Welfare reform

Last week the Coalition Government launched plans for a complete overhaul of the benefit system.

Successive governments have talked about reform but shied away from it.  We can't put it off any longer.

Today, nearly 5 million people of working age receive one of the main out-of-work benefits.

Almost 2 million children are growing up in households where no-one is in work - a higher proportion than in any other EU country. 

And the costs are spiralling out of control.  In the last 13 years, spending on working-age benefits rose from £63 billion to £87 billion a year.

That's twice the amount we spend on schools or defence.

So we've got to get a grip of this problem and tackle the culture of welfare dependency.

Too many people believe they are better off on benefits than in work.  For some, going back to work means losing 95p in benefits for every extra £1 they earn. 

We have to turn the system around so that the incentive is for people to go to work, not to stay at home languishing on benefits.

That means making the benefit system simpler and more transparent.

There is currently a bewildering array of out-of-work benefits - jobseeker's allowance, income support, tax credits, housing benefit, council tax benefit, incapacity benefit.  Millions of pounds are wasted on bureaucracy, error and fraud.

So we want to replace these with a single benefit that rewards people for going back to work instead of penalising them.

We'll also ensure that benefits are focused on those who really need them.  For those who genuinely can't work, there will be unconditional support.  But those who can work will be expected to look for a job and take work when it's available.

These reforms will be a huge challenge - but it is one we must face.  The welfare system was set up to help people, not make them dependent.  As its architect, Sir William Beveridge said, when he warned that "idleness" had to be addressed as much as "want", "The State in organising security should not stifle incentive, opportunity, responsibility."

Christopher N Howarth