Three reasons for action on welfare reform

Poverty The Senedd
Photo: Bevan Foundation
ViewsNovember 9th, 2015

With the latest news on Tax Credits showing how they support 1/4 million households and are worth £1.46 billion to Wales, Victoria Winckler says it’s time for a Welsh Welfare Reform Strategy.

The Bevan Foundation’s latest briefing in its Equality and Social Justice series shows that Tax Credits help over 1/4 million households and are worth £1.46 billion to the Welsh economy. Nobody yet knows what the revised reforms to Tax Credits will be, but we can be sure of one thing – there will be some sort of change.

The reforms to Tax Credits come on top of one of the most radical shake-ups to the social security system for a generation. Changes such as the benefits freeze, the benefit cap, the removal of the so-called ‘spare bedroom subsidy’ in social housing and a myriad of other changes have changed the entitlement and the amounts received by hundreds of thousands of families.

To date, the reaction of Welsh Government to the changes has been to commission research on the impact, at a cost of £250,000, and convene a Ministerial group, but not much else. Several reports have highlighted the lack of an effective policy response, such as the Public Accounts Committee and the Public Policy Research Institute Wales.

But the belief that ‘the Welsh Government shouldn’t cover for the UK Government’s decisions’ continues to hold sway.

It is time for this view to change.

The idea that ‘nothing should be done’ is damaging to the people affected, Wales as a whole and indeed the institution of the Assembly. Here’s why.

1. The Welsh Government has a responsibility for people in Wales.

It doesn’t matter what causes people difficulties, the Welsh Government should respond. It doesn’t argue, for example, that it won’t respond to the crisis in steel because it’s the fault of Tata or that it won’t respond to problem household debt because it’s the fault of lenders or borrowers. It’s absolutely right that if a government identifies a problem that affects its citizens it should take action.

2. It affects key devolved areas

Even if you do buy the argument that “welfare isn’t devolved therefore we shouldn’t / can’t respond”, it falls apart when the changes impinge on devolved areas. So, the multiple changes to Housing Benefit (not devolved) radically change how people on low incomes can access housing (devolved). The reforms made to disability benefits (not devolved) affect the support needed by disabled people (devolved). And so on and so forth. So the Welsh Government MUST look at welfare reform at least in part even if it chooses only to respond to devolved areas.

3. People don’t care who’s responsible

People affected by dramatic falls in their income are unlikely to distinguish between which government has hit them. Awareness of what is or is not devolved is low at best, and the idea – if it exists – that people will affected will think “Westminster Government bad, Welsh Government good” is laughable. They’ll just blame you all.

If the Welsh Government wanted to demonstrate that it’s different to the UK Government then this is one issue where it could show its mettle.

About £10 billion a year is spent in Wales on various benefits – while it’s difficult to forecast the scale of the reduction in expenditure, reduction there is and will be.

It’s time for an effective policy and practical response.

Victoria Winckler is Director of the Bevan Foundation. The briefing on Tax Credits is available on subscription for £255 + VAT a year – subscribe here. An extract of the briefing is available here

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