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 1257.

    If litter needs picking, and rubbish removing from rivers etc. and graffiti needs removing, and roads need sweeping, then PAY US A WAGE TO DO IT. Stop pouring Billions £££s of taxpayers money down the drain on useless back-to-work schemes. Stop blaming the poorest in society for the problems caused by the rich. Increase wages and increase dole.

  • rate this

    Comment number 1256.

    £40K benefits for unemployed with 2 kids - what planet are you living on? if that were a reality we would have gone broke decades ago!

    There are problems that need addressing, but that is exactly the sort of sensationalist rubbish that puts a spanner in the works. Not at all helpful - we need rational discourse to come up with sensible solutions.

  • rate this

    Comment number 1255.

    ...totally disagree....nobody on benefits would have gym membership...unless they were giving away booz and free meat pies

  • rate this

    Comment number 1254.

    at our place(electronics industry) they sacked 11 PAT testers and replaced them with 11 bulgarians..on low wages...none even new anything about electronics"

    If that is true then that looks a pretty clear case of unfair dismissal as it sound like neither redundancy nor performance were grounds for dismissal. Were the Bulgarians based in the UK or in Bulgaria?

  • rate this

    Comment number 1253.

    ......give council a work force for road sweeping and litter picking.....

    How do you propose handling the ensuing general strike by Public Service Workers?

  • rate this

    Comment number 1252.

    A couple of socialists in a multi party coalition doesn't make a socialist government. Some US republicans are convinced the Tories are socialists because they dont scrap the NHS. Socialist is used by some these days for anything left of margaret Thatcher & they're not too sure about her. I dont know of any Government in Europe whose implemented policies arent best described centre right

  • rate this

    Comment number 1251.

    Why would I bother going to work? With 2 kids my equivalent gross income on benefits would be more than 40k and I'd have to pay for things like gym membership, child care, school meals, transport to school, tv license etc.

    No thanks I'll stick with lie-ins, Jeremy Kyle and my sofa thanks.

  • rate this

    Comment number 1250.

    1237. Ian "..they have absolutely no idea how to fix"

    Gov't can't create wealth - they can only re-distribute it through taxes (from rich to poor) or through debt (from future generations to present). The only thing they can try to do is foster better conditions for businesses to thrive and grow - such as lower taxes, less red tape, flexible employment laws etc.

  • rate this

    Comment number 1249.

    If you believe Labour created the ' benefit culture ' in their last tenure, either you are in denial or are deluded.

    Lamont believed that high unemployment was a price ' well worth paying '.

    The former Rothschild boy was not the only one then, he's not the only one now.

  • rate this

    Comment number 1248.

    1240.Joe Bloggs
    Just now
    Take the wealth off the rich and give it to the poor.

    Make everyone equal and you make everyone poor. There are too many people and not enough to go around. It makes a good soundbite but there are not that many rich people and a great many of everyone else and you remove the incentive to try harder becasue it will get you no where

  • rate this

    Comment number 1247.

    The welfare system ought to be completely stopped. Extended families and their members ought to pay / support their disabled and unemployed members when needs arise. In addition, increase the minimum wage, and create true workers rights; that is, if one gets fired, the private company pay a 'fine' based on years service completed. If one leaves due to sickness or injury, same again.

  • rate this

    Comment number 1246.

    Agree with most of what yiu say. There are thousands of jobs that need doing throughout the Country that local authorities cannot afford. You have only to look at the neglect in Town Centers and the rubbish that has been dumped down country lanes and in Lay-bys. Pay Benefits, but make it a condition that they have to "work" 35 hours a week before they collect.

  • Comment number 1245.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 1244.

    The way to reduce the biggest cost the housing benefit bill is to scrap a replacement for trident, then the £34 bn could be used on new social housing, building on the land banks held by the builders, a shovel ready project that would help the economy too.

  • rate this

    Comment number 1243.

    @1233. Napoleon Hill
    1217. JPublic
    13 years of Labour.... blah blah blah.
    I didn't hear anyone complain during those 13 years blah blah blah

    Neither Labour or Tory (or Lib Dem for that matter) would have the right approach to running the UK because they are all corrupt crony career politicians protecting themselves and their ilk and dividing and pitting the public against each other.

  • rate this

    Comment number 1242.

    just assuming the benefits bill was cut by 3/4 there would still be a massive debt to be brought under control. then who would be in the firing line? it will be the next weakest in once this all this demonising of benefit recipients is done and dusted just think who will be next. i could well be your turn.

  • rate this

    Comment number 1241.

    It makes absolutely no sense to give away money to people for nothing...

    I mean for starters in town today I walked past- a river with so much rubbish it cant have been cleaned for 10years, potholed roads, the library had posters requesting volunteers to run it, uncollected recycling, closed down shops with filthy windows and half torn down signs. I'm sure my town is no different to many others.

  • rate this

    Comment number 1240.

    Take the wealth off the rich and give it to the poor.

  • rate this

    Comment number 1239.

    People have been brainwashed into allowing welfare to become the main topic of debate when our financial problems are caused by those in the financial sector. Allowing this government to concentrate on welfare is just a cover for their friends to get away with their responsibilities. Get the bankers to sort out their mess and pay for what they did, then sort out welfare. More jobs, less welfare.

  • rate this

    Comment number 1238.

    @1224. kleptocratistan

    Unskilled labour is rather cheap in most other parts of the world - mostly due to repressive regimes and working conditions we would find abhorrent. work
    well, that just shows what's wrong with the whole system

    when immensely rich corporations exploit workers in the third world in order to avoid paying fair wages


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