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

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

Recruitment Genius: Senior Web Designer / Front End Developer

£28000 - £32000 per annum: Recruitment Genius: This fast expanding web managem...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Recruitment Consultant / Account Manager - Surrey / SW London

£40000 per annum + realistic targets: Ashdown Group: A thriving recruitment co...

Day In a Page

Read Next

i Editor's Letter: Why it won’t be the i wot won it – our promise to you

Oliver Duff Oliver Duff
A relative of dead Bangladeshi blogger Washiqur Rahman reacts after seeing his body at Dhaka Medical College in Dhaka on March 30,  

Atheists are being hacked to death in Bangladesh, and soon there will be none left

Rory Fenton
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor