Wednesday, 5 June 2013

Labour 'would cap welfare spending'

Source BBC News@ tienganhvui.com


Ed MilibandEd Miliband will say that social security spending must be subject to financial discipline


Ed Miliband is to promise to cap spending on social security so that a future Labour government can "turn the economy around".


The party leader will also pledge to allow councils to negotiate lower rents with landlords to cut housing benefit and free up money for housebuilding.


Mr Miliband will say only people who pay in to the system for more than two years should get jobseeker's allowance.


But the Conservatives said he was "too weak" to deliver change.


Mr Miliband's speech appears to represent a further move by Labour away from so-called "universal" benefits, awarded to all, irrespective of income.


Earlier this week, shadow chancellor Ed Balls said the party would end winter fuel payments for pensioners on high and top-level income tax rates.


And on Wednesday BBC political editor Nick Robinson reported that Labour's leadership had decided not to reverse the coalition's decision to axe child benefits for households where one person is earning at least £50,000.


'Bring down the bill'

In his speech at Newham Dockside, in east London, Mr Miliband will say: "The next Labour government will have less money to spend.


"If we are going to turn our economy around, protect our NHS, and build a stronger country we will have to be laser focused on how we spend every single pound.


"Social security spending, vital as it is, cannot be exempt from that discipline."


He will promise to cap "structural" social spending - such as housing benefit and disability allowances - for three years from the government's 2015-16 spending review.


This would not affect parts of the welfare budget affected by changes in unemployment.


The idea of a cap was suggested by Conservative Chancellor George Osborne in the Budget in March.


No overall figure for this will be given by Mr Miliband in his speech.


But, to help cut costs, he will argue that councils should be encouraged to make "immediate" savings by negotiating lower rents from private landlords, through measures such as bulk purchasing.


Rather than return the money saved to the Treasury, they should keep future costs down by investing more in building new homes, Mr Miliband will argue.


"We can't afford to pay billions on ever-rising rents when we should be building homes to bring down the bill," he will say.


"Thirty years ago for every £100 pounds we spent on housing, £80 was invested in bricks and mortar and £20 was spent on housing benefit.


"Today, for every £100 we spend on housing, just £5 is invested in bricks and mortar and £95 goes on housing benefit.


"We expect individual families to negotiate with their landlords when we know there aren't enough houses to go around.


"It is inevitable that tenants end up paying over the odds - and so does the state, in the housing benefit bill. It's time to tackle this problem at source."


'Faith shaken'

In the speech, the Labour leader will outline plans to cut long-term unemployment and encourage employers to pay a "living wage", keeping the costs of in-work benefits down.


He will pledge to restore the "contributory principle" to jobseeker's allowance, so that only people who have paid in "for significantly longer" than the current minimum of two years will be eligible.


The party will look at whether to give more than the current £71-a-week rate to those who have contributed longest, he will say.


Mr Miliband is expected to say: "People's faith in the system has been shaken by a system that appears to give a minority of people something for nothing and other people nothing for something.


"Currently, after two years of work, someone is entitled to contributory jobseeker's allowance.


"They get £71 per week, whether they've worked for two years or 40 years.


"Two years of work is a short period to gain entitlement to extra help.


"And £71 is in no sense a proper recognition of how much somebody who has worked for many decades has paid into the system.


"A longer period of qualification would mean some new claimants would have to work longer than they expected before being entitled to extra support if they lose their job - but greater support for those who have worked for a longer time, providing real recognition of their contribution."


Conservative Party chairman Grant Shapps called the speech "completely empty".


He added: "Ed Miliband is too weak to deliver the tough decisions on welfare hardworking people rightly want to see. His plans would actually increase welfare spending, and mean more borrowing and more debt."





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