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 237.

    Isn't it wonderful how labour has come up with this stuff yet did nothing about it during their disastrous years in office?

  • rate this

    Comment number 236.

    All this shows that Labour cares little for ordinary, working people who try to do the right thing.
    If they had their way, everyone in the UK would be on benefits.

  • rate this

    Comment number 235.

    The same old Tory policies. Make those who can least defend even poorer. Ask yourself when are the Tories going to start reigning in those who avoid tax and national insurancve (including Companies). That would help pay off the debt left by their friendly greedy bankers.

  • rate this

    Comment number 234.

    Truth of matter is that coalition has failed to get economy moving by the usual methods, so they now resort to a traditional caning of the poor. Not that Labour lot will do any better?

    As for Philpott. He was in prison for 7 years. There was opportunity then to address his egoccentric behaviours.

    Inflated ego amongst older men is a social problem all over the UK? But nothing done about it?

  • rate this

    Comment number 233.

    There is no way the state could ever repay the contribution made into it by most people.

    Don't hold your breath on that truism coming from either the so called ' government ' or it's media cling ons.

  • rate this

    Comment number 232.

    The Government are correct in their approach. Only the elderly and severely disabled people in the UK have a right to the states help. Some people think they have the right to claim well over £30,000 a year in benefits, whilst some hard workers earn less putting in the hours. Well done to the government for stopping this something for nothing culture and asking people work for a living.

  • rate this

    Comment number 231.

    2 kids and you get child benefit. Every kid after get nowt!
    If you really want a big family,and that should be not be welcomed by a society whose population is growing too quickly,then you pay for them and the state does not.
    Regarding work...when you have a people forced to accept low wage,you get a system where the state subsidises capitalism...and that is also wrong!

  • rate this

    Comment number 230.

    The Party of Champagne Socialism suggests people should work for a living. No wonder some dispute they are real socialists.

  • rate this

    Comment number 229.

    Sounds a lot like Labour jumping on a bandwagon
    Lets all support people who have contributed?
    That's a new one for them
    Does it mean they have finally discovered how most hard working people have felt totally fleeced by their "free for all! policy, and never mind where the money comes from

  • rate this

    Comment number 228.

    Those that cannot help themselves should always be helped.
    What has happened though is that individuals and families have been allowed by the state to make lifestyle choices at the expense of their neighbours.
    This poisonous benefits culture drives wages down, and taxes up.

  • rate this

    Comment number 227.

    Late 1970's into the 1980's Margaret Thatcher and the City of London financial interests who backed her, introduced wholesale measures of privatization, state budget cuts, moves against labor and deregulation of the financial markets. She did so in parallel with similar moves in the USA initiated by advisers around President Ronald Reagan.

    Tory policy started the rot, lets make this quite clear.

  • rate this

    Comment number 226.

    Labour have a point here. They started NI, which was what it said on the tin. Welfare state provided a safety net for those who had paid in, and pensions, from NI contributions. Two big mistakes perverted the ideal:
    Not ringfencing pension contributions (as per Scandinavia) and in 1981 the ERS was removed by Mrs T enabling her govt to destroy our industry and create mass unemployment.

  • rate this

    Comment number 225.

    There is a sustained 'divide-&-rule' campaign being perpetrated by Westminster, getting the public bickering with each other over relative trivia.
    By far the biggest part of the welfare budget is pension payments for people who've generally worked their whole lives & paid into it.
    Meanwhile bankers continue to receive huge 'welfare' payments.
    Don't fall for the oldest trick in the book!

  • rate this

    Comment number 224.

    Can we not have all party agreement for a limit on child benefit and working tax credit, to commence in 9 months time and not be retrospective, limiting claims to the first 2 births, hence allowing for twins etc.

  • rate this

    Comment number 223.

    184.Man from the Midlands.
    In a contribution based system, which the respected Labour MP Frank Field has advocated as opposed to a needs based system, pay nothing in, get nothing out. What is the point of people making contributions if you can still get money regardless.

    As for being PM I am not a big enough liar or have enough faces for that.

  • rate this

    Comment number 222.

    I'm beginning to see see flaws with Labour's proposals already.

    Taxing bankers bonuses is a stupid idea. Such a tax would be so riddled with loopholes that a GCSE economics student could find their way around it. And secondly, very few people earn over £150k a year, so removing tax relief on their pension contributions won't raise that much money.

  • rate this

    Comment number 221.

    Why all the hate and divide and conquer that these parasites do in Government whatever Party.
    They are only doing all this by the orders of their contributors without contributors they are nothing.
    Focus on the contributors as your Government they hold the power of this country and the World.
    The Government are only the puppets that can make rules and regulation work for their contributors not us.

  • rate this

    Comment number 220.

    So why didn't Labour do anything about this when they were in power for 13 years. If I recall correctly Tony Blair once commissioned Frank Field to 'think the unthinkable on welfare.' Frank Field did just that.
    Tony Blair sacked him!

  • rate this

    Comment number 219.

    How does this effect women who never will for cultural reasons?
    However, there are hundreds of thousands of people out there at the moment who desperately WANT TO WORK....and getting them into work should be the TOP priority of this Government.....& in that respect they need to KICK the banks into lending more to small businesses.

  • rate this

    Comment number 218.

    The welfare state was set up as a short term measure for people that had fell on hard times. The fact that we give people money who could be working is unfair on those who work and contribute. Unless you're old/truly disabled, if you want HB, food vouncers, JSA etc etc etc - work on behalf of the country for it! Keep going DC!


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