The Labour leader, Ed Miliband has outlined his vision for the future of welfare reform yesterday, giving councils a role to play in getting people back into work.
He also pledged to give councils power to negotiate rents for housing benefit tenants – giving them cash back on the savings to put into house building.
Other proposals included scraping winter fuel allowance for pensioners, maintaining the current Government’s cap on child benefit for families on more than £50,000, and a three-year structural pay cap on social security spending to keep the welfare bill in check.
Making his speech in Newham, where he paid tribute to Mayor Sir Robin Wales’ plans to tackle worklessness locally, Mr Miliband acknowledged the current system would need to be reformed in a bid to cut costs.
He said: ‘We must change our economy, so that welfare is not a substitute for good employment and decent jobs.’
He outlined four key cornerstones of Labour plans for reform including:
– overcoming worklessness,
– rewarding work and tackling low pay,
– investing in the future
– recognising contribution
Outlining his plans for the future of welfare reform under Labour, Mr Miliband said: ‘For every young man and woman who has been out of work for more than a year, we would say to every business in the country, we will pay the wages for 25 hours a week, on at least the minimum wage.
’Fully funded by a tax on bankers’ bonuses. The business would provide the training of at least 10 hours a week. And because it is a compulsory jobs guarantee, young people will have an obligation to take a job after a year or lose their benefits.
’And we will do the same for everyone over 25 unemployed for more than two years.’
The Labour leader also outlined his plans to make this happen through ‘local action’, with the kind of work he had seen in Newham, where the speech was held.
‘Devolving power and resources to local communities so there can be advice and support suitable for the individual who is looking for work and tailored to the particular needs of businesses in the area.’
He added: ‘And we will do everything in our power to promote the living wage. If local councils can say if you want a contract with the council then you need to pay the living wage, then central government should look at doing that too.’
He also outlined plans to tackle the housing benefit bill which continues to rise because ‘we have built too few homes in this country’.
Mr Miliband said: ‘Any attempt to control housing benefit costs which fails to build more homes is destined to fail.’ He pledged to put house building as a key priority for the next labour government and added: ‘We will need every local authority in Britain to be part of this effort.’
Under Labour plans, local authorities would be given the ability to negotiate rents on behalf of tenants on housing benefit to get a better deal for taxpayers in a ‘radical devolution’ of power.
In return, they would be able to keep some of the savings to invest in building new homes. ‘This is the way we can start to bring about the shift from benefits to building. Bringing the housing benefit bill down for the long-term too.’