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 69.

    None of these idiots have an answer to any of the issues this country faces.

    Tired of hearing each of them slagging each other off when in reality they are all the same ... clueless and out of touch with reality.

    Time to find a new approach without career politicians

  • rate this

    Comment number 68.

    Miliband had a song writen for him by the Arctic Monkeys once;

    "and what a scummy man, just give him half a chance i'll bet he'll rob you if he can..."

  • rate this

    Comment number 67.

    They put their Eds together and realised that they have not a clue what to do.

  • rate this

    Comment number 66.

    For a long time now there has been little or no difference between the Labour and Conservative parties. This is just more evidence, as if any was needed. Thatcher said the achievement was New Labour. Sadly true. That is why fewer people are voting and more of those who do vote are voting for protest parties.

  • rate this

    Comment number 65.

    "I think the puppet on the right shares my beliefs." "I think the puppet on the left is more to my liking." "Hey, wait a minute, there's one guy holding out both puppets!"

  • rate this

    Comment number 64.

    Why doesn't he just shake the money tree that previous Labour governments have.
    In the words of one of the most loved men in politics and previous PM and Chancellor...prudence, prudence, prudence.
    Yeah right.

  • rate this

    Comment number 63.

    The Labour party has been opposing the governments welfare spending cap and reductions in the welfare budget since the coalition came to power. Now they support benefit cuts all of a sudden! I dont trust a word Ed Milliband says when it comes to the economy. Lets see if the Labour party starts voting in support of government spending cuts in parliament now.

  • rate this

    Comment number 62.

    If the money we spent on welfare was used to educate and train the masses. Support new and existing UK businesses and employees then the UK would be a much better place.

    If we weren't spending billions on wars and security (to deal with terrorism that these wars are creating) we could do so much more. Why isn't the opposition talking about ending the war-mongering and intervention to save money?

  • rate this

    Comment number 61.

    Politicians don't know what welfare actually is

    They think its a soft political target with no financial or social consequences

    It is a social tool of tax and benefits package to redistribute wealth

    Returns between 86 and 121% back to the tresurey (it creates wealth) the only cost is distribution

    7 m people depend on it for their jobs

    Intigration into the tax system is the right way

  • rate this

    Comment number 60.

    I am sick fed up of Politicians referring to "Hard Working People"

    I do not want to WORK HARD, I want a nice easy cushy laa that pays me a mint for doing bugger all.... the same as MP's get.

    Why should any of us Work hard ?

    They shoot horses ...

  • rate this

    Comment number 59.

    Another populist bandwagon jumped on by our ruling classes to ensure that they get the marginal seats that will ensure victory at the next election. Soon we will have the same 'democratic' choices as they have over the pond; a right wing party or an extreme right wing party.

  • rate this

    Comment number 58.

    So Ed Miliband is a Tory, Nick Clegg is a Tory, and David Cameron is an Aristocrat. Does this mean the UK is a one party state?
    Isn't democracy great.

  • rate this

    Comment number 57.

    Way too late to be credible

  • rate this

    Comment number 56.

    Have they learned nothing. Private sector landlords will simply refuse to rent to HB claimants....they are doing that now. The poor are already living on food parcels. Why not just bring back the workhouse....its what they really want. Cutting benefits is not going to mend the economy, ensuring that coporations pay their tax might, as well as closing tax loopholes and benefits for the rich!

  • rate this

    Comment number 55.

    I suppose positioning themselves to the right of the tories & starting to encroach on UKIP terrortory might get them elected but I wouldn't bet on it & it leaves them without an ideological base to work from

  • rate this

    Comment number 54.

    So Ed and Eds tactic to try and convine the public that they can run an economy without spending like there is no tomorrow is to basically copy exactly a policy put in place by the coalition and claim it is their own! If these fools think the public will fall for this lip-service then they really are more stupid then I thought!

  • rate this

    Comment number 53.

    Its extremely hard to be a party of opposition in this scenario. I think lowering excessive rents, remove payments for wealthiest pensioners, and progressing with housebuilding is vital. This will help people on lower incomes significantly.

  • rate this

    Comment number 52.

    excellent speech!! hitting those who got us in the mess the rich bankers,landlords etc,while tempering with social justice.

  • rate this

    Comment number 51.

    Listen Ed, start representing the working man,start opposing the Tories like an opposition party should,promise a referendum on Europe and maybe,just maybe you may have a smidgin of a chance at the next election.If not UKIP for me!

  • rate this

    Comment number 50.

    Miliband is just trying to move his party to the right of the Tories. Its time we had a proper left-wing party in this country.


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