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Written evidence submitted by Wales TUC (COV0076) About the Wales TUC The Wales Trades Union Congress is the voice of Wales at work, our aim is to make Wales a fair work nation. As the largest democratic membership based civic body in Wales, we speak for approximately 400,000 union members of our 49 affiliated unions. Proudly part of the TUC and the wider international union movement, the Wales TUC is the devolved authority for unions in Wales. What additional financial support does the Welsh economy require in order to survive during the pandemic and to recover afterwards? Government investment in Wales’ infrastructure and public services was vital before the coronavirus pandemic hit and is all the more pressing now. Wales needs to urgently move towards our net zero-carbon target, to tackle persistent inequality, and to strengthen public services that have been weakened by 10 years of austerity. Meeting these needs now is the best way to repair the economic damage caused by the COVID 19. With government borrowing costs at record lows, there has rarely been a more urgent need for government to invest. This investment – across the private and public sector can not only help create demand in the economy but also be used to directly create and support jobs. We have set out many of our investment priorities in our new Wales TUC report A Green Recovery and a Just Transition1 and, at a UK level, in Rebuilding after Recession2. They include: Investing in tidal lagoon projects Building new green social housing and retrofitting existing social housing. Research and development in de-carbonising technology in manufacturing, including carbon capture and storage. Expanding and upgrading the rail network and delivering the South Wales Metro project. Investing in the electrification of transport, including electric buses, new electric ferries, battery factories, and electric charging points. We also believe that there is an urgent need to vastly expand employment support and skills programmes. We have called for a new Job Guarantee Scheme – modelled on the successful Future Jobs Fund that was established after the 2008 financial crisis. This scheme would be 1 https://www.tuc.org.uk/sites/default/files/2020- 06/A%20green%20recovery%20and%20a%20just%20transition%20Wales%20TUC%20May%202020.pdf 2 https://www.tuc.org.uk/blogs/rebuilding-after-recession-plan-decent-jobs 1 managed and delivered in Wales by the Welsh Government in line with the particular needs of the Welsh labour market The scheme should deliver jobs that: are paid at least the real living wage rate, or the union negotiated rate for the job to ensure the worker gets the skills they need to move into permanent work, including the option for kickstarting an apprenticeship are additional – this means the money should only be used to create jobs that would not have been created in the absence of a scheme, ensuring that job guarantee participants are not replacing existing workers provide a community, public benefit and/or help to decarbonise the economy: the inclusion of a “community benefit” criteria was one of the clear successes attributed to the Future Jobs Fund, and so any similar scheme should adopt and widen this principle to explicitly include a contribution to public good, and/or decarbonising the economy meet local labour market needs: this means the ability for the money to be used to create jobs in sectors which correspond with regional or local economic plans seek to reduce labour market inequalities. Take-up by people with protected characteristics who face the greatest discrimination in the labour market must be monitored, and action taken to address any inequalities in access. The scheme must seek to support women who need access to childcare to enable them to work, support employers to make reasonable adjustments to enable disabled workers to take up jobs and ensure that BME workers have proportionate access to the scheme across local labour markets. Action taken during this period must aim to tackle persistent discrimination, not exacerbate it ensure access to trade unions. In addition, we have called on the Welsh Government to expand access to schemes such as Jobs Growth Wales, ReAct and Personal Learning Accounts. The impacts of COVID 19 on the Welsh economy are likely to be compounded by the impact of the UK exiting the EU. Sectors that have suffered less during the lockdown are the ones that are exposed to bigger negative impacts from Brexit, as measured by actual effects since the Brexit vote and predicted effects from higher trade barriers with the EU3. Therefore, we have supported the Welsh Government’s calls for an extension to the transition period. How effectively are the UK and Welsh Governments working together in ensuring sufficient support is provided to the Welsh economy during, and after, the pandemic? 3 https://voxeu.org/article/covid-19-and-brexit-contrasting-sectoral-impacts-uk 2 Following some initial delay and confusion, the economic support measures from both UK Government and Welsh Government have been ambitious and effective. The Coronavirus Job Retention Scheme and Self-Employed Income Support schemes developed by the UK Government following representations to government by the TUC and unions have unquestionably protected thousands of Welsh jobs during this period. 316,500 people in Wales have been supported through the CJRS scheme and just over 100,000 have claimed a SEISS grant, which is 73% of the eligible population. We have also supported the Welsh Government’s Economic Resilience Fund (ERF) spending. Our priority from the outset has been to ensure that workers in Wales have jobs to go back to and the ERF funding has certainly protected jobs that would otherwise have been lost. Maintaining the relationship between a worker and their employer is proven to be an effective way of mitigating the impact of economic downturns. The ERF has also meant that a much greater number of employers in Wales have signed up to the Welsh Government’s ‘Economic Contract’. We view engagement with employers via the Economic Contract as an opportunity to drive up levels of union access, rates of collective bargaining and, consequently, improve the quality and security of jobs in the private sector in Wales. There is a huge risk, however, that the success of those schemes will be undermined in the coming weeks and months. The primary risk factors are: A mishandling of the return to work process and the opening-up of the economy: The economic and public health challenges are inextricably linked. We have favoured the more cautious approach that the Welsh Government has taken on easing lockdown restrictions. We have significant concerns about the capacity of health and safety enforcement agencies to effectively oversee the safety of workers in the new and radically different workplace contexts. This oversight weakness is the result of a decade of austerity: the HSE budget has been cut by over £100m since 2010 and its workforce has been cut by a third. Similarly, the number of local authority health and safety inspectors has more than halved since 2010. Our analysis suggests that there are on average fewer than two FTE health and safety inspectors in each local authority area in Wales. Along with the Wales CBI, we have been calling for Welsh Government to establish a Health and Safety Forum for Wales. This group would be made up of representatives 3 from Welsh Government, trade unions, employer groups and enforcement agencies and would serve to oversee the effectiveness of measures taken to protect worker safety. The need for such a group has been highlighted by the recent COVID 19 outbreaks in three meat processing plants across Wales. While the Welsh Government has indicated a willingness to establish the group, we have been disappointed by the delays in this process. The premature unwinding of the CJRS and SEISS schemes: The danger with the CJRS is that in many instances it will have only served to delay redundancies unless it is continued to the point where (a) the economic conditions have improved to allow employers to trade with a meaningful degree of normality and/or (b) there is appropriate levels of alternative government support in place. We’ve welcomed the extra flexibility that will be built into the next phase of the CJRS, but we are concerned that the progressive increases in the employer contributions in coming months may undermine the success of the scheme up to this point. We also believe that the UK Government needs to recognise that there are significant sectoral differences in the prospects for businesses to return to ‘normal’ and they must therefore be prepared to offer some further continuation of the scheme in sectors like hospitality and the creative industries. What additional financial powers and budgetary flexibility should be provided to the Welsh Government in response to the pandemic? Both the Wales Governance Centre4 and The Institute for Fiscal Studies5 have recently published research suggesting that the Welsh Government’s ability to respond effectively to crises is made more difficult by funding mechanisms from UK Government that fail to recognise the particular challenges that Wales faces. It proposed that Welsh Government should be given greater borrowing powers to allow it to make stronger market interventions. We support such reforms. What work can be done to make the Welsh economy more resilient in the face of future crises and potential outbreaks of Covid-19 and other pandemics? The crisis has exposed some fundamental weaknesses in the Welsh economy. An insufficient focus on fair work and job quality in the long terms has meant that thousands of Welsh workers went into the crisis with little or no security and were subsequently highly vulnerable.

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