Alok Sharma's Westminster Diary: January, 26

Published 27 Jan 2012 09:30

Welfare reform has been centre stage at Westminster over the past days. Anyone who has had any dealings with benefits will appreciate just how frustratingly complicated the current system is. The Coalition is in the process of passing legislation to make the system simpler and to limit the amount of benefits any household can receive.

The Universal Credit, which will be introduced next year, will combine Jobseekers' Allowance, Housing Benefit, Child Tax Credit, Income Support, Working Tax Credit and Employment Support Allowance into one payment, making the system simpler and more transparent.

In terms of putting a cap on benefits, it is not fair that households on out-of-work benefits should receive a greater income from the State than the average working household receives in wages. Judging from the letters and emails which have come into my postbag on this subject this is a principle which many agree with.

The Coalition has proposed to cap benefits for households at £26,000. This is equivalent to someone earning around £35,000 before tax, a salary that many working families would be happy to receive.

To ensure fairness, the cap excludes war widows, the disabled and those in work receiving working tax credits. The government is determined to get the Welfare Reform Bill passed into law and I am sure the debate will continue in both Houses over the

coming days.

In the latest twist the House of Lords voted to exclude child benefit from the overall cap. Ministers believe that this change would effectively raise the cap to £50,000. This would of course render the cap pretty meaningless and fail on the main principles of the Bill.

On welfare reform, as on much else, the Labour Party is all over the shop with no coherent policy. Labour says the welfare budget should be reduced but then they oppose any measures to make this happen.

In 2010 the Cabinet Office published figures which showed that 1.4 million people spent most of the last decade on out-of-work benefits and by the time Labour left office there were almost 4 million households where no one aged over 16 worked.

We must always have a welfare system which takes care of the vulnerable and those who have fallen on hard times. But the system needs to be universally perceived as fair and ultimately work should pay. Tony Blair admits Labour failed to reform welfare. By contrast the Coalition is determined to implement its reforms.

The Universal Credit, which will be introduced next year, will combine Jobseekers' Allowance, Housing Benefit, Child Tax Credit, Income Support, Working Tax Credit and Employment Support Allowance into one payment, making the system simpler and more transparent.

In terms of putting a cap on benefits, it is not fair that households on out-of-work benefits should receive a greater income from the State than the average working household receives in wages. Judging from the letters and emails which have come into my postbag on this subject this is a principle which many agree with.

The Coalition has proposed to cap benefits for households at £26,000. This is equivalent to someone earning around £35,000 before tax, a salary that many working families would be happy to receive.

To ensure fairness, the cap excludes war widows, the disabled and those in work receiving working tax credits. The government is determined to get the Welfare Reform Bill passed into law and I am sure the debate will continue in both Houses over the

coming days.

In the latest twist the House of Lords voted to exclude child benefit from the overall cap. Ministers believe that this change would effectively raise the cap to £50,000. This would of course render the cap pretty meaningless and fail on the main principles of the Bill.

On welfare reform, as on much else, the Labour Party is all over the shop with no coherent policy. Labour says the welfare budget should be reduced but then they oppose any measures to make this happen.

In 2010 the Cabinet Office published figures which showed that 1.4 million people spent most of the last decade on out-of-work benefits and by the time Labour left office there were almost 4 million households where no one aged over 16 worked.

We must always have a welfare system which takes care of the vulnerable and those who have fallen on hard times. But the system needs to be universally perceived as fair and ultimately work should pay. Tony Blair admits Labour failed to reform welfare. By contrast the Coalition is determined to implement its reforms.

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