By Richard Johnstone | 19 June 2014
Ed Miliband has announced that a future Labour government would replace Jobseekers’ Allowance for those aged under 21 with a new means-tested youth allowance, conditional on recipients undertaking training.
Setting out Labour’s welfare reform plans at the Institute for Public Policy Research today, the Labour leader said the party was committed to building a more equal and successful country through big reforms but not big spending.
He said the change to Jobseekers’ Allowance for those aged between 18 and 21 would help ensure claimants get the training they need to find work. The new allowance would be based on a means-test of parental income, similar to the test used to determine support for university study.
‘We must reshape our social security system so that it does everything it can to get people into decent jobs and the world of work not a life on benefits,’ he said.
‘And yet the perversity of the system means that the one thing we most discourage those young people from doing is getting the skills they need for a decent career. The system is telling them that they should sign on for benefits not sign up for proper training but at the same time, it is saying to those who go to university that they are entitled to financial support.’
The recommendation is one of the proposals contained in the IPPR’s Condition of Britain report published today, which makes sever welfare reform recommendations.
‘What the IPPR proposals show is that we can address these issues in a way that is progressive not punitive. Britain’s young people who don’t have the skills they need for work should be in training not on benefits,’ Miliband added.
He also said that Labour would also restore the principle of contribution to the heart of the social security system.
As a first step, Labour would introduce a higher rate of Jobseekers’ Allowance for those who become unemployed but have a record of contributions through National Insurance.
Basing benefits on contributions was a principle ‘deeply felt by the British people,’ he said.
‘But people also know that the principle of contribution has been eroded over the years with less than 10% of social security spending outside pensions goes on contributory entitlements today.
‘And, although it may not be realistic to change the system in its entirety, I do not believe we should allow the contributory principle to recede still further. Instead, we should strengthen it. That’s why the next Labour government will change the way Jobseekers’ Allowance operates to make sure that someone who has been working for years and years and paying in to the system gets more help if they lose their job than someone who has been working for just a couple of years.’
This would be paid for by extending the length of time people need to have worked to qualify for existing element based on contributions, he added.
Labour said it would address the ‘historic problem’ of growing spending on housing benefits by allowing local authorities to build more homes in their local area.
However, responding to the report, Conservative Party chair Grant Shapps said Miliband’s plans were ‘a recipe for more spending on welfare, more borrowing – and more taxes to pay for it’.
He added: ‘That’s exactly how Labour got us into a mess in the first place. Ed Miliband has no economic plan. All he offers is more of the same old Labour, and Britain would have a less secure future as a result.’
