Covid-19 is an economic as well as a health crisis, and we have to get the balance right
Helen Mary Jones MS, Plaid Cymru Shadow Minister for the Economy
As we complete our third month of lockdown as a result of the coronavirus pandemic, we have become accustomed to looking towards the numbers to see what they tell us.
We’ve become well versed in the language of R numbers, hospital admissions and testing volumes. These are important factors in understanding whether the health crisis is showing any signs of stabilising.
But while we’ve been looking towards these figures, another set of numbers have crept up on us, and they cannot be ignored. They tell us that, in pulling back with such force from the cliff edge of a health crisis there is a danger of thousands of people plunging off an economic one.
When the Office of National Statistics (ONS) published their latest set of unemployment figures on 16 June, at first glance it looked like it showed good news. Unemployment figures in Wales remain largely unchanged during February – to April when compared to the previous three month period.
However, we know that many businesses have been completely shut down since 23 March, so what this, in fact, tells us is that the furlough scheme – at least at the start of lockdown – has been successful.
Once the furlough scheme begins to be tapered off by Westminster in August however, businesses will start to let staff go. Businesses in the hospitality and tourism sectors that are unlikely to be able to make a profit by August – many of which may still have no income at all – will have no choice.
This is when another set of data from the ONS starts tugging at our sleeve, demanding attention. We find out from this that out of work benefit claims have doubled compared to last year already, and since this covers a more recent period than the unemployment figures, it is an ominous sign that worse is to come.
Some advocate – in response to this – to allow all businesses to open their doors again now, but here it quickly becomes evident that any move of the sort aiming to solve the economic crisis, risks pushing the health crisis back towards that cliff edge. The minute people start interacting more inside shops and in places like theatres and pubs, the coronavirus will spread again, and before we know it, we’re facing the second wave of the pandemic.
That would be a disaster for the economy, as well as devastating lives and putting our health service at risk. There is a constant need to revisit where we are with this complex balancing act – and we need to understand why the Welsh Government takes the decisions it does.
We are not yet out of the woods with the health crisis. And with the UK Government seemingly committed to start winding down the job retention scheme, Welsh Government needs a clear plan about what needs to be done next. I just don’t see that plan.
We can’t assume that everything will go back to normal once the pandemic is over, and business models will remain unchanged. Many businesses have already made changes in terms of automation, staff location and, tragically, personnel headcount. For those that do go back to interacting face to face with the public, permanent changes will need to be made to our workplace health and safety considerations.
For those staff that do make a return to their jobs, undertaking retraining might be the first thing they do. And for many the old jobs will not return and they will need to be supported properly to look for, or to create new opportunities.
It’s clear that three things are needed that will help pull us back from the economic cliff edge, without stumbling back over the health one:
1.) Businesses need clear guidance on what they need to do to be able to open safely, so that there is no delay once they get the green light. I’m thinking of tourism businesses in all their variety, from caravan parks, to fishing boats to bed and breakfasts.
Hospitality businesses like hotels, restaurants and pubs, and cultural venues like theatres and concert halls; all may need time to adapt. It’s one thing putting a sign up asking for visitors to wash their hands. It’s another matter to build a second door in order to create a one-way system around your premises.
We need detail, and we need it now. The government must work closely with businesses. They will have their own ideas about reopening safely, and these need to be listened to. The government needs to work in partnership with businesses, not dictate to them.
2.) And some businesses will need longer-term support, if our hospitality, tourism and cultural infrastructure is to survive. We are told there are talks going on, which is nice to know, but businesses need clarity and a clear time table on longer-term support packages.
For example, for businesses that are closed to all income streams, such as hotels and tourist attractions, they will be unable to contribute towards the furlough scheme. Their only option will be to let their workers go unless the furlough scheme is amended and, for those sectors of the economy that are unlikely to be able to open safely and profitably in the short term, extended.
3.) We need an economic plan that protects livelihoods, re-boots the economy and helps us to build a better future for all ages. Last week Plaid Cymru unveiled its own Emergency Economic Renewal Plan which lays out this – a plan to start building back better. The plan proposes:
a) An Employment Guarantee Scheme for 18-24-year-olds – with a Future Wales Fund which would offer a job to every unemployed 18-24-year-old in Wales.
b) A plan to “reskill” Wales by giving every unemployed person over 24 years old a one-off, tax-free payment of £5,000 designed to help them reskill and find employment.
c) An All-Wales Renewal Fund to support activity to:
- Transform sectors identified as being hit hardest by Covid-19.
- Build a sustainable Wales, paving the way to a Carbon-free nation by 2030.
- Develop a new sense of ‘localism’ which values public services.
One thing is clear in my mind – the time for talking about the immediate response to the economic crisis is now over. We need action, and we need it now.
We can’t sit around discussing what might be needed when tens of thousands of people face falling off an economic cliff edge in August. We need a swift conclusion to the ongoing discussions about further support for the tourism, hospitality and arts sectors, so that businesses can plan. And we need an emergency action plan from Welsh Government setting out what they are going to do to address the inevitable rise in unemployment.
We in Plaid Cymru have said what we think is needed. What is the Welsh Government going to do?
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