Jobless people in Northern Ireland would receive lower benefit payments than in other areas under controversial plans floated by the Prime Minister.
David Cameron’s spokesman revealed No. 10 was exploring lower out-of-work benefits in areas where pay is lower, to increase “incentives” to look for a job.
The move — which comes as ministers explore ‘local pay’ in the public sector — would scrap the principle that such benefits should be set nationally.
And it would almost certainly result in lower rates of jobseeker’s allowance, income support and tax credits in Northern Ireland, compared with most of the UK.
A No. 10 spokesman said housing benefit and council tax benefit already varied across the country and that the same principle could apply to out-of-work benefits. Arguing for the need to ensure work was more attractive than welfare, he said: “It is about local labour markets and ensuring that it is not better to be on benefits.
“Clearly, wage rates vary around the country and what someone receives in benefit, compared to what they could potentially get by going into a job, has an impact on the incentives they face.”
Other radical reforms were floated by Mr Cameron in a speech setting out his aim to end the “culture of entitlement”, which sees some people living long-term on welfare with higher incomes than neighbours who work. Mr Cameron suggested withdrawing housing benefit from under-25s, removing the right for high earners to keep their council homes, a cut in the £20,000-a-year cap on housing support and limits on the additional benefit for families with three or more children.
Mark H Durkan, the SDLP’s social development spokesman, said: “David Cameron has waged war on what he calls a ‘something for nothing' culture — a phrase which strikes me as rich coming from the man who got to No. 10 without a clear mandate. However, his new ideas will be catastrophic in the current and ongoing economic climate.”
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Politicians and unions in Northern Ireland are already angry at plans to set public sector pay on a local, rather than national basis. The province would be in the firing line from such a proposal because of the high proportion of public sector workers and a perceived gap between public and private wages. This has led ministers to believe that inflated public sector wages are “crowding out” the economic recovery in some areas.