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 709.

    So welfare is to be capped for 3 years. The country deserves to know what is going to happen after 3 years. Will this simply be a 3 year lid on a socialist welfare pressure cooker that blows after 3 years and the country is back to borrowing, binging and bankruptcy ?

  • rate this

    Comment number 708.

    689. Davewhoever
    The Conservative comment highlights that they are only interested in saving money not in helping people."

    That's because they believe the best way to help people long term is to save money.

    The (old) Labour way of 'helping' people was to borrow money with no sense and give it away, with no plan to pay it back. That is a very short term 'help' which leads to massive hurt.

  • rate this

    Comment number 707.

    Some sensible policy announcements from Milliband and Balls in recent days, but it does now seem a bit odd that Labour are now ever so slightly to the right of the Tories on some welfare issues.

    The Tories now need to pull their finger out and prove that they can be more radical than Labour.

  • rate this

    Comment number 706.

    3 years of waiting for a policy whilst hearing how everyone else is doing it so badly wrong and the anticipation is broken by "we'll do it the same as them".

    Hopefully the Labour party have a leadership election so that the next election can be competitive, polls are sliding already.

    Surely, even the one eyed Labour supporters are having a serious think about who to vote for in 2 years.

  • rate this

    Comment number 705.

    He has only said that Labour would "manage" the economy better than the Tories. We need some philosphical ballast behind policies. This would result in substantially reducing inequality, ending class based privilege, closing tax havens, ending the dominance of public schools and re-establishing the value of public service. Why vote Labour if issues like these remain unaddressed?

  • rate this

    Comment number 704.

    1 Minute ago

    "it's called economics, our extraction price was too high vs world mkt."

    Economics is correct. However, invading and murdering hundreds of thousands of Iraqis and Afghanis is ALSO 'economics'. The law of the jungle. Where do you draw the line? Can we be civilised and find an alternative? Not if those who're currently profiting control our democracy instead of US!

  • rate this

    Comment number 703.

    690. Jaw dropping truth
    I have said it many times ( always to a deluge of mark downs ) The curse of the Socialists has come back to haunt them

    Do you actually know what a socialist is?

    Look it up and let me know if you still think it applies to NuLab (Tory Lite).

  • rate this

    Comment number 702.

    Yet again Labour jump on the welfare bandwagon whilst having opposed every single coalition reform of the welfare system, no credibility, no serious fiscal & economic policies, just soundbites without any substance or figures to back them up, just another attempt @ deception of the voters into thinking that the party is competent economically & no apology for the mess they created, hypocrisy again

  • rate this

    Comment number 701.

    I am no tory but the labour party has lost its direction and is loosing its core voters, I will never vote labour again, but I detest the right wing torys and UKIP so who is left , minority parties, but a vote for them might as well be a vote for the major parties . a box for none of the above is needed .

  • rate this

    Comment number 700.

    Sorry I cannot believe a thing this muppet says. If Labour have any hope of getting back into power they have to ditch the cock and Balls story.

  • rate this

    Comment number 699.

    #696 your leader has just vindicated 3 years of conservative economic policy, wheres his credibilty? where do working people go now? who stands up for working class values? you tell me.

  • rate this

    Comment number 698.

    When the left wing loons cry "foul" and the Tories resort to personal insults then we know Ed Milliband is on to a winner!

    Its not champagne socialism its A caring Social policy, basing welfare on Contributions and fundamentally encouraging full employment and a fair wage for a fair days work.

    Re Osborne's pathetic letter about a legitimate donation I have just 2 words to say MICHAEL ASHCROFT

  • rate this

    Comment number 697.

    Actually, they're not even champagne socialists anymore, simply champagne quaffers.

  • rate this

    Comment number 696.

    I think you will find that the Conservatives do NOT HAVE A MAJORITY, the Lib/Dems DO NOT HAVE A MAJORITY.

    Do want to start your Conservative activism by knocking on doors and asking people what they think? No, just full of wind and Daily Mail propaganda to spout on a blog.

  • rate this

    Comment number 695.

    Only tax payers should be allowed to vote as it is their money.

  • rate this

    Comment number 694.

    666.Si Hope
    I think you are missing a few facts. Labour 'hid' some 250bil worth of debts in the form of PFI which were never declared as part of our debt. Had these been included then our debt/deficit was a lot worse, its very easy (and Brown was a master at it) to manipulate figures to show economic competence.

  • rate this

    Comment number 693.

    This is a disastrous policy betrayal. Now watch Labour plummet in the polls.

  • rate this

    Comment number 692.

    This highlights how out-of-touch the Labour leadership(?) is with the grass roots. Labour should be for the workers, poor and unemployed NOT for the uncaring high earners and rich. The headlines here will only depict Labour as moving back towards the new conservative party which it became under Blair/Brown. Start now supporting your core by saying you will raise taxes on business and rich!

  • rate this

    Comment number 691.


    You took a masters and yet are so oblivious to social mobility and the class system, the same system that discriminates against women to this day. Whatever social class they belong to. You described women on benefits as chavs, suggesting that masters is wasted on you.

  • rate this

    Comment number 690.

    I have said it many times ( always to a deluge of mark downs ) The curse of the Socialists has come back to haunt them , they have stolen every penny they can squeeze from the hard working tax payer. there is nothing left they cannot borrow maxed out ! So many Idle will now have to get up and running many backside will fell the boot of economic reality best get up and at it now not before time


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