First Minister Mark Drakeford has today announced a new £500m fund to provide extra support to the Welsh economy, businesses and charities experiencing a sharp drop in trading as a result of the coronavirus pandemic.
The Economic Resilience Fund aims to plug the gaps in the support schemes already announced by the UK Government, including the Job Retention Scheme and the Self-Employed Income Support Scheme, which will guarantee 80% of people’s wages and income.
The new £500m Welsh fund will support firms of all sizes, including social enterprises, with a focus on those which have not already benefited from the coronavirus grants already announced by the Welsh Government.
First Minister Mark Drakeford said: “The pace at which the coronavirus pandemic is affecting our economy is extraordinary. Now, more than ever, government needs to do all it can to support the economy and business.
“The recent announcements by the UK Government provided some much-needed protection for many workers and their families in Wales. Only the UK Government has the macro-economic and fiscal levers to minimise the enormous damage this economic shut-down will do to the UK economy.
“But even with these interventions, there are elements of the economy, businesses and charities in Wales facing insolvency because fixed and operating costs – rent, residual salary costs, leasing charges for vital equipment and maintaining operations – cannot be met during this crisis.
“We made a commitment as a Welsh Government to fill the gaps and support the economy and businesses through this incredibly difficult time.
“This package of support provides further assurance to firms, charities and social enterprises that we will do just that – help them deal with the economic impact of the pandemic.”
The £500m fund is made up of two main elements:
- A new £100m Development Bank of Wales fund will be available for companies experiencing cash flow problems as a result of the pandemic and will provide loans of between £5,000 and £250,000 at favourable interest rates.
- Businesses will also be able to benefit from a £400m emergency pot providing: i) Grants of £10,000 for micro-businesses employing up to nine people. This includes sole traders employing staff. Qualifying businesses will be able to apply by mid-April; ii) Grants of up to £100,000 for small and medium-sized firms with between 10 and 249 employees. Qualifying businesses will be able to apply from next week. iii) Support for larger Welsh companies, which are of critical social or economic importance to Wales. This element will be open to qualifying businesses within the next two weeks
The £500m Economic Resilience Fund will support businesses forced to temporarily cease trading – to go into “hibernation” – or which need cash-flow support to adapt to a remote way of working.
The new fund builds on the £1.4bn business support package announced by the Welsh Government on March 18, which provides a year-long rate relief holiday for all but the largest premises in the retail, hospitality and leisure sectors and grant-support for more than 70,000 small businesses.
Ken Skates, Minister for the Economy, Transport and North Wales, said: “This £500m package will provide further vital assistance to thousands of firms and third sector organisations, which normally rely on trading income.
“We have been very clear, we are here to support the economy and the business community. We stand with every business and worker. Together we will get through this exceptionally challenging period.”
Paul Davies AM, the Leader of the Welsh Conservatives, said he welcomed the announcement to redirect funds to tackle coronavirus but said that more needed to be done.
“Last week I called on the First Minister to change the budget, to redirect money to shore up our frontline services and businesses, and I am pleased that he is starting to listen to my calls,” he said.
“The UK Government gave Wales an additional £1.5 billion for the forthcoming fiscal year, and a further £1.4bn to combat Coronavirus, some £2.9bn in total.
“The Welsh Government’s £1.1bn announced today consists of only 25 percent of Welsh Government money as the rest is from European funding and the UK Treasury.
“Surely, we must see Ministers re-prioritising their budgets even further as the emergency the country finds itself in cannot be business as usual.
“It is absolutely imperative, therefore, that the Welsh Government immediately brings forward a supplementary budget as the First Minister promised last week.”