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Present

  • Rt. Hon. Mark Drakeford MS (Chair)
  • Vaughan Gething MS

Via video link

  • Rebecca Evans MS
  • Julie James MS
  • Lesley Griffiths MS
  • Eluned Morgan MS
  • Ken Skates MS
  • Kirsty Williams MS
  • Jeremy Miles MS
  • Jane Hutt MS
  • Hannah Blythyn MS
  • Julie Morgan MS
  • Dafydd Elis Thomas MS
  • Lee Waters MS

Officials

  • Shan Morgan, Permanent Secretary (via video link)
  • Carys Evans, Principal Private Secretary to the First Minister (via video link)
  • Will Whiteley, Head of Cabinet Division
  • Toby Mason, Head of Strategic Communications (via video link)
  • Jane Runeckles, Special Adviser (via video link)
  • Alex Bevan, Special Adviser (via video link)
  • Ian Butler, Special Adviser (via video link)
  • Kate Edmunds, Special Adviser (via video link)  
  • Paul Griffiths, Special Adviser (via video link)
  • Clare Jenkins, Special Adviser (via video link)
  • Andrew Johnson, Special Adviser (via video link)
  • Gareth Williams, Special Adviser (via video link)
  • Mitch Theaker, Special Adviser (via video link)
  • Tom Woodward, Special Adviser (via video link)
  • Christopher W Morgan, Cabinet Secretariat (minutes)
  • Damian Roche, Cabinet Secretariat
  • Jonathan Scourfield, Specialist Policy Adviser (via video link)
  • Dewi Knight, Specialist Adviser for Education Reform (via video link)
  • Tracey Burke, Director General, Education and Public Services (via video link)
  • Andrew Goodall, Director General, Health (via video link)
  • Andrew Slade, Director General ESNR (via video link)
  • Jonathan Price, Chief Economist (via video link)
  • Andrew Jeffreys, Director Treasury (via video link)
  • Margaret Davies, Deputy Director Strategic Budgeting (via video link)
  • Simon Brindle, Director COVID-19 project team (via video link)
  • Liz Lalley, Deputy Director Recovery (via video link)
  • Gillian Richardson, Senior Professional Advisor Health (via video link)
  • Chrishan Kamalan, CMO’s Office (via video link)

Item 1: Minutes of the previous meeting

  1. Cabinet approved the minutes of 21 September.

Item 2: First Minister’s items

COVID-19 Restrictions: 21 Day review  

  1. The First Minister informed Cabinet that Ministers would have an informal discussion on the issues surrounding the 21 day review of the Health Protection (Coronavirus Restrictions) Regulations and other lockdown measures the following morning. This would be in advance of the formal Cabinet discussion on Thursday. One of the matters under consideration would be whether to allow single adult households to form an extended household with one other household in Local Health Protection Areas.

COVID-19 Local Restrictions: North Wales

  1. The First Minister informed Cabinet that he, along with other relevant Ministers, would be meeting the Leaders and Chief Executives of North Wales Local Authorities, representatives from Betsi Cadwaladr Health Board and North Wales Police the following afternoon to discuss the spread of the virus in the region. Representatives from Bangor and Wrexham Glyndŵr Universities had also been invited to the meeting.
  1. It was agreed that the Minister for Health and Social Services’ Oral Statement the following day on local restrictions would need to be rescheduled to later that afternoon to allow the Minister to reflect on any decisions taken at the meeting.

Item 3: Senedd business

  1. Cabinet noted the Plenary forward schedule.  

Item 4: Economic update

  1. The First Minister invited the Government’s Chief Economist to provide an overview of the economic situation.
  1. The latest UK data suggests that GDP had partially recovered from the unprecedented collapse at the start of the lockdown. There had been an almost 9% increase in June followed by nearly a 7% increase in July. However, if growth in August was similar to July, the gap with February would still be around 6%, which was similar to the decline experienced during the 2008 recession.
  1. The limited available data suggests the effects on Wales have been similar to the UK as a whole, and if anything somewhat worse.
  1. The latest retail sales suggest large compositional changes since February, with a rise in non-store retailing, with a corresponding fall in shop footfall, particularly clothing outlets. There had been increased spending on home improvements and household goods, but there were questions over the sustainability of such expenditure and recent unofficial survey data suggested that the recovery was already ‘losing steam’ before the new restrictions had been imposed.
  1. The Office of Budget Responsibility (OBR) had produced a number of scenarios for the recovery, all of which assumed a smooth transition to a free trade agreement with the EU. The latest analysis from the Bank of England suggested a similar recovery to the OBR’s upside scenario, with the GDP data for August suggesting a slightly better situation than the upside scenario. However, the Chief Economist indicated that this positive position was unlikely to persist in view of the recurrence of the virus and continuing uncertainty over future trading arrangements with the EU.
  1. Official labour market data did not yet fully reflect the extent of the economic downturn, but all the indications were that there would be a large and sustained increase in unemployment. Early indications confirmed the expectation that young people, especially those entering the labour market for the first time, would suffer the most severe difficulties. Other disadvantaged groups would also face increased risk, along with the self-employed and those in part-time employment.  
  1. The Bank of England was suggesting that unemployment would peak around 7% (although with a major risk of a worse outcome), with a less positive scenario of 12% from the OBR.  In addition, the risk of redundancies was greatly elevated and the survey data suggested big risks for the labour market in the autumn. 
  1. Supporting job creation would be a key priority. Normally, around 8,000 jobs were created and lost across the UK each day, which was equivalent to 400 posts in Wales and the role of direct job creation by government was therefore modest in that context. It was noted that the Welsh labour market was performing relatively well when the pandemic and subsequent lockdown commenced.
  1. Added to the uncertainty associated with the pandemic were the risks of leaving the Transition period without a free trade agreement with the EU. Analysis by independent economists suggested that if the UK traded with the EU on World Trade Organisation terms over the longer term of 10 to 15 years, this could result in incomes being around 10% lower. This was likely to have a greater impact in Wales, given the greater reliance on the EU as an export market.  Research suggested that while COVID-19 could have a greater short term impact, over the longer term a no deal Transition impact would be two to three times greater. 
  1. The measures taken to address the crisis had resulted in a large increase in borrowing, and OBR analysis indicated that levels of UK Government debt were unsustainable over the long term. However, there was a consensus amongst economists that premature fiscal tightening would be counterproductive.
  1. Cabinet thanked the Chief Economist for his presentation.

Item 5: Update on preparations for the 2021-22 Budget - CAB(20-21)04

  1. The Minister for Finance and Trefnydd introduced the paper, which provided Cabinet with an update on the factors shaping the preparations for the 2021-22 Budget, and set out the parameters for the next stage of the process.
  1. There was a need to consider the implications of the Chancellor of the Exchequer’s recent announcement that the UK Budget, planned for the autumn, had been cancelled.
  1. Cabinet approved the recommendations within the paper.

Item 6: Reconstruction after COVID-19: Challenges and Priorities CAB(20-21)06

  1. The Counsel General and Minister for European Transition introduced the paper, which invited Cabinet to consider the latest draft of COVID-19 Reconstruction: Challenges and Priorities document.
  1. The document emphasised that the Government’s approach to reconstruction after COVID-19 would be driven by the existing vision of a more prosperous, equal and greener Wales. These interventions were consistent with Welsh Ministers’ values and it was acknowledged that throughout the pandemic the delivery of critical actions to ensure the delivery of the Programme for Government had been protected.
  1. The paper summarised the feedback received through the ‘our future Wales’ mailbox and from the numerous round table discussions with a breadth of sectors from Welsh society.
  1. Cabinet approved the document.