Iain Duncan Smith calls for massive shake-up of benefits system
In the Government’s emergency budget in June, it was revealed that the benefits system would be in line for a radical overhaul.
One option being considered would see unemployment benefits and tax credits abolished and replaced with a single payment, Work and Pensions Secretary, Iain Duncan Smith, has announced.
The move is designed to cut down on benefit spending as 1.46 million Britons are currently claiming jobseeker’s allowance (JSA), according to the latest figures from the Office for National Statistics.
Approximately 1.4 million of the 5 million people on out-of-work benefits have been receiving them for 9 of the last 10 years.
Mr Duncan Smith said: “We need nothing less than a complete re-think of the benefits system” adding that the current system is “on the verge of breakdown”.
However, costs related to introduce a new system could cost up to £7 billion, according to Labour, but Mr Duncan Smith argues that billions could be saved in bureaucracy, fraud and error with a “radically” simpler system.
The measures are aimed at helping people get back to work but, at the same time, end the situation where some risk losing out financially if they take a job.
A White Paper setting out the government’s preferred options will be published in the autumn.
However, Mr Duncan Smith’s announcement was welcomed with caution and the TUC said he was in a “Catch 22″ situation.
TUC general secretary Brendan Barber said: “You can only make work pay in two ways, either you make those who are out of work poorer…..or you can boost income in work either through more generous benefits or a higher minimum wage.
“The first should be morally unacceptable while the Treasury will not allow the second,” he added.