Government launches huge assault on benefits culture (with video)

Work and Pensions Secretary Iain Duncan Smith said he was determined to tackle the UK's culture of welfare dependency by making work pay.

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

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

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

"Worse than the growing expense though, is the fact that the money is not even making the impact we want it to.

"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."

The minister said the proportion of people "parked" on inactive benefits had almost tripled in the past 30 years to 41% of the inactive working age population.

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.

"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."

Mr Duncan Smith, with his new ministerial team sitting beside him, 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.

Sanctions will also be introduced to benefit claimants who refuse to take up jobs, while all those on incapacity benefit will now be reassessed.

The former Tory leader 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 and their families in poverty for years.

He said: "If you are unemployed and you come from a family that is unemployed, all you can see when you think about work is risk. It is a real risk because for all the efforts you make, the rewards are very minimal and in some cases none at all.

"Socially, everyone says 'You are a bloody moron - why are you doing this?'."

A report published by the Work and Pensions Department today revealed that income inequality in the UK was now at its highest level since comparable 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.

Mr Duncan Smith acknowledged he will have to take "tough decisions" because of the state of the public finances, but said the welfare system had to become simple and more efficient.

A new Cabinet Committee is being set up, chaired by Mr Duncan Smith with Cabinet colleagues from across government, including the Treasury, Home Office, Health, and Communities and Local Government, to tackle the underlying causes of poverty in Britain.

Shadow work and pensions secretary Yvette Cooper said the introduction of tax credits meant many people in low-paid jobs were "thousands of pounds better off" but did not always realise it.

She accused the Government of slashing job chances for young people.

"If you look really at what the Conservatives are proposing, they talk about trying to get more people back into work.

"In fact, the only thing they have done so far is to cut 300 million from the employment programmes budget - including cutting one of the highest-quality programmes, the Future Jobs Fund - and that means cutting 80,000 youth jobs at a time when unemployment is too high," she told BBC Radio 4's Today programme.

Ms Cooper conceded that Labour was "slow to get started on some of the incapacity reforms" and urged the new administration to continue with them.

Martina Milburn, chief executive of youth charity The Prince's Trust, commented: "Thousands of young people don't have the skills, confidence and qualifications to break out of long-term unemployment and poverty.

"These youngsters have been pushed further from the jobs market in the recession, as they struggle to compete with graduates fresh out of university.

"It is hugely important to tackle this entrenched youth unemployment now. Government, charities and employers must work together to give them the long-term support they need to escape unemployment for good."