Labour plans for benefits reform

The opposition Labour Party's plans for the future of the benefits system have been clarified in two new reports. The first, by Liam Byrne (shadow Secretary of State for Work and Pensions), bases plans for reforming the social security system on a return to full employment. The second, published by the Labour Party to coincide with its annual conference, sets out a range of policies aimed at reforming benefits and tackling the cost of living crisis.

Byrne – writing in a Fabian Society pamphlet – says most people no longer believe the existing benefits system is fit for modern times. He calls for the 'spirit of 1945' to be rekindled, but says the social security system can only be rebuilt if there is a return to full employment. Ending the human waste of unemployment will involve investing in infrastructure, raising wages, and moving to a more effective local framework for welfare-to-work services. This will reduce the public deficit and put the ethos of 'something for something' back into social security. He says reform needs to build on the renewed values of 'contribution, work, compassion, duty and dignity'.

Arising from the Labour Party's policy review process, the One Nation Economy document also says job creation and economic growth will be the top priorities for a future Labour government. But it promises a fairer sharing of the burdens involved in cutting the public deficit. Specific measures proposed include:    

  • Action will be taken to tackle excessive top pay rates and ensure the gains from company success are more equally shared. Support will be given to the campaign for a 'living' wage.
  • A lower 10 pence starting rate of income tax will be reintroduced (paid for by a tax on houses worth over £2 million).
  • The exploitative use of zero-hours contracts will be banned.
  • Free childcare for children aged 3-4 will be extended from 15 to 25 hours a week for working parents (paid for by an increase in the levy on banks).
  • Gas and electricity bills for every home and business will be frozen for a period of 20 months.
  • 'Structural' social security spending will be capped.
  • The 'bedroom tax' on social housing tenants will be scrapped.

Source: Liam Byrne MP, The Road to Full Employment: How We Rebuild Social Security for 21st Century Britain, Fabian Society | One Nation Economy, Labour Party
Links (Byrne)Report | Summary | Guardian report | Public Finance report
Links (Labour)Report | BBC report

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Publication date: 
Sep 23 2013