Coalition vows to 'make work pay'

A grim picture of the level of poverty in the UK was painted by the coalition Government yesterday as it unveiled plans to radically change the system to "make work pay".

Ministers complained that entire communities were existing at the "margins" of society, trapped in dependency and leaving disadvantaged children to become disadvantaged adults.

Work and Pensions Secretary Iain Duncan Smith said sanctions would be used against benefit claimants who refuse to take up jobs, while all those on incapacity benefit would now be reassessed.

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Charity groups said root and branch reform of the benefits system was "long overdue", but union leaders said the Government should be reducing unemployment by creating jobs, not driving people off welfare and "further into poverty".

Civil servants who administered welfare programmes told Mr Duncan Smith the system was "breaking" and in need of urgent attention, he said yesterday.

He told an audience of welfare experts from the voluntary, private and public sectors that there was an "absurd" situation where some of the poorest people in the country faced huge penalties for trying to get off benefits and into work.

Pledging a new approach to fighting "persistent poverty", Mr Duncan Smith laid out stark statistics showing there were more working age adults living in poverty than ever before, 5.3 million suffering "multiple disadvantages" and 1.4 million who had been on out-of-work benefits for nine or more of the last 10 years.

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"This picture is set against a backdrop of 13 years of continuously increasing expenditure, which has outstripped inflation," he said.

"A system that was originally designed to support the poorest in society is now trapping them in the very condition it was supposed to alleviate."

Mr Duncan Smith said that even in London, one of the richest cities in the world, wealth lived in close proximity to the "harsh realities" of poverty.

It was a "tragedy" that people on incapacity benefit for more than two years were more likely to retire or die than get a job.

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"We must be here to help people improve their lives, not just park them on long-term benefits. Aspiration, it seems, is in danger of becoming the preserve of the wealthy."

The former Tory leader said he had inherited a "broken system", with almost five million people on out of work benefits and 1.4 million under-25s not working or in full-time education.

"We literally cannot afford to go on like this," said Mr Duncan Smith, pledging to end Labour's "programme-itis", where schemes were tailored "solely to meet the next headline".

The Government will create a Work Programme which will move towards a single scheme, including allowing older workers on to a welfare-to-work programme immediately rather than having to wait 12 months, as is currently the case.

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Mr Duncan Smith highlighted the fact that people were better off claiming dole rather than working in a job paying 15,000 a year or less, risking trapping them in poverty for years.

A report by the Work and Pensions Department yesterday revealed that income inequality in the UK was now at its highest since statistics began in 1961.

The research showed that social mobility in Britain was worse than in the US, France, Germany, Spain, Sweden, Canada, Finland and Denmark, and a higher proportion of children grew up in workless households in the UK than in any other EU country.

The head of UK policy at Save the Children, Sally Copley, said: "Root and branch reform of a benefits system is long overdue. Nearly four million children are still living in poverty in the

UK."