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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 and warned of a likely cut to child tax credits and housing benefit. 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.
The BBC's Chris Mason says that in a speech in Sunderland the prime minister would make the case for change, arguing that people capable of work have been "written off" and abandoned to a "lifetime on benefits". 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.
Mr Cameron will promise "action on welfare" to ensure, as he will put it, that "work is always a better option". 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.