Ed Miliband: We must build a better future for poor families

People doing the right thing, trying to support themselves and their children. The last Labour government took action on this, and was right to provide tax credits for those in work.

But we didn’t do enough to tackle Britain’s low wage economy, a low wage economy that just leaves the taxpayer facing greater and greater costs subsidising employers.

To tackle the problem of poverty at work and to control costs we need to create an economy that genuinely works for working people. I want to teach my kids that it is wrong to be idle on benefits, when you can work.

But I also want to teach them that the people in this country who work 40 or 50 or 60 hours a week, do two or even three jobs, should be able to bring up their families without fear of where the next pound is coming from.

For too many people in Britain the workplace is nasty, brutish and unfair. We will change the law to stop employment agencies using loopholes to undermine the pay of what are effectively full-time employees.

We will do everything in our power to promote the living wage. If local councils can say if you want a contract with the council then you need to pay the living wage, then central government should look at doing that too.

And for every pound that employers pay above the minimum wage
 towards a living wage, government would save 50 pence in lower tax 
credits and benefits and higher revenues.

We should look at offering some of these savings back to those employers to persuade them to do the right thing and pay the living wage.

It will be tougher to tackle big issues facing our society like child poverty in the next Parliament, but I still think we can make progress if everyone pulls their weight.

It starts with tackling child poverty among families in work, as part of a long-term goal that no-one should have to work for their poverty.

We should also be investing for the future, not paying for the costs of failure.

We can’t afford to pay billions on ever-rising rents, when we should be building homes to bring down the bill.

Thirty years ago for every £100 we spent on housing, £80 was invested in bricks and mortar and £20 was spent on housing benefit.

Today, for every £100 we spend on housing, just £5 is invested in bricks and mortar and £95 goes on housing benefit.

There’s nothing to be celebrated in that. And as a consequence we are left with a housing benefit bill that goes up higher and higher. For the simple reason, that we have built too few homes in this country and therefore we see higher and higher prices, particularly in the private sector.

Now, this government talks a lot 
about getting housing benefit under control. But let me be clear: any attempt to control housing benefit costs which fails to build more homes is destined to fail.

For all the cuts this Government has made to housing benefit, it is still rising and it is forecast to carry on rising too.

Of course, there is an issue of values here too. In 2011, there were 10 cases where £100,000 a year was spent on housing benefit for individual families. That’s 10 too many. And it is one of the reasons why Labour has said we would support a cap on overall benefits.

As Ed Balls said on Monday, an independent body should advise government on how best to design this cap to avoid it pushing people into homelessness and costing more.

But the real, long-term solution is clear: we have to do what hasn’t been done for three decades and to move from benefits to building.

Currently Britain is building fewer new homes than at any time since the 1920s. Ed Balls also talked about how we invest for the future of our country.

Clearly, the building of homes is high on that list. This will be a priority of the next Labour government.

But just like tackling worklessness, we can’t do it from central government alone. We will need every local 
authority in Britain to be part of this effort. At the moment, we expect individual families to negotiate with their landlords.

In these circumstances, it is almost inevitable that tenants end up paying over the odds. And so does the taxpayer, in the housing benefit bill. It’s time to tackle this problem at source. So a Labour government would seek a radical devolution to local authorities. And Labour councils in Lewisham, Liverpool, Leeds, Manchester, Sheffield and Birmingham have all come to us and said that if they had power to negotiate on behalf of tenants on housing benefit, they could get far greater savings than the individual on their own.

*Ed Miliband delivered this speech yesterday on welfare reform, this is an edited version