Radical Welfare Reform Plans Unveiled By PM - Sky News

2:43pm UK, Thursday February 17, 2011

Joey Jones, deputy political editor

Prime Minister David Cameron has published a reform package which he says will deliver "the most ambitious, fundamental and radical changes to the welfare system" since it was created.

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Iain Duncan Smith's Welfare Reform Bill involves a radical overhaul, aimed at simplifying the system and tackling the culture that he believes encourages people to choose a life on benefits.

The proposals include replacing work-related benefits with a single, universal credit, designed to ensure people are always better off when they are employed.

The Government intends to close the loophole which enables some couples to receive more living apart.

But there is also a significant climbdown, with ministers shelving a controversial plan to cut people's housing benefit by 10% if they were in receipt of Jobseeker's Allowance for more than a year.

Mr Cameron said the changes announced would slash £5.5bn from the welfare bill in real terms over the next four years by limiting housing benefit, reforming tax credits and taking child benefit away from higher-rate taxpayers.

The benefits system... doesn't just allow people to act irresponsibly, but often actively encourages them to do so

Prime Minister David Cameron

In a speech to mark the publication of the bill, the Prime Minister said that the "collective culture of responsibility" that used to be the bedrock of the welfare system has been lost.

He has argued that there are some individuals who, "with no regret or remorse, intentionally rip off the system," but that more broadly, the system itself is at fault.

"The benefit system has created a benefit culture," David Cameron said.

"It doesn't just allow people to act irresponsibly, but often actively encourages them to do so."

For those people who refuse to play ball, there will be increasingly severe sanctions.

Anyone who repeatedly refuses to take up a job offer face losing their benefits for as long as three years.

The Prime Minister has spoken of his concern that sickness absence from work is frequently a first step towards finding oneself on benefits.

"We simply have to get to grips with the sicknote culture that means a short spell of sickness absence can far too easily become a gradual slide to a life of long-term benefit dependency."

But the reform package came under attack from unions, who accused the coalition Government of punishing the unemployed and impoverished for their own misfortunes.

"Long-term unemployment has doubled not because of a sudden increase in work-shy scroungers, but as an inevitable result of economic policies based on cuts that destroy growth," said TUC general secretary Brendan Barber.

"Making low-income working families thousands of pounds worse off through welfare cuts over the next two years to claim that they will be slightly better off in 2013 is an absurd argument that will ring hollow as families suffer the toughest income squeeze for nearly a century."