Rural Wales will feel greater negative effects of the British Government's flagship Universal Credit policy – that was the message from Plaid Cymru Member of Parliament Jonathan Edwards who says the self-employed and farmers are likely to be more negatively affected by the "cruel" policy.
Universal Credit is planned to be rolled out in Carmarthenshire in March 2018 and will replace six different types of benefits which currently exist such as Working Tax Credit and Jobseeker's Allowance. It has already made national headlines for the way in which recipients of the benefit face delays in receiving financial support, leaving them in extreme debt.
A report by the Low Income Tax Reform Group (LITRG) this week concluded that self-employed people who need assistance from Universal Credit are likely to be at a disadvantage compared to recipients who are employed. The LITRG suggests the difference could be more than £2,000 a year.
The main reason for this disadvantage is a condition by the British Government to impose a 'Minimum Income Floor' – an assumption that just because someone is self-employed they will earn automatically take home circa £1,150 a month.
Carmarthenshire MP Jonathan Edwards said that self-employed tradespeople, shopkeepers, those in the hospitality sector and farmers in particular – all of which he says are the "foundation of a rural economy" - are more likely to have incomes which fluctuate each month, meaning they will get minimal support in months of modest to no income, and no support at all when income is good.
Ahead of its rollout early next year Mr Edwards has made representations to the UK Secretaries of State for Work and Pensions and Environment, Food and Rural Affairs seeking assurances that these "unfair punishments" will be amended before the new policy is forced on his constituents. He said the "discredited" Universal Credit policy was "bad enough" but that Carmarthenshire was "more likely to be hit hard if changes aren't made."
The Carmarthen East and Dinefwr MP said:
"Those working in Industries like the hospitality sector, construction and trades, shopkeepers and farming – the foundation of a rural economy and where a person's income is seldom likely to remain consistent each month - will be profoundly affected by the government's assumption that they have a minimum monthly income. Indeed it is likely that for several months of the year they have very little income whatsoever.
"The Universal Credit policy, as it currently stands, would see them get minimal support in months of modest to no income, and no support at all when their income is good.
"There are almost 25,000 active farms in Wales. Farmers are already experiencing profound uncertainties in terms of the UK's future trade and export mechanisms. The unnecessary and preventable difficulties Universal Credit will bring are a worry and headache farmers do not need.
"Of course the absolute scandal is the substantial rise in the number of working people who are left with little choice but to claim social security in order to make ends meet.
"Universal Credit is cruel and already discredited for the punitive way in which it punishes those who have fallen on tough times. It's bad enough now, but the make-up of our economy means rural Wales is more likely to be hit hard if changes aren't made.
"The British Government must look urgently at the policy and allow those who are self-employed to average out their incomes. Not changing these unfair punishments will see thousands of self-employed people worse off."
Notes to Editor:
Minimum Income Floor - £1,150 is equivalent to an over 25 year old working 35 hours a week at minimum wage – with no consideration that the claimant may not actually have earned anything at all.