Employment: Welfare reform aims to move five million off benefits

The Welfare Reform Bill contains proposals that promise to simplify the benefits system and introduce better incentives for people to return to work.

Ministers want to dramatically reduce the millions of Britons claiming benefits and to encourage them to take up jobs by making clear the gains they stand to make.

They also want to remove what they called "the confusing complexity of the benefits system" which they claimed "too often leaves people afraid to make any change to their circumstances and can be a barrier to moving from benefits to work".

The Bill also proposes to make efforts to reduce the massive amounts of money lost every year through fraud and error by cutting "unnecessary administration".

The new coalition Government aims to do this by clamping down on the numbers of people swapping between benefits such as JobSeekers Allowance and Incapacity Benefit – something that creates a great deal of paperwork.

It was also announced the earnings link to the basic state pension – broken under Margaret Thatcher's government in 1980 – would be restored from April 2011, a move that prompted praise from the country's trade unions.

The state pension age could be increased to 66 sooner than the present 2024 timetable as part of measures to pay for restoring the link between state pensions and earnings.

The Queen said: "People will be supported into work with sanctions for those who refuse available jobs and the timetable for increasing the State Pension Age will be reviewed."

CBI deputy director-general John Cridland said: "We support the idea of creating a single welfare-to-work programme where providers are given the freedom to tailor a package of personalised support to meet a client's unique needs rather than taking a one-size-fits-all approach. "