BOKISSONTHRONE: UK must tackle 'causes not Symptoms' of Low Pay

The prime minister will say it is wrong to treat "the symptoms of the social and economic problems we face" while "ignoring the causes" of low pay.

He will argue the UK needs a welfare system that encourages well-paid work.

It comes amid a debate over government plans for £12bn in welfare cuts.

Watch the speech and reaction on Politics Live

The government says the welfare bill has to take its fair share of cuts as part of its plan to balance the books and eliminate the £90bn deficit by 2017-8.

Chancellor George Osborne is expected to give more details of what entitlements will be cut in next month's Budget.

'Lifetime on benefits'

Labour claims that it is "disgraceful" that the Conservatives did not spell out their intentions before the election beyond a pledge to freeze working-age benefits for two years.

They have warned of a likely cut to the £29bn annual tax credit bill. According to the Treasury, about 4.5 million families received child and working tax credits in 2013-4, nearly 70% of which were in some form of employment.

In a speech in Runcorn, Mr Cameron will promise "action on welfare" to ensure, as he will put it, that "work is always a better option".

He will stress this is only one element in extending economic opportunity and must sit alongside moves to reduce the tax burden on the low-paid, ensuring the minimum wage reflects improvements in the economy and guaranteeing young people have the education and skills needed to compete in the workplace and secure higher-paying jobs.

"When it comes to extending opportunity - there is a right track and a wrong track," he will say.PM to make case for welfare changes

"The right track is to recognise the causes of stalled social mobility and a lack of economic opportunity. Family breakdown. Debt. Addiction. Poor schools. Lack of skills. Unemployment. People capable of work, written off to a lifetime on benefits.

"Recognise those causes, and the solutions follow. Strong families that give children the best start in life. A great education system that helps everyone get on. A welfare system that encourages work - well paid work."

'Right track'

He will add: "The wrong track though, is to ignore the causes, and simply treat the symptoms of the social and economic problems we face.

"Take for example the complacency in how we approach the crucial issue of low pay. There is what I would call a merry-go-round.

The Welfare Budget and Where it is spent

In 2015-6, spending on benefits and tax credits is expected to total £220bn
State pensions and age-related benefits, such as winter fuel allowance and free TV licences, will account for £95bn
Child tax credits and working tax credits - £30bn
Housing benefit - £26bn
Disability and incapacity benefits - £37bn
Child benefit - £12bn
Pension credit - £6bn
Jobseekers Allowance and income support - £5bn

What has already been announced?

Working-age benefits and tax credits will be frozen for two years, saving an estimated £1bn
The benefits cap will be reduced from £26,000 to £23,000, saving an estimated £150m
18-21 year olds jobseekers will not be able to claim housing benefit, saving an estimated £120m

What is still left to be done?

Experts say £10.5bn of the government's planned £12bn cuts by 2017-8 have yet to be identified

What has been ruled out?

Any cuts to state pensions, which are protected through the "triple lock" guarantee
Any cuts to universal benefits for pensioners, ruled out in Conservative manifesto
Any cuts to child benefit, which David Cameron has indicated is protected in this Parliament

What are the options?

Reducing the per-child element of child tax credits, in real terms, to 2003-4 levels could save about £5bn. It would see 3.7 million families lose, on average, about £1,400 a year
Restrict per-child element of child tax credits to families with two children could save an estimated £3.3bn
Limiting cuts to child tax credits to non-working families by reimbursing those in work through the Universal Credit system could save an estimated £2.5bn.
Reducing work allowances for families with children to same levels as families without children could save an estimated £3.3bn
Cutting the Local Housing Allowance element of housing benefit for private sector tenants could save an estimated £400m
Requiring all LHA claimants to contribute to their rent could save an estimated £900m a year
Requiring social housing tenants to contribute to their rent, allied to further cuts in their benefit, could save £1.6bn a year
Abolishing housing benefit for all under-25s could save £1.5bn, affecting about 300,000 people
Taxing personal independent payments could save an estimated £900m a year. Taxing the attendance allowance could save an estimated £600m. Abolishing the carer's allowance completely could save a reported £1bn a year
Abolishing contributory jobseeker's allowance (JSA) and employment and support allowance (ESA) could save £1.3bn
Increased means-testing of Universal Credit could save an estimated £2bn