Labour campaigns against benefit cuts: Warning of reduced spending on housing and sickness. Colin Brown reports and unemployment

CUTS IN the welfare state will be targeted in a Labour autumn offensive on the Government, launched tomorrow by Gordon Brown, the Labour spokesman on the economy.

Mr Brown said last night that proposed cuts in housing benefit, disclosed yesterday in the Independent, would be 'another attack on the pensioners'. Using the slogan 'You can't trust the Tories', Labour leaders will attempt to capitalise on opinion poll findings that the public feel betrayed under John Major's leadership.

Mr Brown will warn of cuts in other parts of the welfare state, including sickness benefit, for which companies could be asked to pay more of the burden, and unemployment benefit, which ministers want to cut from 12 months to 6 months.

The housing charity Shelter last night warned the Government that it risked increasing the cost of homelessness with cuts in the pounds 7bn budget for housing benefit.

Ministers are considering cutting the numbers eligible for housing benefit by halving the limit for savings from pounds 16,000 to pounds 8,000 in line with income support; lowering the earnings limit, where claimants lose benefit (known as 'the taper'); and penalising local authorities, which administer the system, for failing to tackle fraud and abuses.

Shelter criticised the confusion over benefit payments, and called for a thorough review of the system, but opposed sharpening the tapers.

'We are creating poverty ghettos of people who cannot afford to go to work because the housing taper is too sharp. Making it sharper is absurd,' a spokeswoman for Shelter said.

The Department of Social Security said the main reason for the rise in the cost of housing benefit was the rise in unemployment caused by the recession. But the Select Committee on the Environment found that housing benefit may inhibit claimants from leaving the dole when the recession ends.

'The present housing benefit taper of 65 per cent contributes to a maximum effective rate of tax of up to 97p in each pound of extra income and provides a consequent disincentive to work. The effect is commonly known as the poverty trap or earnings trap, sometimes as the benefit trap,' the committee said.

The poverty trap has been deepened by the switch of government resources from capital spending through housing association grants (HAG) to personal subsidies through benefits, such as housing benefit.

David Willetts, the Tory MP for Havant and former head of the Centre for Policy Studies, said: 'We have got into a position where we are giving help to low income tenants at two different stages, first as a subsidy to the Housing Corporation and housing associations, and secondly as a subsidy to the tenant through housing benefit. There is a case for drawing back on one of these two.'

However, John Major knows the difficulty of doing so. He was the Chief Secretary to the Treasury in charge of public spending when Margaret (now Baroness) Thatcher was forced to retreat over an attempt to restrict eligibility to those with savings of pounds 2,000 or less. It was raised to pounds 8,000 at a cost of pounds 100m and John Moore, then Secretary of State for Social Security, was later sacked.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Arts and Entertainment
booksPhotographer Richard Young has been snapping celebrities at play for 40 years - but he says it wasn’t all fun and games...
News
i100
Sport
Aguero - who single-handedly has kept City's Champions League dreams alive - celebrates his dramatic late winner
footballManchester City 3 Bayern Munich 2: Argentine's late hat-rick sees home side snatch vital victory
News
Muhammad Ali pictured in better health in 2006
peopleBut he has enjoyed publicity from his alleged near-death experience
Arts and Entertainment
Tony breaks into Ian Garrett's yacht and makes a shocking discovery
TVReview: Revelations continue to make this drama a tough watch
News
news
News
peopleSinger tells The Independent what life is like in rehab in an exclusive video interview
News
The assumption that women are not as competent in leadership positions as men are leads to increased stress in the workplace
science... and it's down to gender stereotypes
Arts and Entertainment
Inner sanctum: Tove Jansson and friends in her studio in 1992
booksWhat was the inspiration for Finland's most famous family?
News
i100
Arts and Entertainment
Singer songwriter Bob Dylan performs on stage
films
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Austen Lloyd: Commercial Property Lawyer - Cheshire

Excellent Salary: Austen Lloyd: CHESHIRE MARKET TOWN - An exciting and rare o...

Austen Lloyd: Residential Property Solicitor - Hampshire

Excellent Salary : Austen Lloyd: NORTH HAMPSHIRE - SENIOR POSITION - An exciti...

Recruitment Genius: Gas Installation Engineer

£29000 per annum: Recruitment Genius: A Gas Installation Engineer is required ...

Recruitment Genius: Domestic Gas Technical Surveyor

£28000 per annum: Recruitment Genius: A Domestic Gas Technical Surveyor is req...

Day In a Page

Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches
Colouring books for adults: How the French are going crazy for Crayolas

Colouring books for adults

How the French are going crazy for Crayolas
Jack Thorne's play 'Hope': What would you do as a local politician faced with an impossible choice of cuts?

What would you do as a local politician faced with an impossible choice of cuts?

Playwright Jack Thorne's latest work 'Hope' poses the question to audiences
Ed Harcourt on Romeo Beckham and life as a court composer at Burberry

Call me Ed Mozart

Paloma Faith, Lana del Ray... Romeo Beckham. Ed Harcourt has proved that he can write for them all. But it took a personal crisis to turn him from indie star to writer-for-hire
10 best stocking fillers for foodies

Festive treats: 10 best stocking fillers for foodies

From boozy milk to wasabi, give the food-lover in your life some extra-special, unusual treats to wake up to on Christmas morning
Phil Hughes head injury: He had one weakness – it has come back to haunt him

Phil Hughes had one weakness – it has come back to haunt him

Prolific opener had world at his feet until Harmison and Flintoff bounced him
'I have an age of attraction that starts as low as four': How do you deal with a paedophile who has never committed a crime?

'I am a paedophile'

Is our approach to sex offenders helping to create more victims?
How bad do you have to be to lose a Home Office contract?

How bad do you have to be to lose a Home Office contract?

Serco given Yarl’s Wood immigration contract despite ‘vast failings’
Green Party on the march in Bristol: From a lost deposit to victory

From a lost deposit to victory

Green Party on the march in Bristol
Putting the grot right into Santa's grotto

Winter blunderlands

Putting the grot into grotto
'It just came to us, why not do it naked?' London's first nude free runner captured in breathtaking images across capital

'It just came to us, why not do it naked?'

London's first nude free runner captured in breathtaking images across capital