Short Debate: Cuts Watch Cymru

Mark Drakeford: I am happy to offer a minute each during this short debate to Aled Roberts and Leanne Wood.

Yesterday, Cuts Watch Cymru, a new coalition of organisations in Wales, published its first report. The alliance came together to trace and track the impact of changes in the benefits system on people who live in Wales. Its report concludes that the impact of benefit changes is only just beginning to be felt across the United Kingdom. Almost 90% of the cuts are yet to come, and, over the next four years, their impact will be felt by hundreds of thousands of people in Wales, whether they are the one in five people of working age who receive a Department for Work and Pensions benefit or one of the 0.25 million people receiving housing benefit.

Underpinning the changes is a desperate drive to force people off welfare and into work. Lone parents will be obliged to seek work once their youngest child is five years old and they will be required to do so within a 90-minute commute of their home. People with disabilities will be subject to fitness-for-work procedures, which we already know are both flawed in application and distressing in prospect. At the same time, changes in housing benefit will mean that almost all tenants are worse off: people with a so-called spare bedroom and those under 35 who live alone face the prospect of a forced move. More than 1.2 million Welsh pensioners will, this winter, experience reductions in their winter fuel allowance—a benefit that, because of rising prices, has already seen its real value fall from 63% of fuel bills in 2008 to only 50% this last winter.
All of this will be happening at a time when demand for public housing to rent is at an all-time high, as repossessions of owner-occupied houses broke through the 5,000 barrier in Wales in the last calendar year, and the number of people accepted as being statutorily homeless was 13% higher in the first quarter of 2011 than in the same quarter of 2010. It is also all happening at a time when unemployment is rising and jobs are in ever shorter supply.

The answer of the Westminster coalition is that jobs will be created in the private sector, and yet official figures show that, between July and September last year, for every job in the private sector 13 jobs were lost in the public sector. Indeed, were it not for a statistical quirk, whereby jobs in Lloyds TSB and the Royal Bank of Scotland are now listed by the ONS as public sector employment, the number of jobs in the private sector in the UK economy would actually have been recorded as shrinking over that quarter. It is hardly surprising then that, since 2008, a derisory 3.5% of lone parents with their youngest child aged between 12 and 15, let alone five, forced to switch to jobseeker’s allowance, have actually found a job.

The Cuts Watch Cymru report contains a wealth of detail and from all of that two key conclusions stand out with a new force. First, although the impact of cuts is almost always discussed in terms of separate benefits, their impact is cumulative at the level of the individual and the family. Put simply, it is the same people who will have their incomes reduced right across the range of benefit cuts. It is the same people who are losing £690 in cancelled pregnancy and maternity grants and finding their child benefit and working tax credits frozen, who are dealing with cuts in help towards childcare costs and who are having to work longer hours to qualify for tax credits, and that on top of cuts in housing benefit. It is the same people who are facing these cuts in each and every part of their lives.

Secondly, all of these different changes not only coalesce in the lives of individuals and families but have a hidden but strongly cumulative effect on particular places. Time and again, the Cuts Watch Cymru report demonstrates the fact that, in terms of simple job-seeking unemployment, for example, some local authorities have almost four times as many of their population in that position as others do. Those with the highest rates of claimants include, as we would all expect, Blaenau Gwent with 6.6%, Merthyr Tydfil with 5.6% and Newport with 5.1%. Other local authorities have less than half that rate. When it comes to long-term sickness and disability, the same pattern of uneven distribution occurs. Once again, some of the most deprived local authorities have twice as many claimants in that category as the more advantaged areas do. Unsurprisingly, the same pattern can be found again in relation to housing benefit. Here, claimants are concentrated in social rented housing, with 82% of housing benefit claimants in that situation in Torfaen and 74% in Blaenau Gwent.

Gareth Morgan, a leading analyst of the social security system has concluded that, cumulatively across Wales, more than £2 billion will be lost though benefit cuts over a four-year period. As a result, more than £37 million will be sucked out of the local economy of Merthyr Tydfil and £46 million out of Blaenau Gwent. Those are some of most fragile economies in Wales, and when you lose 20% of the purchasing power from a high street in a fragile economy of that sort it is not just people on benefits who suffer as a result; it is everybody who depends upon the shops and services that will not be able to trade or operate when that purchasing power is no longer there to support them.
In my view, these issues demand a radical response across all levels of government in Wales. There needs to be a new prominence to the work going on within the Welsh Government to respond to the impact of welfare reform. Minister, we were grateful for your statement yesterday on the work of the Cabinet’s task and finish group on welfare reform, and I have been reading with dismay the research that you have published that demonstrates, as Cuts Watch Cymru has done, the impact of these reforms on families, including families that are already in the most difficult of circumstances and families with children. I think that that Cabinet task and finish group will want to work with organisations represented in Cuts Watch Cymru to assess the impact of the changes about to happen, drilling down to the local level to establish key facts about the likely loss of income to those areas, and the number of people who might be forced to seek rehousing. We then need to follow that analysis with a new focus on possible programmes of support for such communities. As well as mobilising the different services available through the Welsh Government and local authorities, that could identify and draw upon the major contribution of social partners and third sector organisations. Workfare schemes as organised by the Westminster coalition have rightly and recently come under fire, and it is very good to see today’s latest victory, which means that the threat of losing your benefit if you did not take part in such a scheme has been withdrawn by Westminster. Even so, the creation of meaningful opportunities for work and training remain essential if young people in particular are to come through the next four years without a permanent blight on their futures. There is no shortage of worthwhile work to be done in Wales, from community-wide environmental improvement programmes to housing stock improvement to tackle fuel poverty.

When we have done that, the scale of the problems demands that the response should go beyond the range of tools that have been deployed in Wales to date. We need to be prepared to implement directly and quickly initiatives that have already been worked up in other parts of the United Kingdom and which, up until now, we have perhaps felt that we did not need to draw upon. Two examples must suffice to illustrate this argument. In May of this year a local currency will come into use in Bristol, the Bristol pound, which will go beyond the experiments already attempted in other towns and cities, such as Brixton and Lewes. Local currencies fill the gap in places where goods and services are available, but the conventional means of exchange—money—is in short supply. The Bristol pound goes beyond previous examples to form a new partnership between voluntary effort and the local state, because traders accepting the local currency in payment for goods and services will be able to use those Bristol pounds to pay for their business rates, for example.

The Dumfries food train is of longer duration, having been founded in 1996. It provides a grocery shopping, befriending and household support service for older people, assisting and enabling them to live at home independently for as long as possible. From very modest beginnings, the scheme has, a decade later, made more than 15,000 deliveries to nearly 600 participating households in the Dumfries area.

Running through all of this is the need to generate radical community-wide approaches to do whatever is possible to minimise the impact of changes that have already begun and which will be driven through before the next general election. Local resilience will be the key to survival over the next three years, supported by national action and sustained by political determination to stand up for the interests of those who most need that solidarity. The first Cuts Watch Cymru report demonstrates the scale of that challenge; now is also the time to demonstrate the strength of our response.