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 1309.

    1185. koolkarmauk

    Great riposte. Which of my facts were made up?

  • rate this

    Comment number 1308.

    1282 bbcid

    'If the Thatcher govt had projected into the figures the future cost of coal, then every coal mine in the UK would still be open and making a huge profit,'

    No it wouldn't. They'd all be on strike.

  • Comment number 1307.

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

  • rate this

    Comment number 1306.

    The man is a blithering comedian put him next to Mr Bean and you'd struggle to find the more painstakingly agonising buffoon. Ed is not a leader and never will be it's an impossibility and it's about time someone in Labour got someone in with some credibility and charisma.

  • Comment number 1305.

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

  • rate this

    Comment number 1304.

    What we need in UK is working class jobs. People want to work, however, all the jobs are in India, China etc

  • rate this

    Comment number 1303.

    At last! They now admit there is no more money because their last tenure spent it all on goodness knows what. Oh yes, it was consultants and stupid schemes designed only to get them re-elected again and again.

    Now if they can only admit that they wasted our gold reserves by selling them (at a low) when tax revenues were at a record high. Where did that money go?

  • rate this

    Comment number 1302.

    1259. Sanchez

    "This man Miliband will say anything at all to try to get elected. And that is a real problem. Because we know from the start that he is lying to us."

    Could not agree more. Next thing you know he will be mucking about with huskies in the Arctic, giving a cast iron guarantee on an EU referendum, and proclaiming himself the "heir to Blair"
    We will never fall for it. Will we?

  • rate this

    Comment number 1301.

    Blah blah blah, Miliband will say anything to get into power, I just hope nobody believes him.

    Labours economic record is poor, they had 13 years in power and just went on a spending spree.

  • rate this

    Comment number 1300.

    1289.Tim Browning

    Tim it might not have measured on your radar... but the unemployed are unemployed because there is no jobs.. I also don't believe the "starve" nonsense, I know when I was unemployed in the 80's I got cash that same day.

    Tio .. You make your cash of the state you so detest.. Ironic. Libertarian hypocricy.

  • rate this

    Comment number 1299.

    Fool me once, shame on you. Fool me twice shame on me so not a chance I'd be willing to let these lacklustre idiots regain power.

  • rate this

    Comment number 1298.

    Ok, Ed ~ From 2005 on, during continuing lobby, finance was deregulated, light soft touch as it went crazy without effective internal and external controls, accounting insanity, bonus culture and outright criminality in the game of inflating asset values. The profits were huge and flow of funds to the exchequer to good to be true and squandered on Pandora's box. The mess isn't sorted out yet.

  • rate this

    Comment number 1297.


  • rate this

    Comment number 1296.

    @1073.JPublic - "I notice a distinct whiff of horse manure in the air"

    @1047. sarah - "No, its distinctly bull."

    * * *

    Actually, they told you it was bull, but someone fiddled it. Turns out it was horse after all.

    : D

  • rate this

    Comment number 1295.

    Whatever is that noise? Why it’s the bones of James Kerr, aka Keir Hardy, rotating at 4000 rpm.

  • rate this

    Comment number 1294.

    1277.Trout Mask Replica
    A resident in one of my BTL's came and told me he was out of work and could not pay his rent, he's Polish. I agreed to let him pay his dues by working on my properties. He, and his wife, now run their own, very successful business renovating properties, mine and others. They are workers, not shirkers, and dont rely on the government to survive. Not everyone is a consultant

  • rate this

    Comment number 1293.

    #1284 if you give an unskilled immigrant a job your keeping a person on the dole so it costs money...theres no point in having unskilled migrants in the uk with millions on the dole...its pointless and expensive send all unskilled migrants back to their own countries and certainly dont pay them benefits.

  • rate this

    Comment number 1292.

    liebour are tory in everything but name just like all the present political parties out for their own gains no matter what it costs the rest of the country but the parties all have to play the game and lie about them not all being in it together otherwise their scam fails.
    Vote all these jokers out of power including ukip who are just a new name for old fashioned racist tories

  • rate this

    Comment number 1291.

    The Party of no shame...they helped to cause this mess, have not only condemned every single cut made by the Tories, but have also actively tried to scare people with the nonsense about Bedroom Tax (which isn't even a tax!)..and now they say "erm..ok..yep the Tories were right all along!"...you would have to be slightly unhinged ever to trust Labour with the economy again.

  • rate this

    Comment number 1290.

    "Councils will be given power to negotiate rents"

    If this is the first step towards regulating rents in the private sector then I am all for this.

    But I suspect that it is yet another example of a politician being completely disconnected with the real World.

    I genuinely wonder if the leaders of our nation realise that Market Rent is significantly higher than what LHA pays?


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