Cap or no cap?

Labour voted against capping benefits in April for three financial years up to 2015-16, now they want to cap social security spending if they enter Government in 2015.

An article in The Independent notes that the Labour Party have said that they would not borrow in order to finance reinstating the link between benefits and inflation. Rather they would reintroduce a top rate of tax of 50p, five pence more than the Coalition, 10p more than all but the last months of 13 years of Labour Government.

They’re welcome to re-evaluate their position as a ‘working-people’s party’ giving tax cuts for millionaires, but the Labour Party should be careful not to say too much.

They have completely opposed a cap, but now say that they want a cap, but it’s not really a cap, and can’t tell anyone anything that makes it a credible policy. Milliband admitted that the last Labour Government was to blame for out of control spending on welfare and Britain’s low wage economy, but he refused to admit the UK’s budget deficit was caused by Labour overspending.

Milliband said that some of the £24bn-a-year bill for housing benefit would be used for housebuilding to allow councils to negotiate lower rents for tenants of private landlords. Labour believes the savings could allow local authorities to build 200,000 homes over four years.

Cutting  housing benefit to ensure lower rents for tenants is, in my view, a risky way of supporting people on housing benefit. There can be no guarantee that rents will be lowered at the same rate that benefits are capped, which is likely to lead to a reduction in household budgets having to pay for the shortfall, or tightened budgets for Councils who have to make up the shortfall in housing benefit for tenants whose rent will not be lowered at the same level as the benefit cap.

Ed Balls also hinted towards regional housing benefits. Ed Balls MP said that Labour wants a system that takes account of housing costs in different parts of the country – with an independent body, like the Low Pay Commission, advising on whether the cap should be higher in high-cost housing areas like London, but potentially lower in other parts of the country“.

The Welsh Labour Government has remained, typically silent.

Jenny Willott, MP for Cardiff Central commented saying;

“The Welsh Labour Government is happy to protest against every single decision taken by the Coalition Government, yet Welsh Ministers remain silent when they disagree with their own party. Labour’s plan for regional benefits would victimise people looking for work in Wales merely because of where they live.

“Week in, and week out, Huw Lewis stands up in the Assembly pontificating and scaremongering about welfare changes. Yet, was Huw Lewis brave enough to raise this issue with Ed Balls when he visited Cardiff less than two weeks ago? I imagine he didn’t even bother. As the fiasco of council tax benefit recently showed, Welsh Labour Ministers are more interested in sitting back and having a spat with the UK Government than they are in actually trying to support the people of Wales.

“Liberal Democrats are fighting for a stronger economy in a fairer society. After the mess Labour left the country in, we have had to make tough decisions to balance the books. While welfare reform is necessary, it mustn’t be done in a heavy handed way that would punish people just because they live in Wales.

“Welsh Liberal Democrats fought and won our campaign to halt George Osborne’s plans for regional pay, will Welsh Labour now do likewise on regional benefits?”