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Cameron: UK must tackle 'causes not symptoms' of low pay | Cameron: UK must tackle 'causes not symptoms' of low pay |
(about 1 hour later) | |
David Cameron is to promise an end to what he will call the "merry-go-round" of taxing those on low incomes and the government then handing money back to the same people in benefits. | David Cameron is to promise an end to what he will call the "merry-go-round" of taxing those on low incomes and the government then handing money back to the same people in benefits. |
The prime minister will say it is wrong to treat "the symptoms of the social and economic problems we face" while "ignoring the causes" of low pay. | The prime minister will say it is wrong to treat "the symptoms of the social and economic problems we face" while "ignoring the causes" of low pay. |
He will argue the UK needs a welfare system that encourages well-paid work. | He will argue the UK needs a welfare system that encourages well-paid work. |
It comes amid a debate over government plans for £12bn in welfare cuts. | It comes amid a debate over government plans for £12bn in welfare cuts. |
The government says the welfare bill has to take its fair share of cuts as part of its plan to balance the books and eliminate the £90bn deficit by 2017-8. | The government says the welfare bill has to take its fair share of cuts as part of its plan to balance the books and eliminate the £90bn deficit by 2017-8. |
Chancellor George Osborne is expected to give more details of what entitlements will be cut in next month's Budget. | Chancellor George Osborne is expected to give more details of what entitlements will be cut in next month's Budget. |
'Lifetime on benefits' | 'Lifetime on benefits' |
Labour claims that it is "disgraceful" that the Conservatives did not spell out their intentions before the election beyond a pledge to freeze working-age benefits for two years. | |
They have warned of a likely cut to the £29bn annual tax credit bill. According to the Treasury, about 4.5 million families received child and working tax credits in 2013-4, nearly 70% of which were in some form of employment. | |
In a speech in Sunderland, Mr Cameron will promise "action on welfare" to ensure, as he will put it, that "work is always a better option". | |
He will stress this is only one element in extending economic opportunity and must sit alongside moves to reduce the tax burden on the low-paid, ensuring the minimum wage reflects improvements in the economy and guaranteeing young people have the education and skills needed to compete in the workplace and secure higher-paying jobs. | He will stress this is only one element in extending economic opportunity and must sit alongside moves to reduce the tax burden on the low-paid, ensuring the minimum wage reflects improvements in the economy and guaranteeing young people have the education and skills needed to compete in the workplace and secure higher-paying jobs. |
"When it comes to extending opportunity - there is a right track and a wrong track," he will say. | "When it comes to extending opportunity - there is a right track and a wrong track," he will say. |
"The right track is to recognise the causes of stalled social mobility and a lack of economic opportunity. Family breakdown. Debt. Addiction. Poor schools. Lack of skills. Unemployment. People capable of work, written off to a lifetime on benefits. | "The right track is to recognise the causes of stalled social mobility and a lack of economic opportunity. Family breakdown. Debt. Addiction. Poor schools. Lack of skills. Unemployment. People capable of work, written off to a lifetime on benefits. |
"Recognise those causes, and the solutions follow. Strong families that give children the best start in life. A great education system that helps everyone get on. A welfare system that encourages work - well paid work." | "Recognise those causes, and the solutions follow. Strong families that give children the best start in life. A great education system that helps everyone get on. A welfare system that encourages work - well paid work." |
'Right track' | 'Right track' |
He will add: "The wrong track though, is to ignore the causes, and simply treat the symptoms of the social and economic problems we face. | He will add: "The wrong track though, is to ignore the causes, and simply treat the symptoms of the social and economic problems we face. |
"Take for example the complacency in how we approach the crucial issue of low pay. There is what I would call a merry-go-round. | "Take for example the complacency in how we approach the crucial issue of low pay. There is what I would call a merry-go-round. |
"People working on the minimum wage having that money taxed by the government and then the government giving them that money back - and more - in welfare. | "People working on the minimum wage having that money taxed by the government and then the government giving them that money back - and more - in welfare. |
"Again, it's dealing with the symptoms of the problem - topping up low pay rather than extending the drivers of opportunity - helping to create well paid jobs in the first place." | "Again, it's dealing with the symptoms of the problem - topping up low pay rather than extending the drivers of opportunity - helping to create well paid jobs in the first place." |
The government has said it will pass a law to guarantee that no-one on the minimum wage working 30 hours a week will pay tax as part of a plan to lift the point at which everyone starts paying income tax to £12,500. | The government has said it will pass a law to guarantee that no-one on the minimum wage working 30 hours a week will pay tax as part of a plan to lift the point at which everyone starts paying income tax to £12,500. |
Speaking on Sunday, Labour leadership contender Andy Burnham said the government's proposed spending cuts would hit the "most vulnerable" and lead to the "destruction of public services". | Speaking on Sunday, Labour leadership contender Andy Burnham said the government's proposed spending cuts would hit the "most vulnerable" and lead to the "destruction of public services". |
He suggested the government did not have a mandate for the scale of welfare cuts being proposed because they did not spell out what they would do in their general election manifesto. | He suggested the government did not have a mandate for the scale of welfare cuts being proposed because they did not spell out what they would do in their general election manifesto. |