Labour’s ‘new deal’ for working people explained

A Labour government would change the universal credit system to let low-income workers earn more without their welfare payments being cut, the party has pledged.

Outlining the proposed shake-up, shadow work and pensions secretary Jonathan Reynolds promised to “make work pay” as part of a wider strategy to create “jobs you can raise a family on”.

In a tweet prior to the announcement yesterday, Reynolds said that “to tackle the endemic levels of in-work poverty in the UK, we need a new deal for working people”.

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The pledge is “the first element of what is expected to be a significant overhaul” of the work and social security system, said The Guardian. Labour is planning to reduce the taper rate for universal credit - claimed by almost six million people - under which for every £1 earned over the work allowance, payment is currently reduced by 63p.

The party will specify the scale of the proposed reduction “as part of its wider tax and spending plans”, the paper reported, but “the cost could be substantial, with some estimates suggesting that every percentage point reduction in the taper rate would cost £350m”.

Here are the five main areas covered by Labour’s “new deal for working people”, which was first announced in July.

Job security

According to Labour’s website, 3.6m people in the UK “are in insecure work” that “means they can’t plan for the future”. The party has pledged to give workers “full protections from day one on the job” and to “strengthen trade unions”, and to “ban fire and rehire and give people the right to work flexibly”.

British business boost

In a move aimed at helping the “one in six working families living in poverty”, Labour would “support British businesses so we buy, make and sell more in Britain”. “This would help to create well-paid, green jobs in the industries of the future,” said the party.

Fairer economy

Some “big, global businesses, like Amazon”, don’t pay their fair share of taxes, with the result that “our British businesses are being undercut and losing out”, said Labour’s online summary of the new deal. The party would “level the playing field and give our businesses the boost they need to create good jobs locally”.

Training opportunities

Under the plans, Labour would also “deliver a jobs-promise for young people with a guarantee of quality education, training or employment”.

Living wage

The party is pledging to introduce a “real living wage of at least £10 an hour”, along with universal sick pay, increased protection against unfair dismissal, and the right to flexible working for all.