UK & World News
Labour Plans Pensions Grab To Fund Jobs
Labour has unveiled plans to provide guaranteed jobs to the long-term unemployed by slashing pension tax relief for top earners.
The £1bn scheme would see 130,000 people out of work for more than two years offered posts on at least the minimum wage.
Under the plans, outlined by shadow chancellor Ed Balls, the jobless would face losing benefits if they refuse to take the jobs on offer.
It is one of the first tax policies confirmed by Labour, which has been under increasing pressure to spell out its spending plans.
The plans are similarly designed to the last Labour government's youth unemployment scheme the Future Jobs Fund, which was scrapped by the coalition.
Mr Balls, writing for the Politics Home website, said: "A One Nation approach to welfare reform means government has a responsibility to help people into work and support those who cannot, but those who can work must be required to take up jobs or lose benefits as a result - no ifs or buts."
He added: "While getting people back to work will save the taxpayer money in the long-term, the up-front costs of Labour's jobs contract can be funded by reversing the Government's decision to stop tax relief on pension contributions for people earning over £150,000 being limited to 20%.
"When times are tough it cannot be right that we subsidise the pension contributions of the top 2% of earners at more than double the rate of people on average incomes paying the basic rate of tax.
"£1bn-a-year would fund a compulsory jobs guarantee initially for all those out of work for 24 months or more - which we would seek to reduce to 18 or 12 months over time."
Top earners on more than £150,000-a-year currently receive a maximum of 50% in pension relief which is due to fall to 45% in April.
The proposal is similar to one announced by the Labour government in 2009, which was later scrapped by the coalition.
Labour is positioning ahead of a key Commons vote next week on capping benefit rises at 1% for the next three years.
The Government insists it is unfair for the handouts to rise unchecked while those in work are suffering from austerity.
But the Opposition are set to vote against the curb, arguing that the majority of people affected by the cap are those in low income jobs.
Mr Balls told Sky News: "The Government's work programme is failing and we have a choice coming up next week about what kind of welfare reform we want.
"Two-thirds of people hit by the benefits curb are in work... I don't see why we should go along and hit working families while they cut top rate taxes. That's not fair."
David Cameron described Labour's position as "bizarre" and condemned its jobs plan as a "sort of reheating of a rather unworkable scheme that we inherited in 2010".
"I think what Labour really need to focus on is their bizarre decision to support benefits going up faster than wages, which is what they are going to be voting for on Tuesday," he said.
The Tories also accused Mr Balls of double counting because last year he suggested using money raised by cutting pension relief to avoid curbs on tax credits.
Conservative Party Chairman Grant Shapps added: "Ed Balls is trying to spend the same money twice.
"That means more borrowing and more debt - exactly how Labour got us into this mess in the first place. Labour have learnt nothing from their mistakes."
Labour's plans came as the TUC accused the Government of misleading the public about benefits to ensure support for its drastic cuts.
A poll for the union found that two-fifths think benefits are too generous and three in five believe there is a culture of dependency.
But it suggested that support starts to dwindle once people realise capping benefits will also affect workers in low-paid jobs.
General secretary Frances O'Grady said: "It is not surprising that voters want to get tough on welfare. They think the system is much more generous than it is in reality, is riddled with fraud and is heavily skewed towards helping the unemployed, who they think are far more likely to stay on the dole than is actually the case.
"But you should not conduct policy, particularly when it hits some of the most vulnerable people in society, on the basis of prejudice and ignorance.
"It is plainly immoral to spread such prejudice purely for party gain, as ministers and their advisers are doing, by deliberately misleading people about the value of benefits and who gets them.
"Voters who have a better grasp of how benefits work and what people actually get oppose the Government's plans. When people learn more about benefits, support moves away from coalition policy.
"The truth remains that benefits are far from generous, the vast majority of the jobless are desperate for work and most benefit spending goes either on pensions or on benefits for those in jobs or who aren't able to work."
what do you think?
Clueless political point scoring.
What's Frances ogrady know she's come straight from university into the unions top job,,how come the middle class have took over the unions,they use to be run by the working class,same with the labour party.
Not just by middle class. Run by bigots. The Labour Party in the west of Scotland is run by Roman Catholics and everyone else does not get a fair chance. Bigotry is rife in the so called workings s party. Politicians are corrupt
Why don't they take the extra 20p off the over 80s pensions they are obviously rolling in it...... If you read The Philanthropists Trousers never a truer word was written, we are actually living in Mugsborough and it is so disheartening to be told it is better to despise the poor than to be kind and considerate to fellow man.....chrome dome excluded.
Benefits are a pittance. Those few high profile cases the rightwing media love to highlight - families who have 18 kids and expect houses/child benefit number in the dozens only. For the vast majority life on benefit is a constant struggle against poverty.
stevie the same ol story if you are in a regular job well paid and inflation proof pension you can make the rules easily so let us see the politicians and Civil Servants live on benefits. Let them also see the free riders culture we have acquired. They are all so ring fenced
Stevie - you are right of course, but benefits should be a lifeline for those in need, and should be classed as temporary. The high profile cases you mention are the professional scroungers that play the system because its out there to be abused. Before you knock me down, my wife comes from a family of 15 - she has 14 brothers/sisters. Their father did not claim benefits apart from child benefit. He worked 24/7 to provide for his family, and they all lived in a 3 bedroomed council house and he paid the rent in full - there was no such thing as housing benefit back then.
So just exactly where is Edd going to pluck these 130,000 extra imaginary jobs from?
In their dreams but then when in opposition it does not matter cause you never have to face the consequences
By sacking a full time worker and employing two part time workers you cut the unemployment total by half, simple!
Does anybody think that someone out of work, on benefits and with full housing benefits is going to take a job paying the minimum wage less travelling costs,which will end up about 60 pounds a week lower than they get for not working? Cookoo land is what these politicians live in.
Hang on you are expecting Ed to think things through
You are right mate a lot of farmers offerd work to out of work people onley to get no takers
WLU - For £390 a month, a lot of others would not even get out of bed for that. I'm no expert on it, but the minimum wage would provide about £1000 a month, less tax of £150+, less NI of £50.. less travel costs, less meal costs, which would equate to take home nett wage of about £700.00 a month. JSA (£70.00 x 4)+ housing benefit of say £500 per month, + any other benefits = over £800 a month nett. So why should someone bother getting up in the morning and get a job for £100 a month less than benefits would pay. Having said that - Good on you if it benefits you, you should be very proud of yourself. - Not everyone has the same circumstances.
I wouldn't believe a word that comes from any Labour politiican and would trust them on any issue facing the country
When theres hundreds chasing each job, it's no wonder the benifits bill is high, it will get higher as foreign firms buy up everything cheap (Royal mail next) sack British workers and import cheap labour. With "Open Access Mode 4" on its way, all skilled jobs will go to Indian workers on Indian wages, Nothing of this in the Sun or on the BBC. Slave Britannia, as it was as it will always be. To Hell on a hand cart!
So ! we will be paying tax to provide payment for people to go to work to earn money to :- Pay tax to provide payment for people to go to work to earn money to :- Pay tax to -- !
At least they will be taking from those that are already well off instead of hitting the benefit system.what seems ridiculuos to me is their introducing the bedroom tax yet those with second homes arent being effected in any way.where i live their still building apartments that cost 250.000 on the sea front yet locals cant get on the step ladder as theres a lack of first homes being built.but what really rubs salt in the wounds is that these 250.000 apartments are empty for most of the year.at this time of year the place is like a ghost town.tax second homes and build starter homes.
The BBC news site tells a slightly different story. Apparently Ed B said if they were in govt now they would introduce a scheme to guarantee the long term unemployed 6 mths work paid for by reductions in relief on pension contributions. But they aren't in govt so they can't do it. They then admitted they could not commit to the scheme if returned to power in 2015. So there you have it. Can't do it now, won't do it then and they call this a policy statement
This is a Labour politician posing as a class warrior - a policy 'in theory' that will not happen in practice. He's saying 'let's hit the rich a little bit' to make us look on the side of the workers - when they are patently NOT on our side, not when they oppose workers going on strike to REALLY fight back against the cuts. Labour are just the Tory second eleven.
---- or, are the Tories, the Labour second eleven ? and the Lib-Dems ? are they the third ?
Chris. You are absolutely right. It is just meaningless political psycho-babble for the consumption of the masses to make them think Ed B is doing something to help them. Nothing could be further from the truth, it is simply empty rhetoric
Typical falso posturing by the Labour party and the brain dead Milliband i.e. no policy at all t