Blair U-turn on disability benefit after row

TONY Blair was yesterday facing the fury of inner-city Labour MPs after he revealed a welfare reform programme which will not alter the status of the 2.7 million who are claiming incapacity benefit.

The Prime Minister has climbed down from plans to stop incapacity payments after two years. Instead, the British welfare system remains almost entirely intact for the foreseeable future.

The five-year plan announced yesterday will instead focus on new schemes to lure the long-term sick back into work, and further enhance payments for single mothers who seek employment.

Alan Johnson, Work and Pensions Secretary, outlined to the House of Commons plans which reject radical welfare reform and will instead leave almost all of Britain’s benefits system intact.

Incapacity benefit - claimed by 266,000 in Scotland alone - will be renamed and split into two categories: "rehabilitation support allowance" and "disability and sickness allowance". Both offer a lower payout, with more focus on job interviews.

It is understood Mr Johnson showed stiff opposition to Mr Blair’s plans to place a two-year limit on incapacity benefit - saying it would provoke uproar ahead of a general election.

The lack of radical reform dismayed several Labour MPs, who fear the welfare system is already bankrolling social failure in inner-city constituencies.

One Scottish Labour MP, speaking on condition of anonymity, said that the price of Westminster’s failure to tackle the problem will also be paid by council tax payers who must foot the bill for social services. This problem is especially acute in Glasgow where council tax is the highest in Britain.

"Every problem the Scottish Executive and local authorities deal with - education, crime, antisocial behaviour - can be traced to the underclass living in Scotland today," said the Labour MP.

"The problem is the 2.7 million on incapacity benefit - these are people who were put on it under the Tories and have taught their children how to apply for it. If we can’t tackle this problem, there’s no point."

These remarks were echoed by a Manchester MP. "We’re not going to break ranks ahead of the election, but for those of us dealing with social failure there isn’t much good news," he said.