Jobs and training must be top priority for economic recovery in Wales – CBI urges Welsh First Minister

Dame Carolyn Fairbairn, CBI Director-General and Ian Price, the CBI’s Wales Director, have today written to First Minister Mark Drakeford. They urge him to put jobs and training, especially for young people, at the heart of economic recovery plans.

Businesses recognise the need to prioritise health and adapt to new ways of working following the Covid-19 crisis. But that must not delay urgently implementing an ambitious recovery plan that responds to the scale of the economic challenge Wales faces.

As people begin returning to work safely, two priorities stand out: jobs and investment. Unemployment is the biggest threat to livelihoods and must not be allowed to scar communities across the country. We know unemployment falls unevenly, so future policy must be geared towards reversing rather than entrenching inequality. Meanwhile, business investment must bounce back fast to create the jobs of the future and address Wales’s poor productivity performance.

CBI Wales has laid out an ambitious, health-first, recovery plan that would help secure a jobs-rich, fair and sustainable future for the economy:

1. Make job creation, skills training and opportunities, especially for young people, the top priority.

Specific proposals include: In order to deliver on the Economy Minister’s pledge that everyone over the age of 16 will be offered   support and advice to find work, the government will need to expand existing upskilling and retraining initiatives such as Working Wales, ReAct and scaling up PACE to increase the speed at which people can move between roles and sectors to match demand.

2. Invest in the green economy to create new jobs, investment and a more sustainable future.

Support the Future Generation Commission’s call for specific proposals to grow our green economy: retrofitting all homes with a high standard of energy efficiency; expanding and quickening the deployment of electric vehicle charging networks, help Welsh firms build resilient supply chains and incentivise remote working for those employees that wish to do so.

3. Kick-start demand and boost competitiveness.

Specific proposals include: introducing a time-limited scrappage scheme to incentivise the take-up of electric vehicles, extending business rates relief to mid-sized businesses in all sectors to help them press ahead with paused innovation projects and accelerating shovel-ready construction projects.

(Full recommendations are outlined in the letter copied below)

Ian Price, CBI Wales Director, said:

“This unprecedented crisis demands an unprecedented response to get the economy back on track. The Welsh economy was already struggling before Covid-19 hit, and now every single bit of growth matters for people’s jobs and livelihoods.

“While we live with the virus, any recovery plan must continue to prioritise health as well as the impact on the economy. Urgent interventions are required to create jobs, especially for young people, and investment.

“Speed is of the essence – we know the dangers of long-term unemployment and the impact it has on individuals and communities. As research by the Centre for Towns reveals, Wales will be the worst affected part of the UK with thirteen of the top twenty most severely hit towns within our border.

“That’s why we’re calling for the recovery plan to prioritise jobs and training to support people keep their jobs and get people back to work as quickly as possible.

“Ultimately, business and government must find new, innovative ways of working together to support the recovery in the short-term and lay the foundations for a more competitive and sustainable future for the Welsh economy.”

Full letter to First Minister

Rt Hon Mark Drakeford AM

Welsh Government

Cathay Park

Cardiff

CF99 1NA

Dear First Minister

Re: Build Back Better: Proposals for an equitable and dynamic restart of the Welsh economy

The COVID-19 crisis has created an unprecedented challenge and rightly led to a relentless focus on health. Business recognises that will remain the case for some time and we will all need to adapt to new ways of living with Covid-19, at least until a vaccine is found. But this must not stop all of us from implementing an ambitious recovery plan for the Welsh economy.

Early research is confirming what many of us feared that the Welsh economy might suffer the worst and recover last. As a new report from the Centre for Towns reveals, Wales has thirteen of the top twenty most economically impacted towns in Great Britain.

Amidst all the uncertainty, one thing is clear: Wales will only build back better if we have a plan that not only responds to today but prepares us for tomorrow.

We need to address new challenges with new solutions and have the courage to leave behind closely-held policies if they no-longer fit a post-pandemic world. One such issue for the CBI is the M4 relief road. Working together, business and government have a real opportunity to lock-in new ways of working which are both better for the environment and the economy.

While the CBI’s response to the pandemic includes three distinct phases – reopen, revive and renew – each is being developed concurrently and in concert.  At this moment, this letter focuses on the support the men and women in our hardest-hit communities need right now.

Safeguarding and recreating jobs must be critical priorities as our regions reopen. A sector - and occupation-level heat map can be a key tool in this effort: for each at-risk industry or service, governments and their partners can shape bold, rapid interventions to increase business activity and recreate jobs. The CBI would be willing to work with your officials to develop this.

One key focus of early government interventions must be to stimulate consumer demand and rebuild confidence in our economy for both domestic and foreign investors. Dynamic, resilient and deep-rooted enterprises have the potential to deliver a return to growth and enable sustainable public spending. It is also our opportunity to get ahead in an increasingly competitive global economy and rebuild local, sustainable supply chains.

While we live with the virus, any renewal plan must continue to prioritise health. The CBI has valued its partnership with both the Welsh and UK governments as well as other key stakeholders to ensure the UK is safe to visit, safe to invest in, safe to work in, and safe to study in. These assurances are critical to the recovery of Wales’ tourism, hospitality and higher education sectors, as well as many others.

But two other priorities stand out: jobs, especially for young people; and investment. Redundancies will rise fast over the autumn as support schemes, especially the JRS, wind down. Past recessions show the impact of joblessness is deeply uneven. Without immediate intervention, pre-crisis inequalities across nations, regions, gender and race will worsen.

As Wales knows too well, long term unemployment leaves generational scars. And investment will need to bounce back fast – business investment was weak before the pandemic and is now at historic lows – so needs stimulating to create the jobs of the future.

Time is of the essence. Dynamic markets will, over time create good jobs, but smart, fast policy is needed now to accelerate the process and minimise the human cost. Together with our members and in consultation with stakeholders, the CBI has developed simple, implementable proposals that can be acted on now to help create the best possible recovery.

1. Make job creation, skills training and opportunities, especially for young people, the top priority

To deliver on the Economy Minister’s pledge to offer all those over the age of 16 to find work, the government will need to expand existing upskilling and retraining initiatives such as Working Wales, ReAct and scale-up PACE to increase the speed at which people can move between roles and sectors to match demand.

2. Invest in the green economy to create new jobs, investment and a more sustainable future

Support the Future Generation Commissioner’s proposals to grow the low-carbon environmental goods and services market. Priority actions include retrofitting all homes with a high standard of energy efficiency; expanding and quickening the deployment of electric vehicle charging networks, help Welsh firms build resilient supply chains and incentivise remote working for those employees that wish to do so.

3. Kick-start demand and boost competitiveness

Specific proposals include going further and faster to remove the barriers facing Welsh organisations purchasing products and services made in Wales. Specific recommendations include introducing a time-limited scrappage scheme to incentivise the take-up of electric vehicles, extending business rates relief to mid-sized businesses in all sectors to help them press ahead with paused innovation projects and, finally, accelerate shovel-ready construction projects.

Yours sincerely

Dame Carolyn Fairbairn, CBI Director General

Ian Price, CBI Wales Director