Welsh Government says Rishi Sunak’s summer statement ‘does not come close’ to tackling coronavirus economic challenges
The Welsh Government says the UK chancellor’s summer statement “does not come close” to tackling the economic challenges caused by the coronavirus.
The UK Government said today’s announcement meant Wales would receive an extra £500m as Rishi Sunak outlined measures to boost the hospitality and tourism industries.
They included slashing VAT for the two sectors from 20 per cent to 5 per cent for six months.
He has also announced the government will give everyone 50 per cent off meals in participating restaurants during August.
However, Rebecca Evans MS, said greater support was required to handle the crisis.
In a written statement, the Minister for Finance, said there was “growing evidence” of distress in the jobs market as the Westminster government begins to draw the Coronavirus Job Retention Scheme and Self Employed Income Support Scheme to a close.
She said: “We are disappointed there were no assurances today over whether they will be revived if there are further local lockdowns or a second peak.
“The announcement of the job retention bonus, though welcome, assumes that we will continue on a smooth path out of the crisis and does not address what will happen if there is a second peak.
“The Welsh Government is supportive of an interventionist approach to support businesses, communities and individuals in Wales, as shown by our Economic Resilience Fund.
“I am encouraged the chancellor intends to effectively replicate the Welsh Government’s Jobs Growth Wales in his plan for jobs.
“We will work with the Department of Work and Pensions to make sure this really does deliver for young people in Wales.
“The Chancellor’s Jobs Plan alone will not be sufficient to resuscitate the economy and should be supplemented by a comprehensive package of active labour market measures including more ambitious investment in training and skills.”
With rising unemployment, the minister said it was “essential” that the benefits system provides an adequate level of support to vulnerable people.
She also called for the UK Government to reverse the welfare reforms implemented over the last decade.
Ms Evans continued: “While I welcome the UK Government’s decision to reduce the VAT rate on the hospitality sector which has been particularly impacted during these unprecedented times, the UK Government should also put in place sectoral employment protection schemes for sectors which continue to be closed or very substantially impacted by Covid-19 measures such as tourism, aerospace, automotive and steel.
“The ‘Eat out, Help out’ scheme falls short of the ambitious response which is needed.
“I am disappointed the Chancellor had so little to say on funding for public services as they continue to respond to the crisis.
“Robust health, social care, and local government services will be critical to the recovery and the UK Government needs to commit the additional funding our public services require to deliver what is needed.”
She added: “The chancellor’s statement today, while including some welcome announcements, simply does not come close to measuring up to the scale of the challenges we face.
“More extensive and far-reaching action is needed to tackle this crisis head on and to build back better.”
In his statement to Parliament, Mr Sunak said the VAT cut would save households around £160 per year on average.
He said: “I’m announcing two new measures to get these sectors moving and protect jobs.
“So first, at the moment, VAT on Hospitality and Tourism is charged at 20%, so I’ve decided for the next six months to cut VAT on food, accommodation and attractions.
“Eat in or hot takeaway food from restaurants, cafes and pubs. Accommodation in hotels, B&B’s, campsites and caravan sites and attractions like cinemas, theme parks and zoos.
“All these and more will see VAT reduced from next Wednesday, until January the 12th.”
Welsh Conservative MS Darren Millar, the Shadow Minister for Covid Recovery, backed the announcement by his party.
He said: “The six-month cut in VAT from 20 percent to five percent for eligible hospitality and tourism businesses will be a shot in the arm for an industry which has been hit hard by the coronavirus pandemic.
“The announcement of further assistance from the Chancellor with the #EatOutToHelpOut discount of 50 percent off meals throughout August will also be music to the ears of the sector.
“The UK Government is doing everything it can to aid the economic recovery and help businesses to bounce back from the pandemic, we now need some urgency from the Welsh Labour-led Government to do what it can to re-open Wales and help businesses here to adapt so that we can protect as many livelihoods as possible while keeping staff and customers safe.”
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