Latest Public Sector News

02.01.13

Benefits rising faster than wages is ‘unfair’ – IDS

Work and pensions secretary Iain Duncan Smith has labelled the current system of calculating benefit payments as unfair, ahead of a Commons vote on welfare caps.

Jobless benefits rose by 20% in the last five years, compared with an average 12% rise in private sector pay. Welfare increases have cost the taxpayer £6.3bn since the beginning of the recession in 2008, Duncan Smith said.

New legislation could see a three year cap of 1% introduced on most working-age benefits and tax credits from 2013/14. This is below the expected rise in the cost of living. Child benefit, housing benefit and universal credit would be capped for two years from 2014/15.

Duncan Smith said: “The welfare state under Labour effectively trapped thousands of families into dependency as it made no sense to give up the certainty of a benefit payment in order to go back to work.

“This Government is restoring fairness to the system and universal credit will ensure it always pays to be in work.”

Shadow work and pensions secretary Liam Byrne retorted: “This Tory-led government is comprehensively out of touch with the reality of Britain's working families.”

(Image of Iain Duncan Smith copyright Northern Ireland Executive.)

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