Wales

'Bruising' week sees welfare-to-work reform moves

Peter Hain Image copyright AP
Image caption Peter Hain said forcing people off benefits when there were no jobs available is 'punitive'

"Those who deliberately refuse to co-operate in getting back to work, will have their benefits reduced. This is only fair."

The harsh message of a Conservative/Liberal Democrat coalition targeting the poor?

Actually, the words are those of a Labour Work and Pensions Secretary, Peter Hain, speaking about the launch of a consultation paper In Work, Better Off.

This was all of three years ago, before the crash, when ministers could talk with a straight face of full employment.

Today, in changed economic times, and his current role as Shadow Welsh Secretary, this was his reaction to the UK Government's welfare plans:

"There are more than five unemployed people in Wales chasing every job vacancy and unemployment in Wales is predicted by independent groups to rise by over 60,000 as a direct result of the government's programme of savage cuts.

"Moreover, a higher proportion of people in Wales depend upon benefits both because of Wales' legacy of heavy and dangerous industry history and high unemployment. For these reasons, there is a real danger the government's new welfare proposals will hit Wales harder than any other part of Britain."

'New poor law'

Mr Hain says that as Work and Pensions Secretary he made changes which helped to make work pay - a key principle underlying Iain Duncan Smith's reforms.

"And I support any further changes to help achieve this," said Mr Hain. "But forcing people off benefit, or making cuts in their payments, when there are no jobs available would be punitive.

"I fear the government's new regime will usher in a new poor law causing widespread misery and injustice in Wales."

Is Peter Hain right on welfare dependency in Wales?

Wales Office Minister David Jones pointed to a recent study that suggested one-in-five Welsh children are growing up in a home where no-one works.

No fewer than 226,000 households, according to ONS figures cited by Mr Jones, are without work and dependent on benefits. That's 22% of homes containing people of working age in Wales.

Millionaires

"Wales has the second highest worklessness rate in the UK," said Mr Jones. This is a tragedy that we must bring to an end before future generations of Welsh families become trapped in this culture of worklessness and despair."

So everyone agrees on the scale of the problem. There's no consensus on the solution.

Mr Jones says the overhaul of the benefits system will ensure that people are always better off in work. Those who take jobs may find themselves better off but they may still keep no more than 35p in every pound they earn - a marginal tax rate of 65%, higher than millionaires.

Those claiming incapacity benefit and its successor - up to 190,000 in Wales - face tests to see if they can work.

Between June 2009 and May 2010, 63% of people completing what's known as the work capability assessment were found to be fit for work. But 40% of those who appealed against the decision won their appeal so reducing the overall benefits bill won't be easy.

Labour's slogan is "without work, it won't work" and the supply of jobs is a key point. Plaid Cymru point out that of 2,500 people applied for 350 jobs at a Tesco Express in Pontyminster.

'Overdue'

Plaid Cymru MP Hywel Williams said: "Iain Duncan Smith has already shown his ignorance through callous and bizarre cries that people in Merthyr Tydfil should "get on the bus" to Cardiff to find work without realising that for every job vacancy in the city there are nine unemployed people."

The Liberal Democrats, after a bruising week for the party, say the welfare reforms are long overdue.

Cardiff Central MP Jenny Willott said: "Liberal Democrats can be proud of our role in securing these new reforms which will finally put an end to the ridiculous situation where for many people it pays more to be on benefits than in work."

But with childcare and travel costs for rising, for those fortunate enough to find work, the calculation about how much better off it will leave them will be a finely balanced one.

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