ED Miliband will today set up a clash with some North-East MPs by vowing to press head with a tougher’ benefits cap’ in the North than in the South.

But the Labour leader will sweeten the pill by pledging new ways for local councils to drive down housing benefit costs – allowing claimants to avoid the cap.

The moves will come in a crunch speech in Labour’s attempts to win back the public’s trust on the key issue of welfare spending.

In it, Mr Miliband will pledge to: * Introduce a lower benefits cap in areas – such as most of the North - with lower housing costs, subject to the recommendations of an independent commission.

* Allow local authorities to “bulk purchase” private homes for housing benefit claimants, to cut rents.

* Allow local councils to retain some of the savings in order to build more homes – and cut rent bills further.

* Cap overall welfare spending over each three-year spending period – but not each year, as George Osborne has proposed.

* Restore the “contributory principle” in the benefits system with higher Jobseeker’s Allowance (JSA) payments for those who have paid more tax.

* Give local councils powers to run back-to-work schemes, currently run by private firms.

Mr Miliband - faced with Tory taunts that Labour is the “party of welfare” - will say: “The next Labour government will have less money to spend.

“Controlling social security spending and putting decent values at the heart of the system are not conflicting priorities.

“It is only by reforming social security with the right values that we’ll be able to control costs.

“And it is only by controlling costs that we can sustain a decent social security system for the next generation.”

Mr Miliband will hope to convince voters that he is committed to lower benefit bills – days after the party vowed to be tougher on overall public spending, if it wins power.

But the idea of an annual benefits cap in the North, harsher than the £26,000 ceiling introduced by the Coalition, has already been attacked by some North-East MPs.

Nick Brown, the Newcastle East MP and Gordon Brown’s former chief whip, has already vowed he will not support it.

However, Mr Miliband will insist the “bulk purchasing” plan – put forward by a number of Labour councils – can finally cut housing benefit, the bulk of most people’s benefit claims.

He will say: “We expect individual families to negotiate with their landlords when we know there aren’t enough houses to go around.

“It is inevitable that tenants end up paying over the odds - and so does the state, in the housing benefit bill. It’s time to tackle this problem at source.”