Wales “faces £2billion shortfall by 2020” from welfare reforms

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The Motion

The Senedd:


  • Notes the analysis of the effect of the UK Government’s welfare reform on households in Wales (pdf).
  • Recognises and regrets the negative impact on the lives of the poorest and most vulnerable people in Wales.

“Disproportionate and unfair”

Leading the debate, Deputy Minister for Housing & Local Government Hannah Blythyn (Lab, Delyn) told AMs that while some recent positive changes have been announced – such as an increase in universal credit work allowances – these were small.

“We also know that many benefit cuts are only partly implemented, with the spectre of further significant cuts looming large. Relative child poverty in Wales is estimated to increase substantially, with the reforms pushing an extra 50,000 children into poverty by the time they are fully enforced. The stark reality is that the double whammy of welfare reform and the agenda of austerity is hitting those least able to bear the burden the hardest. And, it does not stop there.”
– Deputy Minister for Housing & Local Government, Hannah Blythyn

The analysis (linked to in the text of motion above) said there’s been a “disproportionate and unfair” impact on ethnic minorities and the disabled, while universal credit roll-out has lead to three specific problems: an increase in rent arrears, increase in the use of food banks and issues with online applications.

The Deputy Minister said estimates suggest the shortfall for Wales resulting from welfare reform will reach £2billion by 2020, but Welsh Government levers are limited and she said funding for advice services may only increase to around £8.5million a year – though there were a number of indirect measures like discretionary assistance funding and council tax reductions, both worth a combined ~£290million.

“Record employment”

Shadow Communities Minister, Mark Isherwood AM (Con, North Wales) praised the economic turnaround in the UK since 2010, with record employment. He rejected the “politicised nature” of the government’s motion and the absence of any meaningful Welsh Government poverty reduction targets.

“….(The) Equality and Human Rights Commission report ‘Is Wales Fairer?’ found, poverty and deprivation still remain higher in Wales than in other British nations. Wales is the least productive nation in the UK and median weekly earnings in Wales are lower than in England and Scotland. Damningly, ONS figures on employee earnings (2018) also showed that average earnings in Wales were lower and had grown slower than other UK nations in the previous year.”
– Shadow Communities Minister, Mark Isherwood AM

He told AMs universal credit was a success. It was getting people into work faster and helping them stay there longer. Under personal independence payments, a higher proportion of the neediest disabled people were receiving the highest level of support than under the old disability benefits system.

A callous system

Leanne Wood AM (Plaid, Rhondda) wanted to focus on the attitudes of administrators:

“….I don’t believe we can really create a human social security system worthy of the name unless we change the way in which staff interact with people in need on a day-to-day basis. The long list of sanctions given to people experiencing tragic circumstances – for example, the man who was sanctioned for a missed appointment due to being at hospital with his partner who had just had a stillborn child – is illustrative of this. This system is callous.”
– Leanne Wood AM

She repeated calls for the devolution of administration of welfare. The system was draconian, punished the poor and had little to do with work incentives; it’s been an attempt by “Blairites to appease the Daily Mail“.

Huw Irranca-Davies AM (Lab, Ogmore) recounted how he found himself in serious problems in his 20s when he was facing redundancy following a company take over, where he was working 12-hour shifts as a security guard in London surrounded by wealth and before the minimum wage. He paid tribute to organisations on the front line providing help and advice to individuals.

Joyce Watson AM (Lab, Mid & West Wales) pointed out that changes coming into force this May will see the housing benefit and pension credit criteria for mixed-age couples – where one is above pensionable age and the other not – change, potentially costing those households £7,000; people looking for work over the age of 65 were more likely to die than find that work.


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