IDS pledges 'no losers' from welfare reform

DWP will spend £2bn on transition to new system
DWP will spend £2bn on transition to new system

By Alex Stevenson

Reforms to the welfare system announced today will not result in any deserving claimants becoming worse off, Iain Duncan Smith has pledged.

"We will protect those people who for whatever reason may find themselves with less," he said, as his white paper outlining plans to shake up the benefits system were finally published.

The work and pensions secretary has finally published his white paper on shaking up the benefits system after months of build-up.


The government's plans outline a four-year transition period to the new benefits system dominated by the universal credit, which will replace a raft of benefits including some of those introduced by the Labour government.

Housing benefit, child tax credit, jobseeker's allowance, working tax credit and income support are among those which will be scrapped and replaced with the universal benefit.

Mr Duncan Smith said 350,000 children would be lifted out of poverty as a result of the changes, which - thanks to the simplification of the existing system - would save £1 billion a year. Workless households could be reduced by 300,000.

"We right now have a system that traps people because it's complex... but having one withdrawal rate will actually make sure people retain more of what they earn when they go back to work," Mr Duncan Smith told the BBC.

Today's white paper also includes announcements relating to the government's work programme, which will seek to help Britain's long-term unemployed get into work again from next summer.

The government will withhold benefits for those who do not accept work in the longer-run, however.

"As the growth comes in the economy, as jobs are available, all we're simply saying is you have the responsibility... to actually take the work when it is available," Mr Duncan Smith explained.

Shadow work and pensions secretary Douglas Alexander indicated he was likely to support much of the proposals, telling the Today programme: "If we can move to a benefits system that is simpler and makes it easier for people to move from welfare to work, that's the right thing to do."

He defended Labour's decision to introduce the minimum wage and tax credit system, however, pointing out that today's claimant count was about half the level it had been after the last two recessions.

Labour's criticisms appear more general at present, with Mr Alexander expressing concern that the government's wider spending cuts agenda will limit the number of jobs being created in the next few years.

In the Commons he suggested these moves could be "contradictory" to the goals of the welfare reform, suggesting Mr Duncan Smith had sacrificed too much to secure his £2 billion of funding for the change.

"Our concern isn't that we don't support simplification of the benefits system, it's just we think that needs to be matched by an equivalent commitment to make sure that there are jobs there for people to take," he added.

The reforms announced today were initially confirmed in Mr Duncan Smith's speech to the Conservative party conference in Birmingham.

They had been the subject of intense debate between George Osborne and the DWP during the spending review period, which saw the chancellor finally cave in to pressure to allow Mr Duncan Smith to fund the switchover from the current system to the new one.

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