Radical welfare reforms announced by David Cameron

Thursday, 17 February 2011 03:30

The Prime Minister, David Cameron, has announced a reform package to the welfare system which aims to simplify the system and to reward work.

Iain Duncan Smith’s Welfare Reform Bill aims to address the culture that the government believes encourages people to become dependant on benefits.

The new proposals will be based around the single, universal credit, which will simplify the administration of the welfare system and ensure that people who work will benefit by 35p for every £1 earned over benefit recipients.

The Prime Minister described the new proposals as “the most ambitious, fundamental and radical changes to the welfare system” since it was created. He said that the changes would reduce the annual welfare bill by £5.5 billion for each of the next four years by the measures which include taking child benefit away from higher-rate taxpayers and limiting housing benefit.

However, plans to reduce housing benefit by ten per cent for benefits claimants who have been out of work for over a year have been scrapped.

For people who refuse to accept work there will be sanctions that increase as those claimants refuse more offers of work and they could face losing their benefits for up to three years.

Some experts say that introducing such a radical change in times of economic prosperity would be difficult enough, but to do so at a time when unemployment is rising and inflation is high and rising will cause severe problems for some people.

Family Action Chief Executive Helen Dent warned:
"Welfare reform could be a make-or-break time for the poor and disadvantaged families with children who use Family Action services. This isn't the time for Iain Duncan Smith to be a have-a-go hero on welfare. He has got to get this right if the reforms are not going to undermine the Coalition's promises to tackle disadvantage and improve social mobility."

However, David Cameron said: "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."

Katja Hall, CBI Chief Policy Director, said:

"Getting the UK working is crucial for securing economic growth. We welcome the Government's plans to get people off benefits and into long-term employment, and to tackle long-term sickness.

"The introduction of a universal credit will simplify the benefits system and ensure that work really pays. But the transition must not impose costs on businesses, nor take away responsibility for paying staff from employers.

"The Government must now ensure that next month's Budget focuses on measures that support growth and employment, as boosting private-sector job creation is crucial to getting the UK working."

• Tags:
• benefits
,
• jobs
,
• news
,
• unemployment
,
• universal credit
,
• welfare