Bevan Foundation gives evidence to Welsh Affairs Select Committee

We have responded to the Welsh Affairs Select Committee’s inquiry on COVID19 and the Welsh Economy

The Welsh Affairs Select Committee is inquiring into the effect of Covid-19 on the Welsh economy. Our evidence to the Committee highlights that the Welsh economy is likely to be harder-hit than other parts of the UK. The expected impact is on top of pre-existing challenges including Brexit, climate change and automation. The pandemic has underlined the critical importance that governments can play in intervening in and managing the economy, and in providing a minimum income for people unable to work.  The pandemic has also shown that some groups of people in the economy have been at much greater risk from Covid-19 than others.

In our evidence we advocate a period of major economic restructuring and large-scale economic stimulus to support  adjustment, encourage new investment and help to maintain strategically important but vulnerable industries. This requires a much bigger and more comprehensive response than simply restart and recovery and should include:

• Investment in green, social and digital infrastructure
• Support for new ways of working, including more flexible and agile working
• Action to support businesses themselves complemented by action to encourage consumer spending

We outline key actions to make the Welsh economy more resilient, in which both the UK and Welsh Governments should take a firm lead:

• Diversify and strengthen the economy, with a wider range and better geographic spread of economic activity. The UK Government should adopt a regional policy which balances and ‘levels up’ all parts of the UK and the Welsh Government must focus on developing the weakest local economies.
• Substantial investment in up-skilling the workforce, and in particular, up-skilling of workers with lower-level qualifications and skills.
• Greater protections for people in employment, as well as strict enforcement of health and safety at work measures.  Unfair working practices s should be eradicated especially for ‘essential workers’ who do not have the option of working remotely.
•  Adequate support for people who are unable to work and out of work

We also outline how vital it is that the  social security system provides an adequate ‘safety net’ for all.  The recent increases in the Local Housing Allowance (LHA) and the base rate for Universal Credit  are welcome, but  these gains must not be reversed if key sections of the population are to be supported in the medium to long term.

Further steps could include maintaining the increase in Universal Credit beyond March 2021 and eradicating the five week wait. Raising or removing the benefit cap would ensure that the newly- unemployed do not face arrears or eviction while they search for new work and increasing the child element of Universal Credit and Child Tax Credits by at least £20 a week would be an investment in the future of thousands of families across Wales at a difficult time.

The combination of a more balanced UK economy, better terms and conditions in work, and better provision for people who are out of work will provide both flexibility and security during a period of major economic adjustment and restructuring.

Read our response here