Minister for Finance and Minister for Economy respond to COVID-19 ‘economic crisis’

REBECCA Evans, Minister for Finance and Trefnydd & Ken Skates, Minister for Economy, Transport and North Wales have issued a statement in response to the COVID-19 economic crisis. The statement reads as follows:

Covid 19 is not only a huge threat to health, well-being and public services in Wales, it is also a threat for many businesses, and indeed whole swathes of the economy.

The Welsh Government is determined to do what it can to minimise business failures and to enable viable businesses to ‘hibernate’ through the worst of the shutdown of our economy occasioned by Covid 19. However, this is clearly dependent on the UK Government deploying the macro-economic levers it controls.

For this reason we strongly welcome the announcements by the Chancellor of the Exchequer last Friday, 20 March, notably the Coronavirus Job Retention Scheme, which was an essential step to enabling businesses to survive. We also welcomed the earlier announcement confirming increased support for the hospitality, retail and leisure sectors via rate relief and grant payments. Following this announcement, the Welsh Government announced its scheme the next day in order to provide certainty and support for those sectors most affected by the crisis.

There remains, however, an urgent need for government intervention in a number of areas, including, for example, providing support for the self-employed and helping businesses meet the cost of Non Domestic Rates in other sectors of the economy, as well as rent of commercial premises.

To address emerging gaps in the UK Government’s interventions, the Welsh Government will put in place a cross-sector, cross-Government fund to respond to the specific needs of businesses, during what will be a managed period of enterprise hibernation. This will help meet fixed costs which are no longer covered by earned income and which are not adequately addressed by the UK Government interventions. It will also assist self-employed citizens, should U.K. Government not step in with direct assistance this week.

This will be designed specifically to include social enterprises and charitable organisations which have until now relied in whole or part on revenues from trading.

We intend to announce precise details as soon as we possibly can over the coming days and clearly, the exact coverage will depend on what further measures the Chancellor of the Exchequer announces.

Ensuring adequate resources for such a fund will undoubtedly require difficult choices. As a result, the Welsh Government has decided to make one adjustment to the Non-Domestic Rates (NDR) Relief for the hospitality, retail and leisure sector announced last week: to not extend the 100% relief to the small proportion of properties with a rateable value of £500,000 and above.

This will affect fewer than 200 properties across Wales but will release more than £100 million to kick-start the economic crisis fund. We will be writing to all of the businesses affected and making clear that we will consider discretionary support if there is a compelling economic case to do so.

We are also pleased to report that Welsh Local Authorities have risen to the challenge and have agreed not only to re-issue NDR demands to those businesses which no longer are liable for them, but to distribute the grants which we announced last week, of £10,000 for each small business which qualifies for Small Business Rate Relief and £25,000 for retail, hospitality, and leisure businesses occupying properties with a rateable value of between £12,001 and £51,000.

Finally, we would once again urge employers across the public, third and private sector to prioritise the health and wellbeing of their employees during this challenging period.