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 277.

    Cameron repeatedly talks about 'fairness' The only thing fair that I can see, is the crop on Boris Johnson's head.

  • rate this

    Comment number 276.

    Speaking of benefits...
    Britain’s bankers and other finance workers scooped £13billion in bonuses last year as the rest of the country struggled to make ends meet.
    But the city of London contributed 10% to our GDP , that's 153Bn, quite a lot of that goes to the low paid workers in the company
    while Wayne Rooney gets 10M per year for playing 38 days a year

  • rate this

    Comment number 275.

    Surely all political parties subscribe to this dictum, that is as old as the hills, that you can only take out what you put in. The problem is that a sector of the population exists that does all the taking and none of the contributing. I wait with bated breath to see how Labour puts this dictum into practice!. The welfare system should be a safety net, not an alternative lifestyle.

  • rate this

    Comment number 274.

    I agree with people receiving benefits who are disabled or have severe health problems that prevent them from working. However, there are a number of able bodied people out there who are more than capable of working but claim they can't or class themselves as unemployable. The worrying thing is that they teach their kids how screw the benefits system too so they just join in when they leave school

  • rate this

    Comment number 273.

    My wife and I paid in OVER £140k to the system We hold 5 degrees between us have raised productive children who also contribute to society. So why after a accident and no longer able to work are we begrudges every penny? Why when the system is about fairness are we set to lose £72 PER WEEK. We are not scroungers we are part of society and yet you feel fit to judge us.

  • rate this

    Comment number 272.

    The people who really need benefits are the dirt poor immigrants and asylum seekers who come to escape persecution from their own countries, and to contribute to the UK economy and society. We need more of them and they are entitled to welfare

    I agree that benefits should be cut for scroungers - like the people you see on Jeremy Kyle - but stop persecuting immigrants!!!

  • rate this

    Comment number 271.

    224. LJ

    Another cruel and heartless idea. Why should children be punished for being born into a large family, something which is beyond their control?

    226. John from Poole

    NI wasn't a Labour invention, it was created by the Liberal government in 1911. If you're referring to the post war welfare reforms, all Labour did was convert it from a voluntary to a mandatory contribution scheme.

  • rate this

    Comment number 270.

    too many people think people on benefits they sit at home all day doing nothing sat in front of the TV watching sky.

    that is not always the case,yes I'm on benefits but i was working till 2011 when i developed cancer, prior to that i spent nearly 2 years working for free. lots of us want a job there is just nothing out there ( in my area) and the government are doing nothing to create those jobs.

  • rate this

    Comment number 269.

    So Labour seem to abandoning yet another of their founding principles - the redistribution of wealth.

    The whole point of the tax / benefits system is to take money from the rich and give it to the poor. Change that and you might as well say every man (and woman) for themselves.

    Labour should really stop trying to out Tory the Tories.

  • rate this

    Comment number 268.

    so Harmoan, the welfare state is a lot bigger than just social housing, so instead of continuing with your poison towards all other parties why not do something original and tell us what your reforms of the welfare system would be....
    You spoke for ages and said absolutely nothing...

  • rate this

    Comment number 267.

    Does no one read history anymore?

    The use of the word "Marxist" for the welfare state is ignorance. Karl Marx was against all welfare payments which he saw as a bribe ("crumbs from the rich mans table") to not change the whole capitalist system
    The deserving poor/underserving poor argument is centuries old leading to workhouses which actually proved that the vast majority were deserving

  • rate this

    Comment number 266.

    What will happen to people who are denied employment?

  • rate this

    Comment number 265.

    Start by reforming the tax system so that people on minimum wage for (say) 37 or 40hours per week do not pay tax or national insurance contributions.
    That way you cut out the merry-go-round whereby you take with one hand and give back with the other in terms of income support and working tax credit.

  • rate this

    Comment number 264.

    240.Jaw dropping truth

    They are a myth, the statistics are against you. the vast majority of the welfare bill as many people have pointed out, are on pensions. Those are the people that have worked all their lives and deserve to get something back. Most of the rest are families having their wages topped up through tax credits(so working & taxpaying) and the rest are unemployed. So you are wrong.

  • rate this

    Comment number 263.

    Labour did nothing about this while in office because they thought it would cost them the election. Now public opinion has changed,and so Labour have changed their tune.Their hypocrisy is astounding.If a Labour MP told me the sun rose in the morning and set at night,I'd want to go outside and check it for myself.

  • rate this

    Comment number 262.

    The biggest fraud numerically amongst benefits for working age people is employed people claiming Job seekers allowance - by defintion a fraud committed by employed people NOT UNEMPLOYED people, they're almost invariably fiddling their tax/NI as well - hard to get JSA if you & your employer (can be self) are paying your NI contributions & PAYE

  • rate this

    Comment number 261.

    241 You do realise this is a Labour policy right? As in even the Party of the Vote Bribe admits it has now run out of enough of other people's money to bribe everyone it needs too? Oh no, you just got straight on with the blinkered frothing. Good good.

  • rate this

    Comment number 260.

    Why is this a "top story"? Labour have no actual policies to reform welfare . And they never will have, given that lifestyle scroungers are a key part of the Labour vote.

  • rate this

    Comment number 259.

    Lets talk about welfare, ....

    It would be well fare if the government expended as much energy on stamping out tax avoidance as they do on welfare reform.

    It would be well fare if the government introduced a 'living wage', that's if they really do want to make work pay ?

    It would be well fare if the government means tested ALL benefits, such as winter fuel payments to the rich.

  • rate this

    Comment number 258.

    It is high time this country recognised what you pay in as the main driver of benefit entitlement. For at present there is a massive disconnect in the perceptions of those that have paid in and get virtually nothing back and those who pay in nothing and take it all!


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