Work or lose your benefits: Iain Duncan Smith heralds biggest shake-up of welfare state since war
By James Chapman
Last updated at 11:39 PM on 26th May 2010
Overhaul: Iain Duncan Smith said Britain's welfare system is 'bust'
Britain's welfare system is 'bust' and faces its most radical overhaul for 60 years to undo Labour's legacy of benefit dependency, Work and Pensions Secretary Iain Duncan Smith has declared.
The former Tory leader vowed to end the scandal that means welfare claimants are no better off – and sometimes poorer – if they come off the dole to take jobs paying up to £15,000 a year.
He also signalled that benefit payments to the middle classes were likely to be pared back in favour of income tax cuts – and the state pension age might have to rise more quickly than planned.
Giving his first newspaper interview since making an extraordinary return to the political frontline, Mr Duncan Smith told the Daily Mail the unemployed should do community work to keep benefits.
Those who refused to look for work, take jobs that were offered to them or do voluntary work would have their handouts stopped, he said.
Mr Duncan Smith said it was simply not 'sustainable' for Britain to carry on spending almost 14 per cent of its national income on welfare.
The bewilderingly complex benefits system should be radically simplified, and the perverse penalty against couples living together brought to an end, he added.
Mr Duncan Smith is today preparing to publish startling new evidence of the benefits culture and inequality that Labour has left behind after 13 years in power.
A Government report will reveal that 1.4million people in the UK have been on an out-of-work benefit for nine or more of the past ten years.
It will show income inequality in the UK is at its highest level since comparable statistics began in 1961, and a higher proportion of children are growing up in workless households in the UK than in any other EU country.
Mr Duncan Smith said it was clear that Britain's welfare system was 'broken' and 'bust'.
'It's not going to be sustainable,' he said.
'We have created a benefits system which basically says you are better off out of work than you are in work.
'We have to challenge the whole idea that it's acceptable for a society like Britain to have such a significant number of people who do not work one day of the week and don't have any possibility of improving the quality of their lives.
'Five million people are actually sitting there doing nothing, fulfilling no employment role. The present benefits system is counter-productive, it's complex and difficult to understand.'
Mr Duncan Smith said he wanted a rapid reassessment of all those claiming incapacity benefit and said he would move a 'significant number' into work.
'About 43 per cent of those who are economically inactive are stuck on some sort of sickness benefit.
'That has risen from about 15 per cent in 1981,' he said.
'What we propose will save money, but it will also shake up this nonsense.'
Mr Duncan Smith said that as Britain struggled to pay back its £156billion budget deficit, middleclass welfare would have to be reined in, in favour of income tax breaks.
The Government has already indicated that it will scrap tax credits for better-off families.
He said: 'The benefits system is a deeply ineffective and costly way of subsidising people's lives.
'We obviously have a limited amount of money and our purpose is to improve the quality of life for the worst-off in society so they can play a part and hopefully pay tax one day themselves.'
Mr Duncan Smith said the coalition government represented a 'once in a generation chance' for radical welfare reform.
He invited senior Labour figures – including his predecessor James Purnell – to help draw up the Government's plans.
'What we want to do is reform the welfare system in the way that Tony Blair talked about 13 years ago but never achieved – a system that was created for the days after the Second World War,' he said.
'That prize is now I think achievable. I will also invite the Labour Party to play a part in this. Do they want to just sit back and just throw rocks at us?
'Or do people like James Purnell, who admits that the system cannot go on much longer as it is, want to play a part?'
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