A future Tory Government would slash benefits for around 100,000 struggling families and young people to fund more low-paid apprenticeships, Prime Minister David Cameron will pledge on Monday.
David Cameron will say that he plans to deliver 3 million more apprenticeships by cutting the benefit cap from £26,000 to £23,000 a year.
The plan would affect 70,000 families in receipt of either in-work or out-of-work benefits and tax credits, saving around £135 million a year. This will include 40,000 households who have so far managed to escape welfare cuts, according to Conservative Party figures released to the Press Association (PA).
Figures released at the end of last year (December 2013) show that for the first time in recorded history more low-paid working households are living on or below the breadline than those who are out-of-work. More cuts to in-work benefits could further exacerbate this issue and cost the Tories votes at the next general election.
The Tories would also remove Housing Benefit entitlement from 18-21 year-olds, affecting 30,000 young people and saving an estimated £120 million a year.
SKY News reports that Mr Cameron has the backing of a number of large firms including Nestle, Airbus, Ford, Balfour Beatty, Fujitsu and the National Grid.
PM David Cameron said: “Because of difficult decisions we will make on welfare, we will deliver three million apprenticeships by 2020. This is a crucial part of our long-term economic plan to secure a better future for Britain.
“It will help give us the skills to compete with the rest of the world. And it will mean more hope, more opportunity, and more security for our young people, helping them get on in life and make something of themselves.
“We have already doubled apprenticeships this Parliament. We will finish the job in the next and end youth unemployment.”
Mr Cameron had previously told the Andrew Marr show: “All the evidence is the cap is too loose, particularly in some parts of the country, so bringing it down saves money, will mean more families getting into work, and what I want to see – the plan we have for Britain – is to spend less money on welfare and more on helping people into work.”
However, the Tories relentless attack against the young and low-paid has come under criticism from their coalition partners, the Liberal Democrats.
Leader Nick Clegg used his speech at the Liberal Democrats annual conference to attack the Tories for taking an “axe” to the welfare budget, without showing any “regard for the impact on people’s lives”.
His words will anger millions of people affected by welfare cuts his party helped (voted) to introduce – including the cap on benefits.
Currently the minimum wage rate for an apprentice is £2.73 an hour for 16-18 year-olds. The same hourly rate applies to 19 year-olds who are in the first year of their apprenticeship.
Apprentices over the age of 19, or who have completed their first year, are paid at least the national minimum wage for their age group, with some businesses willing to pay more – if you’re lucky.
The national minimum wage rate for 16-18 year-olds currently stands at £3.79 an hour, £1.06 higher than that for apprentices. Those aged 18-20 receive a minimum wage rate of £5.13 an hour, rising to £6.50 for the over 20’s.
In related news, all of the three main political parties have been criticised for a “lamentable” lack of ambition in tackling child poverty.
The criticism comes from the Government’s own anti-poverty Tsar, Alan Milburn, who said: “Urgent action is needed to prevent this generation of young people faring worse than their parents’ generation.
He added: “Social mobility relies on young people having better opportunities to progress. Investment in skills and employment of young people today is money saved in social security and the costs of poverty tomorrow.”