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 837.

    I was worried about how I would vote at the next election as Coalition and Labour policies were so similiar.
    Now they are both the same it makes my decision so much easier.

    It won't matter how I vote.

  • rate this

    Comment number 836.

    The problem with Labour is they have no credibility in anything they say. I've been a life long Labour voter but when i see and hear the kinds of ideas that the present day Labour party are indulging in and supporting it makes me cringe. Abstaining from voting on IDS's retroactive legislation on workfare, to speed it through the houses of parliament, being a recent calamity.

  • rate this

    Comment number 835.

    Good job your parents didn't subscribe to that, you may not have been here

  • rate this

    Comment number 834.

    825. koolkarmauk

    whats your point they both sound as bad as each other. maybe a new party like ukip might do it better.

  • rate this

    Comment number 833.

    Personally, I'm benefiting from the higher tax allowance. However there do seem to be disabled people losing out because of the Con/Dem reforms and that needs addressing. But it seems to me, all Labour are doing here is desperately searching for different ideas to reform benefits because they don't want to admit the current changes are a step in the right direction.

  • rate this

    Comment number 832.

    Hands up all those not on the top tax rate.

    I suggest that you are feckless bunch of spongers living the life of Riley dependant on those who are paying the rate for all you benefits of Police Force, Hospitals etc.

    Everybody really 'subsidises' and depends on everybody else in some form or another ... a matter of scale really!

  • rate this

    Comment number 831.

    it would be nice if they had a grown up debate on the problem instead of the vote for me because I care more approach, I hated being out of work and did any job available until I finally found a full time decent paying job, i worked with 20 men in a warehouse and enjoyed it but was disgusted when 2 of them with large families decided to quit because they could get more on benefits and they did

  • rate this

    Comment number 830.


    Why would anyone have 3 or 4 kids in the 21st century? Ever heard of global overpopulation? Benefits should not only be limited to two kids but an environmental tax should be applied to additional kids. I'm not happy to have my taxes used to breed even more homosapiens when there way too many already.

  • rate this

    Comment number 829.

    As a slight aside, the Office of Budget Responsibility estimated the revenue maximizing top rate of tax to be 48%. Hence, by cutting it to only 45%, George Osborne is actually losing the Exchequer money and increasing the deficit. The implication of this is that the burden of deficit reduction is reduced for the very wealthy and correspondingly increased for those who are less well off.

  • rate this

    Comment number 828.

    It has come to a sad state of affairs when I think Britain will have more chance with David and Vic Beckham in charge than the likes of Milliband and Harman.

  • rate this

    Comment number 827.

    glamorgan9560: you do know the bedroom tax isn't a tax don't you? Obviously not. Those people with jobs who don't have to claim benefit can do what the hell they like with the money they earn.
    Being bitter of someones success because you don't have it doesn't help anyone.

  • rate this

    Comment number 826.

    We stopped at two kids which is what we could afford. I would have loved a large family & it hurts to meet someone who has never worked with 6 kids. I have been unemployed & amazed the dhss when I took a job at half my salary as a teacher. It is much harder now. So many jobs done by robots or exported. High salaries? What about footballers

  • Comment number 825.

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

  • rate this

    Comment number 824.

    Agree with your theory,but not your solution.Adopting a Chinese-style one child policy has only one result - the killing or abandoning of female babies.People have to take their own responsibility for the number of children that they have and unfortunately some people just don't seem capable of it.

  • rate this

    Comment number 823.

    " Simon Clemison Political correspondent, BBC News

    but the welfare bill is about £200bn and is a significant part of the government spend. "

    The *benfits* (we are not American) bill is about £200bn, 50% or so of which is spent on pensioners, around 40% on *working* people due to *low pay*, leaving only around 10% on unemployment. As a journalist I'd expect you to be pointing this out.

  • rate this

    Comment number 822.

    "And the Union workhouses?" demanded Scrooge. "Are they still in operation?"
    "They are. Still," returned the gentleman, "I wish I could say they were not."
    "The Treadmill and the Poor Law are in full vigour, then?" said Scrooge.
    "Both very busy, sir."
    "Oh…," said Scrooge. "I'm very glad to hear it."

    Low wage economy anyone?

  • rate this

    Comment number 821.

    @253 Surely you need a holiday by now.... ;0)

    The article smacks of desperation. Labour reacting to populist policies based on public reaction? This is like Browns 'British jobs for British People' response prior to the election.... This country hasn't got an unmanageable benefit bill. It has got a screwed up policy on part-time work and employers avoiding tax both corporation and NI conts.

  • rate this

    Comment number 820.

    1 Minute ago The best way forward at the moment would be a council house buildng programme, built by Brits, for working Brits.'

    and for working immigrants

  • rate this

    Comment number 819.

    Once again, the announcement from Labour today is all about spending more and more public money in an effort to win votes.
    The Labour party guys just don't get it. You can't spend what you haven't got unless you are prepared to borrow endlessly.
    Labour wrecked the UK economy over 13 years and, given the chance in 2015, they will do it again and we could easily go the way of Greece & Cyprus.

  • rate this

    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.


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