Monday, 17 December 2012

Welfare Debate: The evidence

Last week on the blog I wrote about how I though Labour was wrong to oppose the Government's plans to cap certain benefits at 1% (not including benefits for the disabled, or pensions which will rise at 2.5%)

The graph below, from the independent Institute for Fiscal Studies, shows that at the moment benefits have actually increased much more than wages. Our plans (in yellow) simply bring benefits back into line with wages.

As well as the fairness argument I think its also important to recognise that when benefits increase much faster than wages that creates a real trap for low paid workers. For many years under Labour it made more financial sense for some people to be on benefits rather than to work. We are changing that with the Universal Credit and Benefit Cap to make sure work always pays. Limiting the latest benefits rise to 1% is part of restoring that balance.