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Miliband would cap welfare spending

Labour will cap social security spending, Ed Miliband is to announce. The party leader will also set out how councils could be allowed to renegotiate rents with landlords to cut housing benefit and use the savings for house building.

Only people who pay into the welfare system for more than two years should receive jobseeker’s allowance, Miliband will state. Labour is also considering whether to give more benefits to those who have contributed longest.

The speech will also cover plans to cut long-term employment and encourage employers to pay a living wage. Social security spending would be capped for three years from the Government’s 2015-16 spending review.

Miliband will say: “The next Labour government will have less money to spend.

“If we are going to turn our economy around, protect our NHS, and build a stronger country we will have to be laser focused on how we spend every single pound. Social security spending, vital as it is, cannot be exempt from that discipline.

“We can't afford to pay billions on ever-rising rents when we should be building homes to bring down the bill.

“Thirty years ago for every £100 pounds we spent on housing, £80 was invested in bricks and mortar and £20 was spent on housing benefit. Today, for every £100 we spend on housing, just £5 is invested in bricks and mortar and £95 goes on housing benefit.

“We expect individual families to negotiate with their landlords when we know there aren't enough houses to go around.

“It is inevitable that tenants end up paying over the odds – and so does the state, in the housing benefit bill. It's time to tackle this problem at source.”

But Conservative Party chairman Grant Shapps called the speech “completely empty”.

He added: “Ed Miliband is too weak to deliver the tough decisions on welfare hardworking people rightly want to see. His plans would actually increase welfare spending, and mean more borrowing and more debt.”

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