Clampdown on new benefit claims

Key points

• Government to slash numbers on incapacity benefit

• Paper aims to find work for 184,000

• But figures only account for 1 in 10 claimants

Key quote

"We want to return to fundamental principles where the welfare state is able to respond to people's abilities and help them into the workplace - not condemn them to a life on benefits" - John Hutton, Work and Pensions Secretary

Story in full

PLANS to slash the number of people entitled to incapacity benefits over the next ten years will focus on creating barriers for new applicants rather than moving claimants into work.

Under the long-awaited green paper unveiled yesterday, the government aims to find jobs for just 184,000 of those on incapacity benefits - fewer than one in ten of the 2.49 million current claimants.

To achieve its target of reducing the total number of people on the benefit by one million within a decade, it will rely on 864,000 of today's claimants reaching retirement age and no longer qualifying.

Yesterday's paper revealed how new applicants will have to sign a document detailing their plan to return to work

Single parents and the over-50s will also be the focus of a plan which ministers claimed would "redefine the welfare state" by coaxing, rather than forcing, people back into work.

John Hutton, the Work and Pensions Secretary, said he was dealing with a problem of sponsored joblessness left by the last Conservative government, which he blamed for creating the present incapacity benefit system.

Labour, he said, would "bring this shameful legacy of Thatcherism to an end". From 2008, the benefit will be renamed the Employment and Support Allowance .

He admitted that most of those who had been receiving incapacity benefit for more than two years would never return to work.

This, in effect, means ministers will focus on toughening up the incapacity assessment procedure - while launching a 350 million scheme to help younger incapacity benefit claimants find work.

Mr Hutton said the government aimed to save 7 billion by reducing the claimant list - and, to do this, he promised to spend an extra 350 million on schemes and benefits to make work pay for the poorest.

"Our plans will redefine the role of the welfare state. The fundamental emphasis will be on what people can do, not what they cannot," he said.

"We want to return to fundamental principles where the welfare state is able to respond to people's abilities and help them into the workplace - not condemn them to a life on benefits.

The Conservatives said they shared his aims, but that his reforms fell far short of what was required. Philip Hammond, the Tory work and pensions spokesman, said the target of one million by 2016 was unambitious.

"The government is relying on natural wastage to meet this goal - we would have liked them to be far more ambitious," he said. But he said the Tories welcomed the reforms, as far as they went.

In Scotland, 191,000 people were claiming incapacity benefit in May last year, of whom 90,000 will have retired in ten years. In some areas of Glasgow, two in five adults are claiming incapacity benefit. The new system will impose a tougher medical examination.

The Pathways to Work scheme, offering enhanced benefits to persuade people to take work, will be rolled out nationwide. It is currently being piloted in Glasgow.

There is also a focus on the over-50s, who have in recent months filled the majority of job vacancies in Britain. Those unemployed and in their 50s will be given enhanced support.

Lone parents who are on income support will qualify for a 20-a-week "back to work" premium - a scheme which has been piloted in some areas.

Throughout the new system, there will be limited penalties for non-compliance. Lone parents and those on incapacity benefit who refuse to attend interviews - and who are considered eligible for full-time work - will face cuts of up to 22 a week.

Labour MPs, who rebelled at the last attempt at welfare reform in 1998, were satisfied with the emphasis on incentives rather than penalties, and welcomed the proposals. Campaign groups for the disabled warned they would be watching for any element of compulsion when the final welfare reform legislation is drawn up.

How New York saw 86% drop in sickness payments

NEW York in the early 1990s was a very different place to the city which today boasts some of the highest employment and lowest crime in the world. Much of the credit for that change has gone to its then mayor, Rudy Giuliani.

His thinking was blunt: welfare fuelled poverty, and keeping people in penury was not compassionate. His attention turned to the 24,900 people then claiming the United States equivalent of incapacity benefit.

He had each rigorously assessed by an independent firm of medics. The old system was like the current British system: it sought to establish whether or not people could work.

But Mr Giuliani asked his firm of doctors to assess which type of work each person was physically and mentally capable of doing. He then hired a private company to help them find work.

Crucially, those assessed capable of even low-level employment were given jobs by the state - such as tending the parks or cleaning graffiti from the walls - if they refused to find them outside.

Staying at home and collecting benefit was not an option in New York. Faced with the alternative of low-paid and low-skilled work serving neighbourhoods, the incapacity benefit claimants dropped 86 per cent.

All this was achieved within three years. By 1999 - his fifth year as mayor - the sickness benefit rolls had shrunk to 3,423.

Many were re-categorised as unemployed and put on a level of welfare payments which were demonstrably inferior to the jobs then being created so quickly.

As president, Bill Clinton applied the same for states in what was called "workfare", as it demanded work.

But Britain looks set to remain in the "welfare" era.

How government plans to get people back to work

GOALS

Reduce incapacity benefit claimants to 1.5 million within a decade.

Return 300,000 lone parents into work.

Encourage one million over-50s to return to work.

INCAPACITY BENEFIT (IB)

To be renamed Employment and Support Allowance.

New claimants to have "work-focused interviews" and engage in "work-related activity" to qualify.

Those refusing to attend interviews will have payments cut, but not below level of jobseekers' allowance.

Pathways to Work scheme, being piloted in Glasgow, to be rolled out nationwide.

Those returning to work will qualify for extra benefits.

Those with severest disabilities or health problems will have a higher benefit and be exempt from interviews.

Doctors discouraged from signing people on to IB - and asked to support patients who want to return to work.

Doctors' surgeries will have employment advisers to intercept those claiming IB.

LONE PARENTS

Will be required to attend a job interview every three months once the youngest child turns 11.

Will be offered benefits if they return to work, so no parent would be better off on benefits.

HOUSING BENEFIT

Moves afoot to give benefit directly to claimant, thereby giving them an incentive to find a cheaper place to live.