Minister tones down IB reforms

5 Jan 06
Government proposals to reform incapacity benefit appear to have come full circle, with senior Whitehall sources claiming that this month's welfare green paper would build on the Department for Work and Pensions' five-year plan published last year.

06 January 2006

Government proposals to reform incapacity benefit appear to have come full circle, with senior Whitehall sources claiming that this month's welfare green paper would build on the Department for Work and Pensions' five-year plan published last year.

The sources confirmed that the long-delayed green paper will back away from some of the more controversial proposals floated since the plan was published alongside a target to reduce IB claimants by 1 million.

The idea of imposing a strict time limit on IB eligibility, for example, has been shelved amid fears of a backbench rebellion. Paying part of the benefit in vouchers to be exchanged for work-training programmes has also been rejected.

However, a DWP spokeswoman said Work and Pensions Secretary John Hutton was 'clear there would still be conditions attached to future IB claims – and that the green paper would propose a something-for-something approach to future payments'.

One Whitehall source said Hutton would build on the 'less controversial, but still radical' framework outlined in February 2005 by one of his predecessors, Alan Johnson. This is despite a year in which Johnson's successor, David Blunkett, and Hutton both considered additional reforms.

Prime Minister Tony Blair last year promised a 'radical' and potentially cost-cutting reform of IB, which is claimed by 2.7 million people at an annual cost of £12bn.

Johnson's key 2005 proposal was to split payments into two from 2008: a higher-rate benefit for those with severe disabilities that kept them out of work and a lower payment for those with minor disabilities that merely limited their capacity to work.

Kate Stanley, head of social policy at the Institute for Public Policy Research think-tank, said: 'It seems that [the discussion] has come full circle – and that splitting IB will be the core part of the government's plan. In some ways we're back to Alan Johnson's original five-year plan, despite two changes of secretary of state at the DWP since.'

Hutton this week wrote to MPs representing 100 areas with the highest IB claims, identifying a 'clear link' between the number of people claiming the benefit and deprivation. His figures indicate that people in areas with high claimant levels were five times more likely to suffer from deprivation. He urged MPs to reform a system that 'perpetuates hardship'.

'The green paper will break down the barriers people face when seeking to enter work. A key part of that will be replacing IB with a system that gives genuine protection to people who truly cannot work, but properly assesses what people are able to do and gives them increased support,' he said.

PFjan2006

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