South’s working poor forced to push up benefits bill

In a major speech at Bloomberg today, Rachel Reeves MP, Labour’s Shadow Work and Pensions Secretary, warned of the huge cost to taxpayers from another five years of Tory failure on low pay.

Cameron is failing to make work pay, and failing to tackle the shortage of housing here which is pushing up rents. We’ve mapped new figures from the Department of Work and Pensions, showing the rise in the number of in-work housing benefit claimants.

Source: Source: Stat-Xplore, Department for Work and Pensions
Note: claimants are counted in the HB data as ‘in employment’ if they have income from employment and are not also on a means-tested ‘passport benefit’ (income-based JSA, income-related ESA, Income Support, Pension Credit Guarantee Credit).

Labour’s Southern Taskforce have previously highlighted the increasing number of working people who are having to claim for housing benefit in Southern and Eastern England. David Cameron has presided over the largest fall in wages since the 1870s, with working people on average £1,600 a year worse off than in 2010 and those in full time work £2,000 a year worse off. The number of people earning less than a living wage has rocketed from 3.4 million in 2009-10 to 4.9 million according to the latest figures.

“The Tories’ failure to make work pay, and their failure to deliver their promises on the deficit, are two sides of the same coin.”

“The government’s failure to make work pay has meant they are struggling to keep social security spending under control. Last week the IFS confirmed that, for all David Cameron and George Osborne’s rhetoric, social security spending will be no lower next year than it was when David Cameron took office.”

“The number of working people reliant on Housing Benefit to keep a roof over their head will have more than doubled over the decade at a cost of over £14 billion.”
Rachel Reeves MP, Labour’s Shadow Work and Pensions Secretary

According to new analysis, published by Labour today from the House of Commons library, five more years of Tory failure to make work pay, with wages falling short of expectations to the same extent in the next parliament as they have in this, will mean we face another £9 billion in social security spending on top of that already projected - a £337 bill for every household in the country.

A Labour government would make work pay with a high-wage, high-skill economy. Labour will halve the number of people on low pay by 2025 and drive up living standards by helping businesses to boost skills, productivity and pay. A Labour government will:

Tackle low pay and poor employment practices:
• Raising the National Minimum Wage to £8 before the end of the next Parliament
• Bringing in ‘Make Work Pay’ contracts to get more workers paid a living wage
• Ban exploitative zero hours contracts
• Closing loopholes in Agency Worker regulations
• Cracking down on false self-employment
• Outlawing the exploitative use of migrant workers to undercut wages and working conditions

Equip our workforce for more high skilled, well paid jobs:
• Introduce a Basic Skills Test to give jobseekers the skills they need to find work
• Bringing in a Youth Allowance to ensure young people are in training or work
• Revolutionising vocational education and training;

Tackle long-term unemployment:
• Introducing a compulsory jobs guarantee
• Reforming the government’s failing Work Programme
• Delivering a dedicated, more tailored service for disabled people

Ensure as part of our plan to deliver a more productive economy:
• Back small businesses and the growth industries of the future;
• Secure investment in ideas, innovation and infrastructure;
• Get more homes built in the places we need them;
• Extend accessible and affordable childcare for parents who want to work;
• Reform banking and energy markets so they work for the whole economy;
• Devolve power and money to city and country regions to grow their economies;
• Keep in Britain in Europe, where our key export markets lie.

“The choice we now face is clear the Tories’ low wage, low skill economy driving up benefit bills and undermining tax revenues or Labour’s plan: a plan to help businesses create and fill more productive, high skilled jobs. The Tories will leave us paying the bills of in-work poverty for years to come. Only Labour will make work pay.”
Rachel Reeves MP, Labour’s Shadow Work and Pensions Secretary

The Labour Southern Taskforce website is an independent website, setting out the Labour case for southern and eastern England. While we have attempted to accurately reflect Labour policy, the Labour Party has no responsibility for the content of this website.