Blunkett calls for more self-help and less state aid

http://www.theguardian.com/politics/2015/feb/04/blunkett-calls-for-more-self-help-and-less-state-aid

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Labour should tax the perks of pensioners, make a living wage mandatory for adults across the country by 2018 and ensure the payment of child benefit for a second child is conditional on recipients attending parenting classes, the former work and pensions secretary David Blunkett says.

Seen as one of the first New Labour advocates of greater self-reliance, Blunkett puts forward a balanced package designed to remove poorly targeted spending in the welfare budget, and foster a stronger culture of self-help. His speech on Wednesday comes on the same day as interventions by Labour and Conservative welfare frontbenchers made against the backdrop of Tory plans to cut welfare costs by £12bn.

Blunkett warns that if the massive cuts proposed by the chancellor, George Osborne, were implemented, they would “place the burden of austerity measures on the shoulders of those struggling to cope” and “raise searching questions about the kind of society Britain is becoming”.

In a speech to the centre-right thinktank Policy Exchange he will say: “The British people have so far been remarkably tolerant in the face of the austerity programme, which without quantitative easing would have plunged us even deeper into recession, but their patience is now running out.

“With 60% of cutbacks still to come, public services beginning to deteriorate rapidly and food banks springing up throughout the country the general election really is a moment to say enough is enough” .

In his most specific proposals Blunkett suggests the winter fuel allowance, the Christmas bonus and the free television licence for pensioners should all be taxed. He also calls for pensioners who continue to work to be required to pay national insurance and pay for prescriptions that are not for long-term conditions.

He also calls for the Living Wage – currently set at £7.85 for the UK and £9.15 in London – to become mandatory for businesses, in effect a large hike in the statutory minimum wage.

He also proposes that anyone that applies for child benefit for a second child would be required to attend appropriate classes in parenting, money management and postnatal learning.

His proposals came as Rachel Reeves, the shadow work and pensions secretary, said: “Our ambition must be to build an economy in which someone who is willing to put in the hours at work can support themselves and raise a family without having to rely on benefits to cover their rent.”

She will set out her housing benefit plans in a speech at Bloomberg in which she claims there has been a 66% rise in the numbers of working people claiming housing benefit since 2010. She warns the number of working people reliant on housing benefit will have more than doubled at a cost more than £14bn by 2020.

In a third intervention on welfare, Iain Duncan Smith, the work and pensions secretary, will urge City investors to take up the cause of social investment in welfare, saying they have the chance to reunite the City with the inner city.

He warns: “The disparity between the top and bottom of society is in many cases larger than it has ever been. We have a group of skilled professionals and wealth creators at the top of society who have little or no connection to those at the bottom.

“Yet in so many cases what divides the two is little more than a different start in life,” he will say.

Duncan Smith urges wealth creators to invest commercially in social improvement schemes and recognise “they could have a powerful influence on the communities themselves, a human interface between two polarised worlds, bringing success to the doorstep of failure, and two ends of our society closer together.”

He will also claim the growth in the size of the welfare state is at its lowest since the modern welfare state was founded, claiming that his reforms will have saved a total of £50bn cumulatively over the parliament. He says: “That is a momentous reversal of Labour’s reckless spending, but has led through a relentless focus on outcomes to 700,000 fewer people in workless households.”

Duncan Smith’s claims came as the communities secretary, Eric Pickles, announced that he had secured £74m for local councils to fund local welfare crisis relief schemes.

Ministers originally intended to abolish the local welfare assistance scheme, formerly the social fund, worth £180m last year. Poverty charities claimed Pickles had backtracked after local campaigns and a revolt by Tory backbenchers, saying it would remove funding for those fleeing domestic violence.