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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 has promised an end to what he called the "ridiculous merry-go-round" of taxing low earners and the government then handing money back to the same people in benefits. | |
The prime minister said it was wrong to treat "the symptoms of the social and economic problems we face" while "ignoring the causes" of low pay. | |
He argued the UK needed 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 has 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 Runcorn, Mr Cameron said he wanted to move from a "low wage, high tax, high welfare society to a high wage, low tax, low welfare" one. | |
He condemned what he called "a tolerance of government failure", including adoption agencies and "sink schools that have failed one generation after another". | |
Almost all of the 117,000 "troubled families" identified for intervention had been "turned around" in terms of school attendance or getting a job, he said. | |
On welfare, Mr Cameron said the most vulnerable, and pensioners, would be protected, and that he would "always make sure that work pays". | |
He said this was 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 said. | |
"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 added: "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." | |
The welfare budget and where it is spent | The welfare budget and where it is spent |
What has already been announced? | What has already been announced? |
What is still left to be done? | What is still left to be done? |
What has been ruled out? | What has been ruled out? |
What are the options? | What are the options? |
Source: Institute for Fiscal Studies | Source: Institute for Fiscal Studies |
"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. |
Harriet Harman, the acting leader of the Labour Party, said the government planned welfare cuts were "absolutely the wrong thing to do". | |
She said: "This is going to hit hard at families where they're going out to work but they're low paid so they need tax credits to top up their income." | |
People on tax credits are not "abusers of the welfare system" she added. | |
Will you be affected by the changes outlined? What is your reaction to the planned cuts? You can share your experiences by emailing haveyoursay@bbc.co.uk. | Will you be affected by the changes outlined? What is your reaction to the planned cuts? You can share your experiences by emailing haveyoursay@bbc.co.uk. |
Or WhatsApp us on +44 7525 900971. | Or WhatsApp us on +44 7525 900971. |