Labour leader Ed Miliband denied that the party was abandoning its values at a speech on benefits yesterday in Newham in East London.
Miliband committed Labour to a three-year benefit cap if it formed a government after the 2015 general election, in one of his first policy announcements on welfare.
Having previously been seen as the party of the poor, the speech showed that Labour has moved closer to the Conservatives on welfare:
"It is only by reforming social security with the right values that we'll be able to control costs.
"And the system does need reform. If we are going to turn our economy round, 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," Miliband said.
No specific benefit cuts were detailed. Polls have shown that many people respond negatively to the idea of 'benefits' as a collective term, while valuing many individual benefits.
The main policies announced included:
- a three year cap on benefits, monitored by an independent body, although the specific benefits to be included were not revealed. The cap may be increased in certain circumstances, raising questions on its firmness
- employer subsidies to support them to pay the living wage. Miliband said: "For every pound that employers pay above the minimum wage towards a living wage, government would save 50p in lower tax credits and benefits, and higher revenues. We should look at offering some of these savings back to those employers to persuade them to do the right thing and pay the living wage."
- increasing contributory Jobseeker's Allowance so that those who were employed for at least five years before they lost their jobs would get higher benefits than those who weren't
- local councils to be allowed to negotiate private rents down and to put more money into house building. Miliband said: "We can't afford to pay billions on ever-rising rents, when we should be building homes to bring down the bill. Thirty years ago, for every £100 we spent on housing, £80 was invested in bricks and mortar and £20 was spent on housing benefit. Today, for every £100 we spend on housing, just £5 is invested in bricks and mortar and £95 goes on housing benefit.
- unemployed parents of children aged three or four losing benefits if they do not do enough to find work. Miliband said: "The very least we should offer and demand is that while their children are at nursery, both partners in a workless household, as well as single parents who aren't working, should use some of the time to undertake some preparations to help them get ready to go back to work. Attending regular interviews in the jobcentre, undertaking training, finding out what opportunities exist."
- winter fuel allowance and child benefit no longer paid to top-rate taxpayers
- Work Capability Test of disabled and long-term sick people to be reformed
Miliband indicated that the retirement age would need to rise and that child poverty targets would be missed in the next parliament.
The leader's message that British people were justifiably angry when the unemployed got 'money for nothing' if they hadn't paid into the system was undercut by his belief that the economic situation was to blame for a lack of jobs.
He pointed out that high unemployment was a characteristic of Conservative governments, and thus "the growth rate of social security spending was higher under the Thatcher and Major governments of 1979-1997 than under the New Labour governments of 1997-2010".
Miliband drew a distinction between himself and the Prime Minister, saying:
"I will tell you that there is a minority who don't work but should. He will tell you anyone looking for work is a skiver. I will tell you that we need to protect the dignity of work and make work pay. He will hit the low-paid in work."