Let me surprise those of you who do not know me well. I do not wish to see any cuts in benefits paid to those in need. In some cases I would like us to be more generous. In that sense I am like Mr Cameron a One Nation Conservative. I accept the UK cross party tradition that people who are better off pay more in tax to provide incomes for those in need.I do not wish to see people who require welfare made worse off. I do wish to see fewer people needing welfare.
So how then can we find the welfare savings Mr Osborne talked about in the run up to the General election? The main way is by getting to the happy position where fewer people need the benefits. If we tackle poverty by helping the creation of more jobs for those who are out of work, and better paid jobs for those who are in work, so the need for benefits declines. IN the last Parliament many people moves from being unemployed to being employed, cutting their need for state income. Some people got promoted or found better paid jobs, reducing their need for top up income from the state.
If we stop paying any benefits to European job seekers who have been here for less than four years, that will save us money. If we ask unemployed Europeans looking for jobs to leave after six months if they have found nothing, that will reduce some of the pressures on the jobs market which keeps some wages down. If we say to all European migrants they do not receive benefits for children who live in another country, that too will save money.
In this Parliament it is the government’s aim to create conditions where many more jobs are created. This should drive unemployment down further. We also want to raise skill levels, and see more higher paid jobs, which cuts the need for benefit top ups.
Most jobs are in the private sector. Tax cuts for all will help boost living standards and will reduce the need for top up benefits as growth in the economy boosts in work incomes. Wage rises based on gains in productivity are also needed, so that more people have a good income from their employment.
When Conservatives argue that welfare cuts come from better economic growth they are right. It takes good growth to generate more jobs for the unemployed, and higher wages for the employed. That is how the welfare bill will be cut.
It is also important not to be mean to people in need at a time when welfare is being reformed. Reform requires sufficient money so there are no unfortunate loers.