Bold action needed on economic inequality

Carys Mair Thomas looks at how the next Welsh Government can tackle economic inequality and poverty.

The wealthiest 16% of the Welsh population now have as much wealth as everyone else put together.

This, of course, is a worldwide problem.  Already the richest 1% of the world’s population owns more wealth than the other 99% put together. In the last 15 years, extreme poverty has been halved.  We could eliminate it in the next 15, but increasing economic inequality makes that job much harder.

Oxfam Cymru wants a Wales where economic inequality is reduced through proactive policy choices that reduce poverty and create a fairer and more equal country. The pioneering Well-being of Future Generations (Wales) Act 2015 demands this, specifically in relation to the goal of delivering a more equal Wales, enabling people to reach their full potential.

Today in Wales 23% of households live in relative poverty, which means they struggle to afford the basics, like putting a hot meal on the table. Half of these households already have one salary coming in, disproving the much quoted adage that a person can work themselves – and their family – out of poverty.  Much of this results from low pay. Its extent in Wales has remained unchanged for a decade and one in four Welsh workers are currently paid less than the Living Wage (as defined by the Living Wage Foundation – currently £7.85 an hour outside London, and rising to £8.25 from April).










Against this backdrop of poverty and low pay, the rise in food bank use must be addressed. Wales has disproportionately high usage of food banks compared with other UK regions, with three days of emergency food provided to 85,875 Welsh people in 2014-15.

Given that women comprise 62% of all UK workers who are paid less than the Living Wage, it would be remiss to ignore the gender dimension of economic inequality and poverty.  Evidently, women are more vulnerable to poverty and the continued existence of the gender pay gap, currently at 19% for full and part time workers in the UK, draws attention to the economic inequality that women experience. This is shaped by their position in the labour market where they are less likely to be in “decent work”. In Wales, women occupy 80% of all part time jobs, 75% of which are in retail, administration, personal services and other typically low paid occupations.

So, what is to be done, when the causes and symptoms are complex and wide-ranging? Oxfam Cymru’s Blueprint for Change offers up a number of solutions. For example, it recommends the appointment of a brand new Deputy Minister within the Welsh Government’s Finance Department, to coordinate effective cross-departmental responses, which is in line with the All Party Parliamentary Inquiry into Hunger in the UK’s Feeding Britain report.

Other Blueprint for Change policy recommendations designed to tackle domestic poverty and economic inequality, include steps to make Wales a Living Wage Nation and to provide an individual, tailored approach to anti-poverty programmes, based on Oxfam’s model.

We must also be mindful of our contribution and impact on the world – Wales does not exist in isolation. Over the past 10 years, the number of people affected by humanitarian crises across the world has now almost doubled. Wales’ consumption of natural resources is far beyond what its population size can justify, exceeding the safe limits for consumption of CO2 by 410%.

Simultaneously, we are facing the greatest refugee crisis of our time. At the end of 2014 there were almost 60 million forcibly displaced people. Alongside other developed nations, Wales must ensure that those fleeing violence and persecution are able to find a safe and welcoming place to live.

These issues affect communities in Wales, as they do around the globe, and it is crucial the incoming Welsh Government places them at the heart of its programme of work.  There must be commitment to dramatically reduce our CO2 consumption emissions and establish Wales as the first Nation of Sanctuary, known for its proactive and welcoming policies and practices for refugees.

Not all political power rests in Wales, but, where it does have power, the next Welsh Government should act boldly and, where it does not, it should be a strong and progressive advocate for change.

Carys Mair Thomas is Head of Oxfam Cymru. To read Even It Up: A Blueprint for Change in full, go to:

2 thoughts on “Bold action needed on economic inequality

  1. Good see these points being raised again – poverty is the one area that will define who we are as a country more than anything else. It is our hardest challenge and I think for a country such as ours, which has a small CO2 footprint globally, then it will have to be prioritised above certain environmental considerations on occasions – hopefully not that often.

    Wealth redistribution is fine and we need to consider these things and act accordingly, because wealth will always gravitate towards the wealthy. More fundamentally however, as a country, we need to figure out how we can magic our people and resources to effectively generate and release an extra £10-15 bilion a year into our economy. A daunting task, but a valid aim if we want to have the capability of effectively addressing poverty in our society.

    We also have to address the costs associated with being less affluent– it’s unacceptable that the poorer that you are the more you have to pay for access to finance, power, heat and everyday necessities – let’s ban prepay meters and higher tariffs for those least able to pay. Also there shouldn’t be any burdens or deterrents to people earning income from sporadic opportunities or imaginative means – we don’t want to penalise people through the tax and benefit system, when they are displaying the traits that we need i.e. using their own initiative, being resourceful and being clever or creative.

    A problem that we have is that collectively as a people we have little or no ownership and sovereignty over our resources and our territory. This hinders us from using and exploiting our land and resources effectively. We have people and we have land and natural resources which are underutilised and these should be seriously scrutinised for their positive economic potential. We have a pool of at least half a million people who are impoverished and need to be empowered. This pool of people contains a large proportion who can and who need to be economically productive; something that needs facilitation. 90% of our land area is relatively unproductive generating less than 5% of our national income. We are impotent when it comes to serious decisions about power generation and the use of our natural resources and this is holding us back.

    We have a large coastline relative to our land area, yet we generate relatively little income from our maritime industries or international sea trade. Tourism is great, but how much more can we effectively grow that area in the near term. Agriculture and Forestry is good, but generates a low return with respect to the land area employed. We should look to increase the value from these areas, but this requires fundamentally new products, with strikingly better returns. We need to work on getting better value from our land and resources – we do fund this area in terms of R&D, but we need to do so much more.

    We need to embrace new ideas and push for control of things like power generation on a more local level – energy democracy is a new buzzword, as are smart grids and we need to be able to bring these things to reality across all our communities for the economic benefit of our communities. Large power generation schemes, generating more power for it’s own sake is a pointless exercise in Wales – we don’t require it and it doesn’t benefit us – we already produce twice the amount that we consume and for no financial benefit, which is very altruistic of us, but daft in the extreme. If we are going to produce more renewable energy from a wider array of sources then we need to benefit from it and be in control of this, together with its dispersal and distribution – with a crucial economic dividend locally.
    We need solutions that enable our most impoverished to be able to generate their own wealth, either individually or collectively. If we want to address poverty the most impoverished in our society have to be major players in our future wealth generation. On the face of it that is impossibility, because viewed as notional groups in our society then those collective proportions of our society and our most deprived communities have the least capabilities either financially educationally or in terms of physical health. Communities should have greater cooperatively held land ownership rights and the ability to lease land to retailers and housing developers, so that income can be reinvested collectively for the wider benefit of local communities.

    I drove down the Rhymney valley yesterday on a cold day and its almost impossible to imagine how we can empower these areas to become areas of significant wealth generation, but that is the task we have to grapple – we can’t give up on these areas and say that the only solution lies within our cities, but that is simply wrong. Yes, we can and we should power our cities and major towns to become powerhouses of our economy and we can happily envision city regions, where these other places become commuter belts, but I firmly believe in an almost old fashioned and to many now outdated notion that we need to figure out how to create wealth from and within our most deprived areas. We need to give these communities some powerful tools to be able to do that.

    Many of these areas will not benefit from inward investment, commuters to the big cities will live in new build developments around their fringes and in order to deal with poverty, the growth has to come from within. The main ingredients to this are motivation, education, inspiration and access to appropriate risk-free finance. Also “the place” – where to informally bring people together to discuss and bounce around ideas or try business ideas out, without incurring costs.

    This is where politically we need to make interventions that enable that to happen – we need to facilitate activities and collectives that can generate income and provide access to finance and find the means to stimulate seed investments. We need our cleverest individuals and our most affluent to play a key role in stimulating discussions about enhancing economic activity in these areas.

    Education and skills is a fundamental requirement, but the missing ingredient is the economic drivers that stimulate the personal need and motivation to access skills and education. Many of our cleverest people are often delinquents of the education system, perhaps because of the home environment or because they were too independently minded and resourceful in their youth. We need to tap into this talent pool, not give up on them and be different to the traditional large employer and look beyond simplistic paper qualifications.

  2. No one can blame Ms Thomas for attempting to raise consciousness about real problems. But this article is more likely to increase apathy than reduce it. We have somehow to raise the minimum and average wage in Wales, while restrfcting our use of energy and CO2 emissions and accept more refugees. How are we going to achieve all these competing goals at once? The suggestions are:appoint a Deputy Minister to co-ordinate departmental responses (?!!) and “and to provide an individual, tailored approach to anti-poverty programmes” – whatever that means. In other words, here are some big problems, we have no clue what to do about them but meanwhile appoint another politician and here is a collection of buzz-words to be going on with. The article does not contain one single, concrete suggestion for specific action to tackle any of the problems it cites.

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