Poorest risk being the worst affected in exposed Wales economy, say MPs

By July 21, 2020NEWS

A cross-party group of MPs have warned that there is a real risk that the worst effects of Covid-19 could fall on those who are least able to afford it in Wales, a nation whose economy was already vulnerable to economic shocks before the pandemic.

Impact on people and businesses in Wales

In their interim report on the Welsh economy and Covid-19 the Welsh Affairs Committee describes the impact that the virus has had to date on businesses and people throughout Wales. It also details support provided by both the UK and Welsh Governments and focuses attention on some of the sectors at particular risk during the crisis.

Before the crisis, Wales was ranked second to last in a list of 12 UK nations and regions for Gross Disposable Household Income and had a poverty rate of 23%. The nation also has the second-highest levels of employment in sectors most exposed to the headwinds caused by virus countermeasures, namely retail, food and drink, and arts and leisure.

The Committee’s report warns that Covid-19 has created a ‘perfect storm’ for key sectors of the Welsh economy. For some of Wales’s most important employers, the short-term impacts of the pandemic have converged with longer-term challenges to restructuring to deliver sustainable growth.

The Committee intends to return to this report in the Autumn to make recommendations on how to reduce the risks of the pandemic and to build a successful and sustainable economic recovery for Wales.

Chair’s comments

The Chair of the Welsh Affairs Committee Rt Hon Stephen Crabb MP said:

“The coronavirus pandemic has dealt a devastating blow to families and businesses across Wales, with the burden falling most heavily on communities which were already vulnerable prior to the crisis. Both UK and Welsh Governments are responding to this crisis with unprecedented levels of support.”

“Our interim report shows in raw numbers the scale of the economic challenge now facing our nation. Key industries are facing a perfect storm and there is a real prospect of unemployment returning to levels not seen for decades in Wales. Wales needs a sustainable recovery that leads to a stronger and more resilient economy.”

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