What now for poverty and housing?

In this guest article, John Griffiths MS considers what’s next for housing in Wales

The recent election of a UK Labour Government, now working in partnership with a Welsh Labour Government in Cardiff Bay, will bring us new opportunities to tackle the issues and challenges we face around housing in Wales. And the recent comments by the new UK Housing Secretary, Angela Rayner, have been encouraging, significantly increase supply tackling the barriers and reintroducing housing targets, make housing more affordable and make reforms to the private rented sector.

The new priority and focus should support ambitions for progress in Wales.

Good housing underpins everything and if done right, we can begin to bring down the poverty rates in Wales, which are at just over a fifth of the population. 

As chair of the Local Government and Housing Committee, we have published reports such as The Right to Adequate Housing detailing the poverty and housing crisis affecting Wales. Similarly, in my constituency postbag, I am all too familiar of the challenges facing too many of my constituents. Citizens Advice data found 250,000 people in Wales are living on a negative budget, with a further 436,000 only making ends meet by cutting their essential spending back to unsafe levels. Likewise, the Trussell Trust has said more than 187,000 emergency food parcels were provided to people on the lowest incomes across Wales in the past 12 months (2023/24) – representing a dramatic 61% increase in five years and illustrates the legacy of fourteen years of UK Conservative Government rule. 

Whilst Welsh Government doesn’t have all the powers and levers available to tackle poverty, they have taken policy steps to ease the financial burden on households. This has included the Single Advice Fund (since January 2020), which has helped around 280,000 people to deal with more than one million social welfare problems. This support has created an additional income worth £137 million and had debts totalling £38.5 million written off and is why the scheme has received further funding for the next three financial years to continue this work.  

An area in which the new UK Government can supplement this important work is through making changes to Universal Credit and the tapering rates, which at present, can make many households worse off. This is the rate at which maximum universal credit is reduced by earnings. The current earnings taper rate is 55% and means that for every £1 an individual or their partner earn over their work allowance (if they are eligible for one) the Universal Credit will be reduced by 55p. This amount will be deducted automatically from their benefit payment. 

On housing specifically, like the rest of the UK, Wales isn’t building enough houses.

Property prices are out of reach of a growing number of individuals and families – in 2022, on average full-time employees in Wales needed to spend 6.2 times their earnings on purchasing a home. This compares with just three times average earnings in 1997. And as I referred to earlier, that’s why I am pleased that affordability is a key priority for the new UK Secretary of State. To address this, I believe there needs to be a stronger focus on how we manage land for affordable housing. We need to get better at capturing land value, and the Welsh Government needs to take the lead, but also work with local authorities in strategically planning large-scale development of great new places to live.  

While we focus on those in poverty and inadequate housing, we must also consider those homeless – and in the height of the Covid pandemic, we showed we can do this. In Newport, we made good progress in this space with a significant number of rough sleepers being moved into permanent accommodation. During the recent general election campaign, Shelter Cymru found there were approximately 11,700 people in Wales homeless or trapped living in temporary accommodation, 3,143 of whom are children. The ongoing cost of living crisis has only made things worse – and it’s why I hope we now have a Labour Government in Westminster, who ultimately hold the financial purse strings, that will give the Welsh Government the funding they need so homelessness services (and the wraparound support which comes with it) are well resourced.  

The Welsh Government have also taken action to address the decline in social housing. Firstly, by abolishing Right to Buy, but also setting targets of delivering 20,000 new low carbon homes for social rent during this five-year Senedd term. So far, just over a quarter of those homes have been built, but with that renewed partnership with the new UK Labour Government, I am confident we can accelerate this process. 

There can be no doubt Keir Starmer and the new UK Labour Government have inherited one of the worst set of economic circumstances since World War Two. As he told the Labour Party conference last October, “a new Labour government will face the challenges of 1945, 1964 and 1997 combined”.  And our Welsh Labour Government is ready to play its part in facing those challenges. By doing so together, we can help tackle the poverty and housing crises which are so interconnected.   

John Griffiths is Member of the Senedd for Newport East