Ken Skates: No avoiding a recession but we must do all we can to avert a major depression

There will be no avoiding a recession, but governments across the UK must everything they can to “shelter businesses through the coronavirus pandemic storm” minister for economy and transport Ken Skates said.

Mr Skates – who is also the minister for North Wales – headed up the Welsh Governments daily press brief on Wednesday and gave the latest details on the battle again the COVID-19 with his particular focus on how business is being helped. 

He said: “There can be no doubt now of the scale of the economic challenge that lays ahead of us.

The Office of Budget Responsibility said last week it expects UK GDP to fall by 35% in the second quarter of this year.

Mr Skates said: “There is no avoiding a recession, but if we are to avert a major depression, it is imperative that governments across the UK do everything in their power to shelter businesses through this storm – and protect workers from the very great threat of unemployment.”

The Welsh Government has put in place a new £500m Economic Resilience Fund, the Economy minister said:

“Our fund provides significant financial support that is additional to that provided by the UK Government. It provides vital support for businesses – particularly those small and medium sized firms so critical to the Welsh economy – that isn’t available to firms in England.

We have done this because we want to support good businesses in 2019 to be a good business in 2021. We want to support people who had good job in 2019 have a good job in 2021.”

Last Friday the Welsh Government opened the application process for the fund, more than 6,000 grant applications were received within 24 hours of launch.

As of 6am Wednesday morning (22 April), the Economic Resilience Fund had received 5,842 micro-business applications totalling £56.7m, and 2,267 SME applications totalling £127.3m. The overall total is 8,109 applications totalling £184m.

“That demand speaks to the scale of the crisis we now find ourselves in.” Said Mr Skates.

On Monday, a further £100m was released into this phase of the Economic Resilience Fund.

“This work builds on the more than £440m worth of business relief grants that have now reached nearly 35,000 businesses across Wales.” Said Mr Skates.

“Local Authorities have worked with urgency and with skill to process payments and are doing a fantastic job getting funding to businesses as quickly as possible. I want to thank every single local authority who has played a part in this work.

I also want to pay further tribute to the staff at both Business Wales, the Development Bank of Wales and my officials who have worked tirelessly, often in difficult personal circumstances, to develop the most comprehensive package of support for business anywhere in the UK.

We have sought to strike the balance between supporting as many enterprises as possible and making a meaningful contribution to each one’s survival.” He added.

The minister said there is an urgent need to see more of the promised lending guaranteed by the UK Government, getting to the front line.

“The UK Government must continue to support and press the high street banks to be much more responsive to the needs of our businesses at this difficult time.”

I believe that there is a lot that they could learn from our own Development Bank of Wales in the way it has adapted its own policies and processes to get funding and support to businesses quickly.” Added Mr Skates.