Ed Miliband: Labour would cap social security spending


Labour leader Ed Miliband: ''The system does need reform''

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Ed Miliband has promised to cap spending on benefits as he unveiled his party's new approach to welfare.

A future Labour government would introduce a three-year cap on structural spending, including housing benefits, from 2015-6, its leader said.

He also said those in work for under five years may not be eligible for some jobless benefits while those who had worked for longer should get more help.

The Conservatives said the "vacuous" plan would not bring down costs.

In a speech in east London, Mr Miliband announced a series of changes to Labour policy:

  • A three-year cap on spending on structural benefits - including housing benefit and other non-cyclical costs - will be introduced in 2015-6
  • Contribution-based unemployment benefits such as jobseekers allowance (JSA), will be reviewed
  • Priority will be given to those who have worked and paid tax for longer while eligibility for the top-up contributory JSA may be extended from two to five years in work
  • Councils will be given power to negotiate rents with landlords to help reduce housing benefits bills
  • Child benefit for families with one person earning over £50,000 will not be reinstated
  • More help for disabled people to take up work opportunities

The Labour leader said the government's "short-term" approach was failing and history showed that cutting individual benefits alone would not reduce the overall cost of social security.

Instead, Labour would tackle the "underlying causes" of rising welfare costs, such as unemployment, low pay and high rents.

Start Quote

What was clear today, however, is the Labour leader's philosophy. He believes that cutting benefits is not the way to cut the benefit bill”

End Quote

"The next Labour government will have less money to spend. If we are going to turn our economy around, protect our NHS, and build a stronger country we will have to be laser focused on how we spend every single pound.

"Social security spending, vital as it is, cannot be exempt from that discipline."

He said Labour, if elected, would introduce a cap on "structural spending" - such as housing benefit and disability allowances - for three years from 2015-16 to deal with the long-term pressures on welfare budgets.

The idea of a cap - which would not affect parts of the welfare budget affected by changes in unemployment - was suggested by Conservative Chancellor George Osborne in March's Budget.

'Faith shaken'

Mr Miliband did not give an overall figure for the cap, saying it would have to be set at a "sensible" level, but argued that it would help "to control costs" and introduce "greater discipline".

He said the country could not afford to continue paying billions on housing benefit when there was a chronic shortage of new homes being built.

A future Labour government would give councils the power to negotiate with landlords on tenants' behalf over rents and keep any savings they make to invest in building new homes.

Start Quote

Ed Miliband is too weak to deliver the tough decisions on welfare hard working people rightly want to see”

End Quote Grant Shapps Conservative Party chairman

"This government talks a lot about getting housing benefit under control," he said. "But let me be clear: any attempt to control housing benefit costs which fails to build more homes is destined to fail."

Mr Miliband also outlined plans to cut long-term unemployment and encourage employers to pay a "living wage", keeping the costs of in-work benefits down, as well as increasing opportunities for disabled people.

Welfare could not be "a substitute for good jobs and decent employment", he said.

The Labour leader said people's faith in the welfare system has been "shaken" by the appearance that a minority of people were getting "something for nothing and other people nothing for something."

He pledged to restore the "contributory principle" to jobseeker's allowance, so that only people who have paid in "for significantly longer" than the current minimum of two years will be eligible.

The party, he said, will look at whether to give more than the current £71-a-week rate to those who have contributed longest, as this was not "a proper recognition of how much somebody who has worked for many decades has paid into the system".

'Distinctive choice'

The BBC's political editor Nick Robinson said Labour believed they could reduce the benefits bill by getting more people into work, getting employers to pay higher wages and reforming the private rental market.

Start Quote

There's a difference between putting a cash ceiling, which will be difficult to operate in some areas of welfare expenditure, and dealing with what is the main criticism of voters”

End Quote Frank Field Labour MP

In that sense, he added, it did not mark a fundamental change in approach since Labour were not yet spelling out what benefits they would cut and who would get less.

Earlier this week, shadow chancellor Ed Balls said the party would end winter fuel payments for pensioners on high and top-level income tax rates, but this is only likely to raise £100m.

Labour MP Frank Field, a critic of the party's welfare policies in the past, said the speech was a move in the right direction but more must be done to allay public perceptions there was a "something for nothing" culture in the system.

"There's a difference between putting a cash ceiling, which will be difficult to operate in some areas of welfare expenditure, and dealing with what is the main criticism of voters," he said.

But speaking on his weekly phone-in on LBC 97.3 FM, Deputy Prime Minister Nick Clegg said Labour had spent the last three years "vilifying" coalition benefit changes but had now "flip-flopped" to support them.

And Conservative Party chairman Grant Shapps called the speech "completely empty".

He added: "Ed Miliband is too weak to deliver the tough decisions on welfare hard working people rightly want to see. His plans would actually increase welfare spending, and mean more borrowing and more debt."

The government is introducing a £26,000 annual cap on total benefits that can be paid to a single family, which it says means no-one on state support will get more than the average annual income.

An estimated 67,000 households will be affected by the cap this year.


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  • rate this

    Comment number 49.

    I wonder what happened to conviction politics, rather then sound-bites, spin and rhetoric.

    I am deeply disillusioned with the current crop of politicians - there's not that much to choose between them. Neither party gives a hoot for anyone other than their supporters / backers.

    Tax payers will just keep funding their luxury lifestyle and gold-plated pensions.

    No wonder the country is in a mess!

  • rate this

    Comment number 48.

    Despite the LibDems having to compromise with the Tories in the coalition; they might be the best alternative to the two big parties, if they were voted in alone. Their policies do look credible and they don't have the baggage .

  • rate this

    Comment number 47.

    Labour are as bad of the Tories they're trying to oust. They've seen the last vote from me.

  • rate this

    Comment number 46.

    Thunderbird 2 has it all worked out, apparently. Shame that he has no credibility or charisma whatsoever.

  • rate this

    Comment number 45.

    Ahhhh isn't it nice, our politicos are pooling speech writers and policy makers in an effort to save money. Bless.

  • rate this

    Comment number 44.

    6th Form Ed's 'cap' is probably no more than an alignment with the original Tory cut brought about by his party's overspending.

    Not that he would say so...

  • rate this

    Comment number 43.

    The first to offer a single universal flat 'living' benefit coupled with a single flat tax on everything earned will get my vote - it will be a huge amount cheaper for us all mainly by cutting millions of paper shuffling form filling waste of title jobs.
    Nothing else is more than tinkering with a broken system - bit like checking the tyre pressure when the engine is siezed

  • rate this

    Comment number 42.

    The crux of the welfare issue is shifting the mentality of all people, whatever the level of their income and "wealth" so that they once again take as much responsibility as they can for supporting themselves. That will still leave many people who are in genuine need and we should continue to support them.

  • rate this

    Comment number 41.

    Come back, David... all is forgiven! It wasn't your fault that brother Ed got the votes... they saw the name Milliband and put their X next to his and not yours. Never mind.

    Red or Blue the colour is really a shade of Yuck... with a little bit of Yellow, Green (and more Green) and Purple added. Is there ANYONE who can run this economy sensibly?


  • rate this

    Comment number 40.

    Blue Labour!
    It seems there are now three parties in this coalition.

    The government should be suing Milibandwagon for plagiarism.

  • rate this

    Comment number 39.

    Shouldn't welfare be paid to those who need it? Sounds like Ed's trying to buy votes.

  • rate this

    Comment number 38.

    Really weird... as I saw the headline I just knew this would be on HYS!! Strange that we've had so many more controversial happenings of government yet the BBC puts this up for comment!

    After all, this is simply a statement of we're not going to reverse whats been done. This is the 'norm' for all parties and all governments, those with open minds think about how this is being portrayed!

  • rate this

    Comment number 37.

    As a social democrat I'll admit to feeling that Labour's policy strategy is failing or has failed. Credibility isn't exactly a hallmark at the moment and I mean credibility which has been affected by lack of pronouncements about policies or lack of therein. For me, Ed Balls is too closely associated with this strategy and I feel he must go for Labour to salvage any integrity or hope frankly.

  • rate this

    Comment number 36.

    As a non-labour voter it is still embarrassing that the best our official opposition party can do are the feckless Miliband and Balls. They do not have a creative bone between them nor the ability to demonstrate that they have more than an A-Level student's understanding of the issues we face.

    On second thoughts..... Please stay at the helm of the spend-spend-spend Labour party and save us all!

  • rate this

    Comment number 35.

    Will the unions let him cap anything - especially wages of their members?

  • rate this

    Comment number 34.

    Gross hypocrisy from someone who should NOT be trusted to ever be in power again.

    Just look at what is happening under France's socialist government - unemployment up, taxes up, ludicrous labour laws, etc. and exactly the same will happen here if we elect these awful people back in.

  • rate this

    Comment number 33.

    So they claim that 'like New Labour' they would be prudent. But surely it was new Labour who took the country from being debt free to as much in debt as we were after ww2 in just over 120 years.

    If they really have done a U turn on spending that is great but I remain sceptical!

  • rate this

    Comment number 32.

    What a vacuous,flimsy,leader this man is.Has he nothing original to say?

  • rate this

    Comment number 31.

    All Milipeed needs to do now is say were going to stop mass imigration and that will be the end of the labour voters

  • rate this

    Comment number 30.

    Getting employers to pay higher wages is good in theory, but it will result in an increased wage bill, which will lead to further redundancies and higher inflation.


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