‘We won’t cut the welfare bill by making people poorer – we need to tackle the causes of poverty’

Conversations about bringing down the social security bill are starting in the wrong place – arguing about what can be cut instead of asking why so many people need support in the first place.

In Blackpool, I see the answer every day.

Our town is full of pride, resilience and potential, but it is also a case study in what happens when communities are left to carry the consequences of decades of economic decline, insecure work and under-investment in health, housing and education.

The result isn’t just lower incomes. It’s poorer health, fewer opportunities and greater insecurity. One in four people in Blackpool are living with a disability and too many families are struggling simply to get by.

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That’s why Prime Minister Andy Burnham is spot on to reject “blunt cuts” and turn our focus to tackling the underlying problems of jobs, health and housing to bring the social security bill down in a fair and sustainable way. That’s not only more consistent with Labour values, polling suggests it’s what the public want right across the political spectrum.

It also makes economic sense. Every 100,000 additional people in work reduces Universal Credit spending by around £700 million a year. If Labour achieves its ambition of an 80% employment rate, spending on Universal Credit could fall by around £10 billion. This is how we bring the welfare bill down – by reducing the need for support, not by making life harder for people who rely on it.

I’ve put that thinking into practice in Blackpool, which is why I hold an annual jobs fair on a scale which has never been seen before. This year we had 120 employers offering 2,000 jobs and over 5,000 people attended. It’s attracted the attention of Secretary of State for Work and Pensions, Pat McFadden, who joined me to open this year’s jobs fair, and it’s being increasingly emulated by other MPs in their constituencies. Thousands of people secured jobs on the day – a fantastic demonstration of what happens when opportunity meets ambition.

But tackling the causes of hardship is only half the job. We also need a safety net that gives everyone the security to live with dignity, whatever challenges they face.

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Labour came into government promising to end the need for food banks. We’ve made an important start by abolishing the two-child limit, but food banks in the Trussell community still distributed 2.6 million emergency food parcels last year. When 75% of people turning to food banks are receiving Universal Credit, something has to change.

A social security system can’t help people overcome barriers to work if it leaves them unable to afford the essentials while they do so. Poverty undermines health, erodes confidence and makes it harder to find and keep work. You can’t prevent poverty from within a system that keeps people in it. Adequate support isn’t separate from prevention – it’s the foundation of it.

This summer, I’ve been part of the cross-party inquiry team for the APPG on Ending the Need for Food Banks’ new inquiry into how Universal Credit is set. Labour recognised decades ago that the minimum wage shouldn’t be set by political whim. We created the independent Low Pay Commission to ensure its level was informed by evidence. It’s time to ask whether the same principle should apply to Universal Credit, and if so, what that might look like.

The inquiry will also examine the impact of the current system on people’s lives, their ability to stay in work and their ability to recover from ill health. 

If we are serious about reducing long-term pressure on the social security system, we have to do more than manage hardship. We have to prevent it – tackling the causes of poverty while ensuring the safety net provides real security when people need it. That is how we build a social security system that works for the people who need it and taxpayers alike.

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