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Welsh Government releases additional £100M business support

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The latest phase of the Welsh Government’s Economic Resilience Fund has benefited from the release of a further £100million from ministers within 72 hours of launch, due to a massive demand.

More than 6,000 grant applications from small and medium sized businesses and social enterprises were received within 24 hours of the launch on Friday – an unprecedented response, revealing the scale of the challenges facing Welsh businesses.

The Fund aims to complement and fill the gaps left by UK Government schemes such as the Job Retention Scheme, with grants of up to £10,000 for micro-enterprises and up to £100,000 for SMEs and a light touch appraisal system designed to get money to businesses with the minimum of delay – as well as a new loan fund administered by the Development Bank of Wales.

Less than three weeks since the First Minister announced the intention to create the Fund, the Welsh Government has released a further £100 million, taking the grant fund to £300 million. This will supplement this latest phase of support, providing non-repayable grants to microbusinesses, SMEs and those large businesses of critical, social or economic importance to Wales.

The Fund has been warmly received by trade union and business organisations, with the Institute of Directors calling it ‘very welcome news for business owners and managers who are desperate for all the help they can get at this difficult time’. The South and Mid Wales Chambers of Commerce has called ‘the rapid response to date’ of the Welsh Government in supporting the economy of Wales ‘impressive’. The Wales TUC welcomed ‘additional funding to address the gaps’.

Minister for Economy, Transport and North Wales Ken Skates said:  “We knew that even with the help offered by initiative such as the Job Retention Scheme, there was a massive need for quick access to grant funding if Welsh businesses were to survive this unprecedented economic shock. Whilst in order to make the scheme quick and simple we needed to take tough decisions over eligibility – like requiring businesses to be registered for VAT as a way of having to check on their trading history – it is clear from the level of response received that the Economic Resilience Fund is plugging a gap in UK Government support and providing much needed financial reassurance to many businesses at this challenging time. We will continue to review support and consider how we can develop it over the coming days.

“The rate of applications has been massive and unprecedented. This is the second time in a matter of weeks that access to Welsh Government funds aimed at easing cash flow pressures for Welsh business have quickly reached capacity, and we have responded with pace to release a further £100m into this phase of the fund.

“In these difficult and demanding economic times we have worked hard to free up resources to create such a large Fund despite the huge demands on our budget, and to strike a balance between supporting as many enterprises as possible and making a meaningful contribution to each one’s survival, as well as asking each recipient to sign up to the principles of the economic contract.

“Though we applaud much of what the UK Government has done, 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.”

Finance Minister Rebecca Evans said: “The Economic Resilience Fund is part of more than £2bn of support that we have made available to help businesses and charities during these incredibly difficult times.

“We know that support for business is crucially important but whilst we are doing everything we can in Wales to plug any gaps and provide the best possible financial support to businesses, it is clear there are further steps that the UK Government needs to urgently take.”

The Economic Resilience offers financial support to help businesses, charities and social enterprises deal with the coronavirus crisis and will be vital in helping organisations manage cash flow pressures. It is a unique additional funding stream for Wales and was designed to address gaps not currently met by schemes already announced by the UK Government, Welsh Government and Development Bank of Wales.

The first stage of the Fund saw the £100 million Development Bank of Wales’ loan scheme fully subscribed in little more than a week. Applications are currently being processed and some businesses have already received funding. It is anticipated that the Development Bank will have processed all applications received within the month.

To ensure that money reaches businesses as quickly as possible more than 120 additional Welsh Government and Business Wales staff have been diverted onto processing applications and supporting businesses and organisations in this latest stage of the Fund.

Business

Local businesses to benefit from Supreme Court insurance ruling

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THE SUPREME COURT has largely ruled in favour of policyholders and the City regulator in the landmark business interruption insurance case. 

In a judgment handed down today, the court said it “substantially allowed” the appeal by the Financial Conduct Authority (FCA) and campaign groups Hiscox Action Group and Hospitality Insurance Group Action. 

Tens of thousands of small businesses will receive insurance pay-outs across the UK covering losses from the first national lockdown. There are thought to be hundreds of businesses in Pembrokeshire which will benefit from the ruling.

One of the judges, Lord Briggs, said in the ruling: “On the insurers’ case, the cover apparently provided for business interruption caused by the effects of a national pandemic type of notifiable disease was in reality illusory, just when it might have been supposed to have been most needed by policyholders.

“That outcome seemed to me to be clearly contrary to the spirit and intent of the relevant provisions of the policies in issue.”

The insurers Arch, Argenta, Hiscox, MS Amlin, RSA and QBE, have had their appeals dismissed. 

The ruling will provide guidance for a further 700 policies, potentially affecting up to 400,000 policyholders.

Richard Leedham, partner at Mishcon de Reya who represents the Hiscox Action Group today said: “The judgment should be a massive boost to all businesses reeling from a third lockdown who can now demand their claims are paid.”

“The hope and expectation of our clients is that the claim adjustment process starts immediately and that insurers will not continue to cause further distress by further unnecessary delay.”   

Following today’s decision the insurance industry is expected to pay out over £1.8bn in coronavirus claims related to the first lockdown, which includes business interruption policies.

The FCA, which brought the test case, said: “We will be working with insurers to ensure that they now move quickly to pay claims that the judgment says should be paid, making interim payments wherever possible.”

Huw Evans, director general of the Association of British Insurers (ABI) confirmed insurers would settle claims as soon as possible.

“Customers who have made claims that are affected by the test case will be contacted by their insurer to discuss what the judgment means for their claim. All valid claims will be settled as soon as possible and in many cases the process of settling claims has begun,” he said after the judgment.

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Welsh Government reminding hauliers to be prepared for changes at ports

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FOLLOWING the expected quiet start to the New Year at Welsh ports and with freight levels expected to rise over the next few days, the Welsh Government said it is reminding hauliers to be prepared for the changes which are now in place

To transport goods from Great Britain to Ireland, including from Welsh ports, hauliers need a Pre-Boarding Notification (PBN) from the Irish Revenue.  Without it they will not be able to enter the port to board the ferry, and will be turned away.

Since January 1 around 20 per cent of HGVs have been turned away because they do not have the correct paperwork.

With an increase in freight traffic expected, more hauliers could be turned away.  Forecasts from the UK Government have predicted between 40 and 70 per cent of hauliers could be turned away from ports.

Contingency plans are in place at Holyhead to minimise any potential disruption to the port, town and community as a result of HGVs being turned away.  Hauliers without the correct paperwork will be redirected along the contraflow on the A55 to Junction 4 where they will turn off and join the westbound carriageway where they will either be stacked while they sort their paperwork, or be redirected to Parc Cybi.

Minister for Transport and North Wales Ken Skates said: “When we announced our contingency plans for Holyhead Port we said the New Year period was expected to be quiet, following a very high level of freight passing through the port before Christmas.  Mid-January is expected to be the peak period for HGVs being turned away.

“Many hauliers are prepared for the changes which are now in place as a result of the EU Transition period.  But, as the experience of the first few days have shown, as expected there are a number who are not.  I would urge all hauliers and freight companies which transport goods from Welsh ports to Ireland to familiarise themselves with the process and ensure they have a Pre-Boarding Notification ID before they arrive at the port.

Pembroke Port (Pic MHPA)

“Our contingency plans are there to minimise disruption for the port itself and the wider community.  They are in place and ready to be used should the need arise and as we approach mid-January we will be reaching a busier time for freight at the port.  We will keep our plans under constant review.”

Anglesey Council Leader, Councillor Llinos Medi, added, “We’re working closely with Welsh Government, North Wales Police, Port Authority and other key partners to ensure safe and efficient trade and traffic movement through the Port of Holyhead, whilst protecting our local communities.”

“Given the expected increase in freight volume over the coming weeks, I would echo the Minister’s call for hauliers to be prepared when they reach the Port of Holyhead. Despite contingencies being in place, I would also ask local residents and businesses to bear in mind the impact that any potential traffic congestion in the Holyhead area and on the A55 could have on their lives and daily routines, and to plan any essential journeys accordingly.”

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Reminder of rules over closure of accommodation businesses

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ACCOMMODATION businesses in Pembrokeshire are reminded that they must now be closed under the current Alert Level 4 restrictions put in place by the Welsh Government.

Pembrokeshire County Council acknowledges the major impact the restrictions are having on local businesses but the Council has a duty to help prevent the spread of covid-19 by ensuring that the Alert Level 4 rules are followed.

Local authorities can authorise accommodation businesses to open for specific purposes such as housing key workers, people who have been displaced or are homeless, or medical patients.

However, a permission must first be obtained from the Council.

Businesses are asked to please contact via email at buildings@pembrokeshire.gov.uk or by phone on 01437 764551, providing necessary information.

Businesses should also obtain information to check legitimacy of key workers/vulnerabilities and record the details.

Where people continue to stay in an accommodation business that is otherwise closed, premises must ensure they follow the restrictions on infection prevention and control measures, occupancy, contact tracing, food provision and sale of alcohol.

Catering should be takeaway only and room service can still be provided.

Cllr Cris Tomos, the Council’s Cabinet Member for Public Protection, said: “The Council is very aware of how the restrictions are affecting local businesses and we once again thank all those who are following the rules and doing their bit in the fight against Covid-19.

“We have a duty to ensure the rules are being followed in Pembrokeshire and so over coming weeks our Covid Enforcement Officers will be inspecting businesses and checking that they have the necessary risk assessment in place and documents.

“We have always said that we much prefer to engage and educate rather than enforce and that remains the case. If you wish for your accommodation to open to provide housing for key workers or for other permitted reasons please contact us and we can help.”

Please note it is an offence for owners not to comply with their duties and can be punishable by a fine.

Further information on the Alert Level restrictions can be found at: https://gov.wales/alert-level-4-frequently-asked-questions

The regulations are clear that residents should stay at their primary residence and that travel to holiday accommodation or second homes is not essential travel.

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