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 777.


    re. 614. ludwigvb

    Sorry, WHAT? Ludvig... there is no logic in your statement at all. ..."
    Sorry, GrahamInBedlam, I suggest you read the poster I was answering. Then re-read my post. Then ponder a while. Then go red for a few minutes.

  • rate this

    Comment number 776.

    We drove up the M20 yesterday and the amount of Eastern european cars was quite an eye opener. Maybe the Brits need to take off their rose tinted glasses and see whats really going on.

  • rate this

    Comment number 775.

    Labour have a blind spot on this similar to the blind spot on immigration that Mrs Duffy exposed. I don't care that I paid in and didn't get anything out. I do care that people are using the system to never work.

  • rate this

    Comment number 774.

    657. Assynt "Public Sector jobs which would cost more to the treasury than they will ever create in tax or NI"
    Nonsense. Far better to pay people to work (with the caveat that it's in jobs which actually benefit the country rather than 'obesity denormalisation co-ordinators' or bin snoopers) than to rot on benefits. And the rest of us would get decent public services in return for our taxes!

  • rate this

    Comment number 773.

    It Galls me that every MP of any party always says "If you work hard?"

    When do they work hard?

    It is the duty of the family to feed and support themselves, not to WORK HARD.

    If that means

    Tax Fiddles
    Expenses Fiddles
    and maybe working...?

    then fine I am up for it, i will do the same as MP's, Bankers, City Spivs.



  • rate this

    Comment number 772.

    Is it not about time we had a system whereby everbody working or on benefits contributes towards social security and the NHS? With so many hard pressed just now how would they find the money?
    Simple. Brutal and savage cuts to cost of living. This will free up individual cash for such. Its time people had enough for the basics, for saving a little, welfare and health.

  • rate this

    Comment number 771.

    There will always be a mentality in some people who want an easy life for doing as little as possible. I dont think you can change that. But it all started to get a bit silly when people on benefits here were being allowed to live in Spain subletting their council house out coming back twice a year for medicals and doing cash in hand jobs in Spain. Hope this is now being adressed.

  • rate this

    Comment number 770.

    3 Hours ago
    Anyone who chooses benefits as a lifestyle should be jailed.

    Ha ha! Can you imagine the court case???

    What a muppet!!

  • rate this

    Comment number 769.

    The system is a mess , I have worked for over thirty years solid . I have just been laid off, I can only claim six months job seekers money and then I lose my claim because my partner has a job. I do believe that I deserve something more out of this system that I have paid into for over thirty years . Someone with children new to this country will get so much more benefits than me that's not fair.

  • rate this

    Comment number 768.

    "Benefits: Revive 'principle of contribution' says Labour"

    And how will that help people who work in supermarkets etc, people who probably don't pay-in enough in the first place and whom are likely to go through long periods of unemployment through no fault of their own?

  • rate this

    Comment number 767.


    Considering that unemployment benefit is only 3% and a lot of those don't even have kids, what you say is just untrue. There is nothing wrong with migrants, especially the ones that do contribute, but to say that they are more entitled to the money is pig ignorant to be quite frank. Most people in this country do work and do want to make a better life for themselves.

  • rate this

    Comment number 766.

    There are at half a million vacancies in the UK. Can't find a job that suits you - get over yourself and get on with it

    & 2.52 million unemployed (20 March figures), in reality more cos lots have been pursuaded to become 'benefit subsidised' self-employed with no hope of actually making a real living by it.

    No matter how high unemployment there will always be some vacancies

  • rate this

    Comment number 765.

    Fine to give a bit more to those who contribute. Osborne's debate about Philpott is disgraceful. Many of us would like to stop the Philpott's of the world, but problem is he's already on basics, but taking money from kids. Police should have prosecuted him for this. But you cannot use the benefit system to reduce the money to the innocent kids, and so fire at his "human" sheild, it's immoral.

  • rate this

    Comment number 764.

    Cameron says it's "crazy" certain claimants could have a bigger income on benefits than if they had a job - yes it is crazy because wages are not high enough.

    Tories are eroding the welfare state while doing NOTHING to help workers. Our household of 3 has 3 workers, all of whom fear for the future.

  • rate this

    Comment number 763.

    Didn't Adolf Hitler use the same technique of turning the majority of the people againest small groups in the 20's /30's ? Some strongly ag

    reed, some strongly disagreed, most just let get on with it. Makes me wonder.

    Didn't Adolf Hitler use the same technique of turning the majority of the people againest small groups in the 20's /30's ? The average German just let them get on with it

  • rate this

    Comment number 762.

    The taxes we pay contribute to the general wellbeing of society. A significant aspect of social welfare is to reduce such things as opportunistic theft, and social dysfunction, as well as to provide a safety net for when we are all in need - either in ill-health, misfortune, or old age. That a minority of people abuse the system is not an indicator of the overall social benefit of such services.

  • rate this

    Comment number 761.

    What will be Labour's next Tory-lite gem of an idea I wonder?

    Those who pay go to the head of the NHS queue maybe?

    Labour politicians are only ever after one thing - your vote - and as soon as they have it they will do what they always do, screw things up.

  • rate this

    Comment number 760.

    I'm saddened, but not surprised, that my earlier comment has the most 'down votes' here. Typical of the shameless racism displayed by all sections of society (especially the 'non-working class' left)

    The fact is that immigrants have saved this country and are just as, if not more, entitled to benefits than the scrounging underbelly/chav generation who refuse to work

  • rate this

    Comment number 759.

    37 Minutes ago

    Fraud is a crime, tax avoidance isn't, its something every tax payer in this country does by using tax free allowances etc


    HMRCs Anti-avoidance Group (AAC) exists to tackle tax avoidance so it`s highly unlikely they would go after legal activities. The only people who use tax-avoidance are those who can afford 6 figure tax consultants.

  • rate this

    Comment number 758.

    The Labour Party are panicking!
    Seems like every Tom, Dick and Harriet are now trying to develop a new welfare policy that might win a few extra votes.

    After ruining our economy, I don't think Labour have a leg to stand on.


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