Bethan Jenkins posted yesterday supporting TUC calls for a rescue plan for workers in response to the problems in the economy. The TUC are calling for three immediate policy changes; increasing the statutory minimum redundancy pay (as promised in Labour's 2005 election manifesto), greater tax relief on redundancy payments, and a reverse in cuts to front line staff at the DWP who deal with the unemployed, a campaign I have been involved with as chair of the Assembly all-party PCS group. They have also said that the UK Government should abandon their Welfare to Work proposals. These are plans to which Plaid Cymru is leading opposition in Wales, with our Conference wholly rejecting the principles behind this idea.
Today, I have written to James Purnell, Secretary of State for Work and Pensions, in response to the Government’s consultation on the proposals. The Government's Green Paper is based on the work of David Freud, a City banker and former FT journalist, who has recommended that the Government pays private partners to take people off the Incapacity Benefits list into work, amongst other ideas.
These partners, known as delivery providers, will be big retailers such as Tesco, Sainsbury's, Asda, B&Q and Marks & Spencer, and A4e, a private provider of public services, as well as firms like Ford and Prudential. These huge corporations will get paid £80 a week out of the benefits budget to give people work placements for three months. People will work or train full-time for the same money as they currently get from benefits. That works out about one-fifth of the minimum wage. There'll be no guaranteed jobs at the end of these placements.
There has already been an experiment. Last year we saw the closure of Treforest Remploy because the Government wanted their arms-length company to spend more of their allocated budget on “employment support services”, instead of factory production. This policy saw the York Remploy workers take their grievances to the Labour Party Conference in Manchester this year. Half of the workers at the closed York factory are still out of work.
The Government’s proposals are based on the premise that the unemployed and incapacitated are to blame for not having a job. But the reality to that is that the required number of jobs don’t exist. In the Rhondda for example, there are 8,750 claiming Incapacity Benefit and Severe Disablement Benefit (Feb '08) but only 274 job vacancies (Nov '07) in local job centres.
With a big growth predicted in the numbers of unemployed over the coming months, together with a severe economic recession meaning even fewer job vacancies, forging ahead with these proposals would be economic madness. That’s why I’ve added my name to calls for Purnell to abandon these plans.
You can view my letter to James Purnell here-
Thanks to Rhydian Fon James from Bontnewydd for all his help.