New Lib Dem plan to fight poverty

11.57.37pm UTC (GMT +0000) Mon 30th Jul 2007

Radical new proposals to reduce poverty and tackle inequality in Britain have been launched by the Liberal Democrats. The plans aim to reverse Gordon Brown's dependency culture by giving people education and employment opportunities as well as incentives to work and save. Five million people would be lifted out of relative poverty, with 10 million fewer means-tested benefits in payment, by 2020.

Commenting, Liberal Democrat Shadow Children, Schools and Families Secretary, David Laws MP said: "Under Gordon Brown, Britain remains a society of massive inequalities of both income and opportunity. It is a national disgrace that Britain is the developed country where your chances in life are most dependent on your family background rather than your own abilities and hard work."

"This radical new agenda to combat poverty rejects Gordon Brown's blueprint for a state of dependency, where the spread of mass means-testing undermines incentives to work, save and even form stable families."

"Meanwhile, David Cameron's plan seems to be for a great leap backwards to the failed policies of Victorian Britain."

The proposals contained in the policy document Freedom from Poverty, Opportunity for All: Policies for a fairer Britain include:

• Introducing a 'pupil premium', with £1.5bn extra targeted at the children with the greatest need. The Pupil Premium will give more money to pupils from the poorest backgrounds and help bring funding in the most needy state schools up to private school levels.

• Reforming tax credits by ending the overpayments crisis and taking higher earners out of the system all together.

• Increasing Child Benefit by around £5 per family per week, taking 150,000 children out of poverty.

• Replacing Job Centre Plus with a new 'First Steps' agency to be a single one-stop-shop for all benefit and tax credit claims, while outsourcing properly funded employment support to the private and voluntary sector. A single working age benefit would also be introduced.

• Immediately restoring the earnings link to the basic state pension and in the long run introducing a citizens' pension. Establishing an Independent Commission on Public Sector Pensions to ensure that they are fair and affordable - with any savings re-invested in a higher state pension.

Liberal Democrat Shadow Work and Pensions Secretary, Danny Alexander MP said: "Labour has created a welfare system where millions are trapped in dependency and in low income work. Incredibly complex and chaotically administered means-tested benefits have placed millions at the mercy of a failing central Government bureaucracy."

"Our proposals for Tax Credits will give people an assurance that what is given to them will stay with them, and by removing millions from means-testing we will strengthen incentives to progress in work."

"By taking higher earners out of Tax Credits altogether, we are able to invest in education and the universal Child Benefit, lifting 150,000 children out of poverty. Instead of complexity and dependency, we will offer real opportunity."

"In combination with our tax proposals we are able to both tackle poverty and ensure the vast majority of families will keep more of their income, as they move on to better paid work."