What can be done to combat poverty in Wales

Mike Hedges MS

I represent the east side of Swansea and many of my constituents live in relative poverty. Whilst for a few, poverty will be caused by an addiction to gambling, alcohol or drugs, for most it will be caused by low income and irregular hours of work.

Poverty has been made worse by high inflation and low if any pay increases. This has led to a greater call on food banks and other support services.

The state of the Welsh economy, poverty and low pay are all inter related. A successful Welsh economy should drive up wages and reduce poverty.

Too many of the people living in Wales are employed on “flexible” contracts with no guarantee of weekly income based on variable hours and the government set minimum wage.

I believe that the case for everyone to be paid at least the real living wage as defined by the living wage foundation is overwhelming.

I don’t believe that it makes sense that the government enforces a minimum wage that is not considered enough to live on.

There was a time when the way out of poverty was into employment but following the development of “flexible contracts” and “agency” working all at the minimum wage, it is no longer the case.

For those in work it can make for a precarious life where sickness or loss of hours can plunge people into absolute poverty, literally without any money.

Increasing numbers of companies are taking on staff on ‘zero-hours’ contracts which provides employers with a pool of people who are ‘on-call ‘and thus puts all the financial risk on to the employee whose income is not guaranteed.

Disruptive

A variation on zero-hour contracts is where there is a guarantee of as little as one hour a day and when people arrive at work, they then discover how long the shift is going to be.

Starting at 8:00 am you may finish at 9:00 am or have to work until late in the evening depending on workload and the number of people who are available that day.

This is a highly disruptive work pattern because you are unable to make plans for any part of the day until the day itself and wages vary from week to week.

Both zero hour and short weekly or daily guaranteed hours means that there is no certainty of income on a weekly or monthly basis. This leads to severe financial problems when few or no hours are worked in any week.

Using staff employed via an agency means most employment responsibilities are then with the agency. After twelve weeks in the same role working for the same employer, agency workers are entitled to the same employment and working conditions as permanent staff.

Crucially however agency workers are not entitled to benefits, such as occupational sick pay, redundancy pay, the right to claim for unfair dismissal, and minimum notice of redundancy where they are working.

This means that agency staff are much easier to dismiss than directly employed staff because they are employed by the agency not the company they are working at.

Sanctioning

Then there are people on benefits, with universal benefit sanctioning of claimants for minor failures. It appears that the current benefits system is being administered in such a way that taking money off claimants appears the top priority.

An example is the person who was unemployed and on benefits whose biggest fear was that they would have a job interview and job centre interview at the same time in which case they could not avoid being sanctioned for missing one of them.

Then we have PIP being refused to many severely disabled people leaving them in a serious position financially following an arbitrary decision. According to the DWP’s own statistics, 59% of appeals are won by the claimant because the tribunal reached a different conclusion based on the same facts.

Examples I have come across include people severely disabled refused PIP and people with degenerative disease being asked when they will be fit to work.

These problems cannot be solved overnight or by actions of the Welsh government and for the benefits system to change we will need a change in government at Westminster.

There are things we can do in Wales:

• Ensure all public sector workers employed by bodies directly funded by the Welsh
  Government are paid the real living wage.
• Make paying the real living wage be a pre-condition for contracting with public sector
  bodies funded via the Welsh Government either directly or indirectly.
• Make paying the real living wage a pre-condition of grants and loans to private companies.
• Banning exploitative contracts by Welsh Government funded bodies and their contractors
  and sub-contractors.
• Making financial support for companies both grants and loans dependent on non-
  exploitative contracts.
• Finally, we need to campaign for a fair and equitable benefits system that protects the
  vulnerable, the unemployed and those with sickness and disability.