Welfare Benefits Up-rating Bill

Hywel Williams Excerpts

Tuesday 8th January 2013 Commons Chamber

[Hywel Williams (Arfon) (PC)]

Today, we are debating an uprating Bill that will result in a real-terms cut in support for people working and contributing to the economy. That paradox will not be lost on those hard-working families so beloved of spin doctors. I do not see how the Bill will promote the work ethic so beloved of those on both sides of the House, and I do not see how it will enable working people to contribute more effectively in the savings culture.

As a Welsh MP, I have to say that Wales will be hit particularly hard. Incomes in Wales are substantially lower than elsewhere. Gross value added per head in Wales is £15,696, whereas in the UK it is £21,368—a difference of more than £5,500 per person.

[Alun Cairns]

Given what the hon. Gentleman has said, is he comfortable that welfare payments are rising at twice the rate of earnings?

[Hywel Williams]

This point has been done to death this afternoon. It says a lot about the quality of the hon. Gentleman’s argument that he repeats it continually. I do not think I will bother with it any further.

Some 6.8% of households in the south-east of England, for example, claim working tax credits. In Wales, that figure is 7.1%. In Gwynedd—my own area—9,200 families are on tax credits of some form out of 53,000 households. That is 17.5% of the population—nearly three times the Welsh rate. The point is that any cuts to in-work benefits for the low-paid will hit Wales and my constituency particularly hard.

[Mr Kevan Jones]

Does the hon. Gentleman agree that the individuals receiving those types of benefit do not save the money, but spend it in their local communities? In areas of high unemployment, such as parts of my and his constituencies, it will have a knock-on effect on the local economy.

[Hywel Williams]

Clearly, the hon. Gentleman is blessed with clairvoyance, because that is my next point. People on low incomes tend to spend locally and to spend all their money. The Welsh economy is overwhelmingly made up of small businesses. That is a point for the hon. Member for Vale of Glamorgan (Alun Cairns) to consider. Working tax credit reductions will suck demand out of local economies and make matters even more difficult for small businesses struggling to survive in the recession.

The uprating will also hit those seeking work. The Prime Minister talks of unemployed people abed while others are at work. We can almost see him in Shakespearean mode paraphrasing King Henry: “Gentlemen in England now abed shall think themselves accursed they were not out seeking work”—I can see him doing it anyway, but less extravagantly. Unlike the Prime Minister and his friends, I do not think that the overwhelming majority of unemployed people are abed; they are seeking work. They want to work; they want to improve their lives and those of their children. For those who do not seek work, there is a system of sanctions, and there has been for a long time, as the Secretary of State knows full well.

Poorer areas of Wales have long suffered from high levels of worklessness and low levels of job availability. To end the misery of unemployment, we need not only to help individuals with their skills and, in a small number of cases, their motivation, but to ensure there is real work for people to do. Recently published Work programme figures for Wales show that success there was the lowest in the UK, with only 1,380 of 42,380 people getting a job that lasted six months or more. That is a miserable success rate, at only 3%. In Wales, more than 77,000 people are looking for work and claiming jobseeker’s allowance, while only 20,000-odd vacancies are being posted in jobcentres. Across Wales, there are four people chasing every job, with 11 people chasing every job in Blaenau Gwent and 21 people chasing every job in the Rhondda.

That brings me to Labour’s amendment. I have a question, to which I would like an answer—which might persuade me to back the amendment—in the wind-ups. Long-term unemployed people might still be unable to find a job after 24 months of searching. Large-scale work opportunities are just not available in many Welsh constituencies, so my question is: under Labour’s scheme, would those people face penalties after 24 months? If Labour’s scheme were adopted, would we see benefit cuts 24 months down the road for people who are not refusing to find work, but who just cannot find a job?

We in Plaid Cymru have been as good as our word—to the extent we can be—to the people of Wales, securing thousands of extra apprenticeships as part of the Welsh Government budget deal. We are now pushing for a new procurement policy that would create 50,000 jobs by sourcing public sector contracts locally. However, Wales needs proper job-creating levers to improve our economy, not just handouts and certainly not workfare. For example—this might be a domestic matter as far as most Members in the Chamber are concerned—we want full and early implementation of part 1 of the Silk commission proposals. We also want the transfer of responsibility for Jobcentre Plus to the Welsh Government. There are answers to joblessness and dependence on benefits. At present, we in Wales look in vain to London and the London parties for those answers.