Friday, 17 October 2008

New Labour broken manifesto promises on welfare

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.


chris c paul said...

Those stats from Rhonnda are good. Clear evidence that this policy could only have minimal effect at best. Never mind that it will inevitably lead to the most vulnerable in society being exploited by the UKs richest companies.

The policy is in effect just window dressing, in an effort to appear tough on 'scroungers' and the swathes of 'undeserving urban poor'.

Cibwr said...

And of course at the end of the three month employment training period when they are returned to the dole they will be unable to claim the higher benefits because they have proved they can work.... a cynical exercise. I have worked with the long term unemployed in Cardiff - yes there are some can work but don't want to people. However I noticed there are a huge number who are functionally unemployable due to issues such as mental health issues (such as long term depressive illnesses that are exacerbated by any stress), poor literacy/numeracy, or lack of social skills.

The reality for many is that agencies provide minimum wage jobs for a few weeks but people have no security and find themselves back on the unemployment register. They drift from one temporary and low paid job to another. A depressing prospect for anyone and much exploited by many employers.