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.


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

    Comment number 217.

    The Welfare State was founded on the principle of contribution. Unfortunately over the years the system has moved away from that principle until we've arrived at the current situation where we have a lot of takers who've never paid a penny into the system. This situation is unsustainable. We need an intelligent debate around the future of welfare and paying for it involving the whole of society

  • rate this

    Comment number 216.

    Most benefits are paid out to people already in work because employers are allowed to pay below a living wage or are retired. Private pensions only work if people can afford to pour hundreds of thousands in & can escape the clutches of likes of Gordon Brown & charges.
    Most of the £26,000 handed out to those unemployed goes in exorbitant rents paid to greedy landlords because there is no rent cap.

  • rate this

    Comment number 215.

    It makes me smile when I hear people state they are not benefit dependant because they work,
    well let me explain,If you receive any benefits at all from the state including tax credits then you are benefit dependant.
    stop taking my money to support your life choices and lifstyles,I don't take any benefits because I live within my means,all welfare should stop ASAP I'm sick of paying towards others

  • rate this

    Comment number 214.

    I'm all for changes to the benefit system, especially when it helps out those in actual need. There are a small minority of people who chose to milk the system, but is the real problem that they are able to in the first place? Let's get tougher but not tar every single person receiving benefit with the same tabloid trashy brush akin to the Daily Mail front page. It's like we are in Victorian times

  • rate this

    Comment number 213.

    The current row over benefits is a smoke screen and the government is delighted that the public are sniping at each other. Why? - Because the biggest part of so-called "welfare" is spent on pensioners. Successive governments spent all the contributions made over 50 years or more instead of investing it (i.e. NHI is a Ponzi scheme). Pensioners cannot now be blamed for the mess created by them.

  • rate this

    Comment number 212.

    New Labour cut the amount of time the unemployed received contribution based Jobseekers allowance from a year to 6 months, in other words cut it in half. If they're so keen on contribution based benefits perhaps they should undo that & have a policy of putting the award of contribution based JSA back to a year

  • rate this

    Comment number 211.


    It isn't fair... but what is your solution, let the children go without a home? They are innocent too. The vast majority of people of claim benefits are tax payers or have paid tax for years and have now lost their job. The people who pop kids out for benefits are a very tiny minority. Cameron, Osbourne and Milli are the same, never done a days work in their lives, just a rich family.

  • rate this

    Comment number 210.

    @185 Jaw dropping truth

    Got to laugh at these Labour-Trot-Marxist Socialists. Even when confronted with the sickening truth of the benefits system...
    Would that be the 'real sickening truth' or just the blatent lies & propaganda of the Tories & their pet hate-sheet 'The 'Daily Mail'?

    Just as Theresa May's story of the 'Asylum Seeker & The Cat' was false, so are the endless lies about benefits.

  • rate this

    Comment number 209.

    If government spent about 70-80% less than it does right now, and only did the essential functions of a government, such as the army, police and judiciary... then nobody would need benefits, because they would be free of the massive burden imposed on them. If you want to help poor people, then a very small/limited government is the way to do it. Get government off everyone's back. Free Atlas.

  • rate this

    Comment number 208.

    I have mentioned this in another thread but here goes..
    The cost surrounding a fairly simple welfare system is astronomical. Working for a government department should not be a "job for life", with guaranteed protected pensions and inflation rises.
    This system has bread an obnoxious and lackadaisical culture, in which it takes forever and a day to deal with everything!
    All at the taxpayers expense

  • rate this

    Comment number 207.

    Revive 'principle of contribution'

    Yes, fine, if done wise and fairly, but is the government machine capable of being wise and fair?

    Labour (and Cons) have changed the UK over decades, dismantling our internal economy, eg:favouring effective slavery (low pay) for High Profit empire building employers (eg: Tesco, Sainsbury, Sweat shops, Retail chains etc etc)

    Should be PRIORITY to fix this.

  • rate this

    Comment number 206.

    Footy13"Welfare system re-affirms to people that they don't need to work to get what people who do work have - a house, a car, holidays etc etc"
    A holiday is a LUXURY and NOT necessary ... you make it sound a right!!! If you can holiday for one or two weeks you have sufficient money!

  • rate this

    Comment number 205.

    178. renni garrad
    Why did they not think about this when they opened the floodgates of Europe? Homeless with a 9 month old baby.

    How very selfish to have a child you cant afford!

  • rate this

    Comment number 204.

    Unless it is being poorly presented, this aspiration is that those who pay taxes should receive greater rebates than they currently do.

    The least wastefulway of doing this is, of course, to collect less in tax in the first place.

    So, unless it is being poorly presented, this is merely a capitulation to existing Government policy. It seems poor politics to make such a fuss over a capitulation.

  • rate this

    Comment number 203.

    They must get rid of Harriet Harperson, she's such an embarrassing brown noser.

  • rate this

    Comment number 202.

    For every Philpotts at one end of the spectrum, there is a Goodwin at the other: both self obsessed, greedy and driven by insane and unrealistic ideals.

    For every family with four children living off the state, there is another living off the inherited wealth of the family.

    Treat people fairly, Mr Cameron and stop squeezing the middle and lower earning classes.

  • rate this

    Comment number 201.

    What are they thinking? All the spongers who would vote for them are now going to seriously considering forming a genuine left of centre party of the undeserving greedy or more likely not vote at all. Middle England won't vote labour because they have been reminded all they do is run out of money eventually - another 20 years before they are incorrectly trusted again.

  • Comment number 200.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 199.

    If you can talk on a mobile phone and operate a lap top or PC you can work in todays society. We do not live in an age of only physical manual jobs anymore.

  • rate this

    Comment number 198.

    Since none of the big three parties are even able to identify the actual problems (lack of demand, reduction in real terms of low and middle income households, few real jobs!) and are all addressing symptoms (over demand for low cost housing, increasing welfare draw), they are all as bad as each other.

    How about actually fixing the systems (welfare, education) for once?

    Oh, right. Elections.


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