Last week Ed Miliband set out how Labour will build a country that works for working people, reforming our economy to make work pay, and ensuring that our system is built on the British values of fairness and contribution.
Those are the values that I will apply to the social security system as Labour’s secretary of state for work and pensions. And they are the values that we apply to controlling immigration and making it work for Britain. UKIP would have us leave British values of fairness and toleration at the door, not to mention taking us out of the EU and risking jobs and investment here in Britain. And the Tories look increasingly like they are desperately attempting to out-UKIP UKIP.
I will never pander to those who would deny the positive contribution that immigrants have always made to our country or the economic benefits we gain from our membership of the EU. But I also believe that we have to listen to the real concerns that people have about how immigration is being managed.
That’s why I’m setting out a credible three point plan for reforming our social security system, which was never designed for the levels of migration we are now seeing, to ensure it works for people who come here from the EU. This will ensure the system is fair, and seen to be fair.
First, we know that our welfare state was built on the principle that people should work and contribute before drawing on the system. Other countries, like Germany, have already gone further than us on this issue. So we believe that it is right to extend the period that EU jobseekers need to live and support themselves in the UK before claiming out-of-work benefits from three months to two years. We don’t need to walk away from Europe to put the principles of work and contribution at the heart of our system. We can deliver these changes through negotiation and reform and we will.
Second, if we are serious about making the economy work better for working people we need to be honest about the impact that some employers’ reliance on low-cost, short-term labour from abroad can have on workers’ wages, conditions and job security. To build a recovery that works for the many not just a few at the top we need to address that. That means stronger enforcement of the minimum wage and banning recruitment agencies that only hire from overseas. And, I believe we must also look at the role of in-work benefits.
It is far too easy for employers in Britain to undercut wages and working conditions by recruiting temporary workers from elsewhere in Europe on very low pay and with no job security, knowing that the benefit system will top up their income. There are 252,000 working households from the EU now receiving tax credits, including 12 per cent of all single, childless people receiving Working Tax Credit. Some may have been working for several years, but others may be recent arrivals on short-term contracts. The House of Commons library estimates total spending on in-work tax credits for EU migrant households amounts to £1.6bn a year. Our country’s social security system was never intended to subsidise and perpetuate low-paid and insecure work. The European single market should not be about a race to the bottom on working conditions. So while some have said that we cannot negotiate changes to benefits paid to people in work, I am determined to look at how we can deliver reform in this area too.
Third, we will work with European countries to end the absurdity of child benefit and child tax credits being claimed for children living in other countries. The most recent estimates from the House of Commons library showed 20,400 people receiving child benefit for 34,268 children living in other countries, and 4,011 people receiving Child Tax Credit for 6,838 children living in other countries.
Nowhere is the defeatism of the Conservative approach to Europe more evident than how they have handled this issue. David Cameron has complained that it “seems extremely difficult, if not impossible” to do anything about this. Yet the Irish Minister for Foreign Affairs has recently expressed support for the change we want to see, and I have already raised the issue with government ministers in France and Germany. I promise that a Labour government won’t give up until we have put this right.
Whether it is welfare reform, or reform of the EU, it is the Tories who are letting Britain down. While they break their promises and pander to prejudice it falls to Labour to set out clear principles of fairness and responsibility. These are Labour values and British values, and the values on which we will reform our welfare system, and get a better deal for Britain in a reformed European Union.