protected and been told about domestic violence incidents and how they've taken their employee out of that situation and allowed them to continue flexible working. But, more generally, this is a vital area and we need to do more thinking on it. We'll do that in the next few months. 

Is there anything else you want to ask, Joyce, on this section?

Of course, there's another flipside: let's flip it to the possibilities for—. There was an item on the news just this week highlighting the potential at the moment for people who have different forms of disability where their home is adequately equipped for them to work at home and the office might not have been accessible to them in any case. So, there are always two sides to everything, and, for lots of people, it's been an advantage, not a disadvantage. So, going forward, in terms of your managerial skills that we just talked about and also upskilling people in terms of recruitment, are you looking at that, at the advantages as well as—because we've got to be upbeat here—the disadvantages for different sectors of the workforce?

The CBI is and we're very supportive of that. [Inaudible.]—best employee. This is where we think Government has a role in terms of setting an example of best practice, of getting the barriers out of the way so businesses can do that, maximise that and get the best person for the job—that would be great.

Perhaps if I could just add something very briefly, I think the point that you've made is really important there, because something we've always seen historically is that many businesses are started by people who might have otherwise really struggled to find a way to be included in the economy, and they've started their own business because they've not been able to access the opportunities that they should have been. I'm sure the pandemic might be another way to really make us think more about inclusion and participation within our economy, which is something we can all benefit from if we can really get this conversation right and make this start to work.

And I just wanted to make one small point on the things you said about management and leadership training; businesses supporting parents who have had to look after their children, or supporting employees that have had to have caring responsibilities, that level of HR support for a small business is perhaps a bit of a challenge. It's perhaps something they've never had to deal with before; they may not have a HR person or department. And that, again, is going to be part of that: moving forwards, what does management and leadership training look like? Because it could be something that a business has had to deal with for the very first time with no prior experience or support.

Thank you. Joyce, unless there's something else from yourself—. Sorry, Helen Mary, was there anything you wanted to add?

Yes. Very useful answers, but, just in terms of what we should be recommending to Welsh Government, is there anything you think that we should be saying to them that they can do to support the work that you've been talking about in terms of tackling inequalities? I guess, Amy, there's something in ensuring that any training that they're providing for managers includes that element. But is there anything else specific? There may not be at this stage.

Yes. I think the training point you've identified already is going to be a really important one, and helping managers and business owners understand what the workplace of the future could look like, given that that workplace could be many different homes, many different remote working areas, and how that can be a real benefit to them if that's how they want to make it work. But, similarly, for some types of business, it won't, and that's fine; they'll go back to what works for them too, but it's about making sure that businesses understand the options and can really take advantage of that wherever possible.

Thank you. Leighton.

Just to say: we'd recommend the Government pulls together organisations like Disability Wales, Stonewall, and those businesses—Mind Cymru—that look at mental diversity, neurodiversity, and actually work together so we know some pathways that we can share with employers for how they can go about supporting these employees at home. They do it very well, some of them, at work, but at home is different.

Thank you. That's very helpful.

Thank you. That does bring us to the end of this session. Can I thank Leighton and Amy ever so much for your time? We know that you're particularly busy at the moment, so thank you for your time. We will send the Record of Proceedings to you to check, and, clearly, if there's anything you want to add to that, then please do let us know. We'll particularly check the areas where there was a drop-out for a period, to make sure that we've effectively captured your evidence correctly.

But thank you for that, and we do also appreciate that this inquiry is—. Circumstances are changing during the course of our work, so if there's anything you further want to add, then please just do drop us a note as well. So, thanks ever so much, Amy, Leighton; we appreciate your time this morning. Thank you. And with that, we'll take a short technical break, and we'll be back in five minutes.

Welcome back to the Economy, Infrastructure and Skills Committee. I do move to item 3 in regard to our inquiry on COVID-19 recovery. We have a panel before us for our next session from the trade unions, and I will ask each of the witnesses to introduce themselves for the public record. So, if I come to you, Mike. Would you like to introduce yourself?

Good morning, Chair, and thanks very much for the invitation today. My name is Mike Payne. I'm a GMB senior organiser here in Wales.

Thank you. Peter Hughes.

Thanks, Chair. My name's Peter Hughes. I'm the Welsh secretary for Unite here in Wales.

And Shavanah.

Thank you, Chair. I'm Shavanah Taj. I'm the general secretary of the Wales Trades Union Congress.

Lovely. Thank you all for joining us. If I could ask you just to give a very brief overview, initially, ahead of some of the Members going into questions. So, I'll come to you first, Mike Payne.

Good morning, Chair. I will, as requested, keep my comments brief. I think it's an understatement to say that the last six months have been an extremely challenging period for us here in Wales, and despite a lot of positive work that's been undertaken with Welsh Government, our fears are, as the pandemic continues, that we're going to see mass unemployment, we're going to see workplaces become unsafe, there is going to be an introduction of precarious work, we're going to see lots of our staff that are currently furloughed laid off and made redundant, and in some cases, Chair, we're going to see businesses go to the wall for the want of cash flow to be able to keep their businesses just above the bread line.

We're also seeing impacts upon our individual membership, and it's worth, Chair, just me flagging this one point: that especially low-paid, part-time workers that have been on furlough at 80 per cent—we're starting to get some feedback that they've now been told that they no longer are eligible for benefits in the future. So, they will not even get statutory sick pay in the future. We're trying to clarify that. I've raised that with parliamentary colleagues as well to see whether we can get to the bottom of that. But at the moment, it looks as if lots of low-paid, part-time workers in the main are likely to be impacted upon unnecessarily because they’ve been put on to 80 per cent furlough.

Those are just a few issues, Chair, that we're starting to see, and hopefully we'll be able to develop some of those themes as we go through the meeting.

Thank you. That last point is quite significant. I'm sure that we'll want to follow up on that.

Peter Hughes. I should add as well that you have given us advance notice that you have to leave at 11:30, I understand. So, we completely understand that as well.   

Thanks, Chair. I think the biggest challenge facing the Welsh economy is, obviously, in 37 days, when the furlough scheme finishes. That is going to be a catastrophic blow to working men and women in Wales. And, obviously, the businesses are going to feel the brunt of that. There's going to be a tidal wave of redundancies. We've already seen the announcements of major anchor companies. For instance, Airbus—one employee at Airbus is worth six in the supply chain. I was giving evidence last week on 'Manufacturing Matters' with some of your colleagues, Russell, and the importance of manufacturing in Wales, what that actually means, and that means attracting anchor companies and how we're going to do that.

What we've got to learn from as well, though, is what countries are doing like Germany and France, where they're extending the furlough scheme, actually targeting and investing in people. I think that's the key to all this: how are we going to invest in people? How are we going to invest in skills and how are we going to develop our younger people? Because we're at a very worrying time in our economy where the younger generation are actually going to be a missed generation. We've got people coming out of getting degrees and they're happy to get work in a fast food restaurant now. There's no way for them to go into graduation schemes and stuff like that. That is a real worry—that we haven't got that anymore.

But the positive—I've got to be brutally honest with you—is that nine out of the 10 biggest companies in the aerospace sector have a base here in Wales. Nine out of 10. You wouldn't think that. But that's an opportunity for us. The advanced manufacturing centre that's being built in Broughton with Welsh Government money: we've got to take our hat off to the Welsh Government for what they've done and invested in there, but we need more of that research, we need more of that technology coming in. We need something on the M4 corridor with conductors and what the next generation's going to look like. We should be pushing for what we're looking at with the tidal lagoons, we're looking at the electrification of the railways, what the infrastructure will be like. Most importantly, we've got to believe in people in Wales. We are market leaders. We're market leaders with really good people and really committed people and we've got to make sure that that's the message that's driven worldwide so that companies want to come and invest in Wales. I think that's the key to it. We can't have an Ineos, who quite happily took the mick out of you and then walked away and built a factory in France. We need people to invest and believe in Wales like we all do.

Thank you, Peter. Shavanah Taj.

As my colleagues have already said, mass unemployment is a reality now, that we're on the cliff's edge as far as the job retention scheme going is concerned. I am happy about the fact that we have made positive presentations to the Chancellor at a UK level and presented him with some real options, but as far as the job retention scheme is concerned here in Wales, we know that at the beginning of this month there were still 120,000 workers in Wales who were benefiting from the scheme. Now, with furlough going, immediately those people are going to be impacted and we feel that it's extremely important now that we do start looking at job retention, job protection and the upskilling deal as well, and that's something that the Wales TUC and the TUC at a national level have been pushing for.

The good stuff as well is that as far as health and safety is concerned, the Welsh Government did some really good stuff to begin with. We've now seen that the new health and safety forum has also met for the first time and we feel that it's extremely important now that the approach to health and safety—that it actually prioritises the rights and well-being of a worker and that we don't simply just focus on the companies, because ultimately, when a pub is closed or where there's been a breach of a regulation and so forth, there needs to be appropriate, necessary packages in place for the individual. The workers more often than not are on precarious terms and conditions and when you don't have that one hour—if the area that you work in all of a sudden is going to close an hour earlier than you would have expected it to, or because at a particular workplace there's been an outbreak and therefore it has to shut down, what happens to that worker? Where do they actually go? How do they make ends meet on that particular week for the foreseeable future?

I'm also genuinely concerned that we're not really seeing any detail as far as companies that are making decisions about restructuring and possibly cutting jobs: what is the impact as far as the workforce is concerned? Is that being equally felt? Is it going to be the same people who are going to lose out as they did previously? We know that the pandemic has shone a real light on inequalities in Wales and we really need to be making sure that we are putting the appropriate measures and protections in place, and statutory sick pay is one of those. The fact of the matter is that the announcement today that we've seen as far as the £500 payment for workers that have to self-isolate is welcomed. That's a good thing.

We also know that the Welsh Government has gone a step further than the UK Government in terms of protecting those people who work in care and making sure that they plug the difference between SSP and what they would have had in their normal wages, which they wouldn't have if they're self-isolating. But the fact of the matter is that SSP just isn't enough for anyone to live off, and it does really need to be risen in line with the real living wage, because this is one health pandemic that we're currently facing—this is one crisis—but the real crisis, the big fallout, is going to be immense, and I fear that not every single person in Wales is going to be prepared for it. Many people still don't know what their rights are at work, many people are continuing to be exploited, there are a number of workplaces that we do not currently have access to, and those are the people who are most at risk, and we've seen that in terms of the figures and where we've seen some of these bad practices occur.

Thank you, Shavanah. I'm aware that Hefin David has got a few questions for you. Please don't all feel that you have to address every question; some might just be addressed to some of you. Hefin David.

Those difficult issues that you've mentioned will be tackled by Members, but I wanted to try and focus on recovery just to start with. Do you think it's credible to talk about a green recovery? Shavanah, you can start, if you want to.

Sorry, I was just trying to unmute myself. I think it's the story of the season so far, isn't it? As far as the potential for a green recovery is concerned, given that the Welsh Government have rightly declared a climate emergency, I think that any economic recovery plan has got to have the environment at the heart of this. In June, we published our report, 'A green recovery and a just transition', and the crux of it is that the report says that Wales needs a clear and funded pathway to net zero that maximises the opportunities to create good-quality green jobs that offer fair work, where workers are given a central voice as far as planning the just transition to net zero as well. I think that that's where this idea of green reps is extremely important, and that we do this through workplace transition agreements agreed between the employers, Government, and the trade unions. And I also think that employers can work with us, then, to develop workplace sustainability initiatives. Ultimately, workers are going to be needing more funding to upskill themselves, so that we can provide that clear pathway to new and greener jobs. But yes, I do think that there are some real opportunities. And equally, we've done some further analysis. There was a recently published analysis from transition economics looking at the potential for green job creation as part of the economic recovery plan, and that analysis does demonstrate that almost 60,000 jobs could be created in Wales in the next two years alone through Government investment in key infrastructure projects. I think that there are some real opportunities there.

Do you think there's also a risk? Just before I come to Peter and Mike, do you think there's a risk that a green recovery will be used by employers as a way of introducing flexible working for the benefit of employers, rather than flexible working for the benefit of employees? Do you think there's a risk there? I can see Mike nodding, so I'm sure he'll want to come in. But is there a danger that that might be a way of exploiting employees?

There's always going to be a danger of exploiting employees. I think this goes back to the points that I've just made that if the unions are there, and you have a worker voice—. We do have green reps in workplaces, and they are part of the decision making. Many of these workers do the jobs on a daily basis; they have the understanding of what that transition could look like, and where they feature. So, I think that so long as you have that interconnected relationship and that social partnership approach that we do have here in Wales, I think that those protections can be added. But of course, there is every opportunity that some employers may just look at this as a means to cut jobs, which is not something that we support at all.

Or getting the existing workers to do more work.

Exactly.

I think there are already some unscrupulous employers that are trying to take advantage of the existing situation, never mind the opportunities that are there for introducing green jobs. We're already seeing companies like British Gas that have issued section 188 notices to dismiss and re-engage 6,000 members of staff across the UK and threatening to de-recognise unions. And when that CEO is challenged, he tells us that he's only given us the notice to dismiss and re-engage because he doesn't think that the trade unions are going to agree to massive cuts in jobs and salaries et cetera. So, there are those unscrupulous employers.

But I believe that we can build back greener and better—I do think by investment. Flexibility is one of those things that will help with productivity. That was why Germany, 20 or 30 years ago, introduced the 35-hour week and gave additional public holidays et cetera, so that there was a more flexible workforce, a more engaged workforce and a better-skilled workforce.

But investing in schemes like tidal lagoon, which is something that Peter's already flagged, looking at things like incentivising the change from diesel vehicles that we currently have on the roads to electric vehicles, even if we concentrated initially on things like the taxi trade across Wales or the buses that we have—that is something that is happening in Scotland. There is an incentive scheme there—a scrappage scheme for the taxi trade to scrap their diesel vehicles and buy electric. That's just one way. Also, looking at investment in hydrogen cell batteries. So, for larger electric vehicles—real help.

But, ultimately, this is about investment in the right types of projects that will build a greener industry across Wales that we all want to see, and then investment in skills and training so that members of staff that are currently there are able to continue to work in those industries.

Peter, just to move this on slightly, with regard to that infrastructure investment with regard to the economic side of things, what should be the balance, then, with things like health and social care and social infrastructure?

I think it's important that we do everything, Hefin. The back end of this week we know that Ford Bridgend is closing and 1,700 people are being made redundant, and that short-sightedness, probably on our Government's part and probably on Ford's side, that we haven't invested in the electrification of cars like Mike said—. Airbus announced this week only that they're going to look to have hydrogen planes flying by 2035. We should be at the forefront of that. When we're at the forefront of things that are really important like that, we will be the long-term investment part of it.

When you talk about, 'How's that going to affect social partnership? How's that going to affect the people who are actually involved in that?'—it's always going have a knock-down effect. We have to be leaders in this, Hefin, otherwise we'll be announcing that, God forbid, other anchor companies in Wales are closing. If we don't invest in green technologies, if we don't make green investments, where is that going to leave us?

It's a strange one to answer, because it's not a case of—. We're not learning the lessons. Germany have just invested £6 billion in hydrogen products going forward. How are they going to develop that? Hydrogen cars and hydrogen planes? All we're investing in is a free-meal deal at the moment, and I think that's the difference between the German economy and where we are. Whether you get a free-meal deal or whether you build wings and planes and automotive vehicles in Wales—that's what we need to be talking about. And that gets back on to your social partnership, social care, and everything to do with that, because if people are better paid, and this virus has affected people who aren't the best-paid people—. So, that always has a knock-on effect.

Okay. Thanks, Chair.

Helen Mary Jones.

Thank you, Chair. My first question is: what approach do you think the Welsh Government should take to ensure that we deliver the fair work outcomes through the recovery? And what changes in key workers' terms and conditions, if any, do you feel are needed?

Well, Chair, because I've been unmuted, it looks as if I'm starting. I welcome the opportunity to answer this. I think there are lots of things that Welsh Government have been doing. We've been, for the last few years—through the workforce partnership council, and now through the shadow social partnership council—looking at how we can deal with things. Getting rid of things like non-guaranteed hours, zero-hours contracts and making sure that people are paid properly. We could use procurement as a way forward on that, using the ethical procurement code that Wales was a leader in introducing, giving that statutory underpinning to make sure that companies that come to Wales or take Welsh public money actually do the right thing, pay people the correct salaries, and also extending worker voice across Wales so that people do have a trade union that will speak up for them on their behalf. But I do believe that we're moving in the right direction. I do think that we could, through a social partnership Act in the future, underpin lots of the things that we've already seen trialled across Wales on a voluntary basis. I'd like to see that given statutory underpinning so that people have the right to enforce those rights that have been lacking so far. 

Thank you. [Inaudible.] Shavanah.

So, just repeating or going back to some of the points that Mike has made, I think that there are—. In terms of key workers, I think the first thing that we need to do is make sure they all get a decent pay rise, first and foremost, because they have been on the front line, they have sacrificed—many of them have lost their lives, many of them have seen their colleagues become ill. The big thing that we're currently seeing is there's a huge rise in the number of workers on the front line, key workers who are complaining about the impact on their mental health and well-being. We are really concerned that as we're now approaching this potential second wave, or some say we're already in it, what happens to those workers? How do we actually reward and protect people who are making those sacrifices at this moment in time? There's a number of key workers who work for agencies—not every single person actually works for the Government and is therefore entitled to the same protections as other people. Many of them are migrant workers, they don't have any access to public recourse funds and stuff. So, there's a whole issue there, and additionally, many of them are really badly low paid, and if they do stick their heads above the parapet when something is going wrong, they are genuinely worried that they will lose their jobs, that the agency will strike them off the list, and how are they then going to move on with their lives? So, I think that there are some real gaps there and I think that—

That's really important. Some of what I would regard as the legislative stuff that needs to be done may not be within the Welsh Government's power, though I'd obviously argue that it should be. But are there some specific things that you think the Welsh Government could do to protect those workers? Should we be moving away gradually, perhaps using procurement, as Mike has suggested, from agency staff and back to the situation where, let's say, more care workers, for example, are directly employed either by the company or by the local authority? I think what I'm trying to get at is the things that you need us to tell Welsh Government that they need to do. 

Well, I think you've just answered the question, really. I think that one of the things that has come—. We've now got a social care forum, and I think it's an opportunity, really, for us to start looking at those types of options. I do think that if you are delivering a service on behalf of the public, for the public, I think that you should have decent pay terms and conditions, either if you work for the Government or you don't. I think this really strange position that individuals find themselves in has become—. We've shone an extreme light on these types of situations, so either we are going to say, 'In Wales we're going to do better', because ultimately health is a devolved matter, as is education and so forth, 'And we're going to look to plug those gaps as much as possible'—. Now, I completely respect and understand that, ultimately, this is about funding and then Wales would need the appropriate funding from the UK Government as well, so you can't have the perfect-case scenario without looking at the details. But I do think that even when it comes to schools, for example, there are so many different individuals who work for a variety of different recruitment agencies and particularly for teaching assistants—for TA's and for teaching staff, we saw that, when it came to being deployed and when it came to individual risk assessments, for example, to make sure that they were going to be safe in the workplace, they weren't necessarily being able to access the same level of support. So, it was kind of hit and miss, and we're still seeing some real gaps, and I think that maybe this is an opportunity for Welsh Government to think about having its own agency, so where there are gaps in particular parts of the public sector that they have direct responsibility over, you can then deploy people accordingly. So, I think, in terms of upskilling people, as part of our economic recovery, there are some real opportunities, and I think that we should be looking at the possibilities of doing something like that.

That's helpful. Thank you.

Do you have any further questions, Helen Mary?

I've got just one other area that I'd like to briefly explore, because I know Joyce wants to come in on this as well. It seems that the Welsh Government are doing some things that I think are positive, for example, making the 2m role in workplaces, and putting that on a statutory basis, but I'm getting quite a lot of regional casework coming to me suggesting that there are issues around enforcement, and I just wonder whether any of you have got anything to say about that. My perspective is that it isn't always clear if you're a member of the public or if you're a worker in a non-unionised workplace, and, obviously, the first thing you'd say is that people should join unions, but they're not all in unions.

So, have you got any comments about the enforcement regime, and whether there's anything more Welsh Government could do to make that more effective? And bearing in mind that most employers are trying to do the right thing, but there are always going to be a minority who don't.

To be honest, Helen, I think it's a great question, because you've nearly answered what you were saying. Unionised workplaces, where you've got health and safety reps and people who are trained by the unions with full engagement with their company would be primed to make sure that that doesn't happen. For instance, when the outbreak was in 2 Sisters in Anglesey, because you had health and safety reps who were Unite, trained through the TUC, health and safety reps, they understood the situation, made sure the 2m rule and barriers were put in place. When you get unscrupulous employers, they probably don't go down that road, because there's a bit of a fear factor, and that's why you come back to the fair work scenario. If there is fair work and social partnership, and if they're taking money off a Government, especially if they're taking money off the Welsh Government, there should be terms and conditions in place to make sure that that enforcement is in place. There should be spot checks. We've lost thousands of people from the HSE over the last 20 years, so the Health and Safety Executive has been diminished. Where, for 20 years ago, we'd quite happily call the Health and Safety Executive when anything was happening. People tried to call them in during this pandemic and there wasn't enough people to actually go into workplaces.

It is a welcome thing that the Welsh Government did making sure the 2m rule was actually in legislation. That was welcomed. That protected millions of workers in Wales and we all welcome that. It's how you enforce something when you've got the lack of people to do it, or the lack of skills, and most of that is to make sure that they're actually trained by unions and involve the unions during it.

I'm sure that's true, Peter, but if I can turn to Mike and Shavanah and say, 'What do we do?' Obviously, working through social partnership, we want to get more workplaces unionised, but in the here and now, when that isn't the case, is there something the Welsh Government could do to—whether it's more clarity about who a report ought to be made to, or more resourcing? I don't know if either of you have got any comments. Shavanah.

So, the national health and safety forum has now been set up, and we have got the enforcement agencies, environmental officers, trade unions, business, Welsh Government, working together, and we've had the initial first meeting, and I think that that is going to be a real opportunity for us to be able to identify some of the hotspot areas. So, we had some analysis in terms of what happened so far, so we knew, for example, that—and it was very much in line with our experience on the ground—when it came to meat processing plants and so forth, there was a huge issue. You know, you have a large proportion of the workforce for whom English is a second language, many of them are low paid, they are working in unsafe environments, but they also live in shared accommodation, and there's a variety of socioeconomic factors that impact them. So, I think that we need to up our game in terms of enforcement within the workplaces. And my worry a little bit, if I'm honest with you, is that we're seeing more focus on the responsibilities being on the individual to make sure that they are safe, and not enough responsibility on the employers. And I would like for—. The TUC has been really pushing for the fact that all employers should be publishing their risk assessments publicly; they should be readily available on their websites, within media and these should be available within the Welsh Government sites as well. Because if you are an individual—a lot of people don't even know what a risk assessment looks like in their workplace.

So, I think that, again, going back to the support that individuals have received from Wales and as far as the Welsh Government's economic support fund is concerned, we are going to do a review of that process; I think there are some real opportunities to tighten things up a little bit. Because, let's be honest, at the start of the pandemic, we all wanted to do the right thing, and that was to try and keep businesses alive so that jobs were there at the end of it. But we now need to revisit those companies and those businesses that have benefited from the Welsh public purse, to make sure, first, that they're keeping people safe at work and they are doing the things that they told us that they were going to do, and secondly, that when they are making decisions about what happens next they factor in those individuals, because if you're having to shut down again certain parts of sectors, where those low-paid workers are, it simply comes back to the economics. People can't afford to live off thin air. If they can't work in one place, they're going to go to another factory and work there instead, and that's how—and we've seen that happen, and we're genuinely concerned that that's what going to happen again.

That's really helpful, thank you.

Thank you. Joyce Watson, if you want to come in on the back of this, and also if you then want to move on to your own subject area, and if you can address your questions first to Peter before he has to leave us. Thank you. Joyce Watson.

One area that hasn't received Government money, but the workers will need protection at the front line are shop workers. We're moving fast into a situation where we know they're going to come under pressure. There's plenty of evidence already suggesting that they're already experiencing high levels of abuse and the expectation on them from the worker. So, what, if anything, would you say to Government in terms of enforcing and making those very large supermarkets, who've made a lot of money actually, protect their workforce, who are clearly, clearly not doing it?

Peter. Peter Hughes.

Thanks, Joyce. We've all seen, during this pandemic, the NHS and local authorities stepping up, but ultimately, supermarket workers and shop workers have been at the forefront of everything. People have had the mad dash for the toilet rolls and everything that went with that. I think that what they should be doing is actually employing more staff and making it more reliable to make sure that the numbers of people actually in the stores aren't the same. We've got a problem where people aren't wearing face masks, there should be some people there with enforcements now. You've made the legislation that you've got to wear face masks in shops and in retail outlets. What's going to happen with that is they're actually policing something that they haven't been trained or paid to police. So, we've got to give them—. There's got to be people employed to make sure that's enforced; how is that going to work? What is Welsh Government and what is the UK Government going to do about protecting the retail industry? People have got to have confidence to want to go shops; people haven't got confidence now. People haven't got confidence in a lot of things, especially with the announcements in the last few days by the UK Government, it's backwards and forwards, backwards and forwards.

So, I think, Joyce, what we need to be doing is making sure that people are protected, making sure they're valued, making sure they have the correct people there. The management and the likes of big supermarkets should be putting people in place to make sure that there is security in place to stop people coming through the door without a face mask. So, you're not putting it on the person who's stacking the shelves, who's at the till, 'Sorry I can't serve you.' There need to be measures in place. These supermarkets have made billions during this pandemic; they should be passing some of that onto to the key workers who've actually worked through it as well.

Thank you, Peter. And I understand you might have to leave us shortly, so thank you for your contribution to us for this inquiry. Joyce Watson.

We've talked a lot about protected characteristics and those things, but exactly what should the Welsh Government do for the differential impact on the economy? It's not an even impact, and it's not an even impact on particular sectors or people or places. So, what are your views that the Welsh Government can assist moving this forward?

Who would like to go, Shavanah or Mike? I'll come to you, Shavanah.

Thank you, Joyce. I think that—well, the list is endless, really, in terms of the various different things that the Welsh Government could be doing. I think that we can learn lessons from the previous recession, but again the fact of the matter is that the previous recession did not protect everyone equally.

As far as the decisions that are made at a regional level go, as far as the development is concerned and the plans and so forth, I think again we need to have worker voices, we need to have younger people, we need to have people who are often sort of forgotten about, that are party to those discussions and not just sort of brought in at the last minute, really.

But I think that equally a lot of this is still very much sort of—we need to know what's going to happen as far as the job retention scheme is concerned. I think that if we don't have that, it's quite difficult for us to think about the real proposals for a recovery, because we're at this point now where more people are going to be at risk of losing their jobs. Many people don't even know what their rights are when it comes to being faced with a redundancy situation. So, until we are protecting those people who are in work, looking—. If we don't have a job retention scheme for individuals that also includes the opportunities to upskill people and to train them for the next opportunities, then I'm a little bit concerned that we are going to miss out on certain individuals.

And this idea, for example, of—. One of the big things that we often talk about is homeworking. Homeworking has been a really good thing for many of us, but there are a number of people who can't work from home. Many retail workers can't work from home, many cleaners can't work from home, plumbers can't work from home. So, you've got to think about the entire supply chain. We can't have certain people that we forget about when we are making big policy decisions. Everyone needs to be factored in or otherwise I think the inequality is only going to grow and get worse, if I'm honest with you.

But, I'm sure that Mike has got some good stuff that he can maybe reference as far as Ford and other areas are concerned.

I think, again, there is a stark difference between well-organised, unionised workplaces and non-unionised workplaces. I think it's also a sad fact that many people across Wales that fall into the BAME communities have not been dealt an even hand when it comes to employment. They tend to be concentrated into parts of industry that are sadly low paid, precarious, and are not being given access to lots of the training and the opportunities that are there.

I think, in the last six months, our BAME communities have been adversely affected by the virus. We still need to have a better understanding of why that is that case. Lots of those individuals as well have not been protected as they should have been in their workplaces. Because the scientific evidence showed very early on that they were more likely to contract the virus than others, and yet the risk assessments weren't done, the PPE and the individual assessments weren't put in place to protect those individuals.

But, I think, Joyce, this is an opportunity for us to reset and to re-establish our values and to make sure that we go back, again, in a much fairer way. I think there are even things that Welsh Government can do with regard to public appointments and the fact that there is still not the level of BAME candidates on lots of the boards that run companies, that sit on public authorities like the NHS and like other things. I think if we are going to build back better, then we have to embrace diversity and equality as we move forward.

I thank you for that. Of course, there's one group that hasn't been mentioned and that is those with different levels of disability.

Yes, absolutely.

Some of them have gained from working from home because their homes are well-equipped for them to work from, whereas it's been a reason—or an excuse in many places—not to employ them because the workplace isn't suitable. So, how can we take advantage of helping those people with different levels—there are lots of different levels of disability—to come forward now, while we're thinking about everybody else?

I'm sorry, I'm going to have to ask just one of you to address this point, and if you could just be brief as well. Is there anyone who would particularly like to address this point, Shavanah or Mike?

I was just going to say, Chair, as the union that represented Remploy workers for many years, many of those Remploy workers are still unemployed; they lost the security of working in factories and in workplaces that had been modified to suit their own individual needs. That was done away with by the UK Government, I believe wrongly.

I do think that with the incentives that we're trying to give employers now through procurement and everything else, we should be looking to make sure that their workplaces are modified to allow people to come into the workplace with the knowledge and understanding that they are going to be able to fulfil their full potential. I think we're missing a massive, massive reservoir of talent in Wales because those individuals have barriers placed upon them, not because they've placed them upon them, but society has placed those upon them and employment is one of the places that we should be concentrating on taking away those barriers, giving them the basic dignity of the right to go to work every day and to earn a living. We should all be working as hard as we can to try and do that.

Thank you, Mike. Vikki Howells.

Thank you, Chair. How much of an impact do you think that this recession is going—

Vikki, just put your microphone up to your mouth; I think it might just be a bit low—that's it, great.

Can you hear me now?

We can, thank you.

Yes, great. How much of an impact do you think this recession is going to have on employers' skills demands, and on the level of investment that we need to see in adult and workforce training? And what would you like to see the Welsh Government doing around that, around reskilling and retraining, specifically?

Again, if I could just ask one of you to address this, is there somebody who particularly wants to address this? Shavanah or Mike? Shavanah, thank you.

Yes. We're already seeing a reduction in paid release for learning and training in many of the sectors, and we think that the union-led learning model is successful because it's actually a joint investment between the union, the individual and the employer. So, I think employers investing in their staff by providing paid release is extremely important and that helps us ensure that there's equality of opportunity for people to progress into better work and to widen their options as far as participation in skills is concerned.

I also think that employers need to be incentivised to invest in their workforce as well. We need to look at opening discussions about workforce development plans between the employer and the workforce, and this is why we've been advocating that the follow-up to the job retention scheme actually includes the skills element specifically, just like we delivered for the ProAct initiative in Wales after the last recession. And also, I think that, predictably, we're seeing that a greater number of employers are shifting to online training and this could disproportionately affect more vulnerable groups of workers, but the unions are negotiating the inclusion of digital inclusion, that digital literacy learning goes alongside training programmes. We are asking for online learning to be afforded the same opportunities for paid release as face-to-face learning as well, because, ultimately, there does seem to be this idea that while you can learn from home, you can learn from anywhere, but people do have other responsibilities with their family and so forth as well.

We've welcomed the flexing of the personal learning accounts, which encourage people in low-wage jobs and those affected by COVID to retrain into higher paid jobs in new sectors as well. And I think that as far as the Wales Union Learning Fund is concerned, the additional funding that we've had for WULF has been extremely welcomed, and, you know, we really appreciated the way that the Welsh Government officials have worked with us in terms of the process to ensure that we can maximise opportunities to develop ideas jointly that address the employment crisis and how that can contribute towards the plans that we're hoping to develop as far as the economic recovery is concerned.

But our priorities: retain a focus on in-work progression as well; improve worker voices as far as the skills system is concerned; and take measures to avoid the recession resulting in poor quality of work. And, I think it's worth us mentioning that all the industries—JCB, Greggs, Wilko, et cetera, Bangor Uni—you've got some options there. Enforcing change of contract or face redundancy options, and this whole thing around the will, yes, the will's got to be there, but, ultimately this is about, I think, employers investing in their staff, both for now, but also for the future as well, as those sectors change and develop.

Indeed, and in terms of those changes for the future, how do we best ensure that people are being reskilled in the right sorts of areas? What kind of scheme would you like to see Welsh Government providing there, and would that involve the regional skills partnerships or another different approach?

We do have to just have a brief reply to this. Did you want to come back? Was that really to Shavanah or to Mike? Shavanah.

Yes, I think that the regional skills partnership boards are extremely important, and that's why I think that each of those do really need to have a worker voice on there, not just the one union official. I think it needs to be a bit bigger than that because of a lot of these boards then have sub-groups and so forth as well, and it can become extremely difficult for the one person to be attending every single meeting. So, I think we need to have that more joint approach, more of an agile approach to everything.

Did you have any further questions, Vikki?

No.

I don't want to silence you, Mike, but was there anything you wanted to specifically add, or do you agree with Shavanah's points?

No, I agree with Shavanah. I think, Chair, in the last six months, we've been pretty much forced into—and I'm glad we have been forced into—working across industry, across groups, with employers, with Welsh Government, with local government, with all the enforcement agencies, to try and deal with all of the issues that we've been discussing today. But skills is absolutely vital if we're going to move forward. We're seeing some companies—I know that Wilko's have recently announced they're going to make 600 people redundant at Magor because they're introducing new technology, new ways of working. So, we've got a workforce there that we know are going to have to upskill, using the Wales Union Learning Fund, using things like ReAct, which is only available in Wales, and I'm thankful to the Welsh Government that that is there. If we use all of those funds jointly, working with employers, we can actually find that we're reskilling people to do the jobs of the future, but also finding the gaps in local areas where we need to skill people up because employers need those people to be skilled in a particular way. So, I think that the last six months have shown lessons: if we work together, we actually achieve a hell of a lot more.

Thank you, Mike. Suzy Davies, if you want to come on to any supplementaries and then come on to the last subject area. Suzy Davies.

Okay, thank you. Speed is of the essence, so sorry about this. We've heard from previous witnesses that there's a genuine concern that businesses are likely to contract and look within rather than concentrate on being innovative and being creative about ways of keeping their staff. When we're talking about skills, would you be supportive of action that would help managers and business leaders, actually, to reskill as well, to understand better what a different shape workforce would look like in the future and one that should actually be maximising retaining staff rather than replacing them or feeling they have to get rid of them?

Absolutely I would, and there are examples already where, as a union, we're working with companies. Just one example: Welsh Government worked really hard to bring a company to Wales called CAF rolling stock, based in Newport. We've been working with CAF and another partner organisation that we work with, called Educate, using moneys from the apprenticeship levy to actually upskill managers and supervisors, so that they're able to embrace new working practices, and then cascading that down to people who wish to be supervisors for the future, so that they can actually come forward as well. But, I think I can't emphasise enough the need for partnership working between the employee and the employee representatives and management and the companies that they represent. That is the only way that we're going to be able to jointly meet the challenges that are coming our way.

I certainly wouldn't argue with that. Sorry, Shavanah, do you mind if I move on? I'll give you this question, if you like. The public transport network: again, we've heard from previous witnesses that even though we have a pandemic, it's not anyone's role, really, to support non-viable businesses. Bus companies in particular, because obviously they're private companies, are under enormous strain at the moment, and even more so with social distancing and people choosing, as Hefin's mentioned earlier, their cars rather than public transport because of their fears of travelling on public transport. What advice can you give Welsh Government about supporting the long-term viability of the bus system in particular, but actually public transport generally? Will we actually need it as much as we think, and what should Government do to support it?

In order for us to have a thriving economy in Wales, we have to look at our public transport system, and I think that the buses have a key role to play within all of this, as does rail, really, as well. We think that the Westminster Government's announcement for its new emergency recovery management agreements represents at one and the same time an index of the failure of the privatised railways, but also a historic missed opportunity to re-establish rail on the basis of public ownership. Now, I think that in Wales we have done things slightly differently already. I think that we can build on that as far as reforming transport and looking at better opportunities.

I also think that as far as rail is concerned, rail is going to continue to be essential to the delivery of our carbon reduction goals and avoiding a car-led recovery. I think if passenger confidence is to be rebuilt, we need more staff in better jobs to ensure that the railway is clean, safe and accessible. We need greater capacity on the railways as well, and I think that this is going to require public investment in expanding capacity and investment in staff resources as well. But then, equally, rail has got to be affordable. We've seen rail fares increasing, the same with bus transport and so forth, as well.

But I think that the Wales and borders franchise is structured differently to the ERMAs, but the difference is now less than under franchising in England, and the priorities of the commercial operator still do dictate the behaviour in a situation where passenger revenues have been sharply impacted and may take years to recover—

Can I just ask you, then, because, obviously we've got to come to an end, I'm really sorry: do you think that the Welsh Government's proposal to try and keep 30 per cent of the workforce at home is going to actually create problems for creating a viable public transport system, if we're asking fewer people to use it?

I think that we need to think about—. Ultimately, what we want people to be doing is to safely move around at this moment in time, because, obviously, we are in the middle of a pandemic. But as part of our recovery, I think we have to look very carefully at the electrification of our railways. I think that we need to look at making it cheaper and easier and safer for people to move around in Wales, and it's only going to be then that people are going to be able to visit the range of different businesses that we're looking to create here in Wales, and to make sure that our high streets and our areas are going to be thriving, because we are still going to be needing people to move around safely, and you can't have one without the other, almost.

Okay, thank you.

Mike to finish off.

Just to finish there, I think we're going to need public transport in the future far more than we currently do. On Shavanah's point, we do need to build out of this not using the car as the lead. We need integrated transport, which I know Welsh Government is in favour of. We need to look at hydrogen-powered buses and we need to look at scrappage schemes for taxis to make them electric. But we also need to talk to UK Government about the evolving responsibility for rail infrastructure in Wales, so that we can build those more effectively, and we need to look at the electrification of the network across to west Wales. We need to electrify the north Wales line too, maybe building partnerships with HS2 to build into the Chester link so that we open up the economy in north and mid Wales. And I think we need to push ahead with the electrification of the Valleys lines and the south-east Wales metro, the north Wales metro and the south-west Wales metro. All of those things, I believe, which take people out of their cars onto decent, efficient public transport, will help with air quality, will help with the freight being able to move around on roads far better than it currently does.

But one final plug, Chair, which is that Brendan Kelly, my comrade who's not able to be with us today, asked us to consider what is going to happen with the Stena Line links with the Republic of Ireland in the future. That is something that we also need to take on board: the plight of those marine seamen and women who work on those ferries. We're going to need to make sure that their industry is protected as well. So when we talk about public transport we tend to focus in on buses and trains, but our air transport, our bus transport, our ferries and all of those come into one package, and we need to have an integrated transport policy for all of that.

Thank you, Mike. That's very helpful. Thanks for those final comments. Thank you very much. Shavanah, Mike, can I thank you ever so much for being with us this morning? Sorry that we had to curtail some of the answers and discussion towards the end of the session due to time, but we really appreciate you both being with us this morning, so thank you very much. Diolch yn fawr.

You're welcome, Chair. Diolch yn fawr iawn. 

Thank you. 

I move to item 4, and under Standing Order 17.42, resolve to exclude the public from the remainder of the meeting, if Members are content. Thank you. That brings our public meeting to an end.