Welfare Wales: 'Confusion' on regional benefits

Welsh ministers have accused the UK coalition government of "a great deal of confusion" over the idea of regional benefits.

The policy was mooted in the draft of a speech on welfare given by Prime Minister David Cameron on Monday, but dropped from the final version.

Shadow Welsh Secretary Owen Smith suggested it was dropped as it was "one toxic policy too many".

However Downing Street confirmed Mr Cameron did want to debate the scheme.

Reforms to welfare benefits are at the heart of the UK government's plans to cut government spending.

The policy idea involved different rates of welfare benefit being paid in different parts of the UK, to reflect the differing cost of living in each region.

The Welsh government came out fighting against the idea of regional pay so it is no surprise they have done the same on the idea of regional benefits.

What they are saying is the ideas already on the table, around reducing the level of housing benefit and so on, will already hit Wales hard.

If you add regional benefits into the mix, then that would simply make matters worse.

They think the whole thing is a flawed idea from start to finish.

Politically more interesting is where the Welsh Conservatives stand.

If you bear in mind that they have come out against regional pay - against the policy floated in Westminster by the Conservatives - then is there a contortion of logic by which the Welsh Conservatives would say they are for regional benefits? I doubt it.

We do not know why regional benefits were in the original draft of Mr Cameron's speech but not in the final version.

Downing Street has made it clear that it wants this policy floated, wants it debated, but if it proves to be less popular than perhaps they had hoped, and the Welsh Conservatives might fear, then at least it did not come directly from the prime minister's mouth.

If it were to be introduced, the scheme could mean people on housing or unemployment benefit in Wales would receive less than their counterparts in more expensive parts of the country such as London.

It is understood that references to regional benefits were removed at the eleventh hour from Mr Cameron's speech outlining his ideas for the future of the welfare state.

Downing Street stressed, an hour before the speech, that no decision had been taken on the idea, but the PM wanted to look at whether "it makes sense if you set all benefits at the national level or whether there should be some local or regional element".

The matter was brought out into the open in a question in the House of Commons from Labour MP for Delyn, David Hanson.

And the Welsh government commented: "There appears to be a great deal of confusion surrounding the prime minister's proposal.

"However, should any attempt be made to introduce regional rates of benefits, we will resist such a move."

A Wales government spokesperson said Wales would be hit "disproportionately compared to many other parts of the UK" by the welfare reforms already proposed by the UK government.

Any attempt to introduce regional benefits "would just make matters worse", the spokesperson said.

Commenting on the policy idea Mr Smith said: "I've no doubt why David Cameron chose to drop the idea of regional benefits from his speech at the last minute.

"For someone who's spent his political career trying to hide the true nature of his party, he may have thought this would be one toxic policy too many."

Plaid Cymru leader Leanne Wood also attacked the idea of regional benefits, saying her party would oppose it.

"Introducing regional benefit levels would create low-pay areas, institutionalise low ambition and punch a hole in the local economy," said Ms Wood.

"Too many people are already struggling in Wales yet [Mr] Cameron's latest pronouncements threaten to push them harder. The Labour Welsh government can't sit back and do nothing; it must do what it has promised and protect the people of Wales."

The Welsh Liberal Democrats made it clear on Monday evening that it was not coalition policy and that Mr Cameron was floating an idea to start a debate.