Benefit reform will ensure that work always pays

Labour spent billions on welfare but their approach lacked results, says Conservative MP and Minister without Portfolio Grant Shapps


This October, the Government will roll out the most important changes made to the benefits system since the war. The introduction of Universal Credit will make sure that, in this country, work always pays. It hardly sounds revolutionary. Surely, it should always pay to work. For every pound you earn, you should be better off. Whether you’re a small business, parent or self-starter, the suggestion that it pays to work isn’t just a nice idea – it’s your entire livelihood. It’s how the system should be run.

But for over a decade, and for millions of people, it hasn’t been the case. For years, the gap between those who earn and those who live on benefits has grown. Consider this fact: since 2007, the pay of those working in the private sector rose by 12 per cent. In the same five-year period, benefits going to those of working age rose by nearly twice that amount. During the recession, while British working families tightened their belts, benefits soared. Those going out to work weren’t getting a fair deal. To them, it may have felt like work didn’t always pay.

I believe that investing in welfare is crucial – but I also believe that it only works if you’re getting help to those who need it. If you’re doing it with no results, it’s disastrous.

The benefits system has needed attention for a long time. The last Labour government spent billions on welfare, but their approach lacked results. During that administration, welfare spending increased by 60 per cent, but that increase was never reflected in the number of people getting back to work. In fact there were half a million more unemployed people by the time Labour left office, compared to when Blair was elected.

Picking up the tab

The system simply wasn’t getting jobseekers the jobs they sought. Labour voted to increase welfare spending again and again, without considering the effect that the  spending was having, either on the people it was designed to help or those working to support the system. Meanwhile, the taxpayer picked up the tab and has continued to do so throughout the downturn. The cost of  uprating benefits has topped £6.3bn since 2008 alone. In difficult times, it’s an unwelcome squeeze for those working to pay  the bills.

Labour’s favourite statistic in this debate is that over the past 10 years, wages have outstripped rises in the Jobseekers’ Allowance. But that’s moving the goalposts. By stretching to a longer period of time, which includes the boom years, and only including Jobseekers Allowance in their calculations, Labour have skewed their figures.

Tomorrow, Parliament will vote on the Welfare Uprating Bill – measures which will save the economy £4bn. Before they consider voting against the proposals, Labour have to let the country know how they’d fund their opposition to our plans. That extra money would need to come from somewhere. Would they close hospital wards, take money out of the schools budget or perhaps slash pensions?

Labour face the prospect of having a completely unfunded welfare pledge. They are raising expectations. But overpromising is a dangerous game, especially when they know they cannot deliver.

We’ve had to make difficult decisions on spending, but we’ve made one thing clear. We will never stop supporting those who need our help. So we’re protecting benefits for carers. We’re protecting disability benefits such as Disability Living Allowance, the disability elements of tax credits and the Attendance Allowance. Plus the Basic State Pension is protected by our triple lock guarantee leading to the biggest ever rise in the weekly pension this past year.


Taken together with other pro-job measures we’ve introduced, there are signs of real progress. Nearly 30 million people are now in work, which is a record high. More women are in employment than ever before, and inactivity levels are close to the lowest in a generation.

We’re also making sure that work pays. The personal allowance is about to rise to an unprecedented £9,440 for each individual. As a result of that change, 25 million Britons will pay less tax – and two million of the lowest paid workers will be taken out of the tax system altogether. That’s hardly about targeting shirkers – it’s a basic principle that those who go out to work each day should never be in the position where they’re worse off.

With resources stretched, we need to demonstrate that our country’s system is just. It’s not enough to simply reduce the deficit and put this country back on track. We also need to make sure that, while we’re making those tough economic choices, we’re rewarding people who want to get on in life and do the right thing. We need to make sure that people are progressively better off in work than they would be on welfare. In short, we need fairness. Our welfare reforms are a stepping-stone to a fairer society.

Labour have long since forgotten that people work hard to pay their taxes and support our welfare system. Tomorrow’s vote will be an opportunity for them to show they get it, by joining us in the fairness lobby.

Grant Shapps is a Conservative MP and Minister without Portfolio.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Panel & Cabinet Wireman

£20000 per annum: Recruitment Genius: Panel Wireman required for small electro...

Recruitment Genius: Electronics Test Engineer

£25000 - £27000 per annum: Recruitment Genius: An SME based in East Cheshire, ...

Recruitment Genius: Marketing Assistant

£18000 - £22000 per annum: Recruitment Genius: Do you have previous experience...

Recruitment Genius: Accounts Administrator

£16000 - £18000 per annum: Recruitment Genius: This is an exciting opportunity...

Day In a Page

Read Next
Shia LaBeouf is one of Brad Pitt's favourite actors in the world ever, apparently  

Shia LaBeouf to Luis Suárez: Introducing my anti-heroes of 2014

Ellen E Jones
Gwyneth Paltrow and Coldplay's Chris Martin “consciously uncoupled” in March  

My best and worst stories of 2014

Simmy Richman
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
Say it with... lyrics: The power of song was never greater, according to our internet searches

Say it with... lyrics

The power of song was never greater, according to our internet searches
Professor Danielle George: On a mission to bring back the art of 'thinkering'

The joys of 'thinkering'

Professor Danielle George on why we have to nurture tomorrow's scientists today
Monique Roffey: The author on father figures, the nation's narcissism and New Year reflections

Monique Roffey interview

The author on father figures, the nation's narcissism and New Year reflections
Introducing my anti-heroes of 2014

Introducing my anti-heroes of 2014

Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones
DJ Taylor: Good taste? It's all a matter of timing...

Good taste? It's all a matter of timing...

It has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Olivia Jacobs & Ben Caplan: 'Ben thought the play was called 'Christian Love'. It was 'Christie in Love' - about a necrophiliac serial killer'

How we met

Olivia Jacobs and Ben Caplan
Bill Granger recipes: Our chef's breakfasts will revitalise you in time for the New Year

Bill Granger's healthy breakfasts

Our chef's healthy recipes are perfect if you've overindulged during the festive season
Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

Who does your club need in the transfer window?

Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

Michael Calvin's Last Word

From aliens at FA to yak’s milk in the Tour, here’s to 2015