:00:01. > :00:11.Tonight, we reveal the impact of the UK Government's working tax
:00:11. > :00:24.
:00:24. > :00:27.credit reforms on low income Welsh Good evening. This programme has
:00:27. > :00:30.discovered that more than 9,000 low income households will be more than
:00:30. > :00:33.�70 a week worse off following the UK Government's changes to working
:00:33. > :00:37.tax credits. Couples earning less than �18,000 are being required to
:00:37. > :00:40.increase their working hours from a minimum of 16 hours a week to 24 or
:00:40. > :00:45.lose their working tax credit. That means over 9,000 families in Wales
:00:45. > :00:48.are losing nearly �4,000 of benefits. One children's charity
:00:48. > :00:58.has called it a calamity that plunges thousands of children deep
:00:58. > :01:14.
:01:14. > :01:19.below the poverty line. Arwyn Jones The payment tops up their income of
:01:19. > :01:24.people on low incomes. But the UK government has insisted that couple
:01:24. > :01:31.with children will now have to work for 24 hours a week between them
:01:31. > :01:36.and cannot 16 in order to qualify for working tax credits. Over 9000
:01:36. > :01:42.Welsh families will lose over �4,000 benefits. A single parent
:01:42. > :01:46.has to work 16 hours a week to qualify for working tax credit. The
:01:46. > :01:56.UK government thought it was unfair that a couple between them only had
:01:56. > :01:56.
:01:56. > :02:02.to work 16 hours a week as well. Unless a couple can find an extra
:02:02. > :02:08.eight hours a week, they will lose their working tax credit. But can
:02:08. > :02:17.additional work be found? We have 1.4 million people in part-time
:02:17. > :02:21.work just now who want to be in full-time work. The number of
:02:21. > :02:27.people in part-time work has gone up exponentially in the last few
:02:27. > :02:31.years. It is not easy to pick up an extra eight hours a work to
:02:31. > :02:37.continue to make it worth your while court out to work. That
:02:37. > :02:42.fundamental issue of should have been recognised by the government.
:02:42. > :02:46.They should have thought this through. They are going to do
:02:46. > :02:53.damage to families and further diminished trust in the welfare
:02:54. > :02:57.system. There is plenty of work at the Citizens Advice Bureau. They
:02:58. > :03:07.say thousands of people are coming to them with concerns about changes
:03:08. > :03:12.
:03:12. > :03:18.to working tax credits. People are coming to us, the message is that
:03:18. > :03:22.people have to move back into work, but people have found that if they
:03:22. > :03:26.are not on to be working enough hours, there will not be a
:03:26. > :03:36.financial support for them and so they have postpone the decision to
:03:36. > :03:37.
:03:37. > :03:46.return to work. They will be worse off on in work than on benefits.
:03:46. > :03:56.There is a fear that it will lead to an increase in child poverty.
:03:56. > :03:57.
:03:57. > :04:04.There will be an eight increase of 800,000 children in poverty. Wages
:04:04. > :04:11.are stagnating, unemployment is high, prices are high. Food banks
:04:11. > :04:17.are flourishing in these austere times. A recent report found that
:04:17. > :04:21.42% of those who used food banks are there because of a result of
:04:21. > :04:29.changes or delays to their benefits. When it welfare payments are cut,
:04:29. > :04:35.people still need to buy food for themselves. We have done a survey
:04:35. > :04:43.of people who come to us for help. About 50% of those people have said
:04:43. > :04:48.that if they did not receive help, they would have committed a crime,
:04:48. > :04:54.20% have said they have suffered from depression and 30% of said it
:04:54. > :05:00.has put a strain on family relationships. The Treasury have
:05:00. > :05:06.said they have had to take tough decisions but have done so in the
:05:06. > :05:11.fairest way possible. Meaning that 15 times as many people game than
:05:12. > :05:16.it loser from the recent changes. We are not looking at people having
:05:16. > :05:25.to increase there are us. We are saying that if a single pair it has
:05:25. > :05:30.to work 16 hours, it is not a reasonable that a couple should
:05:31. > :05:36.only work 16 hours. Some of those families will be benefiting from
:05:36. > :05:41.other tax changes as well. The overall picture is not as bad as
:05:41. > :05:44.people are trying to claim. Next year, the rules will change again.
:05:44. > :05:50.In the meantime, thousands of families in Wales will be losing
:05:50. > :05:53.out. Arwyn Jones reporting. I'm joined
:05:53. > :05:56.now by the Labour AM Julie Morgan and the Conservative AM Byron
:05:56. > :06:03.Davies. Do you have any concerns over those
:06:03. > :06:07.figures? There are concerns obviously. In at the last 10 hours,
:06:07. > :06:12.we have been in a terrible state but almost a third of four children
:06:12. > :06:22.in poverty. And yet you support a government reform that is likely to
:06:22. > :06:24.
:06:24. > :06:30.put more than 9000 Welsh families just under �4,000 a year worse off.
:06:30. > :06:37.Government have a responsibility to be equitable in the way it treats
:06:37. > :06:43.people. I believe this is a good step forward. What do you think?
:06:43. > :06:48.am extremely concerned about it. Children will be plunged into
:06:48. > :06:52.poverty. It is an alarming situation. The chances of
:06:52. > :07:01.increasing working hours are limited. You can see from all the
:07:01. > :07:11.empty shops. It is difficult to get extra hours of in retail. I am very
:07:11. > :07:12.
:07:12. > :07:16.concerned. On the face of it, it does seem to have, it does seem
:07:16. > :07:25.unfair to have the same working requirement for a couple as for a
:07:25. > :07:29.single parent. It seems to be an unfair burden on a single person.
:07:29. > :07:39.You have to look at the circumstances under which this is
:07:39. > :07:42.
:07:42. > :07:51.being carried out and the children that are being targeted. These
:07:51. > :07:56.credits are targeted at children and that is why they are a success.
:07:56. > :08:06.Independent studies all agreed that cutting a family tax credit Haas
:08:06. > :08:14.
:08:14. > :08:23.the poorest children in society. -- harms. We spend a lot of money on
:08:23. > :08:32.welfare. These are difficult times and we have to be equitable.
:08:32. > :08:36.mantra has been making work pay. But this appears to be the opposite.
:08:36. > :08:41.If you cannot raise your working level by eight hours a week, there
:08:41. > :08:48.is a disincentive to work at all. would save quite the opposite. It
:08:48. > :08:53.is an incentive to go out to work. I believe this will encourage
:08:53. > :09:02.people out to work. It is unfortunate for the 9000 families
:09:02. > :09:07.in Wales, but the fact is, according to the Treasury, vastly
:09:07. > :09:14.more people will be better off under these reforms. But the
:09:15. > :09:22.poorest families will be hit most. Raising the tax threshold affects
:09:22. > :09:26.everybody. These benefits affect families with children. This is a
:09:26. > :09:30.vulnerable group and they are coming off worst. I cannot see that
:09:30. > :09:40.this is justified. I do think that the government must think again on
:09:40. > :09:50.this policy. These families are suffering in other ways as well. It
:09:50. > :09:51.
:09:51. > :10:01.is a huge concern. If Julia is so worried, why doesn't her government
:10:01. > :10:07.do something about it in Wales? Welsh Labour government is doing a
:10:07. > :10:16.lot about it. The Welsh Labour government has specific benefit
:10:17. > :10:22.aimed at encouraging people to go to work. Free prescriptions. If you
:10:22. > :10:27.are on benefit and go to work, you get free prescriptions. But it is a
:10:27. > :10:31.universal benefit now. But it is a benefit to encourage people to go
:10:31. > :10:38.to work because you do not lose it when you are in work. The Welsh
:10:38. > :10:42.government is working very hard at this. Council tax benefit has been
:10:42. > :10:46.devolved and we are going to try to do something with that. Nothing has
:10:46. > :10:54.changed since Welsh Labour have been in power. Thank you very much
:10:54. > :10:56.for joining us. Wales will not benefit financially
:10:56. > :10:58.if Scotland becomes independent according to one of Wales' leading
:10:58. > :11:00.economists, Professor Gerald Holtham. His report for the Welsh
:11:00. > :11:10.Government found that the country was being underfunded by �300
:11:10. > :11:15.
:11:15. > :11:17.million a year because of the Barnett formula. But he has
:11:17. > :11:19.rejected the conventional wisdom that independence or financial
:11:19. > :11:22.autonomy for Scotland, sometimes known as devo max or devo plus,
:11:22. > :11:32.will inevitably mean that Wales will get more funding from
:11:32. > :11:39.
:11:39. > :11:46.Trade statistics are not covered for Trade within a country. I do
:11:46. > :11:56.not get the impression that the supply-chain... I think there are
:11:56. > :11:59.
:11:59. > :12:03.six sections, but the two economies As we currently understand Scottish
:12:03. > :12:08.independence, it would stay in the single market with the rest of the
:12:08. > :12:13.United Kingdom, have complete freedom of movement of workers, no
:12:13. > :12:18.capital controls and would continue to share the same currency. Given
:12:18. > :12:22.all that, the immediate impact would not be very great at all. The
:12:22. > :12:29.main impact would come if Scotland were able to have very different
:12:29. > :12:39.tax rates from the rest of the country which could result in some
:12:39. > :12:42.
:12:42. > :12:47.businesses moving to or from Scotland as a result. If Scotland
:12:47. > :12:52.were independent, it would not receive a block grant and it would
:12:52. > :12:56.be open to the British government to design again at the block grant
:12:56. > :13:04.that it currently gives the devolved administrations. The
:13:04. > :13:11.Barnett formula could go and they could adopt an needs based Formula.
:13:11. > :13:15.In principle, that would be better for Wales. My concern is that
:13:15. > :13:20.although that should happen, I am not clear that it will. If Scotland
:13:20. > :13:26.is gone, the UK government could afford to give Wales a bit more
:13:26. > :13:29.money, but why should it? If we have not been able to bargain and
:13:30. > :13:38.no go Sirte for that in the present circumstances, it is not obvious
:13:38. > :13:48.that we would be in a better position with Scotland Independent.
:13:48. > :13:56.
:13:56. > :14:00.It looks as if the Scots will not vote for devolution. It makes Flint
:14:00. > :14:07.-- sense for them to say it in a social security union with the UK
:14:07. > :14:15.but devo plus would be very likely. It is not clear to me that Wales
:14:15. > :14:18.can follow Scotland very far down the path. The commission I sat on
:14:18. > :14:24.argued for income tax devolution for Wales and that could work.
:14:24. > :14:28.Wales has not got the resources to go very far in the direction of
:14:28. > :14:35.fiscal autonomy because we are running a public sector deficit
:14:35. > :14:38.which is 25% of the total output of the GDP of the country. It is a
:14:38. > :14:43.huge deficit. We're running a deficit per head three times the
:14:43. > :14:53.size of the English or Scottish deficit. Therefore, we will need a
:14:53. > :15:03.
:15:03. > :15:09.block grant for the foreseeable At the present time, every man,
:15:09. > :15:14.woman and child in Scotland is borrowing �2,000 a year. As a
:15:14. > :15:19.result of the recession and the big deficit the UK is running. In Wales,
:15:19. > :15:23.every man, woman and child is borrowing �6,000 a year. That is
:15:23. > :15:27.the measure of how much we care the economy is that the Scots economy.
:15:27. > :15:34.It is reasonable for people in Wales to want to get their hands on
:15:34. > :15:39.more levers of policy, more ways to stimulate the economy and get it to
:15:39. > :15:45.grow. Until we succeed in rebuilding the economy, our ability
:15:45. > :15:52.to have a lot of autonomy will be restricted. He who pays the piper,
:15:52. > :15:55.will call the tune. Gerald Holtham. Joining me now is the economist and
:15:55. > :16:05.Plaid Cymru advisor Eurfyl ap Gwilym and the political
:16:05. > :16:06.
:16:06. > :16:10.commentator David Torrence. Welcome. David, your thoughts on the very
:16:11. > :16:16.stark contrasts that he was making between the economies of Scotland
:16:16. > :16:20.and Wales and perhaps the ability of Scotland's to go further in
:16:20. > :16:27.terms of independence or fiscal autonomy. Yes, that is a
:16:27. > :16:31.fundamental point. The analysis shows Scotland outside of London is
:16:31. > :16:39.the wealthiest part of the UK. And clearly that is not the case with
:16:39. > :16:42.Wales. The piece was right to point towards devo plus which is in
:16:42. > :16:47.essence the devolution of income tax powers as the most likely
:16:47. > :16:53.outcome of all of this. In Scotland, income tax is a bit of a red
:16:53. > :17:00.herring. It has half been devolved all ready by the Scotland Act and
:17:00. > :17:04.the SNP and no other party are interested in that. They see it as
:17:04. > :17:11.off-limits. So, that is the most likely outcome but even then it
:17:11. > :17:20.will not change. What are your thoughts on the contrast but he was
:17:20. > :17:24.making between the two economies? There is no doubt, as pointed out,
:17:24. > :17:28.Scotland GDP per capita which is a good measure of economic well-being
:17:28. > :17:36.and wealth generation, Scotland has Greywell and is doing well and
:17:36. > :17:41.Wales as poorly. That is what we need to pick up on what he said
:17:41. > :17:46.towards the end of the report, the real challenge is to say we have
:17:46. > :17:51.not been doing well for 20 or 30 years, some of the reasons we
:17:51. > :17:55.understand, and it is disappointing successive Welsh governments have
:17:55. > :18:00.not done further analysis. We will be producing more analysis and I
:18:00. > :18:04.would like to see Wales, not a party political thing, people
:18:04. > :18:07.getting together and say how well we saw the issue out, how will we
:18:07. > :18:12.overcome the weaknesses are going forward because we need to,
:18:12. > :18:17.whatever your political view we want Wales to be more successful
:18:17. > :18:21.economically and socially and that means wrestling with these issues.
:18:21. > :18:29.I wonder what you make of the knock-on argument for Welsh
:18:29. > :18:37.nationalism because Gerry Holtham went on when he gave evidence to a
:18:37. > :18:42.House of Lords committee to say any argument made by Plaid Cymru did
:18:42. > :18:52.Wales could pay its own weight was obviously preposterous --
:18:52. > :18:55.
:18:55. > :18:59.preposterous. I am a great admirer of Gerry Holtham. I watched his
:18:59. > :19:05.performance and I found him despondent. Perhaps he has spent
:19:05. > :19:09.some months working closely with the Welsh government but certainly
:19:09. > :19:15.in the short term we have major challenges. There's no doubt. What
:19:16. > :19:20.I would like to see is how well we address these issues and I think
:19:20. > :19:25.increasingly we want to look to what we can do in Wales. Awash
:19:25. > :19:30.government does have a 15 billion padlock ranch which is substantial
:19:30. > :19:35.sum. How will we make better use of that -- the Welsh government. In
:19:35. > :19:40.essence, we need more people in work and people in work been better
:19:41. > :19:47.paid. We want the private sector companies... That is what has
:19:47. > :19:53.caused the drop in the profitability of world business.
:19:53. > :19:57.David Torrence, talking about the reform of the Barnett formula air
:19:57. > :20:04.which is something that all political parties in Wales would
:20:04. > :20:08.love to see. Scotland does pretty well out of it and has been
:20:08. > :20:11.considered the block to any reform. Gerry Holtham suggests even if the
:20:11. > :20:18.block was rebuked he was not optimistic about the possibilities
:20:18. > :20:24.for reform. The Rhys a certain reluctance in Westminster to open -
:20:24. > :20:28.- there is a reluctance to open the Pandora's box. You're quite right
:20:28. > :20:35.again, you look at the statistics and Scotland as well out of the
:20:35. > :20:40.Barnett formula. It never comes under serious attack. I disagree
:20:40. > :20:44.with it Gerry slightly, if Scotland was removed from that and the block
:20:44. > :20:49.grant is over 30 million, I am sure it would be used as a pretext for a
:20:49. > :20:53.shake-up. The Barnett formula in physical terms is unpopular in
:20:53. > :20:57.Wales and in the North of England and always has been since its
:20:57. > :21:01.introduction. I am sure David Cameron would come under pressure
:21:01. > :21:06.to do something about it. Coming back to the main points, you just
:21:06. > :21:09.have to look at the opinion polls, Scottish independence does not seem
:21:09. > :21:15.inevitable and the SNP long ago stopped arguing for full
:21:15. > :21:22.sovereignty. Briefly, what do you think, is reform possible with the
:21:22. > :21:28.Scottish block out the way? It will be quite difficult. The Treasury
:21:28. > :21:33.has been in Cowes at Trent. The parties in Wales want to reform it
:21:33. > :21:38.but the Labour Party in the UK has not come out against the bonnet for
:21:38. > :21:45.Miller and it defended it. Therefore, the question is Wales
:21:45. > :21:50.has few negotiating cards, we want to focus more on what we -- the
:21:50. > :21:56.authority and what can we do with that rather than the current tactic
:21:56. > :21:59.of doing a megaphone diplomacy down the M4. Thank you. In the biggest
:21:59. > :22:01.overhaul of the Army in decades, it's been announced today that four
:22:01. > :22:04.infantry battalions are to be abolished, including Second
:22:04. > :22:06.Battalion, The Royal Welsh. In a statement to the Commons, the
:22:06. > :22:10.Defence Secretary Philip Hammond confirmed that the regular army is
:22:10. > :22:14.to be cut from 102,000 to 82,000 by the end of the decade - its lowest
:22:14. > :22:18.level since the Napoleonic Wars. Earlier I spoke to military expert
:22:18. > :22:24.Major Alan Davies and asked him how he thinks Wales has fared in
:22:24. > :22:28.today's announcement. Some will think we have done all
:22:28. > :22:33.right because the Queen should dunes guard survived and only one
:22:33. > :22:41.battalion has gone. That actually we have lost another regiment in
:22:41. > :22:46.the Royal Artillery. If you total up the major units it is two from
:22:46. > :22:55.five. 40% in Wales is not good news. Especially when you compare it to
:22:55. > :23:00.Scotland which has survived almost unscathed. There was a botched job
:23:00. > :23:04.to save a company of guards for Holyrood and Edinburgh Castle. With
:23:04. > :23:09.their record of recruiting compared to a good record for Welsh
:23:09. > :23:12.regiments in general I think we are hard done by. There was a
:23:12. > :23:15.suggestion that political considerations are coming into play
:23:15. > :23:21.with Scotland because the government did not want to give
:23:21. > :23:26.those Ardwick for the yes vote for the referendum extra ammunition.
:23:26. > :23:30.Yes, if you cut the record of recruitment, going back over
:23:30. > :23:35.previous defence reviews and the suggestions the Scottish regiments
:23:35. > :23:40.going because they cannot make up the numbers required, it is a
:23:40. > :23:45.regular occurrence. In the 70s and 80s, the Argylls were under threat
:23:45. > :23:54.but survive. There is nothing new in the threat. What has happened is
:23:54. > :23:59.the numbers have been done. A political intervention has happened
:23:59. > :24:02.to ensure there is minimal impact in Scotland, to make sure the
:24:02. > :24:09.nationalists do not have any arguments a throwback to
:24:10. > :24:14.Westminster. Explain to last why this is so important to people, why
:24:14. > :24:19.are there such emotional attachments to battalions? It is
:24:19. > :24:22.very strange to understand. Sometimes it is difficult to
:24:22. > :24:28.understand even if you are part of it. It is history, culture,
:24:28. > :24:32.atmosphere, many people together. Italians that trace histories back
:24:32. > :24:37.hundreds of years, the Royal Welsh tracing the history back over 400
:24:37. > :24:44.years. There are things that have happened in that time bringing
:24:44. > :24:51.people together, heroic moments, moments of absolute Fein in Wales
:24:51. > :24:56.the story of Gorkss drift and the Victoria Cross. These things unite
:24:56. > :25:01.people. Soldiers do not fight for Queen, or country, they do not
:25:01. > :25:06.fight for government. They fight for their mates in the regiment and
:25:06. > :25:13.their Italian and the guys alongside them. Those bombs come
:25:13. > :25:19.from a whole set of very subjective elements, the badge, the name, the
:25:19. > :25:23.history means such a lot. What you think this means for the future
:25:23. > :25:29.capability of our armed forces because budget are extremely tight
:25:29. > :25:37.and the cloth has to be cut. cloth has to be cut. We have to
:25:37. > :25:42.make savings and we cannot afford it. Realistically we have 20% fewer
:25:42. > :25:47.military plant than this morning, and we have no suggestion as to
:25:47. > :25:52.what cuts they might be in terms of expectations of the military. If we
:25:52. > :25:56.look at the rest of the world, there is no certainty we will leave
:25:56. > :26:04.Afghanistan in 2014, we do not know what will happen in Syria and
:26:04. > :26:09.Turkey. The threat to the Falkland Islands exists. These are the known
:26:09. > :26:14.names and there are those unknown events that are yet to be grasping
:26:14. > :26:19.our attention. We do not know what we will face but we will not be
:26:19. > :26:24.able to fight in Afghanistan and anyone else at the same time with
:26:24. > :26:29.an army of 82,000. I do not want us to go to war but there are times
:26:29. > :26:33.when the need to be able to go. We do not have a plan for the right
:26:33. > :26:41.number to project our power corrupted. A thank you. Our
:26:41. > :26:46.political editor Betsan Powys is here. Firstly, the Green Paper UK
:26:46. > :26:50.government has published on changing Assembly boundaries, there
:26:50. > :26:55.seems to be a tiff over whether their prime minister said anything
:26:55. > :27:01.to the first minister. Precisely, the bottom line is they cannot both
:27:01. > :27:03.be right. There is wriggle room around recollection but I did David
:27:03. > :27:06.Cameron said to Carwyn Jones the changes to the arrangements would
:27:07. > :27:13.not be decided without the agreement of the Assembly or he
:27:13. > :27:19.didn't. David Jones got his feet and said David Cameron did not give
:27:19. > :27:23.the assurance to the first minister, it was around this or that but the
:27:23. > :27:28.decision would not be taken by the Assembly. That is not what Carwyn
:27:28. > :27:33.Jones said. He expects the decision to be taken in London but with the
:27:33. > :27:38.blessing of Cardiff. David James then said what did Carwyn Jones say
:27:38. > :27:42.and the notes do not tally with what he said. Labour MPs say the
:27:42. > :27:48.notes are taken by officials who do not understand the nuances around
:27:48. > :27:53.devolution. The bottom line is we are not sure who said what to whom
:27:53. > :27:57.but the respect agenda is looking battered and scrappy. Talking about
:27:57. > :28:01.discussion about precision in language, there has been a hoo-ha
:28:01. > :28:07.about the comments about Trident and whether a base is welcome in
:28:07. > :28:11.Milford Haven. A huge argument. We were discussing how Carwyn Jones
:28:12. > :28:18.was under little pressure despite not having a majority at his own
:28:18. > :28:24.words Arad's Trident and is in backbench and put him under real
:28:24. > :28:30.pressure. Reminding him Labour MPs are not impressed, but it is the