Benefits: Revive 'principle of contribution' says Labour

 

Labour Deputy Leader Harriet Harman says growth in the economy needs to be addressed as part of welfare reform

Labour wants to "strengthen the old principle of contribution" in the benefits system, the shadow work and pensions secretary says.

Many people "feel they pay an awful lot more in than they ever get back", Liam Byrne wrote in the Observer.

He also said "people who work and contribute to their community" should get priority in social housing.

He criticised recent tax and welfare changes, but David Cameron told the Sun the moves were about "fairness".

In his article, Mr Byrne criticised the coalition for failing to support "working families and those in real need", insisting that Labour's approach to reforming welfare would be "very different".

Change needed

"Instead of seeking to divide people, we want to ensure everyone plays their part so we can rebuild Britain together," he said.

He continued: "There are lots of people right now who feel they pay an awful lot more in than they ever get back. That should change.

"We should start by letting councils give priority in social housing allocations to those who work and contribute to their community."

BBC political correspondent Carole Walker said Labour had been under pressure to say what it would do to overhaul the welfare system, after criticising government policies.

Analysis

Will changes to benefits be a key issue at the next general election? We may be two years away from a national poll but some politicians are already mentioning the year 2015.

Today Labour was outlining its ideas on reforms in one newspaper as the prime minister was hailing his in another.

Opposition parties are normally cautious of revealing too many policies before the campaign proper begins.

Comments by the chancellor in the wake of the Philpott case may have raised the temperature of the debate, but the welfare bill is about £200bn and is a significant part of the government spend.

As long as the country's finances remain under pressure, so too will anyone tackling the welfare question.

The party's deputy leader, Harriet Harman, said it was "not surprising" people were concerned about the welfare system and defended Labour's record on welfare reform.

She said the party was looking at wider changes based on the contributory principle as part of its policy review.

She told the BBC's Andrew Marr Show: "We're also, ahead of the general election, putting forward three principles.

"One, that work should pay; secondly, that there should be an obligation to take work; and thirdly, that there should be support through a contributory principle for people putting into the system as well as taking out.

"I think that's the discussion and the debate we're engaging in up to the general election."

She said the results of the review would "come to fruition" in Labour's next manifesto.

Last week, Mr Byrne told the BBC he was looking at helping two groups in particular - working parents and those who are unemployed and over 50.

He said there were many women who had paid into the system but who then did not receive help with childcare to allow them to go back to work.

For those looking for work over the age of 50, he said although some may have paid up to £60,000 more in national insurance than they get out, they were not receiving any extra help to get back into work.

The case of unemployed Mick Philpott, jailed last week for the manslaughter of six of his children in a fire, has led some politicians to comment on whether the state should subsidise large families.

Mr Philpott, who had 17 children, received thousands of pounds a year in child benefit, as well as the income support and wages paid to his wife and mistress.

'Support children'

Asked if there should be a cap on the number of children the state would support through benefits, Ms Harman said: "I don't think that the state should be dictating family size but I do think that the state should support children."

"Rather than trying to encourage women to have children or discourage them from having children, I think it's important to actually support children who are born into a family. But also to make sure women and men are in a position to make proper choices about their families."

Income tax changes

The changes to income tax coming into effect on 6 April include:

  • A cut in tax rate from 50% to 45% for those earning more than £150,000
  • The 40% tax rate now starts at an income of £41,450. Previously it was £42,475
  • An increase in the tax-free personal allowance to £9,440, from £8,105
  • The amount of tax-free income pensioners can earn remaining frozen at £10,500

Meanwhile, Mr Cameron told the Sun the welfare system had lost its way and benefits had become a "lifestyle choice" for some - causing resentment.

He insisted it was "crazy" certain claimants could have a bigger income on benefits than if they had a job.

"So this month we are making some big changes," he added.

"They are changes that have a simple principle at their heart: we are restoring the fairness that should lie at the very heart of our tax and welfare systems."

This week, a series of changes to benefits and taxes have come into force.

Most tax credits and working age benefits are being increased by 1% - below the rate of inflation - while pensioners are getting a larger rise in the state pension, which is going up by 2.5% to £110 a week.

On Saturday, the personal allowance - which is the amount that most people can earn before they pay income tax - rose to £9,440.

And the top rate of income tax was also reduced from 50p in the pound to 45p for people with incomes of more than £150,000.

Also from 6 April, the amount pensioners can earn without paying tax will no longer rise with inflation, giving rise to accusations of a "granny tax".

 

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  • rate this
    -3

    Comment number 818.

    I don't think anything will work fairly until all benefits outwith the OAP are means tested. These are good proposals from Labour but we still need action on housing and our brutal cost of living which is the real destroyer of benefits and wages. Let people have something left at the end of the week that 1. They can save with. 2. They can contribute to welfare and health.

  • rate this
    +1

    Comment number 692.

    the onus is on the job seeker to find work if that was changed so the job centre gave the unemployed a list of employers taking on and an appointment time to visit that employer and impose sanctions against the job seeker who did not attend or refused a job offer the benefit bill would come down . I took a job I didn't like and after a while found that it was ok after all .

  • rate this
    +84

    Comment number 253.

    I'm 42 & have worked every day since I was 16. I've never claimed any benefits; when I was made redundant I took temp jobs at half my previous salary. I've never taken maternity leave. When I retire at whatever age they finally raise retirement to, I'll get a weekly allowance that may just keep me fed and warm. It would be nice to get something back before I'm too old to enjoy it.

  • rate this
    +158

    Comment number 248.

    Limiting the number of children for which benefits are paid, would bring abusers in line with other normal families, if there something you can't afford, you just don't do it.
    Many have openly said they see kids as a way to get easy benefits and climb up the priority list. Having kids should not be an incentive.
    Kids conceived for this reason are not growing up in the best environment either.

  • rate this
    +40

    Comment number 239.

    Benefit should not support those able to work with a standard of living higher than those that do work. It should provide a safety net for the disabled & short term support for unemployed. Food and shelter in extremis for all but not subsidised rental in high cost areas. Govt must reduce the barriers to work especially at the bottom of the scale. Cut NI on low paid, cut red tape on SME's.

 

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