Ed Balls today warned against writing a “blank cheque” to payday loan companies by forcing people to wait seven days to get jobless benefits — but stopped short of opposing the move.
The Shadow chancellor argued that Labour needed time to examine the new policy announced by George Osborne yesterday as part of measures imposing new welfare restrictions.
Currently, unemployed people have to wait three days before getting JobSeekers Allowance. Mr Balls told BBC radio: “We will need to look very carefully at what this means.
“If this is a blank cheque to Wonga and other payday loan companies, that would be a very bad thing. If, on the other hand, it’s a sensible way to focus on job search, it might not be.”
But the reform was condemned by Sarah Teather, Liberal Democrat MP for Brent Central, warning it would lead to individuals being “unable to feed themselves and their children and pay their rent”.
The row came as payday lenders were referred for a full-blown investigation by the Competition Commission after the Office of Fair Trading uncovered “deep-rooted” problems with the industry, without singling out any particular company.
Meanwhile, the Archbishop of Westminster, Archbishop Vincent Nichols, backed the Government for spending 0.7 per cent of GDP on overseas aid but added: “Here in the UK we all need to do more to protect the weakest and most vulnerable, many of whom are already bearing the brunt of the economic downturn and recent spending cuts.”
Separately, the Institute for Fiscal Studies said a million public sector jobs are set to go between 2010 and 2017-18 under the Coalition’s current plans.
But it said the job losses have been more than compensated for by an increase in private sector jobs, particularly in London.
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IFS director Paul Johnson said it was likely that there will be tax rises after the 2015 general election. If they aimed to restore the Tories’ 80-20 split between cuts and tax rises, then that would mean £6 billion more of tax — £230 a year extra per household.
Mr Johnson backed Mr Osborne’s decision to reform the school funding system, saying such a move was “long overdue” and “brave”.
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